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First Business Financial
(NASDAQ:FBIZ)
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Rating:76Outperform
Price Target:
$82.00
â–²(22.06% Upside)
Action:Reiterated
Date:08/04/26
FBIZ scores well primarily on improving profitability and strong cash generation, alongside constructive earnings-call execution (NIM improvement, operating leverage, and clear growth targets). Valuation is supportive with a low P/E. The main constraints on the score are overbought technical conditions and signs of near-term revenue softness/margin compression that could pressure results if sustained.
Positive Factors
Strong cash generation
Consistent and growing free cash flow with FCF roughly matching net income (~0.92–1.00) indicates high cash conversion. This durable cash engine supports loan growth, reserves, reinvestment in higher‑return niches, and shareholder returns while cushioning cyclical stresses.
Negative Factors
Top‑line softness and margin compression
A slight decline in TTM revenue and compression of gross/operating margins signal potential persistence in top‑line pressure. If structural revenue growth falters, sustaining recent margin and earnings gains will depend on scaling fee income or further cost cuts, increasing execution risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistent and growing free cash flow with FCF roughly matching net income (~0.92–1.00) indicates high cash conversion. This durable cash engine supports loan growth, reserves, reinvestment in higher‑return niches, and shareholder returns while cushioning cyclical stresses.
Read all positive factors
First Business Financial Key Performance Indicators (KPIs)
Any
Gross Loans & Leases Receivable Breakdown
Shows how the bank’s loan portfolio is split by loan type, industry, and term, revealing where its interest income and credit risk are concentrated. A mix heavy in commercial real estate or equipment finance can lift yields but increase vulnerability to sector downturns, while broader diversification suggests steadier earnings and lower concentration risk. Useful for spotting potential future losses, funding needs, and how changes in the economy or interest rates could impact profitability.
Shows how the bank’s loan portfolio is split by loan type, industry, and term, revealing where its interest income and credit risk are concentrated. A mix heavy in commercial real estate or equipment finance can lift yields but increase vulnerability to sector downturns, while broader diversification suggests steadier earnings and lower concentration risk. Useful for spotting potential future losses, funding needs, and how changes in the economy or interest rates could impact profitability.
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The Fly
The FlyFirst Business Financial (FBIZ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$595.15M
Dividend Yield1.79%
Average Volume (3M)25.29K
Price to Earnings (P/E)10.6
Beta (1Y)0.78
Revenue Growth6.56%
EPS Growth16.72%
CountryUS
Employees355
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)6.63
Shares Outstanding8,368,320
10 Day Avg. Volume17,199
30 Day Avg. Volume25,287
Financial Highlights & Ratios
PEG Ratio0.54
Price to Book (P/B)1.19
Price to Sales (P/S)1.59
P/FCF Ratio7.25
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$79.33Price Target Upside18.09% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)6.48
Revenue Forecast (FY)$183.25M
First Business Financial Business Overview & Revenue Model
Company Description
First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high...
How the Company Makes Money
FBIZ primarily makes money through its banking and related financial services operations. The largest driver of earnings is typically net interest income: the company earns interest and fees on loans and other interest-earning assets (e.g., commer...
First Business Financial Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call presented a strong operational and financial performance: record pretax pre-provision earnings, double-digit revenue and tangible book value growth, improved NIM, positive operating leverage, resilient fee income, and strengthened capital metrics. Management took a strategic step to exit out-of-footprint SBA origination, which reduces a recurring but low-return business and is expected to be accretive over time while freeing capacity to focus on higher-margin niches (asset-based lending, floor plan, private wealth). Near-term headwinds include one-time severance and impairment charges, the loss of historical SBA gain-on-sale revenue (~$500k quarterly), elevated loan payoffs and prepayment fee volatility (which can both help and create variability in margin), and some expense noise. On balance, the strengths and forward-looking strategic moves materially outweigh the short-term issues.Positive Updates
Earnings Per Share Growth (Excluding One-Time Items)
Reported EPS of $1.84 for Q2 2026 including a $0.14 net one-time benefit; excluding that benefit, EPS grew 18% sequentially (vs Q1) and 26% year-over-year (vs Q2 2025).
Negative Updates
SBA Business Exit Costs and Revenue Loss
Exit of out-of-footprint SBA activities generated $405,000 of SBA-related severance costs in Q2 and will eliminate historical average quarterly SBA gain-on-sale revenue of approximately $500,000, creating near-term earnings headwinds despite longer-term net benefits.
Read all updates
Q2-2026 Updates
Positive
Negative
Earnings Per Share Growth (Excluding One-Time Items)
Reported EPS of $1.84 for Q2 2026 including a $0.14 net one-time benefit; excluding that benefit, EPS grew 18% sequentially (vs Q1) and 26% year-over-year (vs Q2 2025).
Read all positive updates
Company Guidance
Management reiterated measurable guidance and targets: they expect roughly 10% full‑year loan growth and ~10% annual deposit growth (Q2 loans up 10% annualized including a $23.7M held‑for‑sale transfer, 7.2% excluding it; loans up $212M YTD, annualized 12.6%), NIM guidance of 3.60%–3.65% (Q2 NIM 3.78%, +22 bps Q/Q), fee‑income growth target of 10% for the year (fee income +18% YoY in Q2; private wealth fees +14% YoY, private wealth added $508M AUM/A in the past year), and continued pursuit of positive operating leverage (first‑half efficiency ratio 59.31% achieving the sub‑60% goal; operating leverage 6.2% vs. linked quarter and 6.4% YoY, YTD 2.4%). They provided tax and capital guidance: full‑year effective tax rate ~13%–15% (Q2 ETR 7.2% after a $1.5M deferred tax valuation allowance release; normalized H2/2027 ~15%–17%), CET1 above the 9.5% internal target and total capital above the 12% target, and capital return optionality ($5M share repurchase authorization). They quantified the SBA exit economics — ~$310K pretax benefit per quarter in 2027 (~$0.03 EPS after tax), ~30–50 bps efficiency‑ratio improvement, incremental NII of ~$140K/qtr and $20K servicing income/qtr by 2027 offsetting the loss of ~$500K avg quarterly SBA gain‑on‑sale — and noted elevated prepayment fees ($1.3M in Q2; fees‑in‑lieu $3.2M, 37 bps of margin) that should moderate in H2 though Q3 may remain elevated.First Business Financial Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
70
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 287.86M | 279.25M | 262.38M | 226.24M | 150.80M | 124.09M |
| Gross Profit | 169.43M | 159.97M | 144.63M | 135.71M | 131.72M | 118.56M |
| EBITDA | 67.68M | 64.23M | 54.89M | 50.77M | 56.31M | 50.58M |
| Net Income | 55.51M | 50.32M | 44.24M | 37.03M | 40.86M | 35.76M |
Balance Sheet | ||||||
| Total Assets | 4.41B | 4.08B | 3.85B | 3.51B | 2.98B | 2.65B |
| Cash, Cash Equivalents and Short-Term Investments | 573.05M | 39.48M | 499.09M | 436.52M | 314.71M | 262.81M |
| Total Debt | 595.22M | 259.41M | 327.98M | 339.87M | 466.98M | 418.93M |
| Total Liabilities | 4.01B | 3.71B | 3.52B | 3.22B | 2.72B | 2.42B |
| Stockholders Equity | 395.31M | 371.58M | 328.59M | 289.59M | 260.64M | 232.42M |
Cash Flow | ||||||
| Free Cash Flow | 80.91M | 61.10M | 57.27M | 49.41M | 35.42M | 35.60M |
| Operating Cash Flow | 81.39M | 61.70M | 57.49M | 52.29M | 38.65M | 35.99M |
| Investing Cash Flow | -385.72M | -373.38M | -328.47M | -506.85M | -245.27M | -111.01M |
| Financing Cash Flow | 344.47M | 193.47M | 289.17M | 491.38M | 252.19M | 75.22M |
First Business Financial Technical Analysis
Positive
67.18
Price Trends
63.78
Positive
59.79
Positive
56.88
Positive
Market Momentum
2.29
Negative
65.06
Neutral
66.18
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FBIZ, the sentiment is Positive. The current price of 67.18 is below the 20-day moving average (MA) of 68.08, above the 50-day MA of 63.78, and above the 200-day MA of 56.88, indicating a bullish trend. The MACD of 2.29 indicates Negative momentum. The RSI at 65.06 is Neutral, neither overbought nor oversold. The STOCH value of 66.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FBIZ.
First Business Financial Risk Analysis
First Business Financial disclosed 45 risk factors in its most recent earnings report. First Business Financial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
First Business Financial Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
84 Outperform | $731.41M | 5.39 | 27.40% | 0.29% | 40.09% | 327.11% | |
83 Outperform | $659.19M | 14.42 | 12.47% | 0.80% | 7.25% | 22.64% | |
80 Outperform | $565.75M | 11.69 | 10.65% | 1.74% | 2.06% | 14.90% | |
76 Outperform | $595.15M | 10.62 | 14.75% | 1.88% | 6.56% | 16.72% | |
71 Outperform | $509.51M | 9.34 | 11.72% | 3.51% | 35.31% | 190.27% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $616.32M | 16.31 | 4.77% | 4.65% | 1.05% | 38.31% |
* Financial Sector Average
FBIZ
First Business Financial
70.43
23.97
51.58%
HBCP
Home Bancorp
70.63
20.86
41.90%
KRNY
Kearny Financial
9.46
3.88
69.66%
CARE
Carter Bankshares
31.72
14.33
82.40%
RRBI
Red River Bancshares
100.68
39.66
64.99%
COFS
ChoiceOne Financial Services
34.00
6.12
21.94%
First Business Financial Corporate Events
Business Operations and StrategyFinancial Disclosures
First Business Financial Posts Strong Second-Quarter 2026 Results
Positive
Jul 30, 2026
First Business Bank reported strong second-quarter 2026 results on July 30, 2026, with net income available to common shareholders rising to $15.4 million and diluted EPS of $1.84, aided by a tax benefit partially offset by one-time compensation c...
Business Operations and StrategyExecutive/Board Changes
First Business Financial Adds Independent Director to Board
Positive
May 28, 2026
On May 22, 2026, First Business Financial Services, Inc. expanded its Board of Directors from eight to nine members and appointed veteran banker Scott M. Ferris as a Class III director, effective June 1, 2026, also naming him to the Audit and Oper...
Business Operations and StrategyFinancial Disclosures
First Business Financial Highlights Strong Q1 2026 Growth
Positive
May 5, 2026
On May 5, 2026, First Business Financial Services, Inc. published a first-quarter 2026 investor presentation detailing recent operating performance, financial condition, and strategy, which it will use in interactions with investors and analysts. ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.