FBIZ

Image source: The Motley Fool. Friday, July 31, 2026 at 9:00 a.m. ET Chief Executive Officer - David Seiler Chief Financial Officer - Brian Spielmann Operator: Hello, and welcome to the First Business Financial Services Second Quarter 2026 Earnings Conference Call. Please note this event is being recorded. And today's comments may contain forward-looking statements that are subject to risks and uncertainties. Actual results may differ materially from those discussed. Please refer to the company's earnings release, investor presentation and SEC filings for additional information, including risk factors and reconciliations of any non-GAAP financial measures. I would now like to turn the conference over to First Business Financial Services CEO, Dave Seiler. Please go ahead. David Seiler: Good morning, everyone, and thank you for joining us. We appreciate your time and your interest in First Business Bank. Joining me today is our CFO, Brian Spielmann. We encourage you to review our earnings release and supplemental earnings call slides, which are available through our website at ir.firstbusiness.bank, along with our other investor materials. Our team's outstanding execution drove our exceptional performance in the second quarter. We reported earnings per share of $1.84, which included a net benefit of $0.14 related to 2 one-time events. Excluding this benefit, EPS grew 18% from the first quarter and 26% from last year's second quarter. Pretax pre-provision earnings grew to a record $19.8 million for the quarter and were up 15% for the first 6 months of 2026, reflecting strong contributions across the bank. We are very pleased with this performance. I'll cover the one-time events first. During the second quarter, we released the remaining $1.5 million of a deferred tax valuation allowance related to the changes in Wisconsin state law enacted in 2023. Brian will cover this in greater detail. This resulted in an $0.18 benefit to second quarter earnings per share and about a 9 percentage point decrease in the effective tax rate for the quarter. The second onetime item was $405,000 in SBA-related severance costs, which offset the tax-related EPS benefit by $0.04. At the end of May, we exited our national out-of-footprint SBA 7(a) lending activities. You can see a summary of the financial impact of this decision on Slide 5 of the earnings supplement. Over the past 10 years, we invested in expanding our SBA talent and capacity on a national basis, but we were ultimately unable to achieve the volume and profitability required to meet our internal targets for economic returns. This was primarily due to what we came to recognize as a mismatch between the industry standards for SBA underwriting and compliance and our own internal standards. We determined that building the national SBA volume at scale would require a level of underwriting flexibility that was inconsistent with our standards for credit quality. We struggled to build a sales team that consistently produced loan volume using our underwriting standards. We built a robust SBA loan closing and compliance operation that met the high standards we expect of all our lending activities, but which may have resulted in overprocessing the loans to ensure perfect compliance with SBA requirements. This drove up processing costs. You can see on Slide 5 that outside of the onetime severance costs we recorded this quarter, this decision is immediately net positive to our earnings expectations. From a strategic perspective, it's particularly compelling given the capacity that is now freed up for management to prioritize more profitable growth opportunities. For example, we see significant opportunity to take share and grow relationships across our existing bank markets, particularly in Milwaukee and Kansas City. We also continue to prioritize hiring the best talent to accelerate growth in our higher-yielding niche C&I lending businesses and our private wealth management business. And we continue to seek opportunities to increase fee income. This includes our participation in limited partnership investments, which Brian will discuss. Before moving on, I do want to note, our SBA preferred lender status is unchanged and 7(a) and 504 lending will continue as needed to support clients within our bank markets. Moving to our operating results. Our second quarter performance rounded out an outstanding first half of the year and positioned us to achieve our full-year 10% growth goals. We focus on progress against our long-term strategic plan, which you can see on Slide 17. Our first half performance was very strong. Revenue grew 11% over the first half of 2025, exceeding our 10% annual goal, even with the elimination of SBA gains on loan sales. Our first half efficiency ratio measured 59.31%, achieving our sub-60% long-term target. And tangible book value grew 15.2% over the prior year, surpassing our 10% growth goal. Our momentum is strong. Quality balance sheet growth was central to this success. Loans grew 10% annualized during the quarter, and I'll note that included the transfer of $23.7 million in SBA 7(a) loans from held-for-sale to loans and leases receivable as of June 30. Excluding the transfer, loans grew an annualized 7.2%, which was in line with the expectations we communicated last quarter given the extremely strong first quarter growth rate and above-average payoffs. Payoffs in the quarter were approximately 2x or $50 million above our quarterly average over the past 2 years. We saw broad growth in conventional loans across our bank markets with particular strength in our Southeast Wisconsin and Kansas City markets. Multifamily lending and owner-occupied CRE were strong and picked up pace while investor CRE declined. Asset-based lending continued to benefit from new leadership and a growing sales team. Portfolio balances grew 19% annualized during the quarter and were up 48% annualized year-to-date. Loans, including the transfer from held-for-sale, were up $212 million or an annualized 12.6% in the first half of 2026. This is ahead of our target pace and positions us to achieve 10% annual growth for the full year. We do continue to see elevated prepayment fees compared to our historical experience. Prepayment fees totaled $1.3 million, up from $642,000 in the first quarter and above our 12-quarter average of $562,000. We expect this will slow in the second half of the year, but third quarter will likely remain elevated. Recent payoff activity has largely reflected client-driven events, including property sales or refinancings in the secondary market and M&A activity involving commercial clients. Our clients and our markets continue to be strong and steady, and they like doing business with us. Our Net Promoter Score reflects the strength of our relationship model. You can see this on Slide 17. Looking ahead, we expect to drive continued loan growth as we grow our team. We are opportunistic recruiters, and we attract and retain producers with proven track records of growth. Our talent is a differentiator for First Business in any economic landscape. Growing our team also continues to benefit our funding profile. Core deposit growth outpaced loan growth in the quarter, increasing 12% annualized following our robust 18% growth in the first quarter. Growth came from several areas with our Kansas City market and asset-based lending team leading the way. Our focus on hiring the best treasury management talent and maintaining a disciplined approach to business development continues to pay off. Like our outlook for loan growth, we expect deposit growth to be approximately 10% on an annual basis. I'll also highlight fee income for the quarter, which grew 18% year-over-year even with the absence of SBA gain on sale revenue. Private wealth again generated record revenues and provides annuity-like support for our revenue growth and diversification goals. You can see more on our fee income trends on Slide 11. Over the past year, the Private Wealth team has added $508 million in assets under management and administration, of which approximately 70% is new client dollars. Our South Central Wisconsin and Kansas City markets were the largest contributors to this growth. On credit, we were pleased to see nonperforming assets decline during the quarter, and our overall asset quality remains stable. You can see this on Slide 13. We continue to expect progress towards resolving our largest 2 nonperforming assets later this year. Before handing it off to Brian, I'll reiterate our commitment to 4 key objectives: prioritizing high-quality relationship-based growth, diversifying our revenue streams, maintaining long-term positive operating leverage and preserving a culture that attracts and keeps the highest quality talent. We believe consistent execution of these growth strategies will continue to support strong shareholder returns. Now I'll hand it off to Brian. Brian Spielmann: Thanks, Dave. I'll cover the economics of the SBA decision first. Our SBA 7(a) strategy had been to sell 75% of our loan production and retain 25% on balance sheet. Effective June 30, we have moved all held-for-sale balances on balance sheet and any new production is expected to be retained on balance sheet and service through the life of the loans. We currently have about $15 million in process that should fund by the end of 2026. Using our historical SBA spread of 4.9% and an assumption of 75% of $15 million for incremental loans held on balance sheet, we estimate approximately $140,000 in incremental net interest income and $20,000 in incremental servicing income per quarter by 2027. This helps offset the loss of approximately $500,000 in average quarterly SBA gain on sale revenue. On the expense side, salaries and benefits for the eliminated positions averaged about $650,000 per quarter. This brings the net pretax income benefit to approximately $310,000 per quarter in 2027 or about $0.03 per share after tax. That should equate to about 30 to 50 basis points of improvement in our efficiency ratio, all else equal. And now on to our normal financial review. Second quarter net interest margin increased 22 basis points to 3.78% from 3.56% in the first quarter. You can see a breakdown of this on Slide 8 of our earnings supplement. Recall that first quarter net interest margin included a 5 basis point impact of fewer accrual days in the quarter, putting it at 3.61% or 17 basis points lower than Q2 for comparative purposes. The 17 basis point difference primarily reflects the deployment of excess cash held at the Fed during the first quarter into loan growth during the second quarter and an increase in prepayment fees. This contributed to a 24 basis point increase in earning asset yields, while the rate paid on average total bank funding increased just 2 basis points. As Dave mentioned, elevated loan payoffs and related prepayment fees provided a meaningful lift to net interest margin this quarter. Fees in lieu of interest contributed 37 basis points to margin compared to 26 basis points in the first quarter and our historical average of 20 basis points. Looking ahead, we continue to target net interest margin of 3.60% to 3.65% for the year. We also continue to expect 10% growth in fee income for the year and our 17% year-to-date growth over last year's first half supports this expectation. Note that compared to the linked quarter, second quarter fee income declined by just $206,000 despite swap fees decreasing $466,000 and the elimination of SBA loan sale gains, which totaled $592,000 in the linked quarter. The modest linked quarter decline in total fee income highlights the resiliency of our diversified revenue base. Private wealth helped offset pressure from lower swap fees and the elimination of SBA loan sale gains, increasing $380,000 from the first quarter, including approximately $247,000 of seasonal tax processing fees. Private wealth fees grew $509,000 or nearly 14% on a year-over-year basis, showing this business' strength as an off-balance-sheet, capital-free revenue generator. Our strong fee revenue also reflected growth in income from limited partnership investments, which is reported in other noninterest income. These fees grew to $796,000 for Q2 and totaled $1.1 million for the first half of 2026. This compares to $1.2 million for the full year 2025. We continue to look to optimize our limited partnership investment strategy, and we expect returns to grow over time as the portfolio investments mature. Looking at expenses, we had some moving parts related to compensation. Total compensation expense decreased by $79,000 from Q1. This includes several large items. Salaries and benefits declined mainly due to 1 month of SBA-related cost savings amounting to about $217,000. You can see our outlook for SBA-related cost savings on Slide 5 of the earnings supplement. Payroll taxes were also lower by $593,000 following the annual cash bonus payouts in the first quarter. These declines were almost fully offset by a $446,000 increase in annual cash bonus accruals compared to the first quarter, along with $405,000 in onetime severance costs related to the SBA exit. Other noninterest expense included a $552,000 impairment on historic tax credit investments, which has been more than offset by related tax benefits recognized in the current and prior periods. In addition, data processing expenses increased $212,000 due to annual tax processing costs associated with our private wealth clients. On an operating basis, noninterest expense declined $189,000 or almost 1% to $26.9 million. Excluding SBA severance expense and the impairment on tax credit investments, our second quarter expense level was largely in line with the first quarter. We expect the ongoing run rate to trend modestly lower through the remainder of 2026 as SBA-related personnel savings are fully realized while continuing to selectively reinvest a portion of those savings into revenue-producing talent in our existing bank markets, nationwide niche C&I businesses and private wealth. I'll remind you that our primary expense management objective is achieving annual positive operating leverage. That is annual expense growth at some level modestly below our targeted level of 10% annual revenue growth. We achieved operating leverage of 6.2% compared to the linked quarter and 6.4% compared to the prior year quarter, which supported a very strong efficiency ratio. On a year-to-date basis, operating leverage was 2.4%. The effective tax rate was 7.2% for the second quarter, reflecting the benefit of this quarter's $1.5 million deferred tax asset valuation allowance reversal. Excluding this one-time benefit, our effective tax rate was 15.9%. For background, in 2023, Wisconsin enacted a law which excluded small business funding interest from state tax. In the fourth quarter of 2023, we established a deferred tax valuation allowance of approximately $3.2 million based on forecast estimates and preliminary state guidance. In the fourth quarter of 2024, we released $1.7 million of this allowance due to improved guidance from the state. This quarter, we released the remaining $1.5 million due to historical and forecasted Wisconsin taxable income. For the full year 2026, we now expect our effective tax rate to be approximately 13% to 15%, reflecting the benefit of this quarter's deferred tax asset valuation allowance reversal. After that discrete item, we expect the effective tax rate to normalize to approximately 15% to 17% for the second half of 2026 and in 2027. Finally, our strong earnings continue to generate capital. As shown on Slide 15, our CET1 ratio at June 30 exceeded our 9.5% internal target, and our total capital ratio remained above our 12% internal target. Maintaining capital levels above our internal targets provides flexibility in how we deploy excess capital. Our priority remains investing in the business to support organic growth, which we believe creates the greatest long-term value for shareholders. At the same time, we evaluate other capital management alternatives, including our common stock dividend and our $5 million share repurchase authorization. When prudent growth opportunities do not fully utilize our excess capital, share repurchases remain an attractive tool to return capital to shareholders and enhance shareholder value. And now I'll hand it back over to Dave. David Seiler: Thanks, Brian. This was an outstanding quarter. Our primary measures of success were strong with a solid runway for the back half of the year. We are growing in our bank markets and in our niche C&I lending businesses, and we are taking share in a number of ways. We continue to benefit from ongoing M&A disruption in our markets by attracting bankers and clients who see the value in our superior relationship model. We are earning more of our existing clients' business as their needs evolve and they learn of our complementary abilities, be it in private wealth services, treasury management services, et cetera. And we never stopped seeking our next opportunity to win high-quality new relationships. First Business continues to be equipped for growth and our strategic plan guides the way. Thank you for taking the time to join us today. We're happy to take your questions now. Operator: Your first question comes from the line of Tim DeLacey with Raymond James. Timothy DeLacey: This is Tim on for Danny. I appreciate the comments on the prepayments on the ABL fees on the NIM and that you reiterated the long-term guide. But just curious if you can share any puts and takes around the near-term path with the commentary that prepayments could remain elevated here near term? Brian Spielmann: Yes. I would say, on average, we have 20 basis points in our net interest margin of prepayment and ABL fees and other fees in lieu of interest. And so that's kind of how we -- what we manage to. And just given the current climate that we're seeing right now with the elevated payoffs and our ability to collect those prepayment fees. So when we're thinking about that 3.60% to 3.65% long-term targets, we're typically considering about 20 basis points there. And it's just going to be obviously the vagaries of the prepayment activity, which we saw in the second quarter, and we'll have a little bit more of that probably in the third quarter. Timothy DeLacey: Okay. I appreciate that commentary, Brian. And then just maybe flipping over just to the -- on the growth side. We've been hearing from a lot of banks that just competition is increasing for both loans and deposits. So curious if you could just share any commentary on the competitive dynamics that you're seeing in your markets. David Seiler: Sure. As it relates to competition, we think competition is always strong. When we're fighting for new depository clients, there's always competition. Rates is important. And the same thing we're seeing on the loan side. But we feel like if our folks are out and they're doing the right activities, we win our fair share. I don't really see a meaningful shift in competition levels now versus really at any time over the last 5 or 6 years. Operator: Your next question comes from the line of Jeff Rulis with D.A. Davidson. Jeff Rulis: I appreciate the detail on the SBA out of market exit. I wanted to kind of just -- as we sharpen the pencil here, I just wanted to see why that quarterly benefit wouldn't kick in, in Q3 of this year. You kind of stated as '27 quarterly. I guess, is there any cleanup of severance or anything further in the second half that would mask some of that benefit to earnings immediately? Brian Spielmann: Nothing material on the severance side, remaining. I would think it's more about the timing of when those loans in process of closing and those that have closed that are in process of funding. Those remaining balances that I referenced about $15 million. That will just take some time. We expect that to be pretty much wrapped up by the end of the year. but it might take a little bit. So that's really the timing difference there between the immediate impact versus 2027. Jeff Rulis: Got it. So that would be more of a spread income benefit delay versus -- I mean, the salaries and benefits should impact immediately, correct? Brian Spielmann: Yes. That's right away. And then the spread benefit is later on, correct. Then we have the estimated on average $500,000 of gains that we won't have going forward. And that's why we have that as far as what's in people's models and our estimates, we're taking that out, of which all that's being offset by the compensation. But to get to the $0.03 benefit that we're estimating, there's the spread income impact that doesn't come in fully until 2027. Jeff Rulis: Got it. All right, Brian. And I guess the follow-on is just -- and again, not to get too cute with this. But I guess the go forward is you've got that incremental bump into net interest income, do you look at that long-term margin guide of 3.60% to 3.65% is incrementally higher? And then I guess, do you look at reserving any different if you look at the loan loss reserves for this or it's pretty immaterial, I guess, potentially? Brian Spielmann: Yes. So on the margin side, I would say temporarily, there's a little bit of benefit there, but that portfolio is going to continue to amortize down, and we're not expecting any material new SBA 7(a) business. We'll have some that will be in market occasionally, but nothing significant. And so it's really a matter of or other niche C&I areas, maintaining those and growing those that contribute that are already included in our target of 3.60% to 3.65%. And then on the allowance side, I would say it's generally immaterial. It's not really a lot of balances. There's guaranteed portions that are already pulled out of the calculation. We'll see a modest benefit, all else equal, once those start to unwind, but nothing significant or worth really noting in the estimates. Operator: Your next question comes from the line of Damon DelMonte with KBW. Damon Del Monte: Just to kind of circle back on the margin and the impact from the prepayment fees and fees in lieu of interest. I think Dave said in his comments that the prepayment fees are about $1.3 million this quarter. Is that correct? Brian Spielmann: Yes. Damon Del Monte: Okay. And then the fees in lieu of interest was like 37 basis points this quarter. Is that... Brian Spielmann: Yes. In total, that's $3.2 million of fees in lieu of interest, of which the $1.3 million was prepayment fees. Damon Del Monte: Okay. So in total, it was just $3... Brian Spielmann: Yes. Just the largest driver of those fees was prepayments up $645,000. The rest of those buckets of fees in lieu of interest were just not as significant to the drivers of the increase. Damon Del Monte: Okay. Got it. All right. Great. And then if you look at like the cost of funds this quarter, it looks like deposit costs were down a little bit, but then you had increase in Federal Home Loan advances, so that was a little bit higher. I guess kind of how are you thinking about the funding mix going forward? And do you expect there to be additional pricing pressures or pressure on the cost of funds going forward? Brian Spielmann: Yes. I would say on the wholesale side, it's really a balance of either using home loan advances or broker CDs as we do our match funding. And so we kind of actually switched out of broker CDs into home loan advances in the quarter for some of our cash flow hedges for our match funding. So that's what you saw for some of that rate differential there. From just a total funding perspective, when we think about what we're trying to do on the core deposit side, it's still competitive. I think our -- the cost of acquisition remains high. We're confident though in our ability to lend that out with our various niche C&I and our conventional C&I where we can still maintain that 3.60% to 3.65% going forward. Damon Del Monte: Got it. Okay. And then obviously, a strong first half of the year for growth. And just kind of curious with the way that the pipelines are shaping up going into the back half of the year, you seem well on target to at least hit the 10% bogey that you guys strive for. I mean, is there anything to maybe think about being softer here in the third quarter before kind of ramping back up in the fourth? Or do you think it would be pretty steady like what we saw here in this quarter in the 10% range? David Seiler: Right. I think we're still looking at the 10%. If you look at this past quarter, we had a little noise in there. If you subtract out those SBA loans that were transferred from held-for-sale, we were at about 7.2% loan growth, but then we also had $50 million higher than average on payoffs. So if you take out the SBA transfer and you correct for the excess $50 million in payoffs, we're just under 13%. I mean, so what that tells me is our business development activities are going really well. But we're not in a position to certainly say that we expect to be higher than 10%. I think we will -- we target 10%, and I think that's what we can expect in the back half and also into 2027. Operator: Your next question comes from the line of Nathan Race with Piper Sandler. Nathan Race: Appreciate all the perspective, Dave, on the exit of SBA. Just curious if you can speak more broadly in terms of some of the other out-of-footprint lending that you do, whether it's ABL or floor plan, and why those lines or verticals make more sense to continue going forward, just given maybe deposit gathering opportunities or just higher yields or returns overall? David Seiler: Right. Maybe start a little bit with a little more color on SBA. So SBA, I mean we've been looking at -- the senior management team has been looking at that for probably the last 3 or 4 years and trying to evaluate, is this a business we want to stay in? We've tried a lot of different things. I think we've had 3 leaders in the last 10 years, and we could just never get it profitable and never get it to a point where there was, I guess, a clear path to profitability. But when we look at our other business lines, I mean we've got asset-based lending. We've got a new leader there. He's been in place a little over a year. That's growing really well. We see the same thing in floor plan lending. We think there's a ton of opportunity for us to grow floor plan lending. We like our accounts receivable financing area and our equipment finance. And all of those have been much more profitable for us than SBA. So the thought is we were spending a whole lot of management time on SBA and really wanted to just focus our efforts on growing these other business lines that we see clear paths to even higher profitability on. Brian Spielmann: Nate, I can add to that, too, real quickly in terms of the profitability and the dollars, right? You can see in the decision we made in the quarter, an immediate accretive impact in 2027. That would not be the case with any of our other C&I products. There's already a benefit to the bottom line for those. There's more opportunity, and that's where we want to spend more of our time in growing those areas. Nathan Race: Okay. Got it. And I apologize, Brian, if I didn't catch it earlier, but just in terms of the fee income run rate outlook for the back half of the year. Just with SBA revenue going away and obviously, a nice wealth management increase in the quarter. It sounds like there's some seasonal factors there that helped in addition to the strength in equity markets. But just curious how you think about the overall kind of run rate in the back half of the year and kind of what the growth expectation is as you look out to 2027 as well? Brian Spielmann: Yes, you kind of hit it on the head there with the other areas that will offset SBA, in particular, private wealth with the significant increase in AUM. We like the run rate to improve there in the second half and into '27, as well as the service charge income, which we continue to have strong run rates from. So I would think we'll probably be down a little bit relative to the past 2 quarters in the second half of the year, but not materially. And we like that $8-plus million run rate. And then going off of that into '27, we'd like to continue to say 10% growth. It's really going to be more dependent on how our underlying portfolio investments mature and our limited partnership investments that we've deployed here in '26, but still feel really good about that longer-term 10% growth rate in fee income. David Seiler: Right. And maybe just to add on a little bit, Nate. I mean, we're really excited about the private wealth growth. And yes, while equities have increased and portfolio values have increased, over the past year, we've added a little over $350 million of new client dollars in private wealth. So we continue to add new relationships there. Our service charge income is up 21% over the same period last year. So we're seeing a lot of things where we're growing the core business, and we think that really positions us well in terms of fee income going forward. Nathan Race: Got it. That's really helpful. And just one clarification question on just the trajectory for loan yields. If we get back to kind of like a 20 basis points average for -- I think that implies like something around [ 6.50% or 6.65% ] for kind of a better starting point for loan yields in the third quarter. Does that sound right to you, Brian? Brian Spielmann: Yes, that's fair. Operator: We have reached the end of the Q&A session. I will now turn the call back to Dave Seiler, CEO, for closing remarks. David Seiler: Thank you for joining us today. We appreciate your time and interest in First Business Bank. Have a great day. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in First Business Financial Services, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and First Business Financial Services wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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This article first appeared on GuruFocus. Release Date: July 31, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. First Business Financial Services Inc (NASDAQ:FBIZ) reported exceptional second-quarter performance with EPS of $1.84, and excluding one-time items, EPS grew 18% from the first quarter and 26% year-over-year. Pre-tax pre-provision earnings reached a record $19.8 million for the quarter, up 15% for the first six months of 2026, reflecting strong contributions across the bank. The exit from national out-of-footprint SBA 7A lending is immediately net positive to earnings expectations, with an estimated $310,000 net pre-tax income benefit per quarter in 2027 and a 30-50 basis point improvement in the efficiency ratio. Core deposit growth outpaced loan growth in the quarter, increasing 12% annualized, with strong contributions from the Kansas City market and asset-based lending team. Fee income grew 18% year-over-year, driven by record private wealth revenues, which added $508 million in assets under management and administration over the past year, with approximately 70% from new client dollars. Net interest margin increased 22 basis points to 3.78% in the second quarter, driven by deployment of excess cash into loan growth and elevated prepayment fees. The company achieved positive operating leverage of 6.2% compared to the linked quarter and 6.4% year-over-year, supporting a strong efficiency ratio of 59.31% for the first half of 2026. Tangible book value grew 15.2% over the prior year, surpassing the company's 10% growth goal. Asset quality remained stable with non-performing assets declining during the quarter, and the company expects progress on resolving its two largest non-performing assets later this year. The company maintains strong capital levels above internal targets, providing flexibility for organic growth investments and potential share repurchases. First Business Financial Services Inc (NASDAQ:FBIZ) exited its national out-of-footprint SBA 7A lending activities due to an inability to achieve required volume and profitability, resulting in $405,000 in one-time severance costs. The SBA exit will eliminate approximately $500,000 in average quarterly SBA gain on sale revenue, which will only be partially offset by incremental net interest income and servicing income by 2027. Loan payoffs in the quarter were approximately two times or $50 million above the quarterly average over the past two years, leading to elevated prepayment fees that are expected to remain high in the third quarter. The company faces ongoing competitive pressures in both loan and deposit markets, with the cost of deposit acquisition remaining high. Second-quarter fee income declined by $206,000 from the linked quarter due to decreased swap fees and the elimination of SBA loan sale gains, highlighting the need for diversification to offset these losses. The effective tax rate for the second quarter was 7.2% due to a one-time deferred tax asset valuation allowance reversal, and the normalized rate is expected to be higher at 15-17% in the second half of 2026 and 2027. The company recorded a $552,000 impairment on historic tax credit investments during the quarter, which, while offset by tax benefits, represents a non-operating charge. Data processing expenses increased $212,000 due to annual tax processing costs associated with private wealth clients, adding to expense pressures. The company expects loan growth to slow to approximately 10% annualized for the full year, down from the 12.6% annualized growth seen in the first half of 2026, due to elevated payoffs and the SBA transfer. The SBA portfolio will continue to amortize down with no material new business expected, which could limit future net interest margin benefits from this segment. Warning! GuruFocus has detected 6 Warning Sign with FBIZ. Is FBIZ fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide more color on the decision to exit the national out-of-footprint SBA 7A lending activities and why other out-of-footprint verticals like ABL and floor plan make more sense to continue?A: Dave Seiler, CEO, explained that the SBA business was evaluated for the last three to four years and never achieved profitability despite multiple leadership changes. The underwriting standards required for national SBA volume were inconsistent with the bank's credit quality standards, and processing costs were too high. In contrast, other business lines like asset-based lending, floor plan lending, accounts receivable financing, and equipment finance have clear paths to higher profitability. Brian Spielman, CFO, added that the SBA exit is immediately accretive to earnings in 2027, which would not be the case with other C&I products, making it a strategic priority to reallocate resources to these more profitable areas. Q: What is the expected financial impact of the SBA exit, and why won't the quarterly benefit fully kick in until 2027?A: Brian Spielman, CFO, detailed that the exit results in a net pre-tax income benefit of approximately $310,000 per quarter in 2027, or about $0.03 per share after tax, equating to a 30-50 basis point improvement in the efficiency ratio. The salary and benefit savings of approximately $650,000 per quarter are immediate, but the spread income benefit from retaining loans on the balance sheet will take time to materialize. The $15 million in loans currently in process should fund by the end of 2026, with incremental net interest income of $140,000 and $20,000 in servicing income per quarter by 2027, offsetting the loss of $500,000 in average quarterly SBA gain on sale revenue. Q: Can you provide more detail on the net interest margin performance and the outlook for the near-term path given elevated prepayment fees?A: Brian Spielman, CFO, noted that the second quarter net interest margin increased 22 basis points to 3.78%, driven by the deployment of excess cash into loan growth and an increase in prepayment fees. Fees in lieu of interest contributed 37 basis points to margin, compared to the historical average of 20 basis points. The company maintains its target of 360-365 basis points for the year, which assumes about 20 basis points from prepayment and ABL fees. While prepayment activity is expected to remain elevated in the third quarter, the long-term target remains unchanged. Q: How are you thinking about the funding mix and cost of funds going forward, given the shift from broker CDs to FHLB advances?A: Brian Spielman, CFO, explained that the shift to FHLB advances was part of match funding for cash flow hedges, and the company balances between FHLB advances and broker CDs. From a total funding perspective, the cost of deposit acquisition remains competitive, but the company is confident in its ability to lend at yields that maintain the 360-365 net interest margin target. Core deposit growth outpaced loan growth in the quarter, increasing 12% annualized, with growth led by the Kansas City market and the asset-based lending team. Q: With the strong first half loan growth, what is the expectation for the back half of the year, and are there any seasonal softness expectations?A: Dave Seiler, CEO, stated that the company remains on target for 10% annual loan growth. He noted that excluding the SBA transfer and correcting for the $50 million in excess payoffs, the underlying growth rate was just under 13%, indicating strong business development activity. However, the company is not in a position to expect growth higher than 10% and targets 10% for the back half of 2026 and into 2027. Q: What is the outlook for fee income in the back half of the year and into 2027, given the elimination of SBA gains and the strong private wealth performance?A: Brian Spielman, CFO, indicated that fee income will likely be down slightly in the second half relative to the past two quarters but not materially, maintaining an $8 million-plus run rate. Private wealth fees grew nearly 14% year-over-year, and service charge income is up 21%. The company continues to target 10% growth in fee income for the year, supported by 17% year-to-date growth. Dave Seiler, CEO, added that private wealth added over $350 million in new client dollars over the past year, positioning the business well for future growth. Q: Can you provide more detail on the one-time items impacting second quarter earnings and the effective tax rate outlook?A: Brian Spielman, CFO, explained that the second quarter EPS of $1.84 included a net benefit of $0.14 from two one-time events: a $1.5 million release of the deferred tax valuation allowance related to Wisconsin state law changes, which provided an $0.18 benefit, and $405,000 in SBA-related severance costs, which offset by $0.04. The effective tax rate was 7.2% for the quarter, but excluding the one-time benefit, it was 15.9%. For the full year 2026, the effective tax rate is expected to be approximately 13-15%, normalizing to 15-17% for the second half of 2026 and 2027. Q: How are you thinking about capital management and the potential for share repurchases given the strong capital levels?A: Brian Spielman, CFO, stated that the CET1 ratio exceeded the 9.5% internal target and total capital ratio remained above the 12% target. The priority remains investing in the business to support organic growth, which creates the greatest long-term value. However, when prudent growth opportunities do not fully utilize excess capital, share repurchases remain an attractive tool to return capital to shareholders. The company has a $5 million share repurchase authorization and continues to evaluate all capital management alternatives, including the common stock dividend. Q: Can you provide more detail on the competitive dynamics in your markets for both loans and deposits?A: Dave Seiler, CEO, stated that competition is always strong, particularly for new depository clients where rates are important, and the same is true on the loan side. However, he does not see a meaningful shift in competition levels compared to the last five or six years. The company's Net Promoter Score reflects the strength of its relationship model, and it continues to benefit from M For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management exited national out-of-footprint SBA 7(a) lending after determining that achieving necessary scale required underwriting flexibility inconsistent with the bank's credit quality standards. The SBA exit addresses a structural mismatch where the bank's robust compliance and closing operations resulted in 'overprocessing' costs that hindered economic returns. Core loan growth of 7.2% annualized (excluding SBA transfers) was tempered by elevated payoffs, which ran approximately $50 million above the two-year quarterly average due to client M&A and secondary market refinancing. Asset-based lending (ABL) emerged as a primary growth engine, with portfolio balances increasing 48% annualized year-to-date following leadership changes and sales team expansion. Net interest margin expansion to 3.78% was driven by the deployment of excess cash into loans and a significant contribution from fees in lieu of interest, which included $1.3 million in prepayment fees, provided a 37 basis point lift. Private Wealth management achieved record revenues, with 70% of the $508 million in trailing twelve-month asset growth coming from new client dollars rather than market appreciation. The bank is leveraging M&A disruption in its primary markets to attract high-quality bankers and clients who value a relationship-based service model. Management maintains a 10% annual growth target for loans, deposits, and fee income, supported by strong first-half momentum and a robust business development pipeline. Net interest margin is projected to normalize to a range of 3.60% to 3.65% for the full year as elevated prepayment fee activity is expected to moderate in the second half. The SBA exit is projected to be immediately net positive to earnings, with a forecasted $0.03 per share after-tax benefit and 30-50 basis points of efficiency ratio improvement by 2027. Operating expenses are expected to trend modestly lower as SBA-related personnel savings are realized, though a portion will be reinvested into revenue-producing talent in niche C&I and Private Wealth. The effective tax rate is expected to normalize to 15% to 17% for the second half of 2026 following the one-time reversal of the Wisconsin deferred tax asset valuation allowance. A $1.5 million net benefit ($0.18 EPS) was realized from the reversal of a deferred tax valuation allowance following updated guidance on Wisconsin state tax laws. One-time severance costs of $405,000 ($0.04 EPS impact) were recorded in the second quarter related to the elimination of national SBA lending positions. The bank transferred $23.7 million in SBA 7(a) loans from held-for-sale to the held-for-investment portfolio as part of the strategic exit from national lending. A $552,000 impairment was recognized on historic tax credit investments, which management noted was more than offset by associated tax benefits. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that while fees in lieu of interest contributed 37 basis points this quarter, they typically model for a 20 basis point historical average. The 3.60% to 3.65% NIM target accounts for the expected normalization of these 'vagaries' in prepayment activity. Salary and benefit savings are immediate, but the full $0.03 EPS benefit won't be realized until 2027 as approximately $15 million in remaining SBA loans fund and move to the balance sheet. The immediate loss of roughly $500,000 in quarterly gain-on-sale revenue will be offset by compensation savings and eventual incremental interest income. Management noted that while competition for deposits remains high and acquisition costs are elevated, they have not seen a 'meaningful shift' in competitive intensity compared to the last five years. The bank relies on its relationship model and treasury management talent to win its 'fair share' of business despite rate pressures. Unlike the SBA segment, other niche lines like ABL, floor plan, and equipment finance are already profitable with clear paths to higher returns. Exiting SBA allows management to redirect significant time and resources toward these higher-yielding C&I products where the bank maintains a competitive advantage.

For the quarter ended June 2026, First Business Financial Services (FBIZ) reported revenue of $46.71 million, up 13.8% over the same period last year. EPS came in at $1.70, compared to $1.35 in the year-ago quarter. The reported revenue represents a surprise of +2.66% over the Zacks Consensus Estimate of $45.5 million. With the consensus EPS estimate being $1.54, the EPS surprise was +10.39%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how First Business Financial Services performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Efficiency ratio: 57.6% versus 59.4% estimated by three analysts on average. Net Interest Margin: 3.8% versus the three-analyst average estimate of 3.6%. Net charge-offs (recoveries) as a percent of average gross loans and leases (annualized): 0.1% versus the two-analyst average estimate of 0.2%. Average Balance - Total interest-earning assets: $4.03 billion compared to the $4.1 billion average estimate based on two analysts. Total Non-Interest Income: $8.57 million versus the three-analyst average estimate of $8.56 million. Net Interest Income: $38.14 million versus the three-analyst average estimate of $36.96 million. Service charges on deposits: $1.34 million versus $1.08 million estimated by two analysts on average. Swap fees: $0.16 million versus $0.67 million estimated by two analysts on average. Private wealth management service fees: $4.26 million compared to the $4 million average estimate based on two analysts. View all Key Company Metrics for First Business Financial Services here>>> Shares of First Business Financial Services have returned +4.4% over the past month versus the Zacks S&P 500 composite's -1.5% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Business Financial Services, Inc. (FBIZ) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in First Business Financial Services, Inc.? Here are five stocks we like better. Record profitability: First Business reported Q2 EPS of $1.84, including a $0.14-per-share net benefit from one-time items, while pre-tax, pre-provision earnings reached a record $19.8 million. Excluding one-time effects, EPS rose 18% sequentially and 26% year over year. National SBA exit: The company ended out-of-footprint SBA 7(a) lending to improve profitability and maintain credit standards. Salary savings and retained loan income are expected to produce an estimated $310,000 quarterly pre-tax benefit in 2027, while improving the efficiency ratio by 30–50 basis points. Strong core growth and margins: Loans grew 10% annualized in Q2 and core deposits grew 12%, while net interest margin expanded 22 basis points to 3.78%. Management maintained its 2026 targets of approximately 10% annual loan and deposit growth and a 3.60%–3.65% full-year net interest margin. First Business Financial Services (NASDAQ:FBIZ) reported second-quarter 2026 earnings per share of $1.84, including a net $0.14-per-share benefit from two one-time items, as loan growth, margin expansion and fee income supported record pre-tax, pre-provision earnings. CEO Dave Seiler said pre-tax, pre-provision earnings reached a record $19.8 million in the quarter and increased 15% in the first half of 2026. Excluding the one-time items, earnings per share rose 18% from the first quarter and 26% from the prior-year period, he said. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now The company’s second-quarter results included an $0.18-per-share benefit from releasing the remaining $1.5 million deferred tax valuation allowance related to changes in Wisconsin tax law. That benefit was partly offset by $405,000 of severance costs, equivalent to $0.04 per share, related to the company’s decision to exit national, out-of-footprint SBA 7(a) lending operations. First Business ended its national SBA 7(a) lending activities at the end of May, though it will retain its SBA preferred lender status and continue to offer 7(a) and 504 loans to clients in its bank markets as needed. → Microsoft Just Flipped the AI Spending Narrative Overnight Seiler said the company had invested for roughly a decade in expanding SBA talent and capabilities nationally but did not achieve the desired loan volume and profitability. He said the company concluded that industry standards for SBA underwriting and compliance did not align with First Business’ credit-quality standards. “We determined that building the national SBA volume at scale would require a level of underwriting flexibility that was inconsistent with our standards for credit quality,” Seiler said. → Carrier Earnings Could Send the Stock to a New All-Time High CFO Brian Spielmann said the former strategy involved selling 75% of SBA production and keeping 25% on the balance sheet. At June 30, the company moved all SBA loans previously held for sale onto its balance sheet. New SBA production is expected to be retained and serviced over the life of the loans. The company has approximately $15 million of SBA loans in process that it expects to fund by year-end. Based on historical SBA spreads and the expected retention of those loans, Spielmann estimated that the company could generate about $140,000 in additional quarterly net interest income and $20,000 in quarterly servicing income by 2027. Those gains would partly offset the loss of roughly $500,000 in average quarterly SBA gain-on-sale revenue. With quarterly salary and benefit savings of about $650,000 from eliminated positions, the company expects a net pre-tax income benefit of approximately $310,000 per quarter in 2027, or about $0.03 per share after tax. It also expects the change to improve its efficiency ratio by 30 to 50 basis points, all else equal. Loans grew at a 10% annualized rate during the second quarter, including the transfer of $23.7 million in SBA loans from held-for-sale to loans held for investment. Excluding that transfer, annualized loan growth was 7.2%. Seiler said loan payoffs were unusually high, running about $50 million above the company’s quarterly average of the past two years. He attributed recent payoff activity primarily to client property sales, secondary-market refinancings and mergers and acquisitions involving commercial clients. Conventional loan growth was broad across the company’s bank markets, with particular strength in Southeast Wisconsin and Kansas City. Multifamily and owner-occupied commercial real estate lending increased, while investor commercial real estate declined. Asset-based lending portfolio balances grew at a 19% annualized rate in the quarter and 48% annualized year to date. For the first half, loans grew by $212 million, or 12.6% on an annualized basis including the SBA transfer. Management reiterated its goal of 10% annual loan growth for 2026 and said it expects a similar pace in the second half and into 2027. Core deposits increased at a 12% annualized rate during the second quarter, following 18% annualized growth in the first quarter. Growth was led by the Kansas City market and the asset-based lending team. Management expects deposit growth to be approximately 10% on an annual basis. Net interest margin increased 22 basis points sequentially to 3.78%. Spielmann noted that the first-quarter margin was affected by fewer accrual days, and on a comparable basis the margin rose 17 basis points from the first quarter. The increase reflected the deployment of excess cash held at the Federal Reserve into loan growth, along with higher prepayment fees. Earning-asset yields rose 24 basis points, while the rate paid on average total bank funding increased 2 basis points. Fees in lieu of interest contributed 37 basis points to net interest margin, compared with 26 basis points in the first quarter and a historical average of 20 basis points. Total fees in lieu of interest were $3.2 million, including $1.3 million in prepayment fees. Management expects elevated prepayment activity to continue into the third quarter before slowing in the second half. The company maintained its full-year net interest margin target of 3.60% to 3.65%. Fee income increased 18% year over year despite the absence of SBA gain-on-sale revenue. Private wealth generated record revenue, and the business added $508 million in assets under management and administration over the past year, approximately 70% of which represented new client dollars. Private wealth revenue rose $509,000, or nearly 14%, from a year earlier. Income from limited partnership investments reached $796,000 in the second quarter and $1.1 million for the first half, compared with $1.2 million for all of 2025. The company said it expects returns from those investments to increase as the portfolio matures. Operating noninterest expense declined $189,000 from the first quarter to $26.9 million. Excluding SBA severance costs and an impairment on historic tax credit investments, second-quarter expenses were largely in line with the prior quarter. The company expects the expense run rate to trend modestly lower through the remainder of 2026 as SBA-related personnel savings are realized, while it selectively reinvests in revenue-producing talent. First Business reported operating leverage of 6.2% from the linked quarter and 6.4% from the prior-year quarter. Its first-half efficiency ratio was 59.31%, meeting its long-term target of less than 60%. The second-quarter effective tax rate was 7.2%, or 15.9% excluding the deferred tax valuation allowance reversal. Management now expects a full-year 2026 effective tax rate of approximately 13% to 15%, followed by a normalized rate of about 15% to 17% in the second half of 2026 and in 2027. The company said its common equity tier 1 ratio exceeded its 9.5% internal target at June 30, while its total capital ratio remained above its 12% internal target. Management said it continues to prioritize organic growth but may also consider dividends and its $5 million share repurchase authorization when growth opportunities do not fully use excess capital. First Business Financial Services, Inc (NASDAQ:FBIZ) is a bank holding company headquartered in Madison, Wisconsin, offering a suite of commercial banking and financial services. Through its wholly owned subsidiary, First Business Bank, the company provides relationship-driven lending, deposit and treasury management solutions to small and mid-sized businesses, nonprofit organizations and high-net-worth individuals. Its core products include commercial real estate financing, equipment leasing, SBA-guaranteed lending, and cash management services. In addition to lending and depository services, First Business Bank delivers investment advisory and wealth management through dedicated trust and private banking teams. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "First Business Financial Services Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

First Business Financial Services (FBIZ) came out with quarterly earnings of $1.7 per share, beating the Zacks Consensus Estimate of $1.54 per share. This compares to earnings of $1.35 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +10.39%. A quarter ago, it was expected that this bank holding company for First Business Bank and First Business Bank-Milwaukee would post earnings of $1.42 per share when it actually produced earnings of $1.44, delivering a surprise of +1.41%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. First Business Financial Services, which belongs to the Zacks Banks - Midwest industry, posted revenues of $46.71 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.66%. This compares to year-ago revenues of $41.04 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. First Business Financial Services shares have added about 24.5% since the beginning of the year versus the S&P 500's gain of 6.9%. While First Business Financial Services has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for First Business Financial Services was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.60 on $46.83 million in revenues for the coming quarter and $6.21 on $183.87 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Midwest is currently in the top 31% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Ames National (ATLO), another stock in the same industry, has yet to report results for the quarter ended June 2026. This bank is expected to post quarterly earnings of $0.65 per share in its upcoming report, which represents a year-over-year change of +27.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Ames National's revenues are expected to be $18.6 million, up 15.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Business Financial Services, Inc. (FBIZ) : Free Stock Analysis Report Ames National Corporation (ATLO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

-- Sustained balance sheet growth and disciplined operating efficiency drive exceptional earnings and tangible book value growth -- MADISON, Wis., July 30, 2026--(BUSINESS WIRE)--First Business Financial Services, Inc. (the "Company", the "Bank", or "First Business Bank") (Nasdaq: FBIZ) reported quarterly net income available to common shareholders of $15.4 million, or earnings per share ("EPS") of $1.84. This compares to net income available to common shareholders of $12.0 million, or $1.44 per share, in the first quarter of 2026 and $11.2 million, or $1.35 per share, in the second quarter of 2025. EPS for the second quarter of 2026 included a tax benefit that was partially offset by one-time compensation costs, resulting in a net benefit of $0.14 per share. "Our strong second quarter and first-half 2026 results position us to achieve our annual goal of 10% growth in loans, core deposits, revenue, and earnings," said Dave Seiler, President and Chief Executive Officer. "During the quarter, we generated record pre-tax, pre-provision earnings by executing our relationship-based growth strategy, achieving strong loan and deposit growth with positive operating leverage. Our higher-yielding specialty C&I lending portfolios supported a strong net interest margin, which measured 3.67% and 3.68% for the first six months of 2026 and 2025, respectively. These achievements, along with stable asset quality, drove 11% growth in operating revenue, 15% growth in pre-tax, pre-provision earnings, and 17% growth in net income for the first half of 2026, excluding the impact of this quarter's $1.5 million tax benefit. This demonstrates our team's exceptional execution of our long-term strategic goals." "Our commitment to long-term profitability drove our decision to exit Small Business Administration 7(a) lending activities outside our existing bank market footprint. We expect this to have a minimal impact on 2026 earnings and to provide a modest earnings benefit in 2027. We are redirecting resources to higher-return growth opportunities, including our existing bank markets, higher-yielding niche C&I lending businesses, private wealth management, and limited partnership investments. We believe efficient execution of these growth strategies will continue to support strong shareholder returns while maintaining disciplined risk management." Quarterly Highlights Record Pre-Tax, Pre-Provision ("PTPP") Income. PTPP income grew to $19.8 million, up 15.1% and 23.7% from the linked and prior-year quarters, respectively, and up 14.9% on a year-to-date basis. This performance reflects continued growth across the Company’s balance sheet coupled with positive operating leverage. Robust Core Deposit Growth. Core deposits grew $81.6 million, or 11.7% annualized, from the linked quarter and $344.6 million, or 13.6%, from the second quarter of 2025. Continued Loan Growth. Loans increased $87.2 million, or 10.0% annualized, from the linked quarter and $336.2 million, or 10.3%, from the second quarter of 2025, including the transfer of $23.7 million in held-for-sale SBA loans to loans and leases receivable. Net Interest Margin Expansion. The Company's net interest margin was 3.78%, compared to 3.56% for the linked quarter. Expansion primarily reflects increased prepayment fees and asset-based loan fees. Net interest margin was strong and stable at 3.67% and 3.68% for the first six months of both 2026 and 2025, respectively. The Company maintains its annual net interest margin target range of 3.60%-3.65%. Strong Non-interest Income. Non-interest income increased $1.3 million, up 18.1% from the prior-year quarter, driven by a 13.6% increase in private wealth management service fees. Non-interest income for the first six months of 2026 grew 16.9% over the prior-year period, or 24.3% after excluding gains on the sale of SBA loans, reflecting the ongoing success of revenue diversification efforts. Decrease in Non-Performing Assets: Non-performing assets ("NPAs") declined $2.4 million, or 6.0%, from the linked quarter, resulting in an eight basis point improvement in the ratio of NPAs to Total Assets. Continued Tangible Book Value Growth. The Company’s strong earnings continued to drive growth in tangible book value per share, producing a 15.2% increase compared to the prior-year quarter. Quarterly Financial Results Second Quarter 2026 Compared to First Quarter 2026 Net interest income increased $2.6 million, or 7.4%, to $38.1 million. Net interest income increased as average loans and leases receivable grew by $124.7 million, or 14.6% annualized during the second quarter. The increase also benefited from a $645,000 increase in prepayment fees. The yield on average interest-earning assets increased 24 basis points to 6.45% from 6.21%, primarily due to the deployment of excess cash balances held at the Federal Reserve into loan growth during the second quarter and higher prepayment fees. The rate paid for average core deposits was stable at 2.40% compared to 2.41%, while the rate paid on average total bank funding increased two basis points to 2.75% from 2.73%. Total bank funding includes total deposits and Federal Home Loan Bank ("FHLB") advances. Net interest margin increased to 3.78% from 3.56% in the linked quarter, primarily due to the deployment of excess cash balances held at the Federal Reserve into loan growth during the second quarter and higher prepayment fees. The Company maintains a long-term target for net interest margin in the range of 3.60% - 3.65%. Performance in future quarters will vary due to factors such as the level of fees in lieu of interest and the timing, pace, and scale of future interest rate changes. The Bank reported provision for credit losses of $2.1 million compared to $3.0 million in the linked quarter. Compared to the linked quarter, the provision for credit losses was primarily driven by lower net charge-offs and a decrease in qualitative reserve factors within the general reserve, partially offset by increases in general reserves due to quantitative reserve factors and loan growth. See the Provision for Credit Loss breakdown table below for more detail. Non-interest income decreased $206,000, or 2.3%, to $8.6 million. Excluding gain on sale of SBA loans, non-interest income increased $386,000, or 4.7%. Gain on sale of SBA loans decreased $592,000 due to management's decision to hold for investment any existing and new SBA 7(a) loans. Commercial loan swap fee income decreased $466,000, or 74.2%, to $162,000. Swap fee income varies from period to period based on loan activity and the interest rate environment. Private wealth fee income increased $380,000, or 9.8%, to $4.3 million. Private wealth assets under management and administration measured $4.235 billion on June 30, 2026, up $353.8 million or, 36.47% annualized from the prior quarter. Results for the quarter benefited from seasonal client tax processing fees of $247,000. Fee income is primarily based on asset levels and may vary based on seasonal activity and the timing of fluctuations in market values. Other non-interest income increased $362,000 to $1.5 million, primarily due to an increase in limited partnership investment income. Non-interest expense increased $896,000, or 3.3%, to $27.8 million, while operating expense decreased $189,000, or 0.7%, to $26.9 million. Compensation expense was $18.5 million, decreasing by $79,000, or 0.4% from the linked quarter. The decrease was primarily driven by lower salaries and benefits expense associated with the Company's strategic exit from out of market SBA 7(a) lending activities, as well as lower payroll taxes following the first quarter annual cash bonus payout. These decreases were almost fully offset by $405,000 of severance expense related to the out of market SBA 7(a) lending exit and higher annual cash bonus accruals reflecting above-target Company performance. Average full-time equivalents ("FTEs") for the second quarter of 2026 were 360, compared to 373 in the linked quarter, with the decrease primarily driven by exit of out of market SBA 7(a) lending. Excluding FTEs in out of market SBA 7(a) lending from both periods of comparison, average FTEs were 354, compared to 352 in the linked quarter. Other non-interest expense increased $646,000 to $1.8 million, primarily due to a $552,000 impairment on tax credit investments. The impairment on tax credit investments is related to historic rehabilitation tax credits that are more than offset by a reduction to income tax expense in current or prior periods. Data processing expense increased $212,000, or 16.7%, to $1.5 million, due to an increase in core processing costs and annual expense related to tax processing on behalf of the Bank's private wealth clients. Marketing expense increased $129,000, or 18.1%, to $840,000, primarily due to timing of marketing campaigns. Income tax expense decreased $964,000 to $1.2 million. The effective tax rate was 7.2% for the three months ended June 30, 2026, compared to 15.2% for the linked quarter. The change in tax expense primarily reflects the $1.5 million, or $0.18 after tax per share, release of the remaining state deferred tax valuation allowance which was initially recognized in 2023 following the enactment of a state law that excluded small business lending interest from state tax. In the second quarter 2026, this valuation allowance was released due to sustained historical and forecasted Wisconsin taxable income. Excluding the allowance release, the effective tax rate was 15.9%. The Company expects to report a full year 2026 effective tax rate between 13% and 15%. For the remaining quarters, the effective quarterly tax rate is estimated to range between 15% and 17%. Total period-end loans and leases receivable increased $87.2 million, or 10.0% annualized, to $3.588 billion. The average rate earned on average loans and leases receivable was 6.76%, up 19 basis points from 6.57% in the prior quarter. Excluding the transfer of $23.7 million of SBA 7(a) loans from held-for-sale to loans and leases receivable, period-end loans increased 7.2% during the quarter. Loan growth was moderated by elevated payoff activity, with payoffs approximately $50 million above the Company's quarterly average over the past two years. CRE loans increased $66.3 million, or 12.7%, to $2.162 billion, primarily due to growth across the bank markets. C&I loans increased $22.1 million, or 6.5% to $1.380 billion, primarily due to the aforementioned transfer of held for sale SBA 7(a) loans to held for investment and an increase in asset-based lending loans. Total period-end core deposits increased $81.6 million, or 11.7% annualized, to $2.878 billion. The average rate paid was stable at 2.40% compared to 2.41% in the prior quarter. Period-end wholesale funding, including FHLB advances and brokered deposits, decreased $12.1 million, or 1.19%, to $1.006 billion. Wholesale funding continues to support interest rate risk management through match-funding of fixed-rate assets to enhance funding flexibility and help stabilize net interest margin. Wholesale deposits decreased $55.5 million to $714.5 million. The average rate paid on wholesale deposits increased six basis points to 4.03% and the weighted average original maturity remained flat at 3.3 years. FHLB advances increased $43.3 million to $291.9 million. The average rate paid on FHLB advances increased 39 basis points to 3.53% and the weighted average original maturity decreased to 6.0 years from 6.2 years. Non-performing assets decreased $2.4 million to $38.1 million, or 0.86% of total assets, compared to 0.94% in the prior quarter. The decline was primarily due to a repayment of a non-accrual SBA loan and lower non-accrual equipment finance loans and leases. The allowance for credit losses, including the unfunded credit commitments reserve, increased $1.0 million, or 2.7%, primarily due to increases in general reserves due to loan growth and a modest decline in the economic outlook in our model forecast, partially offset by a decrease in general reserves due to qualitative risk factors and lower specific reserves. The allowance for credit losses, including unfunded credit commitment reserves, as a percent of total gross loans and leases was 1.10% in both quarters. Second Quarter 2026 Compared to Second Quarter 2025 Net interest income increased $4.4 million, or 12.9%, to $38.1 million. Growth reflects a 9.59% increase in average gross loans and leases and a $706,000 increase in prepayment fees. The yield on average interest-earning assets decreased 20 basis points to 6.45% from 6.65%. This decrease in yield was primarily due to the decrease in short-term market rates, partially offset by an increase in prepayment fees and asset-based loan fees. The interest-earning asset beta was 28.8%. The rate paid for average core deposits decreased 35 basis points to 2.40% from 2.75%. The rate paid for average total bank funding decreased 33 basis points to 2.75% from 3.08%. The core deposit and total bank funding betas compared to the prior year were 50.0% and 47.1%, respectively. Net interest margin increased 11 basis points to 3.78% from 3.67%. The increase in net interest margin was primarily due to an increase in prepayment fees and asset-based loan fees, partially offset by a decrease in short-term market rates. The Company reported provision for credit losses of $2.1 million, compared to $2.7 million in the second quarter of 2025. See the Provision for Credit Loss breakdown table below for more detail. Non-interest income increased $1.3 million, or 18.1%, to $8.6 million. Excluding gain on sale of SBA loans, non-interest income increased $1.7 million, or 24.9%. Other non-interest income increased $731,000, or 91.6%, to $1.5 million, primarily driven by higher returns on the Company’s investments in limited partnerships. Private wealth fee income increased $509,000, or 13.6%, to $4.3 million. Private wealth assets under management and administration measured $4.235 billion at June 30, 2026 up $503.9 million, or 13.5%. Fee income is primarily based on asset levels and may vary based on seasonal activity and the timing of fluctuations in market values. Service charges on deposits increased $233,000, or 21.1%, to $1.3 million, primarily driven by new and expanded core deposit relationships. Bank-owned life insurance income increased $142,000, or 23.1%, to $757,000, primarily due to the purchase of new policies in the second quarter of 2025. Gain on sale of SBA loans decreased $397,000 due to management's decision to hold for investment any existing and new SBA 7(a) loans. Non-interest expense increased $2.9 million, or 11.5%, to $27.8 million. Operating expense increased $1.9 million or 7.5%, to $26.9 million. Compensation expense increased $1.9 million, or 11.7%, to $18.5 million. Growth reflects annual merit increases and promotions, the aforementioned $405,000 of severance expense related to the out of market SBA 7(a) lending exit, and higher annual cash bonus accruals due to improved Company performance. Excluding SBA severance, compensation expense increased $1.5 million, or 9.2%. Average FTEs decreased 1.1% to 360 in the second quarter of 2026, compared to 364 in the second quarter of 2025. Excluding FTEs in out of market SBA 7(a) lending in both periods of comparison, average FTEs increased 2.9% to 354 in the second quarter of 2026, compared to 344 in the second quarter of 2025. Computer software expense increased $302,000, or 18.2%, to $2.0 million, primarily due to our commitment to innovative technology to support growth initiatives, enhance productivity, and improve the client experience. Marketing expense decreased $222,000, or 20.9%, to $840,000, primarily due to seasonality and timing of marketing campaigns. Management expects marketing spend for full year 2026 to be in line with prior-year spend. Total period-end loans and leases receivable increased $336.2 million, or 10.3%, to $3.588 billion. The average yield decreased 23 basis points to 6.76%, primarily due to a decrease in short-term market rates. CRE loans increased $214.6 million, or 11.0%, to $2.162 billion, primarily due to growth across our bank markets. C&I loans increased $121.3 million, or 9.6%, to $1.380 billion, primarily due to growth across our bank markets and in asset-based lending. Total period-end core deposits grew $344.6 million, or 13.6%, to $2.878 billion. The average rate paid decreased 35 basis points to 2.40%, reflecting a decrease in short-term market rates. Period-end wholesale funding increased $12.9 million, or 1.3%, to $1.006 billion. Wholesale deposits decreased $57.6 million, or 7.5%, to $714.5 million. The average rate paid on wholesale deposits decreased one basis point to 4.03% and the weighted average original maturity decreased to 3.3 years from 4.1 years. FHLB advances increased $70.7 million, or 31.9%, to $346.8 million. The average rate paid on FHLB advances increased 21 basis points to 3.53% and the weighted average original maturity increased to 6.0 years from 5.5 years. Non-performing assets increased to $38.1 million, or 0.86% of total assets, from $28.7 million, or 0.72% of total assets, primarily reflecting the fourth quarter 2025 downgrade of $20.4 million of CRE loans from a single client relationship. The increase was partially offset by a $3.4 million sale at par in the first quarter of 2026 related to that same relationship, paydowns in SBA, and lower non-accrual balances from equipment finance loans. The allowance for credit losses, including unfunded commitment reserves, increased $1.3 million to $39.5 million primarily due to higher general reserves as a result of loan growth and quantitative factors, partially offset by lower specific reserves and lower qualitative factors. The allowance for credit losses as a percent of total gross loans and leases was 1.10%, compared with 1.18% in the prior year. Dividend Announced On July 30, 2026, the Company's Board of Directors declared a quarterly cash dividend on its common stock of $0.34 per share, which is equivalent to a dividend yield of 2.01% based on the market close price of $67.58 on Wednesday, July 29, 2026. The quarterly dividend is the same as the quarterly dividend declared in April 2026, and based on second quarter 2026 earnings per share, this represents a dividend payout ratio of 18%. This regular cash dividend is payable on August 26, 2026, to shareholders of record at the close of business on August 12, 2026. The Board of Directors also declared a dividend on the Company’s 7% Series A Preferred Stock of $17.50 per share, payable on September 15, 2026, to shareholders of record on August 28, 2026. Earnings Release Supplement and Conference Call On July 30, 2026, the Company posted an earnings release supplement to its website firstbusiness.bank under the "Investor Relations" tab which will also be furnished to the U.S. Securities and Exchange Commission on July 30, 2026. The information included in the supplement provides an overview of the Company’s recent operating performance, financial condition, and other data relevant to the quarter. The Company intends to use this supplement in connection with its second quarter 2026 earnings call to be held at 8:00 a.m. Central time on July 31, 2026. The conference call can be accessed at 833-461-5787 (585-542-9983 if outside the United States and Canada), using the conference call access code: FBIZ, 940117929. Investors may also listen live via webcast at: https://events.q4inc.com/attendee/940117929. The webcast archive of the conference call will be available on the Company’s website, ir.firstbusiness.bank. About First Business Bank First Business Bank® specializes in Business Banking, including Commercial Banking and Specialty Finance, Private Wealth, and Bank Consulting services, and through its refined focus delivers unmatched expertise, accessibility, and responsiveness. Specialty Finance solutions are delivered through First Business Bank’s wholly owned subsidiary First Business Specialty Finance, LLC®. First Business Bank is a wholly owned subsidiary of First Business Financial Services, Inc®. (Nasdaq: FBIZ). For additional information, visit firstbusiness.bank. This release may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which reflect First Business Bank’s current views with respect to future events and financial performance. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results, or other developments. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, uncertainties, and other factors that may cause actual results to differ materially from the views, beliefs, and projections expressed in such statements. Such statements are subject to risks and uncertainties, including among other things: Adverse changes in the economy or business conditions, either nationally or in our markets including, without limitation, inflation, economic downturn, labor shortages, wage pressures, the adverse effects of public health events on the global, national, and local economy, and geopolitical instability and international conflicts that may affect energy prices or otherwise result in market volatility. Uncertainty created by potential federal government actions relating to the authority of regulatory agencies (including bank regulators), international trade policy, prolonged shutdown of the federal government, and other significant policy matters. Competitive pressures among depository and other financial institutions nationally and in the Company’s markets. Increases in defaults by borrowers and other delinquencies. Management’s ability to manage growth effectively, including the successful expansion of our client support, administrative infrastructure, and internal management systems. Fluctuations in interest rates and market prices. Changes in legislative or regulatory requirements applicable to the Company and its subsidiaries. Changes in tax requirements, including tax rate changes, new tax laws, and revised tax law interpretations. Fraud, including client and system failure or breaches of our network security, including the Company’s internet banking activities. Failure to comply with the applicable SBA regulations in order to maintain the eligibility of the guaranteed portion of SBA loans. Ongoing volatility in the banking sector may result in new legislation, regulations or policy changes that could subject the Company and the Bank to increased government regulation and supervision. The proportion of the Company’s deposit account balances that exceed FDIC insurance limits may expose the Bank to enhanced liquidity risk. Increases in FDIC insurance assessments. For further information about the factors that could affect the Company’s future results, please see the Company’s annual report on Form 10-K for the year ended December 31, 2025, and other filings with the Securities and Exchange Commission. SELECTED FINANCIAL CONDITION DATA STATEMENTS OF INCOME NET INTEREST INCOME ANALYSIS BETA ANALYSIS PROVISION FOR CREDIT LOSS COMPOSITION ALLOWANCE FOR CREDIT LOSS COMPOSITION PERFORMANCE RATIOS ASSET QUALITY RATIOS NET CHARGE-OFFS (RECOVERIES) CAPITAL RATIOS LOAN AND LEASE RECEIVABLE COMPOSITION DEPOSIT COMPOSITION SOURCES OF LIQUIDITY EARNINGS PER SHARE PRIVATE WEALTH OFF-BALANCE SHEET COMPOSITION NON-GAAP RECONCILIATIONS Certain financial information provided in this release is determined by methods other than in accordance with generally accepted accounting principles (United States) ("GAAP"). Although the Company’s management believes that these non-GAAP financial measures provide a greater understanding of its business, these measures are not necessarily comparable to similar measures that may be presented by other companies. TANGIBLE BOOK VALUE "Tangible book value per share" is a non-GAAP measure representing tangible common equity divided by total common shares outstanding. "Tangible common equity" itself is a non-GAAP measure representing common stockholders’ equity reduced by intangible assets, if any. The Company’s management believes that this measure is important to many investors in the marketplace who are interested in period-to-period changes in book value per common share exclusive of changes in intangible assets. The information provided below reconciles tangible book value per share and tangible common equity to their most comparable GAAP measures. TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS "Tangible common equity to tangible assets" ("TCE") is defined as the ratio of common stockholders’ equity reduced by intangible assets, if any, divided by total assets reduced by intangible assets, if any. The Company’s management believes that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, each exclusive of changes in intangible assets. The information below reconciles tangible common equity and tangible assets to their most comparable GAAP measures. RETURN ON AVERAGE TANGIBLE COMMON EQUITY "Return on Average Tangible Common Equity" ("ROATCE") is defined as the ratio net income available to common shareholders divided by average tangible common equity. The Company’s management believes that this measure is important to many investors in the marketplace who are interested in the return generated for common shareholders on the tangible capital invested. The information below reconciles average tangible common equity to its most comparable GAAP measure. EFFICIENCY RATIO & PRE-TAX, PRE-PROVISION ADJUSTED EARNINGS "Efficiency ratio" is a non-GAAP measure representing non-interest expense excluding the effects of the SBA recourse provision, impairment of tax credit investments, losses or gains on repossessed assets, amortization of other intangible assets and other discrete items, if any, divided by operating revenue, which is equal to net interest income plus non-interest income less realized gains or losses on securities, if any. "Pre-tax, pre-provision adjusted earnings" is defined as operating revenue less operating expense. In the judgment of the Company’s management, the adjustments made to non-interest expense and non-interest income allow investors and analysts to better assess the Company’s operating expenses in relation to its core operating revenue by removing the volatility that is associated with certain one-time items and other discrete items. The information provided below reconciles the efficiency ratio and pre-tax, pre-provision adjusted earnings to its most comparable GAAP measure. View source version on businesswire.com: https://www.businesswire.com/news/home/20260730308044/en/ Contacts First Business Financial Services, Inc.Brian D. SpielmannChief Financial [email protected]

Eagle Bancorp Montana, Inc. (EBMT) came out with quarterly earnings of $0.47 per share, missing the Zacks Consensus Estimate of $0.5 per share. This compares to earnings of $0.41 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -6.00%. A quarter ago, it was expected that this company would post earnings of $0.45 per share when it actually produced earnings of $0.51, delivering a surprise of +13.33%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Eagle Bancorp Montana, which belongs to the Zacks Banks - Midwest industry, posted revenues of $24.16 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.79%. This compares to year-ago revenues of $22.95 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Eagle Bancorp Montana shares have added about 18.2% since the beginning of the year versus the S&P 500's gain of 8.3%. While Eagle Bancorp Montana has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Eagle Bancorp Montana was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.51 on $24.2 million in revenues for the coming quarter and $2.04 on $95.1 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Midwest is currently in the top 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, First Business Financial Services (FBIZ), has yet to report results for the quarter ended June 2026. The results are expected to be released on July 30. This bank holding company for First Business Bank and First Business Bank-Milwaukee is expected to post quarterly earnings of $1.54 per share in its upcoming report, which represents a year-over-year change of +14.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. First Business Financial Services' revenues are expected to be $45.5 million, up 10.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Eagle Bancorp Montana, Inc. (EBMT) : Free Stock Analysis Report First Business Financial Services, Inc. (FBIZ) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Civista Bancshares (CIVB) came out with quarterly earnings of $0.69 per share, beating the Zacks Consensus Estimate of $0.67 per share. This compares to earnings of $0.66 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +2.99%. A quarter ago, it was expected that this bank holding company would post earnings of $0.56 per share when it actually produced earnings of $0.74, delivering a surprise of +32.14%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Civista Bancshares, which belongs to the Zacks Banks - Midwest industry, posted revenues of $47.6 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.52%. This compares to year-ago revenues of $41.4 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Civista Bancshares shares have added about 26.8% since the beginning of the year versus the S&P 500's gain of 9.6%. While Civista Bancshares has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Civista Bancshares was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.71 on $49.15 million in revenues for the coming quarter and $2.82 on $194.15 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks - Midwest is currently in the top 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, First Business Financial Services (FBIZ), has yet to report results for the quarter ended June 2026. The results are expected to be released on July 30. This bank holding company for First Business Bank and First Business Bank-Milwaukee is expected to post quarterly earnings of $1.54 per share in its upcoming report, which represents a year-over-year change of +14.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. First Business Financial Services' revenues are expected to be $45.5 million, up 10.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Civista Bancshares, Inc. (CIVB) : Free Stock Analysis Report First Business Financial Services, Inc. (FBIZ) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research