First Business Bank Announces Second Quarter 2026 Financial Results

First Business Bank Announces Second Quarter 2026 Financial Results MADISON, Wis.--( 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

Quarterly Financial Results

(Unaudited)

As of and for the Three Months Ended

As of and for the Six Months Ended

(Dollars in thousands, except per share amounts)

June 30,

2026

March 31,

2026

June 30,

2025

June 30,

2026

June 30,

2025

Net interest income

$38,142

$35,518

$33,784

$73,659

$67,042

Adjusted non-interest income (1)

8,569

8,775

7,255

17,345

14,834

Operating revenue (1)

46,711

44,293

41,039

91,004

81,876

Operating expense (1)

26,892

27,081

25,023

53,973

49,640

Pre-tax, pre-provision adjusted earnings (1)

19,819

17,212

16,016

37,031

32,236

Less:

Provision for credit losses

2,066

2,960

2,701

5,027

5,360

Loss (gain) on repossessed assets

—

(4)

SBA recourse benefit

—

(121)

(59)

(121)

(59)

Impairment (recovery) of tax credit investments

552

(7)

—

545

110

SBA severance expense

405

—

405

—

Income before income tax expense

16,796

14,380

13,370

31,175

26,829

Income tax expense

1,216

2,180

1,948

3,395

4,236

Net income

$15,580

$12,200

$11,422

$27,780

$22,593

Preferred stock dividends

219

438

Net income available to common shareholders

$15,361

$11,981

$11,203

$27,342

$22,155

Earnings per share, diluted

$1.84

$1.44

$1.35

$3.28

$2.66

Book value per share

$45.81

$44.12

$39.98

$45.81

$39.98

Tangible book value per share (1)

$44.38

$42.68

$38.54

$44.38

$38.54

Net interest margin (2)

3.78%

3.56%

3.67%

3.68%

Fee income ratio (non-interest income / total revenue)

18.34%

19.81%

17.68%

19.06%

18.12%

Efficiency ratio (1)

57.57%

61.14%

60.97%

59.31%

60.63%

Return on average assets (2)

1.43%

1.13%

1.14%

1.28%

1.14%

Return on average tangible common equity (2)

16.89%

13.55%

14.17%

15.25%

14.15%

Period-end loans and leases receivable

$3,585,615

$3,498,903

$3,250,925

$3,585,615

$3,250,925

Average loans and leases receivable

$3,550,415

$3,425,751

$3,239,840

$3,488,427

$3,212,967

Period-end core deposits

$2,877,675

$2,796,059

$2,533,099

$2,877,675

$2,533,099

Average core deposits

$2,860,053

$2,848,601

$2,396,517

$2,854,359

$2,379,799

Allowance for credit losses, including unfunded commitment reserves

$39,517

$38,489

$38,210

$39,517

$38,210

Non-performing assets

$38,062

$40,503

$28,664

$38,062

$28,664

Allowance for credit losses as a percent of total gross loans and leases

1.10%

1.18%

1.10%

1.18%

Non-performing assets as a percent of total assets

0.86%

0.94%

0.72%

0.86%

0.72%

This is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate financial performance, provide greater understanding of ongoing operations, and enhance comparability of results with prior periods. See the section titled Non-GAAP Reconciliations at the end of this release for a reconciliation of GAAP financial measures to non-GAAP financial measures.

Calculation is annualized.

Second Quarter 2026 Compared to First Quarter 2026

Net interest income increased $2.6 million, or 7.4%, to $38.1 million.

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%.

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.

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.

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.

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.

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%.

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.

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.

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.

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:

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

(Unaudited)

As of

(in thousands)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

Assets

Cash and cash equivalents

$163,358

$137,125

$39,485

$44,349

$123,208

Securities available-for-sale, at fair value

409,692

420,325

422,087

411,111

382,365

Securities held-to-maturity, at amortized cost

4,674

4,797

5,210

5,584

5,714

Loans held for sale

—

23,700

18,849

13,482

12,415

Loans and leases receivable

3,585,615

3,498,903

3,373,241

3,334,956

3,250,925

Allowance for credit losses

(37,393)

(36,631)

(35,877)

(36,690)

(36,861)

Loans and leases receivable, net

3,548,222

3,462,272

3,337,364

3,298,266

3,214,064

Premises and equipment, net

4,328

4,500

4,669

4,936

5,063

Repossessed assets

—

Right-of-use assets

4,787

5,053

5,317

5,577

5,713

Bank-owned life insurance

85,533

84,776

83,994

83,255

82,761

Federal Home Loan Bank stock, at cost

13,173

11,242

8,940

9,605

10,027

Goodwill and other intangible assets

11,933

12,011

11,985

12,041

12,049

Derivatives

45,827

38,198

36,515

37,634

40,814

Accrued interest receivable and other assets

118,477

116,856

107,472

109,005

108,501

Total assets

$4,410,004

$4,320,855

$4,081,887

$4,034,845

$4,002,725

Liabilities and Stockholders’ Equity

Core deposits

$2,877,675

$2,796,059

$2,673,003

$2,592,110

$2,533,099

Wholesale deposits

714,490

769,943

707,412

740,961

772,123

Total deposits

3,592,165

3,566,002

3,380,415

3,333,071

3,305,222

Federal Home Loan Bank advances and other borrowings

346,794

303,451

252,051

266,677

276,131

Lease liabilities

6,698

7,032

7,361

7,687

7,887

Derivatives

39,733

35,857

36,926

38,726

41,228

Accrued interest payable and other liabilities

29,307

28,433

33,549

30,365

27,462

Total liabilities

4,014,697

3,940,775

3,710,302

3,676,526

3,657,930

Total stockholders’ equity

395,307

380,080

371,585

358,319

344,795

Total liabilities and stockholders’ equity

$4,410,004

$4,320,855

$4,081,887

$4,034,845

$4,002,725

STATEMENTS OF INCOME

(Unaudited)

As of and for the Three Months Ended

As of and for the Six Months Ended

(Dollars in thousands, except per share amounts)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

June 30,

2026

June 30,

2025

Total interest income

$65,021

$61,896

$62,752

$63,746

$61,282

$126,916

$120,812

Total interest expense

26,879

26,378

27,990

28,860

27,498

53,257

53,770

Net interest income

38,142

35,518

34,762

34,886

33,784

73,659

67,042

Provision for credit losses

2,066

2,960

1,855

1,440

2,701

5,027

5,360

Net interest income after provision for credit losses

36,076

32,558

32,907

33,446

31,083

68,632

61,682

Private wealth management service fees

4,257

3,877

3,788

3,687

3,748

8,134

7,240

Gain on sale of SBA loans

—

592

140

382

397

592

1,360

Service charges on deposits

1,336

1,318

1,188

1,151

1,103

2,653

2,152

Loan fees

528

436

410

501

424

964

812

Bank owned life insurance income

757

739

965

615

1,514

1,051

Swap fees

162

628

738

974

170

790

283

Other non-interest income

1,529

1,167

458

1,980

798

2,698

1,936

Total non-interest income

8,569

8,775

7,461

9,640

7,255

17,345

14,834

Compensation

18,462

18,541

17,151

17,442

16,534

37,003

33,281

Occupancy

638

588

581

567

564

1,226

1,155

Professional fees

1,493

1,446

1,001

1,071

1,487

2,938

2,946

Data processing

1,482

1,270

1,158

1,123

1,368

2,752

2,450

Marketing

840

711

938

876

1,062

1,551

2,030

Equipment

351

407

374

296

335

758

711

Computer software

1,958

1,921

1,902

1,826

1,656

3,879

3,259

FDIC insurance

819

909

800

817

834

1,729

1,614

Other non-interest expense

1,806

1,160

225

1,682

1,128

2,966

2,241

Total non-interest expense

27,849

26,953

24,130

25,700

24,968

54,802

49,687

Income before income tax expense

16,796

14,380

16,238

17,386

13,370

31,175

26,829

Income tax expense

1,216

2,180

2,905

2,993

1,948

3,395

4,236

Net income

$15,580

$12,200

$13,333

$14,393

$11,422

$27,780

$22,593

Preferred stock dividends

219

218

219

438

Net income available to common shareholders

$15,361

$11,981

$13,114

$14,175

$11,203

$27,342

$22,155

Per common share:

Basic earnings

$1.84

$1.44

$1.58

$1.70

$1.35

$3.28

$2.66

Diluted earnings

1.84

1.44

1.58

1.70

1.35

$3.28

$2.66

Dividends declared

0.34

0.29

$0.68

$0.58

Book value

45.81

44.12

43.19

41.60

39.98

$45.81

$39.98

Tangible book value

44.38

42.68

41.75

40.16

38.54

$44.38

$38.54

Weighted-average common shares outstanding (1)

8,208,002

8,186,174

8,173,059

8,171,404

8,141,159

8,201,585

8,149,600

Weighted-average diluted common shares outstanding (1)

8,208,002

8,186,174

8,173,059

8,171,404

8,141,159

8,201,585

8,149,600

(1) Excluding participating securities.

NET INTEREST INCOME ANALYSIS

(Unaudited)

For the Three Months Ended

(Dollars in thousands)

June 30, 2026

March 31, 2026

June 30, 2025

Average

Balance

Interest

Average

Yield/Rate (4)

Average

Balance

Interest

Average

Yield/Rate (4)

Average

Balance

Interest

Average

Yield/Rate (4)

Interest-earning assets

Commercial real estate and other mortgage loans (1)

$2,137,098

$31,660

5.93%

$2,071,202

$30,216

5.84%

$1,932,593

$30,344

6.28%

Commercial and industrial loans (1)

1,364,594

27,594

8.09

1,306,970

25,409

7.78

1,257,296

25,604

8.15

Consumer and other loans (1)

48,723

756

6.21

47,579

683

5.74

49,951

673

5.39

Total loans and leases receivable (1)

3,550,415

60,010

6.76

3,425,751

56,308

6.57

3,239,840

56,621

6.99

Mortgage-related securities (2)

372,462

3,941

4.23

375,989

3,965

4.22

334,159

3,533

4.23

Other investment securities (3)

48,679

279

2.29

50,146

280

2.23

46,416

250

2.15

FHLB stock

14,799

338

9.14

9,067

211

9.31

12,852

297

9.24

Short-term investments

46,681

453

3.88

128,649

1,132

3.52

52,772

581

4.40

Total interest-earning assets

4,033,036

65,021

6.45

3,989,602

61,896

6.21

3,686,039

61,282

6.65

Non-interest-earning assets

250,531

259,039

229,968

Total assets

$4,283,567

$4,248,641

$3,916,007

Interest-bearing liabilities

Transaction accounts

$1,279,116

8,556

2.68%

$1,220,945

$8,354

2.74%

$985,606

$7,964

3.23%

Money market

931,051

6,488

2.79

925,282

6,354

2.75

821,845

6,789

3.30

Certificates of deposit

235,510

2,109

3.58

273,635

2,447

3.58

178,643

1,720

3.85

Wholesale deposits

590,739

5,952

4.03

682,138

6,773

3.97

773,750

7,784

4.02

Total interest-bearing deposits

3,036,416

23,105

3.04

3,102,000

23,928

3.09

2,759,844

24,257

3.52

FHLB advances

327,915

2,891

3.53

200,132

1,567

3.13

284,428

2,358

3.32

Other borrowings

54,846

883

6.44

54,815

883

6.44

54,733

883

6.45

Total interest-bearing liabilities

3,419,177

26,879

3.14

3,356,947

26,378

3.14

3,099,005

27,498

3.55

Non-interest-bearing demand deposit accounts

414,376

428,739

410,423

Other non-interest-bearing liabilities

74,188

85,304

78,388

Total liabilities

3,907,741

3,870,990

3,587,816

Stockholders’ equity

387,798

377,651

340,271

Total liabilities and stockholders’ equity

$4,295,539

$4,248,641

$3,928,087

Net interest income

$38,142

$35,518

$33,784

Interest rate spread

3.30%

3.06%

3.10%

Net interest-earning assets

$613,859

$632,655

$587,034

Net interest margin

3.78%

3.56%

3.67%

(1)

The average balances of loans and leases include non-accrual loans and leases and loans held for sale. Interest income related to non-accrual loans and leases is recognized when collected. Interest income includes net loan fees collected in lieu of interest.

(2)

Includes amortized cost basis of assets available for sale and held to maturity.

(3)

Yields on tax-exempt municipal obligations are not presented on a tax-equivalent basis in this table.

(4)

Represents annualized yields/rates.

BETA ANALYSIS

For the Three Months Ended

(Unaudited)

June 30, 2026

June 30, 2025

Average Yield/Rate (3)

Increase (Decrease)

Total loans and leases receivable (a)

6.76%

6.99%

(0.23)%

Total interest-earning assets (b)

6.45%

6.65%

(0.20)%

Total core deposits (e)

2.40%

2.75%

(0.35)%

Total bank funding (f)

2.75%

3.08%

(0.33)%

Net interest margin (g)

3.78%

3.67%

0.12%

Effective fed funds rate (2)(i)

3.63%

4.33%

(0.70)%

Beta Calculations:

Total loans and leases receivable (a)/(i)

32.8%

Total interest-earning assets (b)/(i)

28.8%

Total core deposits (e/i)

50.0%

Total bank funding (f)/(i)

47.1%

Net interest margin (g/i)

(16.7)%

(1)

Excludes prepayment activity in all periods of comparison.

(2)

Board of Governors of the Federal Reserve System (US), Effective Federal Funds Rate [DFF]. Retrieved from FRED, Federal Reserve Bank of St. Louis. Represents average daily rate.

(3)

Represents annualized yields/rates.

PROVISION FOR CREDIT LOSS COMPOSITION

(Unaudited)

For the Three Months Ended

For the Six Months Ended

(Dollars in thousands)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

June 30,

2026

June 30,

2025

Change due to qualitative factors

$(357)

$(706)

$(538)

$(243)

$590

$(1,063)

$235

Change due to quantitative factors

541

(607)

(173)

746

551

2,306

Charge-offs

1,524

2,331

2,809

1,708

1,338

3,856

5,148

Recoveries

(486)

(168)

(264)

(440)

(332)

(654)

(730)

Change in reserves on individually evaluated loans, net

(37)

382

(76)

(550)

(247)

345

(2,742)

Change due to loan growth, net

615

1,068

408

795

536

1,683

1,277

Change in unfunded commitment reserves

266

123

343

309

(134)

Total provision for credit losses

$2,066

$2,960

$1,855

$1,440

$2,701

$5,027

$5,360

ALLOWANCE FOR CREDIT LOSS COMPOSITION

As of

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

(In

Thousands)

% of Total

Loans and

Leases

(In

Thousands)

% of Total

Loans and

Leases

(In

Thousands)

% of Total

Loans and

Leases

(In

Thousands)

% of Total

Loans and

Leases

Allowance for credit losses:

Loans collectively evaluated

$31,499

0.88%

$30,700

0.88%

$30,327

0.90%

$31,065

0.93%

Loans individually evaluated

5,894

0.16%

5,931

0.17%

5,550

0.16%

5,625

0.17%

Unfunded commitments reserve

2,124

1,858

1,815

1,692

Total

39,517

1.10%

38,489

1.10%

37,692

1.12%

38,382

1.15%

Loans and lease receivables:

$3,585,615

$3,498,903

$3,373,241

$3,334,956

PERFORMANCE RATIOS

For the Three Months Ended

For the Six Months Ended

(Unaudited)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

June 30,

2026

June 30,

2025

Return on average assets (annualized)

1.43%

1.13%

1.25%

1.40%

1.14%

1.28%

1.14%

Return on average tangible common equity (annualized)

16.89%

13.55%

14.83%

17.29%

14.17%

15.25%

14.15%

Efficiency ratio

57.57%

61.14%

56.61%

57.44%

60.97%

59.31%

60.63%

Interest rate spread

3.30%

3.06%

2.99%

3.11%

3.10%

3.18%

3.11%

Net interest margin

3.78%

3.56%

3.53%

3.68%

3.67%

3.68%

Average interest-earning assets to average interest-bearing liabilities

117.95%

118.85%

119.25%

118.66%

118.94%

118.39%

119.44%

ASSET QUALITY RATIOS

(Unaudited)

As of

(Dollars in thousands)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

Non-accrual loans and leases

$38,062

$40,503

$43,855

$23,513

$28,633

Repossessed assets

—

Total non-performing assets

$38,062

$40,503

$43,855

$23,513

$28,664

Non-accrual loans and leases as a percent of total gross loans and leases

1.06%

1.16%

1.30%

0.70%

0.88%

Non-performing assets as a percent of total gross loans and leases plus repossessed assets

1.06%

1.16%

1.30%

0.70%

0.88%

Non-performing assets as a percent of total assets

0.86%

0.94%

1.07%

0.58%

0.72%

Allowance for credit losses as a percent of total gross loans and leases

1.10%

1.12%

1.15%

1.18%

Allowance for credit losses as a percent of non-accrual loans and leases

103.82%

95.03%

85.95%

163.24%

133.45%

NET CHARGE-OFFS (RECOVERIES)

(Unaudited)

For the Three Months Ended

For the Six Months Ended

(Dollars in thousands)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

June 30,

2026

June 30,

2025

Charge-offs

$1,524

$2,331

$2,809

$1,708

$1,338

$3,856

$5,148

Recoveries

(486)

(168)

(264)

(440)

(332)

(654)

(730)

Net charge-offs (recoveries)

$1,038

$2,163

$2,545

$1,268

$1,006

$3,202

$4,418

Net charge-offs (recoveries) as a percent of average gross loans and leases (annualized)

0.12%

0.25%

0.30%

0.15%

0.12%

0.18%

0.28%

CAPITAL RATIOS

As of and for the Three Months Ended

(Unaudited)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

Total capital to risk-weighted assets

12.21%

12.15%

12.24%

12.18%

12.25%

Tier I capital to risk-weighted assets

9.84%

9.74%

9.79%

9.67%

9.66%

Common equity tier I capital to risk-weighted assets

9.54%

9.43%

9.48%

9.34%

9.33%

Tier I capital to adjusted assets

9.11%

8.93%

8.86%

8.87%

8.82%

Tangible common equity to tangible assets

8.44%

8.26%

8.54%

8.31%

8.04%

LOAN AND LEASE RECEIVABLE COMPOSITION

(Unaudited)

As of

(in thousands)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

Commercial real estate:

Commercial real estate - owner occupied

$345,984

$306,593

$293,706

$287,005

$262,988

Commercial real estate - non-owner occupied

874,669

925,425

885,870

871,807

846,990

Construction and land development

227,782

224,866

248,560

236,590

218,840

Multi-family

654,405

577,271

571,468

565,102

573,208

1-4 family

58,981

61,332

60,661

66,735

45,171

Total commercial real estate

2,161,821

2,095,487

2,060,265

2,027,239

1,947,197

Commercial and industrial

1,380,476

1,358,413

1,273,997

1,264,111

1,259,171

Consumer and other

46,027

47,223

40,965

45,323

45,744

Total gross loans and leases receivable

3,588,324

3,501,123

3,375,227

3,336,673

3,252,112

Less:

Allowance for credit losses

37,393

36,631

35,877

36,690

36,861

Deferred loan fees

2,709

2,220

1,986

1,717

1,187

Loans and leases receivable, net

$3,548,222

$3,462,272

$3,337,364

$3,298,266

$3,214,064

DEPOSIT COMPOSITION

(Unaudited)

As of

(in thousands)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

Non-interest-bearing transaction accounts

$420,556

$405,281

$378,770

$400,697

$396,448

Interest-bearing transaction accounts

1,297,353

1,170,271

1,103,696

1,050,233

1,047,434

Money market accounts

936,914

960,052

905,773

840,477

833,684

Certificates of deposit

222,852

260,455

284,764

300,703

255,533

Wholesale deposits

714,490

769,943

707,412

740,961

772,123

Total deposits

$3,592,165

$3,566,002

$3,380,415

$3,333,071

$3,305,222

Uninsured deposits

$1,192,776

$1,237,344

$1,220,177

$1,100,868

$1,069,509

Less: uninsured deposits collateralized by pledged assets

42,130

59,613

68,656

72,561

67,990

Total uninsured, net of collateralized deposits

$1,150,646

$1,177,731

$1,151,521

$1,028,307

$1,001,519

% of total deposits

32.0%

33.0%

34.1%

30.9%

30.3%

SOURCES OF LIQUIDITY

(Unaudited)

As of

(in thousands)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

Short-term investments

$131,294

$104,565

$8,714

$8,074

$72,520

Collateral value of unencumbered pledged loans

987,993

968,320

992,398

906,042

893,499

Market value of unencumbered securities

378,423

387,700

388,474

376,783

347,196

Readily accessible liquidity

1,497,710

1,460,585

1,389,586

1,290,899

1,313,215

Fed fund lines

45,000

Excess brokered CD capacity(1)

878,888

806,268

775,851

732,951

645,843

Total liquidity

$2,421,598

$2,311,853

$2,210,437

$2,068,850

$2,004,058

Total uninsured, net of collateralized deposits

$1,150,646

$1,177,731

$1,151,521

$1,028,307

$1,001,519

Bank internal policy limits brokered CDs to 50% of total bank funding when combined with value of unencumbered pledged loans.

EARNINGS PER SHARE

For the Three Months Ended

For the Six Months Ended

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

June 30,

2026

June 30,

2025

(Dollars in Thousands, Except Share Data)

Basic earnings per common share

Net Income

15,580

12,200

13,333

14,393

11,422

27,780

22,593

Less: preferred stock dividends

219

218

219

438

Less: earnings allocated to participating securities

233

220

235

259

207

462

443

Basic earnings allocated to common shareholders

15,128

11,761

12,879

13,916

10,996

26,880

21,712

Weighted-average common shares outstanding, excluding participating securities

8,208,002

8,186,174

8,173,059

8,171,404

8,141,159

8,201,585

8,149,600

Basic earnings per common share

1.84

1.44

1.58

1.70

1.35

3.28

2.66

Diluted earnings per common share

Earnings allocated to common shareholders, diluted

15,128

11,761

12,879

13,916

10,996

26,880

21,712

Weighted-average diluted shares outstanding, excluding participating securities

8,208,002

8,186,174

8,173,059

8,171,404

8,141,159

8,201,585

8,149,600

Diluted earnings per common share

1.84

1.44

1.58

1.70

1.35

3.28

2.66

PRIVATE WEALTH OFF-BALANCE SHEET COMPOSITION

(Unaudited)

As of

(in thousands)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

Trust assets under management

$3,947,362

$3,613,536

$3,541,768

$3,543,594

$3,461,659

Trust assets under administration

287,226

267,214

272,910

270,222

268,996

Total trust assets

$4,234,588

$3,880,750

$3,814,678

$3,813,816

$3,730,655

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.

(Unaudited)

As of

(Dollars in thousands, except per share amounts)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

Common stockholders’ equity

$383,315

$368,088

$359,593

$346,327

$332,803

Less: Goodwill and other intangible assets

(11,933)

(12,011)

(11,985)

(12,041)

(12,049)

Tangible common equity

$371,382

$356,077

$347,608

$334,286

$320,754

Common shares outstanding

8,368,320

8,343,519

8,325,376

8,324,387

8,323,470

Book value per share

$45.81

$44.12

$43.19

$41.60

$39.98

Tangible book value per share

$44.38

$42.68

$41.75

$40.16

$38.54

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.

(Unaudited)

As of

(Dollars in thousands)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

Common stockholders’ equity

$383,315

$368,088

$359,593

$346,327

$332,803

Less: Goodwill and other intangible assets

(11,933)

(12,011)

(11,985)

(12,041)

(12,049)

Tangible common equity (a)

$371,382

$356,077

$347,608

$334,286

$320,754

Total assets

$4,410,004

$4,320,855

$4,081,887

$4,034,845

$4,002,725

Less: Goodwill and other intangible assets

(11,933)

(12,011)

(11,985)

(12,041)

(12,049)

Tangible assets (b)

$4,398,071

$4,308,844

$4,069,902

$4,022,804

$3,990,676

Tangible common equity to tangible assets

8.44%

8.26%

8.54%

8.31%

8.04%

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.

(Unaudited)

For the Three Months Ended

For the Six Months Ended

(Dollars in thousands)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

June 30,

2026

June 30,

2025

Net Income available to common shareholders (a)

$15,361

$11,981

$13,114

$14,175

$11,203

$27,342

$22,155

Average common stockholders' equity

375,806

365,659

353,820

339,980

328,279

370,633

325,212

Less: average goodwill and other intangible assets

11,972

11,987

12,023

12,056

12,080

11,980

12,020

Average tangible common equity (b)

363,834

353,672

341,797

327,924

316,199

358,653

313,192

Return on average tangible common equity (a)/(b)

16.89%

13.55%

15.35%

17.29%

14.17%

15.25%

14.15%

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.

(Unaudited)

For the Three Months Ended

For the Six Months Ended

(Dollars in thousands)

June 30,

2026

March 31,

2026

December 31,

2025

September 30,

2025

June 30,

2025

June 30,

2026

June 30,

2025

Total non-interest expense

$27,849

$26,953

$24,130

$25,700

$24,968

$54,802

$49,687

Less:

Net loss (gain) on repossessed assets

—

(4)

Impairment (recovery) of tax credit investments

552

(7)

229

—

545

110

SBA severance expense

405

—

405

—

Contribution to First Business Charitable Foundation

—

234

—

SBA recourse benefit

—

(121)

—

(5)

(59)

(121)

(59)

Total operating expense (a)

$26,892

$27,081

$23,901

$25,440

$25,023

$53,973

$49,640

Net interest income

$38,142

$35,518

$34,762

$34,886

$33,784

$73,659

$67,042

Total non-interest income

8,569

8,775

7,461

9,640

7,255

17,345

14,834

Less:

Bank owned life insurance claim

—

234

—

Adjusted non-interest income

8,569

8,775

7,461

9,406

7,255

17,345

14,834

Total operating revenue (b)

$46,711

$44,293

$42,223

$44,292

$41,039

$91,004

$81,876

Efficiency ratio

57.57%

61.14%

56.61%

57.44%

60.97%

59.31%

60.63%

Pre-tax, pre-provision adjusted earnings (b - a)

$19,819

$17,212

$18,322

$18,852

$16,016

$37,031

$32,236