First Business Financial Q4 net income declines

Overview

• Business banking firm reported Q4 net income decline compared to previous quarter and year

• Company announced 17% increase in quarterly cash dividend, 14th consecutive annual raise

• Revenue growth driven by loan and deposit expansion, despite increased non-performing loans

Outlook

• Company targets double-digit growth in earnings and revenue going forward

• First Business Financial Services expects 2026 effective tax rate between 16% and 18%

• Company announces 17% increase in quarterly cash dividend

Result Drivers

• CORE DEPOSIT GROWTH - Core deposits grew $80.9 mln, or 12.5% annualized, from the linked quarter, improving funding mix to 74.7%

• LOAN GROWTH - Loans increased $38.6 mln, or 4.6% annualized, despite elevated commercial real estate payoffs

• EFFICIENCY IMPROVEMENT - Efficiency ratio improved to 56.61%, supporting positive operating leverage

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for First Business Financial Services Inc is $60.00, about 8.2% above its January 28 closing price of $55.44

• The stock recently traded at 9 times the next 12-month earnings vs. a P/E of 9 three months ago

Press Release: ID:nBw6PG378a

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