First Business Financial Services Inc (FBIZ, Financial) announced its Q3 2023 earnings on October 26, 2023, reporting a net income of $9.7 million, or earnings per share of $1.17 on a diluted basis. This is an increase from the net income of $8.1 million, or $0.98 per share, in the second quarter of 2023.
Financial Performance and Highlights
First Business Financial Services Inc (FBIZ, Financial) reported strong deposit growth, with total deposits growing $128.2 million, increasing 20.3% annualized from the second quarter and $569.5 million, or 27.3% from the third quarter of 2022. In-market deposits grew to a record $2.189 billion, up $115.5 million, or 22.3% annualized, from the second quarter and $260.0 million, or 13.5% from the third quarter of 2022.
The company also reported robust loan growth, with loans growing $89.4 million, or 13.4% annualized, from the second quarter of 2023, and $433.3 million, or 18.6%, from the third quarter of 2022. This reflects ongoing expansion across the Company’s products and geographies in the third quarter.
Net interest income grew 3.1% from the linked quarter and 10.5% from the prior year quarter. This expansion was supported by the company's strategy to drive diversified loan portfolio growth even as industry-wide net interest margin compression continued. The net interest margin of 3.76% declined five basis points from the linked quarter.
Commentary from the CEO
“First Business Bank again delivered exceptional double-digit loan and in-market deposit growth during the third quarter, which supports our long-term objectives of revenue expansion and deepening client relationships,” said Corey Chambas, Chief Executive Officer. “We continue to diversify our drivers of profitability, including client deposit initiatives to grow treasury management sales and tax credit opportunities with commercial real estate clients, which have effectively lowered our tax rate while also benefiting the communities where we live and serve. With bottom line earnings up nearly 20% from the second quarter, we are pleased to have generated 13% annualized growth in tangible book value per share, a key measure of shareholder value.”
Outlook
Looking ahead, the company expects loan growth to moderate to its long-term target of 10% in future quarters. Additionally, management is evaluating loan sale and participation strategies as a means of adding to and further diversifying fee income.
Explore the complete 8-K earnings release (here) from First Business Financial Services Inc for further details.
