January 31, 2013

Topic: Products

First Business Financial Services, Inc. Reports Record Net Income of $8.9 Million for 2012

MADISON, Wis., Jan. 31, 2013 (GLOBE NEWSWIRE) -- First Business Financial Services, Inc. (the "Company") (Nasdaq:FBIZ), the parent company of First Business Bank and First Business Bank - Milwaukee, today reported strong fourth quarter and record full year earnings, reflecting successful execution on initiatives to grow loans and in-market deposits, invest in fee-generating capabilities and improve asset quality.

Highlights for the quarter and full year ended December 31, 2012 include:

The successful public offering of $29.1 million in common equity closed in December 2012 at $23.00 per share, nearly 40% higher than 2011’s closing stock price of $16.50 per share.
Net income for the fourth quarter of 2012 was a strong $2.5 million, representing a 6% increase from the $2.4 million earned in the fourth quarter of 2011.

Net income for the full year ended December 31, 2012 was a record $8.9 million, 6% higher than the previous record of $8.4 million earned for the full year ended December 31, 2011. Net income for the full year 2011 had also included a substantial one-time tax benefit relating to a change in Wisconsin tax law.

Core earnings, defined as pre-tax income excluding the effects of provision for loan and lease losses, other identifiable costs of credit and other discrete items unrelated to the Company’s core business activities, grew 4% to a record $5.0 million for the fourth quarter of 2012, compared to $4.8 million recorded in the fourth quarter of 2011. Record core earnings of $18.5 million for the full year of 2012 grew 12% from the prior year.

Annualized return on average assets and return on average equity were 0.84% and 12.88%, respectively, for the quarter ended December 31, 2012, compared to 0.82% and 15.02% for the same period in 2011. Return on average assets and return on average equity for the full year ended December 31, 2012 were 0.75% and 12.65% respectively, compared to 0.75% and 14.03% in 2011. Returns for the full year 2011 benefited from the substantial one-time tax benefit relating to a change in Wisconsin tax law.

Top line revenue, consisting of net interest income and non-interest income, increased 12% to a record $12.1 million for the quarter ended December 31, 2012, compared to $10.8 million for the prior year quarter. Top line revenue of $46.6 million for the full year 2012 grew 10% compared to 2011.

Average in-market deposits of $649.0 million for the full year 2012 grew 25%, increasing to 61.8% of total deposits, compared to $519.3 million, or 51.6% of total deposits, for the full year of 2011.

Net loans and leases at December 31, 2012 increased $33.1 million or an annualized 15% from September 30, 2012 to $896.6 million as of December 31, 2012. 

Net interest margin was 3.36% for the full year of 2012, improving seven basis points compared to the full year of 2011.

Non-performing assets of $15.7 million at December 31, 2012 decreased by $8.3 million, or 35%, from December 31, 2011. Non-performing assets now measure 1.28% of total assets, compared to 2.04% at December 31, 2011. 

The Company recorded net income of $2.5 million in the fourth quarter 2012, an increase of 6.1% compared to net income of $2.4 million earned in the fourth quarter of 2011. Diluted earnings per common share were $0.86 for the fourth quarter of 2012 compared to $0.90 for the 2011 period. Diluted earnings per common share for the fourth quarter of 2012 reflect the issuance of 1,265,000 shares of common stock in December 2012. Weighted-average diluted common shares outstanding during the fourth quarter of 2012 were higher than the prior year quarter by approximately 318,000, or 12.6%, primarily causing the slight decrease in the fourth quarter diluted earnings per common share, despite overall earnings growth. 

The Company earned record net income of $8.9 million for the full year ended December 31, 2012, representing an increase of 5.9% from $8.4 million earned in the full year ended December 31, 2011. Diluted earnings per common share were $3.29 for the full year 2012 compared to $3.23 earned in the prior year. Diluted earnings per share for the full year 2011 had also included a substantial one-time tax benefit relating to a change in Wisconsin tax law. 

"In 2012 First Business again delivered record full year earnings, achieving best-ever results across each of our primary revenue sources and driving substantial improvement in asset quality," said Corey A. Chambas, President and Chief Executive Officer. "Our talented team coupled with our many strategic new hires delivered impressive loan and revenue production during the year, growing net loan balances over 7% and top line revenue nearly 10%. Perhaps most notably, we believe the successful public offering of $29.1 million of FBIZ common stock has positioned us to take advantage of continued market disruption in Wisconsin, accelerating our growth potential in 2013 and beyond."

Read full press release.
About First Business Financial Services, Inc.

First Business Financial Services, Inc. (Nasdaq:FBIZ) is a Wisconsin-based bank holding company, focused on the unique needs of businesses, business executives, and high net worth individuals. First Business offers commercial banking, specialty finance, and private wealth management solutions, and because of its niche focus, is able to provide its clients with unmatched expertise, accessibility, and responsiveness. For additional information, visit www.firstbusiness.com or call (608) 238-8008.

The First Business Financial Services, Inc. logo is available at http://www.firstbusiness.com/logo

Contact:
James F. Ropella
Senior Vice President and Chief Financial Officer
First Business Financial Services, Inc.
608-232-5970
Email