First Business Reports Third Quarter 2016 Results
MADISON, WI, – Oct. 27, 2016 (GLOBE NEWSWIRE) – First Business Financial Services, Inc. (the “Company” or “First Business”) (NASDAQ: FBIZ), the parent company of First Business Bank, First Business Bank – Milwaukee and Alterra Bank (“Alterra”), today reported third quarter results which included elevated credit costs at Alterra, prudent operating expense management, investments to enhance the Small Business Administration (“SBA”) lending platform and high-quality
Highlights for the quarter ended September 30, 2016 include:
- Net income totaled $2.5 million, compared to $4.4 million for the third quarter of 2015.
- Diluted earnings per common share measured $0.29, compared to $0.50 for the third quarter of 2015.
- Provision for loan and lease losses was $3.5 million, up from $287,000 for the third quarter of 2015, driven by increased specific reserves and charge-offs related to three relationships originated at Alterra. First Business Bank and First Business Bank – Milwaukee continued to have strong asset quality.
- During the third quarter of 2016, the Company recognized a $3.6 million historic tax credit that resulted in a net benefit totaling $430,000, or $0.05 per share, after consideration of the $3.2 million impairment of the underlying tax credit investment.
- Annualized return on average assets and annualized return on average equity measured 0.56% and 6.38%, respectively, compared to 1.02% and 11.93%, respectively, for the third quarter of 2015.
- Top line revenue, consisting of net interest income and non-interest income, totaled $18.9 million, compared to $18.7 million for the third quarter of 2015.
- The Company’s efficiency ratio measured 63.6%, compared to 64.8% for the third quarter of 2015.
- Period-end gross loans and leases receivable grew for the eighteenth consecutive quarter to $1.458 billion, up 6% from September 30, 2015.
- Net interest margin measured 3.50%, compared to 3.61% for the third quarter of 2015.
- Non-performing assets as a percent of total assets measured 1.54% at period end, compared to 0.65% at September 30, 2015.
“First Business has long delivered superior asset quality as a result of our talented employees, deep commercial client relationships and disciplined underwriting,” said Corey Chambas, President and Chief Executive Officer. “Unfortunately, the increased reserves on certain loans at our Alterra subsidiary significantly impacted our bottom line. We are taking action to further enhance our policies, processes, controls, training, talent and reporting structures to help ensure First Business’s proven credit culture and discipline are instilled throughout the Company. In order to meet market demand and drive high-quality growth in 2017 and beyond, we are working to ensure future growth is achieved in the way that has historically served our company and shareholders well. Consequently, we have temporarily slowed our SBA production while making investments to enhance the infrastructure, processes, capacity and scalability of the SBA platform.”
“We see great opportunities for Alterra and the Kansas City market, including its SBA lending platform, and we are committed to maximizing this potential. We continue to execute our growth strategy, further building-out our scalable franchise and working to grow long-term shareholder value,” Chambas added.
Read the full press release on the Investor Relations section of our site.
About First Business
First Business Financial Services 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.