First Business Financial Services

First Business Financial Services announced a strategic exit from national out-of-footprint SBA 7(a) lending and reported record pretax preprovision earnings of $19.8 million for the second quarter of 2026. Diluted earnings per share were $1.84, including a net benefit of $0.14 from a tax valuation allowance release and SBA-related severance costs. The exit is expected to be immediately net positive to earnings, with a projected $310,000 pretax quarterly benefit by 2027, or about $0.03 per share after tax. First half revenue grew 11% over the prior year, exceeding the company's 10% annual growth target, and the efficiency ratio measured 59.31%, achieving the sub-60% long-term target. Tangible book value increased 15.2% year over year, surpassing the 10% annual growth goal, while net interest margin rose 22 basis points to 3.78%, driven by higher asset yields and elevated prepayment fees.

First Business Financial Services reported second-quarter 2026 earnings per share of $1.84, including a net $0.14-per-share benefit from one-time items, as pre-tax, pre-provision earnings reached a record $19.8 million. Excluding those items, EPS rose 18% sequentially and 26% year over year. The company also announced it ended its national, out-of-footprint SBA 7(a) lending operations to improve profitability and maintain credit standards, a move expected to yield an estimated $310,000 quarterly pre-tax benefit in 2027 and improve the efficiency ratio by 30 to 50 basis points. Loans grew at a 10% annualized rate in the quarter, core deposits grew 12%, and net interest margin expanded 22 basis points to 3.78%. Management maintained its 2026 targets of approximately 10% annual loan and deposit growth and a full-year net interest margin of 3.60% to 3.65%.