First Business Financial Services Exceeds Expectations in Q1 2026 with Strong Loan and Deposit Growth
First Business Financial Services, Inc. (FBFS) has reported a stellar first quarter of 2026, exceeding expectations with impressive loan and deposit growth, significant fee income expansion, and robust earnings.
In its Q1 2026 conference call, CEO Corey Chambas proudly announced that the company's team had executed exceptionally well, winning new relationships in a highly competitive environment and growing loans and deposits at a pace that far exceeded expectations. The company grew fee income by nearly 16% year-over-year with strong contributions from multiple sources.
The private wealth business, a key area of focus for FBFS, produced record revenues, providing annuity-like support for revenue growth and diversification goals. Asset quality remained stable in the core performing portfolio, with swift progress made toward resolving the company's largest non-performing asset, which was downgraded last quarter.
At the bottom line, net income and earnings per share grew by more than 9% over last year's first quarter, even as the margin returned to a more normalized level after being elevated in early 2025. Perhaps most importantly, FBFS' strong earnings and disciplined capital deployment drove 14% year-over-year growth in tangible book value per share.
The company's success reflects its commitment to four key objectives: prioritizing high-quality relationship-based growth, diversifying revenue streams, maintaining long-term positive operating leverage, and preserving a culture that attracts and retains the highest quality talent. President and Chief Operating Officer Dave Seiler highlighted the company's outstanding first-quarter growth, stating that it positions FBFS well to achieve its long-term goals.
Seiler noted that loan growth came from across the company's markets, led by Madison, Milwaukee, and Kansas City, as well as asset-based lending, which is generating great momentum under its new leader. The growth occurred late in the quarter, with $90 million or 72% of March growth pulling forward some second-quarter growth, leading to lighter pipelines going into Q2.
Despite this, Seiler remains optimistic, stating that FBFS expects a stronger second half of the year and is on track to achieve its 10% annual growth goal for 2026. The company's largest markets in Southern Wisconsin continue to benefit from a strong regional economy, with clients in manufacturing and distribution doing well and commercial real estate occupancies remaining strong.
FBFS also sees signs that new development is picking up after a slight slowdown in 2024 and 2025, which should further boost the company's business. Additionally, the expected changes to federal tax policy are seen as a tailwind for FBFS' business clients and commercial & industrial (C&I) portfolio.
The strong start to 2026 has solidified FBFS' position in the market, making it an attractive option for investors looking for a company with a proven track record of success and a commitment to long-term growth.
