EarningsQ3 2026 Earnings Report
DE:45D Q3 2026 EPS Results
Actual EPS€1.74
Consensus EPS€1.49
Beat/MissBeat by +€0.25
One Year Ago EPS€1.52
DE:45D Q3 2026 Revenue Results
Actual Revenue€66.89M
Expected Revenue€41.83M
Beat/MissBeat by +€25.06M
YoY Revenue Growth+2.14%
Earnings Announcement Details
QuarterQ3 2026
Date10/29/2026
TimeAfter Close
Conference CallThursday, October 29, 2026
DE:45D Upcoming Earnings
First Business Financial's next earnings date is estimated for January 28, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
DE:45D Q3 2026 Earnings Call
0:00 / 0:00
Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was strongly positive overall. Management reported record earnings, double-digit EPS and pre-tax, pre-provision earnings growth, sustained loan and deposit growth, improved funding, strong profitability, capital ratios above targets and continued progress against its strategic plan. The main challenges were a softer near-term loan pipeline, expected net interest margin moderation, variable fee income, higher non-performing assets with delayed resolutions, and planned fourth-quarter expense increases. These lowlights were presented as manageable within the company's broader growth outlook, and the highlights significantly outweighed the challenges.Company Guidance
Record Third-Quarter Earnings and EPS Growth
The company reported record pre-tax, pre-provision and bottom-line earnings in the third quarter of 2026. EPS increased 6% from the second quarter, or 15% excluding the $0.14 of net one-time benefits in the prior quarter, and increased 15% year over year. Year-to-date EPS grew 20% compared with the first nine months of 2025.
Strong Pre-Tax, Pre-Provision Earnings Growth
Pre-tax, pre-provision earnings increased 13% year over year and 14% on a year-to-date basis, reflecting the company's stated strong operating fundamentals.
Consistent Loan Growth and 2026-2027 Growth Outlook
Total loans increased 10% annualized in the third quarter, marking the 20th consecutive quarter of loan growth. Year-over-year loan growth was also 10%. Management continues to target approximately 10% annual loan growth and said it remains confident in achieving that level in 2026 and 2027.
CRE and Specialty Lending Production
Commercial real estate loans were the primary source of quarterly growth, increasing approximately $77 million, or 14% annualized, from the second quarter, with particular strength in South Central and Southeast Wisconsin. Floor plan lending added $13 million of new loan outstandings, up 9% from the second quarter. Management also cited contributions from higher-yielding niche C&I businesses, asset-based lending and factoring.
Robust Core Deposit Growth
Core deposits increased $101 million during the quarter, representing 14% annualized linked-quarter growth and marking the fourth consecutive quarter of growth exceeding $80 million. Core deposit growth outpaced loan growth and management expects it to remain healthy through the remainder of 2026 and into 2027.
Improved Funding Mix and Treasury Management Growth
Core deposits represented 76.7% of total funding at quarter end, above the long-term target of greater than 75% and up from 74% at mid-year. Non-interest-bearing deposits increased $57 million from June 30. Treasury management fees increased 15.9% during the first nine months of 2026 compared with the prior-year period, supporting management's view of strong growth in new deposit relationships.
Net Interest Margin Expansion and Net Interest Income Growth
Net interest margin was 3.80%, up two basis points from the second quarter and 12 basis points from 3.68% in the third quarter of 2025. The improvement reflected stronger loan yields and a more favorable funding mix from core deposit growth, which more than offset lower loan fees. Net interest income increased $4.2 million, or 12%, from the prior-year quarter.
Margin Remains Above Long-Term Target
Although management expects fourth-quarter net interest margin to decline from 3.80%, it expects margin to remain comfortably above the long-term target range of 3.60% to 3.65% for the next few quarters. The company stated that its branch-light business banking model provides flexibility to compete for deposits while maintaining overall profitability.
Meaningful Efficiency and Operating Leverage Progress
The year-to-date efficiency ratio was 57.87%, while the third-quarter ratio was 55.12%. Management said the results demonstrate the compounding benefit of positive operating leverage, with revenue growing faster than expenses quarter after quarter, and noted that the company is ahead of its strategic-plan schedule for getting the efficiency ratio below 60%.
Fee Income Diversification and Private Wealth Momentum
Private wealth year-to-date fee income increased 13% and represented approximately half of quarterly fee income. Assets under management and administration increased 11% year to date to approximately $4.2 billion at quarter end. Management described private wealth as a durable and differentiated growth driver and said growth was sustainable based on hiring and progress in Southeast Wisconsin and Kansas City.
Continued Investment in Growth Capacity and Technology
The company plans investments in marketing, selective banker hiring and technology to expand capacity for future growth, with initiatives beginning in the fourth quarter and building during 2027. Management also cited technology tools such as AI and robotic process automation as helping improve productivity and the efficiency ratio.
Strong Profitability and Tangible Book Value Growth
Tangible book value per share increased 13% year over year and at a 13% compound annual rate over the past five years. Year-to-date return on average tangible common equity was 16%, ahead of target, and management's current strategic plan target is above 15% by 2028.
Capital Ratios Above Internal Targets
The company ended the quarter with a CET1 ratio of 9.65%, above its 9.5% internal target, and a total capital ratio of 12.25%, above its 12% internal target. Management said earnings continue to generate capital and that the first priority remains funding attractive loan growth and broader organic growth.
Share Repurchases Executed
The company repurchased 12,000 shares during the third quarter for approximately $835,000 at an average price of $69.55 per share. From October 1 through October 23, it repurchased an additional 29,058 shares. Total repurchases over the period were 41,058 shares for approximately $2.9 million at an average price of $69.70 per share, using $2.9 million of the $5 million authorization.
Controlled Credit Losses and Stable Broader Portfolio
Management characterized overall asset quality as stable, said year-to-date net charge-offs remain well controlled, and reported an allowance for credit losses of 1.06% of total loans at September 30. Management stated that it is not seeing systemic stress across any particular industry or geography.
Favorable Tax Profile
The third-quarter effective tax rate was 14.8%, within the company's normalized operating range. Management expects the full-year 2026 effective tax rate to be between 13% and 15%, and a normalized rate of approximately 15% to 17% longer term. The adjusted effective tax rate for the 12 months ended June 30 was approximately 16.7%, compared with a peer median of 22.3%.
Diversified Growth Engines Across Markets and Products
Management said growth is being generated through multiple channels, including Southeast and South Central Wisconsin, Kansas City, Northeast Wisconsin, asset-based lending and floor plan finance. Specialized segments represented approximately 23% of the total loan portfolio, and management expressed confidence in continued 10% growth rates.
DE:45D Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed