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Analogy 1: A regional Comerica Bank, for businesses and wealthy individuals.

Analogy 2: Like the business and private banking divisions of U.S. Bank or PNC, but as a specialized, independent bank.

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Major Products and Services of First Business Financial Services (FBIZ)

• Commercial Banking: Provides businesses with comprehensive financial solutions including commercial loans, deposit accounts, and treasury management services.
• Private Wealth Management: Offers tailored investment management, financial planning, and trust services for high-net-worth individuals and families.
• Specialty Finance: Delivers targeted lending products such as equipment financing, asset-based lending, and government-guaranteed small business loans.

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First Business Financial Services (symbol: FBIZ) primarily serves individuals within specific categories, often those with complex financial needs tied to their businesses or wealth.

The major customer categories that First Business Financial Services serves are:

• Business Owners and Executives: This category includes individuals who own or lead small to mid-sized businesses. They seek integrated financial solutions that often encompass both their commercial banking needs (such as business loans, lines of credit, and treasury management services) and their personal wealth management requirements.
• High-Net-Worth Individuals and Families: This category consists of affluent individuals and families who require sophisticated financial planning, investment management, trust services, and other private banking solutions to manage and grow their wealth.

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Corey A. Chambas, Chief Executive Officer & Director

Corey A. Chambas was appointed CEO in December 2006 and has over 40 years of experience in the commercial banking industry, with 30 years at First Business Financial Services, Inc.. His expertise lies in commercial lending and cash management. He is a University of Wisconsin graduate and has completed advanced commercial lending programs. Chambas also serves as an Advisory Board member of the Aldine Capital Fund, L.P., and an advisor to the Board of M3 Insurance Solutions, Inc., where he served for 18 years, including nine as Chairman.

Brian D. Spielmann, Chief Financial Officer

Brian D. Spielmann joined First Business Bank in 2006 and was promoted to Chief Financial Officer in April 2023. Before becoming CFO, he held various roles within the company, including Chief Accounting Officer, Director of Finance, Financial Reporting Manager, and Senior Financial Accountant. He possesses extensive experience in strategic planning and financial management. Spielmann holds an accounting degree from Bradley University, an MBA from Edgewood College, and a Leadership Certificate in Banking from the University of Pennsylvania – The Wharton School, earned through the Stonier Graduate School of Banking program. He is also a Certified Public Accountant.

David R. Seiler, President & Chief Operating Officer, First Business Financial Services, Inc.

David R. Seiler was named President and Chief Operating Officer of First Business Financial Services, Inc. in January 2023, following six years as Chief Operating Officer. He has nearly 25 years of financial services experience with prominent commercial banking firms in the Midwest. Prior to joining First Business Bank in 2016, Seiler was the Managing Director of the Correspondent Banking Division at BMO Harris Bank. His background includes successful leadership in credit administration, relationship management, treasury management, commercial real estate lending, and correspondent banking.

James E. Hartlieb, President & Chief Executive Officer, First Business Bank

James E. Hartlieb joined First Business Bank in 2009 as Senior Vice President and has served as President since 2015, becoming President and CEO of First Business Bank in January 2023. He brings over 25 years of experience in the commercial banking industry, with a particular focus on serving middle-market companies in the Dane County area. Hartlieb earned a Bachelor of Business Administration in Finance from the University of Iowa.

Daniel S. Ovokaitys, Chief Information Officer

Daniel S. Ovokaitys has served as Chief Information Officer of First Business Financial Services, Inc. since June 2014. His prior experience includes serving as Head of Corporate IT (North/South America) for Merz Pharmaceuticals from 2010 to 2014 and as Director of IT for Aurora Health Care from 2006 to 2010. Ovokaitys holds a Bachelor of Science Degree from the Milwaukee School of Engineering (MSOE) and an MBA in Finance from the University of Massachusetts – Amherst.

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The key risks to First Business Financial Services (symbol: FBIZ) are:

1. Adverse Economic Conditions and Interest Rate Fluctuations: First Business Financial Services' profitability is significantly influenced by the overall economic environment, including factors like inflation, economic downturns, labor shortages, and wage pressures, which can negatively impact credit quality, revenue, and business operations. Fluctuations in market interest rates directly affect the bank's net interest income by altering the spread between interest earned on loans and interest paid on deposits.
2. Credit Risk and Loan Defaults: The company faces the risk of increased defaults by borrowers and other delinquencies, which directly impacts the quality and performance of its loan portfolio. Maintaining high credit quality in its loan portfolio is crucial for stable revenue. An instance of increased nonperforming assets tied to a single credit in the transportation and logistics sector was specifically noted, although the company has taken steps to mitigate future exposure in that niche.
3. Regulatory and Compliance Risks: As a financial institution, First Business Financial Services is subject to extensive legislative and regulatory requirements, including changes in tax laws, that can impact its operations and financial performance. The ongoing volatility within the banking sector may also lead to new legislation, regulations, or policy changes, potentially increasing government oversight and supervision. Additionally, the proportion of uninsured deposit account balances may expose the bank to enhanced liquidity risk, and it could face increases in FDIC insurance assessments. The company also faces risks related to fraud, including client and system failures or breaches of network security.

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The emergence of digital-first neobanks and non-bank lenders specializing in business banking, offering streamlined online account opening, faster lending decisions, and integrated financial tools that appeal to small and medium-sized businesses prioritizing digital convenience over traditional branch-based relationships. Concurrently, the rise of embedded finance, where non-financial technology platforms (e.g., e-commerce, POS systems) are integrating financial services such as lending and payments directly into their core offerings, leveraging proprietary data to disintermediate traditional banks from their customer relationships for a growing segment of business financial needs.

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First Business Financial Services (FBIZ) Addressable Markets:

• Commercial Banking: The market size of the Commercial Banking industry in the United States is estimated at $1.6 trillion in 2025.
• Business Lending (including Commercial and Industrial Lending, Commercial Real Estate Lending, and Asset-Based Lending): The U.S. business loans market size was estimated at $480.31 billion in 2024 and is projected to grow to $709.63 billion by 2035. The total estimated value of the small business lending market in the U.S., according to the Consumer Financial Protection Bureau (CFPB), is $1.4 trillion.
• Treasury Management Solutions: The U.S. Treasury Management System (TMS) market size was valued at approximately $5.81 billion (USD 5,806.94 million) in 2024 and is projected to reach approximately $15.15 billion (USD 15,149.86 million) by 2032. North America holds the largest share of the global Treasury Management Market, with the U.S. being a dominating market.
• Private Wealth Management: The North American wealth management market revenue, contributing about two-thirds of the global market, was approximately $1.09 trillion in 2022, based on a global market size of around $1.64 trillion in 2024.
• Equipment Financing: The equipment finance industry in the U.S. expanded to an estimated $1.34 trillion in 2023.

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First Business Financial Services (FBIZ) is expected to drive future revenue growth over the next 2-3 years through several key strategies:

1. Relationship-Based Loan and Deposit Growth: The company emphasizes its focus on high-quality loan and deposit growth, targeting approximately 10% annual expansion in both areas. This growth is anticipated to be sourced from core client relationships and by leveraging market share opportunities.
2. Expansion of Private Wealth Management (PWM) Services and Fee Income: First Business Financial Services anticipates continued growth in its Private Wealth Management division. This segment has shown consistent expansion in assets under management and administration, contributing significant annuity-like fee income. Management projects annual fee income growth to be around 10%, enhancing revenue diversification.
3. Strategic Specialty Lending and Niche Market Focus: Revenue growth is expected to be driven by strategic market expansions and a focus on niche lending areas. This specialized approach is designed to foster organic revenue growth and diversification, potentially leading to higher margins.
4. Operational Efficiency and Technology Investments: Ongoing investments in technology and risk management are streamlining operations and improving efficiency, which supports overall profitability and enables more competitive offerings. This operational leverage is a foundational element supporting robust balance sheet growth and contributes to the company's ability to drive revenue.

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Share Repurchases

• On April 30, 2024, the board of directors approved a $5.0 million share repurchase program with no expiration date. The company indicated no immediate plans to utilize the program but kept it in place for capital management flexibility.
• Prior to this, a $5 million share repurchase program approved on January 28, 2021, was fully utilized by October 2021, resulting in the repurchase of 182,151 shares at a weighted average price of $27.40 per share.
• A subsequent $5 million share repurchase plan was announced on March 9, 2022, and expired on March 4, 2023.

Outbound Investments

• The company has been actively investing in SBIC (Small Business Investment Company) funds, viewing them as a long-term earnings catalyst and an effective use of capital. They plan to continue investing up to their allowed 5% of total capital over time.
• First Business Financial Services focuses its business banking offerings on Midwest markets, while its Specialty Finance products and services have a national reach.

Capital Expenditures

• As of December 30, 2024, First Business Financial Services reported capital expenditures of $223,000.
• The company continues to invest in technology and risk management to streamline operations and limit credit costs.