First Business Financial Services, Inc. (FBIZ): Business Model Canvas [Dec-2025 Updated]

You're looking to quickly map out exactly how First Business Financial Services, Inc. (FBIZ) makes its money and sustains its growth, especially with their assets hitting about $4.0 billion as of mid-2025 and their Private Wealth segment managing $3.814 billion. Honestly, it's a classic relationship-driven model, blending specialized commercial lending with high-touch wealth services, which is why their Net Interest Margin held strong at 3.68% in Q3 2025. This canvas breaks down the nine essential blocks-from their key partnerships with the Federal Home Loan Bank to their focus on middle-market C&I clients-so you can see the precise levers driving their $1.70 Q3 EPS. Dive in below to see the full, actionable strategy map.

First Business Financial Services, Inc. (FBIZ) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that keep First Business Financial Services, Inc. running smoothly and funding its growth, especially as the balance sheet expands. Honestly, these aren't just names on a contract; they are essential for liquidity, regulatory compliance, and service delivery.

The growth you see in the numbers definitely requires strong external support. For instance, First Business Financial Services, Inc. reported total assets of approximately $3.8 billion as of May 2025, and loans grew by 10.4% annualized from the linked quarter in Q3 2025. That kind of expansion puts pressure on funding sources and operational tech.

Federal Home Loan Bank (FHLB) for liquidity and funding management.

The relationship with the Federal Home Loan Bank system is about securing reliable, competitively priced funding to support that loan growth. While specific FHLB advance amounts for First Business Financial Services, Inc. aren't public in the Q3 2025 filings, the need for liquidity is clear given the 10% loan growth year-to-date. The FHLB system nationally had $737 billion of advances outstanding at year-end 2024, showing the scale of the funding mechanism available to members like First Business Financial Services, Inc.

Small Business Administration (SBA) for loan guarantee programs and sales.

First Business Financial Services, Inc. actively participates in SBA programs, which helps manage risk on government-backed loans. The company noted an 18% reduction in non-performing assets in Q3 2025, which is a positive sign for asset quality across the board. Nationally, SBA 7(a) lending in Q2 FY2025 saw over $10 billion in approvals. The company's Q3 2025 results specifically mentioned a decrease in the SBA recourse provision, which speaks directly to the management of this partnership's risk profile.

Technology vendors for core banking and digital platform services.

Digital operations are supported by key vendors, even as the company maintains a limited branch network. Computer software expense for First Business Financial Services, Inc. in Q3 2025 was $1.8 million, representing a 13.6% increase year-over-year, reflecting ongoing investment in innovative technology. A concrete example of a recent partnership is with CorServ, announced in May 2025, to launch a modern credit card program, moving from an Agent Bank referral model.

Here's a snapshot of the operational expenses related to technology:

Brokerage and custody partners for Private Wealth client services.

The Private Wealth Management (PWM) segment relies on external partners for custody and brokerage execution to support its asset base. Record PWM assets under management grew to $3.419 billion as of December 31, 2024, and PWM fee income was $3.4 million in Q4 2024. These figures show the scale of assets managed that depend on these critical back-office relationships.

Strategic alliances to expand niche national C&I lending reach.

While the core commercial banking focus is on stable Midwest markets, Specialty Finance products have a national reach, which is facilitated by strategic alliances. The company's overall loan growth in Q3 2025 was $84.6 million, or 10.4% annualized, showing the success of this broad-based growth strategy which often involves specialized, non-local partners.

The key performance indicators underpinning the need for these partnerships include:

• Loans increased $84.6 million (QoQ, Q3 2025).
• Core deposits grew 9.3% annualized (QoQ, Q3 2025).
• Tangible Book Value per Share grew 16% (YoY).
• Net Income available to common shareholders was $14.2 million (Q3 2025).

Finance: draft 13-week cash view by Friday.

First Business Financial Services, Inc. (FBIZ) - Canvas Business Model: Key Activities

You're focused on the core engine of First Business Financial Services, Inc. (FBIZ), which is all about disciplined, relationship-driven execution. Here's a look at the hard numbers driving their key activities as of late 2025, based on their Q3 2025 results.

Executing a relationship-based core deposit growth strategy

The relationship focus is clearly paying off in funding stability. Core deposits showed consistent growth, which helps First Business Financial Services, Inc. (FBIZ) manage funding costs effectively.

• Core deposits grew 9.3% annualized in Q3 2025 over the linked quarter.
• Core deposits grew 8.8% from the third quarter of 2024, representing $209.4 million in growth year-over-year.
• The core deposit funding mix improved to 73.12% in Q3 2025, up from 71.82% in Q2 2025.

This strategy directly supports balance sheet discipline. For instance, in Q2 2025, core deposit growth was 11% annualized.

Originating commercial and industrial (C&I) loans and leases

Originating quality commercial and industrial (C&I) loans and leases remains central, driving asset growth across the business banking segment. The focus on niche lending, like Asset-Based Lending (ABL), continues to fuel this.

Here's the loan portfolio status:

The 10.4% annualized loan increase in Q3 2025 shows momentum. That's solid execution in a competitive lending environment.

Managing and growing Private Wealth assets under management (AUM&A)

Private Wealth Management acts as a high-margin powerhouse, contributing significantly to non-interest income. Growth here is driven by both new assets and strong client retention.

The Private Wealth segment numbers look like this:

Private Wealth fees represented 45% of year-to-date total non-interest income as of Q3 2025.

Maintaining a strong net interest margin (NIM) through match-funding

The match-funding strategy, pairing asset and liability durations, is key to keeping the Net Interest Margin (NIM) stable and strong, even as market rates shift. This discipline is a hallmark of their operations.

• Q3 2025 Net Interest Margin (NIM) was 3.68%.
• This compares to 3.67% in Q2 2025 and 3.64% in Q3 2024.
• The Company maintains a long-term target for NIM in the range of 3.60% - 3.65%.

Net interest income increased 12.5% from the prior year quarter, showing the benefit of this structure.

Providing specialized bank consulting and asset liability management

Beyond core lending and wealth, First Business Financial Services, Inc. (FBIZ) monetizes its expertise through consulting and specialized investment vehicles, which shows up in fee income.

Look at these specialized income drivers:

• Commercial loan swap fee income reached $974,000 in Q3 2025.
• Income from SBIC funds was $854,000 in Q3 2025, a significant jump from $193,000 in the prior year quarter.
• The company offers bank consulting services covering balance sheet, investment portfolio, and asset liability management.

Other fee income, excluding Private Wealth and swaps, increased 170.5% to $2.0 million.

First Business Financial Services, Inc. (FBIZ) - Canvas Business Model: Key Resources

You're looking at what First Business Financial Services, Inc. (FBIZ) relies on to deliver its specialized services. Honestly, for a firm like this, the resources aren't just about the balance sheet; it's heavily weighted toward the people and the platform they use.

The human capital is defintely a cornerstone. You need people who know the niche markets they serve. This means having relationship managers and specialized bankers who can act as true advisors, not just transaction processors. While I can't give you a headcount for every specialized banker, we know the total team size supporting these operations is significant, with the parent company reporting 353 employees as of late 2025. That team supports the core strategy of relationship-driven growth.

Financial capital provides the necessary scale. As of mid-2025, the total assets were approximately $4.0 billion. That's the foundation that allows them to underwrite the commercial and specialty finance loans they focus on. This resource base supports the entire operation, from Business Banking to Private Wealth.

A stable funding base is critical in this environment, and core deposits are the key here. You saw that core deposits grew 9.3% annualized in the third quarter of 2025. That's a strong indicator of client trust and a reliable, lower-cost source of funds, which helps keep that net interest margin solid. The core deposit funding mix improved to 73.12% as of September 30, 2025, compared to 71.82% in the linked quarter. That's a tangible sign of a healthy funding structure.

The Private Wealth segment brings in significant fee-based revenue, which is less interest-rate sensitive. Private Wealth assets under management and administration (AUM&A) reached $3.814 billion at the end of the third quarter of 2025. That growth, up 12.2% from the prior quarter, generated quarterly Private Wealth fee income of $3.7 million in Q3 2025.

Finally, the operational backbone relies on technology. First Business Financial Services, Inc. focuses on technology and process improvements to enhance efficiency. This proprietary technology underpins their ability to scale operations across their specialized segments-Business Banking, Specialty Finance, Private Wealth, and Bank Consulting-without needing to add layers of administrative staff for every new client.

Here's a quick snapshot of the key financial resources as of the latest reported quarter:

The performance metrics from that quarter really highlight how these resources translate:

• Loans increased 10.4% annualized from Q2 2025.
• Net interest income increased 12.5% from the prior year quarter.
• Private Wealth fees increased 13.0% from the prior year quarter.
• Non-performing assets saw an 18% reduction year-to-date.

Finance: draft 13-week cash view by Friday.

First Business Financial Services, Inc. (FBIZ) - Canvas Business Model: Value Propositions

Specialized commercial banking for middle-market businesses is evidenced by the following balance sheet and growth metrics as of the third quarter of 2025:

• Period-end Loans and Leases Receivable: $3.337 billion.
• Loan Growth (Annualized, Q3 2025 vs Q2 2025): 10.4%.
• Loan Growth (Year-over-Year, Q3 2025 vs Q3 2024): 9.4%, or $286.4 million.
• Core Deposits grew by 8.8% from the third quarter of 2024, totaling an increase of $209.4 million.
• Core Deposit Funding Mix: 73.12%.

Integrated Private Wealth Management for high net worth individuals is supported by the following figures:

The relationship-focused service model, not transactional, is reflected in the consistent growth achieved through this strategy:

• Net Income available to common shareholders (Q3 2025): $14.2 million.
• Tangible Book Value per Share increased 15.6% from the prior year quarter.
• Year-to-date Return on Average Tangible Common Equity: Over 15%.
• Year-to-date Return on Assets (ROA): 1.23%.

Expertise in niche lending areas like Asset-Based Lending (ABL) and Floor Plan Financing is demonstrated by activity in these segments:

• Floorplan Financing programs are available from $500,000 to over $20 million for larger dealers.
• An example Floorplan Financing line of credit funded was $22 million in December 2023.
• The balance of a previously disclosed defaulted Asset-Based Lending loan was $6.2 million as of the first quarter of 2025.

Strong financial performance with Q3 2025 EPS of $1.70 is further detailed in the following performance snapshot:

The Company operates in Wisconsin, Kansas, and Missouri.

First Business Financial Services, Inc. (FBIZ) - Canvas Business Model: Customer Relationships

You're looking at how First Business Financial Services, Inc. (FBIZ) builds and keeps its client base; it's all about deep, personal connections rather than just transactions. This is the core of their relationship-based growth strategy.

Dedicated, high-touch relationship management model.

The success of the relationship-centric approach is clear in the deposit metrics. For instance, in the first quarter of 2025, core deposits grew by $66 million, which was over 11% annualized. By the third quarter of 2025, core deposits were up 8.8% from the third quarter of 2024, showing consistency. This focus on relationships directly impacts funding stability; in the second quarter of 2025, 75% of funding came from in-market deposits, which helps reduce reliance on wholesale sources.

Personalized private banking services for executives and investors.

The Private Wealth Management segment acts as a significant relationship anchor, driving high-margin, recurring revenue. As of September 30, 2025, Private Wealth assets under management and administration stood at $3.814 billion. This generated quarterly Private Wealth fee income of $3.7 million in the third quarter of 2025, a 13.0% increase from the prior year quarter. To put that growth in context, in the second quarter of 2025, AUM hit $3.731 billion, representing a 35.8% surge quarter-over-quarter (QoQ) and a 14.8% year-over-year (YoY) increase. This segment contributed 49% of non-interest income in Q2 2025.

Here are the Private Wealth metrics through the first three quarters of 2025:

The growth in AUM from Q1 2025 to Q3 2025 was $389 million.

Long-term, advisory-style engagement for business clients.

For business clients, the advisory style supports strong loan growth, which aligns with the company's long-term objective of 10% annual growth. Commercial & Industrial (C&I) balances expanded by 27% annualized in the first quarter of 2025. In the second quarter of 2025, the C&I portfolio grew by 9.79% annualized to $1.26 billion. By the third quarter of 2025, total loans increased by 10.4% annualized from the linked quarter, reaching $3.337 billion in period-end balances.

Proactive communication to support their match-funding strategy.

The execution of the match-funding philosophy requires clear communication on balance sheet management. The company's effective match-funding strategy and pricing discipline resulted in a Net Interest Margin (NIM) of 3.68% in the third quarter of 2025, compared to 3.67% in the linked quarter. This strategy involves the continued use of wholesale deposits to maintain adequate liquidity and support loan growth goals. Fees earned in lieu of interest, a component tied to loan activity and funding, grew by $1.2 million in Q1 2025 compared to Q1 2024, reaching $2.1 million for the quarter. Finance: draft 13-week cash view by Friday.

First Business Financial Services, Inc. (FBIZ) - Canvas Business Model: Channels

You're looking at how First Business Financial Services, Inc. gets its value proposition to the customer, and honestly, it's a very targeted approach, not a scattergun one. They lean heavily on people and specialized expertise, which is reflected in their operational headcount.

Direct relationship officers and specialized sales teams.

The core of the channel strategy is the relationship team. While an exact count of dedicated relationship officers isn't public, the operational scale suggests a significant investment in personnel. As of the third quarter of 2025, the average Full-Time Equivalent (FTE) count for the organization was reported at 366. This team supports the relationship-based growth strategy, which drove an 8.4% annualized loan increase in Q2 2025. Furthermore, the growth in niche lending, like the 9.79% annualized increase in C&I loans to $1.259 billion in Q2 2025, points directly to specialized sales teams executing that strategy.

The structure emphasizes direct access to decision-makers, a key differentiator from larger institutions.

Limited physical bank locations, typically one per core market.

First Business Financial Services, Inc. intentionally maintains a limited physical footprint, focusing on key regional markets where their relationship model thrives. As of the latest available data, the bank operates in four distinct geographic markets, aligning with the 'one per core market' idea:

This limited physical presence helps keep overhead down, supporting a focus on expertise over ubiquity. This is a clear choice to differentiate from banks that are actively closing branches.

Digital banking platforms for commercial and private clients.

Digital channels support the relationship model, providing the necessary tools for commercial and private wealth clients to manage their finances efficiently. The success in Private Wealth Management is a strong indicator of effective digital channel support; Assets Under Management and Administration reached $3.814 billion by September 30, 2025. This growth is supported by private wealth fee income reaching $3.7 million in Q3 2025. The overall revenue for Q3 2025 was $44.29 million, which relies on efficient digital transaction processing to support the high-touch relationship teams.

National reach for niche C&I businesses and SBA lending.

While the physical presence is localized, the specialized lending arms extend their reach nationally. The C&I portfolio, which includes niche areas like floorplan financing and equipment finance, saw its balance reach $1.259 billion in Q2 2025. The SBA lending program is explicitly mentioned as a key revenue driver, supported by an expanded team. The channel for these specialized products is national, allowing First Business Financial Services, Inc. to capture business outside its immediate physical markets. For instance, gains on the sale of SBA loans were $397,000 in Q2 2025, showing active participation in that secondary market channel.

The bank's strategy is to use its specialized expertise to source loans nationally, even if the core deposit gathering remains regional.

First Business Financial Services, Inc. (FBIZ) - Canvas Business Model: Customer Segments

First Business Financial Services, Inc. (FBIZ) targets a specific set of clients through its primary subsidiary, First Business Bank, focusing on relationship-based service delivery.

The core customer base includes business executives and entrepreneurs operating within the company's primary geographic footprint, which includes Wisconsin, Kansas, and Missouri, alongside strategic operations in other key Midwestern markets.

A significant segment is middle-market commercial and industrial (C&I) companies. The C&I portfolio demonstrated strong expansion, reaching $1.26 billion as of the second quarter of 2025, reflecting an annualized growth rate of 9.79%. Total loan balances across the organization increased by approximately $275 million Year-over-Year (YoY) in the first quarter of 2025, representing nearly 10% growth. Total period-end loans and leases receivable stood at $3.337 billion on September 30, 2025.

High net worth (HNW) individuals are served through the Private Wealth Management segment. Assets under management and administration (AUM) for this group reached $3.814 billion as of September 30, 2025. In the second quarter of 2025, AUM was reported at $3.73 billion. This segment generated quarterly Private Wealth fee income of $3.7 million in the third quarter of 2025, and comprised 49% of year-to-date total non-interest income for that quarter.

The company also focuses on niche national clients through specialized lending products, including areas like transportation and logistics within its C&I portfolio. The overall client profile also encompasses professionals and general business owners seeking commercial banking and specialty finance solutions.

Here is a snapshot of the financial scale associated with these customer-facing segments as of late 2025 reporting periods:

The relationship-based model targets growth across these areas, with a stated goal of achieving 10% annual growth in loans and deposits.

• Business owners and executives in Midwest markets.
• Middle-market C&I companies.
• High-net-worth individuals.
• Clients requiring specialized finance like asset-based lending.

First Business Financial Services, Inc. (FBIZ) - Canvas Business Model: Cost Structure

The Cost Structure for First Business Financial Services, Inc. (FBIZ) is heavily weighted toward personnel costs and the cost of funding its balance sheet, which is typical for a relationship-focused financial institution. You need to watch these two areas closely for margin pressure.

The primary expense categories for Q3 2025, based on reported figures, show a clear concentration in employee-related costs and the interest paid to depositors and wholesale lenders.

Here's a quick look at the major components of the cost base for the third quarter of 2025:

You should note that the $28.8 million figure for interest expense is derived by taking the Total Interest Income of $63.7 million and subtracting the Net Interest Income of $34.9 million for Q3 2025. This total interest expense directly reflects the cost of deposits and wholesale funding, such as FHLB advances.

General operating expenses, which capture occupancy, technology, and other overhead not directly tied to compensation, are represented by the residual of Total Non-Interest Expense after accounting for compensation. For Q3 2025, this residual was $8.3 million ($25.7 million Total Non-Interest Expense minus $17.4 million Compensation and benefits).

The cost related to credit quality is managed through the provision for credit losses, which is a forward-looking expense based on expected losses, not an operating expense in the same vein as salaries. For the first quarter of 2025, the provision for credit losses was reported at $2.7 million.

Key elements driving the cost structure include:

• Compensation and benefits: Q3 2025 expense of $17.4 million.
• Interest expense on deposits and wholesale funding: Calculated Q3 2025 total interest expense of $28.8 million.
• General operating expenses, including occupancy and technology: Represented by the residual non-interest expense of $8.3 million for Q3 2025.
• Provision for credit losses: Q1 2025 expense of $2.7 million.

Finance: draft 13-week cash view by Friday.

First Business Financial Services, Inc. (FBIZ) - Canvas Business Model: Revenue Streams

You're looking at how First Business Financial Services, Inc. (FBIZ) actually brings in the money, which is key for any analyst. As of late 2025, their revenue streams are anchored by traditional banking income supplemented by strong fee-based services.

The primary engine remains the spread between what they earn on assets and what they pay on liabilities. For the third quarter of 2025, the Net Interest Income (NII) from loans and leases hit $34.9 million. This was supported by a strong Net Interest Margin (NIM) of 3.68% for Q3 2025. That NIM figure is up slightly from the 3.64% seen in the prior year quarter, showing good pricing discipline.

Beyond the core lending spread, fee income is a growing part of the picture. Total Non-Interest Income for Q3 2025 was $9.6 million. This total is made up of several distinct components that you need to watch closely.

Here's a breakdown of the key non-interest revenue drivers for the third quarter of 2025:

You can see the Private Wealth segment is significant, with its quarterly fee income reaching $3.7 million. That represented 45% of year-to-date total non-interest income. Also, look at the loan fee income. The fees in lieu of interest component alone grew to $2.2 million in Q3 2025, up by $1.0 million compared to the third quarter of 2024. This growth reflects a reclassification of certain loan fees and includes prepayment fees. The gain on the sale of SBA loans specifically contributed $0.38 million in the quarter.

The revenue from core deposit relationships, seen through service charges on deposits, was $1.15 million for the quarter. This is a steady, relationship-based stream. It's important to track these fee lines because they often carry higher margins than pure interest income. If you're mapping out future performance, remember that the company is focused on driving growth across its balance sheet and fee income streams.