First Business reports record loans and strong third quarter profitability

Special to The Freeman

Oct. 27, 2014

MADISON First Business Financial Services, Inc. the parent company of First Business Bank and First Business Bank Milwaukee, reported strong third quarter profits. The Company once again grew loans and fee income to record levels while investing in talent, maintaining strong asset quality and expanding client relationships across a spectrum of financial needs.

The Company recorded net income of $3.6 million in the third quarter of 2014, compared to $3.5 million earned in the second quarter of 2014 and $3.6 million earned in the third quarter of 2013. Diluted earnings per common share were $0.89 for the third quarter of 2014, compared to $0.88 for the linked-quarter and $0.91 for the prior-year quarter. Third quarter 2014 results include the impact of $104,000 in non-recurring expenses related to the Company's pending merger with Aslin Group. Merger expenses totaled $320,000 in the second quarter of 2014.

Net interest income for the third quarter of 2014 grew $236,000, or 2.2 percent, compared to the third quarter of 2013, as lower funding costs and growth in earning assets continued to offset declines in earning asset yields. Net interest income benefited from earning asset balances that were 5.7 percent higher than in the prior-year period due to 8.0 percent growth in average loans.

Third quarter 2014 average commercial and industrial ("C&I") loan balances grew 21.1 percent from the comparable prior-year period, demonstrating the Company's continued success in executing on its strategic objective of increasing full commercial banking relationships while maintaining strict underwriting discipline. The increase in C&I loan volume, particularly from the Company's specialty finance offerings, more than offset the 28 basis point compression in average loan yields in the sustained low-rate environment over the last year.

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