Ann Heffron, CFA, CPAFIRST BUS FINL (FBIZ): Get Free ReportTo read this article on Zacks.com click here.
First Business Financial Services, Inc. (NasdaqGM: FBIZ ) posted net
income of $3.2 million, up 47% from the $2.2 million earned in the
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Diluted earnings per share, which fell 1% to $0.83 from $0.84 in
last year's first quarter due to an increased number of average
shares outstanding, beat our $0.75 estimate by a wide $0.08 margin,
largely due to strong gains in asset quality.
Specifically, the loan loss provision of $80,000 came in $0.72
million below our $0.8 million estimate and collateral liquidation
costs and the loss on foreclosed properties posted small gains
rather than the $125,000 and $50,000 losses we had projected.
Nonaccrual loans decreased $2.4 million, or 17%, sequentially to
$11.7 million due to cash pay-offs on certain existing nonaccrual
loans, while foreclosed assets declined by $0.7 million, or 43%, to
$0.9 million as several properties were sold.
As a percentage of total loans and OREO, nonperforming assets fell
35 basis points to 1.37% from 1.72% at the end of the fourth
We are raising our 2013 diluted EPS estimate by a quarter to $3.30
from $3.05, primarily to reflect a reduction to our estimate for
the loan loss provision.
Our $3.30 estimate is flat with 2012's $3.29, due solely to a
higher number of diluted shares outstanding following the late 2012
sale of 1.265 million common shares. Indeed, our 2013 net earnings
estimate of $13.0 million represents a 46% gain over 2012's $8.9
Our initial 2014 estimate calls for a $0.20, or 6%, advance in
diluted per share earnings to $3.50.
FBIZ recently doubled its quarterly dividend rate to $0.14 from
$0.07, its first increase since 2008.
We note that the ABA Banking Journal ranked FBIZ 15 th
among all publicly traded banks with $1-10 billion in total assets
(of which there are about 250 companies in the US), based upon ROE
in 2011, which was 12.8% for FBIZ. It is the first time FBIZ has
made this list, and speaks to the tremendous improvement in
operating performance the Company has made over the last few
First Business Financial Services, Inc. (FBIZ or the Company) is a
bank holding company headquartered in Madison, Wisconsin, with $1.2
billion in total assets at March 31, 2013. FBIZ specializes in
business lending for small-medium-sized companies with sales
ranging from $2-50 million. As an adjunct to these services, FBIZ
also offers banking services to business owners, executives,
professionals, and high net worth individuals, though this is a
less significant part of its business.