First Business Financial Services (NasdaqGS:FBIZ) - Share price, News & Analysis

Q: What is the Fair Price of FBIZ when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

FBIZ ($35.84) is trading below our estimate of [[fair value]] ($64.12)

FBIZ fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	5/6
Financial Health	6/6
Dividends	5/6

FBIZ Stock Overview

Rewards

Trading at 44.1% below our estimate of its fair value

Earnings grew by 31.6% over the past year

Pays a reliable dividend of 2.2%

Risk Analysis

Earnings are forecast to decline by an average of 3.2% per year for the next 3 years

First Business Financial Services Competitors

Esquire Financial Holdings

NasdaqCM:ESQ

US$306.9m

Unity Bancorp

NasdaqGM:UNTY

US$309.2m

Citizens Financial Services

NasdaqCM:CZFS

US$300.9m

PCB Bancorp

NasdaqGS:PCB

US$300.6m

Price History & Performance

Summary of all time highs, changes and price drops for First Business Financial Services
Historical stock prices
Current Share Price	US$35.84
52 Week High	US$36.58
52 Week Low	US$26.57
Beta	0.75
1 Month Change	15.28%
3 Month Change	9.20%
1 Year Change	26.64%
3 Year Change	48.47%
5 Year Change	71.48%
Change since IPO	175.69%

Recent News & Updates

Jul 28

First Business Financial Services GAAP EPS of $1.29 beats by $0.39, revenue of $30.53M beats by $1.2M

First Business Financial Services press release (NASDAQ:FBIZ): Q2 GAAP EPS of $1.29 beats by $0.39. Revenue of $30.53M (+9.3% Y/Y) beats by $1.2M.

Shareholder Returns

	FBIZ	US Banks	US Market
7D	4.0%	3.2%	1.1%
1Y	26.6%	-8.2%	-9.0%

Return vs Industry: FBIZ exceeded the US Banks industry which returned -8.3% over the past year.

Return vs Market: FBIZ exceeded the US Market which returned -8.9% over the past year.

Price Volatility

Is FBIZ's price volatile compared to industry and market?
FBIZ volatility
FBIZ Average Weekly Movement	3.9%
Banks Industry Average Movement	3.6%
Market Average Movement	7.6%
10% most volatile stocks in US Market	17.0%
10% least volatile stocks in US Market	3.1%

Stable Share Price: FBIZ is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: FBIZ's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1909	333	Corey Chambas	https://www.firstbusiness.com

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals. The company offers deposit products, such as non-interest-bearing transaction accounts, interest-bearing transaction accounts, money market accounts, time deposits, and certificates of deposit, as well as credit cards. It also provides loan products, including commercial real estate loans, commercial and industrial loans, small business administration loans, and direct financing leases, as well as consumer and other loans comprising home equity, first and second mortgage, and other personal loans for professional and executive clients.

First Business Financial Services Fundamentals Summary

How do First Business Financial Services's earnings and revenue compare to its market cap?
FBIZ fundamental statistics
Market Cap	US$303.78m
Earnings (TTM)	US$36.31m
Revenue (TTM)	US$123.44m

8.4x

P/E Ratio

1.3x

P/B Ratio

Is FBIZ overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
FBIZ income statement (TTM)
Revenue	US$123.44m
Cost of Revenue	US$0
Gross Profit	US$123.44m
Other Expenses	US$87.12m
Earnings	US$36.31m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	4.28
Gross Margin	100.00%
Net Profit Margin	29.42%
Debt/Equity Ratio	254.9%

How did FBIZ perform over the long term?

See historical performance and comparison

Dividends

2.2%

Current Dividend Yield

17%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is FBIZ undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for FBIZ?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for FBIZ. This is calculated by dividing FBIZ's market cap by their current preferred multiple.
What is FBIZ's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$303.78m

FBIZ key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	-2.6x

Price to Earnings Ratio vs Peers

How does FBIZ's PE Ratio compare to its peers?

FBIZ PE Ratio vs Peers

The above table shows the PE ratio for FBIZ vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	10.3x
ESQ Esquire Financial Holdings	14.7x	25.2%	US$306.9m
UNTY Unity Bancorp	8.2x	3.0%	US$309.2m
CZFS Citizens Financial Services	10.9x	6.8%	US$300.9m
PCB PCB Bancorp	7.4x	3.2%	US$300.6m
FBIZ First Business Financial Services	8.4x	-3.2%	US$303.8m

Price-To-Earnings vs Peers: FBIZ is good value based on its Price-To-Earnings Ratio (8.4x) compared to the peer average (10.3x).

Price to Earnings Ratio vs Industry

How does FBIZ's PE Ratio compare vs other companies in the US Banks Industry?

Price-To-Earnings vs Industry: FBIZ is good value based on its Price-To-Earnings Ratio (8.4x) compared to the US Banks industry average (10.2x)

Price to Earnings Ratio vs Fair Ratio

What is FBIZ's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

FBIZ PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	8.4x
Fair PE Ratio	10x

Price-To-Earnings vs Fair Ratio: FBIZ is good value based on its Price-To-Earnings Ratio (8.4x) compared to the estimated Fair Price-To-Earnings Ratio (10x).

Share Price vs Fair Value

What is the Fair Price of FBIZ when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: FBIZ ($35.84) is trading below our estimate of fair value ($64.12)

Significantly Below Fair Value: FBIZ is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is First Business Financial Services forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-3.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: FBIZ's earnings are forecast to decline over the next 3 years (-3.2% per year).

Earnings vs Market: FBIZ's earnings are forecast to decline over the next 3 years (-3.2% per year).

High Growth Earnings: FBIZ's earnings are forecast to decline over the next 3 years.

Revenue vs Market: FBIZ's revenue (7.2% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: FBIZ's revenue (7.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: FBIZ's Return on Equity is forecast to be low in 3 years time (12.3%).

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Past Performance

How has First Business Financial Services performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

22.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: FBIZ has high quality earnings.

Growing Profit Margin: FBIZ's current net profit margins (29.4%) are higher than last year (26.1%).

Past Earnings Growth Analysis

Earnings Trend: FBIZ's earnings have grown significantly by 22% per year over the past 5 years.

Accelerating Growth: FBIZ's earnings growth over the past year (31.6%) exceeds its 5-year average (22% per year).

Earnings vs Industry: FBIZ earnings growth over the past year (31.6%) exceeded the Banks industry 9.2%.

Return on Equity

High ROE: FBIZ's Return on Equity (15.1%) is considered low.

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Financial Health

How is First Business Financial Services's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Financial Institutions Analysis

Asset Level: FBIZ's Assets to Equity ratio (11.1x) is moderate.

Allowance for Bad Loans: FBIZ has a sufficient allowance for bad loans (432%).

Low Risk Liabilities: 74% of FBIZ's liabilities are made up of primarily low risk sources of funding.

Loan Level: FBIZ has an appropriate level of Loans to Assets ratio (82%).

Low Risk Deposits: FBIZ's Loans to Deposits ratio (121%) is appropriate.

Level of Bad Loans: FBIZ has an appropriate level of bad loans (0.2%).

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Dividend

What is First Business Financial Services's current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.20%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: FBIZ's dividend (2.2%) is higher than the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: FBIZ's dividend (2.2%) is low compared to the top 25% of dividend payers in the US market (3.95%).

Stability and Growth of Payments

Stable Dividend: FBIZ's dividends per share have been stable in the past 10 years.

Growing Dividend: FBIZ's dividend payments have increased over the past 10 years.

Current Payout to Shareholders

Earnings Coverage: With its low payout ratio (17.1%), FBIZ's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: FBIZ's dividends in 3 years are forecast to be well covered by earnings (20% payout ratio).

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Management

How experienced are the management team and are they aligned to shareholders interests?

8.2yrs

Average management tenure

CEO

Corey Chambas (59 yo)

17.5yrs

Tenure

US$1,629,663

Compensation

Mr. Corey A. Chambas has been the Chief Executive Officer of First Business Financial Services, Inc. and First Business Capital Corp. since December 2006 and has been its President since February 2005. Mr....

CEO Compensation Analysis

Compensation vs Market: Corey's total compensation ($USD1.63M) is below average for companies of similar size in the US market ($USD2.58M).

Compensation vs Earnings: Corey's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: FBIZ's management team is seasoned and experienced (8.2 years average tenure).

Board Members

Experienced Board: FBIZ's board of directors are considered experienced (5.5 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: FBIZ insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/17 00:00
End of Day Share Price	2022/08/17 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31