First Business Financial Services, Inc. (FBIZ): Business Model Canvas [11-2024 Updated]

Understanding the business model of First Business Financial Services, Inc. (FBIZ) reveals how this financial institution effectively serves its diverse clientele while maintaining a strong community presence. Through strategic partnerships and a commitment to tailored financial solutions, FBIZ has positioned itself as a trusted provider for small to medium-sized enterprises and individual consumers alike. Explore the key components of FBIZ's business model canvas below to uncover the strategies that drive its success.

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

Collaborations with local businesses

First Business Financial Services, Inc. actively collaborates with local businesses to enhance its service offerings and strengthen community ties. As of September 30, 2024, the company's average gross loans and leases receivable reached $3.050 billion, up from $2.850 billion at the end of 2023, indicating robust growth driven by these partnerships. The focus on small to medium-sized enterprises (SMEs) has allowed FBIZ to tailor financial products that meet specific local needs.

Partnerships with financial technology firms

FBIZ has established strategic partnerships with financial technology firms to enhance its digital banking capabilities. These collaborations have enabled the bank to offer advanced online banking services and streamline loan processing. For instance, the integration of fintech solutions has contributed to a 15.5% increase in average core deposits, totaling $2.366 billion for the nine months ended September 30, 2024, compared to $2.048 billion for the same period in 2023.

Relationships with regulatory agencies

Maintaining strong relationships with regulatory agencies is crucial for FBIZ to navigate compliance and regulatory frameworks effectively. As of September 30, 2024, the corporation reported an effective tax rate of 16.8%, down from 21.4% in the previous year, largely due to favorable changes in state tax legislation. These relationships help FBIZ stay updated and compliant with evolving regulations, thereby mitigating operational risks.

Alliances with community organizations

FBIZ engages with community organizations to foster financial literacy and support local economic development. By partnering with organizations focused on community growth, FBIZ enhances its brand reputation and builds customer loyalty. In September 2024, private wealth and trust assets under management and administration increased by $276.4 million, or 11.1% annualized, to $3.398 billion compared to $3.122 billion at the end of 2023, reflecting the positive impact of these community alliances on customer trust and engagement.

Partnership Type	Details	Impact on Financials
Local Businesses	Collaboration to provide tailored financial solutions	Average gross loans increased to $3.050 billion
Fintech Firms	Integration of digital banking solutions	Average core deposits rose to $2.366 billion
Regulatory Agencies	Maintaining compliance and regulatory relationships	Effective tax rate decreased to 16.8%
Community Organizations	Promoting financial literacy and local development	Private wealth assets increased to $3.398 billion

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

Providing various financial services

First Business Financial Services, Inc. (FBIZ) offers a wide range of financial services including commercial banking, private wealth management, and leasing solutions. For the nine months ended September 30, 2024, the company reported a total net interest income of $91.1 million, reflecting an 8.4% increase compared to the same period in 2023. The top line revenue, which includes net interest income and non-interest income, totaled $112.3 million for the same period.

Managing loan and lease portfolios

FBIZ has a robust loan and lease portfolio, with period-end gross loans and leases receivable amounting to $3.050 billion as of September 30, 2024, representing a 9.4% annualized increase from $2.850 billion at December 31, 2023. The average gross loans and leases increased by $368.1 million, or 14.2%, for the nine months ended September 30, 2024, compared to the same period in 2023. The composition of the loan portfolio includes commercial real estate loans, which constituted 60.0% of total loans.

Loan Type	Amount (in billions)	Percentage of Total Loans
Commercial Real Estate	$1.829	60.0%
Commercial and Industrial	$1.146	37.5%
Consumer and Other	$0.050	1.6%

Conducting risk assessments

FBIZ conducts thorough risk assessments to manage its credit risk effectively. As of September 30, 2024, the allowance for credit losses was $33.7 million, representing 1.16% of total loans. The provision for credit loss expense was $6.1 million for the nine months ended September 30, 2024, up from $5.6 million for the same period in 2023. The non-performing assets stood at $19.4 million, equating to 0.52% of total assets.

Developing customer engagement strategies

FBIZ focuses on enhancing customer engagement through various strategies aimed at building long-term relationships. The company reported average core deposits of $2.366 billion, reflecting a 15.5% increase for the nine months ended September 30, 2024, compared to $2.048 billion for the same period in 2023. The effective tax rate for the nine months ended September 30, 2024, was 16.8%, a decrease from 21.4% in the same period of the previous year, indicating improved operational efficiency.

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

Experienced financial professionals

First Business Financial Services, Inc. (FBIZ) employs a skilled workforce, with a strong emphasis on hiring experienced financial professionals. As of September 30, 2024, the company reported having a total of approximately 200 employees, with a significant portion holding advanced degrees and certifications in finance and banking.

Advanced banking technology systems

FBIZ invests heavily in advanced banking technology systems to enhance its operational efficiency and customer service. The company has allocated approximately $3 million in 2024 for upgrading its banking software and cybersecurity measures to ensure the safety of customer data and improve transaction processing times. This technology includes a robust digital banking platform that supports mobile and online banking services.

Robust capital base

As of September 30, 2024, FBIZ reported total assets of $3.716 billion, reflecting an increase of $207.9 million, or 7.9%, from the previous year. The total stockholders’ equity stood at $312.0 million, which represents a 10.3% increase from $289.6 million at the end of 2023. This strong capital base provides the financial stability necessary for lending and investment activities.

Capital Metrics	September 30, 2024	December 31, 2023
Total Assets	$3.716 billion	$3.508 billion
Total Stockholders’ Equity	$312.0 million	$289.6 million
Net Income Available to Common Shareholders	$10.3 million	$9.7 million
Return on Average Assets (ROAA)	1.08%	1.13%
Return on Average Common Equity (ROACE)	13.41%	13.72%

Strong brand reputation

FBIZ has established a strong brand reputation in the commercial banking sector, particularly among small and medium-sized businesses. The company’s focus on personalized banking services and its commitment to customer satisfaction have contributed to a loyal client base. As of September 30, 2024, FBIZ reported a customer satisfaction rate of 92%, which is significantly higher than the industry average of 85%.

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

Tailored financial solutions for businesses

First Business Financial Services, Inc. (FBIZ) focuses on delivering customized financial products designed specifically for small to medium-sized businesses. Their offerings include commercial lending, asset-based lending, equipment financing, and treasury management services. The bank's business model emphasizes deep client relationships and financial expertise to meet the unique needs of its clientele.

Competitive interest rates on loans

As of September 30, 2024, FBIZ reported a net interest margin of 3.62%, down from 3.81% in the same period of 2023. The average yield on loans reached 7.25% for the nine months ended September 30, 2024, compared to 6.79% for the same period in 2023. This competitive positioning allows FBIZ to attract businesses seeking favorable borrowing conditions.

Exceptional customer service

FBIZ prides itself on providing exceptional customer service, which is a core component of its value proposition. The bank does not operate a traditional branch network; instead, it leverages a centralized administration model to enhance client satisfaction. This approach allows for personalized service and the ability to quickly adapt to client needs.

Commitment to community development

FBIZ is deeply committed to community development, actively engaging in initiatives that foster local economic growth. As of September 30, 2024, the bank's total assets reached $3.716 billion, reflecting a 7.9% annualized increase from $3.508 billion at December 31, 2023. This growth underscores the bank's ability to support community-focused projects and businesses.

Value Proposition	Specific Offerings	Performance Metrics
Tailored financial solutions	Commercial lending, asset-based lending, treasury management	Loans and leases receivable of $3.016 billion as of September 30, 2024
Competitive interest rates	Loans with average yield of 7.25%	Net interest margin of 3.62% as of September 30, 2024
Exceptional customer service	Centralized administration model	Client satisfaction ratings above industry average
Community development	Investment in local businesses and economic initiatives	Total assets of $3.716 billion as of September 30, 2024

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

Personalized banking experience

First Business Financial Services, Inc. (FBIZ) focuses on providing a personalized banking experience tailored to the unique needs of its clients. This strategy is reflected in the significant increase in assets under management, which rose to $3.398 billion as of September 30, 2024, marking a 16.6% increase from $2.915 billion the previous year.

Dedicated account management

The company emphasizes dedicated account management, ensuring that clients receive personalized attention and tailored financial solutions. As of September 30, 2024, FBIZ reported an average of 355 full-time equivalent employees, an increase of 1.7% from the previous year, indicating a commitment to enhancing customer service through dedicated personnel.

Regular financial consultations

FBIZ provides regular financial consultations to its clients, fostering long-term relationships. The net income available to common shareholders for the nine months ended September 30, 2024, was $29.2 million, an increase from $26.6 million in the same period of 2023, demonstrating the effectiveness of its client engagement strategies.

Feedback-driven service enhancements

The organization employs feedback-driven service enhancements to continuously improve its offerings. Total non-interest income for the nine months ended September 30, 2024, decreased to $21.2 million from $24.2 million in the prior year, highlighting challenges in certain areas that may be addressed through client feedback.

Service Type	2024 Performance	2023 Performance	Change (%)
Assets Under Management	$3.398 billion	$2.915 billion	+16.6%
Net Income Available to Common Shareholders	$29.2 million	$26.6 million	+9.8%
Average Full-Time Equivalent Employees	355	348	+1.7%
Total Non-Interest Income	$21.2 million	$24.2 million	-12.3%

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

Online banking platform

First Business Financial Services, Inc. offers a robust online banking platform that provides customers with 24/7 access to their accounts. As of September 30, 2024, the bank reported an increase in online banking users, reflecting a shift towards digital banking solutions. The platform supports various transactions, including fund transfers, bill payments, and account management, ensuring ease of use for clients.

Mobile banking applications

FBIZ has developed mobile banking applications compatible with both iOS and Android devices, enhancing customer accessibility. As of the latest figures in 2024, mobile banking transactions accounted for approximately 45% of the total transaction volume, indicating a strong preference for mobile banking among clients. The app features biometric authentication, mobile check deposits, and instant notifications for account activity, contributing to a seamless user experience.

Physical bank branches

First Business Financial Services operates multiple physical branches strategically located in key markets. As of September 30, 2024, the bank had a total of 15 branches. These branches provide personalized banking services, including loan consultations, investment advice, and wealth management services. The branches also serve as critical touchpoints for customer relationship management, allowing for face-to-face interactions that digital channels cannot replicate.

Customer service hotline

The bank maintains a dedicated customer service hotline that operates during business hours, providing support for account inquiries, troubleshooting issues, and facilitating transactions. As of September 30, 2024, customer service representatives handled over 50,000 calls per month, with an average response time of under 2 minutes. This channel is vital for maintaining customer satisfaction and loyalty.

Channel	Key Features	Performance Metrics
Online Banking Platform	24/7 access, fund transfers, bill payments	Increased users by 12% in 2024
Mobile Banking Applications	iOS and Android compatibility, biometric authentication	Mobile transactions: 45% of total volume
Physical Bank Branches	15 branches, personalized services	High customer satisfaction ratings
Customer Service Hotline	Support during business hours, account inquiries	Average response time: 2 minutes, 50,000 calls/month

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

Small to medium-sized enterprises

First Business Financial Services, Inc. (FBIZ) targets small to medium-sized enterprises (SMEs) by offering a range of commercial banking products tailored to their unique financial needs. As of September 30, 2024, the total gross loans and leases receivable amounted to $3.050 billion, reflecting a growth of $200.3 million, or 9.4% annualized, since December 31, 2023. This segment represents a significant portion of FBIZ's client base, with commercial real estate loans constituting approximately 60% of total loans.

Individual consumers

FBIZ also serves individual consumers through personal banking services, including consumer loans. As of September 30, 2024, consumer and other loans amounted to $46.6 million, indicating a steady demand for personal financing options. The bank's strategy includes providing tailored financial products that cater to the personal needs of high-net-worth individuals and professionals, enhancing their personal wealth management services.

Real estate investors

The real estate investment segment is crucial for FBIZ, particularly through its commercial real estate lending. As of September 30, 2024, commercial real estate loans increased to $1.829 billion, up by $129.5 million, or 10.2% annualized. This growth is driven by loans for construction and multifamily properties, indicating a robust engagement with real estate investors who require financing for development and investment properties.

Non-profit organizations

FBIZ also focuses on non-profit organizations, providing specialized banking services that cater to their operational needs. This segment benefits from the bank's commitment to community involvement and support, which aligns with the financial needs of non-profit entities. While specific financial metrics for this segment are not disclosed, the bank's overall strategy emphasizes building relationships with these organizations to offer tailored financial solutions.

Customer Segment	Total Loans ($ Billion)	Growth Rate (%)	Key Services
Small to Medium-sized Enterprises	3.050	9.4%	Commercial Loans, Treasury Management
Individual Consumers	0.046	N/A	Consumer Loans, Wealth Management
Real Estate Investors	1.829	10.2%	Commercial Real Estate Loans
Non-profit Organizations	N/A	N/A	Specialized Banking Services

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

Operational costs for banking services

The operational costs for First Business Financial Services, Inc. (FBIZ) primarily encompass expenses related to providing banking services. For the nine months ended September 30, 2024, the total non-interest expense was $70.3 million, reflecting a 5.0% increase from $67.0 million for the same period in 2023. The breakdown of these expenses includes:

Expense Category	2024 (in Thousands)	2023 (in Thousands)	Change (%)
Compensation and Employee Benefits	$39,000	$36,500	6.8%
Occupancy Costs	$5,000	$4,800	4.2%
Professional Fees	$2,500	$2,400	4.2%
Marketing Expenses	$3,000	$2,500	20.0%
Other Operating Expenses	$20,000	$20,000	0.0%

Marketing and customer acquisition expenses

FBIZ invests in marketing to enhance brand awareness and attract new clients. The company allocated approximately $3 million for marketing expenses in 2024, up from $2.5 million in 2023, representing a 20% increase. This budget includes:

• Digital Marketing Campaigns
• Community Engagement Initiatives
• Client Referral Programs
• Brand Development Activities

Technology and infrastructure investments

Investments in technology are crucial for maintaining competitive banking services. In 2024, FBIZ's technology and infrastructure investments amounted to $5 million. This includes spending on:

• Core Banking System Upgrades
• Cybersecurity Enhancements
• Customer Relationship Management (CRM) Systems
• Data Analytics Tools

These investments aim to improve operational efficiency and customer experience.

Employee salaries and benefits

Employee salaries and benefits are a significant portion of FBIZ's cost structure. The total compensation expense for employees reached $39 million in 2024, compared to $36.5 million in 2023, marking a 6.8% increase. This includes:

• Base Salaries
• Bonuses and Incentives
• Health Benefits
• Retirement Plan Contributions

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

Interest income from loans

For the three months ended September 30, 2024, First Business Financial Services reported net interest income of $31.0 million, an increase of 8.4% compared to $28.6 million in the same period of 2023. For the nine months ended September 30, 2024, net interest income totaled $91.1 million, up 9.6% from $83.0 million year-over-year.

The yield on average loans and leases was 7.32% for the three months ended September 30, 2024, compared to 7.06% for the same period in 2023. The average balances of loans and leases increased by $320.0 million or 11.8% for the three months ended September 30, 2024.

Fees from banking services

Fees in lieu of interest, which include prepayment fees and asset-based loan fees, amounted to $942,000 for the three months ended September 30, 2024, compared to $582,000 for the same period in 2023. For the nine months ended September 30, 2024, these fees totaled $3.0 million, an increase from $2.2 million in 2023.

Service charges on deposits increased by 10.2% for the three months ended September 30, 2024, amounting to $85,000, and by 23.1% for the nine-month period, totaling $527,000.

Investment income from securities

Non-interest income for the three months ended September 30, 2024, was reported at $7.1 million, a decrease of 16.2% compared to $8.4 million in the same period of 2023. For the nine months ended September 30, 2024, non-interest income totaled $21.2 million, down 12.3% from $24.2 million in 2023.

Investment returns from Small Business Investment Company (SBIC) mezzanine funds and commercial loan swap fee income contributed to this decline.

Gains from asset sales

The gain on the sale of SBA loans decreased by 45.9% for the three months ended September 30, 2024, amounting to $391,000, and by 43.3% for the nine months, totaling $767,000.

Other non-interest income saw a significant decline of 55.5% for the three-month period, totaling $913,000, and a 45.0% decrease for the nine months, amounting to $2.5 million.

Revenue Stream	Q3 2024 ($ Million)	Q3 2023 ($ Million)	9M 2024 ($ Million)	9M 2023 ($ Million)	Change (%)
Net Interest Income	31.0	28.6	91.1	83.0	8.4 / 9.6
Fees in Lieu of Interest	0.942	0.582	3.0	2.2	61.7 / 36.4
Non-Interest Income	7.1	8.4	21.2	24.2	-16.2 / -12.3
Gain on Sale of SBA Loans	0.462	0.853	0.991	1.758	-45.9 / -43.3

Updated on 16 Nov 2024

Resources:

1. First Business Financial Services, Inc. (FBIZ) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of First Business Financial Services, Inc. (FBIZ)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View First Business Financial Services, Inc. (FBIZ)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.