First Business Financial Services, Inc. reported significant growth in its financial performance for the third quarter and the nine months ended September 30, 2024, compared to the same periods in 2023. Total assets increased by $207.9 million, or 7.9%, reaching $3.716 billion, while total liabilities rose by $185.5 million, or 7.7%, to $3.404 billion. Stockholders' equity also saw a notable increase of $22.4 million, or 10.3%, totaling $312.0 million.
The company experienced a robust rise in net interest income, which for the third quarter was $31.0 million, an increase of $2.4 million, or 8.4%, from $28.6 million in Q3 2023. For the nine months, net interest income reached $91.1 million, up $8.0 million, or 9.6%, from $83.0 million in the prior year. This growth was attributed to higher interest rates and increased loan volumes, with total loans and leases receivable rising to $3.050 billion, a 9.3% annualized increase from $2.819 billion at the end of 2023.
However, non-interest income declined significantly, dropping 16.2% in Q3 to $7.1 million and 12.3% for the nine months to $21.2 million. This decrease was primarily due to lower returns from investments in SBIC mezzanine funds and reduced gains on the sale of SBA loans.
Net income for the third quarter was $10.5 million, compared to $9.9 million in Q3 2023, while net income for the nine months increased to $29.8 million from $27.3 million in the previous year. Earnings per share for Q3 2024 were $1.24, up from $1.17 in Q3 2023, and for the nine months, earnings per share rose to $3.50 from $3.19.
The allowance for credit losses increased to $35.5 million as of September 30, 2024, from $33.0 million at the end of 2023, reflecting a proactive approach to managing credit risk. The company reported a stable allowance for credit losses as a percentage of gross loans and leases at 1.16%.
In terms of strategic developments, First Business Financial Services issued new subordinated notes totaling $20.0 million in September 2024, while redeeming $15.0 million of existing notes in August. The company also maintained compliance with all regulatory capital requirements, with a total capital to risk-weighted assets ratio of 11.72%.
Overall, First Business Financial Services demonstrated solid growth in key financial metrics, despite challenges in non-interest income, positioning itself well for future performance.
About FIRST BUSINESS FINANCIAL SERVICES, INC.
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