Recent CEO Letters | First Business

The most recent letter is posted below. Please scroll down to see earlier letters.

November 19, 2009

Dear Shareholder,

We are pleased to announce that First Business earned $1.4 million for the third quarter of 2009. These results are especially noteworthy given the economic environment in which we are operating. A complete set of third quarter financial statements (Form 10-Q) filed with the SEC can be accessed on our website www.firstbusiness.com. Simply go to the “Investor Relations” tab and select “SEC Filings.”

As I mentioned in my last letter, in the current banking environment there are unique opportunities to add new high value client relationships and enhance our staff. We have capitalized on these opportunities which resulted in growth in loans, deposits, and total assets again in the third quarter. This growth is particularly satisfying as loan growth across the industry was actually negative for the quarter.

As we continue to operate in dynamic and challenging economic times, we appreciate your support and are confident in our ability to build long term value for our shareholders. If you have any questions or business opportunities for us to pursue, please feel free to contact me at 608-232-5901 or cchambas@firstbusiness.com.

Sincerely,

Corey Chambas
President & CEO

August 19, 2009

Dear Shareholder,

Thank you for your continued support of First Business in what have been challenging economic times, and trying times for bank stocks in particular. While many banks recently reported net losses for the quarter, we are pleased to have earned a profit for both the second quarter and the first half of 2009. This is after an industry-wide FDIC special assessment that was charged to all banks in the second quarter, which amounted to almost $500,000 for First Business.

Although we aren’t immune to these challenging economic conditions, we are making excellent progress in growing our core earnings by continuing to increase revenues while working diligently to control expenses. In this current banking environment, there are unique opportunities to add new high value client relationships and enhance our staff, both of which will add to our bottom line and create long term value.

One area of focus has been, and continues to be, increasing our in-market deposit levels. In the first half of 2009, we were successful in increasing our in-market deposits by over $125 million. These increases came in NOW accounts, money market accounts and CDs. Our strategies have included targeted treasury management initiatives and marketing our competitive interest rates.

We also want to take this opportunity to acknowledge the significant contributions of Loren Mortenson, a recently retired First Business Financial Services, Inc. board member. As a director for 15 years, Loren has had considerable impact on the vision, direction and success of our company.

As we continue to operate in dynamic times, we appreciate your support and are confident in our ability to build long term value for our shareholders. Please feel free to contact me at 608-232-5901 or cchambas@firstbusiness.com if you have any questions or business opportunities for us to pursue.

Sincerely,

Corey Chambas
President & CEO

May 18, 2009

Dear Shareholder:

We held another successful annual shareholder meeting May 4 at the Fluno Center on the University of Wisconsin campus in Madison. Gary Zimmerman, Mark Bugher, and I were reelected to three year terms as directors with each nominee receiving over 97% of the shares voted at the meeting, either in person or by proxy.

In addition to reviewing our 2008 financial results, we discussed the first quarter of 2009. A complete set of first quarter financial statements filed with the SEC can be accessed through the SEC Filings section of our website www.firstbusiness.com. Simply go to the “Investor Relations” tab and select “SEC Filings.”

The shareholder presentation highlighted the solid execution of our growth plan and our plans going forward. As it has been in the recent past, the focus for 2009 continues to be the organic growth of our existing businesses and the further leveraging of our fixed costs (i.e., growing our revenues faster than our expenses). In addition, given the difficult economic environment, we continue to diligently focus on the credit quality of our loan portfolio. A copy of this shareholder presentation is posted on our website and can be found by going to the “Investor Relations” tab and choosing “Presentations.”

We value this opportunity to interact with our shareholders, listen to their ideas and answer questions. To encourage your attendance and make this meeting as convenient as possible, we are asking for your input. Please take a few moments and complete the enclosed survey card to help us determine whether there is a more convenient time for future annual meetings.

While we are operating in very dynamic and challenging economic times, we remain confident in our ability to build long term value for our shareholders and we appreciate your continued support. Please feel free to contact me at 608-232-5901 or cchambas@firstbusiness.com if you have any questions or business opportunities for us to pursue.

Sincerely,

Corey Chambas
President & CEO

March 30, 2009

Dear Shareholder,

We are very excited to announce First Business surpassed $1 billion in assets at year end 2008 and also wanted to update you on recent events related to our application for the US Treasury TARP program.

Although we applied to the program and subsequently received preliminary approval of our application, we have decided not to participate. Our Board of Directors, in conjunction with outside advisors, has been analyzing the TARP program since it was first announced. After thoughtful and careful consideration, we determined it is in the best interests of our shareholders to decline participation in this program.

We first applied for TARP in October of last year, and there have been many changes to the program since then. This time allowed us to continue to analyze the evolving economic environment and our company’s growth plans and capital needs. Furthermore, in 2008 we added to our capital through another year of profitability and a successful Trust Preferred offering.

You may recall we held a special shareholder meeting in December to amend our Articles of Incorporation to allow for our potential participation in the program. We appreciate the strong support from our shareholders in voting for those changes. Although these important amendments were not used for this program, they do give us the flexibility to consider other capital management opportunities in the future.

While these are challenging times for the economy and our industry, we remain confident in our company and appreciate your continued support.

Sincerely,

Jerry Smith Corey Chambas
Chairman of the Board President & Chief Executive Officer

November 13, 2008

Dear Shareholder:

You may have seen our recent press release which reported a 28.5% increase in net income for the first nine months of 2008 when compared to the same period one year ago. We are also very pleased that we were able to bolster our capital position in the third quarter through a successful $10.0 million Trust Preferred private placement which supports our growth strategy. It is significant to note that we have had minimal loan charge-offs this year and no write downs in our investment portfolio. We are very proud of these results, especially in light of the current economic and banking environment. A complete set of third quarter financial statements filed with the SEC can be accessed on our website www.firstbusiness.com. Simply go to the “Investor Relations” tab and select “SEC Filings.”

Nationally, there were significant developments in the financial services industry during the third quarter, including unprecedented levels of FDIC and Treasury Department involvement. This has created opportunities for First Business, such as unlimited FDIC insurance coverage on non-interest bearing business checking accounts, which we will take advantage of, and potential for additional capital to further enhance our growth, should we participate in the Treasury’s Capital Purchase Plan.

We appreciate your support of First Business and what we are building. Please feel free to contact me at 608-232-5901 or cchambas@firstbusiness.com if you have any questions or any business opportunities for us to pursue.

Sincerely,

Corey Chambas
President & CEO

August 19, 2008

Dear Shareholder,

You may have seen our recent press release which reported a 26.1% increase in net income for the first half of 2008 when compared to the same period one year ago. We are very pleased with these results. A complete set of second quarter financial statements filed with the SEC can be accessed on our website www.firstbusiness.com. Simply go to the “Investor Relations” tab and select “SEC Filings.”

In talking to some of our shareholders about these results, it has come to our attention that there is some confusion about the nuances and terminology of buying or selling our shares. We felt it might be helpful to briefly point out the difference between a “limit order” and a “market order.” In a hypothetical example, let’s say the best “bid,” or the highest price someone is willing to buy shares at is $16.50 and the best “ask,” or the lowest price someone is willing to sell shares at is $18.50. If someone wanted to sell and put in a “market order” to sell, they would immediately hit the $16.50 market bid and sell at that price. However, if they put in a “limit order” to sell at $17.50, that sale would only occur once someone put in a bid at that $17.50 limit price. On a thinly traded stock like FBIZ, where there is often times a meaningful difference in the “bid/ask spread,” the type of trade order placed (limit or market) can result in very different trade prices. As with any matter such as this, we recommend that you consult with your financial advisor.

Sincerely,

Corey Chambas
President & CEO

March 27, 2008

Dear Shareholder:

As shareholders of First Business Financial Services, you will be interested in the attached press release on our dividend increase. In order to provide additional predictable returns to our shareholders, we began paying dividends in 2003 and have increased the total dividend paid each year, with the announced increase now providing an annualized dividend equivalent of $0.28 per share. Details on our dividend history can be found under the Investor Relations tab of our website at www.firstbusiness.com.

We also want to take this opportunity to remind you of the ability to have your dividend directly deposited to your account at any bank. To sign up for this convenient service, please call Computershare, our transfer agent, at 1-800-893-4698.

Finally, we want to invite you to our annual shareholder meeting to be held on May 5, 2008 at 6:00 PM CDT at the Fluno Center in Madison, where we will provide a review of the success we had in 2007 in executing our growth plan. Once again this year, we will be hosting a reception after the meeting and look forward to seeing you there.

Your shareholder packet will be mailed to you by Computershare on or around April 3, 2008. Please return your proxy card with your vote, or vote your shares via the internet or telephone. Your vote is important to us, so please respond in a timely fashion.

We appreciate and value your support of our company.

Sincerely,

Corey Chambas
President & CEO

November 16, 2007

Dear Friends of First Business:

It is a great time to be a business bank! Our niche focus has insulated us from the turmoil of the residential mortgage market and sub-prime lending. These problems, along with significant non-performing loans and charge-offs, declining net interest margins, and weak loan growth, have contributed to a major slump in bank stocks. Unfortunately, all banks have been painted with the same broad brush.

Fortunately, we have none of these issues, as you can see in the third quarter financial statements posted on our website at www.firstbusiness.com. First Business had loan growth of $46 million in the third quarter, and we have grown 30% over the past twelve months. Furthermore, our net interest margin has remained stable and we have had no loan charge-offs in 2007.

While our continued strong performance goes against the grain of the industry, it has gone largely unnoticed because we do not have any research analyst coverage. Coverage is usually initiated at the time of an equity offering and we have not needed to do an equity offering since we went public.

Consequently, we are out telling the First Business story to our market makers and some retail stock brokers. That Investor Presentation is posted on our website at www.firstbusiness.com/presentations. By the time you receive this letter, we hope to have added audio to the PowerPoint slides. Please take a look at it – we are very proud of what we are accomplishing.

The building in which our Northeast team will occupy space is nearing completion, and is very impressive. The building is located right off Highway 41 at the Prospect Avenue exit, and the “First Business” signage on the building is tremendous. We plan to move in during December. You can see the building and the signage at www.firstbusiness.com/photos.

Starting next year, we would like to send these quarterly updates to you via email. This will be more cost effective, get you the information more quickly, and allow convenient direct links to things like the quarterly financial statements, the Investor Presentation, and the Northeast building photos referenced in this letter. Please return the enclosed card with your email address so we can be sure to get you our year end update.

We appreciate your ongoing support of First Business as we continue to execute our growth strategy. Please feel free to contact me at 608-232-5901 or cchambas@firstbusiness.com if you have questions or business opportunities for us to pursue.

Sincerely,

Corey Chambas
President & CEO

August 9, 2007

Dear Shareholder:

As I mentioned in my last letter and at our annual shareholder meeting, our focus for 2007 is on continued organic growth. I am happy to report that we are having great success in that regard. Our loan and lease outstandings grew by a tremendous $46 million in the second quarter, and are up $163 million from a year ago. In addition, assets under administration in First Business Trust & Investments have grown approximately $100 million over the last year. This outstanding asset growth is the primary driver of a 20% increase in Top Line Revenue (net interest income plus fee income) over this same period. Furthermore, the growth in Top Line Revenue exceeds our target of 12.5%, and based on the current pipeline, we believe this level of growth can be sustained through the remainder of the year.

This unprecedented growth demonstrates that we are effectively executing our previously discussed growth strategy. A copy of our second quarter 10Q which details these results as well as full financial statements has been posted to the Investor Relations section of our website, www.firstbusiness.com.

You may notice that this is a new website address. We are very pleased that we have obtained the “firstbusiness.com” name. This is an additional piece in the building of the “First Business” brand.

One other item of note regarding names is that First Business Leasing is now First Business Equipment Finance. The name change reflects both a trend in the equipment finance industry as well as the broader equipment financing capabilities that the company possesses.

Our Northeast location continues to gain momentum and was featured in an excellent article in the July 23, 2007 issue of The Business News. The article explained the innovative and ultra efficient “cashless” approach utilizing remote deposit and branch automation. Their new building is nearing completion and will be ready for occupancy later this year.

Sincerely,

Corey Chambas
President & CEO

May 15, 2007

Dear Shareholder:

We had an excellent turnout at the May 7 annual shareholder meeting at the Fluno Center on the University of Wisconsin campus in Madison.

Approximately 150 people were in attendance. 76.19% of First Business Financial Services shares were represented in person or by proxy, and Jan Eddy, John Silseth, and Dean Voeks were elected to three year terms as directors.

In the shareholder presentation, we reviewed our 2006 financial statements, company profile, geographic footprint, business lines, historical growth, and stock performance. Of particular note, we opened a new full service banking location in the Fox Valley of Wisconsin during the second half of 2006, and new asset based lending business development offices in Chicago and St. Louis in April of 2007. Our focus for this year is continued organic growth of our existing businesses and further leveraging of our fixed costs. A copy of the shareholder presentation has been posted to the Investor Relations section of our website, www.fbfinancial.com. The Investor Relations section of our website is a great resource for shareholder information. If you have yet to use this, we encourage you to do so.

We appreciate your strong support of First Business and what we are building. Please feel free to contact me at 608-232-5901 or cchambas@fbfinancial.com if you have any questions or any business opportunities for us to pursue.

Sincerely,

Corey Chambas
President & CEO

March 29, 2007

Dear Shareholder:

As shareholders of First Business Financial Services, you will be interested in the attached press release on our dividend increase. To provide additional returns to our shareholders, we began paying annual dividends in 2003, moved to semiannual payments in 2004, and quarterly dividends in 2006. We have also increased the total annual dividend paid each year, starting at $0.15 per share in 2003, with the announced increase now providing an annualized dividend equivalent of $0.26 per share. Details on our dividend history can be found under the Investor Relations tab of our website at www.fbfinancial.com.

We also want to take this opportunity to remind you of the ability to have your dividend directly deposited to your bank account at any bank. To sign up for this convenient service, call Computershare, our transfer agent, at 1-800-893-4698.

Finally, we want to invite you to our annual shareholder meeting to be held on May 7, 2007 at 6:00 PM CDT at the Fluno Center in Madison. You will be receiving your shareholder packet during the week of April 2, 2007. Please return your proxy card with your vote, or vote your shares via telephone or email. Your vote is important to us, so please respond in a timely fashion. Once again this year, we will be hosting a reception after the meeting and look forward to seeing you there.

We appreciate your support of our company.

Sincerely,

Corey Chambas
President & CEO

March 5, 2007

Dear Shareholder:

We are pleased to report that First Business experienced excellent growth during the second half of 2006, both in our assets and in our most important resource, our people.

John Silseth, President of Antietam, LLC expanded his role with us at First Business. He was elected to the First Business Financial Services, Inc. Board of Directors in October, and, in keeping with our local decision making philosophy, was elected Chairman of the First Business Bank – Milwaukee Board, where he has served as a director since 2004.

Dave Vetta joined the company as President & CEO of First Business Bank – Milwaukee. Dave, a Milwaukee native, has a broad banking and investment background, with over 30 years of experience in the industry. Prior to joining First Business, he was a Managing Director at Fifth Third Bank, and a Managing Director at JP Morgan Asset Management.

As we continue to execute our growth and expansion strategy, we are very excited about the progress being made. We have formed a management team for our Fox River Valley location, First Business Bank – Northeast, and are in the process of filing a de novo application for that bank. As in keeping with our strategy and philosophy, and distinctly different from our competition, this will be a separately chartered bank, not a branch.

Jerry mentioned our affiliation with Aldine Capital Fund, L.P. in a previous letter. Enclosed is an article about mezzanine financing by Mark Meloy, President of our Madison bank, which was recently published in Business Watch. We hope this helps you better understand mezzanine financing and its fit in the portfolio of products First Business offers to help our clients with their business needs.

We appreciate your support of our company and your help in our business development efforts. Should you become aware of any new business opportunities, please contact me at 608-232-5901 or cchambas@fbfinancial.com.

Sincerely,

Corey Chambas
President & CEO

February 2, 2007

Dear Shareholder:

I am attaching a reprint of an article about Corey that was written shortly after the announcement of the First Business succession plan. I think this article does a great job providing insight on Corey’s personal background, how he came to join First Business, and his thoughts on what makes First Business unique, and I thought you would enjoy the opportunity to read it.

As always, we greatly appreciate your support. Please keep us in mind when talking to your friends and associates.

Very truly yours,

Jerry Smith
Chairman

November 8, 2006

Dear Shareholder:

During the past year First Business Financial Services has invested in the resources that we believed it would take to grow our Company. We committed to adding staff, systems and facilities to position ourselves for expansion, and we believe that we now have the ability to leverage those resources to achieve our goals.

We are pleased to report that we are now experiencing the growth that we have been preparing for. All of our entities experienced strong asset growth in the third quarter. This growth has come from a concerted effort in business development while we continue to focus on providing premier service to our clients.

We have filed our third quarter financials with the SEC and the statements are available on our website: www.fbfinancial.com. Our loan portfolio grew due to our business development efforts. This growth, accompanied by no significant change in the portfolio’s risk profile, is the primary reason for the large provision for loan loss expense.

Our strategic plans include expanding our commercial finance business to include mezzanine financing. Recently, we agreed to invest up to a total of $3 million in two Limited Partnerships, Aldine Capital Fund and Aldine SBIC Fund. These new funds are being started by several individuals whom we know and who have previously managed successful mezzanine ventures.

We have also opened a loan production office in the Fox River Valley. This new office has already generated significant business for us. It is our desire to expand our presence in Northeast Wisconsin.

Michael Losenegger, who has served as President of our Madison Bank, has been named Chief Operating Officer of First Business Financial Services, Inc. Mark Meloy, who has served as Executive Vice President of our Madison Bank, has been named President of that Bank. We are very pleased to have both of these strong individuals on our leadership team. We had previously announced that Corey Chambas will become CEO of our Company on January 1, 2007. I will continue to serve as Chairman and as Executive Consultant to the Company.

We are grateful for your continuing support.

Very truly yours,

Jerry Smith
Chief Executive Officer

August 14, 2006

Dear Shareholder:

We would like to express our appreciation to Chuck Thompson upon his recent retirement as Chairman of the Board of our Company. Chuck has provided vision and leadership for the board and been a valuable adviser for me personally. The board honored Chuck and Diane at a dinner following Chuck’s last board meeting.

Recently, John Klus and Bill McKee retired from the board of our Madison Bank. Both John and Bill served for many years on the board and they will be missed.

Steve Mixtacki, Senior Vice President and CFO of American TV and Appliance of Madison, Inc., has been elected to the Madison bank board and Tim Wallen, Chief Executive Officer of MLG Commercial, LLC, has been elected to our Milwaukee bank board. We welcome them. Their experience and contacts should be very valuable for us.

First Business Financial Services was ranked 18th among 200 publicly traded community banking companies nationwide in the July 2006 issue of U.S. Banker magazine. The banks were ranked according to the three year average return on equity ending in 2005.

We have filed our second quarter financials with the SEC and the statements are available on our website: www.fbfinancial.com.

We are grateful for your continuing support. Please keep us in mind when speaking with your friends and associates.

Very truly yours,

Jerry Smith
Chief Executive Officer

May 11, 2006

Dear Shareholder:

Our 2006 Annual Shareholders Meeting was very well attended. 74% of our shares were represented in person or by proxy. There were over 100 people in attendance and the recommended proposals passed by wide margins. The Fluno Center for Executive Education, located on the University of Wisconsin campus, provided an ideal venue for our presentations and the reception that followed.

Joan Burke, President of First Business Trust & Investments, gave a presentation on the Trust area, its growth from its inception in 2002, and its stellar investment results. We have enclosed a copy of those results with this letter.

We previously mailed a copy of our Annual Report to you. A summary of the financial information from that report is available on our website: www.fbfinancial.com. We filed our first quarter 2006 financials with the SEC and those statements are also available on our website.

We reminded the shareholders present at the annual meeting to utilize our market makers if they are interested in buying or selling shares of our stock. These companies have committed capital to support our stock and work to build value for our shareholders. This is not true for discount or internet brokerage firms. We have enclosed a list of the firms that have made a commitment to us. Our stock is still very thinly traded and using these firms as a resource can be very beneficial.

I am very excited about the position of our company at this time. We have the staff, systems and access to capital to take our company forward. We need to leverage these resources and get our story out.

We are very grateful for your continuing support.

Very truly yours,

Jerry Smith
Chief Executive Officer


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