First Business Financial Services Inc. (FBIZ, Financial) filed Quarterly Report for the period ended 2009-06-30.
First Business Financial Services is the parent of the First Business family of companies managing shareholder relations and providing access to capital for our operating entities. It provides its subsidiaries with cost-effective corporate services including human resources finance information technology and marketing. Its companies include First Business Bank First Business Bank - Milwaukee First Business Trust & Investments First Business Leasing LLC and First Business Capital Corp. First Business Financial Services Inc. has a market cap of $23.9 million; its shares were traded at around $9.39 with and P/S ratio of 0.4. The dividend yield of First Business Financial Services Inc. stocks is 3%.
Average earning assets increased 7.8% to $1.0 billion for the three months ended June 30, 2009 from $932.4 million for the three months ended June 30, 2008, with the growth occurring primarily in our commercial real estate loan portfolios and our short-term investments. As we continue to build our on-balance sheet liquidity, short-term investments primarily include balances on deposit with the Federal Reserve Bank. We experienced a strong level of growth in the loan and lease portfolio during the second quarter of 2008, but experienced limited growth in the loan and lease portfolio in the second quarter of 2009 as we continued to compete with other lenders for fewer high quality loan opportunities. The average balance of our commercial and industrial loan portfolio decreased $13.4 million, or 5.9%, due to many clients reducing their balance sheets and outstanding debt obligations due to the current economic environment.
Average interest bearing liabilities increased 8.5% to $929.2 million for the three months ended June 30, 2009 from $856.2 million for the comparable period of the prior year, with the growth occurring primarily in our money market deposit accounts.
The yield on earning assets was 5.62% for the six months ended June 30, 2009, a decline of 88 basis points from 6.50% for the six months ended June 30, 2008. The decline in the yield on earning assets is attributable to the loan and lease portfolio. Similar to the discussion of the fluctuations in the three months ended June 30, 2009 and 2008 above, loan yields have been primarily impacted by the declining interest rate environment and the repricing of adjustable rate loans mitigated by the existence of interest rate floors within the terms of the contracts. Foregone interest was approximately $731,000 for the six months ended June 30, 2009 compared to $299,000 for the six months ended June 30, 2008 resulting in a reduction in the loan and lease portfolio yield of approximately 10 basis points. The remaining decline in the yield on earning assets is directly related to the changing interest rate environment.
Average earning assets increased 7.8% to $991.2 million for the six months ended June 30, 2009 from $919.2 million for the six months ended June 30, 2008, with the growth occurring primarily in our commercial real estate loan portfolio and our short-term investments as we continue to build our on-balance sheet liquidity. We experienced a strong level of growth in the loan and lease portfolio during the first half of 2008, but have experienced limited growth in the loan and lease portfolio in the first half of 2009 as we continue to compete with other lenders for fewer high quality loan opportunities.
Average interest bearing liabilities increased 8.4% to $916.3 million for the six months ended June 30, 2009 from $845.3 million for the comparable period of the prior year, with the growth occurring primarily in our in-market interest-bearing accounts.
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First Business Financial Services is the parent of the First Business family of companies managing shareholder relations and providing access to capital for our operating entities. It provides its subsidiaries with cost-effective corporate services including human resources finance information technology and marketing. Its companies include First Business Bank First Business Bank - Milwaukee First Business Trust & Investments First Business Leasing LLC and First Business Capital Corp. First Business Financial Services Inc. has a market cap of $23.9 million; its shares were traded at around $9.39 with and P/S ratio of 0.4. The dividend yield of First Business Financial Services Inc. stocks is 3%.
Highlight of Business Operations:
The yield on earning assets was 5.58% for the three months ended June 30, 2009, a decline of 74 basis points from 6.32% for the three months ended June 30, 2008. The decline in the yield on earning assets is attributable to the loan and lease portfolio. Loan yields were primarily impacted by the declining interest rate environment and the repricing of adjustable rate loans mitigated by the existence of interest rate floors within the terms of the contracts. The existence of the interest rate floors and fixed rate loans provide opportunities to protect our interest income in a low rate environment. As of June 30, 2009, approximately 52% of our loan and lease portfolio had a fixed interest rate while 25% of our loan and lease portfolio contained interest rate floors. The magnitude of the portfolio being fixed rate in nature or represented by in-the-money floors has protected our loan and lease portfolio yield from declines of the same magnitude as the overall interest rate environment. The average prime rate declined 183 basis points to 3.25% for the three months ended June 30, 2009 compared to 5.08% for the same three month period of 2008. In addition we have experienced increased levels of non-accrual loans, resulting in foregone interest of approximately $389,000 for the three months ended June 30, 2009, compared to $132,000 for the three months ended June 30, 2008. This equates to approximately a 12 basis point reduction in the overall loan and lease portfolio yield. We also recognize as part of interest yield prepayment fees for loans that are paid in full prior to their stated maturity. For the three months ended June 30, 2009, we recognized approximately $228,000 of prepayment fees compared to $16,000 for the three months ended June 30, 2008 resulting in an increase of the overall yield of the loan and lease portfolio of approximately 10 basis points.Average earning assets increased 7.8% to $1.0 billion for the three months ended June 30, 2009 from $932.4 million for the three months ended June 30, 2008, with the growth occurring primarily in our commercial real estate loan portfolios and our short-term investments. As we continue to build our on-balance sheet liquidity, short-term investments primarily include balances on deposit with the Federal Reserve Bank. We experienced a strong level of growth in the loan and lease portfolio during the second quarter of 2008, but experienced limited growth in the loan and lease portfolio in the second quarter of 2009 as we continued to compete with other lenders for fewer high quality loan opportunities. The average balance of our commercial and industrial loan portfolio decreased $13.4 million, or 5.9%, due to many clients reducing their balance sheets and outstanding debt obligations due to the current economic environment.
Average interest bearing liabilities increased 8.5% to $929.2 million for the three months ended June 30, 2009 from $856.2 million for the comparable period of the prior year, with the growth occurring primarily in our money market deposit accounts.
The yield on earning assets was 5.62% for the six months ended June 30, 2009, a decline of 88 basis points from 6.50% for the six months ended June 30, 2008. The decline in the yield on earning assets is attributable to the loan and lease portfolio. Similar to the discussion of the fluctuations in the three months ended June 30, 2009 and 2008 above, loan yields have been primarily impacted by the declining interest rate environment and the repricing of adjustable rate loans mitigated by the existence of interest rate floors within the terms of the contracts. Foregone interest was approximately $731,000 for the six months ended June 30, 2009 compared to $299,000 for the six months ended June 30, 2008 resulting in a reduction in the loan and lease portfolio yield of approximately 10 basis points. The remaining decline in the yield on earning assets is directly related to the changing interest rate environment.
Average earning assets increased 7.8% to $991.2 million for the six months ended June 30, 2009 from $919.2 million for the six months ended June 30, 2008, with the growth occurring primarily in our commercial real estate loan portfolio and our short-term investments as we continue to build our on-balance sheet liquidity. We experienced a strong level of growth in the loan and lease portfolio during the first half of 2008, but have experienced limited growth in the loan and lease portfolio in the first half of 2009 as we continue to compete with other lenders for fewer high quality loan opportunities.
Average interest bearing liabilities increased 8.4% to $916.3 million for the six months ended June 30, 2009 from $845.3 million for the comparable period of the prior year, with the growth occurring primarily in our in-market interest-bearing accounts.
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