FIRST BUSINESS FINANCIAL SERVICES, INC.

Previous wording

These risks could cause actual results to differ materially from what we have anticipated or projected. These risk factors and uncertainties should be carefully considered by our shareholders and potential investors. See Part I, Item 1A — Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025, and in this report, below, for discussion relating to risk factors impacting us. Investors should not place undue reliance on any such forward-looking statements, which speak only as of the date made. These factors could affect our financial performance and could cause actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods.

Current wording

These risks could cause actual results to differ materially from what we have anticipated or projected. These risk factors and uncertainties should be carefully considered by our shareholders and potential investors. See Part I, Item 1A — Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025, for discussion relating to risk factors impacting us. Investors should not place undue reliance on any such forward-looking statements, which speak only as of the date made. These factors could affect our financial performance and could cause actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods.

Previous wording

We are a registered bank holding company incorporated under the laws of the State of Wisconsin and are engaged in the commercial banking business through our wholly-owned banking subsidiary, FBB. All of our operations are conducted through FBB and First Business Specialty Finance, LLC, a wholly-owned subsidiary of FBB. We operate as a business bank focusing on delivering a full line of commercial banking products and services tailored to meet the specific needs of small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals. Our products and services include those for business banking, private wealth management services, and bank consulting. Within business banking, we offer commercial lending, asset-based lending, accounts receivable financing, equipment financing, floorplan financing, vendor financing, SBA lending and servicing, treasury management services, and company retirement plans. Our private wealth management services include trust and estate administration, financial planning, investment management, and private banking for executives and owners of our business banking clients and others. Our bank consulting experts provide investment portfolio administrative services and asset liability management services. We are not a retail bank and do not rely on a traditional branch network to gather deposits or attract clients. Instead, our operating model is built on deep client relationships, specialized financial expertise, and an efficient, centralized administrative structure designed to deliver best-in-class client satisfaction. This focused approach enables our experienced professionals to provide the level of insight and service required to develop and sustain long-term client relationships. We conduct our commercial banking operations through one operating segment.

Current wording

We are a registered bank holding company incorporated under the laws of the State of Wisconsin and are engaged in the commercial banking business through our wholly-owned banking subsidiary, FBB. All of our operations are conducted through FBB and First Business Specialty Finance, LLC, a wholly-owned subsidiary of FBB. We operate as a business bank focusing on delivering a full line of commercial banking products and services tailored to meet the specific needs of small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals. Our products and services include those for business banking, private wealth management services, and bank consulting. Within business banking, we offer commercial lending, asset-based lending, accounts receivable financing, equipment financing, floorplan financing, vendor financing, treasury management services, and company retirement plans. Our private wealth management services include trust and estate administration, financial planning, investment management, and private banking for executives and owners of our business banking clients and others. Our bank consulting experts provide investment portfolio administrative services and asset liability management services. We are not a retail bank and do not rely on a traditional branch network to gather deposits or attract clients. Instead, our operating model is built on deep client relationships, specialized financial expertise, and an efficient, centralized administrative structure designed to deliver best-in-class client satisfaction. This focused approach enables our experienced professionals to provide the level of insight and service required to develop and sustain long-term client relationships. We conduct our commercial banking operations through one operating segment.

Previous wording

Results as of and for the three months ended March 31, 2026 include:

Current wording

Results as of and for the three and six months ended June 30, 2026 include:

Previous wording

Net income available to common shareholders totaled $12.0 million, or diluted earnings per share of $1.44, for the three months ended March 31, 2026, compared to $11.0 million, or diluted earnings per share of $1.32, for the same period in 2025.

Current wording

Net income available to common shareholders totaled $15.4 million, or diluted earnings per share of $1.84, for the three months ended June 30, 2026, compared to $11.2 million, or diluted earnings per share of $1.35, for the same period in 2025. Net income available to common shareholders totaled $27.3 million, or diluted earnings per share of $3.28, for the six months ended June 30, 2026, compared to $22.2 million, or diluted earnings per share $2.66, for the same period in 2025.

Previous wording

Annualized return on average assets (“ROAA”) for the three months ended March 31, 2026 measured 1.13% compared to 1.14% for the same period in 2025.

Current wording

Annualized return on average assets (“ROAA”) for the three months ended June 30, 2026 measured 1.43%, compared to 1.14% for the same period in 2025. ROAA for the six months ended June 30, 2026 measured 1.28%, compared to 1.14% for the same period in 2025.

Previous wording

Return on average tangible common equity (“ROATCE”) is defined as net income available to common shareholders divided by average equity less average intangible assets and average preferred stock. ROATCE was 13.55% for the three months ended March 31, 2026, compared to 14.12% for the same period in 2025.

Current wording

Return on average tangible common equity (“ROATCE”) is defined as net income available to common shareholders divided by average equity less average intangible assets and average preferred stock. ROATCE was 16.89% for the three months ended June 30, 2026, compared to 14.17% for the same period in 2025. ROATCE was 15.25% for the six months ended June 30, 2026, compared to 14.15% for the same period in 2025.

Previous wording

Pre-tax, pre-provision (“PTPP”) adjusted earnings, which excludes certain one-time and discrete items, for the three months ended March 31, 2026 was $17.2 million, compared to $16.2 million in the same period in 2025.

Current wording

Pre-tax, pre-provision (“PTPP”) adjusted earnings, which excludes certain one-time and discrete items, for the three months ended June 30, 2026 was $19.8 million, compared to $16.0 million in the same period in 2025. PTPP for the six months ended June 30, 2026 was $37.0 million, compared to $32.2 million in the same period in 2025.

Previous wording

Top line revenue, defined as net interest income plus non-interest income, totaled $44.3 million for the three months ended March 31, 2026, compared to $40.8 million in the same period in 2025.

Current wording

Top line revenue, defined as net interest income plus non-interest income, totaled $46.7 million for the three months ended June 30, 2026, compared to $41.0 million in the same period in 2025. Top line revenue totaled $91.0 million for the six months ended June 30, 2026, compared to $81.9 million in the same period in 2025.

Previous wording

Effective tax rate, including the benefit from Low-Income Housing Tax Credits, was 15.16% for the three months ended March 31, 2026 compared to 17.00% for the same period in 2025.

Current wording

Effective tax rate, including the benefit from Low-Income Housing Tax Credits, was 10.89% for the six months ended June 30, 2026 compared to 15.79% for the same period in 2025. Income tax expense for the three and six months ended June 30, 2026 included a $1.5 million release of the remaining state deferred tax valuation allowance.

Previous wording

Provision for credit losses was $3.0 million for the three months ended March 31, 2026 compared to $2.7 million for the same period in 2025.

Current wording

Provision for credit losses was $2.1 million for the three months ended June 30, 2026, compared to $2.7 million for the same period in 2025. Provision for credit losses was $5.0 million for the six months ended June 30, 2026, compared to $5.4 million for the same period in 2025.

Previous wording

Total assets at March 31, 2026 increased $239.0 million, or 5.9%, to $4.321 billion from $4.082 billion at December 31, 2025.

Current wording

Total assets at June 30, 2026 increased $328.1 million, or 8.0%, to $4.410 billion from $4.082 billion at December 31, 2025.

Previous wording

Period-end gross loans and leases receivable increased $125.9 million, or 14.9% annualized, to $3.501 billion as of March 31, 2026 compared to $3.375 billion as of December 31, 2025. Average gross loans and leases of $3.426 billion increased $240.0 million, or 7.5%, for the three months ended March 31, 2026, compared to $3.186 billion for the same period in 2025.

Current wording

Period-end gross loans and leases receivable increased $213.1 million, or 12.6% annualized, to $3.588 billion as of June 30, 2026 compared to $3.375 billion as of December 31, 2025. Average gross loans and leases of $3.488 billion increased $275.5 million, or 8.6%, for the six months ended June 30, 2026, compared to $3.213 billion for the same period in 2025.

Previous wording

Non-performing assets were $40.5 million and 0.94% of total assets as of March 31, 2026, compared to $43.9 million and 1.07% of total assets as of December 31, 2025.

Current wording

Non-performing assets were $38.1 million and 0.86% of total assets as of June 30, 2026, compared to $43.9 million and 1.07% of total assets as of December 31, 2025.

Previous wording

The allowance for credit losses, including reserve for unfunded credit commitments, increased $797,000 compared to December 31, 2025. The allowance for credit losses, including reserve for unfunded credit commitments, was 1.10% of total loans, compared to 1.12% at December 31, 2025.

Current wording

The allowance for credit losses, including reserve for unfunded credit commitments, increased $1.8 million compared to December 31, 2025. The allowance for credit losses, including reserve for unfunded credit commitments, was 1.10% of total loans, compared to 1.12% at December 31, 2025.

Previous wording

Period-end core deposits at March 31, 2026 increased $123.1 million, or 18.4% annualized, to $2.796 billion from $2.673 billion as of December 31, 2025. Average core deposits of $2.849 billion increased $485.7 million or 20.6%, for the three months ended March 31, 2026, compared to $2.363 billion for the same period in 2025.

Current wording

Period-end core deposits at June 30, 2026 increased $204.7 million, or 15.3% annualized, to $2.878 billion from $2.673 billion as of December 31, 2025. Average core deposits of $2.854 billion increased $474.6 million or 19.9%, for the six months ended June 30, 2026, compared to $2.380 billion for the same period in 2025.

Previous wording

Private wealth and trust assets under management and administration increased by $66.1 million, or 6.9% annualized, to $3.881 billion at March 31, 2026, compared to $3.815 billion at December 31, 2025. Private wealth trust assets under management and administration increased $456.2 million, or 13.3%, compared to March 31, 2025.

Current wording

Private wealth and trust assets under management and administration increased by $419.9 million, or 22.0% annualized, to $4.235 billion at June 30, 2026, compared to $3.815 billion at December 31, 2025. Private wealth and trust assets under management and administration increased $503.9 million, or 13.5%, compared to June 30, 2025.

Previous wording

Top line revenue, comprised of net interest income and non-interest income, increased $3.5 million, or 8.5%, for the three months ended March 31, 2026, compared to the same period in 2025, due to a 6.8% increase in net interest income and a 15.8% increase in non-interest income. The increase in net interest income was primarily driven by increases in average loans and leases outstanding, partially offset by a decrease in net interest margin. The increase in non-interest income was due primarily to increases in commercial loan swap income, private wealth income, bank-owned life insurance income, and service charges on deposits, partially offset by decreases in gains on sale of SBA loans.

Current wording

Top line revenue increased $9.1 million, or 11.1%, for the six months ended June 30, 2026, compared to the same period in 2025, due to a 9.9% increase in net interest income and a 16.9% increase in non-interest income. The increase in net interest income was primarily driven by increases in average loans and leases outstanding and prepayment fees, partially offset by lower short-term market rates. The increase in non-interest income was due primarily to increases in private wealth income, income from limited partnership investments, commercial loan swap income, service charges on deposits, and bank-owned life insurance income, partially offset by decreases in gains on sale of SBA loans as noted above.

Previous wording

ROAA for the three months ended March 31, 2026 was 1.13%, compared to 1.14% for the three months ended March 31, 2025. The decrease in ROAA was due to a decrease in net interest margin and an increase in operating expense, partially offset by an improved fee income ratio as non-interest income grew at a faster rate than net interest income. We consider ROAA a critical metric to measure the profitability of our organization and how efficiently our assets are deployed. ROAA also allows us to better benchmark our profitability to our peers without the need to consider different degrees of leverage which can ultimately influence return on equity measures.

Current wording

ROAA for the three and six months ended June 30, 2026 was 1.43% and 1.28%, respectively, compared to 1.14% for both the three and six months ended June 30, 2025. The increase in ROAA was due to an increase in pre-tax, pre-provision earnings driven by average loan growth, stable margin, and strong fee income, as well as a $1.5 million income tax benefit. Excluding the income tax benefit, ROAA was 1.29% and 1.21% for the three and six months ended June 30, 2026, respectively. We consider ROAA a critical metric to measure the profitability of our organization and how efficiently our assets are deployed. ROAA also allows us to better benchmark our profitability to our peers without the need to consider different degrees of leverage which can ultimately influence return on equity measures.

Previous wording

ROATCE for the three months ended March 31, 2026 was 13.6%, compared to 14.1% for the three months ended March 31, 2025. The explanation of the decrease in ROATCE is consistent with the ROAA discussion above. We view ROATCE as an important measurement for monitoring profitability and continue to focus on improving our return to our shareholders by enhancing the overall profitability of our client relationships, controlling our expenses, and minimizing our costs of credit.

Current wording

ROATCE for the three and six months ended June 30, 2026 was 16.9% and 15.2%, respectively, compared to 14.2% for both the three and six months ended June 30, 2025. The explanation of the increase in ROATCE is consistent with the ROAA discussion above. Excluding the income tax benefit, ROATCE was 15.3% and 14.4% for the three and six months ended June 30, 2026, respectively. We view ROATCE as an important measurement for monitoring profitability and continue to focus on improving our return to our shareholders by enhancing the overall profitability of our client relationships, controlling our expenses, and minimizing our costs of credit.

Previous wording

Efficiency ratio measured 61.1% for the three months ended March 31, 2026, compared to 60.3% for the three months ended March 31, 2025. The increase in efficiency ratio was primarily due to a decrease in net interest margin and an increase in compensation expense, partially offset by a volume-driven increase in net interest income and an increase in non-interest income. Efficiency ratio is a non-GAAP measure representing operating expense, which is non-interest expense excluding the effects of the SBA recourse benefit or provision, net gains or losses on repossessed assets, amortization of other intangible assets, and other discrete items, if any, divided by operating revenue, which is equal to net interest income plus non-interest income less realized net gains or losses on securities, if any.

Current wording

Efficiency ratio measured 57.6% and 59.3% for the three and six months ended June 30, 2026, respectively, compared to 61.0% and 60.6% for the three and six months ended June 30, 2025, respectively. The decrease in efficiency ratio was primarily due to a volume-driven increase in net interest income and an increase in non-interest income, partially offset by an increase in compensation expense. Efficiency ratio is a non-GAAP measure representing operating expense, which is non-interest expense excluding the effects of the SBA recourse benefit or provision, net gains or losses on repossessed assets, amortization of other intangible assets, and other discrete items, if any, divided by operating revenue, which is equal to net interest income plus non-interest income less realized net gains or losses on securities, if any.

Previous wording

PTPP adjusted earnings for three months ended March 31, 2026 were $17.2 million, up 6.1%, compared to $16.2 million for the three months ended March 31, 2025. The increase in PTPP is primarily due to an increase in net interest income and non-interest income. This increase in total revenue was partially offset by an increase in non-interest expense primarily due to an increase in compensation expense. In the judgment of the Corporation’s management, the adjustments made to non-interest expense and non-interest income allow investors and analysts to better assess the Corporation’s operating expenses in relation to its core operating revenue by removing the volatility associated with certain one-time items and other discrete items. PTPP adjusted earnings is a non-GAAP measure that allows management to benchmark performance of our model to our peers without the influence of the provision for credit losses and tax considerations, which will ultimately influence other traditional financial measures, including ROAA and ROATCE. The information provided below reconciles the efficiency ratio to its most comparable GAAP measure.

Current wording

PTPP adjusted earnings for the three and six months ended June 30, 2026 were $19.8 million and $37.0 million, respectively, compared to $16.0 million and $32.2 million for the three and six months ended June 30, 2025, respectively. The increase in PTPP adjusted earnings is primarily due to an increase in net interest income and non-interest income and improved efficiency. This increase in total revenue was partially offset by an increase in non-interest expense primarily due to an increase in compensation expense. In the judgment of the Corporation’s management, the adjustments made to non-interest expense and non-interest income allow investors and analysts to better assess the Corporation’s operating expenses in relation to its core operating revenue by removing the volatility associated with certain one-time items and other discrete items. PTPP adjusted earnings is a non-GAAP measure that allows management to benchmark performance of our model to our peers without the influence of the provision for credit losses and tax considerations, which will ultimately influence other traditional financial measures, including ROAA and ROATCE. The information provided below reconciles the efficiency ratio to its most comparable GAAP measure.

Previous wording

The following table provides information with respect to (1) the change in net interest income attributable to changes in rate (changes in rate multiplied by prior volume) and (2) the change in net interest income attributable to changes in volume (changes in volume multiplied by prior rate) for the three months ended March 31, 2026 compared to the same period in 2025. The change in net interest income attributable to changes in rate and volume (changes in rate multiplied by changes in volume) has been allocated to the rate and volume changes in proportion to the relationship of the absolute dollar amounts of the change in each.

Current wording

The following table provides information with respect to (1) the change in net interest income attributable to changes in rate (changes in rate multiplied by prior volume) and (2) the change in net interest income attributable to changes in volume (changes in volume multiplied by prior rate) for the three and six months ended June 30, 2026 compared to the same period in 2025. The change in net interest income attributable to changes in rate and volume (changes in rate multiplied by changes in volume) has been allocated to the rate and volume changes in proportion to the relationship of the absolute dollar amounts of the change in each.

Previous wording

The table below shows our average balances, interest, average yields/rates, net interest margin, and the spread between the combined average yields earned on interest-earning assets and average rates on interest-bearing liabilities for the three months ended March 31, 2026 and 2025. The average balances are derived from average daily balances.

Current wording

The table below shows our average balances, interest, average yields/rates, net interest margin, and the spread between the combined average yields earned on interest-earning assets and average rates on interest-bearing liabilities for the three and six months ended June 30, 2026 and 2025. The average balances are derived from average daily balances.

Previous wording

The change in yield of the respective interest-earning assets or the rate paid on interest-bearing liability compared to the change in short-term market rates is commonly referred to as a beta. The table below displays the beta calculations for loans and leases, total interest earning assets, core deposits, interest-bearing deposits and total interest-bearing liabilities for the three months ended March 31, 2026 and 2025. Additionally, adjusted total loans and leases receivable and adjusted total interest-earning assets exclude the volatile impact of fees in lieu of interest ("FILOI").

Current wording

The change in yield of the respective interest-earning assets or the rate paid on interest-bearing liability compared to the change in short-term market rates is commonly referred to as a beta. The table below displays the beta calculations for loans and leases, total interest earning assets, core deposits, interest-bearing deposits and total interest-bearing liabilities for the three and six months ended June 30, 2026 and 2025.

Previous wording

Comparison of Net Interest Income for the Three Months Ended March 31, 2026 and 2025

Current wording

Comparison of Net Interest Income for the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

Net interest income increased $2.3 million, or 6.8%, during the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in net interest income primarily reflected increases in average gross loans and leases, partially offset by lower net interest margin. Average gross loans and leases for the three months ended March 31, 2026 increased $240.0 million, or 7.5%, compared to the three months ended March 31, 2025.

Current wording

Net interest income increased $4.4 million, or 12.9%, and $6.6 million, or 9.9%, respectively, during the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025. The increase in net interest income primarily reflected increases in average gross loans and leases outstanding and in prepayment fees of $706,000 and $280,000, respectively, during the three and six months ended June 30, 2026. Average gross loans and leases for the three and six months ended June 30, 2026 increased $310.6 million, or 9.6%, and $275.5 million, or 8.6%, respectively, compared to the three and six months ended June 30, 2025.

Previous wording

The yield on average interest-earning assets for the three months ended March 31, 2026, was 6.21%, compared to 6.61% for the three months ended March 31, 2025. The decrease in yield was primarily due to the decrease in short-term market rates.

Current wording

The yield on average interest-earning assets for the three and six months ended June 30, 2026 was 6.45% and 6.33%, respectively, compared to 6.65% and 6.63%, respectively, for the three and six months ended June 30, 2025. The decrease in yield was primarily due to the decrease in short-term market rates.

Previous wording

The average rate paid on total interest-bearing liabilities was 3.14% for the period ended March 31, 2026, a decrease from 3.50% for the period ended March 31, 2025. Total interest-bearing liabilities includes interest-bearing deposits, FHLB advances, subordinated and junior subordinated notes and debentures payable, federal funds purchased, and other borrowings. The average rates paid decreased due to lower short-term interest rates and the replacement of maturing wholesale funds which were at higher fixed rates.

Current wording

The average rate paid on total interest-bearing liabilities was 3.14% for both the three and six months ended June 30, 2026, compared to 3.55% and 3.52% for the three and six months ended June 30, 2025, respectively. Total interest-bearing liabilities includes interest-bearing deposits, FHLB advances, subordinated and junior subordinated notes and debentures payable, federal funds purchased, and other borrowings. The average rates paid decreased due to lower short-term interest rates.

Previous wording

The following table shows the components of the provision for credit losses for the three months ended March 31, 2026 compared to the same period in 2025.

Current wording

The following table shows the components of the provision for credit losses for the three and six months ended June 30, 2026 compared to the same period in 2025.

Previous wording

Comparison of Non-Interest Income for the Three Months Ended March 31, 2026 and 2025

Current wording

Comparison of Non-Interest Income for the Three and Six Months Ended June 30, 2026 and 2025

Previous wording

Non-interest income for the three months ended March 31, 2026 increased $1.2 million, or 15.8%, to $8.8 million compared to $7.6 million for the same period in 2025. The increase in total non-interest income was primarily driven by increases in commercial loan swap fees, private wealth fee income, bank-owned life insurance income, and service charges on deposits, offset by a decrease in gains on sale of SBA loans.

Current wording

Non-interest income for the three months ended June 30, 2026 increased $1.3 million, or 18.1%, to $8.6 million compared to $7.3 million for the same period in 2025. The increase in total non-interest income for the three months ended was primarily driven by higher returns on limited partnership investments, private wealth fee income, service charges on deposits, and bank-owned life insurance income, partially offset by a decrease in gains on sale of SBA loans due to the exit from the out of market SBA 7(a) lending activities in the current quarter. The increase in total non-interest income for the six months ended was primarily driven by increases in commercial loan swap fees, private wealth fee income, bank-owned life insurance income, higher returns on limited partnership investments and service charges on deposits, partially offset by a decrease in gains on sale of SBA loans due to the exit from the out of market SBA 7(a) lending activities in the current quarter. Non-interest income for the six months ended June 30, 2026 increased $2.5 million, or 16.9%, to $17.3 million compared to $14.8 million for the same period in 2025.

Previous wording

Management continues to focus on revenue growth from multiple non-interest income sources to maintain a diversified revenue stream. Contribution from fee-based revenue sources can be variable and driven by changes in the interest rate environment, client activity, and the value of underlying investments. Total non-interest income accounted for 19.8% of total revenues for the three months ended March 31, 2026, compared to 18.6% for the three months ended March 31, 2025.

Current wording

Management continues to focus on revenue growth from multiple non-interest income sources to maintain a diversified revenue stream. Contribution from fee-based revenue sources can be variable and driven by changes in the interest rate environment, client activity, and the value of underlying investments. Total non-interest income accounted for 18.3% and 19.1% of total revenues for the three and six months ended June 30, 2026, respectively, compared to 17.7% and 18.1% for the three and six months ended June 30, 2025, respectively.

Previous wording

Private wealth fee income increased $385,000, or 11.0% for the three months ended March 31, 2026, compared to the same period in 2025. Private wealth fee income was up compared to the prior year primarily due to an increase in assets under management and administration. Private wealth fee income can vary due to the mix of business at different fee structures and can be positively or negatively influenced by the timing and magnitude of volatility in the capital markets. As of March 31, 2026, private wealth and trust assets under management and administration increased $456.2 million, or 13.3%, totaling $3.881 billion compared to $3.425 billion as of March 31, 2025, due to an increase in market values, new clients, and new money from existing clients.

Current wording

Private wealth fee income increased $509,000, or 13.6%, and $894,000, or 12.3%, for the three and six months ended June 30, 2026, respectively, compared to the same period in 2025. Private wealth fee income was up compared to the prior year primarily due to an increase in assets under management and administration. Private wealth fee income can vary due to the mix of business at different fee structures and can be positively or negatively influenced by the timing and magnitude of volatility in the capital markets. As of June 30, 2026, private wealth and trust assets under management and administration increased $503.9 million, or 13.5%, totaling $4.235 billion compared to $3.731 billion as of June 30, 2025, due to an increase in market values, new clients, and new money from existing clients.

Previous wording

Commercial loan swap fee income increased $515,000 for the three months ended March 31, 2026, compared to the same period in 2025. Swap fee income varies period to period based on loan activity and the interest rate environment.

Current wording

Commercial loan swap fee income decreased $8,000, or 4.7%, and increased $507,000, or 179.2%, for the three and six months ended June 30, 2026, respectively, compared to the same period in 2025. Swap fee income varies period to period based on loan activity and the interest rate environment.

Previous wording

Service charges on deposits increased $270,000, or 25.8% for the three months ended March 31, 2026, compared to the same period in 2025. The increase was primarily driven by new and expanded core deposit relationships and a reduction in earnings credit rates. Treasury management business development efforts remain robust as gross treasury management service charges increased $148,000, or 9.1%, for the three months ended March 31, 2026, compared to the same period in 2025. Management believes growth in gross analyzed service charges is a strong indicator of success for the Corporation given the direct correlation to adding and expanding core business relationships.

Current wording

Service charges on deposits increased $233,000, or 21.1%, and $501,000, or 23.3%, for the three and six months ended June 30, 2026, respectively, compared to the same period in 2025. The increase was primarily driven by new and expanded core deposit relationships. Treasury management business development efforts remain robust as gross treasury management service charges increased $281,000, or 16.5%, and $537,000, or 16.0%, for the three and six months ended June 30, 2026, compared to the same period in 2025. Management believes growth in gross analyzed service charges is a strong indicator of success for the Corporation given the direct correlation to adding and expanding core business relationships.

Previous wording

Non-interest expense for the three months ended March 31, 2026 increased $2.2 million, or 9.0%, compared to the same periods in 2025. Operating expense, which excludes certain one-time and discrete items as defined in the Efficiency Ratio and Pre-Tax, Pre-Provision Adjusted Earnings section above, increased $2.5 million, or 10.0%, for the three months ended March 31, 2026, compared to the same periods in 2025. The increase in operating expense was primarily due to an increase in compensation expense.

Current wording

Non-interest expense for the three and six months ended June 30, 2026 increased $2.9 million, or 11.5%, and $5.1 million, or 10.3%, respectively, compared to the same periods in 2025. Operating expense, which excludes certain one-time and discrete items as defined in the Efficiency Ratio and Pre-Tax, Pre-Provision Adjusted Earnings section above, increased $1.9 million, or 7.5%, and $4.3 million, or 8.7%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025. The increase in operating expense was primarily due to an increase in compensation expense.

Previous wording

Computer software expense increased $318,000, or 19.8%, for the three months ended March 31, 2026, compared to the same period in 2025. The increase was primarily due to our commitment to innovative technology to support growth initiatives, enhance productivity, and improve the client experience.

Current wording

Computer software expense increased $302,000, or 18.2%, and $620,000, or 19.0%, for the three and six months ended June 30, 2026, respectively, compared to the same period in 2025. The increase was primarily due to our commitment to innovative technology to support growth initiatives, enhance productivity, and improve the client experience.

Previous wording

Data processing expense increased $188,000, or 17.4%, for the three months ended March 31, 2026, compared to the same period in 2025. The increase was primarily due to a change in credit card vendor and core provider costs commensurate with an increase in transactions, accounts, and clients.

Current wording

Data processing expense increased $114,000, or 8.3%, and $302,000, or 12.3%, for the three and six months ended June 30, 2026, respectively, compared to the same period in 2025. The increase was primarily due to a change in credit card vendor and core provider costs commensurate with an increase in transactions, accounts, and clients.

Previous wording

Marketing expense decreased $257,000, or 26.5%, for the three months ended March 31, 2026, compared to the same period in 2025. The decrease was primarily due to timing of projects. Management expects marketing spend for full year 2026 to be in line with prior year spend.

Current wording

Marketing expense decreased $222,000, or 20.9%, and $479,000, or 23.6%, for the three and six months ended June 30, 2026, respectively, compared to the same period in 2025. The decrease was primarily due to seasonality and timing of marketing campaigns. Management expects marketing spend for full year 2026 to be in line with prior year spend.

Previous wording

Income tax expense totaled $2.2 million for the three months ended March 31, 2026 compared to $2.3 million for the same period in 2025. Income tax expense included a $578,000 net benefit from tax credit investments compared to $459,000 for the same period in 2025. The effective tax rate for the three months ended March 31, 2026 was 15.2%, compared to 17.0% for the same period in 2025. The change in tax expense reflects updated tax credit partnership estimates and timing of stock compensation vesting activity. The Corporation expects to report an effective tax rate between 16% and 18% for 2026.

Current wording

Income tax expense totaled $3.4 million for the six months ended June 30, 2026 compared to $4.2 million for the same period in 2025. Income tax expense included a $1.2 million net benefit from tax credit investments compared to $882,000 for the same period in 2025. The effective tax rate for the six months ended June 30, 2026 was 10.9%, compared to 15.8% for the same period in 2025. The change in tax expense reflects the release of state deferred tax valuation allowance and timing of stock compensation vesting activity. Income tax expense for the three and six months ended June 30, 2026 includes a $1.5 million release of the remaining state deferred tax valuation allowance. This was initially recognized in 2023 following the enactment of a state law, which excluded small business lending interest from state income tax. The valuation allowance was released due to sustained historical and forecasted Wisconsin taxable income.