First Business Financial Services, Inc. Reports Record Net Income of $8.9 Million for 2012

First Business Financial Services, Inc. Reports Record Net Income of $8.9
Million for 2012

Continued Revenue Expansion and Record Loan Growth While Asset Quality Remains
Strong

MADISON, Wis., Jan. 31, 2013 (GLOBE NEWSWIRE) -- First Business Financial
Services, Inc. (the "Company") (Nasdaq:FBIZ), the parent company of First
Business Bank and First Business Bank - Milwaukee, today reported strong
fourth quarter and record full year earnings, reflecting successful execution
on initiatives to grow loans and in-market deposits, invest in fee-generating
capabilities and improve asset quality.

Highlights for the quarter and full year ended December 31, 2012 include:

  *The successful public offering of $29.1 million in common equity closed in
    December 2012 at $23.00 per share, nearly 40% higher than 2011's closing
    stock price of $16.50 per share.
  *Net income for the fourth quarter of 2012 was a strong $2.5 million,
    representing a 6% increase from the $2.4 million earned in the fourth
    quarter of 2011.
  *Net income for the full year ended December 31, 2012 was a record $8.9
    million, 6% higher than the previous record of $8.4 million earned for the
    full year ended December 31, 2011. Net income for the full year 2011 had
    also included a substantial one-time tax benefit relating to a change in
    Wisconsin tax law.
  *Core earnings, defined as pre-tax income excluding the effects of
    provision for loan and lease losses, other identifiable costs of credit
    and other discrete items unrelated to the Company's core business
    activities, grew 4% to a record $5.0 million for the fourth quarter of
    2012, compared to $4.8 million recorded in the fourth quarter of 2011.
    Record core earnings of $18.5 million for the full year of 2012 grew 12%
    from the prior year.
  *Annualized return on average assets and return on average equity were
    0.84% and 12.88%, respectively, for the quarter ended December 31, 2012,
    compared to 0.82% and 15.02% for the same period in 2011. Return on
    average assets and return on average equity for the full year ended
    December 31, 2012 were 0.75% and 12.65% respectively, compared to 0.75%
    and 14.03% in 2011. Returns for the full year 2011 benefited from the
    substantial one-time tax benefit relating to a change in Wisconsin tax
    law.
  *Top line revenue, consisting of net interest income and non-interest
    income, increased 12% to a record $12.1 million for the quarter ended
    December 31, 2012, compared to $10.8 million for the prior year quarter.
    Top line revenue of $46.6 million for the full year 2012 grew 10% compared
    to 2011.
  *Average in-market deposits of $649.0 million for the full year 2012 grew
    25%, increasing to 61.8% of total deposits, compared to $519.3 million, or
    51.6% of total deposits, for the full year of 2011.
  *Net loans and leases at December 31, 2012 increased $33.1million or an
    annualized 15% from September30, 2012 to $896.6 million as of
    December31, 2012.
  *Net interest margin was 3.36% for the full year of 2012, improving seven
    basis points compared to the full year of 2011.
  *Non-performing assets of $15.7 million at December31, 2012 decreased by
    $8.3 million, or 35%, from December31, 2011.Non-performing assets now
    measure 1.28% of total assets, compared to 2.04% at December31, 2011.

The Company recorded net income of $2.5 million in the fourth quarter 2012, an
increase of 6.1% compared to net income of $2.4 million earned in the fourth
quarter of 2011.Diluted earnings per common share were $0.86 for the fourth
quarter of 2012 compared to $0.90 for the 2011 period.Diluted earnings per
common share for the fourth quarter of 2012 reflect the issuance of 1,265,000
shares of common stock in December 2012.Weighted-average diluted common
shares outstanding during the fourth quarter of 2012 were higher than the
prior year quarter by approximately 318,000, or 12.6%, primarily causing the
slight decrease in the fourth quarter diluted earnings per common share,
despite overall earnings growth.

The Company earned record net income of $8.9 million for the full year ended
December31, 2012, representing an increase of 5.9% from $8.4 million earned
in the full year ended December31, 2011.Diluted earnings per common share
were $3.29 for the full year 2012 compared to $3.23 earned in the prior
year.Diluted earnings per share for the full year 2011 had also included a
substantial one-time tax benefit relating to a change in Wisconsin tax law.

"In 2012 First Business again delivered record full year earnings, achieving
best-ever results across each of our primary revenue sources and driving
substantial improvement in asset quality," said Corey A. Chambas, President
and Chief Executive Officer. "Our talented team coupled with our many
strategic new hires delivered impressive loan and revenue production during
the year, growing net loan balances over 7% and top line revenue nearly 10%.
Perhaps most notably, we believe the successful public offering of $29.1
million of FBIZ common stock has positioned us to take advantage of continued
market disruption in Wisconsin, accelerating our growth potential in 2013 and
beyond."

Successful Capital Raise

In December 2012, the Company successfully raised approximately $29.1 million
through the issuance of 1,265,000 shares of common stock at a price of $23.00
per share.The net proceeds of the offering, approximately $27.1 million, were
immediately used to repay a portion of subordinated debt, lowering the
Company's future interest expense and strengthening its capital ratios.The
Company expects the net proceeds to ultimately support its future growth
plans, including accelerated investment in organic growth and the potential
for future acquisitions of niche talent and organizations.

Core Business Results

Net interest income increased $527,000, or 5.9%, to $9.4 million in the fourth
quarter of 2012 compared to $8.9 million for the fourth quarter of 2011.More
than offsetting the year-over-year decline in interest income attributed to
higher asset balances with lower yields in the sustained low-rate environment,
interest expense for the fourth quarter of 2012 decreased $1.2 million, or
24.7%, to $3.7 million.The decline in interest expense is primarily due to
reduced interest expense on other borrowings due to the substantial pay-down
of subordinated debt from the common stock offering net proceeds, along with
lower deposit funding costs due to continued success of the Company's
initiative to attract in-market deposits through new business relationships
and increase client deposit balances.In-market client deposits - comprised of
all transaction accounts, money market accounts, and non-brokered certificates
of deposit - grew 18.7% to $717.9 million at December31, 2012 from $604.6
million at December31, 2011.Correspondingly, the Company also continued to
reduce its overall reliance on higher-cost brokered certificates of deposit by
$72.3 million, or 16.2%, lowering balances to $374.4 million at December31,
2012.The improvement in funding costs and lesser decline in earning asset
yields resulted in the widening of the net interest margin by eight basis
points to 3.31% in the fourth quarter of 2012, compared to 3.23% in the fourth
quarter of 2011.The Company's net interest margin of 3.31% declined compared
to the linked third quarter of 2012 primarily due to fewer exits from lending
relationships in the fourth quarter, resulting in lower pre-payment fees
collected in lieu of interest, which had benefited prior quarters' net
interest income.Additionally, lower average yields on commercial and
industrial loans in the fourth quarter of 2012 also reflected new originations
booked at lower yields than exiting relationships.

Net interest income for the full year ended December31, 2012 increased $2.4
million, or 6.8%, to a record $37.9 million, compared to $35.5 million
generated during the full year of 2011.The Company's success in growing and
rebalancing its deposit portfolio in 2012 drove a reduction in the overall
cost of funds which offset the effects of declines in the weighted average
yield of the securities portfolio.Overall this benefited net interest margin,
which increased seven basis points to 3.36% for the full year 2012 compared to
2011.

Non-interest income increased $780,000, or 40.7%, to a record $2.7 million for
the fourth quarter of 2012, compared with the fourth quarter of 2011.
Improvement over the prior year reflects substantial growth across each of the
Company's primary fee income sources, most notably loan fees, which grew
$379,000, or 94.3%, to a record $781,000 primarily due to the completion of a
large loan syndication during the quarter.Trust and investment services
income grew by $135,000, or 22.0%, to $749,000 for the fourth quarter of 2012,
reflecting an 18.4% increase in trust assets under management and
administration to $784.2 million at December31, 2012, compared to
December31, 2011.In addition, service charges on deposits grew by $27,000,
or 5.4%, to $524,000, as continued success in acquiring new commercial
relationships drove increased deposit transaction volume.Other income
increased $239,000, or 59.3%, to $642,000 for the fourth quarter of 2012
compared to the same quarter of the prior period.The increase in other income
is primarily due to an initial fair value recognition related to interest rate
swaps.

Similarly, non-interest income increased $1.6 million, or 23.2%, to a record
$8.7 million for the full year 2012, demonstrating successful execution of the
Company's strategic plan to grow top line revenue in 2012.Early results of
strategic investments in additional talent were evident across each of the
Company's primary fee income sources.Loan fees grew by $545,000, or 36.8%, to
$2.0 million for the full year 2012.The Company experienced improved pricing
and volumes of letters of credit and other administrative loan fees during the
year, while the completion of a large loan syndication in the fourth quarter
also bolstered revenues.Success in attracting new trust administration
relationships drove trust and investment services income to $2.9 million for
the full year 2012, $395,000, or 15.6%, higher than in 2011.In addition,
continued success in attracting new commercial relationships drove deposit
service charges up by $316,000, or 18.5%, to $2.0 million for the full year of
2012.

Non-interest expense for the fourth quarter of 2012 was $7.4 million, an
increase of $1.2 million, or 19.2%, compared to the same quarter in
2011.Compensation expense grew $1.1 million, or 30.9%, to $4.6 million,
reflecting the Company's continued investment in key talent in support of
strategic initiatives as well as increased accruals to record the appropriate
level of compensation expense associated with the Company's non-equity
incentive compensation program.A reduction in FDIC Insurance expense of
$399,000, or 68.2%, in the fourth quarter of 2012 helped offset overall
expense growth compared to the prior year quarter.Other non-interest expense
was $2.1 million, an increase of $430,000, or 25.2%, compared to the same
quarter of 2011.Most notably, marketing expense grew by $207,000 to $379,000
as the Company continued to capitalize on market disruption in Wisconsin.The
Company's efficiency ratio increased to 58.46% from 55.17% in the fourth
quarter of 2011.

Non-interest expense for the full year 2012 increased by $2.3 million, or
8.6%, to $28.7 million as compared to the full year 2011.Compensation expense
increased by $2.1 million, or 14.2%, to support strategic investments in
additional talent along with annual salary merit increases, increased accruals
associated with non-equity incentive compensation programs, and other
ancillary benefits.From December 2011 to December 2012 the Company expanded
its team of Business Development Officers by nearly 30%, to 44.Additionally,
other non-interest expense increased.Specifically, marketing expense grew by
$230,000, or 23.1%, while real estate costs associated with the process of
exiting certain foreclosed properties increased by approximately $269,000, or
84.1%.Overall expense growth was partially offset by a decline in FDIC
insurance costs of $754,000, or 30.3%, primarily due to a change in the method
of assessment. Expense growth was appropriately aligned with the Company's
growth in top line revenue, thus aiding in the improvement of the efficiency
ratio to 60.27% for the full year 2012, 75 basis points lower than the 61.02%
reported for the full year 2011.

The provision for loan and lease losses for the fourth quarter of 2012 was
$844,000, representing a modest decrease of $6,000 compared to the linked
third quarter of 2012 and a decrease of 9.9%, or $93,000, from the fourth
quarter of 2011.Net charge-offs for the fourth quarter of 2012 improved to
$150,000, compared to $962,000 for the third quarter of 2012 and $923,000 for
the fourth quarter of 2011.For the same periods, annualized net charge-offs
as a percentage of average loans and leases measured 0.07%, 0.44% and 0.43%,
respectively.

Provision for loan and lease losses totaled $4.2 million for the full year
ended December31, 2012, essentially flat compared to the prior year
period.Net charge-offs for the full year 2012 fell by more than half to $3.0
million from $6.4 million in the full year 2011.Annualized net charge-offs as
a percentage of average loans and leases improved to 0.35% for the full year
2012, compared to 0.74% for full year 2011.

Loans Grow To Record Levels While Asset Quality Remains Strong

Net loans and leases reached a record $896.6 million at December31, 2012,
growing $33.1 million, or 15.3% annualized, from September30, 2012.Growth
reflected the combined efforts of the strong existing business development
team and the Company's more recent additions of niche lending talent, coupled
with increased demand from new and existing quality clients, during the
quarter.Over the last year, net loan and lease balances grew $59.9 million,
or 7.2%, from $836.7 million at December31, 2011.At the same time, total
assets of $1.2 billion grew $34.0 million, or 11.4% annualized, from
September30, 2012 and grew $48.9 million, or 4.2%, from December31, 2011.

Asset quality continues to be a source of strength and differentiation for the
Company.The ratio of non-performing assets to total assets remained strong at
1.28% at December31, 2012, modestly higher than 1.26% at September30,
2012.The same measure fell 76 basis points from 2.04% at December31,
2011.Non-performing assets increased by $663,000, or 4.4%, from September30,
2012 to December31, 2012, reflecting reductions offset by continued additions
of newly identified impaired loans and leases.Non-performing assets decreased
by $8.3 million, or 34.6%, from December31, 2011 to December31, 2012,
reflecting the success of certain exit strategies, including payoffs, paydowns
and charge-offs, as well as improved client performance causing a return to
accrual status.These reductions were partially offset by continued additions
of newly identified impaired loans and leases. The Company's allowance for
loan and lease loss as a percentage of total loans and leases measured 1.69%
as of December31, 2012, modestly higher compared to 1.67% at September30,
2012 and 1.66% at December31, 2011.

Capital Strength

The Company's earnings power continues to generate capital, and its capital
ratios are in excess of the highest required regulatory benchmark levels.In
addition, the common stock offering completed in the fourth quarter of 2012
improved the composition of the Company's capital by increasing Tier 1 capital
in the form of equity and allowing the Company to pay down Tier II capital
previously in the form of subordinated debt.Total capital to risk-weighted
assets was 12.97% as of December31, 2012, compared to 13.11% at December31,
2011.Tier 1 capital to risk-weighted assets was 10.54% as of December31,
2012, compared to 7.91% at December31, 2011.Tier 1 capital to average assets
was 8.99%, as of December31, 2012, compared to 6.22% as of December31,
2011.

The Company is pleased to return a portion of the capital it generates to
shareholders.During the fourth quarter of 2012 the Company's Board of
Directors approved a $0.07 quarterly cash dividend on its common stock, which
was paid on January15, 2013 to shareholders of record at the close of
business on January1, 2013.This maintained the Company's annualized dividend
at $0.28 per share, a level it has maintained for 20 consecutive quarters.

About First Business Financial Services, Inc.

First Business Financial Services (Nasdaq:FBIZ) is a $1.2 billion
Wisconsin-based bank holding company that specializes in focused financial
solutions for businesses, key executives, and high net worth individuals
through its operating companies. It is the second largest Wisconsin-based
commercial bank holding company listed on NASDAQ or the New York Stock
Exchange. Its companies include: First Business Bank - Madison; First Business
Bank - Milwaukee; First Business Bank - Northeast; First Business Trust &
Investments; First Business Equipment Finance, LLC; and First Business Capital
Corp. For additional information, visit www.firstbusiness.com or call (608)
238-8008.

This press release includes "forward-looking" statements related to First
Business Financial Services, Inc. (the "Company") that can generally be
identified as describing the Company's future plans, objectives or goals. Such
forward-looking statements are subject to risks and uncertainties that could
cause actual results or outcomes to differ materially from those currently
anticipated. These forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. For
further information about the factors that could affect the Company's future
results, please see the Company's annual report on Form 10-K, quarterly
reports on Form 10-Q and other filings with the Securities and Exchange
Commission.

The First Business Financial Services, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=2667

SELECTED FINANCIAL CONDITION DATA

(Unaudited)         As of
                   December31, September30, June30,  March31, December31,
(Dollars in         2012         2012          2012      2012      2011
Thousands)
ASSETS                                                         
Cash and cash       $ 85,586     $ 87,842      $ 78,369  $ 135,351 $ 130,093
equivalents
Securities
available-for-sale, 200,596      202,805       195,904   170,547   170,386
at fair value
Loans and leases    911,960      878,192       862,529   831,748   850,842
receivable
Allowance for loan  (15,400)     (14,706)      (14,818)  (14,451)  (14,155)
and lease losses
Loans and leases,   896,560      863,486       847,711   817,297   836,687
net
Leasehold
improvements and    968          965           1,030     1,035     999
equipment, net
Foreclosed          1,574        2,187         1,937     2,590     2,236
properties
Cash surrender
value of bank-owned 22,272       18,068        18,006    17,830    17,660
life insurance
Investment in FHLB  1,144        1,144         1,519     1,748     2,367
stock, at cost
Accrued interest
receivable and      17,408       15,638        15,550    15,647    16,737
other assets
Total assets        $ 1,226,108  $ 1,192,135   $         $         $ 1,177,165
                                               1,160,026 1,162,045
LIABILITIES AND
STOCKHOLDERS'                                                  
EQUITY
In-market deposits  $ 717,869    $ 670,530     $ 632,699 $ 618,609 $ 604,647
Brokered CDs        374,385      390,728       396,531   415,180   446,665
Total deposits      1,092,254    1,061,258     1,029,230 1,033,789 1,051,312
Federal Home Loan
Bank and other      12,405       39,482        42,396    41,498    40,292
borrowings
Junior subordinated 10,315       10,315        10,315    10,315    10,315
notes
Accrued interest
payable and other   11,595       10,531        10,319    10,009    11,032
liabilities
Total liabilities   1,126,569    1,121,586     1,092,260 1,095,611 1,112,951
Total stockholders' 99,539       70,549        67,766    66,434    64,214
equity
Total liabilities                              $         $
and stockholders'   $ 1,226,108  $ 1,192,135   1,160,026 1,162,045 $ 1,177,165
equity

STATEMENTS OF INCOME

            Three Months Ended                                         Year Ended
(Unaudited)  December31, September30, June30, March31, December31, December31, December31,
(Dollars in
Thousands,
except per   2012         2012          2012     2012      2011         2012         2011
share
amounts)
Total
interest     $ 13,158     $ 14,032      $ 13,943 $ 13,633  $ 13,854     $ 54,766     $ 56,217
income
Total
interest     3,727        4,117         4,334    4,707     4,950        16,885       20,756
expense
Net interest 9,431        9,915         9,609    8,926     8,904        37,881       35,461
income
Provision
for loan and 844          850           2,045    504       937          4,243        4,250
lease losses
Net interest
income after
provision    8,587        9,065         7,564    8,422     7,967        33,638       31,211
for loan and
lease losses
Trust and
investment   749          736           755      687       614          2,927        2,532
services fee
income
Service
charges on   524          532           493      479       497          2,028        1,712
deposits
Loan fees    781          502           345      398       402          2,026        1,481
Other        642          479           311      286       403          1,718        1,335
Total
non-interest 2,696        2,249         1,904    1,850     1,916        8,699        7,060
income
Compensation 4,563        4,224         4,226    4,005     3,485        17,018       14,898
FDIC         186          426           533      587       585          1,732        2,486
insurance
Collateral
liquidation  204          264           79       108       212          655          786
costs
Net loss
(gain) on    357          (14)          67       175       261          585          420
foreclosed
properties
Other        2,136        2,351         2,227    1,957     1,706        8,671        7,807
Total
non-interest 7,446        7,251         7,132    6,832     6,249        28,661       26,397
expense
Income
before tax   3,837        4,063         2,336    3,440     3,634        13,676       11,874
expense
Income tax   1,308        1,441         771      1,230     1,250        4,750        3,449
expense
Net income   $ 2,529      $ 2,622       $ 1,565  $ 2,210   $ 2,384      $ 8,926      $ 8,425
Per common                                                                     
share:
Basic        $ 0.86       $ 0.99        $ 0.60   $ 0.84    $ 0.90       $ 3.30       $ 3.23
earnings
Diluted      0.86         0.99          0.60     0.84      0.90         3.29         3.23
earnings
Dividends    0.07         0.07          0.07     0.07      0.07         0.28         0.28
declared
Book value   25.41        26.56         25.77    25.31     24.46        25.41        24.46
Tangible     25.41        26.56         25.77    25.31     24.46        25.41        24.46
book value

SELECTED FINANCIAL RATIOS

                Three Months Ended                                         Year Ended
(Unaudited)      December31, September30, June30, March31, December31, December31, December31,
                2012         2012          2012     2012      2011         2012         2011
Return on        0.84%        0.88%         0.54%    0.74%     0.82%        0.75%        0.75%
average assets
Return on        12.88%       15.10%        9.16%    13.43%    15.02%       12.65%       14.03%
average equity
Efficiency ratio 58.46%       59.73%        61.37%   61.78%    55.17%       60.27%       61.02%
Average
interest-earning
assets to
average          119.30%      116.34%       116.67%  115.08%   115.47%      116.84%      114.02%
interest-
bearing
liabilities
Interest rate    3.06%        3.26%         3.23%    2.91%     2.95%        3.11%        3.02%
spread
Net interest     3.31%        3.50%         3.49%    3.15%     3.23%        3.36%        3.29%
margin

ASSET QUALITY RATIOS

                   As of
(Unaudited)
(Dollars in         December31, September30, June30, March31, December31,
Thousands)
                   2012         2012          2012     2012      2011
Non-performing      $ 14,122     $ 12,846      $ 15,451 $ 20,199  $ 21,766
loans and leases
Foreclosed          1,574        2,187         1,937    2,590     2,236
properties, net
Total
non-performing      $ 15,696     $ 15,033      $ 17,388 $ 22,789  $ 24,002
assets
Non-performing
loans and leases as 1.55%        1.46%         1.79%    2.43%     2.56%
a percent of total
loans and leases
Non-performing
assets as a percent
of total loans and  1.72%        1.71%         2.01%    2.73%     2.81%
leases plus
foreclosed
properties
Non-performing
assets as a percent 1.28%        1.26%         1.50%    1.96%     2.04%
of total assets
Allowance for loan
and lease losses as
a percent of total  1.69%        1.67%         1.72%    1.74%     1.66%
gross loans and
leases
Allowance for loan
and lease losses as
a percent of        109.05%      114.48%       95.90%   71.55%    65.03%
non-performing
loans

NET CHARGE-OFFS

(Unaudited)  Three Months Ended                                         Year Ended
            December31, September30, June30, March31, December31, December31, December31,
(Dollars in  2012         2012          2012     2012      2011         2012         2011
thousands)
Net          $ 150        $ 962         $ 1,678  $ 208     $ 923        $ 2,998      $ 6,366
charge-offs
Net
charge-offs
as a percent
of average   0.07%        0.44%         0.80%    0.10%     0.43%        0.35%        0.74%
loans and
leases
(annualized)

NON-GAAP RECONCILIATIONS

Certain financial information provided in this release is determined by
methods other than in accordance with generally accepted accounting principles
(United States) ("GAAP").Although the Company believes that these non-GAAP
financial measures provide a greater understanding of its business, these
measures are not necessarily comparable to similar measures that may be
presented by other companies.

CORE EARNINGS

"Core Earnings" is a non-GAAP measure representing pre-tax income excluding
the effects of provision for loan and lease losses, other identifiable costs
of credit and other discrete items that are unrelated to core business
activities.In the judgment of the Company's management, the presentation of
core earnings allows the management team, investors and analysts to better
assess the growth of the Company's core business by removing the volatility
that is associated with costs of credit and other discrete items that are
unrelated to its core business and facilitates a more streamlined comparison
of core growth to its benchmark peers.The information provided below
reconciles core earnings to its most comparable GAAP measure.

(Unaudited) Three Months Ended                                         Year Ended
           December31, September30, June30, March31, December31, December31, December31,
(Dollars in 2012         2012          2012     2012      2011         2012         2011
thousands)
Income
before tax  $ 3,837      $ 4,063       $ 2,336  $ 3,440   $ 3,634      $ 13,676     $ 11,874
expense
Add back:                                                                     
Provision
for loan    844          850           2,045    504       937          4,243        4,250
and lease
losses
Loss (gain)
on          357          (14)          67       175       261          585          420
foreclosed
properties
Core
earnings    $ 5,038      $ 4,899       $ 4,448  $ 4,119   $ 4,832      $ 18,504     $ 16,544
(pre-tax)

EFFICIENCY RATIO

"Efficiency ratio" is a non-GAAP measure representing non-interest expense
excluding the effects of losses or gains on foreclosed properties and
amortization of other intangible assets divided by operating revenue, which is
equal to net interest income plus non-interest income less any realized gains
on securities. In the judgment of the Company's management, the adjustments
made to non-interest expense and operating revenue allow investors and
analysts to better assess the Company's operating expenses in relation to its
core operating revenue by removing the volatility that is associated with
certain one-time items and other discrete items that are unrelated to its core
business.The information provided below reconciles the efficiency ratio to
its most comparable GAAP measure.

(Unaudited)  Three Months Ended                                          Year Ended
            December31, September30, June30,  March31, December31, December31, December31,
(Dollars in  2012         2012          2012      2012      2011         2012         2011
thousands)
Total
non-interest $7,446     $7,251      $7,132  $6,832  $6,249     $28,661    $26,397
expense
Less:                                                                           
Loss (gain)
on           357          (14)          67        175       261          585          420
foreclosed
properties
Amortization
of other     —            —             —         —         19           —            32
intangible
assets
Total
operating    $7,089     $7,265      $7,065  $6,657  $5,969     $28,076    $25,945
expense
Net interest $9,431     $9,915      $9,609  $8,926  $8,904     $37,881    $35,461
income
Total
non-interest 2,696        2,249         1,904     1,850     1,916        8,699        7,060
income
Less:                                                                           
Gain on sale
of           —            —             —         —         —            —            —
securities
Total
operating    $12,127    $12,164     $11,513 $10,776 $10,820    $46,580    $42,521
revenue
Efficiency   58.46%       59.73%        61.37%    61.78%    55.17%       60.27%       61.02%
ratio

TANGIBLE BOOK VALUE

"Tangible book value per share" is a non-GAAP measure representing tangible
equity divided by total common shares outstanding."Tangible equity" itself is
a non-GAAP measure representing common stockholders' equity reduced by
intangible assets.The Company's management believes that these measures are
important to many investors in the marketplace who are interested in changes
period to period in book value per common share exclusive of changes in
intangible assets.The information provided below reconciles tangible book
value per share and tangible equity to their most comparable GAAP measures.

                  As of
(Unaudited)        December31, September30, June30,  March31, December31,
(Dollars in
Thousands, except  2012         2012          2012      2012      2011
per share amounts)
Equity             $99,539    $70,549     $67,766 $66,434 $64,214
Intangible assets  —            —             —         —         —
Tangible Equity    $99,539    $70,549     $67,766 $66,434 $64,214
Common shares      3,916,667    2,656,102     2,629,352 2,625,288 2,625,669
outstanding
Book value per     $25.41     $26.56      $25.77  $25.31  $24.46
share
Tangible book      25.41        26.56         25.77     25.31     24.46
value per share

CONTACT: First Business Financial Services, Inc.
         James F. Ropella, Senior Vice President
         and Chief Financial Officer
         608-232-5970
         jropella@firstbusiness.com

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