First Business Targets About 10% Annual Loan Growth in 2026 and 2027

First Business Financial Services, Inc. (FBIZ) is targeting about 10% annual loan growth in 2026 and 2027, while management expects net interest margin to remain above its long-term range for the next few quarters.

Management expects net interest margin (NIM) to ease from 3.80% in the fourth quarter. Deposit repricing and lower prepayment fees are expected to pressure the margin, which is forecast to stay above the 3.60%-to-3.65% long-term range for the next few quarters.

The loan pipeline had softened somewhat heading into the fourth quarter, management said.

Nonperforming assets increased by $2.2 million, including an additional $5.7 million multifamily loan placed on nonaccrual status. Management does not expect two large problem assets to be resolved until the first quarter of 2027 and expects to collect the $5.7 million loan in full.