Madison-based First Business Financial Services Inc. today reported its second quarter profit dropped significantly from last year.
The First Business Bank-Milwaukee parent reported net income was $1.9 million, or 22 cents per diluted share, in the second quarter, down from $3.7 million, or 43 cents per share, in the second quarter of 2016.
Net interest income was $15.5 million in the quarter, down from $15.7 million in the year-ago quarter. Total non-interest income was $4.7 million, down from $5.8 million in the second quarter of 2016.
The profit decline was in part driven by bad debt related to the energy sector. Net charge-offs were $3.6 million in the second quarter, up from $1.3 million in the same period a year ago.
First Business also increased its provision for loan and lease losses, from $2.8 million in the second quarter of 2016 to $3.7 million in the most recent quarter.
In January, First Business Financial announced it would consolidate the charters of its three subsidiary banks, Madison-based First Business Bank, Brookfield-based First Business Bank-Milwaukee and Leawood, Kansas-based Alterra Bank. Those changes took effect during the second quarter.
“Our organizational focus remains on moving credit quality metrics toward the bank’s historical levels, building on the operating efficiency gains we’ve made to date and laying the foundation to generate sustainable and high-quality revenue growth,” said Corey Chambas, president and chief executive officer. “Our efforts today are designed to bring First Business back to levels of profitability that generate returns on average assets and equity in excess of 1 percent and 12 percent, respectively, along with above-market levels of revenue growth.”