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Regulatory Capital | 9 Months Ended
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Sep. 30, 2024
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] |
Regulatory Capital | Note 14 — Regulatory Capital The Corporation and the Bank are subject to various regulatory capital requirements administered by Federal and Wisconsin banking agencies. Failure to meet minimum capital requirements can result in certain mandatory, and possibly additional discretionary actions on the part of regulators, that if undertaken, could have a direct material effect on the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory practices. The Corporation’s and the Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. The Corporation regularly reviews and updates, when appropriate, its capital and liquidity action plans, which is designed to help ensure appropriate capital adequacy, to plan for future capital needs, and to ensure that the Corporation serves as a source of financial strength to the Bank. The Corporation’s and the Bank’s Board and management teams adhere to the appropriate regulatory guidelines on decisions which affect their respective capital positions, including but not limited to, decisions relating to the payment of dividends and increasing indebtedness. As a bank holding company, the Corporation’s ability to pay dividends is affected by the policies and enforcement powers of the Board of Governors of the Federal Reserve system (the “Federal Reserve”). Federal Reserve guidance urges financial institutions to strongly consider eliminating, deferring, or significantly reducing dividends if: (i) net income available to common shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividend; (ii) the prospective rate of earnings retention is not consistent with the bank holding company’s capital needs and overall current and prospective financial condition; or (iii) the bank holding company will not meet, or is in danger of not meeting, its minimum regulatory capital ratios. Management intends, when appropriate under regulatory guidelines, to consult with the Federal Reserve Bank (“FRB”) of Chicago and provide it with information on the Corporation’s then-current and prospective earnings and capital position in advance of declaring any cash dividends. As a Wisconsin corporation, the Corporation is subject to the limitations of the Wisconsin Business Corporation Law, which prohibit the Corporation from paying dividends if such payment would: (i) render the Corporation unable to pay its debts as they become due in the usual course of business, or (ii) result in the Corporation’s assets being less than the sum of its total liabilities plus the amount needed to satisfy the preferential rights upon dissolution of any shareholders with preferential rights superior to those shareholders receiving the dividend. The Bank is also subject to certain legal, regulatory, and other restrictions on their ability to pay dividends to the Corporation. As a bank holding company, the payment of dividends by the Bank to the Corporation is one of the sources of funds the Corporation could use to pay dividends, if any, in the future and to make other payments. Future dividend decisions by the Bank and the Corporation will continue to be subject to compliance with various legal, regulatory, and other restrictions as defined from time to time. Quantitative measures established by regulation to ensure capital adequacy require the Corporation and the Bank to maintain minimum amounts and ratios of Total Common Equity Tier 1 and Tier 1 capital to risk-weighted assets and of Tier 1 capital to adjusted total assets. These risk-based capital requirements presently address credit risk related to both recorded and off-balance sheet commitments and obligations. As of September 30, 2024, the Corporation’s capital levels exceeded the regulatory minimums and the Bank’s capital levels remained characterized as well capitalized under the regulatory framework. The following tables summarize both the Corporation’s and the Bank’s capital ratios and the ratios required by their federal regulators:
|  | As of September 30, 2024 |
|  | Actual (1) |  |  | Minimum Required for Capital Adequacy Purposes |  |  | For Capital Adequacy Purposes Plus Capital Conservation Buffer |  |  | Minimum Required to Be Well Capitalized Under Prompt Corrective Action Requirements |
|  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |
|  | (Dollars in Thousands) |
Total capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  | $ | 407,421 |  |  |  | 11.72 | % |  | $ | 278,219 |  |  |  | 8.00 | % |  | $ | 365,162 |  |  |  | 10.50 | % |  | N/A |  |  | N/A |
First Business Bank |  |  | 402,567 |  |  |  | 11.57 |  |  |  | 278,257 |  |  |  | 8.00 |  |  |  | 365,212 |  |  |  | 10.50 |  |  | $ | 347,821 |  |  |  | 10.00 | %
Tier 1 capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  | $ | 316,792 |  |  |  | 9.11 | % |  | $ | 208,664 |  |  |  | 6.00 | % |  | $ | 295,607 |  |  |  | 8.50 | % |  | N/A |  |  | N/A |
First Business Bank |  |  | 366,597 |  |  |  | 10.54 |  |  |  | 208,692 |  |  |  | 6.00 |  |  |  | 295,648 |  |  |  | 8.50 |  |  | $ | 278,257 |  |  |  | 8.00 | %
Common equity tier 1 capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  | $ | 304,800 |  |  |  | 8.76 | % |  | $ | 156,498 |  |  |  | 4.50 | % |  | $ | 243,441 |  |  |  | 7.00 | % |  | N/A |  |  | N/A |
First Business Bank |  |  | 366,597 |  |  |  | 10.54 |  |  |  | 156,519 |  |  |  | 4.50 |  |  |  | 243,474 |  |  |  | 7.00 |  |  | $ | 226,083 |  |  |  | 6.50 | %
Tier 1 leverage capital (to adjusted assets) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  | $ | 316,792 |  |  |  | 8.68 | % |  | $ | 145,944 |  |  |  | 4.00 | % |  | $ | 145,944 |  |  |  | 4.00 | % |  | N/A |  |  | N/A |
First Business Bank |  |  | 366,597 |  |  |  | 10.05 |  |  |  | 145,914 |  |  |  | 4.00 |  |  |  | 145,914 |  |  |  | 4.00 |  |  | $ | 182,393 |  |  |  | 5.00 | %
|  | As of December 31, 2023 |
|  | Actual (1) |  |  | Minimum Required for Capital Adequacy Purposes |  |  | For Capital Adequacy Purposes Plus Capital Conservation Buffer |  |  | Minimum Required to Be Well Capitalized Under Prompt Corrective Action Requirements |
|  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |
|  | (Dollars in Thousands) |
Total capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  | $ | 375,440 |  |  |  | 11.19 | % |  | $ | 268,500 |  |  |  | 8.00 | % |  | $ | 352,406 |  |  |  | 10.50 | % |  | N/A |  |  | N/A |
First Business Bank |  |  | 376,310 |  |  |  | 11.21 |  |  |  | 268,595 |  |  |  | 8.00 |  |  |  | 352,531 |  |  |  | 10.50 |  |  | $ | 335,744 |  |  |  | 10.00 | %
Tier 1 capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  | $ | 293,338 |  |  |  | 8.74 | % |  | $ | 201,375 |  |  |  | 6.00 | % |  | $ | 285,281 |  |  |  | 8.50 | % |  | N/A |  |  | N/A |
First Business Bank |  |  | 343,604 |  |  |  | 10.23 |  |  |  | 201,446 |  |  |  | 6.00 |  |  |  | 285,382 |  |  |  | 8.50 |  |  | $ | 268,595 |  |  |  | 8.00 | %
Common equity tier 1 capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  | $ | 281,346 |  |  |  | 8.38 | % |  | $ | 151,031 |  |  |  | 4.50 | % |  | $ | 234,937 |  |  |  | 7.00 | % |  | N/A |  |  | N/A |
First Business Bank |  |  | 343,604 |  |  |  | 10.23 |  |  |  | 151,085 |  |  |  | 4.50 |  |  |  | 235,021 |  |  |  | 7.00 |  |  | $ | 218,233 |  |  |  | 6.50 | %
Tier 1 leverage capital (to adjusted assets) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  | $ | 293,338 |  |  |  | 8.43 | % |  | $ | 139,145 |  |  |  | 4.00 | % |  | $ | 139,145 |  |  |  | 4.00 | % |  | N/A |  |  | N/A |
First Business Bank |  |  | 343,604 |  |  |  | 9.87 |  |  |  | 139,262 |  |  |  | 4.00 |  |  |  | 139,262 |  |  |  | 4.00 |  |  | $ | 174,077 |  |  |  | 5.00 | %
(1) 2024 and 2023 capital amounts include $677,000 and $1.0 million, respectively, of additional stockholders’ equity as elected by the Corporation and permitted by federal banking regulatory agencies related to the adoption of ASC 326. Risk-weighted assets were also adjusted accordingly.

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- Definition The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (c)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1D -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1D Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1A -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1F -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1F + Details
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