DEF 14A of First Business Financial Services, Inc., Mar 5, 2026

DEF 14A of First Business Financial Services, Inc.

Filed Mar 5, 2026 · FY20250001193125-26-092613

Open on EDGAR

  1. ☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

    March 5, 2026 Dear Fellow Shareholder: We are pleased to invite you to attend the 2026 Annual Meeting of Shareholders ("Annual Meeting") of First Business Financial Services, Inc. (the "Company"), to be held in a virtual meeting format only on Friday, April 24, 2026 at 10:00 a.m. CDT. Shareholders will be provided an opportunity to ask questions and to consider matters described in the proxy statement. In connection with the Annual Meeting, we want to share with you some of the recent highlights of the work of the Board of Directors and Company. 2025 was another year of consistent, high-quality execution of our long-term strategic plan. Our team continued to expand client relationships, growing core deposit and loan balances 11% and 8%, respectively, outpacing industry growth. Total revenue grew in tandem, rising 10% over 2024 and aiding improvement in our efficiency ratio to 58.78%, which outperformed our five-year plan target of less than 60% by 2028. We continued our track record of producing double-digit annual growth, exceeding 14% growth in both pre-tax, pre-provision earnings and earnings per share. Our 2025 return on average tangible common equity was robust at 15.3%, exceeding our goal of 15% or greater by 2028. These results supported 14% growth in tangible book value per share, again exceeding our goal to produce annual growth of at least 10% on what is arguably our most meaningful measure of success1. We believe our long-term success should be evaluated by our ability to produce shareholder returns that consistently outperform peers. Over the five-year period ended December 31, 2025, the Company generated cumulative total shareholder returns ("TSR") totaling 235%. Over the same period, our peer group2 delivered a median TSR measuring 66%. The Russell 2000 – a benchmark group including small-cap companies across all industries – returned 73%. Even the large cap S&P 500 Banks index returned only 125% over this period. We are delighted to share this success with our shareholders. In 2026 we continue to pursue excellence with disciplined execution, prudent underwriting, investment in talent, and technology enhancements that support scalable growth. We are well positioned to execute the planned leadership transition we announced in May 2025, with the Company’s President & Chief Operating Officer Dave Seiler set to assume the role of Chief Executive Officer in May 2026, following Corey’s retirement. We believe our focus, discipline and consistency will continue to serve First Business Bank and our shareholders well in 2026 and beyond. On behalf of the Board of Directors and management team, we thank you for your continued support. Your vote is important. We hope you join us in supporting the proposals presented at the Annual Meeting. Whether or not you attend, it is very important that your shares are represented at the Annual Meeting. Accordingly, please vote your shares by following the instructions on the Notice of Annual Meeting of Shareholders. Sincerely,

  2. OPTION 2

    | COMPENSATION COMMITTEE REPORT | 46 | | EXECUTIVE COMPENSATION | 47 | | Summary Compensation Table | 47 | | All Other Compensation | 47 | | Grant of Plan-Based Awards | 48 | | Outstanding Equity Awards at Fiscal Year End | 49 | | Option Exercises and Stock Vested in 2025 | 50 | | Pension Benefits | 50 | | POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL | 51 | | CEO Pay Ratio | 57 | | Pay Versus Performance Disclosure | 58 | | Equity Awards Grant Policies | 61 | | ITEM 4 - RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 62 | | REPORT OF THE AUDIT COMMITTEE | 63 | | MISCELLANEOUS | 64 | | Independent Registered Public Accounting Firm | 64 | | Audit Committee Pre-Approval Policy | 64 | | Related Party Transactions | 64 | | PRINCIPAL SHAREHOLDERS | 66 | | OTHER MATTERS | 68 | | Shareholder Proposals | 68 | | APPENDIX A | 69 | | APPENDIX B | 1 |

  3. Proxy Statement For Annual Meeting Of Shareholders To Be Held April 24, 2026

    | Carla C. Chavarria Senior Vice President and Chief Human Resources Officer AMC Entertainment, Inc. Age: 60 Independent Director since 2017 COMMITTEES • Compensation, Chair • Corporate Governance and Nominating | Experience • Senior Vice President and Chief Human Resources Officer (since 2014) and various human resources roles (1994-2014), AMC Entertainment, Inc., a publicly traded company Qualifications • Executive Compensation/Human Capital expertise gained through her role as Senior Vice President and Chief Human Resources Officer providing enterprise-wide leadership of total rewards, executive and broad-based compensation, talent acquisition, succession planning, learning and development, associate engagement, and internal communications • Corporate Governance and Public Company expertise acquired over more than 35 years at AMC Entertainment, Inc., and engagement in public company board-level governance, organizational oversight, and community relations • Risk Management and Strategy expertise demonstrated through responsibility for workforce-related risk oversight, compliance with relevant laws and fair and ethical employment practices, and as a member of the executive committee for AMC Entertainment, Inc., guiding enterprise strategy, organizational planning, and long-term corporate objectives Education • BS, Business Administration, Pennsylvania State University Other Boards and Organizations • Director, FBB Board of Directors (since 2018) |

  4. Proxy Statement For Annual Meeting Of Shareholders To Be Held April 24, 2026

    | Jerry L. Kilcoyne Managing Partner Pinnacle Enterprises, LLC Age: 66 Independent Director since 2011 Board Chair since 2018 COMMITTEES • Audit | Experience • Managing Partner, Pinnacle Enterprises, LLC (since 1997) • President, Northbrook Rail Corporation (1989-1996) Qualifications • Financial Services and Financial Reporting/Accounting/Audit expertise acquired over more than 35 years of executive-level experience with responsibility for all aspects of financial management and oversight, as well as board, committee and board chair service for a publicly traded financial institution and its subsidiaries • Risk Management and Strategy expertise developed through more than 25 years leading investment, operational, and financial decision-making as the Managing Partner of Pinnacle Enterprises, LLC, and prior executive leadership as President of Northbrook Rail Corporation with accountability for corporate strategy, financial management and mergers and acquisitions activity • Corporate Governance expertise demonstrated through service as a director and board chair of a publicly traded financial institution and its subsidiaries, with deep experience in board leadership, committee oversight, and regulated-industry governance Education • AA, Accounting, Madison Area Technical College Other Boards and Organizations • Chair, FBB Board of Directors (since November 2018, May 2010-June 2018) • Director, FBB Board of Directors (since November 2018 and 2005-June 2018) • Director, First Business Equipment Finance, LLC (2006-2017), and Director, First Business Capital Corp. (2006-2013), both FBB entities were merged into First Business Specialty Finance, LLC, a wholly-owned subsidiary of FBB in 2021 • Director, Alterra Bank (2016-2017) until its charter consolidation with FBB in 2017 |

  5. Proxy Statement For Annual Meeting Of Shareholders To Be Held April 24, 2026

    | Daniel P. Olszewski Director Weinert Center for Entrepreneurship Age: 61 Independent Director since 2018 COMMITTEES • Operational Risk, Chair • Corporate Governance and Nominating | Experience • Director, Weinert Center for Entrepreneurship, Wisconsin School of Business, University of Wisconsin-Madison (since 2006) • Chair/President, PNA Holdings, LLC, owner of Parts Now! and Katun Corporation (1999-2002, 2003-2005); CEO, Katun Corporation (2003-2005); CEO/President (1999-2003) and COO (1997-1999), Parts Now! • Consultant, McKinsey & Company (1988-1990, 1992-1997) Qualifications • Strategy, Risk Management, and Financial Services expertise obtained in his role as a strategy and finance consultant at McKinsey, through roles as a CEO and president of multiple companies, and as an instructor of graduate courses on corporate finance, capital budgeting and structure, valuation methods, and entrepreneurial finance • Technology experience through leadership of entrepreneurship programs supporting STEM innovators, instruction of technology-driven venture creation courses, and work with early-stage companies focused on technical product development and innovation • Corporate Governance expertise acquired through experience as a CEO and board chair, as a director and committee chair of a publicly traded financial institution and its subsidiaries, and service on the boards of other private organizations Education • BA, Economics and Computer Science, University of Wisconsin-Madison • MBA, Harvard Business School Other Boards and Organizations • Director, FBB Board of Directors (since 2010) • Director, First Business Capital Corp. (2011-2018), FBB entity merged into First Business Specialty Finance, LLC, a wholly-owned subsidiary of FBB in 2021 • Member of the boards of other private organizations |

  6. Proxy Statement For Annual Meeting Of Shareholders To Be Held April 24, 2026

    | Laurie S. Benson CEO LSB Unlimited, LLC Age: 72 Independent Director since 2018 COMMITTEES • Compensation • Corporate Governance and Nominating, Chair | Experience • CEO, LSB Unlimited, LLC (since 2009) • ICEO Senior Advisor, LHH, International Center for Executive Options (Since 2025) • Executive Director Emeritus (since 2025) and Executive Director (2016-2024), Nurses on Boards Coalition • Co-Founder and CEO, Inacom Information Services (1984-2009) Qualifications • Corporate Governance and Executive Compensation/Human Capital expertise acquired through experience as a CEO and C-Suite advisor on board governance, high performance teams, human resources, and succession planning; supporting increased nurse participation on boards; and as a director and committee chair of a publicly traded financial institution and its subsidiaries, and the boards of other private organizations • Strategy and Regulatory Compliance expertise demonstrated through co-founding and scaling Inacom Information Services into a multi-location organization with more than 150 employees, as the founder of LSB Unlimited, LLC serving as an advisor on complex business issues, strategy, business growth, organizational design, and innovation, and as ICEO Senior Advisor • Technology expertise developed as the co-founder and CEO of an IT systems integrator, leading strategy, implementation, and innovation from inception through its sale in 2009 Education • BS, Nursing, University of Wisconsin-Madison Other Boards and Organizations • Director, FBB Board of Directors (since 2009) • Member, FBB Northeast Wisconsin Advisory Board (2012-2021) • Member of the boards of other private organizations | | Corey A. Chambas Chief Executive Officer First Business Financial Services, Inc. Age: 63 Director since 2002 COMMITTEES • None | Experience • Chief Executive Officer (since 2006), President (2005-2023), Chief Operating Officer (2005-2006), Executive Vice President (2002-2005), First Business Financial Services, Inc. • Chief Executive Officer (1999-2006), President (1999-2005), First Business Bank Qualifications • Financial Services and Financial Reporting/Accounting/Audit expertise acquired over 40 years in the financial services industry, with a specific focus in the commercial banking sector and leadership roles with responsibility for oversight of all aspects of financial management • Risk Management and Strategy expertise developed while serving as CEO of both the Company and FBB with responsibility for enterprise-wide risk, development and execution of the strategic planning process and oversight for six distinct financial services businesses • Executive Compensation/Human Capital expertise demonstrated in his role as CEO with responsibility for senior management recruitment and succession planning, oversight of human resources leadership, executive compensation, and Company culture Education • BBA, Finance, Investment & Banking, Wisconsin School of Business, University of Wisconsin-Madison Other Boards and Organizations • Director, FBB Board of Directors (since 2018, 2009-2011, 1999-2006) • Advisory board member and advisor to the board of other private organizations |

  7. Proxy Statement For Annual Meeting Of Shareholders To Be Held April 24, 2026

    | Jason R. Graham Founder, Rationality Capital LLC and Principal, J Graham Consulting LLC Age: 53 Independent Director since 2025 COMMITTEES • Audit, Chair Elect | Experience • Founder, Rationality Capital LLC and Principal, J Graham Consulting LLC (since 2017) • Senior Vice President, Chief Financial Officer, and Treasurer, Journal Media Group, Inc. (2015-2016); Senior Vice President of Finance and Chief Financial Officer (2014-2015); Vice President/Corporate Controller (2012-2014), Journal Communications, Inc. • Vice President/Corporate Controller (2008-2012), Senior Director of Financial Reporting (2007), Director of Financial Reporting (2006), Brookdale Senior Living Inc. • Senior Manager (2005-2006)/Various Audit and Advisory Roles (1997-2003), KPMG, LLP Qualifications • Financial Reporting/Accounting/Audit expertise developed through CFO and senior finance roles at multiple publicly traded companies, with responsibility for SEC reporting, internal controls, financial planning, and transaction due diligence • Financial Services and Public Company expertise demonstrated through executive leadership roles at publicly traded companies, directing finance functions, treasury operations, capital allocation, investor relations, and merger and acquisitions and divestiture activity • Strategy and Regulatory Compliance expertise gained through executive-level oversight of complex corporate transactions, regulatory reporting, and long-term strategic planning activities, and as the founder of Rationality Capital LLC and principal at J Graham Consulting LLC Education • BS, Accounting, Marquette University Other Boards and Organizations • Member, FBB Southeast Wisconsin Advisory Board (2019-2025) • Member of the boards of other private organizations |

  8. Proxy Statement For Annual Meeting Of Shareholders To Be Held April 24, 2026

    | Term expiring at the 2028 Annual Meeting | | | W. Kent Lorenz Owner and Managing Director Lakeside Consulting, LLC Age: 63 Independent Director since 2018 COMMITTEES • Audit • Compensation • Operational Risk | Experience • Owner and Managing Director, Lakeside Consulting, LLC (since 2017) • Chairman and CEO, Acieta LLC (2014-2017) • President, Midwest Region, Ellison Technologies (2006-2014) and President, Ellison Machinery & Robotics of Wisconsin (1998-2006) Qualifications • Financial Reporting/Accounting/Audit, Strategy, and Risk Management expertise gained through the Ellison Technologies acquisition and divestiture and the formation of Acieta, LLC, including serving as chairman and CEO of Acieta, LLC with responsibility for strategic planning, financial management, and oversight of operational and enterprise-level risk • Technology expertise developed through leadership in advanced industrial automation, including integration of robotics and emerging technologies for North American manufacturers and their global affiliates • Executive Compensation/Human Capital experience acquired through executive-level leadership as chairman, CEO and president with responsibility for organizational structure, workforce strategy, and leadership performance and through advising manufacturing and industrial automation companies as Owner and Managing Director of Lakeside Consulting, LLC Education • BS, Engineering Mechanics, University of Wisconsin-Madison Other Boards and Organizations • Director, FBB Board of Directors (since 2017) • Member, FBB Southeast Wisconsin Advisory Board (2017-2021) • Director, FBB-Milwaukee Board of Directors (2010-2017) • Member of the boards and advisory boards of other private organizations |

  9. Operational Risk Committee

    The Company believes open and transparent communication between management and the Board is essential for effective risk management and oversight. The Board, acting as a whole and through its committees, is responsible for oversight of the Company’s enterprise-wide risk management including, but not limited to, strategic, financial, credit, liquidity, compensation, information security including cybersecurity, regulatory and compliance, reputation, and operational risks. Given the critical link between strategy and risk, the Board is responsible for providing strategic oversight based on the Company’s approved Risk Appetite Statement of Policy and the capacity to manage the resulting risk. As part of its ongoing planning, the Board discusses with executive management the strategies, key challenges, risks and opportunities facing the Company. Executive management is responsible for the day-to-day management of the Company’s key risks and operates through a Senior Management Risk Committee ("SMRC"). The SMRC monitors key risks, develops and executes risk mitigation or remediation plans as appropriate, identifies top and emerging risks, evaluates the effectiveness of the Company’s risk management processes and reports such to the Board or its committees on a regular basis. The SMRC is responsible for the annual review of each key risk indicator ("KRI") included in the Risk Tolerance Dashboard and presents its recommendations to the Operational Risk Committee. The Operational Risk Committee reviews the SMRC's recommendations regarding any potential changes to KRIs and tolerance levels to ensure the Company’s most significant risks along with related metrics/KRIs have been identified, and risk tolerance thresholds have been established. ERM is a standing agenda item for each of the Board’s regular quarterly meetings. At these meetings the Board reviews the Risk Tolerance Dashboard, the status of each KRI relative to the designated tolerance threshold, and the related remediation plans as appropriate. The Board has delegated oversight of each of the key risks to either the Audit, Compensation, Corporate Governance and Nominating or Operational Risk Committee in accordance with the committee charters. These charters are reviewed annually to reflect the changing risk environment. Each committee monitors the assigned specific key risks, ensures that appropriate risk mitigation plans are in place, identifies emerging risks, reports back to the Board with recommendations and updates, and apprises the Board of any areas of concern. The following table summarizes each committee’s role in the risk oversight function.

  10. Operational Risk Committee

    CEO and Executive Officer Succession Planning Succession planning and leadership development are top priorities for the Board and management. Because of the significance of the CEO’s leadership, the Board retains primary responsibility for oversight of CEO succession planning as well as overall executive leadership development and succession planning practices and strategies. The Board has delegated certain responsibility for the ongoing development and monitoring of CEO and executive officer succession planning to the Corporate Governance and Nominating Committee, and at least annually, that committee reviews the policies and principles of selecting a successor to the CEO. The Board participates in the annual review of the CEO succession plan, which includes an assessment of potential CEO candidates, contingency plans in the event of a sudden termination (including death or disability), development plans that are being utilized to strengthen the skills and qualifications of candidates and the Company CEO’s recommendations for contingency and longer term succession planning for the CEO. The Corporate Governance and Nominating Committee in accordance with its charter also reviews succession plans for the other executive officers. On May 5, 2025 the Company announced that Corey A. Chambas intends to retire from his role as Chief Executive Officer in May, 2026. The Company will name David R. Seiler, President & Chief Operating Officer, to succeed him as Chief Executive Officer and appoint him to the boards of directors of the Company and the Bank, effective the same date. Mr. Chambas will remain on the boards of directors of the Company and First Business Bank. Communication with the Board Shareholders may communicate with the Board by writing to First Business Financial Services, Inc., Board of Directors (or, at the shareholder’s option, to a specific director), c/o Lynn Ann Arians, Corporate Secretary, 401 Charmany Drive, Madison, Wisconsin 53719. The Corporate Secretary will ensure that all appropriate communications are delivered to the Board or the specified director, as the case may be. DIRECTOR COMPENSATION In October 2024, the Board implemented changes to the non-employee director cash compensation. The annual cash retainer increased from $30,000 to $37,500. Committee fees were consolidated into a single annual committee retainer and increased to $4,000, replacing the prior structure of $750 per meeting. The annual retainers for the chair of each of the Compensation Committee, Corporate Governance and Nominating Committee, and Operational Risk Committee were increased from $5,000 to $7,500. The Audit Committee Chair continued to receive an annual retainer of $10,000 and the Board Chair received an additional annual retainer of $60,250. Non-employee director cash retainers are paid quarterly. During 2025, the annual non-employee director equity retainer increased from $22,500, which had been issued as restricted stock units vesting after one year, to $30,000, issued in the form of fully vested shares of the Company's Common Stock. The Compensation Committee is responsible for periodically reviewing and making recommendations to the Board regarding director compensation. In 2025, the Compensation Committee engaged its independent compensation consultant, McLagan, which is part of the Human Capital Solutions practice at Aon plc ("McLagan"), to review the Company's non-employee director compensation program. Based on this review, beginning in 2026, the annual non-employee director equity retainer will increase from $30,000 to $40,000, issued as fully vested shares of Common Stock. This increase is intended to position the Company's average non-employee director compensation at the median of its peer group and to further align the directors' and shareholders' interests through equity based compensation. The Board has established the Stock Ownership Guidelines and Share Retention Policy (the "Policy") as another means by which to align the interests of non-employee directors' with those of the Company's shareholders. Per the Policy, non-employee directors have five years from the later of the adoption of the Policy or their appointment to the Board to achieve the share ownership target with a value equal to four times the cash portion of the annual non-employee director retainer. Until a non-employee director satisfies the share ownership target, they are required to retain 100% of the shares issued under the Company's equity plan. Non-employee directors are also required to comply with any holding requirements included in award agreements applicable to equity awards granted under the Company's equity plan and are expected to continuously own sufficient shares of Common Stock to meet the share ownership target once achieved for as long as they remain directors. All non-employee directors were in compliance with the Policy as of December 31, 2025.

  11. Operational Risk Committee

    | Name | Fees Earned Or Paid In Cash(1) | Stock Unit Awards(2) | Total | | Laurie S. Benson | $56,000 | $30,000 | $86,000 | | Carla C. Chavarria | $53,000 | $30,000 | $83,000 | | Jason R. Graham(3) | $27,667 | $30,000 | $57,667 | | Ralph R. Kauten | $59,500 | $30,000 | $89,500 | | Gerald L. Kilcoyne | $113,250 | $30,000 | $143,250 | | W. Kent Lorenz | $52,500 | $30,000 | $82,500 | | Daniel P. Olszewski | $57,000 | $30,000 | $87,000 |

  12. Operational Risk Committee

    (1) Includes annual Board retainer, chair retainers, and committee retainers paid in cash. (2) On May 16, 2025 each non-employee director received an equity retainer with a grant date value of $30,000, issued as 620 fully vested shares of Common Stock. The number of shares issued was determined using the 20-day average closing price of the Company's Common Stock of $48.44. Pursuant to the applicable share award agreement, 100% of the shares issued on May 16, 2025 are subject to transfer restrictions until the end of the director's service on the Board. Mr. Graham joined the Board on May 1, 2025. A proposal will be presented at the First Business Financial Services, Inc. Annual Meeting to approve the First Business Financial Services, Inc. 2026 Equity Incentive Plan (the "2026 Plan"). The Board of Directors (the "Board") of First Business Financial Services, Inc. adopted the 2026 Plan, subject to shareholder approval. The complete text of the 2026 Plan is attached as Appendix B to this proxy statement. The following summary description of the material terms of the 2026 Plan does not purport to be complete and is qualified in its entirety by reference to Appendix B. Proposed 2026 Equity Incentive Plan The Board is proposing to adopt a new incentive plan, the 2026 Plan, subject to shareholder approval. The Company is adopting the 2026 Plan in order to do the following: • Make 157,000 shares available, plus any unused shares from the First Business Financial Services, Inc. 2019 Equity Incentive Plan (the "Prior Plan") for future awards to employees and non-employee directors under the 2026 Plan; and • Close the Prior Plan to future awards. In determining the number of shares available for issuance under the 2026 Plan, the Compensation Committee and the Board considered the number of shares of Common Stock currently outstanding and the potential dilutive effect of the increase; our historical usage of shares under the Prior Plan; recent trends in the market price of our Common Stock; and our recent and projected practices with respect to awards under the Prior Plan. In the event the 2026 Plan is not approved by our shareholders, we expect that we would continue to grant awards using the shares remaining available under the Prior Plan, and the Compensation Committee would consider non-equity-based alternatives for compensating participants while maintaining, to the greatest extent possible, the objectives of the Company’s compensation programs. The following table shows, effective as of February 20, 2026, for the Prior Plan: (a) The number of Restricted Stock Units ("RSU") and Restricted Stock Awards ("RSA") outstanding and the number of shares reserved for issuance under all existing Performance Restricted Stock Units ("PRSU") if such awards were to pay out at the maximum level; (b) The number of shares remaining available for future issuance.

  13. Operational Risk Committee

    | Plan | RSUs, RSAs, and PRSUs (#) | Shares Remaining Available for Future Grant (#) | | First Business Financial Services, Inc. 2019 Equity Incentive Plan(1) | 205,929 | 142,966 |

  14. Operational Risk Committee

    Includes a reserve for PRSUs if issued at the Maximum performance level. If PRSUs are issued at Target performance level, an additional 55,585 shares are available for grant. While the Compensation Committee has no present intention of doing so, shareholder approval of the 2026 Plan would also enable the Company to grant options that, if so desired, will qualify as "incentive stock options" under Section 422 of the Code. Best Practice Features of the 2026 Plan The 2026 Plan includes a number of features that we consider to be consistent with best practices, including, among others: • Independent Oversight. The 2026 Plan is administered by the Compensation Committee, comprised of independent members of our Board. • No Evergreen Provision. The number of shares authorized for issuance under the 2026 Plan will be fixed at 157,000, plus any unused shares from the Prior Plan. The 2026 Plan does not include an "evergreen" feature that would cause the number of authorized shares to automatically increase in future years. • Conservative Share Reuse Provision. Shares subject to an award under the 2026 Plan will not be available for reissuance if such shares are tendered in payment of a stock option, delivered or withheld to satisfy any tax withholding obligation, added back after having been repurchased by the Company using stock option exercise proceeds, or not issued upon the settlement of a stock-settled Stock Appreciation Right ("SAR" or "SARs") or other award. • Minimum Vesting Periods. The 2026 Plan requires that stock awards that vest solely based on continued service must have a vesting period of at least one year, with the exception that up to 5% of the share reserve may have a shorter vesting period. Stock awards that are vested based on the achievement of performance measures or other performance objectives must include a performance measurement period of at least one year. • No dividends or dividend equivalents on unvested awards. No dividends or dividend equivalents will be paid on unvested awards, meaning that the Company's awards of both time-vested and performance-vested RSUs will only pay dividend equivalents to participants if and when the underlying unit awards vest. • Clawback Policy. All awards under the 2026 Plan are subject to any applicable law respecting recapture of compensation, the Company's Recovery Policy, and any other applicable Company clawback policy, as may be in effect from time-to-time. • Forfeiture Provisions. If a participant is terminated for cause or breaches a non-competition, non-solicitation, non-disclosure, non-disparagement or other restrictive covenant set forth in an award agreement or any other agreement between the participant and the Company, whether during or after the participant's termination of service, the participant will be required to forfeit or pay to the Company any and all awards granted to the participant (whether vested or unvested), any shares held by the participant acquired under awards after or during the 12-month period preceding such termination of service, and profits realized after or during the 12-month period preceding such termination of service in connection with the exercise of awards or the sale of shares obtained from awards. • Multiple Award Types. The 2026 Plan permits the issuance of stock options, RSUs, PRSUs, RSAs and other types of equity grants, subject to the share limits of the 2026 Plan. This breadth of award types enables the Compensation Committee to tailor awards in light of the accounting, tax and other standards applicable at the time of grant, which tend to change over time. • Repricing Prohibited. Repricing of stock options and SARs generally is prohibited without prior shareholder approval, with customary exceptions for stock dividends or splits, reorganizations, recapitalizations and similar events. Discount Stock Options and SARs Prohibited. All stock options and SARs must have an exercise price equal to or greater than the fair market value of our Common Stock on the date the stock option or SAR is granted. Material Terms of the Plan

  15. General

    General The 2026 Plan has been adopted by our Board to promote the Company's long-term financial success by providing a means to attract, retain and reward individuals who can and do contribute to such success, and to further align their interests with those of the Company's shareholders. The 2026 Plan will be administered by the Compensation Committee, which has the authority to select award recipients from the eligible participants, determine the types of awards to be granted, and determine the applicable terms, conditions, performance criteria, restrictions and other provisions of such awards, including any vesting or accelerated vesting requirements or conditions applicable to an award or awards. The 2026 Plan incorporates a broad variety of cash-based and equity-based incentive compensation elements to provide the Compensation Committee with significant flexibility to appropriately address the requirements and limitations of applicable legal, regulatory and financial accounting standards in a manner mutually consistent with the purposes of the 2026 Plan and shareholder interests. Subject to permitted adjustments for certain corporate transactions, the maximum number of shares of Common Stock that may be delivered to participants, or their beneficiaries, under the 2026 Plan will be 157,000 shares plus that number of shares remaining available for grant under the Prior Plan as of the date of shareholder approval of the 2026 Plan, as well as the number of shares that were covered under the Prior Plan that otherwise would become available for reuse under the Prior Plan due to forfeiture, expiration, cancelation or the like, all of which may be issued pursuant to the award of incentive stock options. To the extent that any shares of stock covered by an award (including stock awards) under the 2026 Plan expire or are not delivered for any reason, including because the award is forfeited, cancelled, or settled in cash, such shares will not be deemed to have been delivered for purposes of determining the maximum number of shares of stock available for delivery under the 2026 Plan. With respect to stock options for which payment of the exercise price is satisfied by tendering shares of stock of the Company or by the net exercise of the award, the full number of shares of stock set forth in the award agreement will be counted for purposes of these limitations. Additionally, shares that are tendered to, or withheld by, the Company to satisfy any tax withholding obligations will be deemed to have been delivered for purposes of these limitations. Finally, any shares that are repurchased by the Company with stock option exercise proceeds will not be added back to the number of shares reserved for issuance under the 2026 Plan. The 2026 Plan’s effective date will be April 24, 2026, subject to approval by shareholders. If approved, the 2026 Plan will continue to be in effect as long as any awards are outstanding; provided, however, that no awards may be granted under the 2026 Plan after the ten-year anniversary of the effective date. Any awards that are outstanding after the tenth anniversary of the effective date shall remain subject to the terms of the 2026 Plan. The Compensation Committee may use shares of stock available under the 2026 Plan as the form of payment for grants or rights earned or due under any other compensation plans or arrangements of the Company or a subsidiary, including the plan of any entity acquired by the Company or a subsidiary. In the event of a corporate transaction involving the stock of the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), the share limitations and all outstanding awards under the 2026 Plan will automatically be adjusted proportionally and uniformly to reflect such event; provided, however, that the Compensation Committee may adjust awards, or prevent the automatic adjustment of awards, to preserve the benefits or potential benefits of the awards. Except as provided by the Compensation Committee, awards granted under the 2026 Plan are not transferable except as designated by the participant by will or by the laws of descent and distribution. The Compensation Committee has the discretion to permit the transfer of awards under the 2026 Plan; provided, however, that such transfers will be limited to immediate family members of participants, trusts, partnerships, limited liability companies and other entities established for the primary benefit of such family members, and as long as such transfers are made without value to the participant. If the right to become vested in an award granted under the 2026 Plan to an employee participant is conditioned on the completion of a specified period of service with the Company or a subsidiary, without achievement of performance measures or other performance conditions being required as a condition of vesting, and without being granted instead of or in exchange for other compensation or awards, then the required period of service for full vesting must be at least one year. This minimum required period of service for full vesting does not apply to stock awards granted to directors provided that the aggregate of such grants does not exceed 5% of the total share reserve under the 2026 Plan. In addition, if an award becomes vested based on the achievement of performance measures or other performance objectives, then the period of time over which such achievement is measured cannot be less than one year. The Compensation Committee may provide a participant with the right to receive dividend payments or dividend equivalent payments on shares subject to outstanding awards granted under the 2026 Plan. Such dividend payments or dividend equivalent payments are subject to vesting on the same terms as the underlying award, such that dividends or dividend equivalents are only paid to the extent an award vests.

  16. Stock Options and Stock Appreciation Rights

    Stock Options and Stock Appreciation Rights A stock option represents the right to purchase shares of Common Stock at an exercise price established by the Compensation Committee. The Compensation Committee may grant incentive stock options or non-qualified stock options to purchase stock at a specified exercise price. SARs entitle the participant to receive cash or stock equal in value to, or based on the value of, the amount by which the fair market value of a specified number of shares on the exercise date exceeds an exercise price established by the Compensation Committee. Each award must be pursuant to an award agreement setting forth the terms and conditions of the individual award. Stock option or SAR awards must expire no later than ten years from the date of grant (and no later than five years for incentive stock options granted to a person who beneficially owns 10% or more of the Common Stock). The exercise price for each stock option and SAR may not be less than the fair market value of the Common Stock on the date the award is granted (or, if greater, the par value of a share). In addition, the exercise price of an incentive stock option granted to a person who beneficially owns 10% or more of the Common Stock at the time of grant, may not be less than 110% of the fair market value of the stock on the date the stock option is granted. The exercise price may, however, be higher or lower than the fair market value in the case of stock options and SARs granted in replacement of an existing award held by an employee or director of, or service provider to, a third party that is acquired by the Company or one of its subsidiaries. The exercise price may not be decreased after the date of grant nor may a stock option or SAR be surrendered to the Company as consideration for the grant of a replacement stock option with a lower exercise price, except as approved by the Company's shareholders, as adjusted for corporate transactions described above. Stock options and SARs awarded under the 2026 Plan will be exercisable in accordance with the terms established by the Compensation Committee. Any incentive stock option granted under the 2026 Plan that fails to continue to qualify as an incentive stock option will be deemed to be a non-qualified stock option and the Compensation Committee may unilaterally modify any incentive stock option to disqualify it as an incentive stock option. Except as otherwise determined by the Compensation Committee, the exercise price of a stock option or SAR may be paid in cash, by personal, certified or cashiers' check, in shares of the Common Stock (valued at fair market value as of the day of exercise) either via attestation or actual delivery, by other property deemed acceptable by the Compensation Committee, by irrevocably authorizing a third party to sell shares of the Common Stock and remit a sufficient portion of the proceeds to the Company to satisfy the exercise price and any tax withholding resulting from such exercise price, by payment through a net exercise such that, without the payment of any funds, the Participant may exercise the option and receive the net number of shares equal in value to the number of shares as to which the option is exercised, multiplied by a fraction, the numerator of which is the fair market value less the exercise price, and the denominator of which is the fair market value, or in any combination of the foregoing methods deemed acceptable by the Compensation Committee.

  17. Stock Awards

    Stock Awards A stock award is a grant of shares of the Common Stock or a right to receive shares of the Common Stock, an equivalent amount of cash or a combination thereof in the future. Such awards may include, but are not limited to, bonus shares, stock units, performance shares, performance units, restricted stock, restricted stock units or any other equity-based award as determined by the Compensation Committee. The specific performance measures, performance objectives or period of service requirements are set by the Compensation Committee in its discretion.

  18. Change in Control

    Change in Control Unless otherwise provided in an award agreement or an employment, retention, change of control, severance or similar agreement with the Company, upon the occurrence of a change in control followed by a qualifying termination of employment ("double trigger"), unvested awards granted under the 2026 Plan that have been assumed or replaced by an acquirer shall vest. A qualifying termination includes a termination of participant's employment without cause during the 12-month period following a change in control. In addition, in the event an acquirer does not assume or replace awards under the 2026 Plan in connection with a change in control, the Compensation Committee retains the discretion to accelerate the vesting of such awards and cash out such awards at the time of a change in control. The 2026 Plan further provides that the payout level of awards that are subject to performance objectives that vest in connection with a change in control will be the greater of (a) the target level of payout, or (b) the estimated payout level at expected actual performance, as determined by the Compensation Committee. For purposes of the 2026 Plan, a "change in control" generally will be deemed to occur when (i) any person (or persons acting as a group) acquires the beneficial ownership of more than 50% of the Common Stock of the Company, except that certain corporate restructurings involving current shareholders or members of the Company's controlling group generally will not be a change in control for purposes of the 2026 Plan, (ii) during any 12-month period, a majority of the Board members serving as of the 2026 Plan's effective date are replaced by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election, or (iii) any person or persons acting as a group acquires assets from the Company that have a total gross fair market value equal to more than 50% of the total gross fair market value of all of the assets of the Company.

  19. Amendment and Termination

    Amendment and Termination The Board may at any time amend or terminate the 2026 Plan or any award granted under the 2026 Plan, provided that no amendment or termination may impair the rights of any participant without the participant's written consent. The Board may not amend the provision of the 2026 Plan to materially increase the original number of shares that may be issued under the 2026 Plan (other than as provided in the 2026 Plan), materially increase the benefits accruing to a participant, or materially modify the requirements for participation in the 2026 Plan, without approval of shareholders. However, the Compensation Committee may amend the 2026 Plan or any award agreement at any time, retroactively or otherwise, to ensure that the 2026 Plan complies with current or future law without shareholder approval, and the Compensation Committee may unilaterally amend the 2026 Plan and any outstanding award, without participant consent, in order to avoid the application of, or to comply with, Section 409A of the Code, and applicable regulations and guidance thereunder. U.S. Federal Income Tax Considerations The following is a summary of the U.S. federal income tax consequences that may arise in conjunction with participation in the 2026 Plan and does not contain a complete analysis of all the potential tax consequences relating to awards granted under the 2026 Plan, including state or local tax consequences. Non-Qualified Stock Options. The grant of a non-qualified stock option generally will not result in taxable income to the participant. Except as described below, the participant generally will realize ordinary income at the time of exercise in an amount equal to the excess of the fair market value of the shares acquired over the exercise price for those shares and the Company generally will be entitled to a corresponding deduction. Gains or losses realized by the participant upon disposition of such shares will generally be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of exercise. Incentive Stock Options. Participants will not be deemed to recognize taxable income upon the grant or exercise of an Incentive Stock Option ("ISO"). If a participant makes no disqualifying disposition of the shares received upon exercise within the one-year period beginning after the transfer of such shares to the participant nor within two years from the date of grant of the ISO, and if the participant at all times from the date of the grant of the ISO to a date three months before the date of exercise has been an employee of the Company, any gain recognized on the disposition of the shares acquired upon exercise will be long-term capital gain. The difference between the fair market value of the shares at the time of exercise and the exercise price will, however, be an item of tax preference, and may subject a participant to the alternative minimum tax. The Company will not be entitled to any deduction with respect to the grant or exercise of the ISO or the transfer of shares acquired upon exercise. If the participant makes a disqualifying disposition of the shares before the expiration of the one or two year holding periods described above, the participant will be deemed to have received taxable ordinary income at the time of such disposition to the extent that the fair market value of the shares at the time of exercise, or, if less, the amount realized on such disposition, exceeds the exercise price. To the extent that the amount realized on such disposition exceeds the fair market value of the shares at the time of exercise, such excess will be taxed as capital gain if the shares are otherwise a capital asset in the hands of the participant. To the extent the participant recognizes ordinary income on a disqualifying disposition of the shares, the Company may be entitled to a deduction for federal income tax purposes in an amount equal to the ordinary income recognized by the participant. Stock Appreciation Rights. The grant of a SAR generally will not result in taxable income to the participant. Upon exercise of a SAR, the fair market value of shares received generally will be taxable to the participant as ordinary income and the Company will be entitled to a corresponding deduction. Gains and losses realized by the participant upon disposition of any such shares generally will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of exercise. Stock Awards. A participant who has been granted a stock award generally will not realize taxable income at the time of grant, provided that the stock subject to the award is not delivered at the time of grant, or if the stock is delivered, it is subject to restrictions that constitute a "substantial risk of forfeiture" for U.S. income tax purposes. Upon the later of delivery or vesting of shares subject to an award, the holder generally will realize ordinary income in an amount equal to the then fair market value of those shares and the Company generally will be entitled to a corresponding deduction. Gains or losses realized by the participant upon disposition of such shares generally will be treated as capital gains and losses, with the basis in such shares equal to the fair market value of the shares at the time of delivery or vesting. Withholding of Taxes. The Company may withhold amounts from participants to satisfy withholding tax requirements. Except as otherwise provided by the Compensation Committee, participants may tender cash, have shares withheld from awards or may tender previously owned shares to the Company to satisfy tax withholding requirements. The shares withheld from awards may not be used to satisfy more than the individual statutory tax rate for each applicable tax jurisdiction. Section 280G of the Code. Any acceleration of the vesting or payment of awards under the 2019 Plan in the event of a change in control in the Company may cause part or all of the consideration involved to be treated as an "excess parachute payment" under Section 280G of the Code, subjecting the participant to a 20% excise tax, and preclude a deduction by the Company. The awards under the 2026 Plan are subject to limitations on vesting or payment if it is determined that the payments of such awards would be deemed to be excess parachute payments under Section 280G of the Internal Revenue Code. The limitation to a participant will be applied to reduce the payment or value of acceleration below the threshold for an excess parachute payment for a participant if such a reduction would result in an increase in the aggregate benefits to be provided to the participant on an after-tax basis. Section 162(m) of the Code Under Section 162(m) of the Code, the deduction for a publicly held corporation for otherwise deductible compensation to a "covered employee" (the chief executive officer, the chief financial officer and the next three most highly compensated executive officers (other than the chief executive officer or chief financial officer)) is limited to $1 million per year. Plan Benefits The number and types of future awards to be made pursuant to the 2026 Plan is subject to the discretion of the Compensation Committee and is not determinable at this time. The following table sets forth the equity awards granted under the Prior Plan during 2025 to (i) each of our NEOs, (ii) all executive officers as a group, (iii) all current directors who are not executive officers as a group and (iv) all employees, including all current officers who are not executive officers, as a group:

  20. Amendment and Termination

    | Name | PRSUs Awarded in 2025(1) | Dollar Value of PRSUs(2) | RSAs/RSUs Awarded in 2025 | Dollar Value of RSAs/RSUs(2) | | Corey A. Chambas | 3,120 | $164,611 | 2,080 | $109,741 | | Brian D. Spielmann | 1,395 | $73,600 | 930 | $49,067 | | David R. Seiler | 2,340 | $123,458 | 1,560 | $82,306 | | Bradley A. Quade | 1,200 | $63,312 | 800 | $42,208 | | James E. Hartlieb | 1,105 | $58,300 | 740 | $39,042 | | All Executive Officers | 11,950 | $630,482 | 7,965 | $420,233 | | All Directors | — | — | 4,340 | $214,309 | | All Employees including Non Exec Officers | — | — | 32,745 | $1,717,091 |

  21. Amendment and Termination

    (1) Includes the following type of awards: options - 0 shares; RSUs - 90,861 shares; PRSUs assuming maximum performance - 92,000 shares. All shares subject to RSUs and PRSUs were issued under the Prior Plan. (2) The weighted-average exercise price does not take into account awards of RSUs or PRSUs which do not have an exercise price. (3) Includes the number of shares remaining available for future issuance under the following plans: Employee Stock Purchase Plan - 223,691 shares; and Prior Plan - 173,612 shares (assuming maximum performance is achieved under PRSU awards). SEC regulations require publicly traded companies to conduct a separate shareholder advisory vote to approve the compensation of their Named Executive Officers ("NEOs"), as disclosed pursuant to the SEC’s compensation disclosure rules, commonly referred to as a "say-on-pay" vote. In a non-binding advisory vote on the frequency of say-on-pay votes held at the Company’s 2025 annual meeting of shareholders, shareholders voted in favor of conducting say-on-pay votes annually. In light of this result, and other factors considered by the Board, the Board determined that the Company would hold say-on-pay votes on an annual basis until the next advisory vote on such frequency, which will occur at the 2031 annual meeting of shareholders. The overall objective of the Company’s compensation programs has been to align NEO compensation with the success of meeting annual and long-range strategic operating and financial goals. The Compensation Committee and the Board believe that the Company’s policies and procedures are effective in implementing the Company's Compensation Philosophy and achieving its goals, and that the compensation of the NEOs in 2025 reflects and supports these compensation policies and procedures. In accordance with the requirements of the Dodd-Frank Act and the rules and regulations promulgated thereunder, the following resolution is submitted for shareholder approval: "RESOLVED, that First Business Financial Services, Inc.’s shareholders approve, on an advisory basis, the compensation of the Company’s NEOs, as described in the Company’s proxy statement dated March 5, 2026." Approval of this resolution requires that the number of votes cast in favor of the resolution at the Annual Meeting exceed the number of votes cast against it. While this say-on-pay vote is required, under SEC regulations, it is not binding on the Compensation Committee or the Board and may not be construed as overruling any decision by the Compensation Committee or the Board. However, the Compensation Committee will take into account the outcome of the vote when considering future compensation arrangements. Abstentions and broker non-votes will not affect the voting results for this proposal. COMPENSATION DISCUSSION AND ANALYSIS This Compensation Discussion and Analysis describes elements of the Company’s compensation philosophy and explains the structure and rationale associated with each material component of the NEOs' compensation, providing important context for the more detailed disclosure tables and specific compensation amounts that follow this section. The Company’s NEOs for 2025 included the following individuals:

  22. Amendment and Termination

    | What We Do | What We Don't Do | | Pay for performance by having a significant portion of executives' compensation tied to Company performance and weighted toward the long-term. | Have excess perquisites. | | Use long-term incentive pay that is denominated and delivered in equity and does not have a cash component. | Make tax gross-up payments in connection with excise tax or other tax liabilities. | | Use robust incentive plan governance that is reviewed by internal experts, the Compensation Committee, and by an independent third- party as needed. | Grant new awards that accumulate dividend equivalents that vest before the end of the performance period. | | Retain an independent compensation consultant selected by the Compensation Committee for executive pay consultation. | Allow hedging or pledging of Company securities by Section 16 Reporting Persons. | | Require a double trigger for vesting of equity awards and severance payments upon a change of control. | | | Have a robust policy to clawback executive compensation in the event of a material restatement of financial statements. | | | Hold an annual say-on-pay vote to solicit regular feedback from shareholders. | | | Require stock ownership for executives based on a salary multiple of stock and retention of a portion of shares after vesting. | |

  23. Amendment and Termination

    Alignment of Pay with Performance Our executive compensation program supports long-term value creation. Approximately 50% of our CEO’s total direct compensation and 40% of the compensation for the other NEOs is variable and at risk, tied to the achievement of rigorous performance metrics that are aligned with our strategic priorities and important to our shareholders. A significant percentage of executive compensation opportunities are in the form of performance-based equity incentives. The executive officers’ grants are delivered in a mix of approximately 60% in Performance Restricted Stock Units ("PRSUs") and 40% in Restricted Stock Units ("RSUs"). The Company believes PRSUs incentivize executive officers to drive long-term Company performance, thereby aligning the executive officers’ interests with the long-term interests of shareholders. Within the 2025 compensation program, the PRSUs are measured 50% on Total Shareholder Return ("TSR") and 50% on Return on Average Tangible Common Equity ("ROATCE") and will cliff-vest after a three-year measurement period based on the Company’s performance relative to a custom peer group. The Bonus Plan for fiscal 2025 paid out at 134% of target. The payout reflects our strong performance across the key performance metrics (operating revenue, ROAA, efficiency ratio) which drive shareholder value and the Company’s business strategy.

  24. Role of Independent Compensation Consultant

    Role of Independent Compensation Consultant For 2025, the Compensation Committee engaged McLagan as its independent compensation consultant. McLagan supported the Committee through a series of strategic advisory engagements designed to strengthen compensation governance, prepare for leadership succession, and ensure competitive and performance-aligned compensation practices. The Compensation Committee’s consultant regularly attends Compensation Committee meetings and attends executive sessions as requested by the Compensation Committee Chair. McLagan's work in 2025 included: Evaluating non-employee director compensation against market benchmarks to ensure alignment with peers and continued competitiveness, • Conducting a comprehensive CEO compensation review to inform long-term planning and support the Company's CEO succession transition, • Calculating and validating the performance results for PRSUs for the performance period ending December 31, 2024, enabling the Committee's certification and approval process, • Recommending an updated peer group for assessing relative performance in connection with the 2025 annual PRSU grant, ensuring alignment with market standards and strategic priorities, • Reviewing potential equity award cost mitigation strategies including formalizing the post-vest holding period for executives, and • Reviewing the Compensation Discussion and Analysis included in the proxy statement to ensure clarity, transparency, and alignment with regulatory expectations and shareholder interests.

  25. Peer Group Companies and Analysis

    Peer Group Companies and Analysis The Compensation Committee reviews compensation levels and design at peer companies as part of its decision-making process in order to understand how the Company's practices align with those of similarly-situated organizations. The Compensation Committee generally strives to establish compensation for its executive officers that is competitive with that of our peer companies, while also taking into consideration other factors such as additional competitive market data, the scope of particular job responsibilities, individual performance of the executive officer, internal pay equity and other factors. The Compensation Committee’s determinations for executive officers are based on its review of such factors. Determinations are also informed by the experiences of the members of the Compensation Committee as well as input from, and peer group data, provided by McLagan. For purposes of peer analysis in assessing performance, the Company utilizes a peer group that includes commercial banks with similar annual revenue. Given the ever-changing landscape within the banking industry, the Compensation Committee regularly reviews and recalibrates the group of banks used for this analysis as recommended by McLagan. In 2024, the Compensation Committee engaged McLagan to conduct executive and non-employee director compensation market studies. A new peer group was approved reflecting a reference group of publicly traded bank holding companies with revenue between $90 and $280 million, which at the time was approximately one-half to two times the Company's size, a commercial lending concentration of at least 75%, headquarters in the continental United States (excluding some specific states and large metropolitan areas due to different market and compensation conditions), listed on a national exchange and a minimum of 0.50% ROAA for the current year and prior two years. This updated reference group had median revenue of $149 million at the time of the analysis, placing the Company at the 47th percentile of the group. Newly added peer companies are italicized in the table on the following page. The companies included in the peer group used for purposes of 2025 compensation decisions are as follows:

  26. Peer Group Companies and Analysis

    | Bankwell Financial Group, Inc. (BWFG) | Enterprise Bancorp, Inc. (EBTC) | Lakeland Financial Corporation (LKFN) | | Bridgewater Bancshares, Inc. (BWB) | Equity Bancshares, Inc. (EQBK) | Macatawa Bank Corporation (MCBC)* | | Business First Bancshares, Inc. (BFST) | Farmers & Merchants Bancorp (FMAO) | Mercantile Bank Corporation (MBWM) | | Citizens & Northern Corporation (CZNC) | FirstBank (FRBA) | Mid Penn Bancorp, Inc. (MPB) | | Citizens Financial Services (CZFS) | Great Southern Bancorp, Inc. (GSBC) | MidWestOne Financial Group, Inc. (MOFG) | | Civista Bancshares, Inc. (CIVB) | Heritage Financial Corporation (HFWA) | Northeast Bank (NBN) | | Colony Bankcorp, Inc. (CBAN) | Home Bancorp, Inc. (HBCP) | Orange County Bancorp, Inc. (OBT) | | CrossFirst Bankshares, Inc. (CFB)* | HomeTrust Bancshares, Inc. (HTBI) | SmartFinancial, Inc. (SMBK) |

  27. Peer Group Companies and Analysis

    *CrossFirst Bankshares, Inc. was acquired in 2025 and Macatawa Bank Corporation was acquired in 2024. Both companies were included for 2025 compensation decisions. Compensation Program Components The Compensation Committee strives to provide an appropriate mix of compensation components, including finding a balance between current and long-term compensation and between cash and equity incentive compensation. Cash payments primarily are aligned with and reward more recent performance, while equity awards encourage the Company’s executives to continue to deliver results over a longer period of time and also serve as a retention tool. Compensation for the NEOs was allocated between base salary, annual incentive compensation, and longer-term awards as described below.

  28. Annual Bonus Plan

    Annual Bonus Plan The Compensation Committee typically determines eligibility for annual bonus payments using the parameters defined in the Company’s Annual Bonus Plan (the "Bonus Plan"), which is a performance-based bonus plan for eligible officers and employees of the Company, including the NEOs. The Bonus Plan is formulaic and driven by clearly articulated performance measures. The Compensation Committee retains the right to apply discretion to modify the Bonus Plan or withhold payment at any time. For 2025, the NEOs participating in the Bonus Plan earned cash bonuses based on the Company's achievement of a combination of three equally-weighted financial goals, as pre-established and measured by the Compensation Committee and the Board. At the beginning of each year, the Compensation Committee approves threshold, target, and superior levels for each of the measures used in the Bonus Plan, based upon the expectations and strategies for each particular year. Bonus payments under the Bonus Plan are determined by the formulas described below. As an additional safeguard, the Bonus Plan requires that the Company must meet one-half of the return on asset threshold before any bonus payment can be made based on performance on any criteria. The following chart outlines the Company's performance measures that were used in the NEOs’ bonus calculations. The bonus calculations for all NEOs were based 100% on the performance of the Company. Achievement with respect to each performance measure at the threshold level will result in a payout of 50% of the target value, at the target level will result in a payout of 100% of target, and at the superior level will result in a payout of 200% of target. If achievement with respect to a particular performance measure does not reach threshold level, then no portion of the bonus will be awarded with respect to such performance measure. Each performance measure is determined by straight-line interpolation for actual performance falling between threshold and target or target and superior levels.

  29. Annual Bonus Plan

    | Measure | Weighting | Threshold | Target | Superior | Actual | Achievement % of Target | | Operating Revenue(1) | 33.33% | $160,170,000 | $168,600,000 | $177,030,000 | $168,392,641 | 98.24% | | Efficiency Ratio(2) | 33.33% | 62.00% | 60.00% | 58.00% | 58.78% | 160.96% | | Return on Average Assets(3) | 33.33% | 1.01% | 1.17% | 1.33% | 1.24% | 141.33% | | | | | | Total Achievement | | 133.51% |

  30. Annual Bonus Plan

    (1) Operating Revenue is defined as net interest income plus non-interest income less gain/loss on sales of securities or other discrete items unrelated to the Company's primary business activities, if any. See Appendix A for a reconciliation of the GAAP financial measure to the non-GAAP financial measure. (2) Efficiency ratio is a non-GAAP measure representing non-interest expense excluding the effects of the SBA recourse provision, impairment of tax credit investments, losses or gains on foreclosed properties, 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 gains or losses on securities, if any. See Appendix A for a reconciliation of the GAAP financial measure to non-GAAP financial measure. Return on Average Assets is defined as net income available to common shareholders divided by average assets. The specific performance metrics established with respect to the Company’s 2025 performance include the following non-GAAP financial measures, which the Company believes are relevant measures to align employees’ performance with profitability, growth and achievement of the Company’s strategic objectives: Operating revenue, which is equal to net interest income plus non-interest income minus any realized securities losses or gains or other discrete items that are unrelated to the Company’s primary business activities, if any. • Efficiency ratio, which is equal to non-interest expense excluding the effects of the SBA recourse provision, impairment of tax credit investments, losses or gains on repossessed assets, amortization of other intangible assets and other discrete items, if any, divided by operating revenue. The adjustments made to non-interest expense and non-interest income allow investors and analysts to better assess the Company's operating expenses in relation to its operating revenue by removing the volatility that is associated with certain one-time items and other discrete items. The bonus formula provides for bonus payments of 0% to 200% of each executive officer's respective target bonus percentage, which is denominated as a percent of each executive officer's eligible salary. The specific target payout varies by executive officer. The target annual incentive opportunities for each position increased by 5% in 2025 to align with the market median for each position as reported in McLagan's Executive Compensation study in 2024. After the end of fiscal 2025, the Compensation Committee determined the extent to which the performance goals were achieved and subsequently approved the award to each NEO for payment in 2026.

  31. Annual Bonus Plan

    | Name | Targeted Payout As % Of Base Salary | Maximum Payout As % Of Base Salary | Actual Payout As % Of Base Salary | Bonus Payout ($) | | Corey A. Chambas | 50.00% | 100.00% | 66.72% | $355,617 | | Brian D. Spielmann | 40.00% | 80.00% | 53.39% | $181,534 | | David R. Seiler | 45.00% | 90.00% | 60.06% | $300,280 | | Bradley A. Quade | 35.00% | 70.00% | 46.73% | $159,601 | | James E. Hartlieb | 35.00% | 70.00% | 46.73% | $147,195 |

  32. Long-Term Incentive Plan

    Long-Term Incentive Plan The Long-Term Incentive Plan ("LTI Plan") was established to advance the interests of the Company’s shareholders by enhancing the Company’s ability to attract, retain and motivate employees who make or are expected to make important contributions to the Company by providing equity ownership opportunities and equity-based incentives, thereby aligning the interests of such persons with those of the shareholders. The LTI Plan is administered by the Compensation Committee and provides for the grant of equity ownership opportunities through incentive stock options and non-qualified stock options, restricted stock, restricted stock units, performance restricted stock units, and any other type of award permitted by the LTI Plan. In 2025, the Company issued a mix of PRSUs and RSUs to its executive officers. The PRSUs cliff-vest after the end of a three-year measurement period based on the Company’s TSR and ROATCE performance relative to a custom peer group. The PRSUs are intended to align long-term Company performance with executive officer pay by linking the ultimate payout to pre-established relative goals based on a formula. The RSUs vest ratably over a three-year period and serve as a strong retention tool for the Company’s executive officers. The executive officers' grants are weighted approximately 60% in PRSUs and 40% in RSUs. The Company’s executive officers are eligible to receive dividend equivalents with respect to PRSU and RSU grants made after January 2023 which will be paid at the time of vesting only if and to the extent the underlying PRSUs and RSUs vest.

  33. Long-Term Incentive Plan

    | 2025 PRSU Program Features | | Vehicle Value of units is measured on a relative basis over the performance period; PRSUs are settled in shares at vesting. | | Performance Period Awards made in 2025 have a three-year performance measurement period of 2025-2027 and will cliff vest at the end of the measurement period. | | Performance Measures Relative TSR (50% weighting) and ROATCE (50% weighting). | | Payout Payout under the program is calculated at the end of the three-year performance period and is based on the relative performance for each measure against the custom peer group. Payout at the 25th percentile of the peer group will result in an award of 50% of the target value, payout at the 50th percentile of the peer group will result in an award of 100% of the target value, and payout at the 75th percentile or above of the peer group will result in an award of 200% of the target value. Achievement of each performance measure is determined by straight-line interpolation for actual performance falling between threshold and target or target and maximum levels. If achievement with respect to a particular performance measure does not reach threshold level, then no portion of the award will vest with respect to such performance goal. | | Peer Group Performance A peer group is established to measure relative performance under the LTI Plan. The LTI Plan peer group for the 2025 grant consists of 118 publicly traded banks, headquartered in the U.S., with assets between $2.0 billion and $7.0 billion. No new peers will be added to the 2025 LTI peer group throughout the measurement period, and peers will only be removed if they fail or are acquired prior to the end of the measurement period. |

  34. Long-Term Incentive Plan

    Shares certified as earned by the Compensation Committee at the end of the performance period will be distributed in the calendar year following the end of the performance period. Per the holding requirements outlined in the Performance-Based Restricted Stock Unit Award Agreement, NEOs are required to hold at least 50% of vested shares issued under the agreement, generally for 12 months after vesting or until the end of employment, whichever is earlier. Additionally, until an NEO satisfies their share ownership target outlined in the Stock Ownership Guidelines and Share Retention Policy, they are required to retain 100% of their net shares received as the result of the exercise, vesting or payment of any equity awards granted to the NEO, but in no case less than 50% of the applicable shares. The targeted amount of the long-term incentive awarded for each of the NEOs is determined utilizing market data for similar positions within the industry as well as relative roles and responsibilities within the Company. The targeted value of the grant is determined as a percentage of their base salary and ranges from 30% to 50%. The following chart summarizes the equity awards made to each of the NEOs in 2025.

  35. Long-Term Incentive Plan

    | Name | Long-Term Incentives (% Of Base Salary) | Total Long-Term Incentives ($) | PRSU # Granted At Target | PRSU Grant Date Fair Value | RSU # Granted | RSU Grant Date Fair Value | | Corey A. Chambas | 50.00% | $312,837 | 3,120 | $203,096 | 2,080 | $109,741 | | Brian D. Spielmann | 35.00% | $139,887 | 1,395 | $90,820 | 930 | $49,067 | | David R. Seiler | 40.00% | $234,628 | 2,340 | $152,322 | 1,560 | $82,306 | | Bradley A. Quade | 30.00% | $120,322 | 1,200 | $78,114 | 800 | $42,208 | | James E. Hartlieb | 30.00% | $110,985 | 1,105 | $71,942 | 740 | $39,042 |

  36. Long-Term Incentive Plan

    These equity awards are also listed in the Grant of Plan Based Awards on page 48 and the Outstanding Equity Awards at Fiscal Year End table on page 49. 2022-2024 LTI Plan Performance Results For the PRSU grant made in 2022 with a three-year performance period ended December 31, 2024, the Compensation Committee determined that the performance goals were achieved at the following levels against relative performance of a custom peer group consisting of approximately 122 U.S.-based publicly listed banks with $1.5 billion to $5.0 billion in total assets at the beginning of the performance period. Shares were certified and approved on April 11, 2025. Final LTI Plan performance approved by the Compensation Committee is displayed below.

  37. Long-Term Incentive Plan

    | Percentile | | | | | | | LTI Measure | Weight | Threshold | Target | Superior | Performance Results | | Relative TSR | 50% | 25th | 50th | 75th | 96th | | Relative ROAE | 50% | 25th | 50th | 75th | 88th | | Performance Payout | | | | | 200% of Target |

  38. Long-Term Incentive Plan

    Shares Earned Under the PRSU Award for the 2022-2024 Performance Period Due to the Company's superior performance on both TSR and ROAE relative to the custom peer group, the NEOs earned 200% of the targeted amount and the number of shares earned under the PRSU awards below were delivered to the NEOs on April 11, 2025.

  39. Long-Term Incentive Plan

    | Named Executive Officer | Position | Shares Earned For The 2022-2024 Performance Period | | Corey A. Chambas | Chief Executive Officer | 10,240 | | Brian D. Spielmann(1) | Chief Financial Officer | — | | David R. Seiler | President & Chief Operating Officer | 4,530 | | Bradley A. Quade | EVP & Chief Credit Officer | 2,770 | | James E. Hartlieb | President & CEO – First Business Bank | 2,710 |

  40. Long-Term Incentive Plan

    (1) Mr. Spielmann was not an executive officer at the time the 2022 PRSU grant was made. The PRSUs the Company granted to its executive officers in 2023 for the performance measurement period of 2023-2025 will be paid out in April 2026. As of the date of this proxy statement, the number of shares earned under that award is unknown due to the unavailability of final Relative ROATCE information. The Company intends to file a Current Report on Form 8-K disclosing the number of shares earned by the NEOs under the 2023 PRSU award once the information becomes available. All Other Compensation and Perquisites. While the Compensation Committee reviews and monitors the level of other compensation offered to the NEOs, it typically does not adjust the level of benefits offered on an annual basis. The Compensation Committee does consider the benefits and perquisites offered to the NEOs in its evaluation of the total compensation received by each. It is the Compensation Committee's belief that perquisites for NEOs should be very limited in scope and value and reflective of similar perquisites from competitive employers both in the industry and the region. Due to this philosophy, the Company has generally provided nominal benefits to NEOs that are not available to other employees and plans to continue this approach in the future. The benefits offered in 2025 to the NEOs will continue for 2026. The perquisites received by the NEOs in 2025 are reported in the Summary Compensation Table on page 47. Named Executive Officer Stock Ownership Guidelines The Board has established the Stock Ownership Guidelines and Share Retention Policy (the "Policy") as another means by which to align the interests of the NEOs with those of the Company's shareholders. The share ownership target is based on a multiple of base salary for the CEO and NEOs as follows:

  41. Long-Term Incentive Plan

    | Position | Baseline | Minimum Ownership As A Multiple Of The Baseline | | CEO | Base Salary | 3x | | NEOs | Base Salary | 1x |

  42. Long-Term Incentive Plan

    Per the Policy, NEOs have five years from the later of the adoption of the Policy or their appointment to achieve the appropriate share ownership target. Until an NEO satisfies the share ownership target, they are required to retain 100% of net shares received as the result of the exercise, vesting or payment of any equity awards granted to the NEO, but in no case less than 50% of the applicable shares. NEOs are also required to comply with any holding requirements included in award agreements applicable to equity awards granted under the Company's equity plan and are expected to continuously own sufficient shares of Common Stock to meet the applicable share ownership target once achieved until the end of employment. All NEOs were in compliance with the Policy as of December 31, 2025. Clawback Policies The Company’s 2019 Clawback Policy applies to all current and former executive officers. In the event of a material restatement of the Company’s financial results, other than a restatement due to changes in accounting principles or applicable law or interpretations thereof, the Board will review the facts and circumstances that led to the requirement for the restatement and will take such actions, including clawback, as it deems necessary or appropriate. The Board will consider whether any executive officer received incentive compensation based on the original financial statements because it appeared they achieved financial performance targets which in fact were not achieved based on the restatement. The Board will also consider the accountability of any executive officer whose acts or omissions were responsible in whole or in part for the events that led to the restatement and whether such acts or omissions constituted improper conduct. The 2019 Clawback Policy also includes clawback provisions for incentive compensation in the event of improper conduct by the executive officer. In 2023, the Company adopted the Executive Officer Compensation Recovery Policy (the "Recovery Policy"), which adheres to the listing standards of Nasdaq and the rules of the SEC. Under the Recovery Policy, in the event the Company is required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the federal securities laws, the Company will recover the amount of any applicable incentive-based compensation received by an executive covered by the Recovery Policy during the applicable recovery period (generally the prior three completed fiscal years) that exceeds the amount that otherwise would have been received had it been determined based on the restated financial statements. In adopting the Recovery Policy, the Company did not supersede the 2019 Clawback Policy, but instead preserved any rights it still has related to use the 2019 Clawback Policy that are in addition to those it has under the newer Recovery Policy. Additional details are available in the Recovery Policy posted on the website at https://ir.firstbusiness.bank/corporate-overview/corporate-governance/default.aspx. No-Hedging and No-Pledging Provisions The Company has adopted an Insider Trading Policy ("Insider Trading Policy"), which governs the purchase and sale of our securities by all directors, officers, employees, consultants and contractors of the Company and members of their immediate families or households, in order to promote compliance with insider trading laws, rules and regulations, and the Nasdaq rules. The Company follows the principle that it cannot engage in transactions in its own securities while in possession of material nonpublic information, except in accordance with trading plans intended to satisfy the requirements of Rule 10b5-1(c) under the Exchange Act. The Company's Insider Trading Policy includes provisions that prohibit all Section 16 Reporting Persons from hedging Company stock, from holding Company stock in a margin account and from pledging Company stock as collateral for a loan. All Section 16 Reporting Persons are currently in compliance with these provisions. The full text of our Insider Trading Policy was filed as Exhibit 19 to the 2025 Annual Report. Assessment of Compensation Risk As a publicly traded financial institution, the Company must comply with several often overlapping layers of regulations when considering and implementing compensation-related decisions. These regulations do not set specific parameters within which compensation decisions must be made, but do require the Company and the Compensation Committee to be mindful of the risks that often go hand-in-hand with compensation programs designed to incentivize the achievement of better than average performance. The Compensation Committee believes that a sensible approach to balancing risk-taking and rewarding reasonable, but not necessarily easily attainable, goals has always been a component of its overall assessment of the compensation plans, programs and arrangements it has established for the NEOs. In addition to our cultural competencies, the Company engages in the following practices to ensure its executive compensation program is aligned with shareholders’ interests and protects the Company against excessive risk taking: • Variable compensation based on a variety of performance goals, • Board discretion to lower incentive award amounts, • Balanced mix of short-term and long-term incentives with emphasis on performance, • Stock ownership guidelines, • No-hedging and no-pledging provisions, and • Clawback provisions. In 2025, the Compensation Committee completed its thorough annual review of all compensation programs offered at the Company, including those described in this Compensation Discussion and Analysis, to determine whether any aspect of the plans or programs encourages excessive or unnecessary risk that would adversely affect the long-term value or performance of the Company. Based on the risk assessment process, the Compensation Committee concluded that the compensation plans and programs, considered individually and as a whole, do not encourage excessive risk-taking by NEOs or other employees, and are designed to encourage and reward decisions that create long-term shareholder value in a manner consistent with the Company's core values. COMPENSATION COMMITTEE REPORT The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management, and based on review and discussion with management, the Compensation Committee recommended to the Board, and the Board approved, the inclusion of the Compensation Discussion and Analysis in this proxy statement and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Submitted by the members of the Compensation Committee: Carla C. Chavarria, Compensation Committee Chair Laurie S. Benson W. Kent Lorenz

  43. Compensation Committee Interlocks and Insider Participation

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3) | All Other Compensation ($)(4) | Total ($) | | Corey A. Chambas | 2025 | $533,000 | 0 | $312,837 | $355,617 | $0 | $34,715 | $1,236,169 | | Chief Executive Officer | 2024 | $554,667 | 0 | $352,781 | $289,367 | $0 | $32,268 | $1,229,082 | | | 2023 | $610,000 | 0 | $336,580 | $310,969 | $691,210 | $29,990 | $1,978,750 | | Brian D. Spielmann | 2025 | $340,000 | 0 | $139,887 | $181,534 | — | $26,845 | $688,265 | | Chief Financial Officer | 2024 | $308,333 | 0 | $115,558 | $126,828 | — | $25,323 | $576,043 | | | 2023 | $268,750 | 0 | $97,009 | $108,919 | — | $24,222 | $498,900 | | David R. Seiler | 2025 | $500,000 | 0 | $234,628 | $300,280 | — | $48,284 | $1,083,192 | | President & Chief Operating Officer | 2024 | $434,271 | 0 | $151,603 | $197,464 | — | $45,994 | $829,332 | | | 2023 | $375,000 | 0 | $145,497 | $166,073 | — | $42,766 | $729,335 | | Bradley A. Quade | 2025 | $341,550 | 0 | $120,322 | $159,601 | — | $46,013 | $667,486 | | EVP & Chief Credit Officer | 2024 | $312,500 | 0 | $99,398 | $107,607 | — | $42,458 | $561,963 | | | 2023 | $276,000 | 0 | $91,327 | $93,386 | — | $45,797 | $506,510 | | James E. Hartlieb | 2025 | $315,000 | 0 | $110,985 | $147,195 | — | $47,308 | $620,487 | | President & CEO – First Business Bank | 2024 | $300,000 | 0 | $99,398 | $103,303 | — | $43,270 | $545,970 | | | — | — | — | — | — | — | — | — |

  44. Potential Payments and Benefits

    Potential Payments and Benefits The following tables set forth information concerning potential payments and benefits under the Company’s compensation programs and benefit plans to which the NEOs, whose benefits are described on the previous page, could be entitled upon the NEO’s termination of employment or a change in control of the Company. The tables assume a change in control and termination date (to the extent applicable) of December 31, 2025, and a price per share of $54.30, the closing price of the Company’s Common Stock on December 31, 2025. The NEOs’ employment agreement, change in control agreements and the 2019 Plan may limit the amount payable in the event of a change in control of the Company to the extent any payments would constitute an "excess parachute payment" under Internal Revenue Code Section 280G, but the following tables do not show any reduction in benefits due to such a limitation. The amounts shown in the following tables also assume that in a change of control, the acquiring or surviving company would have assumed all outstanding and unvested equity awards.

  45. Tax Deductibility of Compensation

    | Year | Summary Compensation Table Total for PEO(1) ($) | Compensation Actually Paid to PEO(¹)(²)(³) ($) | Average Summary Compensation Table Total for Non-PEO NEOs(1) ($) | Average Compensation Actually Paid to Non-PEO NEOs(1)(2)(3) ($) | Value of Initial Fixed $100 Investment based on:(4) | | Net Income ($ Thousands) | Return on Average Assets | | | | | | | TSR ($) | Peer Group TSR ($) | | | | 2025 | 1,236,169 | 2,649,852 | 764,858 | 925,299 | 335.22 | 196.00 | 50,319 | 1.24% | | 2024 | 1,229,082 | 1,927,809 | 628,327 | 705,822 | 279.17 | 147.85 | 44,245 | 1.20% | | 2023 | 1,978,750 | 2,422,445 | 475,638 | 659,922 | 235.71 | 107.76 | 37,027 | 1.13% | | 2022 | 1,835,629 | 2,407,904 | 630,011 | 864,228 | 208.72 | 108.73 | 40,858 | 1.46% | | 2021 | 1,629,663 | 2,424,342 | 562,326 | 883,253 | 162.83 | 138.33 | 35,755 | 1.37% |