FIRST BUSINESS FINANCIAL SERVICES, INC. 10-K

Item 9A. Controls and Procedures Disclosure Controls and Procedures The Corporation’s management, with the participation of the Corporation’s Chief Executive Officer and Chief Financial Officer, has evaluated the Corporation’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based upon that evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer have concluded that the Corporation’s disclosure controls and procedures were effective as of December 31, 2020. Changes in Internal Control over Financial Reporting There was no change in the Corporation’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934, as amended) that occurred during the quarter ended December 31, 2020 that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting. Management’s Annual Report on Internal Control over Financial Reporting The Corporation’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. The Corporation’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Corporation’s financial statements for external purposes in accordance with generally accepted accounting principles. Management, under the supervision of the Chief Executive Officer and the Chief Financial Officer, assessed the effectiveness of the Corporation’s internal control over financial reporting based on criteria for effective internal control over financial reporting established in Internal Control – Integrated Framework (2013) , issued by the Committee of Sponsoring Organization of the Treadway Commission (COSO). Based on this assessment, management has determined that the Corporation’s internal control over financial reporting was effective as of December 31, 2020. Crowe LLP, the independent registered public accounting firm that audited the Consolidated Financial Statements of the Corporation included in this Annual Report on Form 10-K, has issued an attestation report on the effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2020. The report, which expresses an unqualified opinion on the effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2020, is included under the heading “Report of Independent Registered Public Accounting Firm.” 123 Table of Contents Item 9B. Other Information None. PART III. Item 10. Directors, Executive Officers and Corporate Governance (a) Directors of the Registrant . The information included in the definitive Proxy Statement for the Annual Meeting of the Shareholders to be held on April 30, 2021 under the caption “Item 1 - Election of Directors” is incorporated herein by reference. (b) Executive Officers of the Registrant . The information presented in Item 1 of this document is incorporated herein by reference. (c) Code of Ethics . The Corporation has adopted a code of ethics applicable to all employees, including the principal executive officer, principal financial officer and principal accounting officer of the Corporation. The FBFS Code of Ethics is posted on the Corporation’s website at www.firstbusiness.bank. The Corporation intends to satisfy the disclosure requirements under Item 5.05(c) of Form 8-K regarding any amendment to or waiver of the code with respect to its Chief Executive Officer, Chief Financial Officer, principal accounting officer, and persons performing similar functions, by posting such information to the Corporation’s website. (d) Audit Committee . The information included in the definitive Proxy Statement for the Annual Meeting of the Shareholders to be held on April 30, 2021 under the caption “Item 1 - Election of Directors” is incorporated herein by reference. Item 11. Executive Compensation Information with respect to compensation for our directors and officers included in the definitive Proxy Statement for the Annual Meeting of the Shareholders to be held on April 30, 2021 under the captions “Executive Compensation”, “Director Compensation,” “Compensation Committee Report,” and “Compensation Committee Interlocks and Insider Participation” is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters Information with respect to security ownership of certain beneficial owners and management included in the definitive Proxy Statement for the Annual Meeting of the Shareholders to be held on April 30, 2021 under the caption “Principal Shareholders” is incorporated herein by reference. Information with respect to compensation plans in the definitive proxy statement for the Annual Meeting of the Shareholders to be held on April 30, 2021 under the caption “Equity Compensation Plan Information” is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence Information with respect to certain relationships and related transactions included in the definitive Proxy Statement for the Annual Meeting of the Shareholders to be held on April 30, 2021 under the captions “Related Party Transactions” and “Item 1 - Election of Directors” is incorporated herein by reference. Item 14. Principal Accountant Fees and Services Information with respect to principal accounting fees and services included in the definitive Proxy Statement for the Annual Meeting of the Shareholders to be held on April 30, 2021 under the caption “Miscellaneous” is incorporated herein by reference. 124 Table of Contents PART IV. Item 15. Exhibits and Financial Statement Schedules The Consolidated Financial Statements listed on the Index included under “Item 8. Financial Statements and Supplementary Data” are filed as a part of this Form 10-K. All financial statement schedules have been included in the Consolidated Financial Statements or are either not applicable or not significant. Exhibit Index Exhibit No. Exhibit Name 3.1 Amended and Restated Articles of Incorporation of First Business Financial Services, Inc. (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed on March 10, 2017) 3.2 Amended and Restated Bylaws of First Business Financial Services, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on October 31, 2018) Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the Registrant agrees to furnish to the Securities and Exchange Commission, upon request, any instrument defining the rights of holders of long-term debt not being registered that is not filed as an exhibit to this Annual Report on Form 10-K. No such instrument authorizes securities in excess of 10% of the total assets of the Registrant. 4.1 Form of Common Stock Certificate (incorporated by reference to Exhibit 4.3 to Amendment No. 1 to the Registration Statement on Form S-1 filed on November 26, 2012) 4.2 Description of Registrant’s Securities (filed herewith) 10.1 * 2012 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on July 27, 2012) 10.2 * Form of Executive Change-in-Control and Severance Agreement (filed herewith) 10.3 * Amended and Restated Agreement effective December 22, 2014 between First Business Bank and Corey A. Chambas (incorporated by reference to Exhibit 10.8 of the Registrant’s Annual Report on Form 10-K filed on March 16, 2015) 10.4 * First Amendment of Agreement by and between First Business Bank and Corey Chambas (Amended and Restated December 22, 2014) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 29, 2016) 10.5 * Annual Cash Bonus Plan, effective January 1, 2019 (incorporated by reference to Exhibit 10.6 of the Registrant’s Annual Report on Form 10-K filed on February 28, 2019) 10.6 * First Business Financial Services, Inc. 2019 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Corporation’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 3, 2019) 10.7 * Form of Performance-Based Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.8 to the Annual Report on Form 10-K filed on February 27, 2020) 10.8 * Form of Restricted Stock Unit Agreement (incorporated by reference to the Quarterly Report on Form 10-Q filed July 26, 2019) 10.9 * Form of Restricted Stock Agreement (incorporated by reference to the Quarterly Report on Form 10-Q filed July 26, 2019) 125 Table of Contents 10.10 * Form of Performance-Based Restricted Stock Unit Agreement - Retiree (incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K filed on February 27, 2020) 10.11 * Form of Restricted Stock Unit Agreement - Retiree (incorporated by reference to the Quarterly Report on Form 10-Q filed July 26, 2019) 10.12 * Form of Performance-Based Restricted Stock Unit Exchange Agreement - Retiree (incorporated by reference to Exhibit 10.13 to the Annual Report on Form 10-K filed on February 27, 2020) 10.13 * Form of Restricted Stock Unit Exchange Agreement - Retiree (incorporated by reference to the Quarterly Report on Form 10-Q filed July 26, 2019) 10.14* Form of Restricted Stock Agreement - Director (incorporated by reference to the Quarterly Report on Form 10-Q filed April 24, 2020. 21 Subsidiaries of the Registrant 23 Consent of Crowe LLP 31.1 Certification of the Chief Executive Officer 31.2 Certification of the Chief Financial Officer 32 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 101 The following financial information from First Business Financial Services, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2020 and December 31, 2019, (ii) Consolidated Statements of Income for the years ended December 31, 2020 and 2019, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2020 and 2019, (iv) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2020 and 2019, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019, and (vi) the Notes to Consolidated Financial Statements * Management contract or compensatory plan. Item 16. Form 10-K Summary None. 126 Table of Contents Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. FIRST BUSINESS FINANCIAL SERVICES, INC. February 24, 2021 /s/ Corey A. Chambas Corey A. Chambas Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. 127 Table of Contents Signature Title Date /s/ Corey A. Chambas Chief Executive Officer February 24, 2021 Corey A. Chambas (principal executive officer) /s/ Edward G. Sloane, Jr. Chief Financial Officer February 24, 2021 Edward G. Sloane, Jr. (principal financial officer) /s/ Brian D. Spielmann Chief Accounting Officer February 24, 2021 Brian D. Spielmann (principal accounting officer) /s/ Gerald L. Kilcoyne Chair of the Board of Directors February 24, 2021 Gerald L. Kilcoyne /s/ Laurie S. Benson Director February 24, 2021 Laurie S. Benson /s/ Mark D. Bugher Director February 24, 2021 Mark D. Bugher /s/ Carla C. Chavarria Director February 24, 2021 Carla C. Chavarria /s/ Jan A. Eddy Director February 24, 2021 Jan A. Eddy /s/ John J. Harris Director February 24, 2021 John J. Harris /s/ Ralph R. Kauten Director February 24, 2021 Ralph R. Kauten /s/ Timothy J. Keane Director February 24, 2021 Timothy J. Keane /s/ W. Kent Lorenz Director February 24, 2021 W. Kent Lorenz /s/ Daniel P. Olszewski Director February 24, 2021 Daniel P. Olszewski /s/ Carol P. Sanders Director February 24, 2021 Carol P. Sanders 128