April 26, 2011
First Busey Announces 2011 First Quarter Results
Champaign, IL – (Nasdaq: BUSE)
Message from our President & CEO
First Busey Corporation’s net income was $9.1 million and net income available to common stockholders was $7.3 million, or $0.09 per fully-diluted common share, for the first quarter of 2011. In comparison, the company reported net income for the first quarter of 2010 of $4.2 million and net income available to common stockholders of $2.9 million, or $0.04 per fully-diluted common share.
Our priorities remain balance sheet strength, profitability and growth – in that order. We expect to continue to see gradual improvement in non-performing loans and profitability while maintaining high capital ratios.
Asset Quality: Our non-performing loans at March 31, 2011 continued to show improvement. We expect continued gradual improvement in our overall asset quality in 2011; however, this is dependent on market specific economic conditions. The key metrics are as follows:
| · | Non-performing loans decreased to $60.9 million at March 31, 2011 from $68.1 million at December 31, 2010 and $100.7 million at March 31, 2010. |
o | Illinois non-performing loans decreased to $30.1 million at March 31, 2011 from $38.3 million at December 31, 2010 and $36.0 million at March 31, 2010. |
| o | Florida non-performing loans decreased slightly to $23.4 million at March 31, 2011 from $23.8 million at December 31, 2010 and $43.7 million at March 31, 2010. |
| o | Indiana non-performing loans increased to $7.4 million at March 31, 2011 from $6.0 million at December 31, 2010, but decreased compared to $21.0 million at March 31, 2010. |
| · | Loans 30-89 days past due decreased to $18.4 million at March 31, 2011 from $23.5 million at December 31, 2010, and $24.6 million at March 31, 2010. The primary reason for the increase in the fourth quarter of 2010 is related to single family residential mortgages, primarily in Illinois. Although we generally experience an increase in single family residential past dues in the fourth quarter, the increase in the fourth quarter of 2010 was higher than fourth quarter of 2009. We believe our loss exposure in single family residential mortgages is limited. |
| · | Other non-performing assets decreased to $7.2 million at March 31, 2011 from $9.2 million at December 31, 2010 and $18.5 million at March 31, 2010. |
| · | The ratio of non-performing assets to total loans plus other real estate owned at March 31, 2011 decreased to 3.04% from 3.25% at December 31, 2010 and 4.38% at March 31, 2010. |
| · | The allowance for loan losses to non-performing loans ratio increased to 122.89% at March 31, 2011 from 111.64% at December 31, 2010 and 94.23% at March 31, 2010. |
| · | The allowance for loan losses to total loans ratio increased to 3.35% at March 31, 2011 compared to 3.21% at December 31, 2010, but decreased from 3.51% at March 31, 2010. |
| · | Net charge-offs were $6.2 million for the first quarter of 2011, which were lower than the $17.4 million recorded in the fourth quarter of 2010, and the $20.0 million recorded for the first quarter of 2010. |
| · | Provision expense in the first quarter of 2011 was $5.0 million compared to $10.3 million in the fourth quarter of 2010 and $14.7 million in the first quarter of 2010. |
Operating Performance: Our profit increased to $9.1 million in the first quarter of 2011 as compared to $7.3 million in the fourth quarter of 2010 and $4.2 million in the first
quarter of 2010. The primary reason for the increase over the fourth quarter of 2010 was reduced provision expense of $5.3 million, offset by a decline in gains on sale of mortgage
loans of $3.5 million.
Significant operating performance items were:
| · | Net income available to common stockholders (net of TARP dividends) for the quarter ended March 31, 2011 was $7.3 million, or $0.09 per fully-diluted share, compared to net income of $2.9 million, or $0.04 per fully-diluted common share, for the quarter ended March 31, 2010. |
| · | Net interest margin decreased to 3.55% for the first quarter of 2011 as compared to 3.68% for the fourth quarter of 2010, but increased slightly from 3.52% for the first quarter of 2010. The increase in average earning assets from our December 2010 capital raise and loan pay downs were the primary reasons for the decline in net interest margin in the first quarter of 2011 as compared to fourth quarter of 2010. Overall, yields were fairly consistent on a linked quarter basis. |
| · | The efficiency ratio increased to 55.87% for the first quarter of 2011, as compared to 51.51% for the fourth quarter of 2010 and 53.69% for the first quarter of 2010. |
| · | Total revenue, net of interest expense and security gains, for the first quarter of 2011 was $43.9 million compared to $46.6 million for the fourth quarter of 2010 and $44.6 million for the first quarter of 2010. |
| · | FirsTech’s net income increased to $0.5 million for the first quarter of 2011 compared to $0.3 million for the fourth quarter of 2010, but decreased slightly compared to $0.6 million for the first quarter of 2010. |
| · | Busey Wealth Management’s net income of $0.7 million for the first quarter of 2011 was consistent with net income for the fourth quarter of 2010, but decreased slightly from $0.9 million for the first quarter of 2010. |
Growth: In late January 2011, we began an initiative to spur organic growth and provided certain tools to our front line associates to foster this initiative. These tools facilitated
the first quarter growth in non-time deposits of $30.5 million, or 1.6%, over December 31, 2010 levels, and we hope to see continued results going forward.
The sales cycle on deposits is shorter than the sales cycle on loans. We have not yet experienced growth within our loan portfolio. Loans, net of allowance for loan losses,
declined $105.2 million from December 31, 2010 due to soft loan demand and our reduction of non-relationship commercial real estate exposure. Additionally, loans held-for-sale
declined $29.5 million in that period as interest rate increases on mortgages during the first quarter of 2011 slowed refinancing demand and our gains on sales of loans.
Capital: On March 4, 2011, we converted 318.6225 shares of Series B Convertible Preferred Stock into 7,497,000 shares of common stock. The Series B Preferred Stock had been issued as a part of our December 2010 registered direct offering, in which we raised a net $84.3 million in capital. Following the issuance of the common stock, we had 86,596,527 shares of common stock issued and outstanding. No shares of Series B Convertible Preferred Stock remained outstanding.
Overall, we are pleased with our operating results for the first quarter of 2011. Each quarter of improved asset quality and profitability reinforces our belief that now is the time for growth. We continue to explore external growth opportunities while simultaneously focusing on internal growth. We will continue to base our efforts for internal growth on service, listening to our customers and fulfilling our promise to help them accomplish their goals.
On April 29, 2011, we will pay a cash dividend of $0.04 per common share to stockholders of record on April 22, 2011.
We thank our associates for their efforts, our customers for their business and you, our stockholders, for your continued support of Busey.
\s\ Van A. Dukeman
President & Chief Executive Officer
First Busey Corporation
| SELECTED FINANCIAL HIGHLIGHTS | |||||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||||
| Three Months Ended | |||||||||||||||||
| March 31, | December 31, | September 30, | March 31, | ||||||||||||||
| 2011 | 2010 | 2010 | 2010 | ||||||||||||||
| Net income | $ | 9,110 | $ | 7,306 | $ | 6,022 | $ | 4,217 | |||||||||
Income available to common stockholders1 | 7,334 | 5,984 | 4,739 | 2,935 | |||||||||||||
Revenue2 | 43,888 | 46,623 | 44,202 | 44,557 | |||||||||||||
| Fully-diluted income per share | 0.09 | 0.09 | 0.07 | 0.04 | |||||||||||||
| Cash dividends paid per share | 0.04 | 0.04 | 0.04 | 0.04 | |||||||||||||
| Net income by operating segment | |||||||||||||||||
| Busey Bank | $ | 8,820 | $ | 7,008 | $ | 5,449 | $ | 3,470 | |||||||||
| Busey Wealth Management | 694 | 710 | 716 | 899 | |||||||||||||
| FirsTech | 450 | 299 | 425 | 641 | |||||||||||||
| AVERAGE BALANCES | |||||||||||||||||
| Assets | $ | 3,590,108 | $ | 3,548,171 | $ | 3,598,237 | $ | 3,724,025 | |||||||||
| Earning assets | 3,294,097 | 3,227,207 | 3,280,987 | 3,402,221 | |||||||||||||
| Deposits | 2,898,517 | 2,930,644 | 2,982,590 | 3,088,437 | |||||||||||||
| Interest-bearing liabilities | 2,654,425 | 2,723,625 | 2,778,286 | 2,909,035 | |||||||||||||
| Stockholders' equity - common | 289,475 | 237,485 | 234,916 | 230,703 | |||||||||||||
| Tangible stockholders' equity - common | 249,563 | 196,616 | 193,008 | 187,776 | |||||||||||||
| PERFORMANCE RATIOS | |||||||||||||||||
Return on average assets3 | 0.83 | % | 0.67 | % | 0.52 | % | 0.32 | % | |||||||||
Return on average common equity3 | 10.27 | % | 10.00 | % | 8.00 | % | 5.16 | % | |||||||||
Return on average tangible common equity3 | 11.92 | % | 12.07 | % | 9.74 | % | 6.34 | % | |||||||||
Net interest margin3 | 3.55 | % | 3.68 | % | 3.64 | % | 3.52 | % | |||||||||
Efficiency ratio4 | 55.87 | % | 51.51 | % | 58.21 | % | 53.69 | % | |||||||||
Non-interest revenue as a % of total revenues2 | 35.41 | % | 36.92 | % | 32.96 | % | 34.90 | % | |||||||||
| ASSET QUALITY | |||||||||||||||||
| Gross loans | $ | 2,232,849 | $ | 2,368,777 | $ | 2,518,209 | $ | 2,706,793 | |||||||||
| Allowance for loan losses | 74,849 | 76,038 | 83,098 | 94,929 | |||||||||||||
| Net charge-offs | 6,189 | 17,361 | 18,531 | 19,950 | |||||||||||||
| Allowance for loan losses to loans | 3.35 | % | 3.21 | % | 3.30 | % | 3.51 | % | |||||||||
| Allowance as a percentage of non-performing loans | 122.89 | % | 111.64 | % | 104.29 | % | 94.23 | % | |||||||||
| Non-performing loans | |||||||||||||||||
| Non-accrual loans | 56,829 | 65,486 | 78,223 | 97,630 | |||||||||||||
| Loans 90+ days past due | 4,078 | 2,618 | 1,457 | 3,116 | |||||||||||||
| Geographically | |||||||||||||||||
| Downstate Illinois/ Indiana | 37,527 | 44,281 | 56,831 | 57,020 | |||||||||||||
| Florida | 23,380 | 23,823 | 22,849 | 43,726 | |||||||||||||
| Loans 30 -89 days past due | 18,419 | 23,477 | 19,322 | 24,630 | |||||||||||||
| Other non-performing assets | 7,193 | 9,160 | 11,470 | 18,511 | |||||||||||||
| 1 | Available to common stockholders, net of preferred dividend and discount accretion | ||||||||||||||||
| 2 | Net of interest expense, excludes security gains | ||||||||||||||||
| 3 | Quarterly ratios annualized and calculated on net income available to common stockholders | ||||||||||||||||
| 4 | Net of security gains and intangible charges | ||||||||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||||
| (Unaudited, in thousands, except per share data) | March 31, | December 31, | March 31, | |||||||||
| 2011 | 2010 | 2010 | ||||||||||
| Assets | ||||||||||||
| Cash and due from banks | $ | 412,152 | $ | 418,965 | $ | 218,867 | ||||||
| Investment securities | 664,930 | 599,459 | 530,215 | |||||||||
| Net loans, including loans held for sale | 2,157,999 | 2,292,739 | 2,611,864 | |||||||||
| Premises and equipment | 72,518 | 73,218 | 76,322 | |||||||||
| Goodwill and other intangibles | 39,358 | 40,242 | 43,308 | |||||||||
| Other assets | 171,008 | 180,380 | 221,904 | |||||||||
| Total assets | $ | 3,517,965 | $ | 3,605,003 | $ | 3,702,480 | ||||||
| Liabilities & Stockholders' Equity | ||||||||||||
| Non-interest bearing deposits | $ | 484,480 | $ | 460,661 | $ | 443,207 | ||||||
| Interest-bearing deposits | 2,369,516 | 2,455,705 | 2,635,811 | |||||||||
| Total deposits | $ | 2,853,996 | $ | 2,916,366 | $ | 3,079,018 | ||||||
| Securities sold under agreements to repurchase | 120,734 | 138,982 | 133,297 | |||||||||
| Long-term debt | 36,409 | 43,159 | 73,076 | |||||||||
| Junior subordinated debt owed to unconsolidated trusts | 55,000 | 55,000 | 55,000 | |||||||||
| Other liabilities | 27,895 | 30,991 | 33,373 | |||||||||
| Total liabilities | $ | 3,094,034 | $ | 3,184,498 | $ | 3,373,764 | ||||||
| Total stockholders' equity | $ | 423,931 | $ | 420,505 | $ | 328,716 | ||||||
| Total liabilities & stockholders' equity | $ | 3,517,965 | $ | 3,605,003 | $ | 3,702,480 | ||||||
| Per Share Data | ||||||||||||
| Book value per common share | $ | 3.74 | $ | 3.65 | $ | 3.45 | ||||||
| Tangible book value per common share | $ | 3.29 | $ | 3.14 | $ | 2.79 | ||||||
| Ending number of common shares outstanding | 86,597 | 79,100 | 66,361 | |||||||||
| Condensed Consolidated Statements of Operations | ||||||||
| (Unaudited, in thousands, except per share data) | Three Months Ended March 31, | |||||||
| 2011 | 2010 | |||||||
| Interest and fees on loans | $ | 30,508 | $ | 36,036 | ||||
| Interest on investment securities | 4,398 | 4,657 | ||||||
| Total interest income | $ | 34,906 | $ | 40,693 | ||||
| Interest on deposits | 5,259 | 9,951 | ||||||
| Interest on short-term borrowings | 121 | 163 | ||||||
| Interest on long-term debt | 496 | 894 | ||||||
| Junior subordinated debt owed to unconsolidated trusts | 683 | 680 | ||||||
| Total interest expense | $ | 6,559 | $ | 11,688 | ||||
| Net interest income | $ | 28,347 | $ | 29,005 | ||||
| Provision for loan losses | 5,000 | 14,700 | ||||||
| Net interest income after provision for loan losses | $ | 23,347 | $ | 14,305 | ||||
| Trust fees | 4,548 | 4,210 | ||||||
| Commissions and brokers' fees | 441 | 440 | ||||||
| Fees for customer services | 4,329 | 3,943 | ||||||
| Remittance processing | 2,381 | 2,620 | ||||||
| Gain on sales of loans | 2,632 | 2,438 | ||||||
| Net security gains (losses) | (2 | ) | 742 | |||||
| Other | 1,210 | 1,901 | ||||||
| Total non-interest income | $ | 15,539 | $ | 16,294 | ||||
| Salaries and wages | 9,560 | 9,666 | ||||||
| Employee benefits | 2,759 | 2,639 | ||||||
| Net occupancy expense | 2,415 | 2,342 | ||||||
| Furniture and equipment expense | 1,324 | 1,531 | ||||||
| Data processing expense | 2,110 | 1,896 | ||||||
| Amortization expense | 884 | 1,023 | ||||||
| Regulatory expense | 1,847 | 1,463 | ||||||
| OREO expense | 212 | 393 | ||||||
| Other operating expenses | 4,554 | 4,260 | ||||||
| Total non-interest expense | $ | 25,665 | $ | 25,213 | ||||
| Income before income taxes | $ | 13,221 | $ | 5,386 | ||||
| Income taxes | 4,111 | 1,169 | ||||||
| Net income | $ | 9,110 | $ | 4,217 | ||||
| Preferred stock dividends and discount accretion | $ | 1,776 | $ | 1,282 | ||||
| Income available for common stockholders | $ | 7,334 | $ | 2,935 | ||||
| Per Share Data | ||||||||
| Basic earnings per common share | $ | 0.09 | $ | 0.04 | ||||
| Fully-diluted earnings per common share | $ | 0.09 | $ | 0.04 | ||||
| Diluted average common shares outstanding | 81,356 | 66,361 | ||||||
Corporate Profile
First Busey Corporation is a $3.5 billion financial holding company headquartered in Champaign, Illinois. Busey Bank, First Busey Corporation’s wholly-owned bank subsidiary, is headquartered in Champaign, Illinois and has thirty-three banking centers serving downstate Illinois, a banking center in Indianapolis, Indiana, and seven banking centers serving southwest Florida. Busey Bank had total assets of $3.5 billion as of March 31, 2011.
Busey Wealth Management is a wholly-owned subsidiary of First Busey Corporation. Through Busey Trust Company, Busey Wealth Management delivers trust, asset management, retail brokerage and insurance products and services. As of March 31, 2011, Busey Wealth Management had approximately $3.9 billion in assets under care.
First Busey Corporation owns a retail payment processing subsidiary, FirsTech, Inc., which processes over 28 million transactions per year through online bill payments, lockbox processing and walk-in payments through its 3,100 agent locations in 38 states.
Busey provides electronic delivery of financial services through our website, www.busey.com.
Contact:
David B. White, CFO
217-365-4047
Special Note Concerning Forward-Looking Statements
This document may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) the strength of the local and national economy; (ii) the economic impact of any future terrorist threats or attacks; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (iv) changes in interest rates and prepayment rates of the Company’s assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of acquisitions; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.