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First Busey Announces 2019 Fourth Quarter Earnings

First Busey Announces 2019 Fourth Quarter Earnings

CHAMPAIGN, Ill., Jan. 28, 2020 (GLOBE NEWSWIRE) -- (BUSE)

Message from our President & CEO

Positive advances in the fourth quarter of 2019 compared to the third quarter of 2019 and for the full year 2019 compared to the full year 2018

  • Fourth quarter net income and adjusted net income1 increased to $28.6 million and $31.8 million, respectively
  • Fourth quarter diluted earnings per share of $0.52 and adjusted earnings per share1 of $0.57 compared to $0.45 and $0.55, respectively
  • Fourth quarter wealth management segment revenue increased 26.2% to $11.4 million compared to $9.0 million
  • Full year net income and adjusted net income1 increased to $103.0 million and $118.4 million, respectively
  • Full year diluted earnings per share of $1.87 and adjusted earnings per share1 of $2.15 compared to $2.01 and $2.10, respectively
  • Portfolio loans of $6.69 billion at December 31, 2019 as compared to $6.67 billion at September 30, 2019 and $5.57 billion at December 31, 2018
  • Tangible book value per common share of $15.46 at December 31, 2019 as compared to $15.12 at September 30, 2019 and $14.21 at December 31, 2018

First Busey Corporation’s (“First Busey” or the “Company”) net income for the fourth quarter of 2019 was $28.6 million, or $0.52 per diluted common share, as compared to $24.8 million, or $0.45 per diluted common share, for the third quarter of 2019 and $25.3 million, or $0.51 per diluted common share, for the fourth quarter of 2018.  Adjusted net income1 for the fourth quarter of 2019 was $31.8 million, or $0.57 per diluted common share, as compared to $30.5 million, or $0.55 per diluted common share, for the third quarter of 2019 and $26.0 million, or $0.53 per diluted common share, for the fourth quarter of 2018.

The Company views certain non-operating items, including acquisition-related and restructuring charges, as adjustments to net income reported under generally accepted accounting principles (“GAAP”).  Non-operating pretax adjustments for the fourth quarter of 2019 were $2.4 million of expenses related to acquisitions and $3.1 million of expenses related to other restructuring costs, offset by a $1.8 million reversal of mortgage servicing rights impairment from TheBANK of Edwardsville (“TheBANK”).  The reconciliation of non-GAAP measures (including adjusted net income, adjusted earnings per share, adjusted return on average assets, adjusted net interest margin, adjusted efficiency ratio, tangible book value, tangible book value per share and return on average tangible common equity), which the Company believes facilitates the assessment of its financial results and peer comparability, is included in tabular form at the end of this release.

Net income for the full year 2019 was $103.0 million, or $1.87 per diluted common share, compared to net income of $98.9 million, or $2.01 per diluted common share, for the full year 2018. Adjusted net income1 for the full year 2019 was $118.4 million, or $2.15 per diluted common share, compared to $103.5 million or $2.10 per diluted common share for the full year 2018.  The effective tax rate for the year end December 31, 2019 was 23.43%, a decrease from 26.13% for the year ended December 31, 2018. The decrease in the effective tax rate was primarily driven by an increase in tax exempt income combined with the benefits received from tax credit investments.

For the fourth quarter of 2019, annualized return on average assets and annualized return on average tangible common equity were 1.17% and 13.41%, respectively.  Based on adjusted net income1, annualized return on average assets was 1.30% and annualized return on average tangible common equity was 14.92% for the fourth quarter of 2019.  For the year ended December 31, 2019, return on average assets and return on average tangible common equity were 1.09% and 12.64%, respectively.  Based on adjusted net income1, return on average assets was 1.25% and return on average tangible common equity was 14.54% for the year ended December 31, 2019.

1 A Non-GAAP financial measure. See “Non-GAAP Financial Information” below for reconciliation.

On January 31, 2019, the Company completed its acquisition of The Banc Ed Corp. (“Banc Ed”), the holding company for TheBANK.  First Busey operated TheBANK as a separate subsidiary from the completion of the acquisition until October 4, 2019, when it was merged with and into Busey Bank.  At that time, TheBANK’s banking centers became banking centers of Busey Bank.   When we completed the Banc Ed acquisition, we reset the baseline for the future financial performance of First Busey.  With TheBANK now merged and integrated, we expect to see the full contribution and synergies of TheBANK reflected in the Company’s financial performance in the years ahead. 

On August 31, 2019, the Company completed the previously announced merger of Busey Bank with Investors’ Security Trust Company (“IST”), a Fort Myers, Florida wealth management firm, with $471.1 million assets under care.  Through this transaction, Busey Bank and IST broaden the expertise and raise the level of service available to clients—from individuals and families to institutions and foundations—and remain committed to their founding principles of being active community stewards and providing the highest level of personal service to clients delivered by experienced, local professionals.

On October 4, 2019, in addition to the merger of TheBANK into Busey Bank, the Company partnered with a new core operating system provider.  The core conversion positioned the combined organization for future growth, and will allow the Company to serve customers more efficiently and effectively for years to come.

Our goal of being a strong community bank for the communities we serve begins with outstanding associates. The Company is honored to be named among the 2019 Best Banks to Work For by American Banker, the 2019 Best-In-State Banks for Illinois by Forbes and Statista, the 2019 Best Places to Work in Illinois by Daily Herald Business Ledger, the 2019 Best Companies to Work For in Florida by Florida Trend magazine, the 2019 Best Place to Work in Indiana by the Indiana Chamber of Commerce, the 2019 Best Places to Work in St. Louis by the St. Louis Business Journal and the 2019 Best Places to Work in Money Management by Pensions and Investments.

As we reflect back on 2019, we are pleased with our accomplishments and feel confident that we are well positioned moving into the new year.  We are grateful for the opportunity to continually earn the business of our customers, based on the contributions of our talented associates and the loyal support of our stockholders.

/s/ Van A. Dukeman
President & Chief Executive Officer
First Busey Corporation




SELECTED FINANCIAL HIGHLIGHTS1
(dollars in thousands, except per share data) As of and for the As of and for the
  Three Months Ended Year Ended
  December 31, September 30, June 30, December 31, December 31, December 31,
   2019
 2019   2019   2018   2019   2018 
EARNINGS & PER SHARE DATA            
Revenue2 $   102,969   $   104,051   $ 102,350   $   83,184   $ 403,656   $ 331,068  
Net income    28,571      24,828      24,085     25,290      102,953       98,928  
Diluted earnings per share   0.52     0.45     0.43     0.51     1.87     2.01  
Cash dividends paid per share   0.21     0.21     0.21     0.20     0.84     0.80  
Net income by operating segment            
  Banking $   29,573   $   25,731   $   24,441   $   24,134   $ 106,409     97,369  
  Remittance Processing    958      972      1,105     814     4,060     3,710  
  Wealth Management   3,465     2,184     2,845     2,040     11,135     9,372  
             
AVERAGE BALANCES            
Cash and cash equivalents $ 533,519   $ 515,965   $ 328,414   $   272,811   $ 427,223   $   239,149  
Investment securities   1,677,962     1,780,066     1,897,486     1,443,054     1,769,291     1,370,460  
Loans held for sale   68,480     42,418     25,143     23,380     37,447     29,666  
Portfolio loans   6,657,283     6,558,519     6,528,326     5,540,852     6,469,920     5,533,549  
Interest-earning assets   8,810,505     8,781,590     8,666,136     7,174,755     8,590,262     7,067,710  
Total assets   9,713,858     9,659,769     9,522,678     7,846,154     9,443,690     7,742,142  
             
Non-interest bearing deposits   1,838,523     1,780,645     1,747,746     1,486,977     1,746,938     1,492,242  
Interest-bearing deposits   6,052,529     6,086,378     5,970,408     4,852,649     5,927,154     4,707,289  
Total deposits   7,891,052     7,867,023     7,718,154     6,339,626     7,674,092     6,199,531  
Securities sold under agreements to  repurchase   204,076     184,637     193,621     210,416     196,681     234,239  
Interest-bearing liabilities   6,537,611     6,557,518     6,493,885     5,329,898     6,414,969     5,247,017  
Total liabilities   8,489,411     8,446,936     8,326,876     6,866,652     8,257,563     6,787,193  
Stockholders' common equity   1,224,447     1,212,833     1,195,802     979,502     1,186,127     954,949  
Tangible stockholders' common
  equity3
  845,179     835,232     818,951     678,023     814,461     651,032  
             
PERFORMANCE RATIOS            
Return on average assets3   1.17 %   1.02 %   1.01 %   1.28 %   1.09 %   1.28 %
Return on average common equity3   9.26 %   8.12 %   8.08 %   10.24 %   8.68 %   10.36 %
Return on average tangible common
  equity3
  13.41 %   11.79 %   11.80 %   14.80 %   12.64 %   15.20 %
Net interest margin3,4   3.27 %   3.35 %   3.43 %   3.38 %   3.38 %   3.45 %
Efficiency ratio3   60.54 %   62.73 %   63.62 %   56.57 %   61.29 %   56.16 %
Non-interest revenue as a % of total revenues2   30.14 %   29.38 %   28.26 %   27.27 %   28.84 %   27.08 %
             
NON-GAAP INFORMATION            
Adjusted net income3 $   31,782   $   30,535   $ 29,498   $   25,958   $ 118,429   $ 103,477  
Adjusted diluted earnings per share3   0.57     0.55     0.53     0.53     2.15     2.10  
Adjusted return on average assets3   1.30 %   1.25 %   1.24 %   1.31 %   1.25 %   1.34 %
Adjusted return on average tangible
  common equity3
  14.92 %   14.50 %   14.45 %   15.19 %   14.54 %   15.89 %
Adjusted net interest margin3,4   3.14 %   3.22 %   3.27 %   3.27 %   3.23 %   3.30 %
Adjusted efficiency ratio3   57.02 %   55.42 %   56.55 %   55.49 %   56.35 %   54.49 %
 
1 Results are unaudited.
2 Revenues consist of net interest income plus non-interest income, excluding security gains and losses.
3 See “Non-GAAP Financial Information” below for reconciliation.
4 On a tax-equivalent basis, assuming a federal income tax rate of 21%.
 
 



Condensed Consolidated Balance Sheets1
 

As of
 
(dollars in thousands, except per share data) December 31, September 30, June 30, March 31, December 31,  
   2019
 2019   2019   2019   2018   
Assets            
Cash and cash equivalents $   529,288   $    525,457   $   420,207   $   330,407   $   239,973    
Investment securities   1,654,209     1,721,865     1,869,143     1,940,519     1,312,514    
             
Loans held for sale   68,699     70,345     39,607     20,291     25,895    
             
Commercial loans   4,943,646     4,900,430     4,759,329     4,744,136     4,060,126    
Retail real estate and retail other loans   1,743,603     1,768,985     1,772,797      1,770,945      1,508,302    
Portfolio loans $   6,687,249   $   6,669,415   $   6,532,126   $   6,515,081   $   5,568,428    
             
Allowance for loan losses   (53,748 )   (52,965 )   (51,375 )   (50,915 )   (50,648 )  
Premises and equipment   151,267     153,641     149,726     147,958     117,672    
Goodwill and other intangibles   373,129     381,323     375,327     377,739     300,558    
Right of use asset   9,490     9,979     10,426     10,898     -    
Other assets   276,146     274,700     267,480     245,356     187,965    
Total assets $   9,695,729   $   9,753,760   $   9,612,667   $   9,537,334   $   7,702,357    
                       
Liabilities & Stockholders' Equity            
Non-interest bearing deposits $   1,832,619   $   1,779,490   $   1,766,681   $   1,791,339   $   1,464,700    
Interest-bearing checking, savings, and money
  market deposits
  4,534,927     4,498,005     4,316,730     4,214,809     3,287,618    
Time deposits   1,534,850     1,652,971     1,749,811     1,757,078     1,497,003    
Total deposits $   7,902,396   $   7,930,466   $   7,833,222   $   7,763,226   $   6,249,321    
             
Securities sold under agreements to
  repurchase
  205,491     202,500     190,846     217,077     185,796    
Short-term borrowings   8,551     29,739     30,761     30,739     -    
Long-term debt   182,522     183,968     185,576     188,221     148,686    
Junior subordinated debt owed to
  unconsolidated trusts
  71,308     71,269     71,230     71,192     71,155    
Lease liability   9,552     10,101     10,531     10,982     -    
Other liabilities   95,475     109,736     86,893     69,756     52,435    
Total liabilities $   8,475,295   $   8,537,779   $   8,409,059   $   8,351,193   $   6,707,393    
Total stockholders' equity $   1,220,434   $   1,215,981   $   1,203,608   $   1,186,141   $   994,964    
Total liabilities & stockholders' equity $   9,695,729   $   9,753,760   $   9,612,667   $   9,537,334   $   7,702,357    
                       
Share Data            
Book value per common share $   22.28   $   22.03   $   21.73   $   21.32   $   20.36    
Tangible book value per common share2 $   15.46   $   15.12   $   14.95   $   14.53   $   14.21    
Ending number of common shares outstanding   54,788,772     55,197,277     55,386,636     55,624,627     48,874,836    
     
1 Results are unaudited except for amounts reported as of December 31, 2018.  
See “Non-GAAP Financial Information” below for reconciliation, excludes tax effect of other intangible assets.  



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Condensed Consolidated Statements of Income1
       
(dollars in thousands, except per share data)      
  For the   For the
  Three Months Ended December 31,   Year Ended December 31,
    2019   2018     2019     2018
           
Interest and fees on loans $   76,290 $    64,410   $   304,193   $    251,249
Interest on investment securities   10,682   8,993       45,721       32,293
Other interest income   1,824   911     6,320     2,491
Total interest income $   88,796 $    74,314   $   356,234   $    286,033
           
Interest on deposits   13,670   10,764       55,077       32,601
Interest on securities sold under agreements to
  repurchase
  559   487     2,348     1,618
Interest on short-term borrowings     156     279      1,041      1,544
Interest on long-term debt     1,719     1,414       7,131       5,614
Interest on junior subordinated debt owed to unconsolidated trusts     756     867     3,414     3,250
Total interest expense $    16,860 $   13,811   $   69,011   $    44,627
           
Net interest income $   71,936 $    60,503   $    287,223   $   241,406
Provision for loan losses   2,367    405        10,406       4,429
Net interest income after provision for loan losses $   69,569 $    60,098   $   276,817   $   236,977
           
Trust fees   10,141   6,611      34,263     27,184
Commissions and brokers' fees, net     1,082   930       4,298     3,790
Fees for customer services   9,048   7,303       36,683     28,879
Remittance processing   3,765   3,757       15,042     14,345
Mortgage revenue   3,576