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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.

2 See “Non-GAAP Financial Information” below for reconciliation, excludes tax effect of other intangible assets.




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