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First Busey Announces 2019 Second Quarter Earnings

First Busey Announces 2019 Second Quarter Earnings

CHAMPAIGN, Ill., July 23, 2019 (GLOBE NEWSWIRE) -- (BUSE)

Message from our President & CEO

Positive advances in the second quarter of 2019 from the comparable quarter of the prior year:

  • Total assets of $9.61 billion, an increase of 23.6%
  • Net interest income of $73.4 million, an increase of 21.6%
  • Portfolio loans of $6.53 billion, an increase of 17.6%
  • Non-interest bearing deposits of $1.77 billion, an increase of 18.0%
    • Tangible book value per common share of $14.95, as compared to $13.40

First Busey Corporation’s (“First Busey” or the “Company”) net income for the second quarter of 2019 was $24.1 million, or $0.43 per diluted common share, as compared to $25.5 million, or $0.48 per diluted common share, for the first quarter of 2019 and $24.9 million, or $0.51 per diluted common share, for the second quarter of 2018. Adjusted net income1 for the second quarter of 2019 was $29.5 million, or $0.53 per diluted common share, as compared to $26.6 million, or $0.50 per diluted common share, for the first quarter of 2019 and $25.6 million, or $0.52 per diluted common share, for the second quarter of 2018.

Year-to-date net income through June 30, 2019 was $49.6 million, or $0.90 per diluted common share, compared to net income of $46.8 million, or $0.95 per diluted common share, for the comparable period of 2018. Year-to-date adjusted net income1 for the first six months of 2019 was $56.1 million, or $1.02 per diluted common share, compared to $50.5 million or $1.03 per diluted common share for the first six months 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 second quarter of 2019 were $4.1 million of expenses related to acquisitions, $1.4 million of expenses related to other restructuring costs and $1.8 million related to mortgage servicing rights impairment from TheBANK of Edwardsville (“TheBANK”) asset. The reconciliation of non-GAAP measures (including adjusted net income, 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.

For the second quarter of 2019, annualized return on average assets and annualized return on average tangible common equity were 1.01% and 11.80%, respectively. Based on adjusted net income1, return on average assets was 1.24% and return on average tangible common equity was 14.45% for the second quarter of 2019.

For the six months ended June 30, 2019, annualized return on average assets and annualized return on average tangible common equity were 1.09% and 12.68%, respectively. Based on adjusted net income1, return on average assets was 1.23% and return on average tangible common equity was 14.35% for the six months ended June 30, 2019.

On January 31, 2019, the Company completed its acquisition of The Banc Ed Corp. (“Banc Ed”), the holding company for TheBANK. TheBANK, founded in 1868, is a privately held commercial bank headquartered in Edwardsville, Illinois. It is anticipated that TheBANK will be merged with and into First Busey’s bank subsidiary, Busey Bank, in the fourth quarter of 2019. Financial results for 2019 were impacted by the Banc Ed acquisition, resetting the baseline for financial performance in future quarters in a multitude of positive ways. 

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

On May 13, 2019, the Company announced the execution of an Agreement and Plan of Merger in connection with the proposed acquisition by Busey Bank of Investors’ Security Trust Company (“IST”), a Fort Myers, Florida wealth management firm. While the proposed acquisition is expected to add to the Company’s wealth management offerings, it is not expected to have any immediate, material impact to the Company’s earnings or overall business. Through this transaction, Busey Bank and IST broaden the expertise and 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. It is anticipated that IST will be merged with and into the wealth management division of Busey Bank in 2019, subject to customary closing conditions and required approvals.

Busey recently received its fourth consecutive honor as one of the 2019 Best Places to Work in Illinois. This awards program—voted by associates and hosted by Best Companies Group and Daily Herald Business Ledger—identifies and recognizes the best places of employment in Illinois, benefiting the state’s economy, workforce and businesses. In addition, for the first time Busey was honored as a 2019 Best Place to Work in Indiana by Best Companies Group and the Indiana Chamber of Commerce and in Missouri as one of the 2019 Best Places to Work in St. Louis by Quantum Workplace and St. Louis Business Journal. Further, Busey was named among the 2019 Best-In-State Banks for Illinois by Forbes and Statista and recognized with the 2019 BEST Award in talent development for the third year by the Association for Talent Development.

Busey takes pride in its culture and its commitment to the communities we serve. As we acknowledge our accomplishments and the positive forward momentum of the Company, we are grateful to you for allowing us the opportunity to serve you and your community.

/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 Six Months Ended
  June 30, March 31, December 31, June 30, June 30, June 30,
    2019     2019     2018     2018     2019     2018  
EARNINGS & PER SHARE DATA            
Net income $ 24,085   $ 25,469   $ 25,290   $ 24,862   $ 49,554   $ 46,779  
Revenue2   102,350     94,286     83,184     83,014     196,636     165,257  
Diluted earnings per share   0.43     0.48     0.51     0.51     0.90     0.95  
Cash dividends paid per share   0.21     0.21     0.20     0.20     0.42     0.40  
             
Net income by operating segment            
Banking $ 24,441   $ 26,665   $ 24,134   $ 24,904   $ 51,106   $ 46,749  
Remittance Processing    1,105     1,025     814     986     2,130     1,939  
Wealth Management   2,845     2,641     2,040     2,288     5,486     5,052  
             
AVERAGE BALANCES            
Cash and cash equivalents $ 328,414   $ 220,471   $ 272,811   $ 218,239   $ 327,525   $ 222,623  
Investment securities   1,897,486     1,722,015     1,443,054     1,308,203     1,810,237     1,309,545  
Loans held for sale   25,143     17,249     23,380     27,516     21,218     33,372  
Portfolio loans   6,528,326     6,128,661     5,540,852     5,533,168     6,329,596     5,520,584  
Interest-earning assets   8,666,136     8,088,396     7,174,755     6,984,486     8,378,862     6,980,457  
Total assets   9,522,678     8,865,642     7,846,154     7,653,541     9,198,975     7,658,691  
             
Non-interest bearing deposits   1,747,746     1,616,913     1,486,977     1,492,251     1,682,691     1,494,680  
Interest-bearing deposits   5,970,408     5,592,495     4,852,649     4,619,710     5,782,495     4,594,078  
Total deposits   7,718,154     7,209,408     6,339,626     6,111,961     7,465,186     6,088,758  
Securities sold under agreements to repurchase   193,621     204,529     210,416     234,282     199,045     246,100  
Interest-bearing liabilities   6,493,885     6,064,091     5,329,898     5,176,986     6,280,175     5,176,113  
Total liabilities   8,326,876     7,755,770     6,866,652     6,709,410     8,042,900     6,719,716  
Stockholders' common equity   1,195,802     1,109,872     979,502     944,131     1,153,075     938,975  
Tangible stockholders' common equity3   818,951     757,285     678,023     639,752     788,289     633,309  
             
PERFORMANCE RATIOS            
Return on average assets4   1.01%     1.17%     1.28%     1.30%     1.09%     1.23%  
Return on average common equity4   8.08%     9.31%     10.24%     10.56%     8.67%     10.05%  
Return on average tangible common equity3,4   11.80%     13.64%     14.80%     15.59%     12.68%     14.90%  
Net interest margin4,5   3.43%     3.46%     3.38%     3.50%     3.45%     3.50%  
Efficiency ratio6   63.62%     57.99%     56.57%     54.82%     60.92%     57.30%  
Non-interest revenue as a % of total revenues2   28.26%     27.47%     27.27%     27.27%     27.88%     27.31%  
             
1 Results are unaudited.
2 Revenues consist of net interest income plus non-interest income, excluding security gains and losses.
3 Average tangible stockholders’ common equity is defined as average common equity less average goodwill and intangibles. See “Non-GAAP Financial Information” below for reconciliation.
4 Annualized, see “Non-GAAP Financial Information” below for reconciliation.
5 On a tax-equivalent basis, assuming a federal income tax rate of 21%.
See “Non-GAAP Financial Information” below for reconciliation.


Condensed Consolidated Balance Sheets1 As of
(dollars in thousands, except per share data) June 30, March 31, December 31, September 30, June 30,
    2019     2019     2018     2018     2018  
Assets          
Cash and cash equivalents $ 420,207   $ 330,407   $ 239,973   $ 160,652   $ 230,730  
Investment securities   1,869,143     1,940,519     1,312,514     1,496,948     1,384,807  
           
Loans held for sale   39,607     20,291     25,895     32,617     33,974  
           
Commercial loans   4,759,329     4,744,136     4,060,126     4,141,816     4,076,253  
Retail real estate and retail other loans   1,772,797     1,770,945     1,508,302     1,481,925     1,479,034  
Portfolio loans $ 6,532,126   $ 6,515,081   $ 5,568,428   $ 5,623,741   $ 5,555,287  
           
Allowance for loan losses   (51,375)     (50,915)     (50,648)     (52,743)     (53,305)  
Premises and equipment   149,726     147,958     117,672     119,162     119,835  
Goodwill and other intangibles   375,327     377,739     300,558     301,963     303,407  
Right of use asset   10,426     10,898     -     -     -  
Other assets   267,480     245,356     187,965     207,045     200,809  
Total assets $ 9,612,667   $ 9,537,334   $ 7,702,357   $ 7,889,385   $ 7,775,544  
           
Liabilities & Stockholders' Equity          
Non-interest bearing deposits $ 1,766,681   $ 1,791,339   $ 1,464,700   $ 1,438,054   $ 1,496,671  
Interest-bearing checking, savings, and money market deposits   4,316,730     4,214,809     3,287,618     3,205,232     3,192,735  
Time deposits   1,749,811     1,757,078     1,497,003     1,552,283     1,474,506  
Total deposits $ 7,833,222   $ 7,763,226   $ 6,249,321   $ 6,195,569   $ 6,163,912  
           
Securities sold under agreements to repurchase   190,846     217,077     185,796     255,906     240,109  
Short-term borrowings   30,761     30,739     -     200,000     150,000  
Long-term debt   185,576     188,221     148,686     148,626     154,125  
Junior subordinated debt owed to unconsolidated trusts   71,230     71,192     71,155     71,118     71,081  
Lease liability   10,531     10,982     -     -     -  
Other liabilities   86,893     69,756     52,435     46,026     39,135  
Total liabilities $ 8,409,059   $ 8,351,193   $ 6,707,393   $ 6,917,245   $ 6,818,362  
Total stockholders' equity $ 1,203,608   $ 1,186,141   $ 994,964   $ 972,140   $ 957,182  
Total liabilities & stockholders' equity $ 9,612,667   $ 9,537,334   $ 7,702,357   $ 7,889,385   $ 7,775,544  
           
Share Data          
Book value per common share $ 21.73   $ 21.32   $ 20.36   $ 19.90   $ 19.62  
Tangible book value per common share2 $ 14.95   $ 14.53   $ 14.21   $ 13.72   $ 13.40  
Ending number of common shares outstanding   55,386,636     55,624,627     48,874,836     48,860,309     48,776,404  
 
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 June 30,   Six Months Ended June 30,
    2019     2018       2019     2018  
           
Interest and fees on loans $ 78,031   $ 62,290     $ 149,820   $ 123,250  
Interest on investment securities   12,352     7,527       23,612     14,777  
Other interest income   1,083     508       2,315     931  
Total interest income $ 91,466   $ 70,325     $ 175,747   $ 138,958  
           
Interest on deposits   14,154     6,904       26,654     12,891  
Interest on securities sold under agreements to repurchase   627     364       1,210     705  
Interest on short-term borrowings   494     465        685     941  
Interest on long-term debt   1,871     1,406       3,581     2,763  
Interest on junior subordinated debt owed to unconsolidated trusts   892     814       1,806     1,529  
Total interest expense $ 18,038   $ 9,953     $ 33,936   $ 18,829  
           
Net interest income $ 73,428   $ 60,372     $ 141,811   $ 120,129  
Provision for loan losses   2,517      2,258       4,628     3,266  
Net interest income after provision for loan losses $ 70,911   $ 58,114     $ 137,183   $ 116,863  
           
Trust fees   8,318     6,735        16,433     14,249  
Commissions and brokers' fees, net   1,170     883       2,084     1,979  
Fees for customer services   9,696     7,290       17,793     14,236  
Remittance processing   3,717     3,566       7,497     6,958  
Mortgage revenue   2,851     1,573       4,796     3,216  
Security gains (losses), net   (1,026 )   160        (984 )   160  
Other   3,170     2,595       6,222     4,490  
Total non-interest income $ 27,896   $ 22,802     $ 53,841   $ 45,288  
           
Salaries, wages and employee benefits   34,268     25,472        66,609     54,291  
Net occupancy expense of premises   4,511     3,689       8,713     7,510  
Furniture and equipment expense   2,352     1,790       4,447     3,703  
Data processing   5,616     4,030       10,017     8,375  
Amortization of intangible assets   2,412     1,490       4,506     3,005  
Other   18,861     10,834       30,891     21,461  
Total non-interest expense $ 68,020   $ 47,305     $ 125,183   $