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First Busey Announces 2019 Third Quarter Earnings

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First Busey Announces 2019 Third Quarter Earnings

CHAMPAIGN, Ill., Oct. 22, 2019 (GLOBE NEWSWIRE) -- (BUSE)

Message from our President & CEO

Positive advances in the third quarter of 2019 compared to the second quarter of 2019

  • Net income and adjusted net income1 increased to $24.8 million and $30.5 million, respectively

  • Earnings per share of $0.45 and adjusted earnings per share1 of $0.55 compared to $0.43 and $0.53, respectively

  • Portfolio loans of $6.67 billion as compared to $6.53 billion, an annualized increase of 8.3%

  • Tangible book value per common share of $15.12 as compared to $14.95

First Busey Corporation’s (“First Busey” or the “Company”) net income for the third quarter of 2019 was $24.8 million, or $0.45 per diluted common share, as compared to $24.1 million, or $0.43 per diluted common share, for the second quarter of 2019 and $26.9 million, or $0.55 per diluted common share, for the third quarter of 2018. Adjusted net income1 for the third quarter of 2019 was $30.5 million, or $0.55 per diluted common share, as compared to $29.5 million, or $0.53 per diluted common share, for the second quarter of 2019 and $27.0 million, or $0.55 per diluted common share, for the third 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 third quarter of 2019 were $7.0 million of expenses related to acquisitions and $0.7 million of expenses related to other restructuring costs. 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.

Year-to-date net income through September 30, 2019 was $74.4 million, or $1.35 per diluted common share, compared to net income of $73.6 million, or $1.50 per diluted common share, for the comparable period of 2018. Year-to-date adjusted net income1 for the first nine months of 2019 was $86.6 million, or $1.57 per diluted common share, compared to $77.5 million or $1.58 per diluted common share for the first nine months of 2018.

For the third quarter of 2019, annualized return on average assets and annualized return on average tangible common equity were 1.02% and 11.79%, respectively. Based on adjusted net income1, annualized return on average assets was 1.25% and annualized return on average tangible common equity was 14.50% for the third quarter of 2019. For the nine months ended September 30, 2019, annualized return on average assets and annualized return on average tangible common equity were 1.06% and 12.37%, respectively. Based on adjusted net income1, annualized return on average assets was 1.24% and annualized return on average tangible common equity was 14.41% for the nine months ended September 30, 2019.

On January 31, 2019, the Company completed its acquisition of The Banc Ed Corp. (“Banc Ed”), the holding company for TheBANK of Edwardsville (“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 in a multitude of positive ways. 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 quarters ahead.

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

On October 4, 2019, in addition to TheBANK being merged into Busey Bank, the Company partnered with a new core provider. The core conversion positions the combined organization for future growth. Strategic process improvements and investments in technology platforms will allow the Company to serve customers more efficiently and effectively for years to come.

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, which had $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.

In addition to the successful integration of these acquisitions, we are pleased to report net organic loan growth of $137.3 million in the third quarter, with total portfolio loans increasing to $6.67 billion at September 30, 2019 from $6.53 billion at June 30, 2019. This is the result of focused initiatives and effort on the part of our associates across our markets and was accomplished while maintaining our conservative credit principles. As of September 30, 2019, the ratio of non-performing loans to total loans declined to 0.50%, while the ratio of allowance to non-performing loans increased to 160.00%.

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 Best Companies Group and 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 Best Companies Group and the Indiana Chamber of Commerce and the 2019 Best Places to Work in St. Louis by Quantum Workplace and St. Louis Business Journal.

We are pleased with our third quarter 2019 operating results and feel confident that we are well positioned for growth as we move into the final quarter of 2019 and into 2020.

/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

Nine Months Ended

September 30,

June 30,

December 31,

September 30,

September 30,

September 30,

2019

2019

2018

2018

2019

2018

EARNINGS & PER SHARE DATA

Revenue2

$

104,051

$

102,350

$

83,184

$

82,627

$

300,687

$

247,884

Net income

24,828

24,085

25,290

26,859

74,382

73,638

Diluted earnings per share

0.45

0.43

0.51

0.55

1.35

1.50

Cash dividends paid per share

0.21

0.21

0.20

0.20

0.63

0.60

Net income by operating segment

Banking

$

25,731

$

24,441

$

24,134

$

26,486

$

76,837

73,235

Remittance Processing

972

1,105

814

957

3,102

2,896

Wealth Management

2,184

2,845

2,040

2,280

7,670

7,332

AVERAGE BALANCES

Cash and cash equivalents

$

515,965

$

328,414

$

272,811

$

238,000

$

391,029

$

227,806

Investment securities

1,780,066

1,897,486

1,443,054

1,417,708

1,800,069

1,345,996

Loans held for sale

42,418

25,143

23,380

28,661

28,326

31,785

Portfolio loans

6,558,519

6,528,326

5,540,852

5,551,753

6,406,779

5,531,087

Interest-earning assets

8,781,590

8,666,136

7,174,755

7,132,324

8,514,580

7,031,636

Total assets

9,659,769

9,522,678

7,846,154

7,802,308

9,352,272

7,707,090

Non-interest bearing deposits

1,780,645

1,747,746

1,486,977

1,492,709

1,715,701

1,494,016

Interest-bearing deposits

6,086,378

5,970,408

4,852,649

4,784,657

5,884,904

4,658,303

Total deposits

7,867,023

7,718,154

6,339,626

6,277,366

7,600,605

6,152,319

Securities sold under agreements to repurchase

184,637

193,621

210,416

234,729

194,189

242,268

Interest-bearing liabilities

6,557,518

6,493,885

5,329,898

5,303,632

6,373,639

5,219,086

Total liabilities

8,446,936

8,326,876

6,866,652

6,840,484

8,179,059

6,760,415

Stockholders' common equity

1,212,833

1,195,802

979,502

961,824

1,173,213

946,675

Tangible stockholders' common
equity3

835,232

818,951

678,023

658,910

804,109

641,937

PERFORMANCE RATIOS

Return on average assets4

1.02

%

1.01

%

1.28

%

1.37

%

1.06

%

1.28

Return on average common equity4

8.12

%

8.08

%

10.24

%

11.08

%

8.48

%

10.40

Return on average tangible common
equity3,4

11.79

%

11.80

%

14.80

%

16.17

%

12.37

%

15.34

Net interest margin4,5

3.35

%

3.43

%

3.38

%

3.41

%

3.42

%

3.47

Efficiency ratio6

62.73

%

63.62

%

56.57

%

53.47

%

61.55

%

56.02

Non-interest revenue as a % of total revenues2

29.38

%

28.26

%

27.27

%

26.45

%

28.40

%

27.02

NON-GAAP INFORMATION

Adjusted net income6

$

30,535

$

29,498

$

25,958

$

27,006

$

86,647

$

77,518

Adjusted diluted earnings per share6

0.55

0.53

0.53

0.55

1.57

1.58

Adjusted return on average assets4

1.25

%

1.24

%

1.31

%

1.37

%

1.24

%

1.34

Adjusted return on average tangible
common equity3,4

14.50

%

14.45

%

15.19

%

16.26

%

14.41

%

16.15

Adjusted net interest margin4,5

3.22

%

3.27

%

3.27

%

3.29

%

3.27

%

3.31

Adjusted efficiency ratio6

55.42

%

56.55

%

55.49

%

53.26

%

56.12

%

54.16

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%.

6 See “Non-GAAP Financial Information” below for reconciliation.





Condensed Consolidated Balance Sheets1



As of

(dollars in thousands, except per share data)

September 30,

June 30,

March 31,

December 31,

September 30,

2019

2019

2019

2018

2018

Assets

Cash and cash equivalents

$

525,457

$

420,207

$

330,407

$

239,973

$

160,652

Investment securities

1,721,865

1,869,143

1,940,519

1,312,514

1,496,948

Loans held for sale

70,345

39,607

20,291

25,895

32,617

Commercial loans

4,900,430

4,759,329

4,744,136

4,060,126

4,141,816

Retail real estate and retail other loans

1,768,985

1,772,797

1,770,945

1,508,302

1,481,925

Portfolio loans

$

6,669,415

$

6,532,126

$

6,515,081

$

5,568,428

$

5,623,741

Allowance for loan losses

(52,965

)

(51,375

)

(50,915

)

(50,648

)

(52,743

)

Premises and equipment

153,641

149,726

147,958

117,672

119,162

Goodwill and other intangibles

381,323

375,327

377,739

300,558

301,963

Right of use asset

9,979

10,426

10,898

-

-

Other assets

274,700

267,480

245,356

187,965

207,045

Total assets

$

9,753,760

$

9,612,667

$

9,537,334

$

7,702,357

$

7,889,385

Liabilities & Stockholders' Equity

Non-interest bearing deposits

$

1,779,490

$

1,766,681

$

1,791,339

$

1,464,700

$

1,438,054

Interest-bearing checking, savings, and money
market deposits

4,498,005

4,316,730

4,214,809

3,287,618

3,205,232

Time deposits

1,652,971

1,749,811

1,757,078

1,497,003

1,552,283

Total deposits

$

7,930,466

$

7,833,222

$

7,763,226

$

6,249,321

$

6,195,569

Securities sold under agreements to
repurchase

202,500

190,846

217,077

185,796

255,906

Short-term borrowings

29,739

30,761

30,739

-

200,000

Long-term debt

183,968

185,576

188,221

148,686

148,626

Junior subordinated debt owed to
unconsolidated trusts

71,269

71,230

71,192

71,155

71,118

Lease liability

10,101

10,531

10,982

-

-

Other liabilities

109,736

86,893

69,756

52,435

46,026

Total liabilities

$

8,537,779

$

8,409,059

$

8,351,193

$

6,707,393

$

6,917,245

Total stockholders' equity

$

1,215,981

$

1,203,608

$

1,186,141

$

994,964

$

972,140

Total liabilities & stockholders' equity

$

9,753,760

$

9,612,667

$

9,537,334

$

7,702,357

$

7,889,385

Share Data

Book value per common share

$

22.03

$

21.73

$

21.32

$

20.36

$

19.90

Tangible book value per common share2

$

15.12

$

14.95

$

14.53

$

14.21

$

13.72

Ending number of common shares outstanding

55,197,277

55,386,636

55,624,627

48,874,836

48,860,309

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 September 30,

Nine Months Ended September 30,

2019

2018

2019

2018

Interest and fees on loans

$

78,083

$

63,589

$

227,903

$

186,839

Interest on investment securities

11,427

8,523

35,039

23,300

Other interest income

2,181

649

4,496

1,580

Total interest income

$

91,691

$

72,761

$

267,438

$

211,719

Interest on deposits

14,753

8,946

41,407

21,837

Interest on securities sold under agreements to
repurchase

579

426

1,789

1,131

Interest on short-term borrowings

200

324

885

1,265

Interest on long-term debt

1,831

1,437

5,412

4,200

Interest on junior subordinated debt owed to unconsolidated trusts

852

854

2,658

2,383

Total interest expense

$

18,215

$

11,987

$

52,151

$

30,816

Net interest income

$

73,476

$

60,774

$

215,287

$

180,903

Provision for loan losses

3,411

758

8,039

4,024

Net interest income after provision for loan losses

$

70,065

$

60,016

$

207,248

$

176,879

Trust fees

7,689

6,324

24,122

20,573

Commissions and brokers' fees, net

1,132

881

3,216

2,860

Fees for customer services

9,842

7,340

27,635

21,576

Remittance processing

3,780

3,630

11,277

10,588

Mortgage revenue

3,331

1,272

8,127