U.S. Markets closed

First Busey Announces 2019 Third Quarter Earnings

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


null

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