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April 23, 2019, 5:02 p.m. EDT

First Busey Announces 2019 First Quarter Earnings

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CHAMPAIGN, Apr 23, 2019 (GLOBE NEWSWIRE via COMTEX) -- /zigman2/quotes/201332947/lastsale BUSE -2.09%

Message from our President & CEO

The Banc Ed Corp. merger leads to positive advances in the first quarter of 2019 from the comparable quarter of the prior year:

First Busey Corporation's ("First Busey" or the "Company") net income for the first quarter of 2019 was $25.5 million, or $0.48 per diluted common share, as compared to $25.3 million, or $0.51 per diluted common share, for the fourth quarter of 2018 and $21.9 million, or $0.45 per diluted common share, for the first quarter of 2018. Adjusted net income for the first quarter of 2019 was $26.6 million, or $0.50 per diluted common share, as compared to $26.0 million, or $0.53 per diluted common share, for the fourth quarter of 2018 and $24.9 million, or $0.51 per diluted common share, for the first 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 first quarter of 2019 were $1.2 million of expenses related to acquisitions and $0.3 million of expenses related to 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.

For the first quarter of 2019, annualized return on average assets and annualized return on average tangible common equity were 1.17% and 13.64%, respectively. Based on adjusted net income, return on average assets was 1.22% and return on average tangible common equity was 14.25% for the first quarter of 2019.

Additional first quarter 2019 highlights include:

-- Non-interest income increased to $25.9 million as compared to $22.9 million for the fourth quarter 2018.

-- Busey Bank organic commercial loan growth of $60.4 million in first quarter of 2019.

-- Total deposits at March 31, 2019 grew to $7.76 billion driven by a linked-quarter increase of $326.6 million in non-interest bearing deposits.

-- Continued disciplined credit management resulted in non-performing loans as a percentage of total loans of 0.56% at March 31, 2019 as compared to 0.66% at December 31, 2018.

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 of Edwardsville ("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.

Under the terms of the merger agreement with Banc Ed, at the effective time of the acquisition, each share of Banc Ed common stock issued and outstanding was converted into the right to receive 8.2067 shares of the Company's common stock and $111.53 in cash for each share of common stock of Banc Ed. The market value of the 6.7 million shares of First Busey common stock issued at the effective time of the acquisition was approximately $166.5 million based on First Busey's closing stock price of $24.76 on January 31, 2019.

Financial results for the first quarter of 2019 were significantly impacted by the Banc Ed acquisition, resetting the baseline for financial performance in future quarters in a multitude of positive ways. At the date of the merger, the fair value of TheBANK's total assets was $1.79 billion, the fair value of total loans was $873.3 million, and the fair value of total deposits was $1.44 billion, which included $245.7 million of non-interest bearing deposits. Since the acquisition date, TheBANK's net income of $3.6 million had a positive impact on the first quarter of 2019.

The Banc Ed transaction fits with our acquisition strategy as the addition of TheBANK will grow the Company's current geographic footprint, allowing the Company to serve customers across a broader portion of the St. Louis Missouri-Illinois Metropolitan Statistical Area and will significantly add to the Company's wealth management business. We are pleased to welcome our Banc Ed colleagues into the Busey family and feel confident that we are well positioned for growth and profitability in 2019.

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.

As we acknowledge our accomplishments and continue growing forward, we are grateful for the opportunity to consistently earn the business of our customers, based on the contributions of our talented associates and the loyal support of our shareholders.

/s/ Van A. Dukeman

President & Chief Executive Officer

First Busey Corporation







        
        SELECTED FINANCIAL HIGHLIGHTS
        (dollars in thousands, except per share data)
                                                       As of and for the
                                                       Three Months Ended
                                                       March 31,                 December 31,              September 30,             March 31,
                                                                   2019                      2018                      2018                      2018
        EARNINGS & PER SHARE DATA
        Net income                                     $           25,469        $           25,290        $           26,859        $           21,917
        Revenue                                                    94,286                    83,184                    82,627                    82,243
        Diluted earnings per share                                 0.48                      0.51                      0.55                      0.45
        Cash dividends paid per share                              0.21                      0.20                      0.20                      0.20
        Net income by operating segment
        Banking                                        $           26,665        $           24,134        $           26,486        $           21,845
        Remittance Processing                                      1,025                     814                       957                       953
        Wealth Management                                          2,641                     2,040                     2,280                     2,764
        AVERAGE BALANCES
        Cash and cash equivalents                      $           220,471       $           272,811       $           238,000       $           227,055
        Investment securities                                      1,722,015                 1,443,054                 1,417,708                 1,310,902
        Loans held for sale                                        17,249                    23,380                    28,661                    39,294
        Portfolio loans                                            6,128,661                 5,540,852                 5,551,753                 5,507,860
        Interest-earning assets                                    8,088,396                 7,174,755                 7,132,324                 6,976,383
        Total assets                                               8,865,642                 7,846,154                 7,802,308                 7,663,899
        Non-interest bearing deposits                              1,616,913                 1,486,977                 1,492,709                 1,497,136
        Interest-bearing deposits                                  5,592,495                 4,852,649                 4,784,657                 4,568,160
        Total deposits                                             7,209,408                 6,339,626                 6,277,366                 6,065,296
        Securities sold under agreements to repurchase             204,529                   210,416                   234,729                   258,049
        Interest-bearing liabilities                               6,064,091                 5,329,898                 5,303,632                 5,175,228
        Total liabilities                                          7,755,770                 6,866,652                 6,840,484                 6,730,137
        Stockholders' common equity                                1,109,872                 979,502                   961,824                   933,762
        Tangible stockholders' common equity                       757,285                   678,023                   658,910                   626,794
        PERFORMANCE RATIOS
        Return on average assets                                   1.17        %             1.28        %             1.37        %             1.16        %
        Return on average common equity                            9.31        %             10.24       %             11.08       %             9.52        %
        Return on average tangible common equity                   13.64       %             14.80       %             16.17       %             14.18       %
        Net interest margin                                        3.46        %             3.38        %             3.41        %             3.51        %
        Efficiency ratio                                           57.99       %             56.57       %             53.47       %             59.80       %
        Non-interest revenue as a % of total revenues              27.47       %             27.27       %             26.45       %             27.34       %
        Results are unaudited.
        Revenues consist of net interest income plus non-interest income, net of security gains and losses.
        Average tangible stockholders' common equity is defined as average common equity less average goodwill and intangibles. See "Non-GAAP Financial
        Information" below for reconciliation.
        Annualized, see "Non-GAAP Financial Information" below for reconciliation.
        On a tax-equivalent basis, assuming an income tax rate of 21%.
        See "Non-GAAP Financial Information" below for reconciliation.
        








        
        Condensed Consolidated Balance Sheets                         As of
        (dollars in thousands, except per share data)                 March 31,            December 31,         September 30,        June 30,             March 31,
                                                                           2019                 2018                 2018                 2018                 2018
        Assets
        Cash and cash equivalents                                     $    330,407         $    239,973         $    160,652         $    230,730         $    367,525
        Investment securities                                              1,940,519            1,312,514            1,496,948            1,384,807            1,286,136
        Loans held for sale                                                20,291               25,895               32,617               33,974               29,034
        Commercial loans                                                   4,744,136            4,060,126            4,141,816            4,076,253            4,061,181
        Retail real estate and retail other loans                          1,770,945            1,508,302            1,481,925            1,479,034            1,470,272
        Portfolio loans                                               $    6,515,081       $    5,568,428       $    5,623,741       $    5,555,287       $    5,531,453
        Allowance for loan losses                                          (50,915    )         (50,648    )         (52,743    )         (53,305    )         (52,649    )
        Premises and equipment                                             147,958              117,672              119,162              119,835              118,985
        Goodwill and other intangibles                                     377,739              300,558              301,963              303,407              304,897
        Right of use asset                                                 10,898               -                    -                    -                    -
        Other assets                                                       245,356              187,965              207,045              200,809              193,365
        Total assets                                                  $    9,537,334       $    7,702,357       $    7,889,385       $    7,775,544       $    7,778,746
        Liabilities & Stockholders' Equity
        Non-interest bearing deposits                                 $    1,791,339       $    1,464,700       $    1,438,054       $    1,496,671       $    1,651,333
        Interest-bearing checking, savings, and money market deposits      4,214,809            3,287,618            3,205,232            3,192,735            3,270,963
        Time deposits                                                      1,757,078            1,497,003            1,552,283            1,474,506            1,408,878
        Total deposits                                                $    7,763,226       $    6,249,321       $    6,195,569       $    6,163,912       $    6,331,174
        Securities sold under agreements to repurchase                     217,077              185,796              255,906              240,109              235,311
        Short-term borrowings                                              30,739               -                    200,000              150,000              -
        Long-term debt                                                     188,221              148,686              148,626              154,125              154,122
        Junior subordinated debt owed to unconsolidated trusts             71,192               71,155               71,118               71,081               71,044
        Lease liability                                                    10,982               -                    -                    -                    -
        Other liabilities                                                  69,756               52,435               46,026               39,135               44,949
        Total liabilities                                             $    8,351,193       $    6,707,393       $    6,917,245       $    6,818,362       $    6,836,600
        Total stockholders' equity                                    $    1,186,141       $    994,964         $    972,140         $    957,182         $    942,146
        Total liabilities & stockholders' equity                      $    9,537,334       $    7,702,357       $    7,889,385       $    7,775,544       $    7,778,746
        Share Data
        Book value per common share                                   $    21.32           $    20.36           $    19.90           $    19.62           $    19.34
        Tangible book value per common share                          $    14.53           $    14.21           $    13.72           $    13.40           $    13.08
        Ending number of common shares outstanding                         55,624,627           48,874,836           48,860,309           48,776,404           48,717,239
        Results are unaudited except for amounts reported as of December 31, 2018.
        See "Non-GAAP Financial Information" below for reconciliation.
        








        
        Condensed Consolidated Statements of Income
        (dollars in thousands, except per share data)
                                                                           For the
                                                                           Three Months Ended March 31,
                                                                                          2019             2018
        Interest and fees on loans                                         $              71,789         $ 60,960
        Interest on investment securities                                                 11,260           7,250
        Other interest income                                                             1,232            423
        Total interest income                                              $              84,281         $ 68,633
        Interest on deposits                                                              12,500           5,987
        Interest on securities sold under agreements to repurchase                        583              341
        Interest on short-term borrowings                                                 191              476
        Interest on long-term debt                                                        1,710            1,357
        Interest on junior subordinated debt owed to unconsolidated trusts                914              715
        Total interest expense                                             $              15,898         $ 8,876
        Net interest income                                                $              68,383         $ 59,757
        Provision for loan losses                                                         2,111            1,008
        Net interest income after provision for loan losses                $              66,272         $ 58,749
        Trust fees                                                                        8,115            7,514
        Commissions and brokers' fees, net                                                914              1,096
        Fees for customer services                                                        8,097            6,946
        Remittance processing                                                             3,780            3,392
        Mortgage revenue                                                                  1,945            1,643
        Security gains, net                                                               42               -
        Other                                                                             3,052            1,895
        Total non-interest income                                          $              25,945         $ 22,486
        Salaries, wages and employee benefits                                             32,341           28,819
        Net occupancy expense of premises                                                 4,202            3,821
        Furniture and equipment expense                                                   2,095            1,913
        Data processing                                                                   4,401            4,345
        Amortization of intangible assets                                                 2,094            1,515
        Other                                                                             12,030           10,627
        Total non-interest expense                                         $              57,163         $ 51,040
        Income before income taxes                                         $              35,054         $ 30,195
        Income taxes                                                                      9,585            8,278
        Net income                                                         $              25,469         $ 21,917
        Per Share Data
        Basic earnings per common share                                    $              0.48           $ 0.45
        Diluted earnings per common share                                  $              0.48           $ 0.45
        Average common shares outstanding                                                 53,277,102       48,775,416
        Diluted average common shares outstanding                                         53,577,935       49,178,939
        Results are unaudited.
        


Balance Sheet Growth

At March 31, 2019, portfolio loans were $6.52 billion, as compared to $5.57 billion as of December 31, 2018 and $5.53 billion as of March 31, 2018. The March 31, 2019 increase in portfolio loans includes $874.1 million of TheBANK loans combined with organic Busey Bank loan growth, primarily in Missouri. Average portfolio loans increased 11.3% to $6.13 billion for the first quarter of 2019 compared to $5.51 billion for the first quarter of 2018.

Average interest-earning assets for the first quarter of 2019 increased to $8.09 billion compared to $7.17 billion for the fourth quarter of 2018 and $6.98 billion for the first quarter of 2018.

Total deposits were $7.76 billion at March 31, 2019, an increase from $6.25 billion at December 31, 2018 and $6.33 billion at March 31, 2018 TheBANK's total deposits were $1.47 billion at March 31, 2019, which included $253.9 million of non-interest bearing deposits. The Company remains funded primarily through core deposits with significant market share in its core markets.

Net Interest Margin and Net Interest Income

Net interest income was $68.4 million in the first quarter of 2019 compared to $60.5 million in the fourth quarter of 2018 and $59.8 million in the first quarter of 2018. Higher yields from loan production partially offset increases in funding costs. Funding costs have increased primarily due to resetting of time deposit rates to reflect market increases and additional borrowings in conjunction with the Banc Ed acquisition. Net purchase accounting accretion and amortization included in interest income and interest expense was $3.0 million for the first quarter of 2019, an increase from $1.9 million for the fourth quarter of 2018 and decrease from $3.4 million for the first quarter of 2018.

Net interest margin for the first quarter of 2019 was 3.46%, compared to 3.38% for the fourth quarter of 2018 and 3.51% for the first quarter of 2018. Adjusted net interest margin for the first quarter of 2019 was 3.31%, compared to 3.27% for the fourth quarter of 2018 but steady with the first quarter of 2018.

Asset Quality

Non-performing loans totaled $36.6 million as of March 31, 2019 and December 31, 2018 compared to $33.6 million as of March 31, 2018. Non-performing loans were 0.56% of total portfolio loans as of March 31, 2019, compared to 0.66% as of December 31, 2018 and 0.61% as of March 31, 2018.

/zigman2/quotes/201332947/lastsale
US : U.S.: Nasdaq
$ 16.39
-0.35 -2.09%
Volume: 172,808
March 27, 2020 4:00p
P/E Ratio
8.75
Dividend Yield
5.37%
Market Cap
$893.93 million
Rev. per Employee
$296,490
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