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Press release from GlobeNewswire (a Nasdaq OMX company)

First Busey Announces 2010 Third Quarter Earnings

Tuesday, October 26, 2010

First Busey Announces 2010 Third Quarter Earnings14:00 EDT Tuesday, October 26, 2010 CHAMPAIGN, Ill., Oct. 26, 2010 (GLOBE NEWSWIRE) -- Message from our President & CEO First Busey Corporation's (Nasdaq:BUSE) net income was $6.0 million and net income available to common stockholders was $4.7 million, or $0.07 per common share, for the third quarter of 2010. In comparison, net income for the second quarter of 2010 was $5.7 million and net income available to common stockholders was $4.4 million, or $0.07 per common share. We are a full year away from the Q3 2009 peak of our asset quality issues and continue to experience gradual improvement in our earnings and asset quality metrics. Our priorities remain balance sheet strength, profitability and growth – in that order.Asset Quality: Overall, our credit metrics at September 30, 2010 showed slight improvement as compared to June 30, 2010 and December 31, 2009 levels. We expect continued gradual improvement in our overall asset quality in the fourth quarter of 2010; however, this is dependent on market specific economic conditions. The key metrics are as follows: Non-performing loans decreased to $79.7 million at September 30, 2010 from $87.8 million at June 30, 2010 and $86.3 million at December 31, 2009, and have declined significantly from $172.5 million at September 30, 2009. Illinois non-performing loans increased to $41.8 million at September 30, 2010 from $38.4 million at June 30, 2010 and $28.0 million at December 31, 2009, and have declined slightly from $42.8 million at September 30, 2009. Florida non-performing loans decreased to $22.8 million at September 30, 2010 from $31.8 million at June 30, 2010 and $40.2 million at December 31, 2009, and have declined significantly from $113.3 million at September 30, 2009. Indiana non-performing loans decreased to $15.1 million at September 30, 2010 from $17.6 million at June 30, 2010 and $18.1 million at December 31, 2009, and have declined slightly from $16.4 million at September 30, 2009. Loans 30-89 days past due increased to $19.3 million at September 30, 2010 from $14.6 million at June 30, 2010 and $12.5 million at December 31, 2009, but below $34.0 million at September 30, 2009. Other real estate owned decreased to $11.5 million at September 30, 2010 from $14.3 million at June 30, 2010 and $17.2 million at December 31, 2009, and has declined from $16.6 million at September 30, 2009. The ratio of non-performing assets to total loans plus other real estate owned decreased to 3.60% from 3.88% at June 30, 2010 and was slightly below the 3.68% ratio at December 31, 2009, and significantly below the 6.26% ratio at September 30, 2009. The ratio of construction and land development loans to total loans decreased to 8.3% at September 30, 2010 from 9.8% at June 30, 2010, 11.7% at December 31, 2009 and 18.8% at September 30, 2009.   The allowance for loan losses to non-performing loans ratio decreased to 104.3% at September 30, 2010 from 104.9% at June 30, 2010, and was below the 116.1% at December 31, 2009, but significantly higher than the 69.6% at September 30, 2009.  The allowance for loan losses to total loans ratio declined slightly to 3.30% at September 30, 2010 compared to 3.52% at June 30, 2010, and was down from 3.59% at December 31, 2009 and 4.00% at September 30, 2009.  Net charge-offs were $18.5 million for the third quarter of 2010, which were higher than the $10.3 million during the second quarter of 2010, but lower than the $73.8 million in the fourth quarter of 2009 and $108.5 million in the third quarter of 2009.  Provision expense in the third quarter of 2010 was $9.5 million compared to $7.5 million in the second quarter of 2010, $54.0 million in the fourth quarter of 2009 and $140.0 million in the third quarter of 2009. We continue to believe the peak of our non-performing assets occurred in the quarter ended September 30, 2009, as we believe we have identified the risks within our loan portfolio. Improving our asset quality metrics will continue to be a high priority until we experience sustained improvement in our market specific economic conditions.Operating Performance: Our profit slightly increased to $6.0 million in the third quarter of 2010 as compared to $5.7 million in the second quarter of 2010, despite a $9.5 million provision for loan losses in the third quarter of 2010, which was $2.0 million higher than the second quarter of 2010. The increased profit was led by our increased quarterly net interest margin of 3.64% as compared to 3.49% in the second quarter of 2010. We continued to experience net interest margin enhancements through decreased costs of funds as higher cost non-core funding matured and was not replaced. However, average loans declined by $84.6 million, which partially offset the decreased cost of funds.    Pre-provision, pre-tax income was $17.4 million for the third quarter of 2010 compared to $15.8 million for the quarter ended June 30, 2010 and a loss of $192.8 million for the quarter ended September 30, 2009. Our normalized pre-provision, pre-tax income was $18.0 million in the third quarter of 2010 compared to the $17.8 million in the second quarter of 2010 and $18.0 million in the third quarter of 2009. The normalized pre-provision, pre-tax income non-GAAP reconciling items in the third quarter of 2010 were increased costs from vendor obligations of $0.6 million and OREO costs of $0.3 million, partially offset by security gains of $0.3 million.  Significant operating performance items were:  Net income available to common stockholders (net of TARP dividends) for the quarter ended September 30, 2010 was $4.7 million, or $0.07 per fully-diluted share, compared to $4.4 million, or $0.07 per fully-diluted common share for the second quarter of 2010 and a loss of $283.7 million, or $7.92 per fully-diluted common share, for the quarter ended September 30, 2009. Net income available to common stockholders (net of TARP dividends) for the nine months ended September 30, 2010 was $12.1 million, or $0.18 per fully-diluted share, compared to a loss of $298.6 million, or $8.34 per fully-diluted common share, for the nine months ended September 30, 2009. Net interest margin increased to 3.64% for the third quarter of 2010 as compared to 3.49% for the second quarter of 2010, and increased from 3.03% for the third quarter of 2009. The net interest margin for the first nine months of 2010 was 3.55% as compared to 2.94% in the same period of 2009. The efficiency ratio decreased to 58.21% for the third quarter of 2010 as compared to 60.56% for the second quarter of 2010, and decreased from 62.69% for the third quarter of 2009. The efficiency ratio for the first nine months of 2010 was 57.46%, an improvement from 60.53% for the same period of 2009. Total revenue, net of interest expense and security gains, for the third quarter of 2010 was $44.2 million compared to $43.5 million for the second quarter of 2010 and $44.9 million for the third quarter of 2009. Total revenue for the first nine months of 2010 was $132.3 million as compared to $134.3 million in the same period of 2009. FirsTech's net income decreased to $0.4 million in the third quarter of 2010 as compared to $0.5 million for the second quarter of 2010 and $0.7 million for the third quarter of 2009. As previously noted, this modest decrease was expected. Busey Wealth Management's net income decreased to $0.7 million in the third quarter of 2010 from $1.0 million for the second quarter of 2010 and increased from $0.6 million for the third quarter of 2009. We have been in a continual process of removing under and non-performing loans from our loan portfolio and reducing non-core, higher cost funds from our balance sheet. While this approach has served us well during the current economic cycle, it is not a sustainable, long-term model for success. Over the remainder of 2010 and into 2011, we will be implementing changes we believe will facilitate growth while continuing to reduce problem loans and higher cost funds. As the economy improves in our markets, we plan to continue to meet the growth needs of our customers. Our capital position and asset quality have improved along with profitability . . . in the proper order, it is now time we plan our growth strategy. Liquidity: The bank continued to show a strong liquidity position at September 30, 2010, which provides us additional flexibility but at the cost of a negative effect on short-term earnings as the liquid assets do not earn as much as an asset deployed in the loan or investment portfolio. Capital: At the end of the third quarter of 2010, both the bank and the holding company continued to meet the capital adequacy requirements to be well capitalized under the regulatory guidance. Our capital has improved gradually as our earnings improve. On October 29, 2010, we will pay a cash dividend of $0.04 per common share to stockholders of record on October 26, 2010.  We thank our associates for their efforts, our customers for their business and you, our stockholders, for your continued support of Busey. \s\ Van A. Dukeman President & Chief Executive Officer First Busey Corporation  SELECTED FINANCIAL HIGHLIGHTS (dollars in thousands, except per share data)              Three Months EndedNine Months Ended  September 30,June 30,September 30,September 30,September 30, 20102010200920102009EARNINGS & PER SHARE DATA           Net income/(loss) $ 6,022  $ 5,685  $ (282,319) $ 15,924  $ (295,555) Income (loss) available to common stockholders1 4,739  4,402  (283,675) 12,076  (298,641) Revenue2 44,202  43,504  44,852 132,263  134,332 Fully-diluted earnings (loss) per share 0.07  0.07  (7.92) 0.18  (8.34) Cash dividends paid per share 0.04  0.04  0.08 0.12  0.36             Net income (loss) by operating segment            Busey Bank $ 5,450  $ 5,302  $ (280,677) $ 14,221  $ (294,942)  Busey Wealth Management 716  959  629 2,574  1,908  FirsTech 425  456  728 1,522  2,397         AVERAGE BALANCES           Assets $ 3,598,237  $ 3,727,110  $ 4,208,503 $ 3,682,753  $ 4,338,453 Earning assets 3,280,987  3,402,562  3,785,110 3,361,535  3,890,905 Deposits 2,982,590  3,107,596  3,325,943 3,059,186  3,415,501 Interest-bearing liabilities 2,778,286  2,918,587  3,247,202 2,868,213  3,356,895 Stockholders' equity - common 234,916  229,412  377,935 231,692  392,680          PERFORMANCE RATIOS           Return on average assets30.52% 0.47% (26.74%)0.44% (9.20%) Return on average common equity38.00% 7.70% (297.79%)6.97% (101.68%) Net interest margin33.64% 3.49% 3.03%3.55% 2.94% Efficiency ratio458.21% 60.56% 62.69%57.46% 60.53% Non-interest revenue as a % of total revenues232.96% 33.11% 36.57%33.66% 37.18%         ASSET QUALITY           Gross loans $ 2,518,209  $ 2,619,530  $ 3,004,072     Allowance for loan losses 83,098  92,129  120,021     Net charge-offs 18,531  10,300  108,528 48,781  176,150 Allowance for loan losses to loans3.30% 3.52% 4.00%     Allowance as a percentage of non-performing loans104.29% 104.93% 69.58%     Non-performing loans            Non-accrual loans 78,223  85,969  157,978      Loans 90+ days past due 1,457  1,831  14,526      Geographically            Downstate Illinois/ Indiana 56,831  56,030  59,158      Florida 22,849  31,770  113,346     Loans 30-89 days past due 19,322  14,593  34,008     Other non-performing assets 11,463  14,298  16,638    1 Available to common stockholders, net of preferred dividend and TARP discount accretion.2 Net of interest expense, excludes security gains.3 Quarterly ratios annualized and calculated on net income (loss) available to common stockholders.4 Net of security gains and intangible charges.    Condensed Consolidated Statements of Operations(Unaudited, in thousands, except per share data)Three Months Ended September 30,Nine Months Ended September 30,  2010 20092010 2009           Interest and fees on loans $ 34,326  $ 39,198 $ 105,906  $ 122,945 Interest on investment securities 4,141  5,409 13,238  17,536Total interest income $ 38,467  $ 44,607 $ 119,144  $ 140,481           Interest on deposits 7,334  13,732 26,544  48,047 Interest on short-term borrowings 170  510 484  2,036 Interest on long-term debt 629  1,220 2,313  3,800 Junior subordinated debt owed to unconsolidated trusts 699  697 2,063  2,216Total interest expense $ 8,832  $ 16,159 $ 31,404  $ 56,099          Net interest income $ 29,635  $ 28,448 $ 87,740  $ 84,382 Provision for loan losses 9,500  140,000 31,700  197,500Net interest income (loss) after provision for loan losses $ 20,135  $ (111,552) $ 56,040  $ (113,118)           Trust fees 3,113  3,067 10,758  9,620 Commissions and brokers' fees 398  431 1,309  1,378 Remittance processing 2,263  3,251 7,116  9,886 Fees for customer services 4,162  4,413 12,126  12,702 Gain on sales of loans 4,104  3,809 9,984  9,942 Net security gains 283  65 1,025  140 Other 527  1,433 3,230  6,422Total non-interest income $ 14,850  $ 16,469 $ 45,548  $ 50,090           Salaries and wages 10,537  10,955 30,271  32,376 Employee benefits 2,487  2,615 7,669  8,186 Net occupancy expense 2,374  2,414 6,947  7,385 Furniture and equipment expense 1,493  1,817 4,602  5,576 Data processing expense 2,008  1,989 5,855  5,651 Amortization expense 1,022  1,091 3,067  3,271 Regulatory expense 2,155  2,140 5,302  7,117 Goodwill impairment --  208,164 --  208,164 OREO expense 380  846 1,443  1,236 Other operating expenses 4,586  5,727 14,766  14,775Total non-interest expense $ 27,042  $ 237,758 $ 79,922  $ 293,737           Income (loss) before income taxes $ 7,943  $ (332,841) $ 21,666  $ (356,765) Income taxes 1,921  (50,522) 5,742  (61,210)Net income (loss) $ 6,022  $ (282,319) $ 15,924  $ (295,555) Preferred stock dividends and discount accretion $ 1,283  $ 1,356 $ 3,848  $ 3,086Income (loss) available for common stockholders $ 4,739  $ (283,675) $ 12,076  $ (298,641)          Per Share Data       Basic earnings (loss) per common share $ 0.07  $ (7.92) $ 0.18  $ (8.34) Fully-diluted earnings (loss) per common share $ 0.07  $ (7.92) $ 0.18  $ (8.34) Diluted average common shares outstanding 66,361  35,816 66,361  35,816    Condensed Consolidated Balance Sheets(Unaudited, in thousands, except per share data)September 30,  December 31,  September 30,   2010 2009 2009Assets       Cash and due from banks $ 222,226  $ 207,071  $ 183,243 Investment securities 551,720  569,640  581,983 Net loans 2,435,110  2,692,644  2,884,051 Premises and equipment 74,362  77,528  79,663 Goodwill and other intangibles 41,263  44,330  45,420 Other assets 208,532  223,639  199,546Total assets $ 3,533,213  $ 3,814,852  $ 3,973,906        Liabilities & Stockholders' Equity       Non-interest bearing deposits $ 449,702  $ 468,230  $ 427,267 Interest-bearing deposits 2,474,503  2,702,850  2,855,386 Total deposits $ 2,924,205  $ 3,171,080  $ 3,282,653         Federal funds purchased & securities sold under agreements to repurchase 130,419  142,325  158,875 Short-term borrowings 4,000  --  -- Long-term debt 52,576  82,076  120,493 Junior subordinated debt owed to unconsolidated trusts 55,000  55,000  55,000 Other liabilities 30,446  36,243  33,826Total liabilities $ 3,196,646  $ 3,486,724  $ 3,650,847Total stockholders' equity $ 336,567  $ 328,128  $ 323,059Total liabilities & stockholders' equity $ 3,533,213  $ 3,814,852  $ 3,973,906        Per Share Data      Book value per common share $ 3.56  $ 3.45  $ 3.95 Tangible book value per common share $ 2.94  $ 2.78  $ 3.14 Ending number of common shares outstanding 66,361  66,361  56,516Corporate Profile First Busey Corporation is a $3.5 billion financial holding company headquartered in Champaign, Illinois. Busey Bank, First Busey Corporation's wholly-owned bank subsidiary, is headquartered in Champaign, Illinois and has thirty-three banking centers serving downstate Illinois, a banking center in Indianapolis, Indiana, and seven banking centers serving southwest Florida. Busey Bank had total assets of $3.5 billion as of September 30, 2010. Busey Wealth Management is a wholly-owned subsidiary of First Busey Corporation. Through Busey Trust Company, Busey Wealth Management delivers trust, asset management, retail brokerage and insurance products and services. As of September 30, 2010, Busey Wealth Management had approximately $3.3 billion in assets under care. First Busey Corporation owns a retail payment processing subsidiary, FirsTech, Inc., which processes over 28 million transactions per year through online bill payments, lockbox processing and walk-in payments through its 3,500 agent locations in 32 states. Busey provides electronic delivery of financial services through our website, www.busey.com.Special Note Concerning Forward-Looking Statements This document may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company's management and on information currently available to management, are generally identifiable by the use of words such as "believe," "expect," "anticipate," "plan," "intend," "estimate," "may," "will," "would," "could," "should" or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) the strength of the local and national economy; (ii) the economic impact of any future terrorist threats or attacks; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company's general business; (iv) changes in interest rates and prepayment rates of the Company's assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of acquisitions; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission.CONTACT: First Busey Corporation David B. White, CFO 217-365-4047