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Press release from GlobeNewswire (a Nasdaq OMX company)

First Busey Announces 2011 Second Quarter Earnings

Tuesday, July 26, 2011

First Busey Announces 2011 Second Quarter Earnings14:00 EDT Tuesday, July 26, 2011 CHAMPAIGN, Ill., July 26, 2011 (GLOBE NEWSWIRE) --Message from our President & CEO First Busey Corporation's (Nasdaq:BUSE) net income was $7.4 million and net income available to common stockholders was $6.2 million, or $0.07 per fully-diluted common share, for the second quarter of 2011, as compared to net income of $5.7 million and net income available to common stockholders of $4.4 million, or $0.07 per fully diluted share, in the second quarter of 2010. The Company's 2011 year-to-date net income was $16.6 million and net income available to common stockholders was $13.5 million, or $0.16 per fully diluted share, compared to net income of $9.9 million, net income available to common stockholders of $7.3 million and fully-diluted earnings per share of $0.11 for the comparable period in 2010. In comparison, the Company reported net income for the first quarter of 2011 of $9.1 million and net income available to common stockholders of $7.3 million, or $0.09 per fully-diluted common share. The decline in earnings per share from the first quarter of 2011 was primarily due to a decrease in the size of the Company's loan portfolio brought on, in part, by continuing soft loan demand, reduction in non-relationship commercial real estate loans and reduction in classified loans, lower residential mortgage sales gains, and an increase in outstanding common stock of 7.5 million shares as a result of the March 2011 conversion of preferred shares.Balance sheet strength, profitability and growth – in that order. Asset Quality: Our non-performing loans at June 30, 2011 continued to show improvement.  We expect continued gradual improvement in our overall asset quality in 2011; however, this continues to be dependent upon market specific economic conditions. The key metrics are as follows: Non-performing loans decreased to $53.8 million at June 30, 2011 from $60.9 million at March 31, 2011 and $68.1 million at December 31, 2010. Illinois non-performing loans decreased to $27.8 million at June 30, 2011 from $30.1 million at March 31, 2011 and $38.3 million at December 31, 2010. Florida non-performing loans decreased to $19.5 million at June 30, 2011 from $23.4 million at March 31, 2011 and $23.8 million at December 31, 2010. Indiana non-performing loans decreased to $6.5 million at June 30, 2011 from $7.4 million at March 31, 2011, but increased from $6.0 million at December 31, 2010. Loans 30-89 days past due decreased to $17.1 million at June 30, 2011 from $18.4 million at March 31, 2011 and $23.5 million at December 31, 2010. Other non-performing assets decreased to $6.9 million at June 30, 2011 from $7.2 million at March 31, 2011 and $9.2 million at December 31, 2010. The ratio of non-performing assets to total loans plus other real estate owned at June 30, 2011 decreased to 2.79% from 3.04% at March 31, 2011 and 3.25% at December 31, 2010. The allowance for loan losses to non-performing loans ratio increased to 128.94% at June 30, 2011 from 122.89% at March 31, 2011 and 111.64% at December 31, 2010. The allowance for loan losses to total loans ratio decreased to 3.20% at June 30, 2011 compared to 3.35% at March 31, 2011 and 3.21% at December 31, 2010. Net charge-offs totaled $10.5 million in the second quarter of 2011 as compared to $6.2 million in the first quarter of 2011, but were lower than the $17.4 million recorded in the fourth quarter of 2010. Provision expense of $5.0 million recorded in the second quarter of 2011 was consistent with the amount recorded in the first quarter of 2011, and was lower than the $10.3 million recorded in the fourth quarter of 2010.Operating Performance: Our net income increased to $7.4 million in the second quarter of 2011, as compared to $5.7 million in the second quarter of 2010, but decreased from $9.1 million in the first quarter of 2011.  The increase in the second quarter of 2011 as compared to the comparable period in 2010 relates to $0.6 million increase in pre-tax, pre-provision income and a $2.5 million decrease in provision for loan losses. As noted above, declines in loans and gains on sales of residential mortgage loans were the primary reasons for the decline in net income from the first quarter of 2011. Significant operating performance items were:  Net interest income declined to $27.8 million in the second quarter of 2011, compared to $28.3 million in the first quarter of 2011 and $29.1 million in the second quarter of 2010. Net interest income for the first six months of 2011 was $56.2 million compared to $58.1 million for the same period of 2010. The decline is primarily related to a decline in loans, which has been partially offset by reduced funding costs. Net interest margin remained flat at 3.54% for the second quarter of 2011 as compared to 3.55% for the first quarter of 2011, but increased from 3.49% for the second quarter of 2010. The net interest margin for the first six months of 2011 increased to 3.54% compared to 3.50% for the same period of 2010. Gains on sales of residential mortgage loans declined to $1.8 million in the second quarter of 2011 compared to $2.6 million in the first quarter of 2011 and $3.4 million in the second quarter of 2010. The decline in the second quarter was primarily due to a decline in volume brought on by increasing residential mortgage rates. Total non-interest expenses have held steady as the second quarter of 2011 was $25.2 million compared to $25.7 million in the first quarter of 2011 and $27.7 million in the second quarter of 2010.   The efficiency ratio increased to 57.80% for the second quarter of 2011 from 55.87% for the first quarter of 2011 and 60.56% for the second quarter of 2010. The efficiency ratio for the first six months of 2011 was 56.81%, an improvement from 57.08% for the same period of 2010. Total revenue, net of interest expense and security gains, for the second quarter of 2011 was $41.6 million, compared to $43.9 million for the first quarter of 2011 and $43.5 million for the second quarter of 2010. Total revenue for the first six months of 2011 was $85.5 million as compared to $88.1 million in the same period of 2010. FirsTech's net income decreased slightly to $0.4 million for the second quarter of 2011, compared to $0.5 million for the first quarter of 2011 and $0.5 million for the second quarter of 2010. FirsTech's net income for the first six months of 2011 was $0.9 million as compared to $1.1 million in the same period of 2010. Busey Wealth Management's net income of $1.0 million for the second quarter of 2011 increased from $0.7 million for the first quarter of 2011, but was consistent with net income of $1.0 million for the second quarter of 2010. Busey Wealth Management's net income for the first six months of 2011 was of $1.7 million as compared to $1.9 million for the first six months of 2010.Growth: As noted in prior releases, we began an initiative to spur organic growth in January 2011. We provided certain tools to our front line associates to foster this initiative. These tools facilitated the growth during the first six months of 2011 in non-time deposits of $37.6 million, or 2.0%, over December 31, 2010 levels. The growth in core accounts resulted in increased fees for customer services to $4.5 million in the second quarter of 2011 as compared to $4.3 million in the first quarter of 2011 and $4.0 million in the second quarter in 2010. The increase from new accounts has more than offset the loss of fees as a result of changes to overdraft program regulations.  Loans, net of allowance for loan losses, declined $193.8 million from December 31, 2010 due to continuing soft loan demand and our reduction of non-relationship commercial real estate exposure. However, we are beginning to see net strength in our loan pipeline as a result of the January 2011 initiative. The economy continues to be a headwind and competition for new business banking opportunities is strong. We believe we are up to the challenge and expect to see gradual improvement in loan volume in the following quarters. We should be able to put on additional loans at a net profit based upon our current liquidity levels and the very low earnings attributable to excess liquidity. We will continue our practice of not sacrificing the quality of our loan portfolio for the sake of growth. We are well positioned to explore external growth opportunities while simultaneously focusing on internal growth. We will continue to base our efforts for internal growth on service, listening to our customers and fulfilling our promise to help them accomplish their goals. On July 29, 2011, we will pay a cash dividend of $0.04 per common share to stockholders of record as of July 22, 2011.  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 CorporationSELECTED FINANCIAL HIGHLIGHTS (dollars in thousands, except per share data)       Three Months EndedSix Months Ended June 30,March 31,June 30,June 30,June 30, 20112011201020112010EARNINGS & PER SHARE DATA      Net income$7,447 $9,110 $5,685$16,557 $9,902 Income available to common stockholders16,164 7,334 4,40213,498 7,337 Revenue241,587 43,888 43,50485,475 88,061 Fully-diluted earnings per share0.07 0.09 0.070.16 0.11 Cash dividends paid per share0.04 0.04 0.040.08 0.08             Net income by operating segment            Busey Bank$7,096 $8,820 $5,302$15,916 $8,772  Busey Wealth Management974 694 9591,668 1,858  FirsTech422 450 456872 1,097            AVERAGE BALANCES           Assets$3,491,237 $3,590,108 $3,727,110$3,540,399 $3,725,661 Earning assets3,209,961 3,294,097 3,402,5623,251,797 3,402,477 Deposits2,823,136 2,898,517 3,107,5962,860,618 3,098,069 Interest-bearing liabilities2,569,520 2,654,425 2,918,5872,611,737 2,913,922 Stockholders' equity – common325,608 289,475 229,411307,641 230,054 Tangible stockholders' equity – common286,586 249,563 186,445268,176 186,611            PERFORMANCE RATIOS           Return on average assets30.71% 0.83% 0.47%0.77% 0.40% Return on average common equity37.59% 10.27% 7.70%8.85% 6.43% Return on average tangible common equity38.63% 11.92% 9.47%10.15% 7.93% Net interest margin33.54% 3.55% 3.49%3.54% 3.50% Efficiency ratio457.80% 55.87% 60.56%56.81% 57.08% Non-interest revenue as a % of total revenues233.05% 35.41% 33.11%34.26% 34.02%            ASSET QUALITY           Gross loans$2,168,240 $2,232,849 $2,619,530     Allowance for loan losses69,329 74,849 92,129     Net charge-offs10,520 6,189 10,300 16,709 30,250 Allowance for loan losses to loans3.20% 3.35% 3.52%     Allowance as a percentage of non-performing loans128.94% 122.89% 104.93%     Non-performing loans            Non-accrual loans52,456 56,829 85,969      Loans 90+ days past due1,314 4,078 1,831      Geographically            Downstate Illinois/ Indiana34,260 37,527 56,030      Florida19,510 23,380 31,770     Loans 30-89 days past due17,057 18,419 14,593     Other non-performing assets6,855 7,193 14,299                         1) Net income 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 available to common stockholders           4) Net of security gains and intangible charges       Condensed Consolidated Balance Sheets      (Unaudited, in thousands, except per share data)June 30, December 31, June 30,  2011 2010 2010Assets       Cash and due from banks $ 357,193  $ 418,965  $ 279,021 Investment securities 742,793  599,459  562,978 Net loans, including loans held for sale 2,098,911  2,292,739  2,527,401 Premises and equipment 71,162  73,218  75,300 Goodwill and other intangibles 38,474   40,242  42,285 Other assets 162,355  180,380  212,231Total assets $ 3,470,888  $ 3,605,003  $ 3,699,216        Liabilities & Stockholders' Equity       Non-interest bearing deposits $ 447,650  $ 460,661  $ 438,421 Interest-bearing deposits 2,366,191  2,455,705  2,642,060 Total deposits $ 2,813,841  $  2,916,366  $ 3,080,481         Securities sold under agreements to repurchase 126,796  138,982  135,554 Short-term borrowings --  --   4,000 Long-term debt 19,834  43,159  58,076 Junior subordinated debt owed to unconsolidated trusts 55,000  55,000  55,000 Other liabilities 25,641  30,991  32,849Total liabilities $ 3,041,112  $ 3,184,498  $ 3,365,960Total stockholders' equity $ 429,776  $  420,505  $ 333,256Total liabilities & stockholders' equity $ 3,470,888  $ 3,605,003  $ 3,699,216        Per Share Data      Book value per common share $ 3.81  $ 3.65  $  3.51 Tangible book value per common share $ 3.36  $ 3.14  $ 2.88 Ending number of common shares outstanding 86,597  79,100  66,361                    Condensed Consolidated Statements of Operations        (Unaudited, in thousands, except per share data)Three Months Ended June 30,Six Months Ended June 30,  2011 20102011 2010           Interest and fees on loans $ 29,173  $  35,544 $ 59,681  $ 71,580 Interest on investment securities 4,700  4,440 9,098  9,097Total interest income $  33,873  $ 39,984 $ 68,779  $ 80,677           Interest on deposits 4,820  9,259 10,079  19,210 Interest on short-term borrowings 110  151 231  314 Interest on long-term debt 486  790 982  1,684 Junior subordinated debt owed to unconsolidated trusts 616  684 1,299  1,364Total interest expense $ 6,032  $ 10,884 $  12,591  $ 22,572          Net interest income $ 27,841  $ 29,100 $ 56,188  $ 58,105 Provision for loan losses 5,000  7,500 10,000  22,200Net interest income after provision for loan losses $ 22,841  $ 21,600 $ 46,188  $ 35,905           Trust fees 3,757  3,435 8,305  7,645 Commissions and brokers' fees 479  471 920  911 Fees for customer services 4,523  4,021 8,852  7,964 Remittance processing 2,403  2,233 4,784  4,853 Gain on sales of loans 1,835  3,442 4,467  5,880 Net security gains (losses) --  -- (2)   742 Other 749  802 1,959  2,703Total non-interest income $ 13,746  $ 14,404 $ 29,285  $  30,698           Salaries and wages 10,028  10,068 19,588  19,734 Employee benefits 2,506  2,543 5,265   5,182 Net occupancy expense 2,136  2,231 4,551  4,573 Furniture and equipment expense 1,340  1,578  2,664  3,109 Data processing expense 2,170  1,951 4,280  3,847 Amortization expense 884  1,022 1,768  2,045 Regulatory expense 1,308  2,040 3,155  3,503 OREO expense 135   670 347  1,063 Other operating expenses 4,678  5,564 9,232  9,824Total non-interest expense $ 25,185  $ 27,667 $ 50,850  $ 52,880           Income before income taxes $ 11,402  $ 8,337 $ 24,623  $ 13,723 Income taxes 3,955   2,652 8,066  3,821Net income $ 7,447  $ 5,685 $ 16,557  $ 9,902 Preferred stock dividends and discount accretion  1,283  $ 1,283 $ 3,059  $ 2,565Income available for common stockholders $ 6,164  $ 4,402 $ 13,498  $ 7,337          Per Share Data       Basic earnings per common share $ 0.07  $ 0.07 $ 0.16  $ 0.11 Fully-diluted earnings per common share $ 0.07  $  0.07 $ 0.16  $ 0.11 Diluted average common shares outstanding 86,617  $ 66,361 84,001  $ 66,361Corporate 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 $3.4 billion as of June 30, 2011. 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 June 30, 2011, Busey Wealth Management had approximately $3.8 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 3,100 agent locations in 38 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: David B. White, CFO 217-365-4047