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Press release from GlobeNewswire (a Nasdaq OMX company)

First Busey Announces 2011 Third Quarter Earnings

Tuesday, October 25, 2011

First Busey Announces 2011 Third Quarter Earnings14:00 EDT Tuesday, October 25, 2011 CHAMPAIGN, Ill., Oct. 25, 2011 (GLOBE NEWSWIRE) -- Message from our President & CEO First Busey Corporation's (Nasdaq:BUSE) net income for the third quarter of 2011 was $7.6 million and net income available to common stockholders was $6.5 million, or $0.08 per fully-diluted common share, as compared to net income of $6.0 million and net income available to common stockholders of $4.7 million, or $0.07 per fully diluted share, for the comparable period in 2010. The Company's 2011 year-to-date net income was $24.1 million and net income available to common stockholders was $20.0 million, or $0.24 per fully diluted share, compared to net income of $15.9 million, net income available to common stockholders of $12.1 million and fully-diluted earnings per share of $0.18 for the comparable period in 2010. In comparison, the Company reported net income for the second quarter of 2011 of $7.4 million and net income available to common stockholders of $6.2 million, or $0.07 per fully-diluted common share. The slight increase in earnings per share from the second quarter of 2011 was attributable to the modest increase in net income available to common stockholders. A contributing factor to this increase in income was a reduction in preferred stock dividends. On August 25, 2011, the Company announced that it had exited the Troubled Asset Relief Program and issued approximately $72.6 million in preferred stock to the U.S. Department of the Treasury through the Small Business Lending Fund. These funds will be used to further enhance our business lending efforts.Balance sheet strength, profitability and growth – in that order. Asset Quality: Our non-performing loans at September 30, 2011 continued to show improvement. We expect continued gradual improvement in our overall asset quality during the remainder of 2011; however, this continues to be dependent upon market specific economic conditions. The key metrics are as follows: Non-performing loans decreased to $42.9 million at September 30, 2011 from $53.8 million at June 30, 2011 and $68.1 million at December 31, 2010. Illinois non-performing loans decreased to $25.3 million at September 30, 2011 from $27.8 million at June 30, 2011 and $38.3 million at December 31, 2010. Florida non-performing loans decreased to $13.2 million at September 30, 2011 from $19.5 million at June 30, 2011 and $23.8 million at December 31, 2010. Indiana non-performing loans decreased to $4.4 million at September 30, 2011 from $6.5 million at June 30, 2011 and $6.0 million at December 31, 2010. Loans 30-89 days past due decreased to $8.2 million at September 30, 2011 from $17.1 million at June 30, 2011 and $23.5 million at December 31, 2010. Other non-performing assets increased to $11.6 million at September 30, 2011 from $6.9 million at June 30, 2011 and $9.2 million at December 31, 2010 due to the foreclosure of four large commercial properties during the third quarter. The ratio of non-performing assets to total loans plus other real estate owned at September 30, 2011 decreased to 2.58% from 2.79% at June 30, 2011 and 3.25% at December 31, 2010. The allowance for loan losses to non-performing loans ratio increased to 148.73% at September 30, 2011 from 128.94% at June 30, 2011 and 111.64% at December 31, 2010. The allowance for loan losses to total loans ratio decreased to 3.04% at September 30, 2011 compared to 3.20% at June 30, 2011 and 3.21% at December 31, 2010. Net charge-offs totaled $10.4 million in the third quarter of 2011 as compared to $10.5 million in the second quarter of 2011 and $18.5 million in the third quarter of 2010. Provision expense of $5.0 million recorded in the third quarter of 2011 was consistent with the amount recorded in the second quarter of 2011 and was lower than the $9.5 million recorded in the third quarter of 2010.Operating Performance: Our net income increased to $7.6 million in the third quarter of 2011 as compared to $6.0 million in the third quarter of 2010, but only slightly increased from $7.4 million in the second quarter of 2011. The primary drivers of the increase in the third quarter of 2011 as compared to the comparable period in 2010 relate to lower provision for loan losses of $4.5 million and reduced regulatory expense of $1.7 million. The lower provision and regulatory expense was partially offset by declines in net interest income and sales of residential mortgage loans, resulting in an overall increase in net income of $1.6 million.      Significant operating performance items were:  Net interest income declined to $27.7 million in the third quarter of 2011, compared to $27.8 million in the second quarter of 2011 and $29.6 million in the third quarter of 2010. Net interest income for the first nine months of 2011 was $83.9 million compared to $87.7 million for the same period of 2010. The decline in net interest income for these periods was primarily related to a decline in loans, which has been partially offset by reduced funding costs. Pre-provision, pre-tax (PPPT) income increased to $16.7 million in the third quarter of 2011, compared to $16.4 million in the second quarter of 2011, but declined from $17.4 million in the third quarter of 2010. PPPT income for the first nine months of 2011 was $51.3 million compared to $53.4 million for the same period of 2010. The decline in PPPT income year over year was primarily related to a decline in net interest income partially offset by expense efficiencies including decreased regulatory expenses. Net interest margin increased to 3.57% for the third quarter of 2011 as compared to 3.54% for the second quarter of 2011, but decreased from 3.64% for the third quarter of 2010. The net interest margin of 3.55% for the first nine months of 2011 was consistent with the same period of 2010. Gains on sales of residential mortgage loans increased to $3.0 million in the third quarter of 2011 compared to $1.8 million in the second quarter of 2011, but decreased from $4.1 million in the third quarter of 2010. The increase in the third quarter versus the second quarter of 2011 was primarily due to refinancing as mortgage rates have declined to record lows during the third quarter of 2011.  Total non-interest expense of $25.7 million for the third quarter of 2011 was consistent with $25.2 million recorded for the second quarter of 2011, but decreased from $27.0 million for the third quarter of 2010. The decrease in the third quarter of 2011 as compared to the comparable period in 2010 primarily related to a decline in regulatory expense of $1.7 million as a result of the change in FDIC assessment methodology, partially offset by an increase in salary and wages and other operating expense. The efficiency ratio increased to 57.87% for the third quarter of 2011 from 57.80% for the second quarter of 2011, but improved from 58.21% for the third quarter of 2010. The efficiency ratio for the first nine months of 2011 was 57.16%, a slight improvement from 57.46% for the same period of 2010. Total revenue, net of interest expense and security gains, for the third quarter of 2011 was $42.4 million, compared to $41.6 million for the second quarter of 2011 and $44.2 million for the third quarter of 2010. Total revenue for the first nine months of 2011 was $127.9 million as compared to $132.3 million in the same period of 2010. FirsTech's net income of $0.4 million for the third quarter of 2011 remained consistent with the second quarter of 2011 and the third quarter of 2010. FirsTech's net income for the first nine months of 2011 was $1.3 million as compared to $1.5 million in the same period of 2010. Busey Wealth Management's net income of $0.7 million for the third quarter of 2011 decreased from $1.0 million for the second quarter of 2011, but was consistent with net income of $0.7 million for the third quarter of 2010. Busey Wealth Management's net income for the first nine months of 2011 was $2.4 million as compared to $2.6 million for the first nine months of 2010.Growth: As noted in prior releases, in January 2011 we embarked upon an initiative (which we call B5th) to spur organic growth by providing new tools to our front line associates. We continue to experience modest success in our retail channel from this growth initiative. We are now beginning to invest further in the growth of our business banking segment. The primary investment will be in people, both our current associates and new associates who we are actively recruiting. We are emphasizing our growth through the increased business expectations from our existing associates and hiring experienced bankers with proven track records in our markets. While maintaining our priorities of balance sheet strength and profitability, achieving meaningful organic growth is a significant focus for 2012.  The economy continues to be a headwind and we expect competition for new business banking opportunities will continue to be strong in our markets. We will continue our practice of not sacrificing the quality of our loan portfolio for the sake of growth. However, we will not allow our quality standards to be an excuse. We believe we have the best people in our markets and plan to add more. We are well positioned in our markets to grow our customer base. We are confident that we are up to this challenge and expect to see gradual improvement in loan volume in 2012. We will continue to base our efforts for organic growth on service, listening to our customers and providing appropriate solutions to their financial needs. We are also well positioned to explore external growth opportunities while simultaneously focusing on organic growth. Organic growth is a significant focus; however, we believe external growth opportunities will play an important role in our future. On October 28, 2011, we will pay a cash dividend of $0.04 per common share to stockholders of record as of October 21, 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 EndedNine Months Ended  September 30, 2011June 30, 2011September 30, 2010September 30, 2011September 30, 2010EARNINGS & PER SHARE DATA           Net income$7,570 $7,447 $6,022$24,127 $15,924 Income available to common stockholders16,521 6,164 4,73920,019 12,076 Revenue242,445 41,587 44,202127,920 132,263 Fully-diluted earnings per share0.08 0.07 0.070.24 0.18 Cash dividends paid per share0.04 0.04 0.040.12 0.12             Net income by operating segment           Busey Bank$7,068 $7,096 $5,449$22,984 $14,221 Busey Wealth Management749 974 7162,417 2,574 FirsTech381 422 4251,253 1,522            AVERAGE BALANCES           Assets$3,420,878 $3,491,237 $3,598,237$3,500,121 $3,682,753 Earning assets3,138,274 3,209,961 3,280,9873,213,540 3,361,535 Deposits2,769,255 2,823,136 2,982,5902,829,830 3,059,186 Interest-bearing liabilities2,505,838 2,569,520 2,778,2862,576,049 2,868,213 Stockholders' equity – common331,387 325,608 234,916315,643 231,692 Tangible stockholders' equity – common293,243 286,586 193,058276,624 188,766            PERFORMANCE RATIOS           Return on average assets30.76% 0.71% 0.52%0.76% 0.44% Return on average common equity37.81% 7.59% 8.00%8.48% 6.97% Return on average tangible common equity38.82% 8.63% 9.74%9.68% 8.55% Net interest margin33.57% 3.54% 3.64%3.55% 3.55% Efficiency ratio457.87% 57.80% 58.21%57.16% 57.46% Non-interest revenue as a % of total revenues234.68% 33.05% 32.96%34.40% 33.66%            ASSET QUALITY           Gross loans$2,099,314 $2,168,240 $2,518,209     Allowance for loan losses63,915 69,329 83,098     Net charge-offs10,414 10,520 18,53127,123 48,781 Allowance for loan losses to loans3.04% 3.20% 3.30%     Allowance as a percentage of non-performing loans148.73% 128.94% 104.29%     Non-performing loans           Non-accrual loans41,987 52,456 78,223     Loans 90+ days past due986 1,314 1,457     Geographically           Downstate Illinois/ Indiana29,733 34,260 56,831     Florida13,240 19,510 22,849     Loans 30-89 days past due8,247 17,057 19,322     Other non-performing assets11,577 6,855 11,470                            1 Net income available to common stockholders, net of preferred dividend and TARP discount accretion2 Net of interest expense, excludes security gains3 Quarterly ratios annualized and calculated on net income available to common stockholders4 Net of security gains and intangible charges                Condensed Consolidated Balance Sheets      (Unaudited, in thousands, except per share data)  September 30,2011 December 31, 2010 September 30, 2010Assets       Cash and due from banks $ 289,144  $ 418,965  $ 222,226 Investment securities 795,403  599,459  551,720 Net loans, including loans held for sale  2,035,399  2,292,739  2,435,110 Premises and equipment 70,179  73,218  74,362 Goodwill and other intangibles 37,589  40,242  41,263 Other assets 165,171  180,380  208,532Total assets $ 3,392,885  $ 3,605,003  $ 3,533,213        Liabilities & Stockholders' Equity       Non-interest bearing deposits $ 467,775  $ 460,661  $ 449,702 Interest-bearing deposits 2,288,686  2,455,705  2,474,503 Total deposits $ 2,756,461  $ 2,916,366  $ 2,924,205         Securities sold under agreements to repurchase 129,905  138,982  130,419 Short-term borrowings --  --   4,000 Long-term debt 19,834  43,159  52,576 Junior subordinated debt owed to unconsolidated trusts 55,000  55,000  55,000 Other liabilities 24,219  30,991  30,446Total liabilities $ 2,985,419  $ 3,184,498  $ 3,196,646Total stockholders' equity $ 407,466  $ 420,505  $ 336,567Total liabilities & stockholders' equity $ 3,392,885  $ 3,605,003  $ 3,533,213        Per Share Data      Book value per common share $ 3.87  $ 3.65  $  3.56 Tangible book value per common share $ 3.43  $ 3.14  2.94 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 September 30,Nine Months Ended September 30,  2011 20102011 2010           Interest and fees on loans $  28,243  $ 34,326 $ 87,924  $ 105,906 Interest on investment securities 4,568  4,141 13,666  13,238Total interest income $ 32,811  $ 38,467 $ 101,590  $ 119,144           Interest on deposits 4,457  7,334 14,536  26,544 Interest on short-term borrowings 96  170 327  484 Interest on long-term debt 230  629 1,212  2,313 Junior subordinated debt owed to unconsolidated trusts 301  699 1,600  2,063Total interest expense $ 5,084  $ 8,832 $ 17,675  $ 31,404          Net interest income $ 27,727  $ 29,635 $ 83,915  $ 87,740 Provision for loan losses  5,000  9,500 15,000  31,700Net interest income after provision for loan losses $ 22,727  $ 20,135 $ 68,915  $ 56,040           Trust fees 3,460  3,113 11,765  10,758 Commissions and brokers' fees 495  398 1,415   1,309 Fees for customer services 4,624  4,162 13,476  12,126 Remittance processing 2,335  2,263  7,119  7,116 Gain on sales of loans 2,977  4,104 7,444  9,984 Net security gains (losses) --   283 (2)  1,025 Other 827  527 2,786  3,230Total non-interest income $ 14,718  $ 14,850 $ 44,003  $ 45,548           Salaries and wages 11,090  10,537 30,678  30,271 Employee benefits 2,494  2,487 7,759  7,669 Net occupancy expense 2,211  2,374 6,762  6,947 Furniture and equipment expense 1,294  1,493 3,958  4,602 Data processing expense 2,145  2,008 6,425  5,855 Amortization expense 885  1,022 2,653  3,067 Regulatory expense 497  2,155 3,652   5,302 OREO expense 112  380 459  1,443 Other operating expenses 4,996  4,586 14,228  14,766Total non-interest expense $ 25,724  $ 27,042 $ 76,574  $ 79,922           Income before income taxes $ 11,721  $ 7,943 $  36,344  $ 21,666 Income taxes 4,151  1,921 12,217  5,742Net income $ 7,570  $ 6,022 $  24,127  $ 15,924 Preferred stock dividends and discount accretion 1,049  $ 1,283 $ 4,108  $ 3,848Income available for common stockholders $  6,521  $ 4,739 $ 20,019  $ 12,076          Per Share Data       Basic earnings per common share $ 0.08  $ 0.07 $ 0.24  $  0.18 Fully-diluted earnings per common share $ 0.08  $ 0.07 $ 0.24  $ 0.18 Diluted average common shares outstanding 86,608  $  66,361 84,880  $ 66,361Corporate Profile First Busey Corporation is a $3.4 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 $3.3 billion as of September 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 September 30, 2011, Busey Wealth Management had approximately $3.6 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