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Press release from GlobeNewswire (a Nasdaq OMX company)

First Busey Announces 2011 Fourth Quarter Earnings and Full Year Results

Tuesday, January 24, 2012

First Busey Announces 2011 Fourth Quarter Earnings and Full Year Results14:00 EST Tuesday, January 24, 2012 CHAMPAIGN, Ill., Jan. 24, 2012 (GLOBE NEWSWIRE) -- Message from our President & CEO First Busey Corporation's (Nasdaq:BUSE) net income for the year ended December 31, 2011 was $29.9 million and net income available to common stockholders was $24.5 million, or $0.29 per fully-diluted common share, as compared to net income of $23.2 million and net income available to common stockholders of $18.1 million, or $0.27 per fully-diluted common share, for the year ended December 31, 2010. Growth in earnings for the year was driven by improved asset quality which allowed us to reduce the Company's loan loss provision expense by $22.0 million from 2010. We made great strides in 2011; we strengthened our balance sheet and increased our net income. 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. As a participant in the Small Business Lending Fund, we will strive to further enhance our business lending efforts, especially to qualifying small businesses. At the end of the fourth quarter of 2011, the bank continued to exceed the capital adequacy requirements to be considered "well-capitalized" under the regulatory guidance. Tangible Common Equity (TCE) strengthened to $306.5 million at December 31, 2011 from $304.2 million at September 30, 2011 and $256.2 million at December 31, 2010. As a percentage of Tangible Assets, TCE expanded upward to 9.09% at December 31, 2011 from 9.05% at September 30, 2011 and 7.17% at December 31, 2010. Net income for the fourth quarter of 2011 was $5.7 million and net income available to common stockholders was $4.5 million, or $0.05 per fully-diluted common share, as compared to net income of $7.3 million and net income available to common stockholders of $6.0 million, or $0.09 per fully-diluted common share, for the comparable period in 2010. This decrease in net income resulted in part from increased spending on salaries and wages during the quarter. We expect this trend of increased spending to continue in 2012, as we begin our efforts to spur organic growth by investing in our existing employees and adding new talent to our organization. Earnings per fully-diluted common share in comparison to the prior year were also impacted by an increase of $7.5 million in common stock related to a December 2010 capital raise, and the subsequent conversion of preferred stock to common in March 2011. On January 27, 2012, we will pay a cash dividend of $0.04 per common share to stockholders of record as of January 20, 2012.Asset Quality: Our non-performing loans at December 31, 2011 demonstrated consistent improvement for the eighth consecutive quarter. In addition, they are down significantly from the peak at September 30, 2009, when non-performing loans totaled $172.5 million and the allowance for loan losses to non-performing loans ratio was 69.58%. We take great pride in the past and continued efforts to move these metrics toward optimal levels. We expect continued gradual improvement in our overall asset quality during 2012; however, this continues to be dependent upon market specific economic conditions. The key metrics are as follows: Non-performing loans decreased to $38.5 million at December 31, 2011 from $42.9 million at September 30, 2011 and $68.1 million at December 31, 2010. Illinois non-performing loans decreased to $23.0 million at December 31, 2011 from $25.3 million at September 30, 2011 and $38.3 million at December 31, 2010. Florida non-performing loans decreased to $10.8 million at December 31, 2011 from $13.2 million at September 30, 2011 and $23.8 million at December 31, 2010. Indiana non-performing loans slightly increased to $4.7 million at December 31, 2011 from $4.4 million at September 30, 2011, but decreased from $6.0 million at December 31, 2010. Loans 30-89 days past due decreased to $4.7 million at December 31, 2011 from $8.2 million at September 30, 2011 and $23.5 million at December 31, 2010. Other non-performing assets decreased to $8.5 million at December 31, 2011 from $11.6 million at September 30, 2011 and $9.2 million at December 31, 2010. The ratio of non-performing assets to total loans plus other real estate owned at December 31, 2011 decreased to 2.28% from 2.58% at September 30, 2011 and 3.25% at December 31, 2010. The allowance for loan losses to non-performing loans ratio increased to 151.91% at December 31, 2011 from 148.73% at September 30, 2011 and 111.64% at December 31, 2010. The allowance for loan losses to total loans ratio decreased to 2.85% at December 31, 2011 compared to 3.04% at September 30, 2011 and 3.21% at December 31, 2010. Net charge-offs of $10.4 million recorded in the fourth quarter of 2011 remained consistent with the amount recorded in the third quarter of 2011 and were lower than the $17.4 million recorded in the fourth quarter of 2010. Provision expense of $5.0 million recorded in the fourth quarter of 2011 was consistent with the amount recorded in the third quarter of 2011 and was lower than the $10.3 million recorded in the fourth quarter of 2010.Operating Performance: Our net income decreased to $5.7 million in the fourth quarter of 2011 as compared to $7.6 million in the third quarter of 2011 and $7.3 million in the fourth quarter of 2010. The decline in net income was primarily related to declines in net interest income and in the gain on sales of residential mortgage loans, increased salary and wages and employee benefits, and increased other operating expenses which are summarized below: Pre-provision, pre-tax (PPPT) income changes were primarily driven by the same set of factors as net income, decreasing to $13.5 million in the fourth quarter of 2011 compared to $16.7 million in the third quarter of 2011 and $21.3 million in the fourth quarter of 2010. PPPT income for the year ended December 31, 2011 was $64.8 million compared to $74.7 million for the year ended December 31, 2010. Net interest income declined to $26.5 million in the fourth quarter of 2011, compared to $27.7 million in the third quarter of 2011 and $29.4 million in the fourth quarter of 2010. Net interest income for the year ended December 31, 2011 was $110.4 million compared to $117.2 million for the year ended December 31, 2010. The decline in net interest income for these periods was primarily related to a decline in loans, which was partially offset by reduced funding costs. The company is focused on growing loans in the quarters ahead as discussed in the summary of the change in salary and wages and employee benefits below. Gains on sales of residential mortgage loans increased to $3.5 million in the fourth quarter of 2011 compared to $3.0 million in the third quarter of 2011, but decreased from a peak of $6.1 million in the fourth quarter of 2010. Gains on sales of residential mortgage loans for the year ended December 31, 2011 were $10.9 million compared to $16.1 million for the year ended December 31, 2010. Fluctuations in sales are primarily a function of changes in market rates for mortgage loans which influence refinance activity.  Salaries and wages and employee benefits increased to $14.8 million in the fourth quarter of 2011 compared to $13.6 million in the third quarter of 2011 and $13.0 million in the fourth quarter of 2010. Salary and wages and employee benefits for the year ended December 31, 2011 were $53.2 million compared to $50.9 million for the year ended December 31, 2010. This increase represents the implementation of plans to invest in talent to drive future business expansion as discussed in the prior period press release. The primary investment is, and will continue to be, concentrated in our commercial banking segment to support profitable asset growth through value-added services to commercial clients in our existing and surrounding footprint. Busey Wealth Management is beginning a similar strategy to support a diversified revenue stream and expanded client service capabilities. Other operating expenses increased to $5.4 million in the fourth quarter of 2011 compared to $4.9 million in the third quarter of 2011 and $3.5 million in the fourth quarter of 2010. Other operating expense for the year ended December 31, 2011 were $19.7 million compared to $18.3 million for the year ended December 31, 2010. The fourth quarter of 2010 included gains on sales of OREO of $1.7 million which represented the majority of the increase from 2010 to 2011. The gains in 2010 reduced the level of operating expenses in 2010, which resulted in an increase on a comparative basis to current year net expenses. Other significant operating performance items were:  Net interest margin decreased to 3.44% for the fourth quarter of 2011, as compared to 3.57% for the third quarter of 2011, and 3.68% for the fourth quarter of 2010. The net interest margin of 3.52% for the year ended December 31, 2011 was slightly lower than 3.58% for the year ended December 31, 2010. Total revenue, net of interest expense and security gains, for the fourth quarter of 2011 was $41.3 million, compared to $42.4 million for the third quarter of 2011 and $46.6 million for the fourth quarter of 2010. Total revenue for the year ended December 31, 2011 was $169.2 million as compared to $178.9 million for the year ended December 31, 2010. Total non-interest expense of $28.0 million for the fourth quarter of 2011 increased from $25.7 million recorded for the third quarter of 2011 and $25.3 million for the fourth quarter of 2010. The increase in the fourth quarter of 2011 as compared to the comparable period in 2010 primarily related to an increase in salary and wages and other operating expenses as explained in the notes to Operating Performance. These increases were offset by a decline in regulatory expense of $1.2 million as a result of the change in the FDIC's assessment methodology for financial institutions. The efficiency ratio increased to 64.83% for the fourth quarter of 2011 from 57.87% for the third quarter of 2011 and 51.51% for the fourth quarter of 2010. The efficiency ratio for the year ended December 31, 2011 was 59.03% as  compared to 55.91% for the year ended December 31, 2010. FirsTech's net income of $0.2 million for the fourth quarter of 2011 decreased from $0.4 million for the third quarter of 2011 and $0.3 million for the fourth quarter of 2010.  FirsTech's net income for the year ended December 31, 2011 was $1.4 million as compared to $1.8 million for the year ended December 31, 2010. Busey Wealth Management's net income of $0.7 million for the fourth quarter of 2011 was consistent with both the third quarter of 2011 and the fourth quarter of 2010.  Busey Wealth Management's net income for the year ended December 31, 2011 was $3.1 million as compared to $3.3 million for the year ended December 31, 2010.Balance sheet strength, profitability and growth – in that order.  As indicated by our fourth quarter results, we have begun execution on our promise to invest in associates with the goal of achieving meaningful organic growth while maintaining our priorities of balance sheet strength and profitability. Supported by new tools and techniques derived from our B5 initiative which was launched at the beginning of this year, front line associates have improved opportunities to deepen our relationship value while listening to our customers and providing appropriate solutions to their financial needs. Traction from this initiative is evident in growth for the current year in core non-interest bearing deposits and fees for customer services. Through the continued application of B5 concepts and expansion of our talent base, we plan to improve penetration in our current markets and widen our sphere of influence to surrounding areas in the coming year. We also continue to be well positioned to explore external growth opportunities. Capital strength, consistent delivery of positive earnings over the past eight quarters, and excellent progress in asset quality provides a solid foundation to embrace bold changes for the future. We are diligently formulating plans to initiate significant investment in our commercial banking and cash management businesses, as well as in Busey Wealth Management and FirsTech, to support a diversified revenue stream. In addition, credit and data processing support will be expanded in a consistent theme of maintaining high-quality standards to support continued balance sheet strength, while seeking efficient technology solutions to drive better business decisions. We believe our history of successfully serving mid-sized communities, alongside the addition of new concepts and competencies, will provide a unique advantage to 'out-big the small' and 'out-small the big' financial industry competitors by offering customers outstanding service via the Busey Promise. Our track record for doing what we say we're going to do is well documented through prior period earnings reports.  We believe the combined power of investment in our people and cutting edge client support processes will lead us to build quality earning assets, and provide a solid basis for long term strength, profitability, and growth in the years ahead. 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 EndedYear Ended  December 31,September 30,December 31,December 31,December 31, 20112011201020112010EARNINGS & PER SHARE DATA           Net income$5,746 $7,570 $7,306$29,873 $23,230 Income available to common stockholders14,512 6,521 5,98424,531 18,060 Revenue241,318 42,445 46,623169,238 178,886 Fully-diluted earnings per share0.05 0.08 0.090.29 0.27 Cash dividends paid per share0.04 0.04 0.040.16 0.16             Net income by operating segment            Busey Bank$5,520 $7,068 $7,008$28,504 $21,230  Busey Wealth Management678 749 7103,095 3,283  FirsTech184 381 2991,437 1,821           AVERAGE BALANCES           Assets$3,394,410 $3,420,878 $3,548,171$3,473,414 $3,648,831 Earning assets3,108,069 3,138,274 3,227,2073,186,956 3,327,677 Deposits2,768,045 2,769,255 2,930,6442,814,191 3,026,788 Interest-bearing liabilities2,483,787 2,505,838 2,723,6252,552,794 2,831,769 Stockholders' equity – common334,179 331,387 237,485320,315 233,152 Tangible stockholders' equity – common296,924 293,243 196,616281,740 190,744          PERFORMANCE RATIOS           Return on average assets30.53% 0.76% 0.67%0.71% 0.49% Return on average common equity35.36% 7.81% 10.00%7.66% 7.75% Return on average tangible common equity36.03% 8.82% 12.07%8.71% 9.47% Net interest margin33.44% 3.57% 3.68%3.52% 3.58% Efficiency ratio464.83% 57.87% 51.51%59.03% 55.91% Non-interest revenue as a % of total revenues235.92% 34.68% 36.92%34.77% 34.51%         ASSET QUALITY           Gross loans$2,051,344 $2,099,314 $2,368.78     Allowance for loan losses58,506 63,915 76,038     Net charge-offs10,409 10,414 17,36037,532 66,141 Allowance for loan losses to loans2.85% 3.04% 3.21%     Allowance as a percentage of non-performing loans151.91% 148.73% 111.64%     Non-performing loans            Non-accrual loans38,340 41,987 65,486      Loans 90+ days past due173 986 2,618      Geographically            Downstate Illinois/ Indiana27,748 29,733 44,281      Florida10,765 13,240 23,823     Loans 30-89 days past due4,712 8,247 23,477     Other non-performing assets8,452 11,577 9,160                         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)December 31,  September 30,  December 31,   2011 2011 2010Assets       Cash and due from banks$315,053 $289,144 $418,965 Investment securities831,749 795,403 599,459 Net loans, including loans held for sale1,992,838 2,035,399 2,292,739 Premises and equipment69,398 70,179 73,218 Goodwill and other intangibles36,704 37,589 40,242 Other assets156,380 165,171 180,380Total assets$3,402,122 $3,392,885 $3,605,003        Liabilities & Stockholders' Equity     Non-interest bearing deposits$503,118 $467,775 $460,661 Interest-bearing deposits2,260,336 2,288,686 2,455,705 Total deposits$2,763,454 $2,756,461 $2,916,366         Securities sold under agreements to repurchase127,867 129,905 138,982 Long-term debt19,417 19,834 43,159 Junior subordinated debt owed to unconsolidated trusts55,000 55,000 55,000 Other liabilities27,117 24,219 30,991Total liabilities$2,992,855 $2,985,419 $3,184,498Total stockholders' equity$409,267 $407,466 $420,505Total liabilities & stockholders' equity$3,402,122 $3,392,885 $3,605,003        Per Share Data      Book value per common share$3.89 $3.87 $3.65 Tangible book value per common share1$3.46 $3.43 $3.14 Ending number of common shares outstanding86,617 86,597 79,100               1 Total common equity less goodwill and other intangibles divided by shares outstanding as of period end.        Condensed Consolidated Statements of Operations      (Unaudited, in thousands, except per share data)Three Months Ended December 31,Year Ended December 31,  2011 20102011 2010           Interest and fees on loans$26,867 $32,954$114,791 $138,860 Interest on investment securities4,362 4,08518,028 17,323Total interest income$31,229 $37,039$132,819 $156,183           Interest on deposits4,124 6,17018,660 32,714 Interest on short-term borrowings78 156405 640 Interest on long-term debt230 6171,442 2,930 Junior subordinated debt owed to unconsolidated trusts319 6851,919 2,748Total interest expense$4,751 $7,628$22,426 $39,032          Net interest income$26,478 $29,411$110,393 $117,151 Provision for loan losses5,000 10,30020,000 42,000Net interest income after provision for loan losses$21,478 $19,111$90,393 $75,151           Trust fees3,892 3,47315,657 14,231 Commissions and brokers' fees443 4471,858 1,756 Fees for customer services4,438 4,46617,914 16,592 Remittance processing2,077 2,2339,196 9,349 Gain on sales of loans3,501 6,14610,945 16,130 Net security gains (losses)172 (7)170 1,018 Other489 4473,275 3,677Total non-interest income$15,012 $17,205$59,015 $62,753           Salaries and wages12,666 10,94843,344 41,219 Employee benefits2,137 2,0249,896 9,693 Net occupancy expense2,135 2,1888,897 9,135 Furniture and equipment expense1,319 1,3605,277 5,962 Data processing expense2,210 2,1228,635 7,977 Amortization expense885 1,0213,538 4,088 Regulatory expense457 1,6764,109 6,978 OREO expense733 4291,192 1,872 Other operating expenses5,449 3,52019,677 18,286Total non-interest expense$27,991 $25,288$104,565 $105,210           Income before income taxes$8,499 $11,028$44,843 $32,694 Income taxes2,753 3,72214,970 9,464Net income$5,746 $7,306$29,873 $23,230 Preferred stock dividends and discount accretion$1,234 $1,322$5,342 $5,170 Income available to common stockholders$4,512 $5,984$24,531 $18,060          Per Share Data       Basic earnings per common share$0.05 $0.09$0.29 $0.27 Fully-diluted earnings per common share$0.05 $0.09$0.29 $0.27 Diluted average common shares outstanding86,610 66,50385,312 66,397Corporate 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 December 31, 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 December 31, 2011, Busey Wealth Management managed approximately $3.8 billion in assets. First Busey Corporation owns a retail payment processing subsidiary, FirsTech, Inc., which processes over 22 million transactions per year through online bill payments, lockbox processing and walk-in payments through its 3,100 agent locations in 38 states. Busey Bank provides electronic delivery of financial services through its 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