First Busey Announces 2021 Third Quarter Earnings
First Busey Corporation (BUSE) reported a net income of $25.9 million for Q3 2021, with a diluted EPS of $0.46, down from $0.53 in Q2 2021 and $0.56 in Q3 2020. Adjusted net income rose to $32.8 million, or $0.58 per share. Core loan growth reached $177.1 million, excluding PPP loans. Wealth management assets under care increased to $12.36 billion, up 30.1% YoY. However, net interest margin declined to 2.41% from 2.50% in the previous quarter. The company successfully merged Glenview State Bank and initiated a Personal Banking Transformation Plan, expected to realize $3.5 million in annual cost savings.
- Net income for Q3 2021 was $25.9 million, a solid performance.
- Core organic loan growth of $177.1 million, or 2.6%, in Q3.
- Wealth management assets grew 30.1% year-over-year to $12.36 billion.
- Wealth management segment revenue increased by 5.7% in Q3 and 20.4% year-to-date.
- Profitability metrics show adjusted return on average assets of 1.03%.
- Diluted EPS decreased to $0.46 from $0.53 in Q2 2021.
- Net interest margin declined to 2.41% from 2.50% in Q2 2021.
- Total noninterest expenses increased to $73.5 million in Q3 from $62.6 million in Q2.
CHAMPAIGN, Ill., Oct. 26, 2021 (GLOBE NEWSWIRE) -- First Busey Corporation (Nasdaq: BUSE)
Message from our Chairman & CEO
Third Quarter 2021 Highlights:
- Third quarter 2021 net income of
$25.9 million and diluted EPS of$0.46 - Third quarter 2021 adjusted net income1 of
$32.8 million and adjusted diluted EPS1 of$0.58 - Core organic loan growth, excluding Paycheck Protection Program (“PPP”) loans, of
$177.1 million , or2.6% , in the third quarter. At September 30, 2021, and consistent with the second quarter, our loan pipeline is more than double what it was at the beginning of the year. - Wealth management assets under care of
$12.36 billion at September 30, 2021, up from$12.30 billion at June 30, 2021, and$9.50 billion at September 30, 2020, which represents30.1% year-over-year growth - Wealth management segment revenue growth of
5.7% in the third quarter, and20.4% year-over-year growth on a YTD basis - FirsTech, our remittance processing segment, revenue growth of
4.5% in the third quarter, and19.3% year-over-year growth on a YTD basis - Noninterest income, excluding security gains, accounted for
31.9% of total revenue in the third quarter of 2021 supported by continued growth in wealth management, customer service fees, and remittance processing - Tangible book value per common share1 of
$17.09 at September 30, 2021, compared to$17.11 at June 30, 2021, and$16.32 at September 30, 2020, an increase of4.7% year-over-year - Successfully merged Glenview State Bank into Busey Bank on August 14, 2021
- For additional information, please refer to the 3Q21 Quarterly Earnings Supplement
Third Quarter Financial Results
Net income for First Busey Corporation (“First Busey” or the “Company”) for the third quarter of 2021 was
Pre-provision net revenue1 for the third quarter of 2021 was
The Company experienced its second consecutive quarter of solid core organic loan growth, principally in commercial lending segments. The Company reported net interest income of
Third quarter 2021 results reflect a provision release, as compared to a reserve build at the onset of the coronavirus disease 2019 (“COVID-19”) pandemic. Specifically, the Company recorded a
Our fee-based businesses continue to add dynamic revenue diversification. In the third quarter of 2021, wealth management fees were
The Company views certain non-operating items, including acquisition-related and other restructuring charges, as adjustments to net income reported under U.S. generally accepted accounting principles (“GAAP”). Non-operating pretax adjustments for the third quarter of 2021 included
Acquisition of Cummins-American Corp.
Effective May 31, 2021, the Company completed its acquisition of Cummins-American Corp. (“CAC”), the holding company for Glenview State Bank (“GSB”). The partnership enhances the Company’s existing deposit, commercial banking, and wealth management presence in the Chicago-Naperville-Elgin, IL-IN-WI Metropolitan Statistical Area. First Busey operated GSB as a separate banking subsidiary from acquisition until it was merged with Busey Bank on August 14, 2021. At that time, GSB banking centers became banking centers of Busey Bank. As part of the acquisition integration plan, during the fourth quarter of 2021 the Company plans to close and consolidate two of the former GSB banking centers, which are in addition to the Personal Banking Transformation Plan outlined below. With GSB now merged and integrated, we expect to see the full contribution and synergies reflected in the Company’s financial performance in the quarters ahead.
Personal Banking Transformation Plan
After thoughtful consideration and analysis, in July 2021 the Company approved a plan to close and consolidate 15 Busey Bank banking centers to ensure a balance between the Company’s physical banking center network and its robust digital banking services. An efficient banking center footprint is necessary to keep First Busey competitive, responsive, and independent. The banking centers are expected to close in the fourth quarter of 2021. When fully realized, annualized expense savings net of expected associated revenue impacts are anticipated to be approximately
COVID-19 Update
The Company continues to navigate the economic environment caused by COVID-19 effectively and prudently and remains resolute in its focus on serving its customers, communities, and associates while protecting its balance sheet. To alleviate some of the financial hardships faced as a result of COVID-19, First Busey offered an internal Financial Relief Program to qualifying customers. As of September 30, 2021, the Company had no loans remaining on full payment deferral, and 27 commercial loans remaining on interest only payment deferrals representing
First Busey served as a bridge for the PPP, actively helping existing and new business clients sign up for this important financial resource. At September 30, 2021, First Busey had
Community Banking
First Busey’s goal of being a strong community bank for the communities it serves begins with outstanding associates. The Company is honored to be named among the 2020 Best Banks to Work For by American Banker, the 2021 Best Places to Work in Illinois by Daily Herald Business Ledger, the 2021 Best Companies to Work For in Florida by Florida Trend magazine, the 2021 Best Place to Work in Indiana by the Indiana Chamber of Commerce, and the 2020 Best Places to Work in Money Management by Pensions and Investments.
The Company remains steadfast in its commitment to the customers and communities it serves. The third quarter results are reflective of our strategic growth plans and improving economic conditions. We feel confident that we are well positioned to continue to produce growth and profitability as we move into the final quarter of 2021 and into 2022.
/s/ Van A. Dukeman
Chairman, President & Chief Executive Officer
First Busey Corporation
| SELECTED FINANCIAL HIGHLIGHTS (Unaudited) | ||||||||||||||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||||||||||
| As of and for the | As of and for the | |||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
| September | June 30, | March 31, | December | September | September | September | ||||||||||||||||||||||
| 30, 2021 | 2021 | 2021 | 31, 2020 | 30, 2020 | 30, 2021 | 30, 2020 | ||||||||||||||||||||||
| EARNINGS & PER SHARE DATA | ||||||||||||||||||||||||||||
| Net income | $ | 25,941 | $ | 29,766 | $ | 37,816 | $ | 28,345 | $ | 30,829 | $ | 93,523 | $ | 71,999 | ||||||||||||||
| Diluted earnings per share | 0.46 | 0.53 | 0.69 | 0.52 | 0.56 | 1.67 | 1.31 | |||||||||||||||||||||
| Cash dividends paid per share | 0.23 | 0.23 | 0.23 | 0.22 | 0.22 | 0.69 | 0.66 | |||||||||||||||||||||
| Pre-provision net revenue 1, 2 | 30,470 | 34,030 | 40,198 | 38,507 | 45,922 | 104,698 | 127,165 | |||||||||||||||||||||
| Revenue 3 | 103,957 | 96,655 | 94,697 | 102,580 | 102,464 | 295,309 | 297,289 | |||||||||||||||||||||
| Net income by operating segments: | ||||||||||||||||||||||||||||
| Banking | 25,124 | 29,237 | 35,528 | 28,573 | 31,744 | 89,889 | 72,653 | |||||||||||||||||||||
| Remittance Processing | 384 | 401 | 429 | 406 | 578 | 1,214 | 1,966 | |||||||||||||||||||||
| Wealth Management | 4,718 | 4,885 | 4,682 | 3,334 | 3,166 | 14,285 | 9,847 | |||||||||||||||||||||
| AVERAGE BALANCES | ||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 1,009,750 | $ | 647,465 | $ | 536,457 | $ | 551,844 | $ | 836,097 | $ | 732,958 | $ | 626,222 | ||||||||||||||
| Investment securities | 3,721,740 | 3,031,250 | 2,561,680 | 2,077,284 | 1,824,327 | 3,109,140 | 1,760,461 | |||||||||||||||||||||
| Loans held for sale | 15,589 | 22,393 | 31,373 | 52,745 | 104,965 | 23,060 | 91,964 | |||||||||||||||||||||
| Portfolio loans | 7,133,108 | 6,889,551 | 6,736,664 | 6,990,414 | 7,160,757 | 6,921,226 | 7,012,497 | |||||||||||||||||||||
| Interest-earning assets | 11,730,637 | 10,448,417 | 9,752,294 | 9,557,265 | 9,805,948 | 10,651,386 | 9,371,157 | |||||||||||||||||||||
| Total assets | 12,697,795 | 11,398,655 | 10,594,245 | 10,419,364 | 10,680,995 | 11,571,270 | 10,249,578 | |||||||||||||||||||||
| Noninterest bearing deposits | 3,365,823 | 2,970,890 | 2,688,845 | 2,545,830 | 2,592,130 | 3,010,999 | 2,303,538 | |||||||||||||||||||||
| Interest-bearing deposits | 7,253,242 | 6,432,336 | 6,033,613 | 5,985,020 | 6,169,377 | 6,577,531 | 6,108,605 | |||||||||||||||||||||
| Total deposits | 10,619,065 | 9,403,226 | 8,722,458 | 8,530,850 | 8,761,507 | 9,588,530 | 8,412,143 | |||||||||||||||||||||
| Securities sold under agreements to repurchase | 221,813 | 204,417 | 184,694 | 194,610 | 190,046 | 203,777 | 185,528 | |||||||||||||||||||||
| Interest-bearing liabilities | 7,842,805 | 6,966,046 | 6,521,195 | 6,482,475 | 6,694,561 | 7,114,856 | 6,578,587 | |||||||||||||||||||||
| Total liabilities | 11,346,379 | 10,055,884 | 9,318,551 | 9,158,066 | 9,432,547 | 10,247,699 | 9,016,230 | |||||||||||||||||||||
| Stockholders' equity - common | 1,351,416 | 1,342,771 | 1,275,694 | 1,261,298 | 1,248,448 | 1,323,571 | 1,233,348 | |||||||||||||||||||||
| Tangible stockholders' equity - common 2 | 970,531 | 974,062 | 913,001 | 896,178 | 880,958 | 952,742 | 863,547 | |||||||||||||||||||||
| PERFORMANCE RATIOS | ||||||||||||||||||||||||||||
| Pre-provision net revenue to average assets 1, 2 | 0.95 | % | 1.20 | % | 1.54 | % | 1.47 | % | 1.71 | % | 1.21 | % | 1.66 | % | ||||||||||||||
| Return on average assets | 0.81 | % | 1.05 | % | 1.45 | % | 1.08 | % | 1.15 | % | 1.08 | % | 0.94 | % | ||||||||||||||
| Return on average common equity | 7.62 | % | 8.89 | % | 12.02 | % | 8.94 | % | 9.82 | % | 9.45 | % | 7.80 | % | ||||||||||||||
| Return on average tangible common equity 2 | 10.60 | % | 12.26 | % | 16.80 | % | 12.58 | % | 13.92 | % | 13.12 | % | 11.14 | % | ||||||||||||||
| Net interest margin 2, 4 | 2.41 | % | 2.50 | % | 2.72 | % | 3.06 | % | 2.86 | % | 2.54 | % | 3.02 | % | ||||||||||||||
| Efficiency ratio 2 | 67.27 | % | 61.68 | % | 54.67 | % | 59.70 | % | 52.42 | % | 61.40 | % | 54.30 | % | ||||||||||||||
| Noninterest revenue as a % of total revenues 3 | 31.94 | % | 33.22 | % | 31.47 | % | 28.90 | % | 31.92 | % | 32.21 | % | 29.36 | % | ||||||||||||||
| NON-GAAP FINANCIAL INFORMATION | ||||||||||||||||||||||||||||
| Adjusted pre-provision net revenue 1, 2 | $ | 39,409 | $ | 37,486 | $ | 42,753 | $ | 47,156 | $ | 48,701 | $ | 119,648 | $ | 133,360 | ||||||||||||||
| Adjusted net income 2 | 32,845 | 31,921 | 38,065 | 34,255 | 32,803 | 102,831 | 74,473 | |||||||||||||||||||||
| Adjusted diluted earnings per share 2 | 0.58 | 0.57 | 0.69 | 0.62 | 0.60 | 1.84 | 1.36 | |||||||||||||||||||||
| Adjusted pre-provision net revenue to average assets 2 | 1.23 | % | 1.32 | % | 1.64 | % | 1.80 | % | 1.81 | % | 1.38 | % | 1.74 | % | ||||||||||||||
| Adjusted return on average assets 2 | 1.03 | % | 1.12 | % | 1.46 | % | 1.31 | % | 1.22 | % | 1.19 | % | 0.97 | % | ||||||||||||||
| Adjusted return on average tangible common equity 2 | 13.43 | % | 13.14 | % | 16.91 | % | 15.21 | % | 14.81 | % | 14.43 | % | 11.52 | % | ||||||||||||||
| Adjusted net interest margin 2, 4 | 2.35 | % | 2.43 | % | 2.63 | % | 2.96 | % | 2.75 | % | 2.46 | % | 2.91 | % | ||||||||||||||
| Adjusted efficiency ratio 2 | 58.97 | % | 58.89 | % | 54.33 | % | 52.39 | % | 49.97 | % | 57.46 | % | 53.24 | % | ||||||||||||||
| 1 Net interest income plus noninterest income, excluding security gains and losses, less noninterest expense. | ||||||||||||||||||||||||||||
| 2 See “Non-GAAP Financial Information” for reconciliation. | ||||||||||||||||||||||||||||
| 3 Revenue consists of net interest income plus noninterest income, excluding security gains and losses. | ||||||||||||||||||||||||||||
| 4 On a tax-equivalent basis, assuming a federal income tax rate of | ||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||
| September | June 30, | March 31, | December 31, | September | ||||||||||||||||
| 30, 2021 | 2021 | 2021 | 2020 | 30, 2020 | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and cash equivalents | $ | 883,845 | $ | 920,810 | $ | 404,802 | $ | 688,537 | $ | 479,721 | ||||||||||
| Investment securities | 4,010,256 | 3,478,467 | 2,804,101 | 2,266,717 | 2,098,657 | |||||||||||||||
| Loans held for sale | 20,225 | 17,834 | 38,272 | 42,813 | 87,772 | |||||||||||||||
| Commercial loans | 5,431,342 | 5,475,461 | 5,402,970 | 5,368,897 | 5,600,705 | |||||||||||||||
| Retail real estate and retail other loans | 1,719,293 | 1,710,189 | 1,376,330 | 1,445,280 | 1,520,606 | |||||||||||||||
| Portfolio loans | 7,150,635 | 7,185,650 | 6,779,300 | 6,814,177 | 7,121,311 | |||||||||||||||
| Allowance for credit losses | (92,802 | ) | (95,410 | ) | (93,943 | ) | (101,048 | ) | (98,841 | ) | ||||||||||
| Premises and equipment | 142,031 | 145,437 | 132,669 | 135,191 | 144,001 | |||||||||||||||
| Goodwill and other intangibles | 378,891 | 381,795 | 361,120 | 363,521 | 365,960 | |||||||||||||||
| Right of use asset | 11,068 | 8,228 | 7,333 | 7,714 | 7,251 | |||||||||||||||
| Other assets | 395,181 | 372,638 | 325,909 | 326,425 | 333,796 | |||||||||||||||
| Total assets | $ | 12,899,330 | $ | 12,415,449 | $ | 10,759,563 | $ | 10,544,047 | $ | 10,539,628 | ||||||||||
| LIABILITIES & STOCKHOLDERS' EQUITY | ||||||||||||||||||||
| Noninterest bearing deposits | $ | 3,453,906 | $ | 3,186,650 | $ | 2,859,492 | $ | 2,552,039 | $ | 2,595,075 | ||||||||||
| Interest checking, savings, and money market deposits | 6,337,026 | 6,034,871 | 4,991,887 | 5,006,462 | 4,819,859 | |||||||||||||||
| Time deposits | 1,026,935 | 1,115,596 | 1,022,468 | 1,119,348 | 1,227,767 | |||||||||||||||
| Total deposits | $ | 10,817,867 | $ | 10,337,117 | $ | 8,873,847 | $ | 8,677,849 | $ | 8,642,701 | ||||||||||
| Securities sold under agreements to repurchase | $ | 241,242 | $ | 207,266 | $ | 210,132 | $ | 175,614 | $ | 201,641 | ||||||||||
| Short-term borrowings | 17,673 | 30,168 | 4,663 | 4,658 | 4,651 | |||||||||||||||
| Long-term debt | 271,780 | 274,788 | 226,797 | 226,792 | 226,801 | |||||||||||||||
| Junior subordinated debt owed to unconsolidated trusts | 71,593 | 71,551 | 71,509 | 71,468 | 71,427 | |||||||||||||||
| Lease liability | 11,120 | 8,280 | 7,380 | 7,757 | 7,342 | |||||||||||||||
| Other liabilities | 134,979 | 140,588 | 99,413 | 109,840 | 129,360 | |||||||||||||||
| Total liabilities | $ | 11,566,254 | $ | 11,069,758 | $ | 9,493,741 | $ | 9,273,978 | $ | 9,283,923 | ||||||||||
| Total stockholders' equity | $ | 1,333,076 | $ | 1,345,691 | $ | 1,265,822 | $ | 1,270,069 | $ | 1,255,705 | ||||||||||
| Total liabilities & stockholders' equity | $ | 12,899,330 | $ | 12,415,449 | $ | 10,759,563 | $ | 10,544,047 | $ | 10,539,628 | ||||||||||
| SHARE DATA | ||||||||||||||||||||
| Book value per common share | $ | 23.88 | $ | 23.89 | $ | 23.29 | $ | 23.34 | $ | 23.03 | ||||||||||
| Tangible book value per common share 1 | $ | 17.09 | $ | 17.11 | $ | 16.65 | $ | 16.66 | $ | 16.32 | ||||||||||
| Ending number of common shares outstanding | 55,826,984 | 56,330,616 | 54,345,379 | 54,404,379 | 54,522,231 | |||||||||||||||
| 1 See "Non-GAAP Financial Information" for reconciliation, excludes tax effect of other intangible assets. | ||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| INTEREST INCOME | ||||||||||||||||
| Interest and fees on loans held for sale and portfolio | $ | 65,163 | $ | 69,809 | $ | 189,132 | $ | 213,434 | ||||||||
| Interest on investment securities | 12,239 | 9,607 | 31,894 | 30,265 | ||||||||||||
| Other interest income | 462 | 213 | 857 | 1,596 | ||||||||||||
| Total interest income | $ | 77,864 | $ | 79,629 | $ | 221,883 | $ | 245,295 | ||||||||
| INTEREST EXPENSE | ||||||||||||||||
| Interest on deposits | $ | 3,059 | $ | 6,105 | $ | 10,086 | $ | 26,053 | ||||||||
| Interest on securities sold under agreements to repurchase | 60 | 88 | 177 | 596 | ||||||||||||
| Interest on short-term borrowings | 112 | 30 | 195 | 215 | ||||||||||||
| Interest on long-term debt | 3,150 | 2,913 | 9,050 | 6,212 | ||||||||||||
| Junior subordinated debt owed to unconsolidated trusts | 728 | 740 | 2,185 | 2,220 | ||||||||||||
| Total interest expense | $ | 7,109 | $ | 9,876 | $ | 21,693 | $ | 35,296 | ||||||||
| Net interest income | $ | 70,755 | $ | 69,753 | $ | 200,190 | $ | 209,999 | ||||||||
| Provision for loan losses | (1,869 | ) | 5,549 | (10,365 | ) | 35,656 | ||||||||||
| Net interest income after provision for loan losses | $ | 72,624 | $ | 64,204 | $ | 210,555 | $ | 174,343 | ||||||||
| NONINTEREST INCOME | ||||||||||||||||
| Wealth management fees | $ | 13,749 | $ | 10,548 | $ | 39,335 | $ | 32,296 | ||||||||
| Fees for customer services | 9,288 | 8,014 | 25,936 | 23,400 | ||||||||||||
| Remittance processing | 4,355 | 3,995 | 13,122 | 11,466 | ||||||||||||
| Mortgage revenue | 1,740 | 5,793 | 6,153 | 9,879 | ||||||||||||
| Income on bank owned life insurance | 999 | 1,022 | 3,439 | 4,361 | ||||||||||||
| Net security gains (losses) | 57 | (426 | ) | 2,596 | 476 | |||||||||||
| Other | 3,071 | 3,339 | 7,134 | 5,888 | ||||||||||||
| Total noninterest income | $ | 33,259 | $ | 32,285 | $ | 97,715 | $ | 87,766 | ||||||||
| NONINTEREST EXPENSE | ||||||||||||||||
| Salaries, wages, and employee benefits | $ | 41,949 | $ | 32,839 | $ | 107,222 | $ | 95,397 | ||||||||
| Data processing expense | 7,782 | 3,937 | 16,881 | 12,383 | ||||||||||||
| Net occupancy expense | 4,797 | 4,256 | 13,606 | 13,419 | ||||||||||||
| Furniture and equipment expense | 2,208 | 2,325 | 6,300 | 7,311 | ||||||||||||
| Professional fees | 1,361 | 1,698 | 5,617 | 5,508 | ||||||||||||
| Amortization expense | 3,149 | 2,493 | 8,200 | 7,569 | ||||||||||||
| Interchange expense | 1,434 | 1,223 | 4,360 | 3,590 | ||||||||||||
| Other operating expenses | 10,807 | 7,771 | 28,425 | 24,947 | ||||||||||||
| Total noninterest expense | $ | 73,487 | $ | 56,542 | $ | 190,611 | $ | 170,124 | ||||||||
| Income before income taxes | $ | 32,396 | $ | 39,947 | $ | 117,659 | $ | 91,985 | ||||||||
| Income taxes | 6,455 | 9,118 | 24,136 | 19,986 | ||||||||||||
| Net income | $ | 25,941 | $ | 30,829 | $ | 93,523 | $ | 71,999 | ||||||||
| SHARE DATA | ||||||||||||||||
| Basic earnings per common share | $ | 0.46 | $ | 0.56 | $ | 1.69 | $ | 1.32 | ||||||||
| Fully-diluted earnings per common share | $ | 0.46 | $ | 0.56 | $ | 1.67 | $ | 1.31 | ||||||||
| Average common shares outstanding | 56,227,816 | 54,585,998 | 55,256,348 | 54,579,088 | ||||||||||||
| Diluted average common shares outstanding | 56,832,518 | 54,737,920 | 55,872,835 | 54,796,354 | ||||||||||||
Balance Sheet Growth
Our balance sheet remains a source of strength. Total assets were
Average portfolio loans were
Total deposits were
Net Interest Margin2 and Net Interest Income
Net interest margin for the third quarter of 2021 was
The Federal Open Market Committee rate cuts during the first quarter of 2020 have contributed to the decline in net interest margin over the past year, as assets, in particular commercial loans, repriced more quickly and to a greater extent than liabilities. The net interest margin has also been negatively impacted by the sizeable balance of lower-yielding PPP loans, significant growth in the Company’s liquidity position, and the issuance of debt. Those impacts were partially offset by the Company’s efforts to lower deposit funding costs as well as the fees recognized related to PPP loans. Factors contributing to the 9 basis point decline in net interest margin during the third quarter of 2021 include:
- Interest earning assets rate/volume mix contributed -12 basis points
- Reduced recognition of purchase accounting accretion contributed -1 basis points
- PPP contributions improved +1 basis points
- Funding costs improved +3 basis points
The majority of the compression attributable to the interest earning assets rate/volume mix results from the consolidation of the GSB acquisition for a full quarter (approximately 9 basis points).
Asset Quality
Credit quality continues to be exceptionally strong. Loans 30-89 days past due were
Net charge-offs totaled
As a matter of policy and practice, the Company limits the level of concentration exposure in any particular loan segment and maintains a well-diversified loan portfolio.
| ASSET QUALITY (Unaudited) | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| As of and for the Three Months Ended | ||||||||||||||||||||
| September | June 30, | March 31, | December 31, | September | ||||||||||||||||
| 30, 2021 | 2021 | 2021 | 2020 | 30, 2020 | ||||||||||||||||
| ASSET QUALITY | ||||||||||||||||||||
| Portfolio loans | $ | 7,150,635 | $ | 7,185,650 | $ | 6,779,300 | $ | 6,814,177 | $ | 7,121,311 | ||||||||||
| Portfolio loans excluding amortized cost of PPP loans | 6,972,404 | 6,795,255 | 6,257,196 | 6,367,774 | 6,384,916 | |||||||||||||||
| Loans 30-89 days past due | 6,446 | 3,888 | 9,929 | 7,578 | 6,708 | |||||||||||||||
| Non-performing loans: | ||||||||||||||||||||
| Non-accrual loans | 25,369 | 27,725 | 21,706 | 22,930 | 23,898 | |||||||||||||||
| Loans 90+ days past due and still accruing | 491 | 590 | 1,149 | 1,371 | 279 | |||||||||||||||
| Total non-performing loans | $ | 25,860 | $ | 28,315 | $ | 22,855 | $ | 24,301 | $ | 24,177 | ||||||||||
| Total non-performing loans, segregated by geography: | ||||||||||||||||||||
| Illinois / Indiana | $ | 17,824 | $ | 21,398 | $ | 15,457 | $ | 16,234 | $ | 15,097 | ||||||||||
| Missouri | 6,736 | 5,645 | 6,170 | 6,764 | 6,867 | |||||||||||||||
| Florida | 1,300 | 1,272 | 1,228 | 1,303 | 2,213 | |||||||||||||||
| Other non-performing assets | 3,184 | 3,137 | 4,292 | 4,571 | 4,978 | |||||||||||||||
| Total non-performing assets | $ | 29,044 | $ | 31,452 | $ | 27,147 | $ | 28,872 | $ | 29,155 | ||||||||||
| Total non-performing assets to total assets | 0.23 | % | 0.25 | % | 0.25 | % | 0.27 | % | 0.28 | % | ||||||||||
| Total non-performing assets to portfolio loans and non-performing assets | 0.41 | % | 0.44 | % | 0.40 | % | 0.42 | % | 0.41 | % | ||||||||||
| Allowance for credit losses to portfolio loans | 1.30 | % | 1.33 | % | 1.39 | % | 1.48 | % | 1.39 | % | ||||||||||
| Allowance for credit losses to portfolio loans, excluding PPP | 1.33 | % | 1.40 | % | 1.50 | % | 1.59 | % | 1.55 | % | ||||||||||
| Allowance for credit losses as a percentage of non-performing loans | 358.86 | % | 336.96 | % | 411.04 | % | 415.82 | % | 408.82 | % | ||||||||||
| Net charge-offs (recoveries) | $ | 739 | $ | 1,011 | $ | 309 | $ | 934 | $ | 2,754 | ||||||||||
| Provision | (1,869 | ) | (1,700 | ) | (6,796 | ) | 3,141 | 5,549 | ||||||||||||
Noninterest Income
Total noninterest income increased to
Wealth management fees were
Remittance processing revenue from the Company’s subsidiary, FirsTech, Inc., was
Fees for customer services increased to
Mortgage revenue was
Operating Efficiency
Total noninterest expense was
Noteworthy components of noninterest expense are as follows:
- Salaries, wages, and employee benefits were
$41.9 million in the third quarter of 2021, an increase from$34.9 million in the second quarter of 2021 and$32.8 million from the third quarter of 2020. Total full-time equivalents at September 30, 2021, numbered 1,462 compared to 1,503 at June 30, 2021, and 1,371 at September 30, 2020. The Company recorded$4.7 million of non-operating salaries, wages, and employee benefit expenses in the third quarter of 2021, as compared to$1.1 million in the second quarter of 2021 and$2.0 million in the third quarter of 2020. The second quarter of 2021 included salaries, wages, and employee benefit expenses for GSB for one month, whereas the third quarter included these expenses for the full quarter, partially offset by the synergies beginning in August after the banks were merged.
- Data processing expense increased to
$7.8 million in the third quarter of 2021, compared to$4.8 million in the second quarter of 2021 and$3.9 million in the third quarter of 2020. The Company recorded$3.2 million of non-operating data processing expenses in the third quarter of 2021, compared to$0.4 million in the second quarter of 2021.
- Professional fees decreased to
$1.4 million in the third quarter of 2021, compared to$2.3 million in the second quarter of 2021 and$1.7 million in the third quarter of 2020. The Company recorded$0.1 million of non-operating professional fees in the third quarter of 2021, compared to$0.9 million in the second quarter of 2021 and$0.2 million in the third quarter of 2020.
- Amortization expense increased to
$3.1 million in the third quarter of 2021, compared to$2.7 million in the second quarter of 2021 and$2.5 million in the third quarter of 2020. The third quarter of 2021 includes a full quarter of amortization expense related to GSB.
- Other operating expense increased to
$10.8 million for the third quarter of 2021, compared to$10.2 million in the second quarter of 2021 and$7.8 million in the third quarter of 2020. The third quarter 2021 increase was across multiple expense categories. The Company recorded$0.6 million of non-operating expenses within the other operating expense line in the third quarter of 2021, compared to$0.2 million in the second quarter of 2021 and$0.4 million in the third quarter of 2020.
Capital Strength
The Company's strong capital levels, coupled with its earnings, have allowed First Busey to provide a steady return to its stockholders through dividends. The Company will pay a cash dividend on October 29, 2021, of
As of September 30, 2021, the Company continued to exceed the capital adequacy requirements necessary to be considered “well-capitalized” under applicable regulatory guidelines. The Company’s tangible common equity5 (“TCE”) was
During the third quarter of 2021, the Company purchased 625,000 shares of its common stock at a weighted average price of
3Q21 Quarterly Earnings Supplement
For additional information on the Company’s response to COVID-19, financial condition, and operating results, please refer to the 3Q21 Quarterly Earnings Supplement presentation furnished via Form 8-K on October 26, 2021, in connection with this earnings release.
Corporate Profile
As of September 30, 2021, First Busey Corporation (Nasdaq: BUSE) was a
Busey Bank, a wholly-owned bank subsidiary of First Busey Corporation, had total assets of
Busey Bank owns a retail payment processing subsidiary, FirsTech, Inc., which processes approximately 30 million transactions for a total of
Through the Company’s Wealth Management division, the Company provides asset management, investment, and fiduciary services to individuals, businesses, and foundations. As of September 30, 2021, assets under care were
First Busey has been named a Best Place to Work across the company footprint since 2016 by Best Companies Group. We are honored to be consistently recognized by national and local organizations for our engaged culture of integrity and commitment to community development.
For more information about us, visit busey.com.
Category: Financial
Source: First Busey Corporation
Contacts:
Jeffrey D. Jones, Chief Financial Officer
217-365-4130
Non-GAAP Financial Information
This earnings release contains certain financial information determined by methods other than GAAP. These measures include adjusted pre-provision net revenue, adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted net interest margin, efficiency ratio, adjusted efficiency ratio, tangible common equity, tangible common equity to tangible assets, tangible book value per share, and return on average tangible common equity. Management uses these non-GAAP measures, together with the related GAAP measures, in analysis of the Company’s performance and in making business decisions. Management also uses these measures for peer comparisons.
A reconciliation to what management believes to be the most direct compared GAAP financial measures, specifically total net interest income in the case of adjusted pre-provision net revenue; net income in the case of adjusted net income, adjusted diluted earnings per share, and adjusted return on average assets; total net interest income in the case of adjusted net interest margin; total noninterest income and total noninterest expense in the case of efficiency ratio and adjusted efficiency ratio; and total stockholders’ equity in the case of tangible common equity, tangible common equity to tangible assets, tangible book value per share, and return on average tangible common equity, appears below. The Company believes the adjusted measures are useful for investors and management to understand the effects of certain non-recurring noninterest items and provide additional perspective on the Company’s performance over time as well as comparison to the Company’s peers.
These non-GAAP disclosures have inherent limitations and are not audited. They should not be considered in isolation or as a substitute for the results reported in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Tax effected numbers included in these non-GAAP disclosures are based on estimated statutory rates or effective rates as appropriate.
| Reconciliation of Non-GAAP Financial Measures – Adjusted Pre-Provision Net Revenue (Unaudited) | ||||||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September | June 30, | September | September | September | ||||||||||||||||
| 30, 2021 | 2021 | 30, 2020 | 30, 2021 | 30, 2020 | ||||||||||||||||
| Net interest income | $ | 70,755 | $ | 64,542 | $ | 69,753 | $ | 200,190 | $ | 209,999 | ||||||||||
| Noninterest income | 33,259 | 33,011 | 32,285 | 97,715 | 87,766 | |||||||||||||||
| Less securities (gains) and losses, net | (57 | ) | (898 | ) | 426 | (2,596 | ) | (476 | ) | |||||||||||
| Noninterest expense | (73,487 | ) | (62,625 | ) | (56,542 | ) | (190,611 | ) | (170,124 | ) | ||||||||||
| Pre-provision net revenue | 30,470 | 34,030 | 45,922 | 104,698 | 127,165 | |||||||||||||||
| Adjustments to pre-provision net revenue: | ||||||||||||||||||||
| Acquisition and other restructuring expenses | 8,677 | 2,713 | 2,529 | 11,710 | 3,161 | |||||||||||||||
| Provision for unfunded commitments | (978 | ) | (496 | ) | 250 | (1,068 | ) | 1,834 | ||||||||||||
| New Market Tax Credit amortization | 1,240 | 1,239 | — | 4,308 | 1,200 | |||||||||||||||
| Adjusted pre-provision net revenue | $ | 39,409 | $ | 37,486 | $ | 48,701 | $ | 119,648 | $ | 133,360 | ||||||||||
| Average total assets | $ | 12,697,795 | $ | 11,398,655 | $ | 10,680,995 | $ | 11,571,270 | $ | 10,249,578 | ||||||||||
| Reported: Pre-provision net revenue to average assets 1 | 0.95 | % | 1.20 | % | 1.71 | % | 1.21 | % | 1.66 | % | ||||||||||
| Adjusted: Pre-provision net revenue to average assets 1 | 1.23 | % | 1.32 | % | 1.81 | % | 1.38 | % | 1.74 | % | ||||||||||
| 1 Annualized measure. | ||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures – Adjusted Net Income, Adjusted Diluted Earnings Per Share, and Adjusted Return on Average Assets (Unaudited) | ||||||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September | June 30, | September | September | September | ||||||||||||||||
| 30, 2021 | 2021 | 30, 2020 | 30, 2021 | 30, 2020 | ||||||||||||||||
| Net income | $ | 25,941 | $ | 29,766 | $ | 30,829 | $ | 93,523 | $ | 71,999 | ||||||||||
| Adjustments to net income: | ||||||||||||||||||||
| Acquisition expenses: | ||||||||||||||||||||
| Salaries, wages, and employee benefits | 4,462 | 1,125 | — | 5,587 | — | |||||||||||||||
| Data processing | 3,182 | 368 | — | 3,557 | — | |||||||||||||||
| Lease or fixed asset impairment | — | — | 234 | — | 234 | |||||||||||||||
| Professional fees, occupancy, and other | 776 | 1,220 | 99 | 2,309 | 385 | |||||||||||||||
| Other restructuring costs: | ||||||||||||||||||||
| Salaries, wages, and employee benefits | 257 | — | 2,011 | 257 | 2,357 | |||||||||||||||
| Professional fees, occupancy, and other | — | — | 185 | — | 185 | |||||||||||||||
| Related tax benefit | (1,773 | ) | (558 | ) | (555 | ) | (2,402 | ) | (687 | ) | ||||||||||
| Adjusted net income | $ | 32,845 | $ | 31,921 | $ | 32,803 | $ | 102,831 | $ | 74,473 | ||||||||||
| Dilutive average common shares outstanding | 56,832,518 | 55,730,883 | 54,737,920 | 55,872,835 | 54,796,354 | |||||||||||||||
| Reported: Diluted earnings per share | $ | 0.46 | $ | 0.53 | $ | 0.56 | $ | 1.67 | $ | 1.31 | ||||||||||
| Adjusted: Diluted earnings per share | $ | 0.58 | $ | 0.57 | $ | 0.60 | $ | 1.84 | $ | 1.36 | ||||||||||
| Average total assets | $ | 12,697,795 | $ | 11,398,655 | $ | 10,680,995 | $ | 11,571,270 | $ | 10,249,578 | ||||||||||
| Reported: Return on average assets 1 | 0.81 | % | 1.05 | % | 1.15 | % | 1.08 | % | 0.94 | % | ||||||||||
| Adjusted: Return on average assets 1 | 1.03 | % | 1.12 | % | 1.22 | % | 1.19 | % | 0.97 | % | ||||||||||
| 1 Annualized measure. | ||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures – Adjusted Net Interest Margin (Unaudited) | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September | June 30, | September | September | September | ||||||||||||||||
| 30, 2021 | 2021 | 30, 2020 | 30, 2021 | 30, 2020 | ||||||||||||||||
| Net interest income | $ | 70,755 | $ | 64,542 | $ | 69,753 | $ | 200,190 | $ | 209,999 | ||||||||||
| Adjustments to net interest income: | ||||||||||||||||||||
| Tax-equivalent adjustment | 598 | 579 | 638 | 1,778 | 2,085 | |||||||||||||||
| Purchase accounting accretion related to business combinations | (1,799 | ) | (1,726 | ) | (2,618 | ) | (5,682 | ) | (7,922 | ) | ||||||||||
| Adjusted net interest income | $ | 69,554 | $ | 63,395 | $ | 67,773 | $ | 196,286 | $ | 204,162 | ||||||||||
| Average interest-earning assets | $ | 11,730,637 | $ | 10,448,417 | $ | 9,805,948 | $ | 10,651,386 | $ | 9,371,157 | ||||||||||
| Reported: Net interest margin 1 | 2.41 | % | 2.50 | % | 2.86 | % | 2.54 | % | 3.02 | % | ||||||||||
| Adjusted: Net interest margin 1 | 2.35 | % | 2.43 | % | 2.75 | % | 2.46 | % | 2.91 | % | ||||||||||
| 1 Annualized measure. | ||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures – Efficiency Ratio and Adjusted Efficiency Ratio (Unaudited) | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September | June 30, | September | September | September | ||||||||||||||||
| 30, 2021 | 2021 | 30, 2020 | 30, 2021 | 30, 2020 | ||||||||||||||||
| Net interest income | $ | 70,755 | $ | 64,542 | $ | 69,753 | $ | 200,190 | $ | 209,999 | ||||||||||
| Tax-equivalent adjustment | 598 | 579 | 638 | 1,778 | 2,085 | |||||||||||||||
| Tax equivalent interest income | $ | 71,353 | $ | 65,121 | $ | 70,391 | $ | 201,968 | $ | 212,084 | ||||||||||
| Noninterest income | $ | 33,259 | $ | 33,011 | $ | 32,285 | $ | 97,715 | $ | 87,766 | ||||||||||
| Less security (gains) and losses, net | (57 | ) | (898 | ) | 426 | (2,596 | ) | (476 | ) | |||||||||||
| Adjusted noninterest income | $ | 33,202 | $ | 32,113 | $ | 32,711 | $ | 95,119 | $ | 87,290 | ||||||||||
| Noninterest expense | $ | 73,487 | $ | 62,625 | $ | 56,542 | $ | 190,611 | $ | 170,124 | ||||||||||
| Non-operating adjustments: | ||||||||||||||||||||
| Salaries, wages, and employee benefits | (4,719 | ) | (1,125 | ) | (2,011 | ) | (5,844 | ) | (2,357 | ) | ||||||||||
| Data processing | (3,182 | ) | (368 | ) | — | (3,557 | ) | — | ||||||||||||
| Impairment, professional fees, occupancy, and other | (776 | ) | (1,220 | ) | (518 | ) | (2,309 | ) | (804 | ) | ||||||||||
| Noninterest expense, excluding non-operating adjustments | 64,810 | 59,912 | 54,013 | 178,901 | 166,963 | |||||||||||||||
| Amortization of intangible assets | (3,149 | ) | (2,650 | ) | (2,493 | ) | (8,200 | ) | (7,569 | ) | ||||||||||
| Adjusted noninterest expense | $ | 61,661 | $ | 57,262 | $ | 51,520 | $ | 170,701 | $ | 159,394 | ||||||||||
| Reported: Efficiency ratio | 67.27 | % | 61.68 | % | 52.42 | % | 61.40 | % | 54.30 | % | ||||||||||
| Adjusted: Efficiency ratio | 58.97 | % | 58.89 | % | 49.97 | % | 57.46 | % | 53.24 | % | ||||||||||
| Reconciliation of Non-GAAP Financial Measures – Tangible common equity, Tangible common equity to tangible assets, Tangible book value per share, Return on average tangible common equity (Unaudited) | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| As of and for the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||
| September | June 30, | September | September | September | ||||||||||||||||
| 30, 2021 | 2021 | 30, 2020 | 30, 2021 | 30, 2020 | ||||||||||||||||
| Total assets | $ | 12,899,330 | $ | 12,415,449 | $ | 10,539,628 | ||||||||||||||
| Goodwill and other intangible assets, net | (378,891 | ) | (381,795 | ) | (365,960 | ) | ||||||||||||||
| Tax effect of other intangible assets, net | 17,115 | 17,997 | 15,239 | |||||||||||||||||
| Tangible assets | $ | 12,537,554 | $ | 12,051,651 | $ | 10,188,907 | ||||||||||||||
| Total stockholders’ equity | $ | 1,333,076 | $ | 1,345,691 | $ | 1,255,705 | ||||||||||||||
| Goodwill and other intangible assets, net | (378,891 | ) | (381,795 | ) | (365,960 | ) | ||||||||||||||
| Tax effect of other intangible assets, net | 17,115 | 17,997 | 15,239 | |||||||||||||||||
| Tangible common equity | $ | 971,300 | $ | 981,893 | $ | 904,984 | ||||||||||||||
| Ending number of common shares outstanding | 55,826,984 | 56,330,616 | 54,522,231 | |||||||||||||||||
| Tangible common equity to tangible assets 1 | 7.75 | % | 8.15 | % | 8.88 | % | ||||||||||||||
| Tangible book value per share | $ | 17.09 | $ | 17.11 | $ | 16.32 | ||||||||||||||
| Average common equity | $ | 1,351,416 | $ | 1,342,771 | $ | 1,248,448 | $ | 1,323,571 | $ | 1,233,348 | ||||||||||
| Average goodwill and other intangible assets, net | (380,885 | ) | (368,709 | ) | (367,490 | ) | (370,829 | ) | (369,801 | ) | ||||||||||
| Average tangible common equity | $ | 970,531 | $ | 974,062 | $ | 880,958 | $ | 952,742 | $ | 863,547 | ||||||||||
| Reported: Return on average tangible common equity 2 | 10.60 | % | 12.26 | % | 13.92 | % | 13.12 | % | 11.14 | % | ||||||||||
| Adjusted: Return on average tangible common equity 2, 3 | 13.43 | % | 13.14 | % | 14.81 | % | 14.43 | % | 11.52 | % | ||||||||||
| 1 Tax-effected measure, | ||||||||||||||||||||
| 2 Annualized measure. | ||||||||||||||||||||
| 3 Calculated using adjusted net income. | ||||||||||||||||||||
Special Note Concerning Forward-Looking Statements
Statements made in this document, other than those concerning historical financial information, may be considered 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 Company’s ability to control or predict, could cause actual results to differ materially from those in the Company’s forward-looking statements. These factors include, among others, the following: (i) the strength of the local, state, national, and international economy (including the impact of the current presidential administration); (ii) the economic impact of any future terrorist threats or attacks, widespread disease or pandemics (including the COVID-19 pandemic), or other adverse external events that could cause economic deterioration or instability in credit markets; (iii) changes in state and federal laws, regulations, and governmental policies concerning the Company’s general business; (iv) changes in accounting policies and practices; (v) changes in interest rates and prepayment rates of the Company’s assets (including the impact of The London Inter-bank Offered Rate phase-out); (vi) increased competition in the financial services sector and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) the loss of key executives or associates; (ix) changes in consumer spending; (x) unexpected results of current and/or future acquisitions, which may include failure to realize the anticipated benefits of any acquisition and the possibility that transaction costs may be greater than anticipated; (xi) unexpected outcomes of existing or new litigation involving the Company; and (xii) the economic impact of exceptional weather occurrences such as tornadoes, hurricanes, floods, and blizzards. 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 its financial results, is included in the Company’s filings with the Securities and Exchange Commission.
_______________________________________________
1 See “Non-GAAP Financial Information” for reconciliation.
2 See “Non-GAAP Financial Information” for reconciliation.
3 Revenue equates to all revenue sources tied to FirsTech (which includes professional service fees) and excludes intracompany eliminations and consolidations.
4 A Non-GAAP financial measure. See “Non-GAAP Financial Information” for reconciliation.
5 A Non-GAAP financial measure. See “Non-GAAP Financial Information” for reconciliation.
FAQ
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