First Busey Announces 2023 First Quarter Earnings
First Busey Corporation (Nasdaq: BUSE) reported a net income of $36.8 million for the first quarter of 2023, translating to diluted EPS of $0.65, marking a 27.5% increase year-over-year. Key highlights include a core loan growth of $58.2 million, a tangible common equity ratio of 7.05%, and non-performing assets at 0.13% of total assets. Net interest income reached $85.9 million, while the net interest margin was 3.13%. Despite positive growth, the company anticipates a potential slowdown in loan growth due to a deteriorating economic outlook. The core deposit ratio remains strong at 97.9%, but non-interest income has declined slightly to 27.4% of total revenue, affected by the Durbin Amendment. The company’s dividend increased to $0.24 per share, reflecting its commitment to shareholder returns.
- Diluted EPS increased by 27.5% year-over-year to $0.65.
- Core loan growth of $58.2 million and a year-over-year growth rate of 7.5%.
- Tangible common equity ratio improved to 7.05%.
- Net interest income rose to $85.9 million, maintaining strong margins.
- Anticipated slowdown in loan growth due to deteriorating economic outlook.
- Non-interest income declined to 27.4% of total revenue, impacted by the Durbin Amendment.
First Busey Reports First Quarter Net Income of
CHAMPAIGN, Ill., April 25, 2023 (GLOBE NEWSWIRE) -- First Busey Corporation (Nasdaq: BUSE)
Message from our Chairman & CEO
First Quarter 2023 Highlights:
- Diluted earnings per share of
$0.65 , a27.5% increase compared with the first quarter of 2022 - Core loan1 growth of
$58.2 million , representing a3.10% annualized growth rate - Non-performing assets of
0.13% of total assets and allowance for credit losses of602.91% of nonperforming loans - Adjusted core efficiency ratio1 of
55.6% , improved from59.9% in the first quarter of 2022 - Tangible common equity ratio1 of
7.05% , a 45 basis point increase from the fourth quarter of 2022 - Core deposits1 represent
97.9% of total deposits, while estimated uninsured deposits2 represent only27% of total deposits - For additional information, please refer to the 1Q23 Quarterly Earnings Supplement
First Quarter Financial Results
Net income for First Busey Corporation (“First Busey” or the “Company”) was
Pre-provision net revenue1 was
The Company experienced its eighth consecutive quarter of core loan1 growth. Loans are being originated at attractive spreads while not sacrificing our prudent underwriting standards and, like prior periods, most of the loan growth occurred within our existing client base. Core loan growth was
Our fee-based businesses continue to add revenue diversification. Non-interest income, excluding net securities gains and losses1, of
Over the last several years we have been purposeful in our efforts to rationalize our expense base given our economic outlook and our view on the future of banking. Over this period, we have reduced the number of service centers from 87 to 58, representing a one-third reduction in the number of service centers we operate, and increased our average deposits per service center from
First Busey’s Conservative Banking Strategy
The quality of our core deposit franchise is a critical value driver of our institution. Despite recent turmoil experienced in certain sectors of the banking industry, we have seen relative stability in our deposit franchise. During the period between March 8, 2023, and March 31, 2023, our deposit base declined by
Asset quality remains pristine by both historical as well as present-day industry standards. Non-performing assets were
The strength of our balance sheet is also reflected in our capital foundation. In the first quarter, our tangible common equity ratio1 increased to
Our operating mandate and focus have been on offering convenient products and services to customers while emphasizing credit quality over asset growth. In essence, First Busey’s financial strength is built on a sound business strategy of conservative banking. That focus will not change now or in the future.
Community Banking
First Busey’s goal of being a strong community bank begins with outstanding associates. The Company is humbled to be named among the 2022 Best Banks to Work For by American Banker, the 2022 Best Places to Work in Money Management by Pensions and Investments, the 2023 Best Places to Work in Illinois by Daily Herald Business Ledger, and the 2022 Best Companies to Work For in Florida by Florida Trend magazine.
For more than 155 years First Busey has delivered on a promise of trusted customer relationships and community support. Our priorities continue to focus around balance sheet strength, profitability, and growth, in that order. With our strong capital position, an attractive core funding base, and a sound credit foundation, we remain confident that we are well positioned for the remainder of 2023.
/s/ Van A. Dukeman
Chairman, President & Chief Executive Officer
First Busey Corporation
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
(dollars in thousands, except per share amounts)
| Three Months Ended | |||||||||||
| March 31, 2023 | December 31, 2022 | March 31, 2022 | |||||||||
| EARNINGS & PER SHARE AMOUNTS | |||||||||||
| Net income | $ | 36,786 | $ | 34,387 | $ | 28,439 | |||||
| Diluted earnings per common share | 0.65 | 0.61 | 0.51 | ||||||||
| Cash dividends paid per share | 0.24 | 0.23 | 0.23 | ||||||||
| Pre-provision net revenue1, 2 | 47,918 | 46,360 | 36,066 | ||||||||
| Revenue3 | 118,321 | 120,037 | 106,442 | ||||||||
| Net income by operating segments: | |||||||||||
| Banking | 36,835 | 37,564 | 26,451 | ||||||||
| FirsTech | (38 | ) | (453 | ) | 550 | ||||||
| Wealth Management | 4,858 | 3,855 | 5,840 | ||||||||
| AVERAGE BALANCES | |||||||||||
| Cash and cash equivalents | $ | 223,196 | $ | 281,926 | $ | 687,455 | |||||
| Investment securities | 3,359,985 | 3,451,471 | 3,970,356 | ||||||||
| Loans held for sale | 1,650 | 1,623 | 11,930 | ||||||||
| Portfolio loans | 7,710,876 | 7,619,199 | 7,160,837 | ||||||||
| Interest-earning assets | 11,180,562 | 11,242,126 | 11,703,947 | ||||||||
| Total assets | 12,263,718 | 12,330,132 | 12,660,939 | ||||||||
| Noninterest bearing deposits | 3,272,745 | 3,494,001 | 3,589,952 | ||||||||
| Interest-bearing deposits | 6,637,405 | 6,843,688 | 7,027,486 | ||||||||
| Total deposits | 9,910,150 | 10,337,689 | 10,617,438 | ||||||||
| Securities sold under agreements to repurchase and federal funds purchased | 230,351 | 236,656 | 271,095 | ||||||||
| Interest-bearing liabilities | 7,614,930 | 7,500,294 | 7,654,661 | ||||||||
| Total liabilities | 11,092,899 | 11,207,585 | 11,379,404 | ||||||||
| Stockholders' equity - common | 1,170,819 | 1,122,547 | 1,281,535 | ||||||||
| Tangible common equity2 | 807,465 | 756,420 | 906,724 | ||||||||
| PERFORMANCE RATIOS | |||||||||||
| Pre-provision net revenue to average assets1, 2 | 1.58 | % | 1.49 | % | 1.16 | % | |||||
| Return on average assets | 1.22 | % | 1.11 | % | 0.91 | % | |||||
| Return on average common equity | 12.74 | % | 12.15 | % | 9.00 | % | |||||
| Return on average tangible common equity2 | 18.48 | % | 18.04 | % | 12.72 | % | |||||
| Net interest margin2,4 | 3.13 | % | 3.24 | % | 2.45 | % | |||||
| Efficiency ratio2 | 56.93 | % | 58.77 | % | 62.97 | % | |||||
| Noninterest revenue as a % of total revenues3 | 27.44 | % | 24.07 | % | 34.18 | % | |||||
| NON-GAAP FINANCIAL INFORMATION | |||||||||||
| Adjusted pre-provision net revenue1, 2 | $ | 49,504 | $ | 50,003 | $ | 39,354 | |||||
| Adjusted net income2 | 36,786 | 36,290 | 29,104 | ||||||||
| Adjusted diluted earnings per share2 | 0.65 | 0.65 | 0.52 | ||||||||
| Adjusted pre-provision net revenue to average assets2 | 1.64 | % | 1.61 | % | 1.26 | % | |||||
| Adjusted return on average assets2 | 1.22 | % | 1.17 | % | 0.93 | % | |||||
| Adjusted return on average tangible common equity2 | 18.48 | % | 19.03 | % | 13.02 | % | |||||
| Adjusted net interest margin2, 4 | 3.12 | % | 3.22 | % | 2.41 | % | |||||
| Adjusted efficiency ratio2 | 56.93 | % | 56.75 | % | 62.18 | % | |||||
___________________________________________
- Net interest income plus noninterest income, excluding securities gains and losses, less noninterest expense.
- See “Non-GAAP Financial Information” for reconciliation.
- Revenue consists of net interest income plus noninterest income, excluding securities gains and losses.
- On a tax-equivalent basis, assuming a federal income tax rate of
21% .
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(dollars in thousands, except per share amounts)
| As of | |||||||||||||||||||
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and cash equivalents | $ | 275,569 | $ | 227,164 | $ | 347,149 | $ | 230,852 | $ | 479,228 | |||||||||
| Investment securities | 3,302,024 | 3,391,240 | 3,494,710 | 3,708,922 | 3,941,656 | ||||||||||||||
| Loans held for sale | 2,714 | 1,253 | 4,546 | 4,813 | 6,765 | ||||||||||||||
| Commercial loans | 5,815,703 | 5,766,496 | 5,724,137 | 5,613,955 | 5,486,817 | ||||||||||||||
| Retail real estate and retail other loans | 1,968,105 | 1,959,206 | 1,945,977 | 1,883,823 | 1,786,056 | ||||||||||||||
| Portfolio loans | 7,783,808 | 7,725,702 | 7,670,114 | 7,497,778 | 7,272,873 | ||||||||||||||
| Allowance for credit losses | (91,727 | ) | (91,608 | ) | (90,722 | ) | (88,757 | ) | (88,213 | ) | |||||||||
| Premises and equipment | 126,515 | 126,524 | 128,175 | 130,892 | 133,658 | ||||||||||||||
| Goodwill and other intangible assets, net | 361,567 | 364,296 | 367,091 | 369,962 | 372,913 | ||||||||||||||
| Right of use asset | 12,291 | 12,829 | 10,202 | 8,615 | 9,014 | ||||||||||||||
| Other assets | 571,794 | 579,277 | 566,123 | 493,356 | 439,615 | ||||||||||||||
| Total assets | $ | 12,344,555 | $ | 12,336,677 | $ | 12,497,388 | $ | 12,356,433 | $ | 12,567,509 | |||||||||
| LIABILITIES & STOCKHOLDERS' EQUITY | |||||||||||||||||||
| Noninterest bearing deposits | $ | 3,173,783 | $ | 3,393,666 | $ | 3,628,169 | $ | 3,505,299 | $ | 3,568,651 | |||||||||
| Interest checking, savings, and money market deposits | 5,478,715 | 5,822,239 | 6,173,041 | 6,074,108 | 6,132,355 | ||||||||||||||
| Time deposits | 1,148,671 | 855,375 | 800,187 | 817,821 | 890,830 | ||||||||||||||
| Total deposits | $ | 9,801,169 | $ | 10,071,280 | $ | 10,601,397 | $ | 10,397,228 | $ | 10,591,836 | |||||||||
| Securities sold under agreements to repurchase | $ | 210,977 | $ | 229,806 | $ | 234,597 | $ | 228,383 | $ | 255,668 | |||||||||
| Short-term borrowings | 615,881 | 351,054 | 16,225 | 16,396 | 17,683 | ||||||||||||||
| Long-term debt | 249,245 | 252,038 | 254,835 | 317,304 | 265,769 | ||||||||||||||
| Junior subordinated debt owed to unconsolidated trusts | 71,855 | 71,810 | 71,765 | 71,721 | 71,678 | ||||||||||||||
| Lease liability | 12,515 | 12,995 | 10,311 | 8,655 | 9,067 | ||||||||||||||
| Other liabilities | 184,355 | 201,717 | 201,670 | 154,789 | 137,783 | ||||||||||||||
| Total liabilities | 11,145,997 | 11,190,700 | 11,390,800 | 11,194,476 | 11,349,484 | ||||||||||||||
| Total stockholders' equity | 1,198,558 | 1,145,977 | 1,106,588 | 1,161,957 | 1,218,025 | ||||||||||||||
| Total liabilities & stockholders' equity | $ | 12,344,555 | $ | 12,336,677 | $ | 12,497,388 | $ | 12,356,433 | $ | 12,567,509 | |||||||||
| SHARE AND PER SHARE AMOUNTS | |||||||||||||||||||
| Book value per common share | $ | 21.68 | $ | 20.73 | $ | 20.04 | $ | 21.00 | $ | 22.03 | |||||||||
| Tangible book value per common share1 | $ | 15.14 | $ | 14.14 | $ | 13.39 | $ | 14.31 | $ | 15.29 | |||||||||
| Ending number of common shares outstanding | 55,294,455 | 55,279,124 | 55,232,434 | 55,335,703 | 55,278,785 | ||||||||||||||
___________________________________________
- See “Non-GAAP Financial Information” for reconciliation.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(dollars in thousands, except per share amounts)
| Three Months Ended | ||||||||||
| March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||
| INTEREST INCOME | ||||||||||
| Interest and fees on loans held for sale and portfolio | $ | 89,775 | $ | 84,947 | $ | 60,882 | ||||
| Interest on investment securities | 20,342 | 19,560 | 14,932 | |||||||
| Other interest income | 988 | 1,377 | 277 | |||||||
| Total interest income | $ | 111,105 | $ | 105,884 | $ | 76,091 | ||||
| INTEREST EXPENSE | ||||||||||
| Interest on deposits | $ | 14,740 | $ | 8,277 | $ | 2,124 | ||||
| Interest on securities sold under agreements to repurchase and federal funds purchased | 1,222 | 810 | 59 | |||||||
| Interest on short-term borrowings | 4,822 | 1,221 | 89 | |||||||
| Interest on long-term debt | 3,551 | 3,546 | 3,109 | |||||||
| Junior subordinated debt owed to unconsolidated trusts | 913 | 881 | 654 | |||||||
| Total interest expense | $ | 25,248 | $ | 14,735 | $ | 6,035 | ||||
| Net interest income | $ | 85,857 | $ | 91,149 | $ | 70,056 | ||||
| Provision for credit losses | 953 | 859 | (253 | ) | ||||||
| Net interest income after provision for credit losses | $ | 84,904 | $ | 90,290 | $ | 70,309 | ||||
| NONINTEREST INCOME | ||||||||||
| Wealth management fees | $ | 14,797 | $ | 12,956 | $ | 15,779 | ||||
| Fees for customer services | 6,819 | 6,989 | 8,907 | |||||||
| Payment technology solutions | 5,315 | 5,022 | 5,077 | |||||||
| Mortgage revenue | 288 | 198 | 975 | |||||||
| Income on bank owned life insurance | 1,652 | 947 | 884 | |||||||
| Net securities gains (losses) | (616 | ) | 191 | (614 | ) | |||||
| Other noninterest income | 3,593 | 2,776 | 4,764 | |||||||
| Total noninterest income | $ | 31,848 | $ | 29,079 | $ | 35,772 | ||||
| NONINTEREST EXPENSE | ||||||||||
| Salaries, wages, and employee benefits | $ | 40,331 | $ | 41,790 | $ | 39,354 | ||||
| Data processing expense | 5,640 | 5,848 | 4,978 | |||||||
| Net occupancy expense | 4,762 | 4,638 | 5,067 | |||||||
| Furniture and equipment expense | 1,746 | 1,771 | 2,030 | |||||||
| Professional fees | 2,058 | 1,432 | 1,507 | |||||||
| Amortization of intangible assets | 2,729 | 2,795 | 3,011 | |||||||
| Interchange expense | 1,853 | 1,692 | 1,545 | |||||||
| Other operating expenses | 11,284 | 13,711 | 12,884 | |||||||
| Total noninterest expense | $ | 70,403 | $ | 73,677 | $ | 70,376 | ||||
| Income before income taxes | $ | 46,349 | $ | 45,692 | $ | 35,705 | ||||
| Income taxes | 9,563 | 11,305 | 7,266 | |||||||
| Net income | $ | 36,786 | $ | 34,387 | $ | 28,439 | ||||
| SHARE AND PER SHARE AMOUNTS | ||||||||||
| Basic earnings per common share | $ | 0.66 | $ | 0.62 | $ | 0.51 | ||||
| Diluted earnings per common share | $ | 0.65 | $ | 0.61 | $ | 0.51 | ||||
| Average common shares outstanding | 55,397,989 | 55,350,423 | 55,427,696 | |||||||
| Diluted average common shares outstanding | 56,179,606 | 56,177,790 | 56,194,946 | |||||||
Balance Sheet Growth
Our balance sheet remains a source of strength. Total assets were
Average portfolio loans were
Total deposits were
Short term borrowings increased to
Asset Quality
Credit quality continues to be exceptionally strong. Loans 30-89 days past due totaled
Net charge-offs of
The Company maintains a well-diversified loan portfolio and, as a matter of policy and practice, limits concentration exposure in any particular loan segment.
ASSET QUALITY (unaudited)
(dollars in thousands)
| As of | |||||||||||||||||||
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | |||||||||||||||
| Total assets | $ | 12,344,555 | $ | 12,336,677 | $ | 12,497,388 | $ | 12,356,433 | $ | 12,567,509 | |||||||||
| Portfolio loans | 7,783,808 | 7,725,702 | 7,670,114 | 7,497,778 | 7,272,873 | ||||||||||||||
| Portfolio loans excluding amortized cost of PPP loans | 7,783,058 | 7,724,857 | 7,668,688 | 7,490,162 | 7,241,104 | ||||||||||||||
| Loans 30 – 89 days past due | 5,472 | 6,548 | 6,307 | 5,157 | 3,916 | ||||||||||||||
| Non-performing loans: | |||||||||||||||||||
| Non-accrual loans | 14,714 | 15,067 | 15,425 | 15,840 | 12,488 | ||||||||||||||
| Loans 90+ days past due and still accruing | 500 | 673 | 1,229 | 1,654 | 197 | ||||||||||||||
| Non-performing loans | $ | 15,214 | $ | 15,740 | $ | 16,654 | $ | 17,494 | $ | 12,685 | |||||||||
| Non-performing loans, segregated by geography: | |||||||||||||||||||
| Illinois / Indiana | $ | 10,416 | $ | 10,347 | $ | 10,531 | $ | 11,261 | $ | 6,467 | |||||||||
| Missouri | 4,103 | 4,676 | 5,008 | 5,259 | 5,263 | ||||||||||||||
| Florida | 695 | 717 | 1,115 | 974 | 955 | ||||||||||||||
| Other non-performing assets | 759 | 850 | 1,219 | 1,429 | 3,606 | ||||||||||||||
| Non-performing assets | $ | 15,973 | $ | 16,590 | $ | 17,873 | $ | 18,923 | $ | 16,291 | |||||||||
| Allowance for credit losses | $ | 91,727 | $ | 91,608 | $ | 90,722 | $ | 88,757 | $ | 88,213 | |||||||||
| RATIOS | |||||||||||||||||||
| Non-performing loans to portfolio loans | 0.20 | % | 0.20 | % | 0.22 | % | 0.23 | % | 0.17 | % | |||||||||
| Non-performing loans to portfolio loans, excluding PPP loans | 0.20 | % | 0.20 | % | 0.22 | % | 0.23 | % | 0.18 | % | |||||||||
| Non-performing assets to total assets | 0.13 | % | 0.13 | % | 0.14 | % | 0.15 | % | 0.13 | % | |||||||||
| Non-performing assets to portfolio loans and other non-performing assets | 0.21 | % | 0.21 | % | 0.23 | % | 0.25 | % | 0.22 | % | |||||||||
| Allowance for credit losses to portfolio loans | 1.18 | % | 1.19 | % | 1.18 | % | 1.18 | % | 1.21 | % | |||||||||
| Allowance for credit losses to portfolio loans, excluding PPP | 1.18 | % | 1.19 | % | 1.18 | % | 1.18 | % | 1.22 | % | |||||||||
| Allowance for credit losses as a percentage of non-performing loans | 602.91 | % | 582.01 | % | 544.75 | % | 507.36 | % | 695.41 | % | |||||||||
NET CHARGE-OFFS (RECOVERIES) AND PROVISION EXPENSE (RELEASE) (unaudited)
(dollars in thousands)
| Three Months Ended | |||||||||||
| March 31, 2023 | December 31, 2022 | March 31, 2022 | |||||||||
| Net charge-offs (recoveries) | $ | 834 | $ | (27 | ) | $ | (579 | ) | |||
| Provision expense (release) | 953 | 859 | (253 | ) | |||||||
| Net charge-offs, annualized | 3,382 | NM | NM | ||||||||
| Average portfolio loans | 7,710,876 | 7,619,199 | 7,160,837 | ||||||||
| Net charge-off ratio | 0.04 | % | NM | NM | |||||||
Net Interest Margin1 and Net Interest Income
Net interest margin was
The FOMC raised rates by 50 basis points during the first quarter of 2023, and by a total of 475 basis points since the onset of the current FOMC tightening cycle that began in the first quarter of 2022. Rising rates initially have a positive impact on net interest margin, as assets, in particular commercial loans, reprice more quickly and to a greater extent than liabilities. As deposit and funding costs catch up, some of the net interest margin expansion is reversed, which we experienced during the first quarter of 2023. Components of the 11 basis point decrease in net interest margin during the first quarter of 2023 include:
- Increased loan portfolio income contributed +28 basis points
- Increases in the cash and securities portfolio yield contributed +4 basis points
- Increased deposit funding costs contributed -24 basis points
- Increased borrowing costs contributed -16 basis points
- Increased net interest expense on cash flow hedges contributed -2 basis points
- Decreased recognition of purchase accounting accretion contributed -1 basis points
Based on our most recent Asset Liability Management Committee ("ALCO") model, a 100 basis point parallel rate shock is expected to increase net interest income by
Noninterest Income
Noninterest income was
Wealth management fees were
Payment technology solutions revenue from FirsTech was
Fees for customer services were
Mortgage revenue was
Other noninterest income was
Operating Efficiency
Noninterest expense was
Noteworthy components of noninterest expense are as follows:
- Salaries, wages, and employee benefits expenses were
$40.3 million in the first quarter of 2023, compared to$41.8 million in the fourth quarter of 2022 and$39.4 million in the first quarter of 2022. Total full-time equivalents numbered 1,473 as of March 31, 2023, compared to 1,497 as of December 31, 2022, and 1,465 as of March 31, 2022. The Company did not record any non-operating expense of for salaries, wages, and employee benefits expenses in the first quarter of 2023, compared to non-operating expenses for salaries, wages, and employee benefits of$2.4 million in the fourth quarter of 2022 and$0.6 million in the first quarter of 2022.
- Data processing expense was
$5.6 million in the first quarter of 2023, compared to$5.8 million in the fourth quarter of 2022 and$5.0 million in the first quarter of 2022. The Company did not record any non-operating expense for data processing in the first quarter of 2023 or the fourth quarter of 2022, and recorded$0.2 million of non-operating expense for data processing in the first quarter of 2022.
- Professional fees were
$2.1 million in the first quarter of 2023, compared to$1.4 million in the fourth quarter of 2022 and$1.5 million in the first quarter of 2022. The quarter over quarter increase is primarily attributable to legal costs and to audit and accounting fees which generally run higher during the first quarter of each year.
- Amortization expense was
$2.7 million in the first quarter of 2023, compared to$2.8 million in the fourth quarter of 2022 and$3.0 million in the first quarter of 2022.
- Other operating expenses were
$11.3 million for the first quarter of 2023, compared to$13.7 million in the fourth quarter of 2022 and$12.9 million in the first quarter of 2022. The quarter-over-quarter decrease is attributable to multiple items, including notable decreases in business development and marketing expenses, partially offset by increased FDIC insurance costs.
The Company's effective tax rate for the first quarter of 2023 was
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. On April 28, 2023, the Company will pay a cash dividend of
As of March 31, 2023, the Company continued to exceed the capital adequacy requirements necessary to be considered “well-capitalized” under applicable regulatory guidelines. The Company’s Common Equity Tier 1 ratio is estimated5 to be
The Company’s tangible common equity1 was
1Q23 Quarterly Earnings Supplement
For additional information on the Company’s financial condition and operating results, please refer to the 1Q23 Quarterly Earnings Supplement presentation furnished via Form 8-K on April 25, 2023, in connection with this earnings release.
Corporate Profile
As of March 31, 2023, First Busey Corporation (Nasdaq: BUSE) was a
Busey Bank, a wholly-owned bank subsidiary of First Busey Corporation, had total assets of
Busey Bank’s wholly-owned subsidiary, FirsTech, is a payments platform specializing in the evolving financial technology needs of small and medium-sized businesses, highly regulated enterprise industries, and financial institutions. With associates across the United States, FirsTech provides comprehensive and innovative payment technology solutions that enable businesses to connect with their customers in a multitude of ways on a single, highly configurable, secure platform. Fast, secure payment modes include, but are not limited to, text-based payments; electronic payments concentration delivered to Automated Clearing House networks; internet voice recognition ("IVR"); credit cards; in-store payments for customers at retail pay agents; direct debit services; and lockbox remittance processing for customers to make payments by mail. Once these payments are processed through integration with our customers’ financial systems, FirsTech provides its customers with reconciliation and settlement services to ensure payment confirmation. Additionally, FirsTech provides consulting and technology services through its Professional Services Division, assisting clients in identifying and implementing payment technologies to meet their evolving needs. In 2022, FirsTech started a phased launch of its innovative BaaS platform, helping community banks and their commercial customers build modernized payment solutions, which include online payment technologies and automated file transfers. More information about FirsTech can be found at firstechpayments.com.
Through the Company’s Wealth Management division, the Company provides asset management, investment, and fiduciary services to individuals, businesses, and foundations. As of March 31, 2023, assets under care were
Busey Bank is honored to be named among America’s Best Banks by Forbes magazine for the second consecutive year. Ranked 26th overall, compared to 52nd in last year's rankings, Busey was once again the top-ranked bank headquartered in Illinois. Additionally, for the first time in 2022, Busey was named a Leading Disability Employer by the National Organization on Disability—this highly selective award is presented only to top performing companies demonstrating positive outcomes in recruiting, hiring, retaining and advancing people with disabilities in their workforce. We are honored to be consistently recognized nationally and locally 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
Ted Rosinus, EVP Investor Relations & Corporate Development
847-832-0392
Non-GAAP Financial Information
This earnings release contains certain financial information determined by methods other than GAAP. Management uses these non-GAAP measures, together with the related GAAP measures, in analysis of the Company’s performance and in making business decisions, as well as for comparison to the Company’s peers. 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.
A reconciliation to what management believes to be the most directly comparable GAAP financial measures—specifically, net interest income, total noninterest income, net security gains and losses, and total noninterest expense in the case of pre-provision net revenue, adjusted pre-provision net revenue, pre-provision net revenue to average assets, and adjusted pre-provision net revenue to average assets; net income in the case of adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, return on average tangible common equity, and adjusted return on average tangible common equity; net interest income in the case of adjusted net interest income and adjusted net interest margin; net interest income, total noninterest income, and total noninterest expense in the case of adjusted noninterest expense, adjusted core expense, efficiency ratio, adjusted efficiency ratio, and adjusted core efficiency ratio; total stockholders’ equity in the case of tangible book value per common share; total assets and total stockholders’ equity in the case of tangible common equity and tangible common equity to tangible assets; portfolio loans in the case of core loans and core loans to portfolio loans; total deposits in the case of core deposits and core deposits to total deposits; and portfolio loans and total deposits in the case of core loans to core deposits—appears below.
These non-GAAP disclosures have inherent limitations and are not audited. They should not be considered in isolation or as a substitute for operating 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 (unaudited) | ||||||||||||
| Pre-Provision Net Revenue, Adjusted Pre-Provision Net Revenue, Pre-Provision Net Revenue to Average Assets, and Adjusted Pre-Provision Net Revenue to Average Assets | ||||||||||||
| (dollars in thousands) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||||
| PRE-PROVISION NET REVENUE | ||||||||||||
| Net interest income | $ | 85,857 | $ | 91,149 | $ | 70,056 | ||||||
| Total noninterest income | 31,848 | 29,079 | 35,772 | |||||||||
| Net security (gains) losses | 616 | (191 | ) | 614 | ||||||||
| Total noninterest expense | (70,403 | ) | (73,677 | ) | (70,376 | ) | ||||||
| Pre-provision net revenue | 47,918 | 46,360 | 36,066 | |||||||||
| Non-GAAP adjustments: | ||||||||||||
| Acquisition and other restructuring expenses | — | 2,442 | 835 | |||||||||
| Provision for unfunded commitments | (635 | ) | (464 | ) | 1,112 | |||||||
| Amortization of New Markets Tax Credits | 2,221 | 1,665 | 1,341 | |||||||||
| Adjusted pre-provision net revenue | $ | 49,504 | $ | 50,003 | $ | 39,354 | ||||||
| Pre-provision net revenue, annualized | [a] | $ | 194,334 | $ | 183,928 | $ | 146,268 | |||||
| Adjusted pre-provision net revenue, annualized | [b] | 200,766 | 198,381 | 159,602 | ||||||||
| Average total assets | [c] | 12,263,718 | 12,330,132 | 12,660,939 | ||||||||
| Reported: Pre-provision net revenue to average assets1 | [a÷c] | 1.58 | % | 1.49 | % | 1.16 | % | |||||
| Adjusted: Pre-provision net revenue to average assets1 | [b÷c] | 1.64 | % | 1.61 | % | 1.26 | % | |||||
___________________________________________
- Annualized measure.
| Reconciliation Of Non-GAAP Financial Measures (unaudited) | ||||||||||||
| Adjusted Net Income, Adjusted Diluted Earnings Per Share, Adjusted Return on Average Assets, Average Tangible Common Equity, Return on Average Tangible Common Equity, and Adjusted Return on Average Tangible Common Equity | ||||||||||||
| (dollars in thousands, except per share amounts) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||||
| NET INCOME ADJUSTED FOR NON-OPERATING ITEMS | ||||||||||||
| Net income | [a] | $ | 36,786 | $ | 34,387 | $ | 28,439 | |||||
| Non-GAAP adjustments: | ||||||||||||
| Acquisition expenses: | ||||||||||||
| Salaries, wages, and employee benefits | — | — | 587 | |||||||||
| Data processing | — | — | 214 | |||||||||
| Professional fees, occupancy, and other | — | 16 | 34 | |||||||||
| Other restructuring expenses: | ||||||||||||
| Salaries, wages, and employee benefits | — | 2,409 | — | |||||||||
| Loss on leases or fixed asset impairment | — | 10 | — | |||||||||
| Professional fees, occupancy, and other | — | 7 | — | |||||||||
| Related tax benefit | — | (539 | ) | (170 | ) | |||||||
| Adjusted net income | [b] | $ | 36,786 | $ | 36,290 | $ | 29,104 | |||||
| DILUTED EARNINGS PER SHARE | ||||||||||||
| Diluted average common shares outstanding | [c] | 56,179,606 | 56,177,790 | 56,194,946 | ||||||||
| Reported: Diluted earnings per share | [a÷c] | $ | 0.65 | $ | 0.61 | $ | 0.51 | |||||
| Adjusted: Diluted earnings per share | [b÷c] | $ | 0.65 | $ | 0.65 | $ | 0.52 | |||||
| RETURN ON AVERAGE ASSETS | ||||||||||||
| Net income, annualized | [d] | $ | 149,188 | $ | 136,427 | $ | 115,336 | |||||
| Adjusted net income, annualized | [e] | 149,188 | 143,977 | 118,033 | ||||||||
| Average total assets | [f] | 12,263,718 | 12,330,132 | 12,660,939 | ||||||||
| Reported: Return on average assets1 | [d÷f] | 1.22 | % | 1.11 | % | 0.91 | % | |||||
| Adjusted: Return on average assets1 | [e÷f] | 1.22 | % | 1.17 | % | 0.93 | % | |||||
| RETURN ON AVERAGE TANGIBLE COMMON EQUITY | ||||||||||||
| Average common equity | $ | 1,170,819 | $ | 1,122,547 | $ | 1,281,535 | ||||||
| Average goodwill and other intangible assets, net | (363,354 | ) | (366,127 | ) | (374,811 | ) | ||||||
| Average tangible common equity | [g] | $ | 807,465 | $ | 756,420 | $ | 906,724 | |||||
| Reported: Return on average tangible common equity1 | [d÷g] | 18.48 | % | 18.04 | % | 12.72 | % | |||||
| Adjusted: Return on average tangible common equity1 | [e÷g] | 18.48 | % | 19.03 | % | 13.02 | % | |||||
___________________________________________
- Annualized measure.
| Reconciliation Of Non-GAAP Financial Measures (unaudited) | ||||||||||||
| Adjusted Net Interest Income and Adjusted Net Interest Margin | ||||||||||||
| (dollars in thousands) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||||
| Net interest income | $ | 85,857 | $ | 91,149 | $ | 70,056 | ||||||
| Non-GAAP adjustments: | ||||||||||||
| Tax-equivalent adjustment | 558 | 564 | 546 | |||||||||
| Tax-equivalent net interest income | 86,415 | 91,713 | 70,602 | |||||||||
| Purchase accounting accretion related to business combinations | (403 | ) | (546 | ) | (1,159 | ) | ||||||
| Adjusted net interest income | $ | 86,012 | $ | 91,167 | $ | 69,443 | ||||||
| Tax-equivalent net interest income, annualized | [a] | $ | 350,461 | $ | 363,861 | $ | 286,330 | |||||
| Adjusted net interest income, annualized | [b] | 348,826 | 361,695 | 281,630 | ||||||||
| Average interest-earning assets | [c] | 11,180,562 | 11,242,126 | 11,703,947 | ||||||||
| Reported: Net interest margin1 | [a÷c] | 3.13 | % | 3.24 | % | 2.45 | % | |||||
| Adjusted: Net interest margin1 | [b÷c] | 3.12 | % | 3.22 | % | 2.41 | % | |||||
___________________________________________
- Annualized measure.
| Reconciliation Of Non-GAAP Financial Measures (unaudited) | ||||||||||||
| Noninterest Expense Excluding Amortization of Intangible Assets, Adjusted Noninterest Expense, Adjusted Core Expense, Noninterest Expense Excluding Non-operating Adjustments, Efficiency Ratio, Adjusted Efficiency Ratio, and Adjusted Core Efficiency Ratio | ||||||||||||
| (dollars in thousands) | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||||
| Net interest income | $ | 85,857 | $ | 91,149 | $ | 70,056 | ||||||
| Non-GAAP adjustments: | ||||||||||||
| Tax-equivalent adjustment | 558 | 564 | 546 | |||||||||
| Tax-equivalent net interest income | 86,415 | 91,713 | 70,602 | |||||||||
| Total noninterest income | 31,848 | 29,079 | 35,772 | |||||||||
| Non-GAAP adjustments: | ||||||||||||
| Net security (gains) losses | 616 | (191 | ) | 614 | ||||||||
| Noninterest income excluding net securities gains and losses | 32,464 | 28,888 | 36,386 | |||||||||
| Tax-equivalent revenue | [a] | $ | 118,879 | $ | 120,601 | $ | 106,988 | |||||
| Total noninterest expense | $ | 70,403 | $ | 73,677 | $ | 70,376 | ||||||
| Non-GAAP adjustments: | ||||||||||||
| Amortization of intangible assets | [b] | (2,729 | ) | (2,795 | ) | (3,011 | ) | |||||
| Non-interest expense excluding amortization of intangible assets | [c] | 67,674 | 70,882 | 67,365 | ||||||||
| Non-operating adjustments: | ||||||||||||
| Salaries, wages, and employee benefits | — | (2,409 | ) | (587 | ) | |||||||
| Data processing | — | — | (214 | ) | ||||||||
| Impairment, professional fees, occupancy, and other | — | (33 | ) | (34 | ) | |||||||
| Adjusted noninterest expense | [f] | 67,674 | 68,440 | 66,530 | ||||||||
| Provision for unfunded commitments | 635 | 464 | (1,112 | ) | ||||||||
| Amortization of New Markets Tax Credits | (2,221 | ) | (1,665 | ) | (1,341 | ) | ||||||
| Adjusted core expense | [g] | $ | 66,088 | $ | 67,239 | $ | 64,077 | |||||
| Noninterest expense, excluding non-operating adjustments | [f-b] | $ | 70,403 | $ | 71,235 | $ | 69,541 | |||||
| Reported: Efficiency ratio | [c÷a] | 56.93 | % | 58.77 | % | 62.97 | % | |||||
| Adjusted: Efficiency ratio | [f÷a] | 56.93 | % | 56.75 | % | 62.18 | % | |||||
| Adjusted: Core efficiency ratio | [g÷a] | 55.59 | % | 55.75 | % | 59.89 | % | |||||
| Reconciliation Of Non-GAAP Financial Measures (unaudited) | ||||||||||||||||||||
| Tangible Book Value and Tangible Book Value Per Common Share | ||||||||||||||||||||
| (dollars in thousands, except per share amounts) | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | ||||||||||||||||
| Total stockholders' equity | $ | 1,198,558 | $ | 1,145,977 | $ | 1,106,588 | $ | 1,161,957 | $ | 1,218,025 | ||||||||||
| Goodwill and other intangible assets, net | (361,567 | ) | (364,296 | ) | (367,091 | ) | (369,962 | ) | (372,913 | ) | ||||||||||
| Tangible book value | [a] | $ | 836,991 | $ | 781,681 | $ | 739,497 | $ | 791,995 | $ | 845,112 | |||||||||
| Ending number of common shares outstanding | [b] | 55,294,455 | 55,279,124 | 55,232,434 | 55,335,703 | 55,278,785 | ||||||||||||||
| Tangible book value per common share | [a÷b] | $ | 15.14 | $ | 14.14 | $ | 13.39 | $ | 14.31 | $ | 15.29 | |||||||||
| Tangible Common Equity and Tangible Common Equity to Tangible Assets | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | ||||||||||||||||
| Total assets | $ | 12,344,555 | $ | 12,336,677 | $ | 12,497,388 | $ | 12,356,433 | $ | 12,567,509 | ||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||
| Goodwill and other intangible assets, net | (361,567 | ) | (364,296 | ) | (367,091 | ) | (369,962 | ) | (372,913 | ) | ||||||||||
| Tax effect of other intangible assets1 | 8,335 | 8,847 | 9,369 | 9,905 | 10,456 | |||||||||||||||
| Tangible assets | [a] | $ | 11,991,323 | $ | 11,981,228 | $ | 12,139,666 | $ | 11,996,376 | $ | 12,205,052 | |||||||||
| Total stockholders' equity | $ | 1,198,558 | $ | 1,145,977 | $ | 1,106,588 | $ | 1,161,957 | $ | 1,218,025 | ||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||
| Goodwill and other intangible assets, net | (361,567 | ) | (364,296 | ) | (367,091 | ) | (369,962 | ) | (372,913 | ) | ||||||||||
| Tax effect of other intangible assets1 | 8,335 | 8,847 | 9,369 | 9,905 | 10,456 | |||||||||||||||
| Tangible common equity | [b] | $ | 845,326 | $ | 790,528 | $ | 748,866 | $ | 801,900 | $ | 855,568 | |||||||||
| Tangible common equity to tangible assets2 | [b÷a] | 7.05 | % | 6.60 | % | 6.17 | % | 6.68 | % | 7.01 | % | |||||||||
___________________________________________
- Net of estimated deferred tax liability.
- Tax-effected measure.
| Reconciliation Of Non-GAAP Financial Measures (unaudited) | ||||||||||||||||||||
| Core Loans, Core Loans to Portfolio Loans, Core Deposits, Core Deposits to Total Deposits, and Core Loans to Core Deposits | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| As of | ||||||||||||||||||||
| March 31, 2023 | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | ||||||||||||||||
| Portfolio loans | [a] | $ | 7,783,808 | $ | 7,725,702 | $ | 7,670,114 | $ | 7,497,778 | $ | 7,272,873 | |||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||
| PPP loans amortized cost | (750 | ) | (845 | ) | (1,426 | ) | (7,616 | ) | (31,769 | ) | ||||||||||
| Core loans | [b] | $ | 7,783,058 | $ | 7,724,857 | $ | 7,668,688 | $ | 7,490,162 | $ | 7,241,104 | |||||||||
| Total deposits | [c] | $ | 9,801,169 | $ | 10,071,280 | $ | 10,601,397 | $ | 10,397,228 | $ | 10,591,836 | |||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||
| Brokered transaction accounts | (6,005 | ) | (1,303 | ) | (2,006 | ) | (2,002 | ) | (2,002 | ) | ||||||||||
| Time deposits of | (200,898 | ) | (120,377 | ) | (103,534 | ) | (117,957 | ) | (139,245 | ) | ||||||||||
| Core deposits | [d] | $ | 9,594,266 | $ | 9,949,600 | $ | 10,495,857 | $ | 10,277,269 | $ | 10,450,589 | |||||||||
| RATIOS | ||||||||||||||||||||
| Core loans to portfolio loans | [b÷a] | 99.99 | % | 99.99 | % | 99.98 | % | 99.90 | % | 99.56 | % | |||||||||
| Core deposits to total deposits | [d÷c] | 97.89 | % | 98.79 | % | 99.00 | % | 98.85 | % | 98.67 | % | |||||||||
| Core loans to core deposits | [b÷d] | 81.12 | % | 77.64 | % | 73.06 | % | 72.88 | % | 69.29 | % | |||||||||
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 effects of inflationary pressures and supply chain constraints); (ii) the economic impact of any future terrorist threats or attacks, widespread disease or pandemics (including the Coronavirus Disease 2019 pandemic), or other adverse external events that could cause economic deterioration or instability in credit markets (including Russia’s invasion of Ukraine); (iii) changes in state and federal laws, regulations, and governmental policies concerning the Company’s general business (including changes in response to the recent failures of other banks); (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 Interbank Offered Rate phase-out); (vi) increased competition in the financial services sector (including from non-bank competitors such as credit unions and fintech companies) 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; (xii) fluctuations in the value of securities held in our securities portfolio; (xiii) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xiv) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; (xv) the level of non-performing assets on our balance sheets; (xvi) interruptions involving our information technology and communications systems or third-party servicers; (xvii) breaches or failures of our information security controls or cybersecurity-related incidents; and (xviii) 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 a reconciliation. |
| 2 | Estimated uninsured deposits consist of account balances in excess of the |
| 3 | The number of service centers and average deposits per service center for September 30, 2020, includes proforma adjustments for Glenview State Bank service centers acquired May 31, 2021. |
| 4 | On- and off-balance sheet liquidity is comprised of cash and cash equivalents, debt securities excluding those pledged as collateral, brokered deposits, and First Busey’s borrowing capacity with its revolving credit facility, the FHLB, Federal Reserve Bank, federal funds purchased lines. |
| 5 | Capital ratios for the first quarter of 2023 are not yet finalized, and are subject to change. |
| 6 | Commercial balances include commercial, commercial real estate, and real estate construction loans. |
| 7 | For the quarterly period, average portfolio loans, the denominator in the net charge off ratio, is calculated on a daily average basis. For the last twelve month period, average portfolio loans is calculated as the average of average portfolio loans over the most recent four quarters. |
| 8 | The blended benchmark consists of |
FAQ
What is the net income reported by First Busey for Q1 2023?
What is the diluted EPS for First Busey for the first quarter of 2023?
What are the core loan growth figures for First Busey in the first quarter of 2023?
How did the non-interest income of First Busey perform in Q1 2023?
What is the tangible common equity ratio for First Busey?
