First Busey Corporation Announces 2024 Second Quarter Earnings
First Busey (Nasdaq: BUSE) reported net income of $27.4 million and diluted EPS of $0.47 for Q2 2024, marking an increase from Q1 2024 but a decrease from Q2 2023. Adjusted net income was $29.0 million, or $0.50 per diluted share. The company's net interest margin rose by 24 basis points to 3.03%. Noninterest income stood at $33.8 million, with a record high in revenue for Wealth Management and FirsTech segments. The acquisition of Merchants & Manufacturers Bank was completed on April 1, 2024, and integrated by June 21, 2024.
Busey's tangible book value per common share rose to $16.97, an 11.3% year-over-year increase. Total assets were $11.97 billion, with portfolio loans reaching $8.00 billion. Noninterest expense rose to $75.5 million, and the allowance for credit losses was $85.2 million. Despite a $2.3 million provision for credit losses, asset quality remains strong, with non-performing assets at 0.08% of total assets.
- Net interest margin increased by 24 basis points to 3.03% from 2.79%.
- Tangible book value per common share increased to $16.97 from $15.25, an 11.3% year-over-year rise.
- Completed the acquisition and integration of Merchants & Manufacturers Bank, adding $418.7 million in loans and $392.8 million in deposits.
- Record high quarterly revenue for Wealth Management and FirsTech segments.
- Adjusted net income of $29.0 million, up from $26.5 million in Q1 2024.
- Noninterest expense increased to $75.5 million from $70.8 million in Q1 2024.
- Reported net income of $27.4 million, down from $29.4 million in Q2 2023.
- Allowance for credit losses at $85.2 million, with net charge-offs of $9.9 million due primarily to a single commercial credit relationship.
- Provision for credit losses stood at $2.3 million.
Insights
First Busey Corporation's second quarter earnings report shows a mixed performance for the company. The net income of
Another significant point is the acquisition of Merchants & Manufacturers Bank Corporation. This acquisition adds considerable assets, loans and deposits to First Busey's portfolio, potentially enhancing the company's market position and revenue streams in the future. However, integration costs and acquisition-related expenses have impacted the current quarter's financials.
Investors should also note the increase in tangible common equity per share to
The earnings report for First Busey Corporation highlights several strategic improvements and challenges. The company's record high quarterly revenue for both Wealth Management and FirsTech operating segments is a significant achievement. This diversification in revenue sources is important for mitigating risks associated with interest rate fluctuations and other market uncertainties.
The finalized acquisition of M&M Bank enhances First Busey's footprint, particularly in the suburban Chicago area, which can lead to increased market share and customer base. However, stakeholders should be wary of the higher noninterest expense reported for the quarter, partly due to the integration of M&M Bank. Efficiently managing these costs while realizing expected synergies will be critical for sustaining long-term growth.
Moreover, the adjusted noninterest income constituting
The acquisition of Merchants & Manufacturers Bank Corporation was executed effectively, as detailed in the earnings report. The merger agreement's meticulous execution, including the different forms of consideration offered to M&M shareholders, reflects strong legal and regulatory compliance. The conversion of M&M common stock and the fractional shares arrangement ensures a smooth transition and mitigates potential shareholder disputes.
The strategic closure of a banking center and the integration of M&M’s products into Busey’s portfolio are well-aligned with the overarching business goals of expanding service offerings and enhancing market presence. Reduced regulatory risks associated with the merger and the efficient absorption of M&M Bank's operations into Busey Bank augur well for future operations.
From a legal perspective, the merger facilitates a stronger capital base and broadens the scope of banking services, ensuring compliance with industry standards while promoting business growth.
CHAMPAIGN, Il., July 23, 2024 (GLOBE NEWSWIRE) -- First Busey Corporation (Nasdaq: BUSE)
Net Income of
Diluted EPS of
SECOND QUARTER 2024 HIGHLIGHTS
- Adjusted net income1 of
$29.0 million , or$0.50 per diluted common share - Net interest margin1 increased by 24 basis points to
3.03% from2.79% in the prior quarter - Noninterest income of
$33.8 million , and adjusted noninterest income1 of$33.9 million , or29.1% of operating revenue1 - Record high quarterly revenue for both the Wealth Management and FirsTech operating segments
- Finalized the acquisition of Merchants & Manufacturers Bank Corporation (“M&M”) and its wholly owned subsidiary Merchants & Manufacturers Bank (“M&M Bank”) on April 1, 2024, and completed the integration of M&M Bank into Busey Bank on June 21, 2024
- Tangible book value per common share1 of
$16.97 at June 30, 2024, compared to$16.84 at March 31, 2024, and$15.25 at June 30, 2023, a year-over-year increase of11.3% - Tangible common equity1 increased to
8.36% of tangible assets at June 30, 2024, compared to8.12% at March 31, 2024, and7.18% at June 30, 2023
For additional information, please refer to the 2Q24 Earnings Investor Presentation.
MESSAGE FROM OUR CHAIRMAN & CEO
Second Quarter Financial Results
Net income for First Busey Corporation (“Busey,” “Company,” “we,” “us,” or “our”) was
Second quarter results included
Pre-provision net revenue1 was
Our fee-based businesses continue to add revenue diversification. Total noninterest income was
Busey 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 acquisition and other restructuring charges in the second quarter of 2024 were
We have effectively managed our noninterest expense during a time of decades-high inflation and have been purposeful in our efforts to rationalize our expense base given our economic outlook and our view on the future of banking. Second quarter expenses include the costs of operating M&M Bank as a stand-alone bank from April 1, 2024, through June 21, 2024. Noninterest expense was
Quarterly pre-tax expense synergies resulting from the M&M acquisition are anticipated to be
Acquisition of Merchants and Manufacturers Bank Corporation Completed April 1, 2024, and Integration of Merchants & Manufacturers Bank with and into Busey Bank Completed June 21, 2024
Effective April 1, 2024, Busey completed its previously announced acquisition (the "Merger") of M&M, pursuant to an Agreement and Plan of Merger, dated November 27, 2023, between Busey and M&M (the “Merger Agreement”). Upon completion of the Merger, each share of M&M common stock converted to the right to receive, at the election of each stockholder and subject to proration and adjustment, either (1)
Most of the M&M common stockholders who submitted an election form by the election deadline made the Share Election to receive their Merger consideration solely in the form of shares of Busey common stock. As a result of the elections of M&M common stockholders, and in accordance with the proration and adjustment provisions of the Merger Agreement, the Merger consideration paid to M&M common stockholders was comprised of an aggregate of 1,429,304 shares of Busey common stock and an aggregate of
Additional Merger consideration of
The M&M transaction added loans with a fair value of
On June 21, 2024, M&M Bank was merged with and into Busey Bank (the “Bank Merger”). At the time of the Bank Merger, M&M Bank’s banking centers became banking centers of Busey Bank, except for the banking center located at 990 Essington Rd., Joliet, Illinois, which was closed in connection with the Bank Merger. Services were assumed by the existing Busey Bank banking center located at 2801 Black Rd., Joliet, Illinois, which is less than one mile away from where the Essington banking center was located. This partnership adds M&M’s Life Equity Loan® products to Busey’s existing suite of services and expands Busey’s presence in the suburban Chicago area.
Busey’s Conservative Banking Strategy
Busey’s financial strength is built on a long-term conservative operating approach. That focus will not change now or in the future.
The quality of our core deposit franchise is a critical value driver of our institution. Our granular deposit base continues to position us well, with core deposits1 representing
Asset quality remains strong by both Busey’s historical and current industry trends. Non-performing assets decreased to
The strength of our balance sheet is also reflected in our capital foundation. In the second quarter of 2024, our Common Equity Tier 1 ratio4 was
Community Banking
Busey’s commitment to bettering the communities we serve includes providing our Pillars with wide-ranging access to financial education tools. We’re pleased to offer Financial Pathways, a complimentary educational platform that provides an engaging learning experience through a series of interactive modules that deliver actionable financial education. Through the Financial Pathways Engage program, community members of all ages can learn how to manage their finances and plan for the future through educational workshops. The Engage program is led by Busey associates who are certified facilitators trained to lead the in-person and virtual sessions. After April’s training, we now have more than 70 Busey associates certified as Financial Pathways facilitators to offer valuable financial education to fellow associates, customers, and community members.
As we build upon Busey’s forward momentum and our strategic growth plans, we are grateful for the opportunities to consistently earn the business of our customers, based on the contributions of our talented associates and the continued support of our loyal shareholders.
| Van A. Dukeman | ||
| Chairman and Chief Executive Officer | ||
| First Busey Corporation |
| SELECTED FINANCIAL HIGHLIGHTS(unaudited) | |||||||||||||||||||
| (dollars in thousands, except per share amounts) | |||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||
| EARNINGS & PER SHARE AMOUNTS | |||||||||||||||||||
| Net income | $ | 27,357 | $ | 26,225 | $ | 29,364 | $ | 53,582 | $ | 66,150 | |||||||||
| Diluted earnings per common share | 0.47 | 0.46 | 0.52 | 0.94 | 1.18 | ||||||||||||||
| Cash dividends paid per share | 0.24 | 0.24 | 0.24 | 0.48 | 0.48 | ||||||||||||||
| Pre-provision net revenue1, 2 | 41,051 | 46,373 | 39,536 | 87,424 | 87,454 | ||||||||||||||
| Operating revenue2 | 116,311 | 109,677 | 108,741 | 225,988 | 227,062 | ||||||||||||||
| Net income by operating segments: | |||||||||||||||||||
| Banking | 26,697 | 26,492 | 30,665 | 53,189 | 67,500 | ||||||||||||||
| FirsTech | 28 | 86 | 226 | 114 | 188 | ||||||||||||||
| Wealth Management | 5,561 | 4,998 | 4,932 | 10,559 | 9,790 | ||||||||||||||
| AVERAGE BALANCES | |||||||||||||||||||
| Cash and cash equivalents | $ | 346,381 | $ | 594,193 | $ | 235,858 | $ | 470,287 | $ | 229,563 | |||||||||
| Investment securities | 2,737,313 | 2,907,144 | 3,255,741 | 2,822,228 | 3,307,575 | ||||||||||||||
| Loans held for sale | 9,353 | 4,833 | 1,941 | 7,093 | 1,796 | ||||||||||||||
| Portfolio loans | 8,010,636 | 7,599,316 | 7,755,618 | 7,804,976 | 7,733,370 | ||||||||||||||
| Interest-earning assets | 10,993,907 | 10,999,903 | 11,130,298 | 10,996,905 | 11,155,291 | ||||||||||||||
| Total assets | 12,089,692 | 12,024,208 | 12,209,865 | 12,056,950 | 12,236,643 | ||||||||||||||
| Noninterest-bearing deposits | 2,816,293 | 2,708,586 | 3,054,483 | 2,762,439 | 3,163,011 | ||||||||||||||
| Interest-bearing deposits | 7,251,582 | 7,330,105 | 6,797,588 | 7,290,844 | 6,717,939 | ||||||||||||||
| Total deposits | 10,067,875 | 10,038,691 | 9,852,071 | 10,053,283 | 9,880,950 | ||||||||||||||
| Federal funds purchased and securities sold under agreements to repurchase | 144,370 | 178,659 | 201,020 | 161,514 | 215,604 | ||||||||||||||
| Interest-bearing liabilities | 7,725,832 | 7,831,655 | 7,762,628 | 7,778,744 | 7,689,187 | ||||||||||||||
| Total liabilities | 10,757,877 | 10,748,484 | 11,001,930 | 10,753,180 | 11,047,164 | ||||||||||||||
| Stockholders' equity - common | 1,331,815 | 1,275,724 | 1,207,935 | 1,303,770 | 1,189,479 | ||||||||||||||
| Tangible common equity2 | 955,591 | 922,710 | 847,294 | 939,150 | 827,489 | ||||||||||||||
| PERFORMANCE RATIOS | |||||||||||||||||||
| Pre-provision net revenue to average assets1, 2, 3 | 1.37 | % | 1.55 | % | 1.30 | % | 1.46 | % | 1.44 | % | |||||||||
| Return on average assets3 | 0.91 | % | 0.88 | % | 0.96 | % | 0.89 | % | 1.09 | % | |||||||||
| Return on average common equity3 | 8.26 | % | 8.27 | % | 9.75 | % | 8.26 | % | 11.21 | % | |||||||||
| Return on average tangible common equity2, 3 | 11.51 | % | 11.43 | % | 13.90 | % | 11.47 | % | 16.12 | % | |||||||||
| Net interest margin2, 4 | 3.03 | % | 2.79 | % | 2.86 | % | 2.91 | % | 2.99 | % | |||||||||
| Efficiency ratio2 | 62.32 | % | 58.13 | % | 60.87 | % | 60.22 | % | 58.82 | % | |||||||||
| Adjusted noninterest income to operating revenue2 | 29.13 | % | 30.92 | % | 27.65 | % | 30.00 | % | 27.54 | % | |||||||||
| NON-GAAP FINANCIAL INFORMATION | |||||||||||||||||||
| Adjusted pre-provision net revenue1, 2 | $ | 42,617 | $ | 38,638 | $ | 42,072 | $ | 81,255 | $ | 91,576 | |||||||||
| Adjusted net income2 | 29,016 | 26,531 | 29,373 | 55,547 | 66,159 | ||||||||||||||
| Adjusted diluted earnings per share2 | 0.50 | 0.47 | 0.52 | 0.97 | 1.18 | ||||||||||||||
| Adjusted pre-provision net revenue to average assets2, 3 | 1.42 | % | 1.29 | % | 1.38 | % | 1.36 | % | 1.51 | % | |||||||||
| Adjusted return on average assets2, 3 | 0.97 | % | 0.89 | % | 0.96 | % | 0.93 | % | 1.09 | % | |||||||||
| Adjusted return on average tangible common equity2, 3 | 12.21 | % | 11.56 | % | 13.90 | % | 11.89 | % | 16.12 | % | |||||||||
| Adjusted net interest margin2, 4 | 3.00 | % | 2.78 | % | 2.84 | % | 2.89 | % | 2.98 | % | |||||||||
| Adjusted efficiency ratio2 | 60.57 | % | 61.70 | % | 60.86 | % | 61.12 | % | 58.81 | % | |||||||||
___________________________________________
- Net interest income plus noninterest income, excluding securities gains and losses, less noninterest expense.
- See “Non-GAAP Financial Information” for reconciliation.
- For quarterly periods, measures are annualized.
- 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 | |||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | |||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 285,269 | $ | 591,071 | $ | 232,703 | |||||
| Debt securities available for sale | 1,829,896 | 1,898,072 | 2,283,848 | ||||||||
| Debt securities held to maturity | 851,261 | 862,218 | 894,102 | ||||||||
| Equity securities | 9,618 | 9,790 | 9,034 | ||||||||
| Loans held for sale | 11,286 | 6,827 | 1,545 | ||||||||
| Commercial loans | 5,799,214 | 5,606,241 | 5,793,426 | ||||||||
| Retail real estate and retail other loans | 2,199,698 | 1,981,836 | 2,011,858 | ||||||||
| Portfolio loans | 7,998,912 | 7,588,077 | 7,805,284 | ||||||||
| Allowance for credit losses | (85,226 | ) | (91,562 | ) | (91,639 | ) | |||||
| Premises and equipment | 121,647 | 121,506 | 122,669 | ||||||||
| Goodwill and other intangible assets, net | 370,580 | 351,455 | 358,898 | ||||||||
| Right of use asset | 11,137 | 10,590 | 11,806 | ||||||||
| Other assets | 567,036 | 539,414 | 580,779 | ||||||||
| Total assets | $ | 11,971,416 | $ | 11,887,458 | $ | 12,209,029 | |||||
| LIABILITIES & STOCKHOLDERS' EQUITY | |||||||||||
| Liabilities | |||||||||||
| Deposits: | |||||||||||
| Noninterest-bearing deposits | $ | 2,832,776 | $ | 2,784,338 | $ | 3,086,885 | |||||
| Interest-bearing checking, savings, and money market deposits | 5,619,470 | 5,598,675 | 5,504,255 | ||||||||
| Time deposits | 1,523,889 | 1,577,178 | 1,471,615 | ||||||||
| Total deposits | 9,976,135 | 9,960,191 | 10,062,755 | ||||||||
| Securities sold under agreements to repurchase | 140,283 | 147,175 | 202,953 | ||||||||
| Short-term borrowings | — | — | 212,000 | ||||||||
| Long-term debt | 227,245 | 223,100 | 246,454 | ||||||||
| Junior subordinated debt owed to unconsolidated trusts | 74,693 | 72,040 | 71,900 | ||||||||
| Lease liability | 11,469 | 10,896 | 12,059 | ||||||||
| Other liabilities | 207,781 | 191,405 | 198,960 | ||||||||
| Total liabilities | 10,637,606 | 10,604,807 | 11,007,081 | ||||||||
| Stockholders' equity | |||||||||||
| Retained earnings | 261,820 | 248,412 | 207,660 | ||||||||
| Accumulated other comprehensive income (loss) | (220,326 | ) | (222,190 | ) | (260,921 | ) | |||||
| Other1 | 1,292,316 | 1,256,429 | 1,255,209 | ||||||||
| Total stockholders' equity | 1,333,810 | 1,282,651 | 1,201,948 | ||||||||
| Total liabilities & stockholders' equity | $ | 11,971,416 | $ | 11,887,458 | $ | 12,209,029 | |||||
| SHARE AND PER SHARE AMOUNTS | |||||||||||
| Book value per common share | $ | 23.50 | $ | 23.19 | $ | 21.74 | |||||
| Tangible book value per common share2 | $ | 16.97 | $ | 16.84 | $ | 15.25 | |||||
| Ending number of common shares outstanding | 56,746,937 | 55,300,008 | 55,290,847 | ||||||||
___________________________________________
- Net balance of common stock (
$0.00 1 par value), additional paid-in capital, and treasury stock. - See “Non-GAAP Financial Information” for reconciliation.
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME(unaudited) | |||||||||||||||||||
| (dollars in thousands, except per share amounts) | |||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||
| INTEREST INCOME | |||||||||||||||||||
| Interest and fees on loans | $ | 109,641 | $ | 99,325 | $ | 94,804 | $ | 208,966 | $ | 184,579 | |||||||||
| Interest and dividends on investment securities | 19,173 | 19,937 | 20,784 | 39,110 | 41,126 | ||||||||||||||
| Other interest income | 3,027 | 6,471 | 1,311 | 9,498 | 2,299 | ||||||||||||||
| Total interest income | $ | 131,841 | $ | 125,733 | $ | 116,899 | $ | 257,574 | $ | 228,004 | |||||||||
| INTEREST EXPENSE | |||||||||||||||||||
| Deposits | $ | 43,709 | $ | 43,968 | $ | 26,768 | $ | 87,677 | $ | 41,508 | |||||||||
| Federal funds purchased and securities sold under agreements to repurchase | 1,040 | 1,372 | 1,223 | 2,412 | 2,445 | ||||||||||||||
| Short-term borrowings | 418 | 232 | 5,741 | 650 | 10,563 | ||||||||||||||
| Long-term debt | 3,181 | 3,405 | 3,552 | 6,586 | 7,103 | ||||||||||||||
| Junior subordinated debt owed to unconsolidated trusts | 1,059 | 989 | 945 | 2,048 | 1,858 | ||||||||||||||
| Total interest expense | $ | 49,407 | $ | 49,966 | $ | 38,229 | $ | 99,373 | $ | 63,477 | |||||||||
| Net interest income | $ | 82,434 | $ | 75,767 | $ | 78,670 | $ | 158,201 | $ | 164,527 | |||||||||
| Provision for credit losses | 2,277 | 5,038 | 627 | 7,315 | 1,580 | ||||||||||||||
| Net interest income after provision for credit losses | $ | 80,157 | $ | 70,729 | $ | 78,043 | $ | 150,886 | $ | 162,947 | |||||||||
| NONINTEREST INCOME | |||||||||||||||||||
| Wealth management fees | $ | 15,917 | $ | 15,549 | $ | 14,562 | $ | 31,466 | $ | 29,359 | |||||||||
| Fees for customer services | 7,798 | 7,056 | 7,239 | 14,854 | 14,058 | ||||||||||||||
| Payment technology solutions | 5,915 | 5,709 | 5,231 | 11,624 | 10,546 | ||||||||||||||
| Mortgage revenue | 478 | 746 | 272 | 1,224 | 560 | ||||||||||||||
| Income on bank owned life insurance | 1,442 | 1,419 | 1,029 | 2,861 | 2,681 | ||||||||||||||
| Realized gain on the sale of mortgage servicing rights | 277 | 7,465 | — | 7,742 | — | ||||||||||||||
| Net securities gains (losses) | (353 | ) | (6,375 | ) | (2,059 | ) | (6,728 | ) | (2,675 | ) | |||||||||
| Other noninterest income | 2,327 | 3,431 | 1,738 | 5,758 | 5,331 | ||||||||||||||
| Total noninterest income | $ | 33,801 | $ | 35,000 | $ | 28,012 | $ | 68,801 | $ | 59,860 | |||||||||
| NONINTEREST EXPENSE | |||||||||||||||||||
| Salaries, wages, and employee benefits | $ | 43,478 | $ | 42,090 | $ | 39,859 | $ | 85,568 | $ | 80,190 | |||||||||
| Data processing expense | 7,100 | 6,550 | 5,902 | 13,650 | 11,542 | ||||||||||||||
| Net occupancy expense of premises | 4,590 | 4,720 | 4,540 | 9,310 | 9,302 | ||||||||||||||
| Furniture and equipment expense | 1,695 | 1,813 | 1,681 | 3,508 | 3,427 | ||||||||||||||
| Professional fees | 2,495 | 2,253 | 973 | 4,748 | 3,031 | ||||||||||||||
| Amortization of intangible assets | 2,629 | 2,409 | 2,669 | 5,038 | 5,398 | ||||||||||||||
| Interchange expense | 1,733 | 1,611 | 1,870 | 3,344 | 3,723 | ||||||||||||||
| FDIC insurance | 1,460 | 1,400 | 1,506 | 2,860 | 3,008 | ||||||||||||||
| Other noninterest expense | 10,357 | 7,923 | 10,205 | 18,280 | 19,987 | ||||||||||||||
| Total noninterest expense | $ | 75,537 | $ | 70,769 | $ | 69,205 | $ | 146,306 | $ | 139,608 | |||||||||
| Income before income taxes | $ | 38,421 | $ | 34,960 | $ | 36,850 | $ | 73,381 | $ | 83,199 | |||||||||
| Income taxes | 11,064 | 8,735 | 7,486 | 19,799 | 17,049 | ||||||||||||||
| Net income | $ | 27,357 | $ | 26,225 | $ | 29,364 | $ | 53,582 | $ | 66,150 | |||||||||
| SHARE AND PER SHARE AMOUNTS | |||||||||||||||||||
| Basic earnings per common share | $ | 0.48 | $ | 0.47 | $ | 0.53 | $ | 0.95 | $ | 1.19 | |||||||||
| Diluted earnings per common share | $ | 0.47 | $ | 0.46 | $ | 0.52 | $ | 0.94 | $ | 1.18 | |||||||||
| Average common shares outstanding | 56,919,025 | 55,416,589 | 55,440,277 | 56,167,807 | 55,419,250 | ||||||||||||||
| Diluted average common shares outstanding | 57,853,231 | 56,406,500 | 56,195,801 | 57,129,865 | 56,187,820 | ||||||||||||||
BALANCE SHEET STRENGTH
Our balance sheet remains a source of strength. Total assets were
As has been our practice, we remain steadfast in our conservative approach to underwriting and disciplined approach to pricing, particularly given our outlook for the economy in the coming quarters, and this approach has impacted loan growth as predicted. Portfolio loans totaled
Average portfolio loans were
Total deposits were
There were no short term borrowings as of June 30 or March 31, 2024, compared to
ASSET QUALITY
Credit quality continues to be strong. Loans 30-89 days past due totaled
Net charge-offs were
Busey 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 | |||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | |||||||||
| Total assets | $ | 11,971,416 | $ | 11,887,458 | $ | 12,209,029 | |||||
| Portfolio loans | 7,998,912 | 7,588,077 | 7,805,284 | ||||||||
| Loans 30 – 89 days past due | 23,463 | 7,441 | 5,169 | ||||||||
| Non-performing loans: | |||||||||||
| Non-accrual loans | 8,393 | 17,465 | 15,209 | ||||||||
| Loans 90+ days past due and still accruing | 712 | 88 | 569 | ||||||||
| Non-performing loans | $ | 9,105 | $ | 17,553 | $ | 15,778 | |||||
| Non-performing loans, segregated by geography: | |||||||||||
| Illinois / Indiana | $ | 5,793 | $ | 13,553 | $ | 11,681 | |||||
| Missouri | 3,089 | 3,746 | 3,928 | ||||||||
| Florida | 222 | 254 | 169 | ||||||||
| Other non-performing assets | 90 | 65 | 68 | ||||||||
| Non-performing assets | $ | 9,195 | $ | 17,618 | $ | 15,846 | |||||
| Allowance for credit losses | $ | 85,226 | $ | 91,562 | $ | 91,639 | |||||
| RATIOS | |||||||||||
| Non-performing loans to portfolio loans | 0.11 | % | 0.23 | % | 0.20 | % | |||||
| Non-performing assets to total assets | 0.08 | % | 0.15 | % | 0.13 | % | |||||
| Non-performing assets to portfolio loans and other non-performing assets | 0.11 | % | 0.23 | % | 0.20 | % | |||||
| Allowance for credit losses to portfolio loans | 1.07 | % | 1.21 | % | 1.17 | % | |||||
| Allowance for credit losses as a percentage of non-performing loans | 936.04 | % | 521.63 | % | 580.80 | % | |||||
| NET CHARGE-OFFS (RECOVERIES) AND PROVISION EXPENSE (RELEASE)(unaudited) | ||||||||||||||
| (dollars in thousands) | ||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||
| Net charge-offs (recoveries) | $ | 9,856 | $ | 5,216 | $ | 715 | $ | 15,072 | $ | 1,549 | ||||
| Provision expense (release) | 2,277 | 5,038 | 627 | 7,315 | 1,580 | |||||||||
NET INTEREST MARGIN AND NET INTEREST INCOME
Net interest margin1 was
The FOMC raised rates by a total of 525 basis points since the onset of the current FOMC tightening cycle that began in the first quarter of 2022, with no further increases during 2024. 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 increase in response to the tightening rate cycle, and we experience deposit migration into higher cost offerings and funding alternatives, some of the net interest margin expansion is reversed, which we began to experience in the first quarter of 2023. As lower yielding securities and loans continue to mature or renew at higher current market rates, expansion in asset yields has outpaced any remaining lagged pressure on funding costs. Our deposit cost of funds peaked in the beginning of the first quarter of 2024, and we have been able to remain below that peak funding cost each month during the second quarter. We continue to offer CD specials with shorter term structures as well as offering attractive premium savings rates to encourage rotation of maturing CD deposits into nimble pricing products as the expected easing cycle begins. The acquisition of M&M Bank provided higher yielding assets to our loan book, and we leveraged the consolidated Company liquidity strength to unwind higher cost funding of
- Increased loan portfolio yield contributed +35 basis points
- Reduced time deposit funding costs contributed +7 basis points
- Balance Sheet repositioning contributed +3 basis points
- Increased purchase accounting contributed +2 basis points
- Reduced borrowing expense +1 basis point
- Decreased cash and securities portfolio yield contributed -18 basis points
- Increased non-maturity deposit funding costs contributed -6 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
Consolidated wealth management fees were
Payment technology solutions revenue was
Revenues from wealth management fees and payment technology solutions activities represented
Fees for customer services were
Net securities losses were
Other noninterest income was
OPERATING EFFICIENCY
Second quarter expenses include the costs of operating M&M Bank as a stand-alone bank from April 1, 2024, through June 21, 2024. Noninterest expense was
Noteworthy components of noninterest expense are as follows:
- Salaries, wages, and employee benefits expenses were
$43.5 million in the second quarter of 2024, compared to$42.1 million in the first quarter of 2024 and$39.9 million in the second quarter of 2023. Busey recorded$1.1 million of non-operating salaries, wages, and employee benefit expenses in the second quarter of 2024, compared to$0.1 million in the first quarter of 2024 and none in the second quarter of 2023. Our associate-base consisted of 1,520 full-time equivalents as of June 30, 2024, compared to 1,464 as of March 31, 2024, and 1,477 as of June 30, 2023. The increase in our associate-base in the second quarter of 2024 was largely due to the M&M acquisition. - Data processing expense was
$7.1 million in the second quarter of 2024, compared to$6.6 million in the first quarter of 2024 and$5.9 million in the second quarter of 2023. Busey recorded$0.3 million of non-operating data processing expenses in the second quarter of 2024, compared to$0.1 million in the first quarter of 2024 and none in the second quarter of 2023. Busey has continued to make investments in technology enhancements and has also experienced inflation-driven price increases. - Professional fees were
$2.5 million in the second quarter of 2024, compared to$2.3 million in the first quarter of 2024 and$1.0 million in the second quarter of 2023. Busey recorded$0.4 million of non-operating professional fees in the second quarter of 2024, as compared to$0.1 million in the first quarter of 2024 and none in the second quarter of 2023. - Amortization of intangible assets was
$2.6 million in the second quarter of 2024, compared to$2.4 million in the first quarter of 2024 and$2.7 million in the second quarter of 2023. - Other noninterest expense was
$10.4 million for the second quarter of 2024, compared to$7.9 million in the first quarter of 2024 and$10.2 million in the second quarter of 2023. Busey recorded$0.3 million of non-operating costs in other noninterest expense in the second quarter of 2024, compared to immaterial amounts in the first quarter of 2024 and the second quarter of 2023. In connection with Busey’s adoption of ASU 2023-02 on January 1, 2024, Busey began recording amortization of New Markets Tax Credits as income tax expense instead of other operating expense, which resulted in a decrease to other operating expenses of$2.3 million compared to the second quarter of 2023. Other items contributing to the fluctuations in other noninterest expense included the provision for unfunded commitments, sales of other real estate owned, fixed asset impairment, marketing, and business development expenses.
Busey's effective tax rate for the second quarter of 2024 was
CAPITAL STRENGTH
Busey's strong capital levels, coupled with its earnings, have allowed the Company to provide a steady return to its stockholders through dividends. On July 26, 2024, Busey will pay a cash dividend of
As of June 30, 2024, Busey continued to exceed the capital adequacy requirements necessary to be considered “well-capitalized” under applicable regulatory guidelines. Busey’s Common Equity Tier 1 ratio is estimated4 to be
Busey’s tangible common equity1 was
2Q24 EARNINGS INVESTOR PRESENTATION
For additional information on Busey’s financial condition and operating results, please refer to the 2Q24 Earnings Investor Presentation furnished via Form 8-K on July 23, 2024, in connection with this earnings release.
CORPORATE PROFILE
As of June 30, 2024, First Busey Corporation (Nasdaq: BUSE) was an
Busey Bank, a wholly-owned bank subsidiary of First Busey Corporation, had total assets of
Through Busey’s Wealth Management division, the Company provides a full range of asset management, investment, brokerage, fiduciary, philanthropic advisory, tax preparation, and farm management services to individuals, businesses, and foundations. Assets under care totaled
Busey Bank’s wholly-owned subsidiary, FirsTech, specializes in the evolving financial technology needs of small and medium-sized businesses, highly regulated enterprise industries, and financial institutions. FirsTech provides comprehensive and innovative payment technology solutions, including online, mobile, and voice-recognition bill payments; money and data movement; merchant services; direct debit services; lockbox remittance processing for payments made by mail; and walk-in payments at retail agents. Additionally, FirsTech simplifies client workflows through integrations enabling support with billing, reconciliation, bill reminders, and treasury services. More information about FirsTech can be found at firstechpayments.com.
For the first time, Busey was named among the World’s Best Banks for 2024 by Forbes, earning a spot on the list among 68 U.S. banks and 403 worldwide. Additionally, Busey Bank was honored to be named among America’s Best Banks by Forbes magazine for the third consecutive year. Ranked 40th overall in 2024, Busey was the second-ranked bank headquartered in Illinois of the six that made this year’s list and the highest-ranked of those with more than
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. Management uses these non-GAAP measures, together with the related GAAP measures, in analysis of Busey’s performance and in making business decisions, as well as for comparison to Busey’s peers. Busey believes the adjusted measures are useful for investors and management to understand the effects of certain non-core and non-recurring noninterest items and provide additional perspective on Busey’s performance over time.
Below is 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, average tangible common equity, return on average tangible common equity, adjusted return on average tangible common equity; net income and net security gains and losses in the case of further adjusted net income and further adjusted diluted earnings per share; 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 income, adjusted noninterest expense, noninterest expense excluding non-operating adjustments, adjusted core expense, efficiency ratio, adjusted efficiency ratio, and adjusted core efficiency ratio; net interest income, total noninterest income, net securities gains and losses, and gain on sale of mortgage servicing rights in the case of operating revenue and adjusted noninterest income to operating revenue; total assets and goodwill and other intangible assets in the case of tangible assets; 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; and total deposits in the case of core deposits and core deposits to total deposits.
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, estimated federal income tax rates, or effective tax rates, as noted with the tables below.
| 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 | Six Months Ended | |||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||||||||
| PRE-PROVISION NET REVENUE | ||||||||||||||||||||
| Net interest income | $ | 82,434 | $ | 75,767 | $ | 78,670 | $ | 158,201 | $ | 164,527 | ||||||||||
| Total noninterest income | 33,801 | 35,000 | 28,012 | 68,801 | 59,860 | |||||||||||||||
| Net security (gains) losses | 353 | 6,375 | 2,059 | 6,728 | 2,675 | |||||||||||||||
| Total noninterest expense | (75,537 | ) | (70,769 | ) | (69,205 | ) | (146,306 | ) | (139,608 | ) | ||||||||||
| Pre-provision net revenue | 41,051 | 46,373 | 39,536 | 87,424 | 87,454 | |||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||
| Acquisition and other restructuring expenses | 2,212 | 408 | 12 | 2,620 | 12 | |||||||||||||||
| Provision for unfunded commitments | (369 | ) | (678 | ) | 265 | (1,047 | ) | (370 | ) | |||||||||||
| Amortization of New Markets Tax Credits | — | — | 2,259 | — | 4,480 | |||||||||||||||
| Gain on sale of mortgage service rights | (277 | ) | (7,465 | ) | — | (7,742 | ) | — | ||||||||||||
| Adjusted pre-provision net revenue | $ | 42,617 | $ | 38,638 | $ | 42,072 | $ | 81,255 | $ | 91,576 | ||||||||||
| Pre-provision net revenue, annualized | [a] | $ | 165,106 | $ | 186,511 | $ | 158,578 | $ | 175,809 | $ | 176,358 | |||||||||
| Adjusted pre-provision net revenue, annualized | [b] | 171,405 | 155,401 | 168,750 | 163,403 | 184,670 | ||||||||||||||
| Average total assets | [c] | 12,089,692 | 12,024,208 | 12,209,865 | 12,056,950 | 12,236,643 | ||||||||||||||
| Reported:Pre-provision net revenue to average assets1 | [a÷c] | 1.37 | % | 1.55 | % | 1.30 | % | 1.46 | % | 1.44 | % | |||||||||
| Adjusted:Pre-provision net revenue to average assets1 | [b÷c] | 1.42 | % | 1.29 | % | 1.38 | % | 1.36 | % | 1.51 | % | |||||||||
___________________________________________
- Annualized measure.
| 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 | Six Months Ended | |||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||||||||
| NET INCOME ADJUSTED FOR NON-OPERATING ITEMS | ||||||||||||||||||||
| Net income | [a] | $ | 27,357 | $ | 26,225 | $ | 29,364 | $ | 53,582 | $ | 66,150 | |||||||||
| Non-GAAP adjustments for non-operating items: | ||||||||||||||||||||
| Acquisition expenses: | ||||||||||||||||||||
| Salaries, wages, and employee benefits | 1,137 | — | — | 1,137 | — | |||||||||||||||
| Data processing | 344 | 100 | — | 444 | — | |||||||||||||||
| Professional fees, occupancy, furniture and fixtures, and other | 731 | 185 | 12 | 916 | 12 | |||||||||||||||
| Other restructuring expenses: | ||||||||||||||||||||
| Salaries, wages, and employee benefits | — | 123 | — | 123 | — | |||||||||||||||
| Related tax benefit1 | (553 | ) | (102 | ) | (3 | ) | (655 | ) | (3 | ) | ||||||||||
| Adjusted net income | [b] | $ | 29,016 | $ | 26,531 | $ | 29,373 | $ | 55,547 | $ | 66,159 | |||||||||
| DILUTED EARNINGS PER SHARE | ||||||||||||||||||||
| Diluted average common shares outstanding | [c] | 57,853,231 | 56,406,500 | 56,195,801 | 57,129,865 | 56,187,820 | ||||||||||||||
| Reported:Diluted earnings per share | [a÷c] | $ | 0.47 | $ | 0.46 | $ | 0.52 | $ | 0.94 | $ | 1.18 | |||||||||
| Adjusted:Diluted earnings per share | [b÷c] | $ | 0.50 | $ | 0.47 | $ | 0.52 | $ | 0.97 | $ | 1.18 | |||||||||
| RETURN ON AVERAGE ASSETS | ||||||||||||||||||||
| Net income, annualized | [d] | $ | 110,029 | $ | 105,476 | $ | 117,779 | $ | 107,753 | $ | 133,396 | |||||||||
| Adjusted net income, annualized | [e] | 116,702 | 106,707 | 117,815 | 111,704 | 133,415 | ||||||||||||||
| Average total assets | [f] | 12,089,692 | 12,024,208 | 12,209,865 | 12,056,950 | 12,236,643 | ||||||||||||||
| Reported:Return on average assets2 | [d÷f] | 0.91 | % | 0.88 | % | 0.96 | % | 0.89 | % | 1.09 | % | |||||||||
| Adjusted:Return on average assets2 | [e÷f] | 0.97 | % | 0.89 | % | 0.96 | % | 0.93 | % | 1.09 | % | |||||||||
| RETURN ON AVERAGE TANGIBLE COMMON EQUITY | ||||||||||||||||||||
| Average common equity | $ | 1,331,815 | $ | 1,275,724 | $ | 1,207,935 | $ | 1,303,770 | $ | 1,189,479 | ||||||||||
| Average goodwill and other intangible assets, net | (376,224 | ) | (353,014 | ) | (360,641 | ) | (364,620 | ) | (361,990 | ) | ||||||||||
| Average tangible common equity | [g] | $ | 955,591 | $ | 922,710 | $ | 847,294 | $ | 939,150 | $ | 827,489 | |||||||||
| Reported:Return on average tangible common equity2 | [d÷g] | 11.51 | % | 11.43 | % | 13.90 | % | 11.47 | % | 16.12 | % | |||||||||
| Adjusted:Return on average tangible common equity2 | [e÷g] | 12.21 | % | 11.56 | % | 13.90 | % | 11.89 | % | 16.12 | % | |||||||||
___________________________________________
- Year-to-date tax benefits were calculated by multiplying year-to-date acquisition expenses and other restructuring expenses by the effective income tax rate for each year-to-date period, which for 2024 excludes a one-time deferred tax valuation adjustment resulting from a change in Illinois apportionment rate due to recently enacted regulations. Tax rates used in these calculations were
25.0% and20.5% for the six months ended June 30, 2024 and 2023, respectively. Quarterly tax benefits were calculated as the year-to-date tax benefit amounts less the sum of amounts applied to previous quarters during the year, equating to tax rates of25.0% ,25.0% , and20.5% for the three months ended June 30, 2024, March 31, 2024, and June 30, 2023, respectively. - Annualized measure.
| Further Adjusted Net Income and Further Adjusted Diluted Earnings Per Share | ||||||||||||||||||||
| (dollars in thousands, except per share amounts) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||||||||
| Adjusted net income1 | [a] | $ | 29,016 | $ | 26,531 | $ | 29,373 | $ | 55,547 | $ | 66,159 | |||||||||
| Further non-GAAP adjustments: | ||||||||||||||||||||
| Net securities (gains) losses | 353 | 6,375 | 2,059 | 6,728 | 2,675 | |||||||||||||||
| Gain on sale of mortgage servicing rights | (277 | ) | (7,465 | ) | — | (7,742 | ) | — | ||||||||||||
| Tax effect for further non-GAAP adjustments2 | (19 | ) | 272 | (418 | ) | 254 | (548 | ) | ||||||||||||
| Tax effected further non-GAAP adjustments3 | 57 | (818 | ) | 1,641 | (760 | ) | 2,127 | |||||||||||||
| Further adjusted net income3 | [b] | $ | 29,073 | $ | 25,713 | $ | 31,014 | $ | 54,787 | $ | 68,286 | |||||||||
| One-time deferred tax valuation adjustment4 | 1,446 | — | — | 1,446 | — | |||||||||||||||
| Further adjusted net income, excluding one-time deferred tax valuation adjustment3 | [c] | $ | 30,519 | $ | 25,713 | $ | 31,014 | $ | 56,233 | $ | 68,286 | |||||||||
| Diluted average common shares outstanding | [d] | 57,853,231 | 56,406,500 | 56,195,801 | 57,129,865 | 56,187,820 | ||||||||||||||
| Adjusted:Diluted earnings per share | [a÷d] | $ | 0.50 | $ | 0.47 | $ | 0.52 | $ | 0.97 | $ | 1.18 | |||||||||
| Further Adjusted:Diluted earnings per share3 | [b÷d] | $ | 0.50 | $ | 0.46 | $ | 0.55 | $ | 0.96 | $ | 1.22 | |||||||||
| Further Adjusted, excluding one-time deferred tax valuation adjustment:Diluted earnings per share3 | [c÷d] | $ | 0.53 | $ | 0.46 | $ | 0.55 | $ | 0.98 | $ | 1.22 | |||||||||
___________________________________________
- Adjusted net income is a non-GAAP measure. See the table on the previous page for a reconciliation to the nearest GAAP measure.
- Tax effects for further non-GAAP adjustments were calculated by multiplying further non-GAAP adjustments by the effective income tax rate for each period, which for 2024 excludes a one-time deferred tax valuation adjustment resulting from a change in Illinois apportionment rate due to recently enacted regulations. Effective income tax rates were
25.0% ,25.0% , and20.3% for the three months ended June 30, 2024, March 31, 2024, and June 30, 2023, respectively, and were25.0% and20.5% for the six months ended June 30, 2024 and 2023, respectively. - Tax-effected measure.
- A one-time deferred tax valuation adjustment of
$1.4 million resulted from a change to our Illinois apportionment rate due to recently enacted regulations.
| Adjusted Net Interest Income and Adjusted Net Interest Margin | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||||||||
| Net interest income | $ | 82,434 | $ | 75,767 | $ | 78,670 | $ | 158,201 | $ | 164,527 | ||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||
| Tax-equivalent adjustment1 | 402 | 449 | 561 | 851 | 1,119 | |||||||||||||||
| Tax-equivalent net interest income | 82,836 | 76,216 | 79,231 | 159,052 | 165,646 | |||||||||||||||
| Purchase accounting accretion related to business combinations | (812 | ) | (204 | ) | (413 | ) | (1,016 | ) | (816 | ) | ||||||||||
| Adjusted net interest income | $ | 82,024 | $ | 76,012 | $ | 78,818 | $ | 158,036 | $ | 164,830 | ||||||||||
| Tax-equivalent net interest income, annualized | [a] | $ | 333,165 | $ | 306,539 | $ | 317,795 | $ | 319,852 | $ | 334,038 | |||||||||
| Adjusted net interest income, annualized | [b] | 329,899 | 305,719 | 316,138 | 317,809 | 332,392 | ||||||||||||||
| Average interest-earning assets | [c] | 10,993,907 | 10,999,903 | 11,130,298 | 10,996,905 | 11,155,291 | ||||||||||||||
| Reported:Net interest margin2 | [a÷c] | 3.03 | % | 2.79 | % | 2.86 | % | 2.91 | % | 2.99 | % | |||||||||
| Adjusted:Net interest margin2 | [b÷c] | 3.00 | % | 2.78 | % | 2.84 | % | 2.89 | % | 2.98 | % | |||||||||
___________________________________________
- Tax-equivalent adjustments were calculated using an estimated federal income tax rate of
21% , applied to non-taxable interest income on investments and loans. - Annualized measure.
| Adjusted Noninterest Income, Operating Revenue, Adjusted Noninterest Income to Operating Revenue, 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 | Six Months Ended | |||||||||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||||||||
| Net interest income | [a] | $ | 82,434 | $ | 75,767 | $ | 78,670 | $ | 158,201 | $ | 164,527 | |||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||
| Tax-equivalent adjustment1 | 402 | 449 | 561 | 851 | 1,119 | |||||||||||||||
| Tax-equivalent net interest income | [b] | 82,836 | 76,216 | 79,231 | 159,052 | 165,646 | ||||||||||||||
| Total noninterest income | 33,801 | 35,000 | 28,012 | 68,801 | 59,860 | |||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||
| Net security (gains) losses | 353 | 6,375 | 2,059 | 6,728 | 2,675 | |||||||||||||||
| Noninterest income excluding net securities gains and losses | [c] | 34,154 | 41,375 | 30,071 | 75,529 | 62,535 | ||||||||||||||
| Further adjustments: | ||||||||||||||||||||
| Gain on sale of mortgage servicing rights | (277 | ) | (7,465 | ) | — | (7,742 | ) | — | ||||||||||||
| Adjusted noninterest income | [d] | $ | 33,877 | $ | 33,910 | $ | 30,071 | $ | 67,787 | $ | 62,535 | |||||||||
| Tax-equivalent revenue | [e = b+c] | $ | 116,990 | $ | 117,591 | $ | 109,302 | $ | 234,581 | $ | 228,181 | |||||||||
| Adjusted tax-equivalent revenue | [f = b+d] | $ | 116,713 | $ | 110,126 | $ | 109,302 | $ | 226,839 | $ | 228,181 | |||||||||
| Operating revenue | [g = a+d] | $ | 116,311 | $ | 109,677 | $ | 108,741 | $ | 225,988 | $ | 227,062 | |||||||||
| Adjusted noninterest income to operating revenue | [d÷g] | 29.13 | % | 30.92 | % | 27.65 | % | 30.00 | % | 27.54 | % | |||||||||
| Total noninterest expense | $ | 75,537 | $ | 70,769 | $ | 69,205 | $ | 146,306 | $ | 139,608 | ||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||
| Amortization of intangible assets | [h] | (2,629 | ) | (2,409 | ) | (2,669 | ) | (5,038 | ) | (5,398 | ) | |||||||||
| Noninterest expense excluding amortization of intangible assets | [i] | 72,908 | 68,360 | 66,536 | 141,268 | 134,210 | ||||||||||||||
| Non-operating adjustments: | ||||||||||||||||||||
| Salaries, wages, and employee benefits | (1,137 | ) | (123 | ) | — | (1,260 | ) | — | ||||||||||||
| Data processing | (344 | ) | (100 | ) | — | (444 | ) | — | ||||||||||||
| Professional fees, occupancy, furniture and fixtures, and other | (731 | ) | (185 | ) | (12 | ) | (916 | ) | (12 | ) | ||||||||||
| Adjusted noninterest expense | [j] | 70,696 | 67,952 | 66,524 | 138,648 | 134,198 | ||||||||||||||
| Provision for unfunded commitments | 369 | 678 | (265 | ) | 1,047 | 370 | ||||||||||||||
| Amortization of New Markets Tax Credits | — | — | (2,259 | ) | — | (4,480 | ) | |||||||||||||
| Adjusted core expense | [k] | $ | 71,065 | $ | 68,630 | $ | 64,000 | $ | 139,695 | $ | 130,088 | |||||||||
| Noninterest expense, excluding non-operating adjustments | [j-h] | $ | 73,325 | $ | 70,361 | $ | 69,193 | $ | 143,686 | $ | 139,596 | |||||||||
| Reported:Efficiency ratio | [i÷e] | 62.32 | % | 58.13 | % | 60.87 | % | 60.22 | % | 58.82 | % | |||||||||
| Adjusted:Efficiency ratio | [j÷f] | 60.57 | % | 61.70 | % | 60.86 | % | 61.12 | % | 58.81 | % | |||||||||
| Adjusted:Core efficiency ratio | [k÷f] | 60.89 | % | 62.32 | % | 58.55 | % | 61.58 | % | 57.01 | % | |||||||||
___________________________________________
- Tax-equivalent adjustments were calculated using an estimated federal income tax rate of
21% , applied to non-taxable interest income on investments and loans.
| Tangible Book Value and Tangible Book Value Per Common Share | ||||||||||||
| (dollars in thousands, except per share amounts) | ||||||||||||
| As of | ||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | ||||||||||
| Total stockholders' equity | $ | 1,333,810 | $ | 1,282,651 | $ | 1,201,948 | ||||||
| Non-GAAP adjustments: | ||||||||||||
| Goodwill and other intangible assets, net | (370,580 | ) | (351,455 | ) | (358,898 | ) | ||||||
| Tangible book value | [a] | $ | 963,230 | $ | 931,196 | $ | 843,050 | |||||
| Ending number of common shares outstanding | [b] | 56,746,937 | 55,300,008 | 55,290,847 | ||||||||
| Tangible book value per common share | [a÷b] | $ | 16.97 | $ | 16.84 | $ | 15.25 | |||||
| Tangible Assets, Tangible Common Equity, and Tangible Common Equity to Tangible Assets | ||||||||||||
| (dollars in thousands) | ||||||||||||
| As of | ||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | ||||||||||
| Total assets | $ | 11,971,416 | $ | 11,887,458 | $ | 12,209,029 | ||||||
| Non-GAAP adjustments: | ||||||||||||
| Goodwill and other intangible assets, net | (370,580 | ) | (351,455 | ) | (358,898 | ) | ||||||
| Tax effect of other intangible assets1 | 7,687 | 6,434 | 7,833 | |||||||||
| Tangible assets2 | [a] | $ | 11,608,523 | $ | 11,542,437 | $ | 11,857,964 | |||||
| Total stockholders' equity | $ | 1,333,810 | $ | 1,282,651 | $ | 1,201,948 | ||||||
| Non-GAAP adjustments: | ||||||||||||
| Goodwill and other intangible assets, net | (370,580 | ) | (351,455 | ) | (358,898 | ) | ||||||
| Tax effect of other intangible assets1 | 7,687 | 6,434 | 7,833 | |||||||||
| Tangible common equity2 | [b] | $ | 970,917 | $ | 937,630 | $ | 850,883 | |||||
| Tangible common equity to tangible assets2 | [b÷a] | 8.36 | % | 8.12 | % | 7.18 | % | |||||
___________________________________________
- Net of estimated deferred tax liability, calculated using the estimated statutory tax rate of
28% . - Tax-effected measure.
| Core Deposits, Core Deposits to Total Deposits, and Portfolio Loans to Core Deposits | ||||||||||||
| (dollars in thousands) | ||||||||||||
| As of | ||||||||||||
| June 30, 2024 | March 31, 2024 | June 30, 2023 | ||||||||||
| Portfolio loans | [a] | $ | 7,998,912 | $ | 7,588,077 | $ | 7,805,284 | |||||
| Total deposits | [b] | $ | 9,976,135 | $ | 9,960,191 | $ | 10,062,755 | |||||
| Non-GAAP adjustments: | ||||||||||||
| Brokered deposits, excluding brokered time deposits of | (43,089 | ) | (6,001 | ) | (6,055 | ) | ||||||
| Time deposits of | (314,461 | ) | (326,795 | ) | (297,967 | ) | ||||||
| Core deposits | [c] | $ | 9,618,585 | $ | 9,627,395 | $ | 9,758,733 | |||||
| RATIOS | ||||||||||||
| Core deposits to total deposits | [c÷b] | 96.42 | % | 96.66 | % | 96.98 | % | |||||
| Portfolio loans to core deposits | [a÷c] | 83.16 | % | 78.82 | % | 79.98 | % | |||||
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 Busey’s financial condition, results of operations, plans, objectives, future performance, and business. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of Busey’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 Busey undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond Busey’s ability to control or predict, could cause actual results to differ materially from those in any forward-looking statements. These factors include, among others, the following: (1) the strength of the local, state, national, and international economy (including effects of inflationary pressures and supply chain constraints); (2) the economic impact of any future terrorist threats or attacks, widespread disease or pandemics, or other adverse external events that could cause economic deterioration or instability in credit markets (including Russia’s invasion of Ukraine and the Israeli-Palestinian conflict); (3) changes in state and federal laws, regulations, and governmental policies concerning Busey's general business (including changes in response to the failures of other banks or as a result of the upcoming 2024 presidential election); (4) changes in accounting policies and practices; (5) changes in interest rates and prepayment rates of Busey’s assets (including the impact of sustained elevated interest rates); (6) 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; (7) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (8) the loss of key executives or associates; (9) changes in consumer spending; (10) unexpected results of acquisitions (including the acquisition of M&M); (11) unexpected outcomes of existing or new litigation, investigations, or inquiries involving Busey (including with respect to Busey’s Illinois franchise taxes); (12) fluctuations in the value of securities held in Busey’s securities portfolio; (13) concentrations within Busey’s loan portfolio (including commercial real estate loans), large loans to certain borrowers, and large deposits from certain clients; (14) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; (15) the level of non-performing assets on Busey’s balance sheets; (16) interruptions involving information technology and communications systems or third-party servicers; (17) breaches or failures of information security controls or cybersecurity-related incidents; and (18) the economic impact of exceptional weather occurrences such as tornadoes, hurricanes, floods, blizzards, and droughts. 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 Busey and its business, including additional factors that could materially affect Busey’s financial results, is included in Busey’s filings with the Securities and Exchange Commission.
END NOTES
| 1 | See "Non-GAAP Financial Information" for a reconciliation. |
| 2 | Estimated uninsured and uncollateralized deposits consist of account balances in excess of the |
| 3 | Central Business District areas within Busey’s footprint include downtown St. Louis, downtown Indianapolis, and downtown Chicago. |
| 4 | Capital amounts and ratios for the second quarter of 2024 are not yet finalized and are subject to change. |
| 5 | On- and off-balance sheet liquidity is comprised of cash and cash equivalents, debt securities excluding those pledged as collateral, brokered deposits, and Busey’s borrowing capacity through its revolving credit facility, the FHLB, the Federal Reserve Bank, and federal funds purchased lines. |
| 6 | The blended benchmark consists of |
FAQ
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