First Busey Corporation (Nasdaq: BUSE)
Message from our Chairman &
CEO
Second Quarter
2023
Highlights:
- Excluding net securities losses, net
income1 for the second quarter of 2023 of $31.0 million or
$0.55 per share
- Total deposits increased
$261.6 million, or 2.7%, quarter-over-quarter, to
$10.06 billion
- Short-term borrowings decreased to
$212.0 million, compared to $615.9 million at the end of
the first quarter of 2023
- Non-performing assets of 0.13% of
total assets, and allowance for credit losses of 580.80% of
nonperforming loans
- Classified assets declined to
$81.9 million, compared to $103.9 million at the close of
the first quarter of 2023
- Tangible common equity ratio1 of
7.18%, a 13 basis point increase from the first quarter of
2023
- Efficiency ratio of 60.87%1 and
adjusted core efficiency ratio1 of 58.55%
- For additional information, please
refer to the 2Q23 Earnings Investor Presentation
Second Quarter Financial ResultsNet income for
First Busey Corporation (“First Busey” or the “Company”) was $29.4
million for the second quarter of 2023, or $0.52 per diluted common
share, compared to $36.8 million, or $0.65 per diluted common
share, for the first quarter of 2023, and $29.8 million, or $0.53
per diluted common share, for the second quarter of 2022.
Adjustments to net income for the second quarter of 2023 were
immaterial, and there were no adjustments to net income for the
first quarter of 2023. Adjusted net income1 was $30.1 million, or
$0.54 per diluted common share, for the second quarter of 2022.
Annualized return on average assets and annualized return on
average tangible common equity1 were 0.96% and 13.90%,
respectively, for the second quarter of 2023. Net income includes
net losses on securities of $2.1 million for the second
quarter of 2023, $0.6 million for the first quarter of 2023,
and $1.7 million for the second quarter of 2022. Excluding
these securities losses, which are largely unrealized, net income1
for the second quarter of 2023 would have been $31.0 million,
resulting in diluted EPS1 of $0.55.
Pre-provision net revenue1 was $39.5 million for
the second quarter of 2023, compared to $47.9 million for the first
quarter of 2023 and $39.6 million for the second quarter of 2022.
Adjusted pre-provision net revenue1 was $42.1 million for the
second quarter of 2023, compared to $49.5 million for the first
quarter of 2023 and $41.3 million for the second quarter of 2022.
Pre-provision net revenue to average assets1 was 1.30% for the
second quarter of 2023, compared to 1.58% for the first quarter of
2023, and 1.27% for the second quarter of 2022. Adjusted
pre-provision net revenue to average assets1 was 1.38% for the
second quarter of 2023, compared to 1.64% for the first quarter of
2023 and 1.33% for the second quarter of 2022.
The decline in pre-provision net revenue in the
second quarter, compared to the first quarter, was primarily the
result of a $7.2 million decrease in net interest income,
which is the result of deposits migrating into higher cost
offerings along with an increase in short-term borrowings as we
progress through the current tightening cycle that began in the
first quarter of 2022. Net interest margin declined from 3.13% in
the first quarter of 2023 to 2.86% in the second quarter of
2023.
Our fee-based businesses continue to add revenue
diversification. Excluding net securities gains and losses1,
noninterest income of $30.1 million accounted for 27.7% of total
operating revenue2 during the second quarter of 2023, compared to
$32.5 million which accounted for 27.4% of total operating
revenue for the first quarter of 2023 and $32.7 million which
accounted for 30.1% of total operating revenue for the second
quarter of 2022. Beginning on July 1, 2022, we became subject to
the Durbin Amendment of the Dodd-Frank Act. The impact of these
rules in the second quarter of 2023 was a $2.4 million
reduction in fee income. Excluding the impact from the Durbin
Amendment, fees for customer services were up 0.8% from the second
quarter of 2022.
During 2023, and 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.
The impact of these efforts are reflected in our operating results.
During a time of decades-high inflation, we have effectively
managed our noninterest expense. Noninterest expense was
$69.2 million in the second quarter of 2023, compared to
$70.4 million in the first quarter of 2023 and
$69.1 million in the second quarter of 2022. Adjusted core
expense1 was $64.0 million in the second quarter of 2023,
compared to $66.1 million in the first quarter of 2023 and
$64.4 million in the second quarter of 2022. As we enter the
second half of 2023, we expect to continue prudently managing our
expenses. These efforts are helping to offset some of the
inflationary pressures that exist today while allowing us to invest
back into other parts of our company.
First Busey’s Conservative Banking StrategyFirst
Busey’s financial strength is built on a sound business strategy of
conservative banking. That focus will not change now or in the
future.
The Company's growth trend for portfolio loans
continued during the second quarter of 2023, albeit at a moderate
pace. Loans are being originated at attractive spreads while not
compromising on our prudent underwriting standards. Loan growth was
$21.5 million in the second quarter of 2023, compared to
growth of $58.1 million in the first quarter of 2023 and
$224.9 million in the second quarter of 2022. Over the last
four quarters, the Company has generated $307.5 million in
portfolio loan growth, equating to a year-over-year growth rate of
4.1%. Our loan to deposit ratio ended the quarter at 77.6%. We
continue to believe that the economic outlook has deteriorated over
the last twelve months. Given this outlook, we expect loan growth
for the remainder of the year is likely to slow compared to our
previous expectations and we intend to remain conservative in our
underwriting and granting of credit.
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. Our granular
deposit base continues to position us well, as our estimated
uninsured deposits3 percentage is 26%, and 97.0% of our deposits
are core deposits1. Furthermore, non-interest bearing deposits at
June comprise 30.7% of our total deposits. As of June 30,
2023, our retail deposit base was comprised of more than 255,000
accounts with an average balance of $21 thousand and an
average tenure of 16.3 years. Our commercial deposit base was
comprised of more than 33,000 accounts with an average balance of
$101 thousand and an average tenure of 12.2 years.
Furthermore, we have sufficient on- and off-balance sheet liquidity
to manage deposit fluctuations and the liquidity needs of our
customers.
Asset quality remains strong by both historical
and current industry trends. Non-performing assets were 0.13% of
total assets for both the first and second quarter of 2023,
compared to 0.15% for the second quarter of 2022. Furthermore, we
saw a quarter-over-quarter decline in total classified assets from
$103.9 million to $81.9 million in the second quarter of
2023. The Company’s results for the second quarter of 2023 include
a provision expense of $0.6 million for credit losses and a
provision expense of $0.3 million for unfunded commitments. The
total allowance for credit losses was $91.6 million at
June 30, 2023, representing 1.17% of total portfolio loans
outstanding, and 580.80% of non-performing loans. The Company
recorded net charge offs of $0.7 million in the second quarter
of 2023, which equates to 0.04% of average loans on an annualized
basis. As of June 30, 2023, our commercial real estate loan
portfolio of investor-owned office properties within Central
Business District4 areas remains low at $10.5 million. Our
credit performance continues to reflect our highly diversified,
conservatively underwritten loan portfolio, which has been
originated predominantly to established customers with tenured
relationships with our company.
The strength of our balance sheet is also
reflected in our capital foundation. In the second quarter, our
tangible common equity ratio1 increased to 7.18% while our Common
Equity Tier 1 and Total Capital to Risk Weighted Assets ratios
increased to 12.35% and 16.56%, respectively5. In fact, our
regulatory capital ratios continue to provide a buffer of more than
$470 million above levels required to be designated
well-capitalized.
Community BankingFirst 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 2023 Best
Companies to Work For in Florida by Florida Trend magazine.
As we enter the second half of 2023, we are
cognizant of the evolving economic outlook and remain focused on
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. We are grateful for the opportunities to earn the
business of our customers, based on the contributions of our
talented associates and the continued support of our loyal
shareholders.
/s/ Van A. DukemanChairman, President &
Chief Executive OfficerFirst Busey Corporation
|
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)(dollars in thousands, except per share
amounts) |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30,2023 |
|
March 31,2023 |
|
June 30,2022 |
|
June 30,2023 |
|
June 30,2022 |
EARNINGS & PER SHARE AMOUNTS |
|
|
|
|
|
|
|
|
|
Net income |
$ |
29,364 |
|
|
$ |
36,786 |
|
|
$ |
29,824 |
|
|
$ |
66,150 |
|
|
$ |
58,263 |
|
Diluted earnings per common share |
|
0.52 |
|
|
|
0.65 |
|
|
|
0.53 |
|
|
|
1.18 |
|
|
|
1.04 |
|
Cash dividends paid per share |
|
0.24 |
|
|
|
0.24 |
|
|
|
0.23 |
|
|
|
0.48 |
|
|
|
0.46 |
|
Pre-provision net revenue1, 2 |
|
39,536 |
|
|
|
47,918 |
|
|
|
39,569 |
|
|
|
87,454 |
|
|
|
75,635 |
|
Revenue3 |
|
108,741 |
|
|
|
118,321 |
|
|
|
108,661 |
|
|
|
227,062 |
|
|
|
215,103 |
|
|
|
|
|
|
|
|
|
|
|
Net income by operating segments: |
|
|
|
|
|
|
|
|
|
Banking |
|
30,665 |
|
|
|
36,835 |
|
|
|
30,499 |
|
|
|
67,500 |
|
|
|
56,950 |
|
FirsTech |
|
226 |
|
|
|
(38 |
) |
|
|
397 |
|
|
|
188 |
|
|
|
947 |
|
Wealth Management |
|
4,932 |
|
|
|
4,858 |
|
|
|
5,092 |
|
|
|
9,790 |
|
|
|
10,932 |
|
|
|
|
|
|
|
|
|
|
|
AVERAGE BALANCES |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
235,858 |
|
|
$ |
223,196 |
|
|
$ |
351,697 |
|
|
$ |
229,563 |
|
|
$ |
518,647 |
|
Investment securities |
|
3,255,741 |
|
|
|
3,359,985 |
|
|
|
3,841,011 |
|
|
|
3,307,575 |
|
|
|
3,905,326 |
|
Loans held for sale |
|
1,941 |
|
|
|
1,650 |
|
|
|
3,089 |
|
|
|
1,796 |
|
|
|
7,485 |
|
Portfolio loans |
|
7,755,618 |
|
|
|
7,710,876 |
|
|
|
7,378,969 |
|
|
|
7,733,370 |
|
|
|
7,270,506 |
|
Interest-earning assets |
|
11,130,298 |
|
|
|
11,180,562 |
|
|
|
11,453,198 |
|
|
|
11,155,291 |
|
|
|
11,577,879 |
|
Total assets |
|
12,209,865 |
|
|
|
12,263,718 |
|
|
|
12,452,070 |
|
|
|
12,236,643 |
|
|
|
12,555,928 |
|
|
|
|
|
|
|
|
|
|
|
Noninterest bearing deposits |
|
3,054,483 |
|
|
|
3,272,745 |
|
|
|
3,535,110 |
|
|
|
3,163,011 |
|
|
|
3,562,380 |
|
Interest-bearing deposits |
|
6,797,588 |
|
|
|
6,637,405 |
|
|
|
6,971,083 |
|
|
|
6,717,939 |
|
|
|
6,999,129 |
|
Total deposits |
|
9,852,071 |
|
|
|
9,910,150 |
|
|
|
10,506,193 |
|
|
|
9,880,950 |
|
|
|
10,561,509 |
|
|
|
|
|
|
|
|
|
|
|
Securities sold under agreements to repurchase and federal funds
purchased |
|
201,020 |
|
|
|
230,351 |
|
|
|
235,733 |
|
|
|
215,604 |
|
|
|
253,316 |
|
Interest-bearing liabilities |
|
7,762,628 |
|
|
|
7,614,930 |
|
|
|
7,574,677 |
|
|
|
7,689,187 |
|
|
|
7,614,448 |
|
Total liabilities |
|
11,001,930 |
|
|
|
11,092,899 |
|
|
|
11,255,018 |
|
|
|
11,047,164 |
|
|
|
11,316,868 |
|
Stockholders' equity - common |
|
1,207,935 |
|
|
|
1,170,819 |
|
|
|
1,197,052 |
|
|
|
1,189,479 |
|
|
|
1,239,060 |
|
Tangible common equity2 |
|
847,294 |
|
|
|
807,465 |
|
|
|
825,162 |
|
|
|
827,489 |
|
|
|
865,718 |
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE RATIOS |
|
|
|
|
|
|
|
|
|
Pre-provision net revenue to average assets1, 2 |
|
1.30 |
% |
|
|
1.58 |
% |
|
|
1.27 |
% |
|
|
1.44 |
% |
|
|
1.21 |
% |
Return on average assets |
|
0.96 |
% |
|
|
1.22 |
% |
|
|
0.96 |
% |
|
|
1.09 |
% |
|
|
0.94 |
% |
Return on average common equity |
|
9.75 |
% |
|
|
12.74 |
% |
|
|
9.99 |
% |
|
|
11.21 |
% |
|
|
9.48 |
% |
Return on average tangible common equity2 |
|
13.90 |
% |
|
|
18.48 |
% |
|
|
14.50 |
% |
|
|
16.12 |
% |
|
|
13.57 |
% |
Net interest margin2, 4 |
|
2.86 |
% |
|
|
3.13 |
% |
|
|
2.68 |
% |
|
|
2.99 |
% |
|
|
2.56 |
% |
Efficiency ratio2 |
|
60.87 |
% |
|
|
56.93 |
% |
|
|
60.56 |
% |
|
|
58.82 |
% |
|
|
61.75 |
% |
Noninterest revenue as a % of total revenues3 |
|
27.65 |
% |
|
|
27.44 |
% |
|
|
30.12 |
% |
|
|
27.54 |
% |
|
|
32.13 |
% |
|
|
|
|
|
|
|
|
|
|
NON-GAAP FINANCIAL INFORMATION |
|
|
|
|
|
|
|
|
|
Adjusted pre-provision net revenue1, 2 |
$ |
42,072 |
|
|
$ |
49,504 |
|
|
$ |
41,267 |
|
|
$ |
91,576 |
|
|
$ |
80,621 |
|
Adjusted net income2 |
|
29,373 |
|
|
|
36,786 |
|
|
|
30,081 |
|
|
|
66,159 |
|
|
|
59,185 |
|
Adjusted diluted earnings per share2 |
|
0.52 |
|
|
|
0.65 |
|
|
|
0.54 |
|
|
|
1.18 |
|
|
|
1.05 |
|
Adjusted pre-provision net revenue to average assets2 |
|
1.38 |
% |
|
|
1.64 |
% |
|
|
1.33 |
% |
|
|
1.51 |
% |
|
|
1.29 |
% |
Adjusted return on average assets2 |
|
0.96 |
% |
|
|
1.22 |
% |
|
|
0.97 |
% |
|
|
1.09 |
% |
|
|
0.95 |
% |
Adjusted return on average tangible common equity2 |
|
13.90 |
% |
|
|
18.48 |
% |
|
|
14.62 |
% |
|
|
16.12 |
% |
|
|
13.79 |
% |
Adjusted net interest margin2, 4 |
|
2.84 |
% |
|
|
3.12 |
% |
|
|
2.66 |
% |
|
|
2.98 |
% |
|
|
2.53 |
% |
Adjusted efficiency ratio2 |
|
60.86 |
% |
|
|
56.93 |
% |
|
|
60.29 |
% |
|
|
58.81 |
% |
|
|
61.23 |
% |
___________________________________________
- 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 |
|
June 30,2023 |
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
ASSETS |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
232,703 |
|
|
$ |
275,569 |
|
|
$ |
227,164 |
|
|
$ |
347,149 |
|
|
$ |
230,852 |
|
Investment securities |
|
3,186,984 |
|
|
|
3,302,024 |
|
|
|
3,391,240 |
|
|
|
3,494,710 |
|
|
|
3,708,922 |
|
Loans held for sale |
|
1,545 |
|
|
|
2,714 |
|
|
|
1,253 |
|
|
|
4,546 |
|
|
|
4,813 |
|
|
|
|
|
|
|
|
|
|
|
Commercial loans |
|
5,793,426 |
|
|
|
5,815,703 |
|
|
|
5,766,496 |
|
|
|
5,724,137 |
|
|
|
5,613,955 |
|
Retail real estate and retail other loans |
|
2,011,858 |
|
|
|
1,968,105 |
|
|
|
1,959,206 |
|
|
|
1,945,977 |
|
|
|
1,883,823 |
|
Portfolio loans |
|
7,805,284 |
|
|
|
7,783,808 |
|
|
|
7,725,702 |
|
|
|
7,670,114 |
|
|
|
7,497,778 |
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses |
|
(91,639 |
) |
|
|
(91,727 |
) |
|
|
(91,608 |
) |
|
|
(90,722 |
) |
|
|
(88,757 |
) |
Premises and equipment |
|
122,669 |
|
|
|
126,515 |
|
|
|
126,524 |
|
|
|
128,175 |
|
|
|
130,892 |
|
Goodwill and other intangible assets, net |
|
358,898 |
|
|
|
361,567 |
|
|
|
364,296 |
|
|
|
367,091 |
|
|
|
369,962 |
|
Right of use asset |
|
11,806 |
|
|
|
12,291 |
|
|
|
12,829 |
|
|
|
10,202 |
|
|
|
8,615 |
|
Other assets |
|
580,779 |
|
|
|
571,794 |
|
|
|
579,277 |
|
|
|
566,123 |
|
|
|
493,356 |
|
Total assets |
$ |
12,209,029 |
|
|
$ |
12,344,555 |
|
|
$ |
12,336,677 |
|
|
$ |
12,497,388 |
|
|
$ |
12,356,433 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES & STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Noninterest bearing deposits |
$ |
3,086,885 |
|
|
$ |
3,173,783 |
|
|
$ |
3,393,666 |
|
|
$ |
3,628,169 |
|
|
$ |
3,505,299 |
|
Interest checking, savings, and money market deposits |
|
5,504,255 |
|
|
|
5,478,715 |
|
|
|
5,822,239 |
|
|
|
6,173,041 |
|
|
|
6,074,108 |
|
Time deposits |
|
1,471,615 |
|
|
|
1,148,671 |
|
|
|
855,375 |
|
|
|
800,187 |
|
|
|
817,821 |
|
Total deposits |
$ |
10,062,755 |
|
|
$ |
9,801,169 |
|
|
$ |
10,071,280 |
|
|
$ |
10,601,397 |
|
|
$ |
10,397,228 |
|
|
|
|
|
|
|
|
|
|
|
Securities sold under agreements to repurchase |
$ |
202,953 |
|
|
$ |
210,977 |
|
|
$ |
229,806 |
|
|
$ |
234,597 |
|
|
$ |
228,383 |
|
Short-term borrowings |
|
212,000 |
|
|
|
615,881 |
|
|
|
351,054 |
|
|
|
16,225 |
|
|
|
16,396 |
|
Long-term debt |
|
246,454 |
|
|
|
249,245 |
|
|
|
252,038 |
|
|
|
254,835 |
|
|
|
317,304 |
|
Junior subordinated debt owed to unconsolidated trusts |
|
71,900 |
|
|
|
71,855 |
|
|
|
71,810 |
|
|
|
71,765 |
|
|
|
71,721 |
|
Lease liability |
|
12,059 |
|
|
|
12,515 |
|
|
|
12,995 |
|
|
|
10,311 |
|
|
|
8,655 |
|
Other liabilities |
|
198,960 |
|
|
|
184,355 |
|
|
|
201,717 |
|
|
|
201,670 |
|
|
|
154,789 |
|
Total liabilities |
|
11,007,081 |
|
|
|
11,145,997 |
|
|
|
11,190,700 |
|
|
|
11,390,800 |
|
|
|
11,194,476 |
|
Total stockholders' equity |
|
1,201,948 |
|
|
|
1,198,558 |
|
|
|
1,145,977 |
|
|
|
1,106,588 |
|
|
|
1,161,957 |
|
Total liabilities & stockholders' equity |
$ |
12,209,029 |
|
|
$ |
12,344,555 |
|
|
$ |
12,336,677 |
|
|
$ |
12,497,388 |
|
|
$ |
12,356,433 |
|
|
|
|
|
|
|
|
|
|
|
SHARE AND PER SHARE AMOUNTS |
|
|
|
|
|
|
|
|
|
Book value per common share |
$ |
21.74 |
|
|
$ |
21.68 |
|
|
$ |
20.73 |
|
|
$ |
20.04 |
|
|
$ |
21.00 |
|
Tangible book value per common share1 |
$ |
15.25 |
|
|
$ |
15.14 |
|
|
$ |
14.14 |
|
|
$ |
13.39 |
|
|
$ |
14.31 |
|
Ending number of common shares outstanding |
|
55,290,847 |
|
|
|
55,294,455 |
|
|
|
55,279,124 |
|
|
|
55,232,434 |
|
|
|
55,335,703 |
|
___________________________________________
- See “Non-GAAP Financial
Information” for reconciliation.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)(dollars in thousands, except per share
amounts) |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30,2023 |
|
March 31,2023 |
|
June 30,2022 |
|
June 30,2023 |
|
June 30,2022 |
INTEREST INCOME |
|
|
|
|
|
|
|
|
|
Interest and fees on loans held for sale and portfolio |
$ |
94,804 |
|
|
$ |
89,775 |
|
|
$ |
65,567 |
|
|
$ |
184,579 |
|
|
$ |
126,449 |
|
Interest on investment securities |
|
20,784 |
|
|
|
20,342 |
|
|
|
16,671 |
|
|
|
41,126 |
|
|
|
31,603 |
|
Other interest income |
|
1,311 |
|
|
|
988 |
|
|
|
358 |
|
|
|
2,299 |
|
|
|
635 |
|
Total interest income |
$ |
116,899 |
|
|
$ |
111,105 |
|
|
$ |
82,596 |
|
|
$ |
228,004 |
|
|
$ |
158,687 |
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
Interest on deposits |
$ |
26,768 |
|
|
$ |
14,740 |
|
|
$ |
2,146 |
|
|
$ |
41,508 |
|
|
$ |
4,270 |
|
Interest on securities sold under agreements to repurchase and
federal funds purchased |
|
1,223 |
|
|
|
1,222 |
|
|
|
147 |
|
|
|
2,445 |
|
|
|
206 |
|
Interest on short-term borrowings |
|
5,741 |
|
|
|
4,822 |
|
|
|
147 |
|
|
|
10,563 |
|
|
|
236 |
|
Interest on long-term debt |
|
3,552 |
|
|
|
3,551 |
|
|
|
3,520 |
|
|
|
7,103 |
|
|
|
6,629 |
|
Junior subordinated debt owed to unconsolidated trusts |
|
945 |
|
|
|
913 |
|
|
|
708 |
|
|
|
1,858 |
|
|
|
1,362 |
|
Total interest expense |
$ |
38,229 |
|
|
$ |
25,248 |
|
|
$ |
6,668 |
|
|
$ |
63,477 |
|
|
$ |
12,703 |
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
$ |
78,670 |
|
|
$ |
85,857 |
|
|
$ |
75,928 |
|
|
$ |
164,527 |
|
|
$ |
145,984 |
|
Provision for credit losses |
|
627 |
|
|
|
953 |
|
|
|
1,653 |
|
|
|
1,580 |
|
|
|
1,400 |
|
Net interest income after provision for credit
losses |
$ |
78,043 |
|
|
$ |
84,904 |
|
|
$ |
74,275 |
|
|
$ |
162,947 |
|
|
$ |
144,584 |
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST INCOME |
|
|
|
|
|
|
|
|
|
Wealth management fees |
$ |
14,562 |
|
|
$ |
14,797 |
|
|
$ |
14,135 |
|
|
$ |
29,359 |
|
|
$ |
29,914 |
|
Fees for customer services |
|
7,239 |
|
|
|
6,819 |
|
|
|
9,588 |
|
|
|
14,058 |
|
|
|
18,495 |
|
Payment technology solutions |
|
5,231 |
|
|
|
5,315 |
|
|
|
4,888 |
|
|
|
10,546 |
|
|
|
9,965 |
|
Mortgage revenue |
|
272 |
|
|
|
288 |
|
|
|
284 |
|
|
|
560 |
|
|
|
1,259 |
|
Income on bank owned life insurance |
|
1,029 |
|
|
|
1,652 |
|
|
|
874 |
|
|
|
2,681 |
|
|
|
1,758 |
|
Net securities gains (losses) |
|
(2,059 |
) |
|
|
(616 |
) |
|
|
(1,714 |
) |
|
|
(2,675 |
) |
|
|
(2,328 |
) |
Other noninterest income |
|
1,738 |
|
|
|
3,593 |
|
|
|
2,964 |
|
|
|
5,331 |
|
|
|
7,728 |
|
Total noninterest income |
$ |
28,012 |
|
|
$ |
31,848 |
|
|
$ |
31,019 |
|
|
$ |
59,860 |
|
|
$ |
66,791 |
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
Salaries, wages, and employee benefits |
$ |
39,859 |
|
|
$ |
40,331 |
|
|
$ |
38,110 |
|
|
$ |
80,190 |
|
|
$ |
77,464 |
|
Data processing expense |
|
5,902 |
|
|
|
5,640 |
|
|
|
5,375 |
|
|
|
11,542 |
|
|
|
10,353 |
|
Net occupancy expense |
|
4,540 |
|
|
|
4,762 |
|
|
|
4,720 |
|
|
|
9,302 |
|
|
|
9,787 |
|
Furniture and equipment expense |
|
1,681 |
|
|
|
1,746 |
|
|
|
2,045 |
|
|
|
3,427 |
|
|
|
4,075 |
|
Professional fees |
|
973 |
|
|
|
2,058 |
|
|
|
1,607 |
|
|
|
3,031 |
|
|
|
3,114 |
|
Amortization of intangible assets |
|
2,669 |
|
|
|
2,729 |
|
|
|
2,951 |
|
|
|
5,398 |
|
|
|
5,962 |
|
Interchange expense |
|
1,870 |
|
|
|
1,853 |
|
|
|
1,487 |
|
|
|
3,723 |
|
|
|
3,032 |
|
FDIC insurance |
|
1,506 |
|
|
|
1,502 |
|
|
|
1,153 |
|
|
|
3,008 |
|
|
|
2,226 |
|
Other operating expenses |
|
10,205 |
|
|
|
9,782 |
|
|
|
11,644 |
|
|
|
19,987 |
|
|
|
23,455 |
|
Total noninterest expense |
$ |
69,205 |
|
|
$ |
70,403 |
|
|
$ |
69,092 |
|
|
$ |
139,608 |
|
|
$ |
139,468 |
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
$ |
36,850 |
|
|
$ |
46,349 |
|
|
$ |
36,202 |
|
|
$ |
83,199 |
|
|
$ |
71,907 |
|
Income taxes |
|
7,486 |
|
|
|
9,563 |
|
|
|
6,378 |
|
|
|
17,049 |
|
|
|
13,644 |
|
Net income |
$ |
29,364 |
|
|
$ |
36,786 |
|
|
$ |
29,824 |
|
|
$ |
66,150 |
|
|
$ |
58,263 |
|
|
|
|
|
|
|
|
|
|
|
SHARE AND PER SHARE AMOUNTS |
|
|
|
|
|
|
|
|
|
Basic earnings per common share |
$ |
0.53 |
|
|
$ |
0.66 |
|
|
$ |
0.54 |
|
|
$ |
1.19 |
|
|
$ |
1.05 |
|
Diluted earnings per common share |
$ |
0.52 |
|
|
$ |
0.65 |
|
|
$ |
0.53 |
|
|
$ |
1.18 |
|
|
$ |
1.04 |
|
Average common shares outstanding |
|
55,440,277 |
|
|
|
55,397,989 |
|
|
|
55,421,887 |
|
|
|
55,419,250 |
|
|
|
55,424,776 |
|
Diluted average common shares outstanding |
|
56,195,801 |
|
|
|
56,179,606 |
|
|
|
56,104,017 |
|
|
|
56,187,820 |
|
|
|
56,149,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Growth
Our balance sheet remains a source of strength.
Total assets were $12.21 billion as of June 30, 2023,
compared to $12.34 billion as of March 31, 2023, and
$12.36 billion as of June 30, 2022. Portfolio loans were
$7.81 billion at June 30, 2023, compared to
$7.78 billion at March 31, 2023, and $7.50 billion
at June 30, 2022. During the second quarter of 2023, Busey
Bank experienced our ninth consecutive quarter of core loan1
growth, albeit at a moderating pace, of $21.6 million. Growth
was driven by our central, Florida, and northern regions. Overall
growth was tempered by the reduction of $22.0 million of classified
assets and a $58.0 million decline in line utilization during the
quarter. 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. This posture will impact loan growth in subsequent
quarters.
Average portfolio loans were $7.76 billion
for the second quarter of 2023, compared to $7.71 billion for
the first quarter of 2023 and $7.38 billion for the second
quarter of 2022. Average interest-earning assets were
$11.13 billion for the second quarter of 2023, compared to
$11.18 billion for the first quarter of 2023, and
$11.45 billion for the second quarter of 2022.
Total deposits were $10.06 billion at
June 30, 2023, compared to $9.80 billion at
March 31, 2023, and $10.40 billion at June 30, 2022.
Average deposits were $9.85 billion for the second quarter of
2023, compared to $9.91 billion for the first quarter of 2023
and $10.51 billion for the second quarter of 2022. Deposit
growth in the second quarter of 2023 over the first quarter of 2023
was primarily related to increases in public funds and largely
occurred in the last month of the quarter. Deposit fluctuations
over the last several quarters were driven by a number of elements,
including (1) anticipated seasonal factors, including ordinary
course public fund flows and fluctuations in the normal course of
business operations of certain core commercial customers,
(2) the macroeconomic environment, including prevailing
interest rates and anticipated future Federal Open Market Committee
(“FOMC”) rate moves, as well as inflationary pressures,
(3) depositors moving some funds to accounts at competitors
offering above-market rates, including state-sponsored investment
programs that provide rates in excess of where we can borrow in the
wholesale marketplace, and (4) deposits moving within the
Busey ecosystem from the bank to our wealth management group. Core
deposits1 accounted for 97.0% of total deposits as of June 30,
2023. Cost of deposits was 1.09% in the second quarter of 2023,
which represents a 49 basis point increase from the first
quarter of 2023. Excluding time deposits, the Company’s cost of
deposits was 0.81% in the second quarter of 2023, a 32 basis
point increase from March 31, 2023.
Short term borrowings decreased to
$212.0 million as of June 30, 2023, compared to
$615.9 million as of March 31, 2023. Average short term
borrowings increased to $443.8 million in the second quarter
of 2023, compared to $424.3 million in the first quarter of
2023. We have sufficient on- and off-balance sheet liquidity6 to
manage deposit fluctuations and the liquidity needs of our
customers. As of June 30, 2023, our available sources of on-
and off-balance sheet liquidity totaled $6.24 billion. To help
offset some of the impact of rising costs associated with increased
borrowings, we increased deposit campaigns starting in the first
quarter of 2023 to attract term funding and savings accounts at a
lower rate than our marginal cost of funds. In addition, we
instituted a company-wide incentive campaign to drive new customer
account openings. Our time deposit campaigns generated increased
traction and production throughout the quarter and we expect to
continue to implement prudent and measured strategies to generate
deposit growth. Furthermore, our balance sheet liquidity profile
continues to be aided by the cash flows we expect from our
relatively short-duration securities portfolio. Those cash flows
were approximately $99.7 million in the second quarter and are
expected to be $186.7 million over the remaining balance of
2023.
Asset Quality
Credit quality continues to be exceptionally
strong. Loans 30-89 days past due totaled $5.2 million as of
June 30, 2023, compared to $5.5 million as of
March 31, 2023, and $5.2 million as of June 30,
2022. Non-performing loans were $15.8 million as of
June 30, 2023, compared to $15.2 million as of
March 31, 2023, and $17.5 million as of June 30,
2022. Continued disciplined credit management resulted in
non-performing loans as a percentage of portfolio loans of 0.20% as
of both June 30, 2023, and March 31, 2023, and 0.23% as
of June 30, 2022. Non-performing assets were 0.13% of total
assets for both the first and second quarter of 2023, compared to
0.15% in the second quarter of 2022. Our total classified assets
declined from $103.9 million at March 31, 2023, to
$81.9 million at June 30, 2023. The quarter over quarter
decline in classified assets is largely attributable to a pay-off
from a single borrower in the skilled nursing industry.
Net charge-offs were $0.7 million for the
second quarter of 2023, $0.8 million for the first quarter of
2023, and $1.1 million for the second quarter of 2022. Our
ratio of net charge-offs to average loans was 0.04% during the
second quarter of 2023 and 0.03% over the last twelve months7. The
allowance as a percentage of portfolio loans was 1.17% as of
June 30, 2023, compared to 1.18% as of both March 31,
2023, and June 30, 2022. The allowance as a percentage of
non-performing loans was 580.80% as of June 30, 2023, compared
to 602.91% as of March 31, 2023, and 507.36% as of
June 30, 2022.
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 |
|
June 30,2023 |
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
Total assets |
$ |
12,209,029 |
|
|
$ |
12,344,555 |
|
|
$ |
12,336,677 |
|
|
$ |
12,497,388 |
|
|
$ |
12,356,433 |
|
Portfolio loans |
|
7,805,284 |
|
|
|
7,783,808 |
|
|
|
7,725,702 |
|
|
|
7,670,114 |
|
|
|
7,497,778 |
|
Portfolio loans excluding amortized cost of PPP loans |
|
7,804,617 |
|
|
|
7,783,058 |
|
|
|
7,724,857 |
|
|
|
7,668,688 |
|
|
|
7,490,162 |
|
Loans 30 – 89 days past due |
|
5,169 |
|
|
|
5,472 |
|
|
|
6,548 |
|
|
|
6,307 |
|
|
|
5,157 |
|
Non-performing loans: |
|
|
|
|
|
|
|
|
|
Non-accrual loans |
|
15,209 |
|
|
|
14,714 |
|
|
|
15,067 |
|
|
|
15,425 |
|
|
|
15,840 |
|
Loans 90+ days past due and still accruing |
|
569 |
|
|
|
500 |
|
|
|
673 |
|
|
|
1,229 |
|
|
|
1,654 |
|
Non-performing loans |
$ |
15,778 |
|
|
$ |
15,214 |
|
|
$ |
15,740 |
|
|
$ |
16,654 |
|
|
$ |
17,494 |
|
Non-performing loans, segregated by geography: |
|
|
|
|
|
|
|
|
|
Illinois / Indiana |
$ |
11,681 |
|
|
$ |
10,416 |
|
|
$ |
10,347 |
|
|
$ |
10,531 |
|
|
$ |
11,261 |
|
Missouri |
|
3,928 |
|
|
|
4,103 |
|
|
|
4,676 |
|
|
|
5,008 |
|
|
|
5,259 |
|
Florida |
|
169 |
|
|
|
695 |
|
|
|
717 |
|
|
|
1,115 |
|
|
|
974 |
|
Other non-performing assets |
|
68 |
|
|
|
759 |
|
|
|
850 |
|
|
|
1,219 |
|
|
|
1,429 |
|
Non-performing assets |
$ |
15,846 |
|
|
$ |
15,973 |
|
|
$ |
16,590 |
|
|
$ |
17,873 |
|
|
$ |
18,923 |
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses |
$ |
91,639 |
|
|
$ |
91,727 |
|
|
$ |
91,608 |
|
|
$ |
90,722 |
|
|
$ |
88,757 |
|
|
|
|
|
|
|
|
|
|
|
RATIOS |
|
|
|
|
|
|
|
|
|
Non-performing loans to portfolio loans |
|
0.20 |
% |
|
|
0.20 |
% |
|
|
0.20 |
% |
|
|
0.22 |
% |
|
|
0.23 |
% |
Non-performing loans to portfolio loans, excluding PPP loans |
|
0.20 |
% |
|
|
0.20 |
% |
|
|
0.20 |
% |
|
|
0.22 |
% |
|
|
0.23 |
% |
Non-performing assets to total assets |
|
0.13 |
% |
|
|
0.13 |
% |
|
|
0.13 |
% |
|
|
0.14 |
% |
|
|
0.15 |
% |
Non-performing assets to portfolio loans and other non-performing
assets |
|
0.20 |
% |
|
|
0.21 |
% |
|
|
0.21 |
% |
|
|
0.23 |
% |
|
|
0.25 |
% |
Allowance for credit losses to portfolio loans |
|
1.17 |
% |
|
|
1.18 |
% |
|
|
1.19 |
% |
|
|
1.18 |
% |
|
|
1.18 |
% |
Allowance for credit losses to portfolio loans, excluding PPP |
|
1.17 |
% |
|
|
1.18 |
% |
|
|
1.19 |
% |
|
|
1.18 |
% |
|
|
1.18 |
% |
Allowance for credit losses as a percentage of non-performing
loans |
|
580.80 |
% |
|
|
602.91 |
% |
|
|
582.01 |
% |
|
|
544.75 |
% |
|
|
507.36 |
% |
|
NET CHARGE-OFFS (RECOVERIES) AND PROVISION EXPENSE
(RELEASE) (unaudited)(dollars in
thousands) |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30,2023 |
|
March 31,2023 |
|
June 30,2022 |
|
June 30,2023 |
|
June 30,2022 |
Net charge-offs (recoveries) |
$ |
715 |
|
|
$ |
834 |
|
|
$ |
1,109 |
|
|
$ |
1,549 |
|
|
$ |
530 |
|
Provision expense (release) |
|
627 |
|
|
|
953 |
|
|
|
1,653 |
|
|
|
1,580 |
|
|
|
1,400 |
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs, annualized |
|
2,868 |
|
|
|
3,382 |
|
|
|
4,448 |
|
|
|
3,124 |
|
|
|
1,069 |
|
Average portfolio loans |
|
7,755,618 |
|
|
|
7,710,876 |
|
|
|
7,378,969 |
|
|
|
7,733,370 |
|
|
|
7,270,506 |
|
Net charge-off ratio |
|
0.04 |
% |
|
|
0.04 |
% |
|
|
0.06 |
% |
|
|
0.04 |
% |
|
|
0.01 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Margin1 and Net Interest
Income
Net interest margin was 2.86% for the second
quarter of 2023, compared to 3.13% for the first quarter of 2023
and 2.68% for the second quarter of 2022. Excluding purchase
accounting accretion, adjusted net interest margin1 was 2.84% for
the second quarter of 2023, compared to 3.12% in the first quarter
of 2023 and 2.66% in the second quarter of 2022. Net interest
income was $78.7 million in the second quarter of 2023,
compared to $85.9 million in the first quarter of 2023 and
$75.9 million in the second quarter of 2022.
The FOMC raised rates by 25 basis points
during the second quarter of 2023, and by a total of 500 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 increase in response to
the tightening rate cycle, some of the net interest margin
expansion is reversed, which we began to experience in the first
quarter of 2023. Components of the 27 basis
point decrease in net interest margin during the second
quarter of 2023 include:
- Increased loan portfolio income
contributed +18 basis points
- Increases in the cash and
securities portfolio yield contributed +2 basis points
- Increased non-maturity deposit
funding costs contributed -23 basis points
- Increased time deposit funding
costs contributed -20 basis points
- Increased borrowing costs
contributed -3 basis points
- Increased net
interest expense on cash flow hedges 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
2.2% over the subsequent twelve-month period. Market competition
for deposits has increased in recent months and deposit betas are
likely to increase going forward, which is factored into our ALCO
model. The Company continues to evaluate off-balance sheet hedging
and balance sheet restructuring strategies as well as embedding
rate protection in our asset originations to provide stabilization
to net interest income in lower rate environments. We are committed
to protecting our quality core deposit franchise and are in regular
contact with our customers to proactively address their needs and
concerns. Stress on liquidity resulting from the continued drain of
stimulus driven inflows has impacted the banking industry. Our
deposit base, particularly non-interest bearing deposits, has
experienced balance attrition, but time deposit specials and retail
incentive campaigns have provided sufficient funding flows to limit
operational borrowings to a minimal level. As a result, deposit
beta expectations have increased marginally as rotation into these
higher cost of fund products has accelerated as the tightening
cycle advances. Since the onset of the current FOMC tightening
cycle that began in the first quarter of 2022, our cumulative
interest-bearing non-maturity deposit beta has been 24.5%. Our
cycle-to-date total deposit beta has been 20.3% through
June 30, 2023. Deposit betas are calculated based on an
average federal funds rate of 5.16% during the second quarter of
2023, which is a 47 basis point increase over the first
quarter of 2023 average federal funds rate of 4.69%.
Noninterest Income
Noninterest income was $28.0 million for
the second quarter of 2023, as compared to $31.8 million for the
first quarter of 2023 and $31.0 million for the second quarter of
2022. Revenues from wealth management fees and payment technology
solutions activities represented 70.7% of the Company’s noninterest
income for the quarter ended June 30, 2023, providing a
balance to spread-based revenue from traditional banking
activities.
Wealth management fees were $14.6 million
for the second quarter of 2023, compared to $14.8 million for the
first quarter of 2023 and $14.1 million for the second quarter of
2022. The Wealth Management operating segment generated net income
of $4.9 million in both the first and second quarter of 2023,
compared to $5.1 million in the second quarter of 2022. First
Busey’s Wealth Management division ended the second quarter of 2023
with $11.48 billion in assets under care, compared to $11.21
billion at the end of the first quarter of 2023 and $11.45 billion
at the end of the second quarter of 2022. Our portfolio management
team continues to produce solid results in the face of very
volatile markets, and has outperformed its blended benchmark8 over
the last twelve months.
Payment technology solutions revenue from
FirsTech was $5.2 million for the second quarter of 2023,
compared to $5.3 million for the first quarter of 2023 and
$4.9 million for the second quarter of 2022. Excluding
intracompany eliminations, FirsTech generated revenue of
$5.6 million during the second quarter of 2023, compared to
$5.7 million in the first quarter of 2023 and
$5.4 million in the second quarter of 2022. The FirsTech
operating segment generated net income of $0.2 million in the
second quarter of 2023, an insignificant amount of net losses in
the first quarter of 2023 and net income of $0.4 million in
the second quarter of 2022. The Company continues to make strategic
investments in FirsTech to enhance future growth, including further
upgrades to the product and engineering teams to build an
application programming interface ("API") cloud-based platform to
provide for fully integrated payment capabilities, as well as the
continued development of our BaaS platform.
Fees for customer services were
$7.2 million for the second quarter of 2023, compared to
$6.8 million in the first quarter of 2023 and
$9.6 million in the second quarter of 2022. Year-over-year
declines are attributable primarily to the impact of the Durbin
Amendment on interchange revenue and, to a lesser extent,
modifications implemented to overdraft and non-sufficient funds fee
structures. The impact from the Durbin Amendment reduced fees for
customer service by $2.4 million in the second quarter of
2023.
Net securities losses were $2.1 million for
the second quarter of 2023, which were comprised of
$0.2 million of realized net losses and $1.9 million of
unrealized net losses on equity securities.
Other noninterest income was $1.7 million
in the second quarter of 2023, a decrease from $3.6 million in
the first quarter of 2023 and from $3.0 million in the second
quarter of 2022. Fluctuations between the first quarter of 2023 and
the second quarter of 2023 were primarily the result of decreases
in swap origination fee income and venture capital investment
values.
Operating Efficiency
Noninterest expense was $69.2 million in
the second quarter of 2023, compared to $70.4 million in the
first quarter of 2023 and $69.1 million for the second quarter
of 2022. The efficiency ratio1 was 60.87% for the quarter ended
June 30, 2023, compared to 56.93% for the quarter ended
March 31, 2023, and 60.56% for the quarter ended June 30,
2022. The adjusted core efficiency ratio1 was 58.55% for the
quarter ended June 30, 2023, compared to 55.59% for the
quarter ended March 31, 2023 and 59.01% for the quarter ended
June 30, 2022. The Company remains focused on expense
discipline.
Noteworthy components of noninterest expense are
as follows:
- Salaries, wages, and employee
benefits expenses were $39.9 million in the second quarter of
2023, compared to $40.3 million in the first quarter of 2023
and $38.1 million in the second quarter of 2022. Total
full-time equivalents numbered 1,477 as of June 30, 2023,
compared to 1,473 as of March 31, 2023, and 1,493 as of
June 30, 2022.
- Data processing expense was
$5.9 million in the second quarter of 2023, compared to
$5.6 million in the first quarter of 2023 and
$5.4 million in the second quarter of 2022. The increase was
related to expenses for FirsTech transaction volume and continued
Company-wide investments in technology enhancements, as well as
inflation-driven price increases.
- Professional fees were
$1.0 million in the second quarter of 2023, compared to
$2.1 million in the first quarter of 2023 and
$1.6 million in the second quarter of 2022. The quarter over
quarter decrease is primarily attributable to audit and accounting
fees which generally run higher during the first quarter of each
year, as well as recapture of legal expenses related to the payoff
of a large classified asset in the second quarter of 2023.
- Amortization expense was
$2.7 million in both the first and second quarter of 2023,
compared to $3.0 million in the second quarter of 2022.
- FDIC insurance
expense was $1.5 million in both the first and second quarter
of 2023, compared to $1.2 million in the second quarter of
2022, as a result of an FDIC final rule to increase the initial
base deposit insurance assessment rate applicable to all
FDIC-insured depository institutions by two basis points beginning
in 2023.
- Other operating
expenses were $10.2 million for the second quarter of 2023,
compared to $9.8 million in the first quarter of 2023 and
$11.6 million in the second quarter of 2022. The year-over-year
decrease is attributable to multiple items, including expense
discipline in business development and marketing expenses.
The Company's effective tax rate for the second
quarter of 2023 was 20.3%, which was lower than the combined
federal and state statutory rate of approximately 28.0% due to tax
exempt interest income, such as municipal bond interest, bank owned
life insurance income, and investments in various federal and state
tax credits.
Beginning in 2024, the Company intends to adopt
ASU 2023-02, which allows entities to elect to account for
equity investments made primarily for the purpose of receiving
income tax credits using the proportional amortization method,
regardless of the tax credit program through which the investment
earns income tax credits, if certain conditions are met. The
proportional amortization method results in the cost of the
investment being amortized in proportion to the income tax credits
and other income tax benefits received, with the amortization of
the investment and the income tax credits being presented net in
the income statement as a component of income tax expense as
opposed to being presented on a gross basis on the income statement
as a component of noninterest expense and income tax expense.
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 July 28,
2023, the Company will pay a cash dividend of $0.24 per common
share to stockholders of record as of July 21, 2023. The
Company has consistently paid dividends to its common stockholders
since the bank holding company was organized in 1980.
As of June 30, 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 12.35% at June 30, 2023, compared to 12.18%
at March 31, 2023, and 11.77% at June 30, 2022. Our Total
Capital to Risk Weighted Assets ratio is estimated5 to be 16.56% at
June 30, 2023, compared to 16.40% at March 31, 2023, and
16.58% at June 30, 2022.
The Company’s tangible common equity1 was
$850.9 million at June 30, 2023, compared to $845.3
million at March 31, 2023, and $801.9 million at June 30,
2022. Tangible common equity represented 7.18% of tangible assets
at June 30, 2023, compared to 7.05% at March 31, 2023,
and 6.68% at June 30, 2022. The Company’s tangible book value
per common share1 increased from $15.14 at March 31, 2023, to
$15.25 at June 30, 2023. The ratios of tangible common equity
to tangible assets1 and tangible book value per common share have
been impacted by the fair market valuation adjustment of the
Company’s securities portfolio as a result of the current rate
environment, which is reflected in the accumulated other
comprehensive income (loss) (“AOCI”) component of shareholder’s
equity.
During the second quarter of 2023, the Company
purchased 20,000 shares of its common stock at a weighted average
price of $19.86 per share for a total of $0.4 million under
the Company’s stock repurchase plan. Repurchases were executed due
to favorable pricing of the Company’s shares during the second
quarter of 2023. On May 24, 2023, First Busey’s board of
directors approved an amendment to increase the authorized shares
under the repurchase program by 2,000,000 shares. As of
June 30, 2023, the Company had 2,102,210 shares remaining on
its stock repurchase plan available for repurchase.
2Q23 Earnings Investor
Presentation
For additional information on the
Company’s financial condition and operating results, please refer
to the 2Q23 Earnings Investor
Presentation furnished via Form 8-K on
July 25, 2023, in connection with
this earnings release.
Corporate Profile
As of June 30, 2023, First Busey
Corporation (Nasdaq: BUSE) was a $12.21 billion financial holding
company headquartered in Champaign, Illinois.
Busey Bank, a wholly-owned bank subsidiary of
First Busey Corporation, had total assets of $12.17 billion as of
June 30, 2023, and is headquartered in Champaign, Illinois.
Busey Bank currently has 46 banking centers serving Illinois,
eight banking centers serving Missouri, three banking centers
serving southwest Florida, and one banking center in Indianapolis,
Indiana.
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.
Through the Company’s Wealth Management
division, the Company provides asset management, investment, and
fiduciary services to individuals, businesses, and foundations. As
of June 30, 2023, assets under care were $11.48 billion.
Busey Bank is honored to be named among
America’s Best Banks by Forbes magazine for the second consecutive
year. Ranked 26th overall in 2023, 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 2023, Busey was named
among DiversityInc’s Top Regional Companies. The DiversityInc Top
50 survey is the external validator for large U.S. employers that
model fairness in their talent strategy, workplace and supplier
diversity practices, and philanthropic engagement. 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: FinancialSource: First Busey
Corporation
Contacts:
Jeffrey D. Jones, Chief Financial
Officer217-365-4130
Ted Rosinus, EVP Investor Relations &
Corporate Development847-832-0392
Non-GAAP Financial
Information
This earnings release contains certain financial
information determined by methods other than U.S. Generally
Accepted Accounting Principles (“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, average
tangible common equity, 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, noninterest expense excluding non-operating adjustments,
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 |
|
Six Months Ended |
|
|
June 30,2023 |
|
March 31,2023 |
|
June 30,2022 |
|
June 30,2023 |
|
June 30,2022 |
PRE-PROVISION NET REVENUE |
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
$ |
78,670 |
|
|
$ |
85,857 |
|
|
$ |
75,928 |
|
|
$ |
164,527 |
|
|
$ |
145,984 |
|
Total noninterest income |
|
|
28,012 |
|
|
|
31,848 |
|
|
|
31,019 |
|
|
|
59,860 |
|
|
|
66,791 |
|
Net security (gains) losses |
|
|
2,059 |
|
|
|
616 |
|
|
|
1,714 |
|
|
|
2,675 |
|
|
|
2,328 |
|
Total noninterest expense |
|
|
(69,205 |
) |
|
|
(70,403 |
) |
|
|
(69,092 |
) |
|
|
(139,608 |
) |
|
|
(139,468 |
) |
Pre-provision net revenue |
|
|
39,536 |
|
|
|
47,918 |
|
|
|
39,569 |
|
|
|
87,454 |
|
|
|
75,635 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Acquisition and other restructuring expenses |
|
|
12 |
|
|
|
— |
|
|
|
303 |
|
|
|
12 |
|
|
|
1,138 |
|
Provision for unfunded commitments |
|
|
265 |
|
|
|
(635 |
) |
|
|
(267 |
) |
|
|
(370 |
) |
|
|
845 |
|
Amortization of New Markets Tax Credits |
|
|
2,259 |
|
|
|
2,221 |
|
|
|
1,662 |
|
|
|
4,480 |
|
|
|
3,003 |
|
Adjusted pre-provision net revenue |
|
$ |
42,072 |
|
|
$ |
49,504 |
|
|
$ |
41,267 |
|
|
$ |
91,576 |
|
|
$ |
80,621 |
|
|
|
|
|
|
|
|
|
|
|
|
Pre-provision net revenue, annualized |
[a] |
$ |
158,578 |
|
|
$ |
194,334 |
|
|
$ |
158,711 |
|
|
$ |
176,358 |
|
|
$ |
152,524 |
|
Adjusted pre-provision net revenue, annualized |
[b] |
|
168,750 |
|
|
|
200,766 |
|
|
|
165,521 |
|
|
|
184,670 |
|
|
|
162,578 |
|
Average total assets |
[c] |
|
12,209,865 |
|
|
|
12,263,718 |
|
|
|
12,452,070 |
|
|
|
12,236,643 |
|
|
|
12,555,928 |
|
|
|
|
|
|
|
|
|
|
|
|
Reported: Pre-provision net revenue to average
assets1 |
[a÷c] |
|
1.30 |
% |
|
|
1.58 |
% |
|
|
1.27 |
% |
|
|
1.44 |
% |
|
|
1.21 |
% |
Adjusted: Pre-provision net revenue to average
assets1 |
[b÷c] |
|
1.38 |
% |
|
|
1.64 |
% |
|
|
1.33 |
% |
|
|
1.51 |
% |
|
|
1.29 |
% |
___________________________________________
- 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 |
|
Six Months Ended |
|
|
June 30,2023 |
|
March 31,2023 |
|
June 30,2022 |
|
June 30,2023 |
|
June 30,2022 |
NET INCOME ADJUSTED FOR NON-OPERATING ITEMS |
|
|
|
|
|
|
|
|
|
|
Net income |
[a] |
$ |
29,364 |
|
|
$ |
36,786 |
|
|
$ |
29,824 |
|
|
$ |
66,150 |
|
|
$ |
58,263 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Acquisition expenses: |
|
|
|
|
|
|
|
|
|
|
Salaries, wages, and employee benefits |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
587 |
|
Data processing |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
214 |
|
Professional fees, occupancy, and other |
|
|
12 |
|
|
|
— |
|
|
|
204 |
|
|
|
12 |
|
|
|
238 |
|
Other restructuring expenses: |
|
|
|
|
|
|
|
|
|
|
Loss on leases or fixed asset impairment |
|
|
— |
|
|
|
— |
|
|
|
99 |
|
|
|
— |
|
|
|
99 |
|
Related tax benefit |
|
|
(3 |
) |
|
|
— |
|
|
|
(46 |
) |
|
|
(3 |
) |
|
|
(216 |
) |
Adjusted net income |
[b] |
$ |
29,373 |
|
|
$ |
36,786 |
|
|
$ |
30,081 |
|
|
$ |
66,159 |
|
|
$ |
59,185 |
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE |
|
|
|
|
|
|
|
|
|
|
Diluted average common shares outstanding |
[c] |
|
56,195,801 |
|
|
|
56,179,606 |
|
|
|
56,104,017 |
|
|
|
56,187,820 |
|
|
|
56,149,466 |
|
|
|
|
|
|
|
|
|
|
|
|
Reported: Diluted earnings per share |
[a÷c] |
$ |
0.52 |
|
|
$ |
0.65 |
|
|
$ |
0.53 |
|
|
$ |
1.18 |
|
|
$ |
1.04 |
|
Adjusted: Diluted earnings per share |
[b÷c] |
$ |
0.52 |
|
|
$ |
0.65 |
|
|
$ |
0.54 |
|
|
$ |
1.18 |
|
|
$ |
1.05 |
|
|
|
|
|
|
|
|
|
|
|
|
RETURN ON AVERAGE ASSETS |
|
|
|
|
|
|
|
|
|
|
Net income, annualized |
[d] |
$ |
117,779 |
|
|
$ |
149,188 |
|
|
$ |
119,624 |
|
|
$ |
133,396 |
|
|
$ |
117,492 |
|
Adjusted net income, annualized |
[e] |
|
117,815 |
|
|
|
149,188 |
|
|
|
120,655 |
|
|
|
133,415 |
|
|
|
119,351 |
|
Average total assets |
[f] |
|
12,209,865 |
|
|
|
12,263,718 |
|
|
|
12,452,070 |
|
|
|
12,236,643 |
|
|
|
12,555,928 |
|
|
|
|
|
|
|
|
|
|
|
|
Reported: Return on average assets1 |
[d÷f] |
|
0.96 |
% |
|
|
1.22 |
% |
|
|
0.96 |
% |
|
|
1.09 |
% |
|
|
0.94 |
% |
Adjusted: Return on average assets1 |
[e÷f] |
|
0.96 |
% |
|
|
1.22 |
% |
|
|
0.97 |
% |
|
|
1.09 |
% |
|
|
0.95 |
% |
|
|
|
|
|
|
|
|
|
|
|
RETURN ON AVERAGE TANGIBLE COMMON EQUITY |
|
|
|
|
|
|
|
|
|
|
Average common equity |
|
$ |
1,207,935 |
|
|
$ |
1,170,819 |
|
|
$ |
1,197,052 |
|
|
$ |
1,189,479 |
|
|
$ |
1,239,060 |
|
Average goodwill and other intangible assets, net |
|
|
(360,641 |
) |
|
|
(363,354 |
) |
|
|
(371,890 |
) |
|
|
(361,990 |
) |
|
|
(373,342 |
) |
Average tangible common equity |
[g] |
$ |
847,294 |
|
|
$ |
807,465 |
|
|
$ |
825,162 |
|
|
$ |
827,489 |
|
|
$ |
865,718 |
|
|
|
|
|
|
|
|
|
|
|
|
Reported: Return on average tangible common
equity1 |
[d÷g] |
|
13.90 |
% |
|
|
18.48 |
% |
|
|
14.50 |
% |
|
|
16.12 |
% |
|
|
13.57 |
% |
Adjusted: Return on average tangible common
equity1 |
[e÷g] |
|
13.90 |
% |
|
|
18.48 |
% |
|
|
14.62 |
% |
|
|
16.12 |
% |
|
|
13.79 |
% |
___________________________________________
- Annualized measure.
|
Reconciliation Of Non-GAAP Financial Measures
(unaudited) |
Net Income Excluding Net Securities (Gains)
Losses |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30,2023 |
|
March 31,2023 |
|
June 30,2022 |
|
June 30,2023 |
|
June 30,2022 |
Net income |
[a] |
$ |
29,364 |
|
|
$ |
36,786 |
|
|
$ |
29,824 |
|
|
$ |
66,150 |
|
|
$ |
58,263 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Net securities (gains) losses |
|
|
2,059 |
|
|
|
616 |
|
|
|
1,714 |
|
|
|
2,675 |
|
|
|
2,328 |
|
Tax effect for net securities (gains) losses |
|
|
(418 |
) |
|
|
(127 |
) |
|
|
(302 |
) |
|
|
(548 |
) |
|
|
(442 |
) |
Net income excluding tax-effected net securities (gains)
losses |
[b] |
$ |
31,005 |
|
|
$ |
37,275 |
|
|
$ |
31,236 |
|
|
$ |
68,277 |
|
|
$ |
60,149 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted average common shares outstanding |
[c] |
|
56,195,801 |
|
|
|
56,179,606 |
|
|
|
56,104,017 |
|
|
|
56,187,820 |
|
|
|
56,149,466 |
|
|
|
|
|
|
|
|
|
|
|
|
Reported: Diluted earnings per share |
[a÷c] |
$ |
0.52 |
|
|
$ |
0.65 |
|
|
$ |
0.53 |
|
|
$ |
1.18 |
|
|
$ |
1.04 |
|
Net income excluding tax-effected net securities (gains) losses per
diluted share |
[b÷c] |
$ |
0.55 |
|
|
$ |
0.66 |
|
|
$ |
0.56 |
|
|
$ |
1.22 |
|
|
$ |
1.07 |
|
Adjusted Net Interest Income and
Adjusted Net Interest Margin |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30,2023 |
|
March 31,2023 |
|
June 30,2022 |
|
June 30,2023 |
|
June 30,2022 |
Net interest income |
|
$ |
78,670 |
|
|
$ |
85,857 |
|
|
$ |
75,928 |
|
|
$ |
164,527 |
|
|
$ |
145,984 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Tax-equivalent adjustment |
|
|
561 |
|
|
|
558 |
|
|
|
546 |
|
|
|
1,119 |
|
|
|
1,092 |
|
Tax-equivalent net interest income |
|
|
79,231 |
|
|
|
86,415 |
|
|
|
76,474 |
|
|
|
165,646 |
|
|
|
147,076 |
|
Purchase accounting accretion related to business combinations |
|
|
(413 |
) |
|
|
(403 |
) |
|
|
(599 |
) |
|
|
(816 |
) |
|
|
(1,758 |
) |
Adjusted net interest income |
|
$ |
78,818 |
|
|
$ |
86,012 |
|
|
$ |
75,875 |
|
|
$ |
164,830 |
|
|
$ |
145,318 |
|
|
|
|
|
|
|
|
|
|
|
|
Tax-equivalent net interest income, annualized |
[a] |
$ |
317,795 |
|
|
$ |
350,461 |
|
|
$ |
306,736 |
|
|
$ |
334,038 |
|
|
$ |
296,590 |
|
Adjusted net interest income, annualized |
[b] |
|
316,138 |
|
|
|
348,826 |
|
|
|
304,334 |
|
|
|
332,392 |
|
|
|
293,045 |
|
Average interest-earning assets |
[c] |
|
11,130,298 |
|
|
|
11,180,562 |
|
|
|
11,453,198 |
|
|
|
11,155,291 |
|
|
|
11,577,879 |
|
|
|
|
|
|
|
|
|
|
|
|
Reported: Net interest margin1 |
[a÷c] |
|
2.86 |
% |
|
|
3.13 |
% |
|
|
2.68 |
% |
|
|
2.99 |
% |
|
|
2.56 |
% |
Adjusted: Net interest margin1 |
[b÷c] |
|
2.84 |
% |
|
|
3.12 |
% |
|
|
2.66 |
% |
|
|
2.98 |
% |
|
|
2.53 |
% |
___________________________________________
- 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 |
|
Six Months Ended |
|
|
June 30,2023 |
|
March 31,2023 |
|
June 30,2022 |
|
June 30,2023 |
|
June 30,2022 |
Net interest income |
|
$ |
78,670 |
|
|
$ |
85,857 |
|
|
$ |
75,928 |
|
|
$ |
164,527 |
|
|
$ |
145,984 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Tax-equivalent adjustment |
|
|
561 |
|
|
|
558 |
|
|
|
546 |
|
|
|
1,119 |
|
|
|
1,092 |
|
Tax-equivalent net interest income |
|
|
79,231 |
|
|
|
86,415 |
|
|
|
76,474 |
|
|
|
165,646 |
|
|
|
147,076 |
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest income |
|
|
28,012 |
|
|
|
31,848 |
|
|
|
31,019 |
|
|
|
59,860 |
|
|
|
66,791 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Net security (gains) losses |
|
|
2,059 |
|
|
|
616 |
|
|
|
1,714 |
|
|
|
2,675 |
|
|
|
2,328 |
|
Noninterest income excluding net securities gains and losses |
|
|
30,071 |
|
|
|
32,464 |
|
|
|
32,733 |
|
|
|
62,535 |
|
|
|
69,119 |
|
|
|
|
|
|
|
|
|
|
|
|
Tax-equivalent revenue |
[a] |
$ |
109,302 |
|
|
$ |
118,879 |
|
|
$ |
109,207 |
|
|
$ |
228,181 |
|
|
$ |
216,195 |
|
|
|
|
|
|
|
|
|
|
|
|
Total noninterest expense |
|
$ |
69,205 |
|
|
$ |
70,403 |
|
|
$ |
69,092 |
|
|
$ |
139,608 |
|
|
$ |
139,468 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
[b] |
|
(2,669 |
) |
|
|
(2,729 |
) |
|
|
(2,951 |
) |
|
|
(5,398 |
) |
|
|
(5,962 |
) |
Non-interest expense excluding amortization of intangible
assets |
[c] |
|
66,536 |
|
|
|
67,674 |
|
|
|
66,141 |
|
|
|
134,210 |
|
|
|
133,506 |
|
Non-operating adjustments: |
|
|
|
|
|
|
|
|
|
|
Salaries, wages, and employee benefits |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(587 |
) |
Data processing |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(214 |
) |
Impairment, professional fees, occupancy, and other |
|
|
(12 |
) |
|
|
— |
|
|
|
(303 |
) |
|
|
(12 |
) |
|
|
(337 |
) |
Adjusted noninterest expense |
[f] |
|
66,524 |
|
|
|
67,674 |
|
|
|
65,838 |
|
|
|
134,198 |
|
|
|
132,368 |
|
Provision for unfunded commitments |
|
|
(265 |
) |
|
|
635 |
|
|
|
267 |
|
|
|
370 |
|
|
|
(845 |
) |
Amortization of New Markets Tax Credits |
|
|
(2,259 |
) |
|
|
(2,221 |
) |
|
|
(1,662 |
) |
|
|
(4,480 |
) |
|
|
(3,003 |
) |
Adjusted core expense |
[g] |
$ |
64,000 |
|
|
$ |
66,088 |
|
|
$ |
64,443 |
|
|
$ |
130,088 |
|
|
$ |
128,520 |
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest expense, excluding non-operating adjustments |
[f-b] |
$ |
69,193 |
|
|
$ |
70,403 |
|
|
$ |
68,789 |
|
|
$ |
139,596 |
|
|
$ |
138,330 |
|
|
|
|
|
|
|
|
|
|
|
|
Reported: Efficiency ratio |
[c÷a] |
|
60.87 |
% |
|
|
56.93 |
% |
|
|
60.56 |
% |
|
|
58.82 |
% |
|
|
61.75 |
% |
Adjusted: Efficiency ratio |
[f÷a] |
|
60.86 |
% |
|
|
56.93 |
% |
|
|
60.29 |
% |
|
|
58.81 |
% |
|
|
61.23 |
% |
Adjusted: Core efficiency ratio |
[g÷a] |
|
58.55 |
% |
|
|
55.59 |
% |
|
|
59.01 |
% |
|
|
57.01 |
% |
|
|
59.45 |
% |
|
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 |
|
|
June 30,2023 |
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
Total stockholders' equity |
|
$ |
1,201,948 |
|
|
$ |
1,198,558 |
|
|
$ |
1,145,977 |
|
|
$ |
1,106,588 |
|
|
$ |
1,161,957 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Goodwill and other intangible assets, net |
|
|
(358,898 |
) |
|
|
(361,567 |
) |
|
|
(364,296 |
) |
|
|
(367,091 |
) |
|
|
(369,962 |
) |
Tangible book value |
[a] |
$ |
843,050 |
|
|
$ |
836,991 |
|
|
$ |
781,681 |
|
|
$ |
739,497 |
|
|
$ |
791,995 |
|
|
|
|
|
|
|
|
|
|
|
|
Ending number of common shares outstanding |
[b] |
|
55,290,847 |
|
|
|
55,294,455 |
|
|
|
55,279,124 |
|
|
|
55,232,434 |
|
|
|
55,335,703 |
|
|
|
|
|
|
|
|
|
|
|
|
Tangible book value per common share |
[a÷b] |
$ |
15.25 |
|
|
$ |
15.14 |
|
|
$ |
14.14 |
|
|
$ |
13.39 |
|
|
$ |
14.31 |
|
Tangible Common Equity and
Tangible Common Equity to Tangible Assets |
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
June 30,2023 |
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
Total assets |
|
$ |
12,209,029 |
|
|
$ |
12,344,555 |
|
|
$ |
12,336,677 |
|
|
$ |
12,497,388 |
|
|
$ |
12,356,433 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Goodwill and other intangible assets, net |
|
|
(358,898 |
) |
|
|
(361,567 |
) |
|
|
(364,296 |
) |
|
|
(367,091 |
) |
|
|
(369,962 |
) |
Tax effect of other intangible assets1 |
|
|
7,833 |
|
|
|
8,335 |
|
|
|
8,847 |
|
|
|
9,369 |
|
|
|
9,905 |
|
Tangible assets |
[a] |
$ |
11,857,964 |
|
|
$ |
11,991,323 |
|
|
$ |
11,981,228 |
|
|
$ |
12,139,666 |
|
|
$ |
11,996,376 |
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity |
|
$ |
1,201,948 |
|
|
$ |
1,198,558 |
|
|
$ |
1,145,977 |
|
|
$ |
1,106,588 |
|
|
$ |
1,161,957 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Goodwill and other intangible assets, net |
|
|
(358,898 |
) |
|
|
(361,567 |
) |
|
|
(364,296 |
) |
|
|
(367,091 |
) |
|
|
(369,962 |
) |
Tax effect of other intangible assets1 |
|
|
7,833 |
|
|
|
8,335 |
|
|
|
8,847 |
|
|
|
9,369 |
|
|
|
9,905 |
|
Tangible common equity |
[b] |
$ |
850,883 |
|
|
$ |
845,326 |
|
|
$ |
790,528 |
|
|
$ |
748,866 |
|
|
$ |
801,900 |
|
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity to tangible assets2 |
[b÷a] |
|
7.18 |
% |
|
|
7.05 |
% |
|
|
6.60 |
% |
|
|
6.17 |
% |
|
|
6.68 |
% |
___________________________________________
- 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 |
|
|
June 30,2023 |
|
March 31,2023 |
|
December 31,2022 |
|
September 30,2022 |
|
June 30,2022 |
Portfolio loans |
[a] |
$ |
7,805,284 |
|
|
$ |
7,783,808 |
|
|
$ |
7,725,702 |
|
|
$ |
7,670,114 |
|
|
$ |
7,497,778 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
PPP loans amortized cost |
|
|
(667 |
) |
|
|
(750 |
) |
|
|
(845 |
) |
|
|
(1,426 |
) |
|
|
(7,616 |
) |
Core loans |
[b] |
$ |
7,804,617 |
|
|
$ |
7,783,058 |
|
|
$ |
7,724,857 |
|
|
$ |
7,668,688 |
|
|
$ |
7,490,162 |
|
|
|
|
|
|
|
|
|
|
|
|
Total deposits |
[c] |
$ |
10,062,755 |
|
|
$ |
9,801,169 |
|
|
$ |
10,071,280 |
|
|
$ |
10,601,397 |
|
|
$ |
10,397,228 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Brokered transaction accounts |
|
|
(6,055 |
) |
|
|
(6,005 |
) |
|
|
(1,303 |
) |
|
|
(2,006 |
) |
|
|
(2,002 |
) |
Time deposits of $250,000 or more |
|
|
(297,967 |
) |
|
|
(200,898 |
) |
|
|
(120,377 |
) |
|
|
(103,534 |
) |
|
|
(117,957 |
) |
Core deposits |
[d] |
$ |
9,758,733 |
|
|
$ |
9,594,266 |
|
|
$ |
9,949,600 |
|
|
$ |
10,495,857 |
|
|
$ |
10,277,269 |
|
|
|
|
|
|
|
|
|
|
|
|
RATIOS |
|
|
|
|
|
|
|
|
|
|
Core loans to portfolio loans |
[b÷a] |
|
99.99 |
% |
|
|
99.99 |
% |
|
|
99.99 |
% |
|
|
99.98 |
% |
|
|
99.90 |
% |
Core deposits to total deposits |
[d÷c] |
|
96.98 |
% |
|
|
97.89 |
% |
|
|
98.79 |
% |
|
|
99.00 |
% |
|
|
98.85 |
% |
Core loans to core deposits |
[b÷d] |
|
79.98 |
% |
|
|
81.12 |
% |
|
|
77.64 |
% |
|
|
73.06 |
% |
|
|
72.88 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 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 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.
End Notes
1 |
See “Non-GAAP Financial Information” for a reconciliation. |
2 |
Operating revenue consists of net interest income plus noninterest
income, net of securities gains and losses. |
3 |
Estimated uninsured deposits consist of account balances in excess
of the $250 thousand FDIC insurance limit, less intercompany
accounts and collateralized accounts (including preferred
deposits). |
4 |
Central Business District areas within Busey’s footprint include
downtown St. Louis, downtown Indianapolis, and downtown
Chicago. |
5 |
Capital ratios for the second quarter of 2023 are not yet
finalized, and are subject to change. |
6 |
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 through its
revolving credit facility, the FHLB, the Federal Reserve Bank, and
federal funds purchased lines. |
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 quarterly average of the ending portfolio loans
balances over the most recent four quarters. |
8 |
The blended benchmark consists of 60% MSCI All Country World Index
and 40% Bloomberg Intermediate US Government/Credit Total Return
Index. |
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