January 25, 2011
 

 
First Busey Announces 2010 Fourth Quarter and Full Year Results
 
Champaign, IL – (Nasdaq: BUSE)
 
Message from our President & CEO
 
First Busey Corporation’s net income was $7.3 million and net income available to common stockholders was $6.0 million, or $0.09 per fully-diluted common share, for the fourth quarter of 2010. In comparison, the company reported a net loss for the fourth quarter of 2009 of $27.6 million and a net loss available to common stockholders of $29.2 million, or $0.49 per fully-diluted common share.
 
Net income for the year ended December 31, 2010 was $23.2 million and net income available to common stockholders was $18.1 million, or $0.27 per fully-diluted common share, compared to a net loss in 2009 of $323.1 million and a net loss available to common stockholders of $327.9 million, or $7.85 per fully-diluted common share.  The 2009 net loss was primarily due to total provision expense of $252.0 million, of which $54.0 million was in the fourth quarter and $208.2 million of goodwill impairment in the third quarter.
 
Our priorities remain balance sheet strength, profitability and growth – in that order.  Since the first quarter of 2010, we have demonstrated improvement in non-performing loans, capital ratios and profitability in each quarter.  We expect to continue to see gradual improvement in non-performing loans and profitability while maintaining high capital ratios.
 
As noted in our prior quarter’s release, we have turned much of our attention toward growth and raising capital to support our future growth plans.  In December 2010, we completed offerings of our common stock and a series of convertible preferred stock, together yielding net proceeds of $84.3 million, pushing our total regulatory capital ratio in excess of 16% and our regulatory tier 1 capital and leverage ratios in excess of 15% and 11%, respectively.  In January 2011, we delivered an initiative and the tools to our front line associates in an effort to spur organic growth. We also believe that the recent capital raise allows us to contemplate external growth opportunities as they become available.
 
Asset Quality:  Our non-performing loans at December 31, 2010 showed improvement as compared to September 30, 2010 and December 31, 2009 levels.  While our past due categories were slightly higher than the prior quarter, they remained within our range of expectations.  We expect continued gradual improvement in our overall asset quality in 2011; however, this is dependent on market specific economic conditions.  The key metrics are as follows:
 
·  
Non-performing loans decreased to $68.1 million at December 31, 2010 from $79.7 million at September 30, 2010 and $86.3 million at December 31, 2009.

o  
Illinois non-performing loans decreased to $38.3 million at December 31, 2010 from $41.8 million at September 30, 2010 and increased from $28 million at December 31, 2009.
o  
Florida non-performing loans increased slightly to $23.8 million at December 31, 2010 from $22.8 million at September 30, 2010 and decreased from $40.2 million at December 31, 2009.
o  
Indiana non-performing loans decreased to $6.0 million at December 31, 2010 from $15.1 million at September 30, 2010 and $18.1 million at December 31, 2009.

·  
Loans 30-89 days past due increased to $23.5 million at December 31, 2010 from $19.3 million at September 30, 2010 and $12.5 million at December 31, 2009.  The primary reason for the increase in past dues related to single family residential mortgages, primarily in Illinois. Although we generally experience an increase in single family residential past dues in the fourth quarter, the spike in the fourth quarter of 2010 was higher than fourth quarter of 2009.  We believe our loss exposure in single family residential mortgages is limited.
 
·  
Other real estate owned decreased to $9.2 million at December 31, 2010 from $11.5 million at September 30, 2010 and $17.2 million at December 31, 2009.
 
·  
The ratio of non-performing assets to total loans plus other real estate owned decreased to 3.25% from 3.60% at September 30, 2010 and 3.68% at December 31, 2009.
 
·  
The ratio of construction and land development loans to total loans decreased to 7.6% at December 31, 2010 from 8.3% at September 30, 2010 and 11.7% at December 31, 2009.
·  
The allowance for loan losses to non-performing loans ratio increased to 111.6% at December 31, 2010 from 104.3% at September 30, 2010, and was below the 116.1% ratio at December 31, 2009.
·  
The allowance for loan losses to total loans ratio declined slightly to 3.21% at December 31, 2010 compared to 3.30% at September 30, 2010, and was down from 3.59% at December 31, 2009.
·  
Net charge-offs were $17.4 million for the fourth quarter of 2010, which were lower than the $18.5 million recorded during the third quarter of 2010 and the $73.8 million recorded for the fourth quarter of 2009.
·  
Provision expense in the fourth quarter of 2010 was $10.3 million compared to $9.5 million in the third quarter of 2010 and $54.0 million in the fourth quarter of 2009.

We continue to believe the peak of our non-performing assets occurred in the quarter ended September 30, 2009.  Improving our asset quality metrics will continue to be a high priority until we experience sustained improvement in our market specific economic conditions.

        Operating Performance:  Our profit increased to $7.3 million in the fourth quarter of 2010 as compared to $6.0 million in the third quarter of 2010 and significantly higher than the
            fourth quarter of 2009 loss of $27.6 million.  The primary reason for the increase over the third quarter of 2010 was $2.0 million in additional gains on sale of mortgage loans and
            $1.9 million of gains on sales of OREO, partially offset by $0.8 million of additional provision expense and increased compensation expense related to mortgage production.
 
             Pre-provision, pre-tax income was $21.3 million for the fourth quarter of 2010 compared to $17.4 million for the quarter ended September 30, 2010 and $12.0 million for the quarter
             ended December 31, 2009. Our normalized pre-provision, pre-tax income was $20.1 million in the fourth quarter of 2010 compared to $18.0 million in the third quarter of 2010 and
      $17.0 million in the fourth quarter of 2009. The normalized pre-provision, pre-tax income non-GAAP reconciling items in the fourth quarter of 2010 were gains on sales of OREO of
              $1.9 million, partially offset by OREO costs of $0.4 million and non-accrual interest reversals of $0.2 million.
 
Significant operating performance items were:
 
·  
Net income available to common stockholders (net of TARP dividends) for the quarter ended December 31, 2010 was $6.0 million, or $0.09 per fully-diluted share, compared to a loss of $29.2 million, or $0.49 per fully-diluted common share, for the quarter ended December 31, 2009.
·  
Net income available to common stockholders (net of TARP dividends) for the year ended December 31, 2010 was $18.1 million, or $0.27 per fully-diluted share, compared to a loss of $327.9 million, or $7.85 per fully-diluted common share, for the year ended December 31, 2009.
·  
Net interest margin increased to 3.68% for the fourth quarter of 2010 as compared to 3.64% for the third quarter of 2010, and increased from 3.36% for the fourth quarter of 2009. The net interest margin for the year ended December 31, 2010 was 3.58% as compared to 3.05% for the year ended December 31, 2009.
·  
The efficiency ratio decreased to 51.51% for the fourth quarter of 2010 as compared to 58.21% for the third quarter of 2010, and decreased from 70.71% for the fourth quarter of 2009. The efficiency ratio for the year ended December 31, 2010 was 55.91%, an improvement from 63.12% in 2009.
·  
Total revenue, net of interest expense and security gains, was $178.9 million in 2010 as compared to $180.3 million in 2009.
 
·  
FirsTech’s net income decreased to $1.8 million in 2010 from $2.9 million in 2009.  As previously noted, this decrease was expected.
 
·  
Busey Wealth Management’s net income increased to $3.3 million in 2010 as compared to $2.6 million in 2009.
 
On January 28, 2011, we will pay a cash dividend of $0.04 per common share to stockholders of record on January 21, 2011. 

We have come a long way in 2010.  While we are not proud of where we were in 2009 as a result of the unprecedented economic challenges, we have accomplished a significant amount in 2010.  We believe only better things are ahead in the future.  We will not rest on our modest accomplishments.  Rather, we will focus a greater amount of our time on growth, which combined with a strong balance sheet and strong profits make a great company.
 
We thank our associates for their efforts, our customers for their business and you, our stockholders, for your continued support of Busey.

 
\s\ Van A. Dukeman
 
President & Chief Executive Officer
 
First Busey Corporation
 
SELECTED FINANCIAL HIGHLIGHTS
 
(dollars in thousands, except per share data)
 
 
                             
 
 
Three Months Ended
   
Year Ended
 
 
 
December 31,
   
September 30,
   
December 31,
   
December 31,
   
December 31,
 
   
2010
   
2010
   
2009
   
2010
   
2009
 
EARNINGS & PER SHARE DATA
                             
Net income (loss)
  $ 7,306     $ 6,022     $ (27,558 )   $ 23,230     $ (323,113 )
Income (loss) available to common stockholders1
    5,984       4,739     $ (29,239 )     18,060     $ (327,880 )
Revenue2
    46,623       44,202       45,953       178,886       180,285  
Fully-diluted earnings (loss) per share
    0.09       0.07       (0.49 )     0.27       (7.85 )
Cash dividends paid per share
    0.04       0.04       0.04       0.16       0.40  
                                         
Net income (loss) by operating segment
                                       
   Busey Bank
  $ 7,008     $ 5,449     $ (25,865 )   $ 21,230     $ (320,807 )
   Busey Wealth Management
    710       716       649       3,283       2,557  
   FirsTech
    299       425       472       1,821       2,869  
                                         
AVERAGE BALANCES
                                       
Assets
  $ 3,548,171     $ 3,598,237     $ 3,894,489     $ 3,648,831     $ 4,230,791  
Earning assets
    3,227,207       3,280,987       3,628,623       3,327,677       3,819,996  
Deposits
    2,930,644       2,982,590       3,208,901       3,026,786       3,363,345  
Interest-bearing liabilities
    2,723,625       2,778,286       3,064,451       2,831,769       3,282,648  
Stockholders' equity - common
    237,485       234,916       244,143       233,152       360,024  
                                         
PERFORMANCE RATIOS
                                       
Return on average assets3
    0.67 %     0.52 %     (2.98 %)     0.49 %     (7.75 %)
Return on average common equity3
    10.00 %     8.00 %     (47.51 %)     7.75 %     (91.07 %)
Net interest margin3
    3.68 %     3.64 %     3.36 %     3.58 %     3.05 %
Efficiency ratio4
    51.51 %     58.21 %     70.71 %     55.91 %     63.12 %
Non-interest revenue as a % of total revenues2
    36.92 %     32.96 %     34.67 %     34.51 %     36.54 %
                                         
ASSET QUALITY
                                       
Gross loans
  $ 2,368,777     $ 2,518,209     $ 2,792,823                  
Allowance for loan losses
    76,038       83,098       100,179                  
Net charge-offs
    17,361       18,531       73,842       66,142       249,992  
Allowance for loan losses to loans
    3.21 %     3.30 %     3.59 %                
Allowance as a percentage of non-performing loans
    111.64 %     104.29 %     116.08 %                
Non-performing loans
                                       
     Non-accrual loans
    65,486       78,223       82,133                  
     Loans 90+ days past due
    2,618       1,457       4,166                  
  Geographically
                                       
     Downstate Illinois/ Indiana
    44,281       56,831       46,120                  
     Florida
    23,823       22,849       40,179                  
Loans 30 -89 days past due
    23,477       19,322       12,493                  
Other non-performing assets
    9,154       11,463       17,241                  
                                         
 
1 Available to common stockholders, net of preferred dividend and discount accretion
 
 
2 Net of interest expense, excludes security gains
 
 
3 Quarterly ratios annualized and calculated on net income (loss) available to common stockholders
 
 
4 Net of security gains and intangible charges
 
 
 
 
 
 
 
Condensed Consolidated Balance Sheets
                 
(Unaudited, in thousands, except per share data)
 
December 31,
   
September 30,
   
December 31,
 
   
2010
   
2010
   
2009
 
Assets
                 
Cash and due from banks
  $ 418,965     $ 222,226     $ 207,071  
Investment securities
    599,459       551,720       569,640  
Net loans
    2,292,739       2,435,110       2,692,644  
Premises and equipment
    73,218       74,362       77,528  
Goodwill and other intangibles
    40,242       41,263       44,330  
Other assets
    180,380       208,532       223,639  
Total assets
  $ 3,605,003     $ 3,533,213     $ 3,814,852  
                         
Liabilities & Stockholders' Equity
                       
Non-interest bearing deposits
  $ 460,661     $ 449,702     $ 468,230  
Interest-bearing deposits
    2,455,705       2,474,503       2,702,850  
Total deposits
  $ 2,916,366     $ 2,924,205     $ 3,171,080  
                         
Federal funds purchased & securities
                       
     sold under agreements to repurchase
    138,982       130,419       142,325  
Short-term borrowings
    -       4,000       -  
Long-term debt
    43,159       52,576       82,076  
Junior subordinated debt owed to unconsolidated trusts
    55,000       55,000       55,000  
Other liabilities
    30,991       30,446       36,243  
Total liabilities
  $ 3,184,498     $ 3,196,646     $ 3,486,724  
Total stockholders' equity
  $ 420,505     $ 336,567     $ 328,128  
Total liabilities & stockholders' equity
  $ 3,605,003     $ 3,533,213     $ 3,814,852  
                         
Per Share Data
                       
Book value per common share
  $ 3.65     $ 3.56     $ 3.45  
Tangible book value per common share
  $ 3.14     $ 2.94     $ 2.78  
Ending number of common shares outstanding
    79,100       66,361       66,361  
 
 
 
 
 


 
Condensed Consolidated Statements of Operations
                       
(Unaudited, in thousands, except per share data)
 
Three Months Ended December 31,
   
Year Ended December 31,
 
   
2010
   
2009
   
2010
   
2009
 
 
                       
Interest and fees on loans
  $ 32,954     $ 39,026     $ 138,860     $ 161,971  
Interest on investment securities
    4,085       5,003       17,323       22,539  
Total interest income
  $ 37,039     $ 44,029     $ 156,183     $ 184,510  
                                 
Interest on deposits
    6,170       12,032       32,714       60,079  
Interest on short-term borrowings
    156       193       640       2,229  
Interest on long-term debt
    617       1,100       2,930       4,900  
Junior subordinated debt owed to unconsolidated trusts
    685       685       2,748       2,901  
Total interest expense
  $ 7,628     $ 14,010     $ 39,032     $ 70,109  
                                 
Net interest income
  $ 29,411     $ 30,019     $ 117,151     $ 114,401  
Provision for loan losses
    10,300       54,000       42,000       251,500  
Net interest income (loss) after provision for loan losses
  $ 19,111     $ (23,981 )   $ 75,151     $ (137,099 )
                                 
Fees for customer services
    4,466       4,384       16,592       17,086  
Trust fees
    3,473       3,197       14,231       12,817  
Commissions and brokers' fees
    447       465       1,756       1,843  
Remittance processing
    2,233       3,146       9,349       13,032  
Gain on sales of loans
    6,146       2,437       16,130       12,379  
Net security gains (losses)
    (7 )     (10 )     1,018       130  
Other
    447       2,305       3,677       8,727  
Total non-interest income
  $ 17,205     $ 15,924     $ 62,753     $ 66,014  
                                 
Salaries and wages
    10,948       12,143       41,219       44,519  
Employee benefits
    2,024       900       9,693       9,086  
Net occupancy expense
    2,188       2,501       9,135       9,886  
Furniture and equipment expense
    1,360       1,712       5,962       7,288  
Data processing expense
    2,122       2,271       7,977       7,922  
Amortization expense
    1,021       1,090       4,088       4,361  
Regulatory expense
    1,676       1,463       6,978       8,580  
Goodwill impairment
    -       -       -       208,164  
OREO expense
    429       1,525       1,872       2,761  
Other operating expenses
    3,520       10,353       18,286       25,128  
Total non-interest expense
  $ 25,288     $ 33,958     $ 105,210     $ 327,695  
                                 
Income (loss) before income taxes
  $ 11,028     $ (42,015 )   $ 32,694     $ (398,780 )
Income taxes
    3,722       (14,457 )     9,464       (75,667 )
Net income (loss)
  $ 7,306     $ (27,558 )   $ 23,230     $ (323,113 )
Preferred stock dividends and discount accretion
  $ 1,322     $ 1,681     $ 5,170     $ 4,767  
Income (loss) available for common stockholders
  $ 5,984     $ (29,239 )   $ 18,060     $ (327,880 )
                                 
Per Share Data
                               
Basic earnings (loss) per common share
  $ 0.09     $ (0.49 )   $ 0.27     $ (7.85 )
Fully-diluted earnings (loss) per common share
  $ 0.09     $ (0.49 )   $ 0.27     $ (7.85 )
Diluted average common shares outstanding
    66,503       59,509       66,397       41,788  
 
 
 
 
 
 

 
Corporate Profile
 

First Busey Corporation is a $3.6 billion financial holding company headquartered in Champaign, Illinois. Busey Bank, First Busey Corporation’s wholly-owned bank subsidiary, is headquartered in Champaign, Illinois and has thirty-three banking centers serving downstate Illinois, a banking center in Indianapolis, Indiana, and seven banking centers serving southwest Florida. Busey Bank had total assets of $3.6 billion as of December 31, 2010.

Busey Wealth Management is a wholly-owned subsidiary of First Busey Corporation. Through Busey Trust Company, Busey Wealth Management delivers trust, asset management, retail brokerage and insurance products and services. As of December 31, 2010, Busey Wealth Management had approximately $3.5 billion in assets under care.

First Busey Corporation owns a retail payment processing subsidiary, FirsTech, Inc., which processes over 28 million transactions per year through online bill payments, lockbox processing and walk-in payments through its 3,100 agent locations in 38 states.

Busey provides electronic delivery of financial services through our website, www.busey.com.

Contact:
David B. White, CFO
217-365-4047




Special Note Concerning Forward-Looking Statements
This document may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company.  Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions.  Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements.  These factors include, among others, the following: (i) the strength of the local and national economy; (ii) the economic impact of any future terrorist threats or attacks; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (iv) changes in interest rates and prepayment rates of the Company’s assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of acquisitions; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices.  These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.  Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.

The following information was filed by First Busey Corp (BUSE) on Wednesday, January 26, 2011 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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