URBANA, Ill., April 21, 2009 (GLOBE NEWSWIRE) -- First Busey Corporation's (Nasdaq:BUSE) consolidated net income for the quarter ended March 31, 2009 was $5.5 million, or $0.15 per fully-diluted common share, compared to net income of $10.0 million, or $0.28 per fully-diluted common share, for the quarter ended March 31, 2008. The decline in net income was primarily due to increased provision for loan losses. We recorded $10.0 million in provision for loan losses in the first quarter of 2009 as compared to $2.2 million in the same period of 2008. Additionally, downward pressure on the net interest margin led to a $3.7 million, pre-tax, decline in net interest income, before provision for loan losses, in the first quarter of 2009 as compared to the same period in 2008. The decrease in net interest income was partially due to the overall decline in asset yields as compared to deposit rates, and interest income lost due to non-accrual loans and loans charged-off.
We implemented a number of cost saving efforts that partially offset the decline in our net interest income. Non-interest expense declined $2.2 million, or 7.9%, in the first quarter of 2009 as compared to the same period in 2008. Many of our cost saving efforts were implemented in the middle of the first quarter of 2009 and are expected to have greater impact going forward. Additionally, we recorded a one-time gain of $2.0 million in other income related to bank owned life insurance in March 2009.
During the first quarter of 2009, net charge-offs were $20.2 million, which resulted in an allowance for loan losses of $88.5 million, or 2.7% of loans at March 31, 2009 compared to $98.7 million, or 3.0% of loans at December 31, 2008. Non-performing loans at March 31, 2009 totaled $121.2 million compared to $84.2 million at December 31, 2008, of which $84.5 million and $61.2 million were in Florida, respectively. Our allowance coverage of non-performing loans was 73% at March 31, 2009 compared to 117% and 68% at December 31, 2008 and September 30, 2008, respectively.
Our banks continue to experience challenges in our loan portfolios brought about by the difficult economic conditions in our markets, primarily in the southwest Florida market. Our Indiana and Illinois markets are also showing signs of economic softening. We expect to see elevated non-performing loans and charge-offs throughout 2009, and expect to continue at least this level of provision expense throughout 2009.
On March 6, 2009, we closed on the sale of $100.0 million of preferred stock to the U.S. Department of the Treasury under the Capital Purchase Program. The Treasury capital allows us to maintain our commitment to our communities through continued lending, while maintaining our capital strength. However, it is a high priority for the company to redeem the Treasury capital as soon as practical.
Given our desire to build capital and the expectation of continued elevated provisions for loan losses, we have taken a careful look at our dividend payout. In January 2009, we paid a dividend of $0.20 per common share. As noted above, we made $0.15 per common share in the first quarter of 2009. As you can deduce, we will not build capital if we continue to pay out more than we earn. We are therefore reducing our dividend to $0.08 per common share for our May 1, 2009 dividend payment. As we continue, we will review our dividend payout to ensure it is consistent with our capital plan and our earnings. The reduction in our dividend is consistent with our goal of building and maintaining a conservative balance sheet. As we move forward, our priorities are balance sheet strength, profitability and growth . . . in that order.
In the next month, we will unveil The Busey Strategy. The Busey Strategy is built upon fulfilling the Busey Promise to our four pillars -- customers, associates, communities and shareholders. Busey will grow by successfully executing our mission of exceeding the service needs of our customers, investing in our associates and communities and delivering long-term value to you, our shareholders.
In closing, I would like to acknowledge all of our associates for their hard work and dedication over the past 18 months. Our Company is fortunate to have a talented group of associates who are committed to fulfilling the Busey Promise -- everyday. While we have been confronted with the serious challenges of the Florida economy during this period, our associates in Florida maintain a positive attitude and tremendous work ethic that enable us to work through these difficult times.
As always, your input and questions are welcome. Thank you for your continued support.
\s\ Van A. Dukeman
Corporate Profile
First Busey Corporation is a $4.5 billion financial holding company headquartered in Urbana, Illinois. First Busey Corporation has two wholly-owned banks with locations in three states. Busey Bank is headquartered in Champaign, Illinois and has forty-five banking centers serving downstate Illinois. Busey Bank has a banking center in Indianapolis, Indiana, and a loan production office in Fort Myers, Florida. As of March 31, 2009, Busey Bank had total assets of $4.0 billion. Busey Bank, N.A. is headquartered in Fort Myers, Florida, with eight banking centers serving southwest Florida. Busey Bank, N.A. had total assets of $422.7 million as of March 31, 2009.
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 March 31, 2009, Busey Wealth Management had approximately $3.1 billion in assets under care.
First Busey Corporation owns a retail payment processing subsidiary, FirsTech, Inc., which processes over 32 million transactions per year through online bill payments, lockbox processing and walk-in payments through its 4,700 agent locations in 40 states.
Busey provides electronic delivery of financial services through our website, www.busey.com.
SELECTED FINANCIAL HIGHLIGHTS
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(dollars in thousands, except per share data)
Three Months Ended
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March 31, Dec. 31, Sept. 30, March 31,
2009 2008 2008 2008
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EARNINGS & PER
SHARE DATA
Net income/
(loss)(1) $ 5,506 $ (61,359) $ 8,817 $ 10,004
Revenue(2) 43,636 41,385 47,311 44,974
Fully-diluted
earnings per share 0.15 (1.71) 0.25 0.28
Cash dividends
paid per share 0.20 0.20 0.20 0.20
Net income (loss)
by operating
segment
Busey Bank $ 6,584 $ (24,747) $ 8,064 $ 11,602
Busey Bank, N.A. (714) (35,891) (1,393) (1,047)
Busey Wealth
Management 562 457 766 629
FirsTech 822 490 705 446
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AVERAGE BALANCES
Assets $4,410,790 $4,399,387 $4,301,126 $4,196,079
Earning assets 3,966,968 3,892,209 3,804,205 3,693,418
Deposits 3,488,527 3,376,011 3,312,634 3,230,782
Interest-bearing
liabilities 3,455,020 3,485,063 3,375,151 3,253,477
Stockholders'
equity 477,327 504,329 513,385 521,701
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PERFORMANCE RATIOS
Return on average
assets(3) 0.51% (5.55%) 0.81% 0.96%
Return on average
equity(3) 4.68% (48.40%) 6.81% 7.71%
Net interest
margin(3) 2.88% 3.04% 3.34% 3.47%
Efficiency ratio(4) 56.07% 68.31% 54.83% 59.17%
Non-interest
revenue as a %
of total
revenues(2) 36.76% 29.67% 33.54% 30.49%
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ASSET QUALITY
Gross loans $3,261,440 $3,257,581 $3,229,394 $3,131,878
Allowance for
loan losses 88,498 98,671 48,674 42,924
Net charge-offs 20,173 25,803 7,905 1,786
Allowance for loan
losses to loans 2.71% 3.03% 1.51% 1.37%
Allowance as a
percentage of
non-performing
loans 73.03% 117.20% 68.37% 134.29%
Non-performing
loans
Non-accrual loans 105,424 68,347 59,347 26,651
Loans 90+ days
past due 15,752 15,845 11,847 5,313
Geographically
Downstate
Illinois/Indiana 36,653 22,986 16,041 16,156
Florida 84,523 61,206 55,153 15,808
Other
non-performing
assets 16,956 15,794 4,846 2,476
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1 Available to common shareholders, net of preferred dividend.
2 Net of interest expense, excludes security gains.
3 Quarterly ratios annualized and calculated on net income
available to common stockholders.
4 Net of security gains and intangible charges.
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.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except per share data)
March 31, December 31, March 31,
2009 2008 2008
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Assets
Cash and due from banks $ 138,413 $ 190,113 $ 123,068
Investment securities 708,112 654,130 600,953
Net loans 3,172,942 3,158,910 3,088,954
Premises and equipment 80,890 81,732 81,269
Goodwill and other
intangibles 255,765 256,868 279,982
Other assets 114,353 118,340 77,596
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Total assets $ 4,470,475 $ 4,460,093 $ 4,251,822
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Liabilities &
Stockholders' Equity
Non-interest bearing
deposits $ 458,332 $ 378,007 $ 395,115
Interest-bearing
deposits 3,031,869 3,128,686 2,853,193
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Total deposits $ 3,490,201 $ 3,506,693 $ 3,248,308
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Federal funds
purchased & securities
sold under agreements
to repurchase 143,635 182,980 142,496
Short-term borrowings 58,000 83,000 116,000
Long-term debt 132,743 134,493 127,910
Junior subordinated
debt owed to
unconsolidated trusts 55,000 55,000 55,000
Other liabilities 39,208 43,110 39,487
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Total liabilities $ 3,918,787 $ 4,005,276 $ 3,729,201
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Total stockholders'
equity $ 551,688 $ 454,817 $ 522,621
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Total liabilities &
stockholders' equity $ 4,470,475 $ 4,460,093 $ 4,251,822
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Per Share Data
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Book value per common
share $ 12.65 $ 12.70 $ 14.57
Tangible book value
per common share $ 5.51 $ 5.53 $ 6.77
Ending number of common
shares outstanding 35,816 35,815 35,858
Condensed Consolidated Statements of Income
(Unaudited, in thousands, except per share data)
Three Months Ended
March 31,
-------------------------
2009 2008
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Interest and fees on loans $ 42,140 $ 51,651
Interest on investment securities 6,167 6,801
Other interest income -- 105
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Total interest income $ 48,307 $ 58,557
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Interest on deposits 17,817 22,847
Interest on short-term borrowings 843 1,759
Interest on long-term debt 1,274 1,730
Junior subordinated debt
owed to unconsolidated trusts 777 959
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Total interest expense $ 20,711 $ 27,295
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Net interest income $ 27,596 $ 31,262
Provision for loan losses 10,000 2,150
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Net interest income after
provision for loan losses $ 17,596 $ 29,112
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Fees for customer services 3,997 3,851
Trust fees 3,205 3,073
Remittance processing 3,254 2,947
Commissions and brokers' fees 519 702
Gain on sales of loans 2,418 1,160
Net security gains 21 472
Other 2,647 1,979
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Total non-interest income $ 16,061 $ 14,184
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Salaries and wages 10,629 11,512
Employee benefits 2,817 3,136
Net occupancy expense 2,575 2,464
Furniture and equipment expense 1,936 1,917
Data processing expense 1,732 1,688
Amortization expense 1,090 1,129
Other operating expenses 5,072 6,247
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Total non-interest expense $ 25,851 $ 28,093
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Income before income taxes $ 7,806 $ 15,203
Income taxes 1,913 5,199
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Net income $ 5,893 $ 10,004
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Preferred stock dividends and TARP
warrant accretion $ 387 $ --
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Income available for common shareholders $ 5,506 $ 10,004
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Per Share Data
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Basic earnings common per share $ 0.15 $ 0.28
Fully-diluted earnings common per share $ 0.15 $ 0.28
Diluted average common shares outstanding 35,816 36,130