First Busey Announces 2008 Year-End Results
URBANA, Ill., Jan. 27, 2009 (GLOBE NEWSWIRE) -- First Busey Corporation's (Nasdaq:BUSE) consolidated net loss for the year ended December 31, 2008 was $15.3 million, or $0.43 per fully-diluted share, compared to net income of $31.5 million, or $1.13 per fully-diluted share, for the year ended December 31, 2007. The consolidated net loss is primarily due to $98.3 million in provision for loan losses recorded during 2008, including $75.8 million in the fourth quarter of 2008. In comparison, we recorded $14.5 million in provision for loan losses during 2007.
We ended the year with an allowance for loan losses of $98.7 million, which represents 117% coverage of non-performing loans at December 31, 2008 as compared to 68% coverage of non-performing loans at September 30, 2008. Approximately 79% of our $42.1 million of net charge offs in 2008 were attributable to southwest Florida loans.
This increased allowance for loan losses positions us well for future earnings performance. During the past year, we have continued to diligently evaluate our loan portfolio, with an emphasis on our southwest Florida loan portfolio. The southwest Florida loan portfolio represents 22.7% of our combined loan portfolio, but 72.7% of our non-performing loans. The action we took in the fourth quarter is a result of this thorough evaluation.
In addition, as you may recall from my comments at our 2008 annual meeting, and in various press releases, I said that we would continue to see elevated credit risk, particularly in the southwest Florida loan portfolio. While our downstate Illinois and Indianapolis markets are experiencing some softening, the markets remain remarkably stable in terms of asset performance. The southwest Florida market has yet to show tangible signs of economic improvement. The duration and depth of the current economic challenges are unknown. We will continue to take a conservative approach and proactively address issues within our loan portfolio.
Despite the overall challenging economic times, there are many positives to report about Busey.
Our banks are well capitalized. Under regulatory standards, our banks continue to be well capitalized. Well capitalized is a greater regulatory standard than adequately capitalized. Although the challenging economic environment has made it difficult to build capital, we are committed to maintaining the highest regulatory standard of well capitalized for our banks.
Our core earnings are strong. Despite the challenging economy during 2008, including some of the lowest interest rates in the history of the United States, our core earnings improved over 2007. Absent the $83.8 million, $50.5 million after-tax, of increased provision expense recorded in 2008 as compared to 2007, our net income would have increased to $35.2 million in 2008 as compared to $31.5 million in 2007. This improvement was in spite of a challenging credit and net interest margin environment and additional costs to achieve the efficiencies inherent in the merger. These core earnings, coupled with additional synergies from our recent merger and our significant allocation of capital to our allowance for loan losses, positions us well for future earnings results.
Downstate Illinois growth remains strong. While it is widely noted in the national press that banks are not lending, Busey is lending when it sees good opportunity. We grew our loan portfolio in excess of $200 million during 2008, due to a strong supply of growth opportunities in downstate Illinois. While we did not grow our loan portfolio in southwest Florida, the blend of strong agricultural, manufacturing, academia and healthcare prevalent in our downstate Illinois markets demanded growth from our communities throughout 2008. This provided Busey Bank with many opportunities to fund quality loans, whereby we assisted our communities at a time of economic contraction.
We have a diversified revenue stream. A significant component of our value resides in our non-interest bearing revenue channels, primarily Busey Wealth Management and FirsTech. Continued growth in the non-interest revenue channels will benefit our customers and shareholders through increased access to products and earnings diversification away from credit and interest related sources. Growth in these non-interest related areas is a priority for Busey.
Customers remain our first priority. Long before it was the trend or mandated by the popular press, we have been working with our customers in all of our markets to provide them a means to resolve their credit issues. We want our customers to succeed. During this challenging economy, it is good business practice to work with our customers who maintain a stable plan and have the means to successfully execute the plan.
2008 completed 14 Years of dividend growth. 2008 completed our 14th straight year of growth in dividends per share and our 29th year of at least a sustained dividend. Despite the economic challenges, our core earnings have allowed us to maintain our dividend throughout 2008. Further, we recently announced a $0.20 per share dividend will be paid on January 30, 2009 to shareholders of record on January 27, 2009. A sustained dividend is one way we continue to deliver long-term returns to our shareholders.
In summary, our banks are well capitalized, core earnings are strong, we have a diversified revenue stream that mitigates the effects of challenging interest rate environments, we have maintained our dividend through the first quarter of 2009 and we allocated significant capital to our allowance for loan losses to position us well for the future.
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 December 31, 2008, 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 $452.4 million as of December 31, 2008.
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, 2008, 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 27 million transactions per year through online bill payments, lockbox processing and walk-in payments through its 4,000 agent locations in 36 states.
Busey provides electronic delivery of financial services through our website, www.busey.com.
SELECTED FINANCIAL HIGHLIGHTS
-----------------------------
(dollars in thousands, except per share data)
Three Months Ended Twelve Months Ended
---------------------------------- -----------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2008 2008 2007 2008 2007
---------------------------------------------- -----------------------
EARNINGS &
PER SHARE
DATA
Net
income/
(loss) $ (38,758) $ 8,817 $ 4,367 $ (15,346) $ 31,477
Revenue(3) 41,385 47,311 46,190 179,151 139,472
Fully-
diluted
earnings
per share (1.08) 0.25 0.12 (0.43) 1.13
Cash
dividends
paid per
share 0.20 0.20 0.18 0.80 0.77
Net income
(loss) by
operating
segment(4)
Busey
Bank $ (24,747) $ 8,064 $ 7,830 $ 1,314 35,088
Busey
Bank,
N.A (13,290) (1,393) (3,589) (17,732) (2,581)
Busey
Wealth
Manage-
ment 457 766 669 2,540 2,408
FirsTech 490 705 438 2,527 744
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AVERAGE
BALANCES
Assets $4,399,387 $4,301,126 $4,154,710 $4,282,466 $3,186,582
Earning
assets 3,892,209 3,804,205 3,651,718 3,781,169 2,891,348
Deposits 3,376,011 3,312,634 3,209,772 3,279,867 2,530,800
Interest-
bearing
liabili-
ties 3,485,063 3,375,151 3,297,075 3,351,212 2,575,915
Stock-
holders'
equity 504,329 513,385 535,911 513,800 318,155
----------------------------------------------------------------------
PERFORMANCE
RATIOS
Return on
average
assets(1) (3.50%) 0.81% 0.42% (0.36%) 0.99%
Return on
average
equity(1) (30.57%) 6.81% 3.23% (2.99%) 9.89%
Net
interest
margin(1) 3.04% 3.34% 3.60% 3.33% 3.58%
Efficiency
ratio(2) 68.31% 54.83% 63.22% 59.44% 57.78%
Non-
interest
revenue
as a % of
total
revenues(3) 29.67% 33.54% 29.50% 31.16% 27.23%
----------------------------------------------------------------------
ASSET
QUALITY
Gross
loans $3,257,581 $3,229,394 $3,053,225
Allowance
for loan
losses 98,671 48,674 42,560
Net
charge-
offs 25,803 7,905 7,287 42,139 8,350
Allowance
for loan
losses to
loans 3.03% 1.51% 1.39%
Allowance
as a
percentage
of non-
performing
loans 117.20% 68.37% 211.95%
Non-
performing
loans
Non-
accrual
loans 68,347 59,347 15,370
Loans 90+
days
past due 15,845 11,847 4,710
Geographic-
ally
Downstate
Illinois/
Indiana 22,986 16,041 11,013
Florida 61,206 55,153 9,067
Other non-
performing
assets 15,794 4,846 2,028
----------------------------------------------------------------------
(1) Quarterly ratios annualized.
(2) Net of security gains and amortization.
(3) Net of interest expense, excludes security gains.
(4) Year ended December 31, 2007 reflects five months of results
following the merger with Main Street. Main Street Bank & Trust
2007 results have been combined with Busey Bank. Busey Wealth
Management results include two months of results of Main Street
Bank & Trust's trust operations for the 2007 periods presented.
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)
Dec. 31, Sept. 30, Dec. 31,
2008 2008 2007
----------------------------------
Assets
Cash and due from banks $ 190,113 $ 93,443 $ 125,228
Federal funds sold -- -- 459
Investment securities 654,130 619,984 610,422
Net loans 3,158,910 3,180,720 3,010,665
Premises and equipment 81,732 81,979 80,400
Goodwill and other intangibles 279,469 277,980 280,487
Other assets 118,340 85,113 85,264
---------------------------------------------------------------------
Total assets $4,482,694 $4,339,219 $4,192,925
=====================================================================
Liabilities & Stockholders' Equity
Non-interest bearing deposits $ 378,007 $ 359,028 $ 389,672
Interest-bearing deposits 3,128,686 2,939,343 2,817,526
---------------------------------------------------------------------
Total deposits $3,506,693 $3,298,371 $3,207,198
---------------------------------------------------------------------
Federal funds purchased &
securities sold under agreements
to repurchase 182,980 227,386 203,119
Short-term borrowings 83,000 72,000 10,523
Long-term debt 134,493 134,910 150,910
Junior subordinated debt owed to
unconsolidated trusts 55,000 55,000 55,000
Other liabilities 43,110 37,692 36,478
---------------------------------------------------------------------
Total liabilities $4,005,276 $3,825,359 $3,663,228
---------------------------------------------------------------------
Total stockholders' equity $ 477,418 $ 513,860 $ 529,697
---------------------------------------------------------------------
Total liabilities & stockholders'
equity $4,482,694 $4,339,219 $4,192,925
=====================================================================
Per Share Data
---------------------------------------------------------------------
Book value per share $ 13.33 $ 14.36 $ 14.58
Tangible book value per share $ 5.53 $ 6.59 $ 6.86
Ending number of shares outstanding 35,815 35,788 36,332
Condensed Consolidated Statements of Income
(Unaudited, in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------------------------
2008 2007 2008 2007
---------------------------------------
Interest and fees on loans $ 46,088 $ 55,763 $195,121 $178,700
Interest on investment
securities 6,237 7,375 25,175 21,865
Other interest income 15 348 188 1,338
---------------------------------------------------------------------
Total interest income $ 52,340 $ 63,486 $220,484 $201,903
---------------------------------------------------------------------
Interest on deposits 19,507 26,169 81,208 84,197
Interest on short-term
borrowings 1,370 1,745 6,318 4,763
Interest on long-term debt 1,519 1,987 6,134 7,407
Junior subordinated debt owed
to unconsolidated trusts 837 1,023 3,488 4,038
---------------------------------------------------------------------
Total interest expense $ 23,233 $ 30,924 $ 97,148 $100,405
---------------------------------------------------------------------
Net interest income $ 29,107 $ 32,562 $123,336 $101,498
Provision for loan losses 75,800 11,700 98,250 14,475
---------------------------------------------------------------------
Net interest income (loss)
after provision for loan
losses $(46,693) $ 20,862 $ 25,086 $ 87,023
---------------------------------------------------------------------
Fees for customer services 4,371 3,923 16,621 12,945
Trust fees 3,332 3,951 13,445 10,041
Remittance processing 3,026 2,720 12,115 4,466
Commissions and brokers' fees 584 604 2,764 2,553
Gain on sales of loans 909 818 4,357 3,232
Net security gains 96 723 605 3,718
Other 56 1,612 6,513 4,737
---------------------------------------------------------------------
Total non-interest income $ 12,374 $ 14,351 $ 56,420 $ 41,692
---------------------------------------------------------------------
Salaries and wages 11,964 11,914 46,861 37,311
Employee benefits 2,269 3,362 10,699 8,357
Net occupancy expense 2,485 2,635 9,600 7,449
Furniture and equipment
expense 1,976 1,785 8,232 4,834
Data processing expense 1,969 2,568 6,855 5,299
Amortization expense 1,129 1,118 4,517 2,503
Other operating expenses 8,004 7,308 25,656 18,552
---------------------------------------------------------------------
Total non-interest expense $ 29,796 $ 30,690 $112,420 $ 84,305
---------------------------------------------------------------------
Income (loss) before income
taxes $(64,115) $ 4,523 $(30,914) $ 44,410
Income taxes (25,357) 156 (15,568) 12,933
---------------------------------------------------------------------
Net income (loss) $(38,758) $ 4,367 $(15,346) $ 31,477
=====================================================================
Per Share Data
---------------------------------------------------------------------
Basic earnings (loss) per
share $ (1.08) $ 0.12 $ (0.43) $ 1.13
Fully-diluted earnings (loss)
per share $ (1.08) $ 0.12 $ (0.43) $ 1.13
Diluted average shares
outstanding 35,893 36,783 35,952 27,924
CONTACT: First Busey CorporationBarbara Harrington, CFO
217.365.4516
barb.harrington@busey.com