First Busey Corporation Announces 2023 Fourth Quarter Earnings
Net Income of Diluted EPS of |
Fourth Quarter 2023 Highlights
- Adjusted net income1 at
$29 .1 million, or$0.52 per diluted common share - Entered into a definitive agreement to acquire
Merchants & Manufacturers Bank Corporation (“M&M”), the holding company forMerchants & Manufacturers Bank (“M&M Bank”) - Executed a two-part balance sheet repositioning related to the securities portfolio, expected to be both capital and earnings accretive
- Non-performing assets declined 34.4% during the fourth quarter of 2023, to
$7 .9 million, now representing 0.06% of total assets - Annualized quarterly net charge-off ratio of 0.02% and full year net charge-off ratio of 0.03%
- Tangible book value per common share1 of
$16.62 atDecember 31, 2023 , compared to$15.07 atSeptember 30, 2023 , and$14.14 atDecember 31, 2022 , an increase of 17.5% year-over-year
For additional information, please refer to the 4Q23 Earnings Investor Presentation
Message from our Chairman & CEO
Fourth Quarter Financial Results
Net income for
Pre-provision net revenue1 was
Adjusted pre-provision net revenue1 was
Taking into account our fourth quarter results, full year 2023 pre-provision net revenue1 and adjusted pre-provision net revenue1 were
Our fee-based businesses continue to add revenue diversification. Noninterest income excluding net securities gains and losses1 was
Busey views certain non-operating items, including acquisition-related and other restructuring charges, as adjustments to net income reported under
We have effectively managed our noninterest expense during a time of decades-high inflation, and have been purposeful in our efforts to rationalize our expense base given our economic outlook and our view on the future of banking. In the fourth quarter, Busey completed an executive reorganization and executed a targeted efficiency optimization plan, expected to generate annual salary and benefit savings of approximately
Noninterest expense was
Fourth quarter 2023 results were negatively impacted by an increase in income tax expense as a result of adjusting our estimated annual effective tax rate ("AETR"). Busey estimates income tax expense for the year based on amounts expected to be owed to federal and state tax jurisdictions. An estimated AETR is established based on this estimate and is used to calculate our quarterly income tax provision. The fourth quarter effective tax rate increased to 22.5% compared to 18.2% in the third quarter, bringing our effective tax rate for the full year 2023 to 20.4%.
Acquisition of Merchants and Manufacturers Bank Corporation Planned for The Second Quarter of 2024
On
Under the terms of the merger agreement, M&M’s stockholders will have the right to receive for each share of M&M common stock, at the election of each stockholder and subject to proration, either (i) $117.74 in cash, (ii) 5.7294 shares of Busey common stock, or (iii) mixed consideration of
The merger is expected to be finalized in the second quarter of 2024, subject to customary closing conditions and required approvals, including the approval of M&M’s stockholders. At the time of the merger, M&M Bank’s banking centers will become banking centers of
Busey executed a two-part balance sheet repositioning strategy
During the fourth quarter of 2023, Busey sold all 16,878 shares of Visa Class B common stock it previously held (the “Visa Sale”) for a pre-tax gain of approximately
Busey also executed a balance sheet repositioning of its available-for-sale securities portfolio (the “Repositioning”) during the fourth quarter of 2023. Busey sold securities with a carrying value of approximately $110 million yielding 1.56%, resulting in an approximate pre-tax loss of
The increased net interest spread as a result of the Visa Sale and the Repositioning is expected to increase net interest income by approximately
The combined impact of the gain generated from the Visa Sale and the loss generated from the Repositioning will have an immediate positive impact on consolidated stockholders’ equity and book value per share. Risk-based regulatory capital ratios will increase modestly as a result of the Repositioning proceeds rotating into lower risk-weighted assets. Busey expects the above transactions to be accretive to capital and earnings per share in future periods.
Busey’s Conservative Banking Strategy
Busey’s financial strength is built on a long-term conservative operating approach. That focus will not change now or in the future.
The quality of our core deposit franchise is a critical value driver of our institution. Since
Asset quality remains strong by both Busey’s historical and current industry trends. Non-performing assets saw a further 34.4% decline during the fourth quarter of 2023 to
The strength of our balance sheet is also reflected in our capital foundation. In the fourth quarter, Common Equity Tier 1 and Total Capital to Risk Weighted Assets ratios6 increased to 13.09% and 17.44%, respectively. In fact, our regulatory capital ratios continue to provide a buffer of more than $520 million above levels required to be designated well-capitalized. Our Tangible Common Equity ratio1 increased to 7.75% during the fourth quarter of 2023, compared to 7.06% for the third quarter of 2023 and 6.60% for the fourth quarter of 2022. Busey’s tangible book value per common share1 increased to
Community Banking
Busey’s Community Banking team now offers new, second chance checking and savings products—which are proudly BankON certified—offering hassle-free, affordable options with digital banking access designed to provide peace of mind. With a suite of online tools that make it easy to track and manage money, these products offer qualified customers tools to build financial strength, improve banking history, and avoid monthly maintenance fees.
As we reflect back on 2023 and look ahead to 2024, we remain cognizant of the evolving economic outlook and extremely focused on balance sheet strength, profitability, and growth, in that order. The pending M&M transaction fits with our acquisition strategy and we are excited to welcome our M&M colleagues into the Busey family. 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.
Chairman, President & Chief Executive Officer | ||
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
(dollars in thousands, except per share amounts)
Three Months Ended | Years Ended | ||||||||||||||||||
2023 |
2023 |
2022 |
2023 |
2022 |
|||||||||||||||
EARNINGS & PER SHARE AMOUNTS | |||||||||||||||||||
Net income | $ | 25,749 | $ | 30,666 | $ | 34,387 | $ | 122,565 | $ | 128,311 | |||||||||
Diluted earnings per common share | 0.46 | 0.54 | 0.61 | 2.18 | 2.29 | ||||||||||||||
Cash dividends paid per share | 0.24 | 0.24 | 0.23 | 0.96 | 0.92 | ||||||||||||||
Pre-provision net revenue1, 2 | 32,909 | 38,139 | 46,360 | 158,502 | 168,493 | ||||||||||||||
Revenue3 | 107,888 | 109,084 | 120,037 | 444,034 | 452,374 | ||||||||||||||
Net income by operating segments: | |||||||||||||||||||
Banking | 25,164 | 31,189 | 37,564 | 123,853 | 131,596 | ||||||||||||||
FirsTech | 325 | 317 | (453 | ) | 830 | 847 | |||||||||||||
Wealth Management | 4,233 | 4,781 | 3,855 | 18,804 | 18,543 | ||||||||||||||
AVERAGE BALANCES | |||||||||||||||||||
Cash and cash equivalents | $ | 608,647 | $ | 252,730 | $ | 281,926 | $ | 330,952 | $ | 411,785 | |||||||||
Investment securities | 2,995,223 | 3,148,759 | 3,451,471 | 3,188,815 | 3,731,048 | ||||||||||||||
Loans held for sale | 1,679 | 2,267 | 1,623 | 1,885 | 5,178 | ||||||||||||||
Portfolio loans | 7,736,010 | 7,834,285 | 7,619,199 | 7,759,472 | 7,445,962 | ||||||||||||||
Interest-earning assets | 11,229,326 | 11,118,167 | 11,242,126 | 11,164,594 | 11,473,063 | ||||||||||||||
Total assets | 12,308,491 | 12,202,783 | 12,330,132 | 12,246,218 | 12,492,948 | ||||||||||||||
Noninterest bearing deposits | 2,827,696 | 2,925,244 | 3,494,001 | 3,018,563 | 3,550,517 | ||||||||||||||
Interest-bearing deposits | 7,545,234 | 7,217,463 | 6,843,688 | 7,052,370 | 6,958,436 | ||||||||||||||
Total deposits | 10,372,930 | 10,142,707 | 10,337,689 | 10,070,933 | 10,508,953 | ||||||||||||||
Securities sold under agreements to repurchase and federal funds purchased | 182,735 | 190,112 | 236,656 | 200,894 | 244,004 | ||||||||||||||
Interest-bearing liabilities | 8,054,663 | 7,864,355 | 7,500,294 | 7,825,459 | 7,583,331 | ||||||||||||||
Total liabilities | 11,106,074 | 10,994,376 | 11,207,585 | 11,048,707 | 11,297,777 | ||||||||||||||
Stockholders' equity - common | 1,202,417 | 1,208,407 | 1,122,547 | 1,197,511 | 1,195,171 | ||||||||||||||
Tangible common equity2 | 846,948 | 850,382 | 756,420 | 838,164 | 824,747 | ||||||||||||||
PERFORMANCE RATIOS | |||||||||||||||||||
Pre-provision net revenue to average assets1, 2,4 | 1.06 | % | 1.24 | % | 1.49 | % | 1.29 | % | 1.35 | % | |||||||||
Return on average assets4 | 0.83 | % | 1.00 | % | 1.11 | % | 1.00 | % | 1.03 | % | |||||||||
Return on average common equity4 | 8.50 | % | 10.07 | % | 12.15 | % | 10.23 | % | 10.74 | % | |||||||||
Return on average tangible common equity2,4 | 12.06 | % | 14.31 | % | 18.04 | % | 14.62 | % | 15.56 | % | |||||||||
Net interest margin2, 5 | 2.74 | % | 2.80 | % | 3.24 | % | 2.88 | % | 2.84 | % | |||||||||
Efficiency ratio2 | 66.89 | % | 62.38 | % | 58.77 | % | 61.65 | % | 59.89 | % | |||||||||
Noninterest revenue as a % of total revenues3 | 28.51 | % | 28.69 | % | 24.07 | % | 28.06 | % | 28.50 | % | |||||||||
NON-GAAP FINANCIAL INFORMATION | |||||||||||||||||||
Adjusted pre-provision net revenue1, 2 | $ | 40,223 | $ | 40,491 | $ | 50,003 | $ | 172,290 | $ | 179,424 | |||||||||
Adjusted net income2 | 29,123 | 30,730 | 36,290 | 126,012 | 131,910 | ||||||||||||||
Adjusted diluted earnings per share2 | 0.52 | 0.55 | 0.65 | 2.24 | 2.35 | ||||||||||||||
Adjusted pre-provision net revenue to average assets2,4 | 1.30 | % | 1.32 | % | 1.61 | % | 1.41 | % | 1.44 | % | |||||||||
Adjusted return on average assets2,4 | 0.94 | % | 1.00 | % | 1.17 | % | 1.03 | % | 1.06 | % | |||||||||
Adjusted return on average tangible common equity2,4 | 13.64 | % | 14.34 | % | 19.03 | % | 15.03 | % | 15.99 | % | |||||||||
Adjusted net interest margin2, 5 | 2.73 | % | 2.79 | % | 3.22 | % | 2.87 | % | 2.81 | % | |||||||||
Adjusted efficiency ratio2 | 62.98 | % | 62.31 | % | 56.75 | % | 60.68 | % | 58.89 | % |
___________________________________________
- 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.
- For quarterly periods, measures are annualized.
- On a tax-equivalent basis, assuming a federal income tax rate of 21%.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(dollars in thousands, except per share amounts)
As of | |||||||||||||||||||
2023 |
2023 |
2023 |
2023 |
2022 |
|||||||||||||||
ASSETS | |||||||||||||||||||
Cash and cash equivalents | $ | 719,581 | $ | 337,919 | $ | 232,703 | $ | 275,569 | $ | 227,164 | |||||||||
Investment securities | 2,970,011 | 3,074,237 | 3,186,984 | 3,302,024 | 3,391,240 | ||||||||||||||
Loans held for sale | 2,379 | 3,051 | 1,545 | 2,714 | 1,253 | ||||||||||||||
Commercial loans | 5,635,048 | 5,824,800 | 5,793,426 | 5,815,703 | 5,766,496 | ||||||||||||||
Retail real estate and retail other loans | 2,015,986 | 2,031,360 | 2,011,858 | 1,968,105 | 1,959,206 | ||||||||||||||
Portfolio loans | 7,651,034 | 7,856,160 | 7,805,284 | 7,783,808 | 7,725,702 | ||||||||||||||
Allowance for credit losses | (91,740 | ) | (91,710 | ) | (91,639 | ) | (91,727 | ) | (91,608 | ) | |||||||||
Premises and equipment | 122,594 | 122,538 | 122,669 | 126,515 | 126,524 | ||||||||||||||
353,864 | 356,343 | 358,898 | 361,567 | 364,296 | |||||||||||||||
Right of use asset | 11,027 | 11,500 | 11,806 | 12,291 | 12,829 | ||||||||||||||
Other assets | 544,665 | 588,212 | 580,779 | 571,794 | 579,277 | ||||||||||||||
Total assets | $ | 12,283,415 | $ | 12,258,250 | $ | 12,209,029 | $ | 12,344,555 | $ | 12,336,677 | |||||||||
LIABILITIES & STOCKHOLDERS' EQUITY | |||||||||||||||||||
Noninterest bearing deposits | $ | 2,834,655 | $ | 2,918,574 | $ | 3,086,885 | $ | 3,173,783 | $ | 3,393,666 | |||||||||
Interest checking, savings, and money market deposits | 5,637,227 | 5,747,136 | 5,504,255 | 5,478,715 | 5,822,239 | ||||||||||||||
Time deposits | 1,819,274 | 1,666,652 | 1,471,615 | 1,148,671 | 855,375 | ||||||||||||||
Total deposits | $ | 10,291,156 | $ | 10,332,362 | $ | 10,062,755 | $ | 9,801,169 | $ | 10,071,280 | |||||||||
Securities sold under agreements to repurchase | $ | 187,396 | $ | 183,702 | $ | 202,953 | $ | 210,977 | $ | 229,806 | |||||||||
Short-term borrowings | 12,000 | 12,000 | 212,000 | 615,881 | 351,054 | ||||||||||||||
Long-term debt | 240,882 | 243,666 | 246,454 | 249,245 | 252,038 | ||||||||||||||
Junior subordinated debt owed to unconsolidated trusts | 71,993 | 71,946 | 71,900 | 71,855 | 71,810 | ||||||||||||||
Lease liability | 11,308 | 11,783 | 12,059 | 12,515 | 12,995 | ||||||||||||||
Other liabilities | 196,699 | 212,633 | 198,960 | 184,355 | 201,717 | ||||||||||||||
Total liabilities | 11,011,434 | 11,068,092 | 11,007,081 | 11,145,997 | 11,190,700 | ||||||||||||||
Total stockholders' equity | 1,271,981 | 1,190,158 | 1,201,948 | 1,198,558 | 1,145,977 | ||||||||||||||
Total liabilities & stockholders' equity | $ | 12,283,415 | $ | 12,258,250 | $ | 12,209,029 | $ | 12,344,555 | $ | 12,336,677 | |||||||||
SHARE AND PER SHARE AMOUNTS | |||||||||||||||||||
Book value per common share | $ | 23.02 | $ | 21.51 | $ | 21.74 | $ | 21.68 | $ | 20.73 | |||||||||
Tangible book value per common share1 | $ | 16.62 | $ | 15.07 | $ | 15.25 | $ | 15.14 | $ | 14.14 | |||||||||
Ending number of common shares outstanding | 55,244,119 | 55,342,017 | 55,290,847 | 55,294,455 | 55,279,124 |
___________________________________________
- See “Non-GAAP Financial Information” for reconciliation.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(dollars in thousands, except per share amounts)
Three Months Ended | Years Ended | ||||||||||||||||
2023 |
2023 |
2022 |
2023 |
2022 |
|||||||||||||
INTEREST INCOME | |||||||||||||||||
Interest and fees on loans held for sale and portfolio | $ | 101,425 | $ | 99,844 | $ | 84,947 | $ | 385,848 | $ | 287,477 | |||||||
Interest on investment securities | 20,634 | 21,234 | 19,560 | 82,994 | 69,412 | ||||||||||||
Other interest income | 6,641 | 1,591 | 1,377 | 10,531 | 3,097 | ||||||||||||
Total interest income | $ | 128,700 | $ | 122,669 | $ | 105,884 | $ | 479,373 | $ | 359,986 | |||||||
INTEREST EXPENSE | |||||||||||||||||
Interest on deposits | $ | 45,409 | $ | 37,068 | $ | 8,277 | $ | 123,985 | $ | 16,112 | |||||||
Interest on securities sold under agreements to repurchase and federal funds purchased | 1,431 | 1,327 | 810 | 5,203 | 1,475 | ||||||||||||
Interest on short-term borrowings | 248 | 1,964 | 1,221 | 12,775 | 1,647 | ||||||||||||
Interest on long-term debt | 3,475 | 3,528 | 3,546 | 14,106 | 14,285 | ||||||||||||
Junior subordinated debt owed to unconsolidated trusts | 1,004 | 991 | 881 | 3,853 | 3,029 | ||||||||||||
Total interest expense | $ | 51,567 | $ | 44,878 | $ | 14,735 | $ | 159,922 | $ | 36,548 | |||||||
Net interest income | $ | 77,133 | $ | 77,791 | $ | 91,149 | $ | 319,451 | $ | 323,438 | |||||||
Provision for credit losses | 455 | 364 | 859 | 2,399 | 4,623 | ||||||||||||
Net interest income after provision for credit losses | $ | 76,678 | $ | 77,427 | $ | 90,290 | $ | 317,052 | $ | 318,815 | |||||||
NONINTEREST INCOME | |||||||||||||||||
Wealth management fees | $ | 13,715 | $ | 14,235 | $ | 12,956 | $ | 57,309 | $ | 55,378 | |||||||
Fees for customer services | 7,484 | 7,502 | 6,989 | 29,044 | 33,111 | ||||||||||||
Payment technology solutions | 5,420 | 5,226 | 5,022 | 21,192 | 20,067 | ||||||||||||
Mortgage revenue | 218 | 311 | 198 | 1,089 | 1,895 | ||||||||||||
Income on bank owned life insurance | 1,019 | 1,001 | 947 | 4,701 | 3,663 | ||||||||||||
Net securities gains (losses) | 761 | (285 | ) | 191 | (2,199 | ) | (2,133 | ) | |||||||||
Other noninterest income | 2,899 | 3,018 | 2,776 | 11,248 | 14,822 | ||||||||||||
Total noninterest income | $ | 31,516 | $ | 31,008 | $ | 29,079 | $ | 122,384 | $ | 126,803 | |||||||
NONINTEREST EXPENSE | |||||||||||||||||
Salaries, wages, and employee benefits | $ | 42,730 | $ | 39,677 | $ | 41,790 | $ | 162,597 | $ | 159,016 | |||||||
Data processing expense | 6,236 | 5,930 | 5,848 | 23,708 | 21,648 | ||||||||||||
Net occupancy expense | 4,318 | 4,594 | 4,638 | 18,214 | 19,130 | ||||||||||||
Furniture and equipment expense | 1,694 | 1,638 | 1,771 | 6,759 | 7,645 | ||||||||||||
Professional fees | 2,574 | 1,542 | 1,432 | 7,147 | 6,125 | ||||||||||||
Amortization of intangible assets | 2,479 | 2,555 | 2,795 | 10,432 | 11,628 | ||||||||||||
Interchange expense | 1,355 | 1,786 | 1,692 | 6,864 | 6,298 | ||||||||||||
1,167 | 1,475 | 950 | 5,650 | 4,058 | |||||||||||||
Other operating expenses | 12,426 | 11,748 | 12,761 | 44,161 | 48,333 | ||||||||||||
Total noninterest expense | $ | 74,979 | $ | 70,945 | $ | 73,677 | $ | 285,532 | $ | 283,881 | |||||||
Income before income taxes | $ | 33,215 | $ | 37,490 | $ | 45,692 | $ | 153,904 | $ | 161,737 | |||||||
Income taxes | 7,466 | 6,824 | 11,305 | 31,339 | 33,426 | ||||||||||||
Net income | $ | 25,749 | $ | 30,666 | $ | 34,387 | $ | 122,565 | $ | 128,311 | |||||||
SHARE AND PER SHARE AMOUNTS | |||||||||||||||||
Basic earnings per common share | $ | 0.46 | $ | 0.55 | $ | 0.62 | $ | 2.21 | $ | 2.32 | |||||||
Diluted earnings per common share | $ | 0.46 | $ | 0.54 | $ | 0.61 | $ | 2.18 | $ | 2.29 | |||||||
Average common shares outstanding | 55,403,662 | 55,486,700 | 55,350,423 | 55,432,322 | 55,387,073 | ||||||||||||
Diluted average common shares outstanding | 56,333,033 | 56,315,492 | 56,177,790 | 56,256,148 | 56,137,164 |
Balance Sheet Strength
Our balance sheet remains a source of strength. Total assets were
As has been our practice, we remain steadfast in our conservative approach to underwriting and disciplined approach to pricing, particularly given our outlook for the economy in the coming quarters, and this approach has impacted loan growth as predicted. Portfolio loans totaled
Average portfolio loans were
Total deposits were
Short term borrowings were
Asset Quality
Credit quality continues to be exceptionally strong. Loans 30-89 days past due totaled
Net charge-offs were
Busey maintains a well-diversified loan portfolio and, as a matter of policy and practice, limits concentration exposure in any particular loan segment.
ASSET QUALITY (unaudited)
(dollars in thousands)
As of | |||||||||||||||||||
2023 |
2023 |
2023 |
2023 |
2022 |
|||||||||||||||
Total assets | $ | 12,283,415 | $ | 12,258,250 | $ | 12,209,029 | $ | 12,344,555 | $ | 12,336,677 | |||||||||
Portfolio loans | 7,651,034 | 7,856,160 | 7,805,284 | 7,783,808 | 7,725,702 | ||||||||||||||
Loans 30 – 89 days past due | 5,779 | 5,934 | 5,169 | 5,472 | 6,548 | ||||||||||||||
Non-performing loans: | |||||||||||||||||||
Non-accrual loans | 7,441 | 11,298 | 15,209 | 14,714 | 15,067 | ||||||||||||||
Loans 90+ days past due and still accruing | 375 | 709 | 569 | 500 | 673 | ||||||||||||||
Non-performing loans | $ | 7,816 | $ | 12,007 | $ | 15,778 | $ | 15,214 | $ | 15,740 | |||||||||
Non-performing loans, segregated by geography: | |||||||||||||||||||
$ | 3,715 | $ | 7,951 | $ | 11,681 | $ | 10,416 | $ | 10,347 | ||||||||||
3,836 | 3,747 | 3,928 | 4,103 | 4,676 | |||||||||||||||
265 | 309 | 169 | 695 | 717 | |||||||||||||||
Other non-performing assets | 125 | 96 | 68 | 759 | 850 | ||||||||||||||
Non-performing assets | $ | 7,941 | $ | 12,103 | $ | 15,846 | $ | 15,973 | $ | 16,590 | |||||||||
Allowance for credit losses | $ | 91,740 | $ | 91,710 | $ | 91,639 | $ | 91,727 | $ | 91,608 | |||||||||
RATIOS | |||||||||||||||||||
Non-performing loans to portfolio loans | 0.10 | % | 0.15 | % | 0.20 | % | 0.20 | % | 0.20 | % | |||||||||
Non-performing assets to total assets | 0.06 | % | 0.10 | % | 0.13 | % | 0.13 | % | 0.13 | % | |||||||||
Non-performing assets to portfolio loans and other non-performing assets | 0.10 | % | 0.15 | % | 0.20 | % | 0.21 | % | 0.21 | % | |||||||||
Allowance for credit losses to portfolio loans | 1.20 | % | 1.17 | % | 1.17 | % | 1.18 | % | 1.19 | % | |||||||||
Allowance for credit losses as a percentage of non-performing loans | 1,173.75 | % | 763.80 | % | 580.80 | % | 602.91 | % | 582.01 | % |
NET CHARGE-OFFS (RECOVERIES) AND PROVISION EXPENSE (RELEASE) (unaudited)
(dollars in thousands)
Three Months Ended | Years Ended | ||||||||||||||||||
2023 |
2023 |
2022 |
2023 |
2022 |
|||||||||||||||
Net charge-offs (recoveries) | $ | 425 | $ | 293 | $ | (27 | ) | $ | 2,267 | $ | 902 | ||||||||
Provision expense (release) | 455 | 364 | 859 | 2,399 | 4,623 | ||||||||||||||
Net charge-offs, annualized | 1,686 | 1,162 | NM | 2,267 | 902 | ||||||||||||||
Average portfolio loans | 7,736,010 | 7,834,285 | 7,619,199 | 7,759,472 | 7,445,962 | ||||||||||||||
Net charge-off ratio | 0.02 | % | 0.01 | % | NM | 0.03 | % | 0.01 | % |
Net Interest Margin1 and Net Interest Income
Net interest margin was 2.74% for the fourth quarter of 2023, compared to 2.80% for the third quarter of 2023 and 3.24% for the fourth quarter of 2022. Excluding purchase accounting accretion, adjusted net interest margin1 was 2.73% for the fourth quarter of 2023, compared to 2.79% in the third quarter of 2023 and 3.22% in the fourth quarter of 2022. Net interest income was
The
- Increases in the cash and securities portfolio yield contributed +15 basis points
- Reduced borrowing costs contributed +6 basis points
- Increased income from our held for sale and portfolio loans contributed +2 basis points
- Increased non-maturity deposit funding costs contributed -17 basis points
- Increased time deposit funding costs contributed -12 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 1.8% over the subsequent twelve-month period. Market competition for deposits continues and deposit betas are likely to rise marginally during the first half of 2024, which is factored into our ALCO model and margin forecast. Busey 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. Time deposit specials and retail incentive campaigns continue to provide sufficient funding flows and we maintained excess earning cash levels throughout the quarter. Since the onset of the current
Noninterest Income
Noninterest income was
Consolidated wealth management fees were
Payment technology solutions revenue was
Fees for customer services were
Net securities gains were
Other noninterest income was
Operating Efficiency
Noninterest expense was
Noteworthy components of noninterest expense are as follows:
- Salaries, wages, and employee benefits expenses were
$42 .7 million in the fourth quarter of 2023, compared to$39 .7 million in the third quarter of 2023 and$41 .8 million in the fourth quarter of 2022. Busey recorded$3 .8 million of non-operating salaries, wages, and employee benefit expenses in the fourth quarter of 2023, as compared to none in the third quarter of 2023 and$2 .4 million in the fourth quarter of 2022. Excluding these items, salaries, wages, and employee benefits expenses were$38 .9 million in the fourth quarter of 2023, compared to$39 .4 million in the fourth quarter of 2022. Our associate-base consisted of 1,479 full-time equivalents as ofDecember 31, 2023 , compared to 1,484 as ofSeptember 30, 2023 , and 1,497 as ofDecember 31, 2022 . - Data processing expense was
$6 .2 million in the fourth quarter of 2023, compared to$5 .9 million in the third quarter of 2023 and$5 .8 million in the fourth quarter of 2022. The year-over-year increase was related to Company-wide investments in technology enhancements, as well as inflation-driven price increases. - Professional fees were
$2 .6 million in the fourth quarter of 2023, compared to$1 .5 million in the third quarter of 2023 and$1 .4 million in the fourth quarter of 2022. Busey recorded$0 .4 million of non-operating Professional fees in the fourth quarter of 2023, as compared to$0 .1 million in the third quarter of 2023 and an immaterial amount in the fourth quarter of 2022. The quarter-over-quarter increase was driven by seasonally higher audit and accounting fees and increased consulting expenses. - Amortization of intangible assets was
$2 .5 million in the fourth quarter of 2023, compared to$2.6 million in the third quarter of 2023 and$2 .8 million in the fourth quarter of 2022. FDIC insurance expense was$1 .2 million in the fourth quarter of 2023, compared to$1 .5 million in the third quarter of 2023 and$1 .0 million in the fourth quarter of 2022. Increases in 2023 were a result of anFDIC final rule to increase the initial base deposit insurance assessment rate applicable to allFDIC -insured depository institutions by two basis points.- Other operating expenses were
$12 .4 million for the fourth quarter of 2023, compared to$11 .7 million in the third quarter of 2023 and$12.8 million in the fourth quarter of 2022. The quarter-over-quarter increase is attributable to multiple items, including increases in the provision for unfunded commitments, marketing, and business development expenses.
Busey's effective tax rate for the fourth quarter of 2023 was 22.5%, bringing the full year effective tax rate for 2023 to 20.4%, 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.
In
Capital Strength
Busey's strong capital levels, coupled with its earnings, have allowed the Company to provide a steady return to its stockholders through dividends. On
As of
Busey’s tangible common equity1 was
During the fourth quarter of 2023, Busey purchased 117,812 shares of its common stock at a weighted average price of
4Q23 Earnings Investor Presentation
For additional information on Busey’s financial condition and operating results, please refer to the 4Q23 Earnings Investor Presentation furnished via Form 8-K on
Corporate Profile
As of
Through Busey’s Wealth Management division, the Company provides a full range of asset management, investment, brokerage, fiduciary, philanthropic advisory, tax preparation, and farm management services to individuals, businesses, and foundations. Assets under care totaled
Busey Bank’s wholly-owned subsidiary, FirsTech, specializes in the evolving financial technology needs of small and medium-sized businesses, highly regulated enterprise industries, and financial institutions. FirsTech provides comprehensive and innovative payment technology solutions including online, mobile, and voice-recognition bill payments; money and data movement; merchant services; direct debit services; lockbox remittance processing for payments made by mail; and walk-in payments at retail agents. Additionally, FirsTech simplifies client workflows through integrations enabling support with billing, reconciliation, bill reminders, and treasury services. More information about FirsTech can be found at firstechpayments.com.
For more information about us, visit busey.com.
Category: Financial
Source:
Contacts:
217-365-4130
Non-GAAP Financial Information
This earnings release contains certain financial information determined by methods other than
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 income and net security gains and losses in the case of net income excluding net securities gains and losses and diluted earnings per share excluding net securities gains and losses; 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 assets and goodwill and other intangible assets in the case of tangible assets; total stockholders’ equity in the case of tangible book value per common share; total assets and total stockholders’ equity in the case of tangible common equity and tangible common equity to tangible assets; 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 | Years Ended | |||||||||||||||||||
2023 |
2023 |
2022 |
2023 |
2022 |
||||||||||||||||
PRE-PROVISION NET REVENUE | ||||||||||||||||||||
Net interest income | $ | 77,133 | $ | 77,791 | $ | 91,149 | $ | 319,451 | $ | 323,438 | ||||||||||
Total noninterest income | 31,516 | 31,008 | 29,079 | 122,384 | 126,803 | |||||||||||||||
Net security (gains) losses | (761 | ) | 285 | (191 | ) | 2,199 | 2,133 | |||||||||||||
Total noninterest expense | (74,979 | ) | (70,945 | ) | (73,677 | ) | (285,532 | ) | (283,881 | ) | ||||||||||
Pre-provision net revenue | 32,909 | 38,139 | 46,360 | 158,502 | 168,493 | |||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
Acquisition and other restructuring expenses | 4,237 | 79 | 2,442 | 4,328 | 4,537 | |||||||||||||||
Provision for unfunded commitments | 818 | 13 | (464 | ) | 461 | 61 | ||||||||||||||
Amortization of New Markets Tax Credits | 2,259 | 2,260 | 1,665 | 8,999 | 6,333 | |||||||||||||||
Adjusted pre-provision net revenue | $ | 40,223 | $ | 40,491 | $ | 50,003 | $ | 172,290 | $ | 179,424 | ||||||||||
Pre-provision net revenue, annualized | [a] | $ | 130,563 | $ | 151,312 | $ | 183,928 | $ | 158,502 | $ | 168,493 | |||||||||
Adjusted pre-provision net revenue, annualized | [b] | 159,580 | 160,644 | 198,381 | 172,290 | 179,424 | ||||||||||||||
Average total assets | [c] | 12,308,491 | 12,202,783 | 12,330,132 | 12,246,218 | 12,492,948 | ||||||||||||||
Reported: Pre-provision net revenue to average assets1 | [a÷c] | 1.06 | % | 1.24 | % | 1.49 | % | 1.29 | % | 1.35 | % | |||||||||
Adjusted: Pre-provision net revenue to average assets1 | [b÷c] | 1.30 | % | 1.32 | % | 1.61 | % | 1.41 | % | 1.44 | % |
___________________________________________
- For quarterly periods, measures are annualized.
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 | Years Ended | |||||||||||||||||||
2023 |
2023 |
2022 |
2023 |
2022 |
||||||||||||||||
NET INCOME ADJUSTED FOR NON-OPERATING ITEMS | ||||||||||||||||||||
Net income | [a] | $ | 25,749 | $ | 30,666 | $ | 34,387 | $ | 122,565 | $ | 128,311 | |||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
Acquisition expenses: | ||||||||||||||||||||
Salaries, wages, and employee benefits | — | — | — | — | 587 | |||||||||||||||
Data processing | — | — | — | — | 214 | |||||||||||||||
Professional fees, occupancy, and other | 266 | 79 | 16 | 357 | 258 | |||||||||||||||
Other restructuring expenses: | ||||||||||||||||||||
Salaries, wages, and employee benefits | 3,760 | — | 2,409 | 3,760 | 2,409 | |||||||||||||||
Loss on leases or fixed asset impairment | — | — | 10 | — | 986 | |||||||||||||||
Professional fees, occupancy, and other | 211 | — | 7 | 211 | 83 | |||||||||||||||
Related tax benefit1 | (863 | ) | (15 | ) | (539 | ) | (881 | ) | (938 | ) | ||||||||||
Adjusted net income | [b] | $ | 29,123 | $ | 30,730 | $ | 36,290 | $ | 126,012 | $ | 131,910 | |||||||||
DILUTED EARNINGS PER SHARE | ||||||||||||||||||||
Diluted average common shares outstanding | [c] | 56,333,033 | 56,315,492 | 56,177,790 | 56,256,148 | 56,137,164 | ||||||||||||||
Reported: Diluted earnings per share | [a÷c] | $ | 0.46 | $ | 0.54 | $ | 0.61 | $ | 2.18 | $ | 2.29 | |||||||||
Adjusted: Diluted earnings per share | [b÷c] | $ | 0.52 | $ | 0.55 | $ | 0.65 | $ | 2.24 | $ | 2.35 | |||||||||
RETURN ON AVERAGE ASSETS | ||||||||||||||||||||
Net income, annualized | [d] | $ | 102,156 | $ | 121,664 | $ | 136,427 | $ | 122,565 | $ | 128,311 | |||||||||
Adjusted net income, annualized | [e] | 115,542 | 121,918 | 143,977 | 126,012 | 131,910 | ||||||||||||||
Average total assets | [f] | 12,308,491 | 12,202,783 | 12,330,132 | 12,246,218 | 12,492,948 | ||||||||||||||
Reported: Return on average assets2 | [d÷f] | 0.83 | % | 1.00 | % | 1.11 | % | 1.00 | % | 1.03 | % | |||||||||
Adjusted: Return on average assets2 | [e÷f] | 0.94 | % | 1.00 | % | 1.17 | % | 1.03 | % | 1.06 | % | |||||||||
RETURN ON AVERAGE TANGIBLE COMMON EQUITY | ||||||||||||||||||||
Average common equity | $ | 1,202,417 | $ | 1,208,407 | $ | 1,122,547 | $ | 1,197,511 | $ | 1,195,171 | ||||||||||
Average goodwill and other intangible assets, net | (355,469 | ) | (358,025 | ) | (366,127 | ) | (359,347 | ) | (370,424 | ) | ||||||||||
Average tangible common equity | [g] | $ | 846,948 | $ | 850,382 | $ | 756,420 | $ | 838,164 | $ | 824,747 | |||||||||
Reported: Return on average tangible common equity2 | [d÷g] | 12.06 | % | 14.31 | % | 18.04 | % | 14.62 | % | 15.56 | % | |||||||||
Adjusted: Return on average tangible common equity2 | [e÷g] | 13.64 | % | 14.34 | % | 19.03 | % | 15.03 | % | 15.99 | % |
___________________________________________
- Full year tax benefits were calculated by multiplying full year acquisition expenses and other restructuring expenses by the annual effective tax rates for the full year periods. The annual effective tax rates used in these calculations were 20.4% for the year ended
December 31, 2023 , and 20.7% for the year endedDecember 31, 2022 . Quarterly tax benefits were calculated as the full year amounts less the sum of amounts applied to previous quarters within the year. - For quarterly periods, measures are annualized.
Adjusted Net Income Excluding Net Securities Gains and Losses and Adjusted Diluted Earnings Per Share Excluding Net Securities Gains and Losses | ||||||||||||||||||||
(dollars in thousands, except per share amounts) | ||||||||||||||||||||
Three Months Ended | Years Ended | |||||||||||||||||||
2023 |
2023 |
2022 |
2023 |
2022 |
||||||||||||||||
Adjusted net income1 | [a] | $ | 29,123 | $ | 30,730 | $ | 36,290 | $ | 126,012 | $ | 131,910 | |||||||||
Further non-GAAP adjustments: | ||||||||||||||||||||
Net securities (gains) losses | (761 | ) | 285 | (191 | ) | 2,199 | 2,133 | |||||||||||||
Tax effect for net securities (gains) losses2 | 171 | (52 | ) | 47 | (448 | ) | (441 | ) | ||||||||||||
Tax effected net securities (gains) losses3 | (590 | ) | 233 | (144 | ) | 1,751 | 1,692 | |||||||||||||
Net income excluding net securities (gains) losses3 | [b] | $ | 28,533 | $ | 30,963 | $ | 36,146 | $ | 127,763 | $ | 133,602 | |||||||||
Diluted average common shares outstanding | [c] | 56,333,033 | 56,315,492 | 56,177,790 | 56,256,148 | 56,137,164 | ||||||||||||||
Adjusted: Diluted earnings per share | [a÷c] | $ | 0.52 | $ | 0.55 | $ | 0.65 | $ | 2.24 | $ | 2.35 | |||||||||
Adjusted: Diluted earnings per share, excluding net securities (gains) losses3 | [b÷c] | $ | 0.51 | $ | 0.55 | $ | 0.64 | $ | 2.27 | $ | 2.38 |
___________________________________________
- Adjusted net income is a non-GAAP measure. See the table on the previous page for a reconciliation to the nearest GAAP measure.
- Tax effects for net securities gains and losses were calculated by multiplying net securities gains and losses by the effective income tax rates for the periods indicated. Effective tax rates were 22.5%, 18.2%, and 24.7% for the three months ended
December 31, 2023 ,September 30, 2023 , andDecember 31, 2022 , respectively, and were 20.4% and 20.7% for the years endedDecember 31, 2023 , andDecember 31, 2022 , respectively. - Tax-effected measure.
Adjusted Net Interest Income and Adjusted Net Interest Margin | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Three Months Ended | Years Ended | |||||||||||||||||||
2023 |
2023 |
2022 |
2023 |
2022 |
||||||||||||||||
Net interest income | $ | 77,133 | $ | 77,791 | $ | 91,149 | $ | 319,451 | $ | 323,438 | ||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
Tax-equivalent adjustment1 | 501 | 553 | 564 | 2,173 | 2,199 | |||||||||||||||
Tax-equivalent net interest income | 77,634 | 78,344 | 91,713 | 321,624 | 325,637 | |||||||||||||||
Purchase accounting accretion related to business combinations | (384 | ) | (277 | ) | (546 | ) | (1,477 | ) | (3,134 | ) | ||||||||||
Adjusted net interest income | $ | 77,250 | $ | 78,067 | $ | 91,167 | $ | 320,147 | $ | 322,503 | ||||||||||
Tax-equivalent net interest income, annualized | [a] | $ | 308,004 | $ | 310,821 | $ | 363,861 | $ | 321,624 | $ | 325,637 | |||||||||
Adjusted net interest income, annualized | [b] | 306,481 | 309,722 | 361,695 | 320,147 | 322,503 | ||||||||||||||
Average interest-earning assets | [c] | 11,229,326 | 11,118,167 | 11,242,126 | 11,164,594 | 11,473,063 | ||||||||||||||
Reported: Net interest margin2 | [a÷c] | 2.74 | % | 2.80 | % | 3.24 | % | 2.88 | % | 2.84 | % | |||||||||
Adjusted: Net interest margin2 | [b÷c] | 2.73 | % | 2.79 | % | 3.22 | % | 2.87 | % | 2.81 | % |
___________________________________________
- Tax-equivalent adjustments were calculated using an estimated federal income tax rate of 21%, applied to non-taxable interest income on investments and loans.
- For quarterly periods, measures are annualized.
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 | Years Ended | |||||||||||||||||||
2023 |
2023 |
2022 |
2023 |
2022 |
||||||||||||||||
Net interest income | $ | 77,133 | $ | 77,791 | $ | 91,149 | $ | 319,451 | $ | 323,438 | ||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
Tax-equivalent adjustment1 | 501 | 553 | 564 | 2,173 | 2,199 | |||||||||||||||
Tax-equivalent net interest income | 77,634 | 78,344 | 91,713 | 321,624 | 325,637 | |||||||||||||||
Total noninterest income | 31,516 | 31,008 | 29,079 | 122,384 | 126,803 | |||||||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
Net security (gains) losses | (761 | ) | 285 | (191 | ) | 2,199 | 2,133 | |||||||||||||
Noninterest income excluding net securities gains and losses | 30,755 | 31,293 | 28,888 | 124,583 | 128,936 | |||||||||||||||
Tax-equivalent revenue | [a] | $ | 108,389 | $ | 109,637 | $ | 120,601 | $ | 446,207 | $ | 454,573 | |||||||||
Total noninterest expense | $ | 74,979 | $ | 70,945 | $ | 73,677 | $ | 285,532 | $ | 283,881 | ||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
Amortization of intangible assets | [b] | (2,479 | ) | (2,555 | ) | (2,795 | ) | (10,432 | ) | (11,628 | ) | |||||||||
Noninterest expense excluding amortization of intangible assets | [c] | 72,500 | 68,390 | 70,882 | 275,100 | 272,253 | ||||||||||||||
Non-operating adjustments: | ||||||||||||||||||||
Salaries, wages, and employee benefits | (3,760 | ) | — | (2,409 | ) | (3,760 | ) | (2,996 | ) | |||||||||||
Data processing | — | — | — | — | (214 | ) | ||||||||||||||
Impairment, professional fees, occupancy, and other | (477 | ) | (79 | ) | (33 | ) | (568 | ) | (1,327 | ) | ||||||||||
Adjusted noninterest expense | [f] | 68,263 | 68,311 | 68,440 | 270,772 | 267,716 | ||||||||||||||
Provision for unfunded commitments | (818 | ) | (13 | ) | 464 | (461 | ) | (61 | ) | |||||||||||
Amortization of New Markets Tax Credits | (2,259 | ) | (2,260 | ) | (1,665 | ) | (8,999 | ) | (6,333 | ) | ||||||||||
Adjusted core expense | [g] | $ | 65,186 | $ | 66,038 | $ | 67,239 | $ | 261,312 | $ | 261,322 | |||||||||
Noninterest expense, excluding non-operating adjustments | [f-b] | $ | 70,742 | $ | 70,866 | $ | 71,235 | $ | 281,204 | $ | 279,344 | |||||||||
Reported: Efficiency ratio | [c÷a] | 66.89 | % | 62.38 | % | 58.77 | % | 61.65 | % | 59.89 | % | |||||||||
Adjusted: Efficiency ratio | [f÷a] | 62.98 | % | 62.31 | % | 56.75 | % | 60.68 | % | 58.89 | % | |||||||||
Adjusted: Core efficiency ratio | [g÷a] | 60.14 | % | 60.23 | % | 55.75 | % | 58.56 | % | 57.49 | % |
___________________________________________
- Tax-equivalent adjustments were calculated using an estimated federal income tax rate of 21%, applied to non-taxable interest income on investments and loans.
Tangible Book Value and Tangible Book Value Per Common Share | ||||||||||||||||||||
(dollars in thousands, except per share amounts) | ||||||||||||||||||||
As of | ||||||||||||||||||||
2023 |
2023 |
2023 |
2023 |
2022 |
||||||||||||||||
Total stockholders' equity | $ | 1,271,981 | $ | 1,190,158 | $ | 1,201,948 | $ | 1,198,558 | $ | 1,145,977 | ||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
(353,864 | ) | (356,343 | ) | (358,898 | ) | (361,567 | ) | (364,296 | ) | |||||||||||
Tangible book value | [a] | $ | 918,117 | $ | 833,815 | $ | 843,050 | $ | 836,991 | $ | 781,681 | |||||||||
Ending number of common shares outstanding | [b] | 55,244,119 | 55,342,017 | 55,290,847 | 55,294,455 | 55,279,124 | ||||||||||||||
Tangible book value per common share | [a÷b] | $ | 16.62 | $ | 15.07 | $ | 15.25 | $ | 15.14 | $ | 14.14 |
Tangible Assets, Tangible Common Equity, and Tangible Common Equity to Tangible Assets | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
As of | ||||||||||||||||||||
2023 |
2023 |
2023 |
2023 |
2022 |
||||||||||||||||
Total assets | $ | 12,283,415 | $ | 12,258,250 | $ | 12,209,029 | $ | 12,344,555 | $ | 12,336,677 | ||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
(353,864 | ) | (356,343 | ) | (358,898 | ) | (361,567 | ) | (364,296 | ) | |||||||||||
Tax effect of other intangible assets1 | 6,888 | 7,354 | 7,833 | 8,335 | 8,847 | |||||||||||||||
Tangible assets2 | [a] | $ | 11,936,439 | $ | 11,909,261 | $ | 11,857,964 | $ | 11,991,323 | $ | 11,981,228 | |||||||||
Total stockholders' equity | $ | 1,271,981 | $ | 1,190,158 | $ | 1,201,948 | $ | 1,198,558 | $ | 1,145,977 | ||||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
(353,864 | ) | (356,343 | ) | (358,898 | ) | (361,567 | ) | (364,296 | ) | |||||||||||
Tax effect of other intangible assets1 | 6,888 | 7,354 | 7,833 | 8,335 | 8,847 | |||||||||||||||
Tangible common equity2 | [b] | $ | 925,005 | $ | 841,169 | $ | 850,883 | $ | 845,326 | $ | 790,528 | |||||||||
Tangible common equity to tangible assets2 | [b÷a] | 7.75 | % | 7.06 | % | 7.18 | % | 7.05 | % | 6.60 | % |
___________________________________________
- Net of estimated deferred tax liability, calculated using the estimated statutory tax rate of 28%.
- Tax-effected measure.
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 | ||||||||||||||||||||
2023 |
2023 |
2023 |
2023 |
2022 |
||||||||||||||||
Portfolio loans | [a] | $ | 7,651,034 | $ | 7,856,160 | $ | 7,805,284 | $ | 7,783,808 | $ | 7,725,702 | |||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
PPP loans amortized cost | (313 | ) | (598 | ) | (667 | ) | (750 | ) | (845 | ) | ||||||||||
Core loans | [b] | $ | 7,650,721 | $ | 7,855,562 | $ | 7,804,617 | $ | 7,783,058 | $ | 7,724,857 | |||||||||
Total deposits | [c] | $ | 10,291,156 | $ | 10,332,362 | $ | 10,062,755 | $ | 9,801,169 | $ | 10,071,280 | |||||||||
Non-GAAP adjustments: | ||||||||||||||||||||
Brokered transaction accounts | (6,001 | ) | (6,055 | ) | (6,055 | ) | (6,005 | ) | (1,303 | ) | ||||||||||
Time deposits of |
(386,286 | ) | (350,276 | ) | (297,967 | ) | (200,898 | ) | (120,377 | ) | ||||||||||
Core deposits | [d] | $ | 9,898,869 | $ | 9,976,031 | $ | 9,758,733 | $ | 9,594,266 | $ | 9,949,600 | |||||||||
RATIOS | ||||||||||||||||||||
Core loans to portfolio loans | [b÷a] | 100.00 | % | 99.99 | % | 99.99 | % | 99.99 | % | 99.99 | % | |||||||||
Core deposits to total deposits | [d÷c] | 96.19 | % | 96.55 | % | 96.98 | % | 97.89 | % | 98.79 | % | |||||||||
Core loans to core deposits | [b÷d] | 77.29 | % | 78.74 | % | 79.98 | % | 81.12 | % | 77.64 | % |
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 Busey and M&M. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of Busey’s and M&M’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 neither Busey nor M&M undertakes any 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 Busey and M&M to control or predict, could cause actual results to differ materially from those in any forward-looking statements. These factors include, among others, the following: (1) the possibility that any of the anticipated benefits of the proposed transaction between Busey and M&M will not be realized or will not be realized within the expected time period; (2) the risk that integration of operations of M&M with those of Busey will be materially delayed or will be more costly or difficult than expected; (3) the inability to complete the proposed transaction due to the failure of the required approval of M&M’s stockholders; (4) the failure to satisfy other conditions to completion of the proposed transaction, including receipt of required regulatory and other approvals; (5) the failure of the proposed transaction to close for any other reason; (6) the effect of the announcement of the transaction on customer relationships and operating results; (7) the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (8) the strength of the local, state, national, and international economy (including effects of inflationary pressures and supply chain constraints); (9) 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
Additional Information
Busey filed a registration statement on Form S-4 with the
These documents also can be obtained free of charge by accessing the Investor Relations page on Busey’s website at ir.busey.com, then under the tab “SEC Filings.” Alternatively, these documents, when available, can be obtained free of charge from Busey upon written request to
This document shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Participants in this Transaction
Busey, M&M, and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from stockholders in connection with the proposed transaction under the rules of the
End Notes
1 | See "Non-GAAP Financial Information" for a reconciliation. |
2 | Tax effected measure. See “Non-GAAP Financial Information” for a reconciliation. |
3 | Operating revenue consists of net interest income plus noninterest income, net of securities gains and losses. |
4 | Estimated uninsured and uncollateralized deposits consist of account balances in excess of the $250 thousand |
5 | |
6 | Capital ratios for the fourth quarter of 2023 are not yet finalized, and are subject to change. |
7 | On- and off-balance sheet liquidity is comprised of cash and cash equivalents, debt securities excluding those pledged as collateral, brokered deposits, and Busey’s borrowing capacity through its revolving credit facility, the FHLB, the |
8 | The blended benchmark consists of 60% MSCI All Country World Index and 40% Bloomberg Intermediate US Government/Credit Total Return Index. |
Source: First Busey Corporation