First Busey Corporation Earnings Release for Quarter Ending June 30, 2007
URBANA, Ill., July 17 /PRNewswire-FirstCall/ --
FINANCIAL HIGHLIGHTS
First Busey Corporation's merger with Main Street Trust, Inc. received approval from regulatory authorities. The approval is subject to successful divestiture of five branches of Main Street Bank & Trust located in Champaign County, Illinois. The holding companies are expected to merge following the close of business on July 31, 2007, with the merger of Busey Bank and Main Street Bank anticipated to occur in the fourth quarter of 2007. The annual meeting of shareholders is expected to occur in the fourth quarter of 2007.
The divestiture of five Main Street branches represents approximately $15 million in loans and $110 million in deposits. The divested amount represents less than 1% of anticipated combined loans and approximately 3% of anticipated combined deposits following the merger. Busey and Main Street are committed to making the transition as smooth as possible for the customers and employees involved in the divestiture.
Net income increased $829,000 or 11.8% to $7,864,000 for the quarter ending June 30, 2007, as compared to $7,035,000 for the comparable period in 2006. For the quarter ending June 30, 2007, earnings per share on a fully-diluted basis were $0.37, an increase of $0.04 or 12.1% from $0.33 for the comparable period in 2006. On a year-to-date basis, net income increased $1,698,000 or 12.2% to $15,600,000 from $13,902,000 for the comparable period in 2006. For the six-month period ending June 30, 2007, earnings per share on a fully-diluted basis were $0.72, an increase of $0.07 or 10.8% from $0.65 for the comparable period in 2006.
Busey Bank's net income was $16,018,000 for the six months ended June 30, 2007, as compared to $14,126,000 for the comparable period in 2006, an increase of 13.4%. Busey Bank, N.A.'s (BBNA) net income was $642,000 for the six months ended June 30, 2007, as compared to $2,072,000 for the comparable period in 2006, a 69.0% decrease. Busey Bank's strong performance offsets a decline in profitability for BBNA, which is primarily related to the weak Florida housing market. Overall, First Busey Corporation maintains a positive outlook for BBNA based on new balance sheet growth, led by strong commercial loan originations.
Net interest income increased $412,000 or 2.1% to $19,663,000 in the second quarter of 2007 compared to $19,251,000 in the comparable quarter in 2006. Interest income increased $4,489,000 during the second quarter of 2007 compared to the same period in 2006 due primarily to loan growth combined with higher yields on investment securities and outstanding loans. Interest expense increased $4,077,000 during the second quarter of 2007 compared to the same period in 2006. The increase in interest expense reflects the combination of growth in deposits and a market-driven increase in deposit and borrowing rates.
Non-interest income increased $493,000 or 7.1% to $7,397,000 during the second quarter of 2007 compared to the same period in prior year. The increase in 2007 primarily relates to a non-recurring $630,000 pre-tax charge for amortization of issuance costs related to redemption of trust preferred securities during the second quarter of 2006.
FINANCIAL SUMMARY
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
(in thousands, except per share data)
Earnings & Per Share
Data
Net income $7,864 $7,035 $15,600 $13,902
Basic earnings per share 0.37 0.33 0.73 0.65
Fully diluted earnings
per share 0.37 0.33 0.72 0.65
Dividends per share 0.18 0.16 0.41 0.32
Average Balances
Assets $2,471,750 $2,297,781 $2,472,457 $ 2,276,421
Investment securities 330,731 324,806 332,833 328,351
Loans 1,957,427 1,791,837 1,953,355 1,770,244
Earning assets 2,297,944 2,122,695 2,297,342 2,104,425
Deposits 1,993,273 1,820,999 1,994,556 1,807,986
Stockholders' equity 189,061 171,943 187,201 171,088
Performance Ratios
Return on average
assets 1.28% 1.23% 1.27% 1.23%
Return on average
equity 16.68% 16.41% 16.80% 16.39%
Net interest margin 3.51% 3.74% 3.50% 3.72%
Efficiency ratio 52.69% 55.90% 53.88% 55.58%
Loan Performance
Net credit losses $203 $402 $433 $498
Accruing loans
90+ days past due 2,326 1,347
Non-accrual loans 8,066 4,656
Foreclosed assets 1,817 561
Non-interest expense decreased $265,000 or 1.8% to $14,522,000 during the quarter ended June 30, 2007, compared to the same period in the prior year. Non-interest expense decrease relates primarily to the effect of full-year efficiencies of the Tarpon Coast acquisition and an overall cost discipline as First Busey Corporation attempts to offset the effects of a challenging net interest margin environment.
First Busey Corporation's loan performance has remained consistent with the first quarter of 2007. Accruing loans 90+ days past due, non-accrual loans and foreclosed assets at June 30, 2007, have increased significantly over the same period in 2006. Consistent with first quarter of 2007, the accruing loans 90+ days past due relates primarily to commercial loans in the central Illinois market. The increase in non-accrual loans and foreclosed assets primarily relate to the weak housing market in Florida and consist largely of 1-4 family residential loans. BBNA's management continues to work to resolve these problematic loans. The resolution process is slowed as the loans in question are largely collateralized by residential real estate. Florida law addressing residential real estate, gives the borrower a substantial amount of time to bring the loan current once the loan goes into default.
Provision for loan losses was $680,000 during the second quarter of 2007 compared to $300,000 in the comparable period of 2006. The provision was $980,000 for the six months ended June 30, 2007, versus $700,000 in the comparable period of 2006. The increase in provision reflects managements' analysis of amounts necessary to cover potential losses in our loan portfolios. As a percentage of total outstanding loans, the allowance for loan losses was 1.22% as of June 30, 2007, and 1.27% as of June 30, 2006.
CONSOLIDATED BALANCE SHEETS
(unaudited) June 30,
2007 2006
(in thousands, except per share data)
Assets
Cash and due from banks $56,104 $61,099
Federal funds sold 14,100 --
Investment securities 323,201 319,984
Loans 1,982,802 1,839,443
Less allowance for loan losses (24,135) (23,392)
Net loans $1,958,667 $1,816,051
Premises and equipment, net 41,328 40,799
Goodwill and other intangibles 57,623 58,804
Other assets 49,173 45,638
Total assets $2,500,196 $2,342,375
Liabilities & Stockholders' Equity
Non-interest bearing deposits $230,595 $251,544
Interest-bearing deposits 1,813,142 1,610,657
Total deposits $2,043,737 $1,862,201
Federal funds purchased & securities
sold under agreements to repurchase 52,697 68,497
Long-term debt 139,825 168,863
Junior subordinated debt
owed to unconsolidated trusts 55,000 55,000
Other liabilities 17,210 13,908
Total liabilities $2,308,469 $2,168,469
Common stock $22 $22
Common stock to be issued 6 292
Surplus 46,870 45,129
Retained earnings 151,758 136,793
Other comprehensive income 4,771 5,459
Treasury stock (11,700) (11,729)
Unearned ESOP shares -- (2,058)
Deferred compensation for stock grants -- (2)
Total stockholders' equity $191,727 $173,906
Total liabilities & stockholders' equity $2,500,196 $2,342,375
Per Share Data
Book value per share $8.93 $8.11
Tangible book value per share $6.25 $5.37
Ending number of shares outstanding 21,467,366 21,444,766
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30, June 30,
(unaudited) 2007 2006 2007 2006
(in thousands, except per share data)
Interest and fees on
loans $36,232 $32,465 $71,747 $62,447
Interest on
investment securities 3,820 3,157 7,581 6,282
Other interest income 128 69 287 122
Total interest income $40,180 $35,691 $79,615 $68,851
Interest on deposits $16,921 $12,713 $33,507 $24,044
Interest on short-term
borrowings 805 817 1,510 1,305
Interest on long-term
debt 1,788 1,864 3,672 3,714
Junior subordinated
debt owed to
unconsolidated trusts 1,003 1,046 2,002 2,039
Total interest expense $20,517 $16,440 $40,691 $31,102
Net interest income $19,663 $19,251 $38,924 $37,749
Provision for loan
losses 680 300 980 700
Net interest income
after provision $18,983 $18,951 $37,944 $37,049
Fees for customer
services $2,923 $2,802 $5,589 $5,338
Trust fees 1,689 1,642 3,399 3,158
Commissions and brokers'
fees 657 710 1,242 1,379
Gain on sale of loans 764 538 1,420 1,072
Net security gains 427 862 930 1,086
Other 937 350 1,749 1,044
Total non-interest
income $7,397 $6,904 $14,329 $13,077
Salaries and wages $6,955 $6,772 $13,699 $13,269
Employee benefits 1,384 1,445 2,937 2,948
Net occupancy expense 1,363 1,257 2,826 2,504
Furniture and equipment
expense 855 948 1,679 1,748
Data processing expense 482 490 1,016 894
Amortization expense 254 352 509 704
Other operating expenses 3,229 3,523 6,554 6,863
Total non-interest
expense $14,522 $14,787 $29,220 $28,930
Income before income
taxes $11,858 $11,068 $23,053 $21,196
Income taxes 3,994 4,033 7,453 7,294
Net Income $7,864 $7,035 $15,600 $13,902
Per Share Data
Basic earnings per
share $0.37 $0.33 $0.73 $0.65
Fully-diluted earnings
per share $0.37 $0.33 $0.72 $0.65
Diluted average
shares outstanding 21,510,376 21,433,249 21,525,552 21,446,704
Corporate Profile
First Busey Corporation (Nasdaq: BUSE) is a financial holding company headquartered in Urbana, Illinois. First Busey Corporation has two wholly- owned banking subsidiaries with locations in three states. Busey Bank is headquartered in Urbana, Illinois and has twenty-two banking centers serving Champaign, McLean, Ford, Peoria, and Tazewell Counties in Illinois. Busey Bank also has a banking center in Indianapolis, Indiana, and a loan production office in Ft. Myers, Florida. On June 30, 2007, Busey Bank had total assets of $2.0 billion. Busey Bank Florida and Tarpon Coast National Bank merged at the close of business on February 17, 2006, and the resultant bank is Busey Bank, N.A. Busey Bank N.A. is headquartered in Port Charlotte, Florida, with nine banking centers serving Lee, Charlotte, and Sarasota Counties in Southwest Florida. Busey Bank N.A. had total assets of $445 million as of June 30, 2007. Busey provides electronic delivery of financial services through Busey e-bank, http://www.busey.com.
Busey Investment Group is a wholly-owned subsidiary of First Busey Corporation and owns three subsidiaries. First Busey Trust & Investment Co. specializes in asset management and trust services. First Busey Securities, Inc. (member NASD/SIPC) is a full-service broker/dealer subsidiary. Busey Insurance Services, Inc. is a provider of personal insurance products. Busey Investment Group has approximately $2.6 billion in assets under care.
First Busey Corporation's common stock is traded on the Nasdaq Global Select Stock Market under the symbol "BUSE". First Busey Corporation has a repurchase program in effect under which it is authorized to purchase up to 750,000 shares of stock.
Forward-Looking Statements
The information in this press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. These may include statements as to the benefits of the merger, including future financial and operating results, cost savings, enhanced revenues and the accretion/dilution to reported earnings that may be realized from the merger as well as other statements of expectations regarding the merger and any other statements regarding future results or expectations. Each of First Busey and Main Street intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of each of First Busey and Main Street, are generally identified by the use of words such as "believe," "expect," "intend," "anticipate," "estimate," or "project" or similar expressions. The companies' respective ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain.
SOURCE First Busey Corporation
Contact: Barbara Harrington, Chief Financial Officer of First Busey Corporation, +1-217-365-4302