UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  January 26, 2010

First Busey Corporation
(Exact name of registrant as specified in its charter)

100 W. University Ave.
Champaign, Illinois  61820
(Address of principal executive offices) (Zip code)

(217) 365-4516
(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.              Results of Operations and Financial Condition.

On Tuesday, January 26, 2010, the Company issued a press release disclosing financial results for the quarter and year ended December 31, 2009.  The press release is made part of this Form and is attached as Exhibit 99.1.

The press release made a part of this Current Report on Form 8-K includes forward looking statements that are intended to be covered by the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.  These forward looking statements include but are not limited to comments with respect to the objectives and strategies, financial condition, results of operations and business of the Registrant.

These forward looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that predictions and other forward looking statements will not be achieved.  The Registrant cautions you not to place undue reliance on these forward looking statements as a number of important factors could cause actual future results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward looking statements.

Item 8.01.              Other Events.

The Registrant announced it will pay a dividend of $0.04 per common share on February 5, 2009 to shareholders of record as of February 2, 2009.

Item 9.01.              Financial Statements and Exhibits.

(d)           Exhibits.

99.1                           Press Release issued by the Company, dated January 26, 2010.

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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

3

Exhibit 99.1

January 26, 2010

First Busey Announces 2009 Fourth Quarter and Full Year Results

Champaign, IL — (Nasdaq: BUSE)

Message from our President & CEO

Set forth below is a detailed breakdown of various key metrics separated into broad categories.  We focused our attention in 2009 to improving these key metrics.

I.                                         Asset Quality:  Our credit metrics improved dramatically in the fourth quarter of 2009.  This improvement is the result of significant effort by our credit and lending groups.  We commented to our shareholders at the 2008 annual meeting and reiterated at our 2009 annual and special shareholders meetings that we believed the credit problems would continue to deteriorate and peak in the latter half of 2009.  Absent additional problems in the economy that could lead to worsening of our credit metrics, the information below would suggest the peak occurred in the third quarter of 2009. The key metrics are as follows:

·                  Loans 30-89 days past due declined to $12.5 million at December 31, 2009 compared to $34.0 million at September 30, 2009, and $40.4 million at December 31, 2008, down from a peak of $61.3 million at March 31, 2009.

·                  Non-performing loans decreased to $86.3 million at December 31, 2009, a 50% decline from $172.5 million at September 30, 2009.  Non-performing loans at December 31, 2009 were essentially flat compared to December 31, 2008 balance of $84.2 million.

·                  Illinois non-performing loans declined to $28.0 million at December 31, 2009 compared to $42.8 million at September 30, 2009 and $21.5 million at December 31, 2008.

·                  Florida non-performing loans declined to $40.2 million at December 31, 2009 compared to $113.3 million at September 30, 2009 and $61.2 million at December 31, 2008.

·                  Indiana non-performing loans were $18.1 million at December 31, 2009 compared to $16.3 million at September 30, 2009 and $1.4 million at December 31, 2008.

·                  Other real estate owned was $17.2 million at December 31, 2009 compared to $16.6 million at September 30, 2009 and $15.8 million at December 31, 2008.

·                  The ratio of non-performing assets to total loans plus other real estate owned was 3.68% at December 31, 2009 compared to 6.26% at September 30, 2009 and 3.05% at December 31, 2008.

·                  The ratio of construction and land development loans to total loans decreased to 11.7% at December 31, 2009 from 22.8% at December 31, 2008, a decrease to 122% of tier 1 capital from 250% of tier 1 capital.

·                  Loans in Florida decreased to 15.4% of our consolidated portfolio at December 31, 2009 compared to 22.8% at December 31, 2008, which represented a $311.8 million dollar decline in Florida loan balances from December 31, 2008.

·                  Allowance for loan losses to non-performing loan ratio was 116.1% at December 31, 2009 compared to 69.6% at September 30, 2009 and 117.2% at December 31, 2008.

·                  Allowance for loan losses to total loans was 3.59% at December 31, 2009 compared to 4.00% at September 30, 2009 and 3.03% at December 31, 2008.

·                  Fourth quarter 2009 net charge-offs were $73.8 million compared to $108.5 million in the third quarter of 2009 and $25.8 million in the fourth quarter of 2008.

·                  Provision expense in the fourth quarter of 2009 was $54.0 million compared to $140.0 million in the third quarter of 2009 and $75.8 million in the fourth quarter of 2008.

·                  Loans on our balance sheet at September 30, 2009 totaling $73.4 million were sold in the fourth quarter of 2009, all of which were Florida loans, with proceeds totaling $47.3 million.

After much consideration of the uncertainties and potential risks of working out certain loans, we made the decision to sell many of our higher risk, transactional substandard and non-performing loans.  These loan sales, which were primarily completed in December 2009, generally yielded proceeds short of the estimated fair value of the loan, resulting in additional charge-offs. These increased net charge-offs necessitated a significant provision to restore our allowance for loan losses.  We employed this strategy to help achieve a balance sheet with significantly decreased non-performing loans, a higher quality loan portfolio and an allowance in excess of our non-performing loans, which consequently should allow for increased human and financial resources to devote to the future of the bank.  Our non-accrual loans were reflected at fair value, which reflected the additional valuation experience gained through the loan sale process. In short, our loan portfolio is now in the best condition it has been in many quarters.

Our investment portfolio continued to be strong throughout 2009.  We did not experience credit losses within our investment portfolio or any significant deterioration in value.

II.                                     Funding and Liquidity:  As our assets have decreased through the reduction in the loan portfolio, wholesale funding declined significantly:

·                  Brokered deposits declined to $173.1 million at December 31, 2009 compared to $377.8 million at December 31, 2008.

·                  Wholesale funding (brokered deposits and borrowings) to total bank funding declined to 7.0% at December 31, 2009 from 13.9% at December 31, 2008.

·                  Consolidated short-term borrowings were zero at December 31, 2009 compared to $83.0 million at December 31, 2008.

·                  Consolidated long-term debt declined by $52.4 million during 2009 to $82.1 million at December 31, 2009.

Wholesale funding is typically more expensive than our core deposit funding.  As non-accrual loans were reduced, we were able to also remove higher cost funding from our balance sheet.  This allowed us to eliminate assets that were not producing revenue and eliminate higher cost funding.

III.                                 Capital:  Busey raised $122.3 million in capital at the end of the third quarter of 2009. Of the $39.3 million raised in the private placement portion, a majority was from our board of directors and members of executive management.  This level of investment by insiders in our Company is extremely rare and represents a remarkable, ongoing commitment to Busey.  We are truly invested along side our outside shareholders.

We strengthened our tangible and regulatory capital positions.  We continue to evaluate the capital position of the Company, and we are mindful of the need to potentially raise additional capital in the future, particularly for the purpose of paying back TARP or in an offensive role as we evaluate potential growth opportunities, such as FDIC assisted transactions.

·                  On a consolidated basis and at the bank level, we were in excess of well-capitalized regulatory standards at December 31, 2009.

·                  Tangible common equity to tangible assets improved to 4.87% at December 31, 2009 compared to 4.71% at December 31, 2008.

IV.                               Operating Performance:  We experienced a significant loss for the quarter and year ended December 31, 2009:

·                  Net loss for the quarter ended December 31, 2009 was $29.2 million, or $0.49 per fully-diluted common share, compared to a net loss of $61.4 million, or $1.71 per fully-diluted common share, for the quarter ended December 31, 2008.

·                  Year-to-date consolidated net loss was $327.9 million, or $7.85 per fully-diluted common share in 2009 as compared to net loss of $37.9 million, or $1.06 per fully-diluted common share in 2008.

·                  Goodwill impairment loss for 2009 was $208.2 million or $4.98 fully-diluted per common share compared to 2008 goodwill impairment loss of $22.6 million or $0.63 per fully-diluted common share.

As noted below, we believe there is a silver lining within our fourth quarter 2009 operating performance.

·                  Net interest margin ratio for the fourth quarter of 2009 increased to 3.34%, including reversal of interest income from non-accrual loans, from 3.03% for the third quarter of 2009 and 3.04% in the fourth quarter of 2008.

·                  With $3.6 billion in average earning assets in the fourth quarter of 2009, each additional 10 basis points of net interest margin ratio represents $3.6 million in pre-tax earnings on an annualized basis.

·                  Total revenue, net of interest expense and security gains, for 2009 was $180.3 million compared to $179.2 million in 2008.

·                  Core pre-provision, pre-tax profit was $17.0 million in the fourth quarter of 2009 compared to $18.8 million in the third quarter of 2009 and $15.3 million in the fourth quarter of 2008. (See non-GAAP reconciliation schedule for listing of non-core items.)

·                  FirsTech’s net income increased to $2.9 million for 2009, compared to $2.5 million for 2008.

·                  Busey Wealth Management’s net income increased to $2.6 million for 2009, compared to $2.5 million for 2008.

Although our earnings were poor primarily due to significant provisioning for loan losses and goodwill impairment, our net interest margin showed significant improvement and our core pre-provision, pre-tax profit improved in 2009.  The fourth quarter of 2009 was off slightly due to loan sales gains being down as the holiday season slowed our mortgage origination volume.

On February 5, 2010, we will pay a cash dividend of $0.04 per common share to shareholders of record on February 2, 2010.  Consistent with prior quarters, we analyzed this dividend payment decision very carefully to ensure it was consistent with our capital plan, our earnings and the Busey Promise of shareholder value.  Although we recorded net losses for the past three quarters, we believe our current core operating results, current capital position and improved credit metrics support the dividend payment. Additionally, we believe we will be profitable going forward, which was a significant factor in the decision to continue the $0.04 per common share dividend.

Our corporate headquarters moved to Champaign, Illinois from Urbana, Illinois; however, our headquarters still resides in a recognized State of Illinois Enterprise Zone.

We thank our associates for their efforts, our customers for their business and you, our shareholders, for your continued support of Busey.

SELECTED FINANCIAL HIGHLIGHTS

(dollars in thousands, except per share data)

PRE-PROVISION, PRE-TAX NON-GAAP RECONCILIATION

(dollars in thousands, except per share data)

Condensed Consolidated Balance Sheets

(Unaudited, in thousands, except per share data)

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)

Corporate Profile

First Busey Corporation is a $3.8 billion financial holding company headquartered in Champaign, Illinois. Busey Bank, First Busey Corporation’s wholly-owned bank subsidiary, is headquartered in Champaign, Illinois and has thirty-four banking centers serving downstate Illinois, a banking center in Indianapolis, Indiana, and eight banking centers serving southwest Florida. Busey Bank had total assets of $3.8 billion as of December 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 December 31, 2009, Busey Wealth Management had approximately $3.4 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.

Contact:

Barbara J. Harrington, CFO

217-365-4516

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.