UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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): October 23, 2023
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(Exact name of Registrant as specified in its charter)
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| (Registrant’s telephone number, including area code) | ||||||||
| N/A | ||||||||
| (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:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). ☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On October 24, 2023, First Busey Corporation (“Busey” or the “Company”) issued a press release (“Earnings Release”) disclosing financial results for the quarter ended September 30, 2023. A copy of the Earnings Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto is being “furnished” and will not, except to the extent required by applicable law or regulation, be deemed “filed” by Busey for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, nor will any of such information or exhibits be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (“Securities Act”), or the Exchange Act.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b), (c)
Robin N. Elliott, a named executive officer of the Company, has departed from his role as President and Chief Executive Officer of Busey Bank (the “Bank”) and his role as Chairman and Chief Executive Officer of FirsTech, Inc. (“FirsTech”), effective October 23, 2023, and has transitioned to a consultative role until December 31, 2023, when his employment will end. Van A. Dukeman has been appointed, effective October 23, 2023, President and Chief Executive Officer of the Bank in addition to his current role as Chairman of the Bank and Chairman, President, and Chief Executive Officer of the Company. Humair Ghauri has been appointed Chief Executive Officer of FirsTech in addition to his current role as President of FirsTech.
Effective October 23, 2023, Amy L. Randolph, a named executive officer of the Company, was appointed Executive Vice President, Chief Operating Officer of the Company. Prior to this appointment, Ms. Randolph served as Chief of Staff and Executive Vice President, Pillar Relations of the Company.
(e)
The Company, the Bank, and Mr. Elliott have entered into a letter agreement dated October 20, 2023 (the “Separation Letter”). Pursuant to the terms of the Separation Letter, Mr. Elliott will continue to be employed by the Company and its subsidiaries at his current base salary until his employment terminates on December 31, 2023 (the “Separation Date”). Mr. Elliott will receive separation payments consisting of (i) severance payments and benefits in accordance with Section 6(b) of his employment agreement with the Company and the Bank, effective December 5, 2019 (the “Employment Agreement”), and (ii) $1,007,526 in respect of the pro rata value of restricted stock units that will be forfeited upon Mr. Elliott’s termination of employment, payable in cash in substantially equal installments over a one (1)‑year period in accordance with the Company’s regular payroll practices then in effect, commencing on March 1, 2024. The separation payments are conditioned on and subject to Mr. Elliott’s execution and non-revocation of a general release and waiver of claims and his compliance with the terms and conditions of the Employment Agreement, including confidentiality, non-competition, and non-solicitation provisions.
The foregoing description of the Separation Letter does not purport to be complete and is qualified in its entirety by reference to the full text of the Separation Letter, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
2
Item 7.01 Regulation FD Disclosure.
On October 24, 2023, Busey published its Earnings Investor Presentation discussing financial results for the quarter ended September 30, 2023. A copy is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
The information in Item 7.01 of this Current Report on Form 8-K and Exhibit 99.2 attached hereto is being “furnished” and will not, except to the extent required by applicable law or regulation, be deemed “filed” by Busey for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor will any of such information or exhibits be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
Item 9.01. Financial Statements and Exhibits.
Exhibit Number | Description of Exhibit | |||||||
| 10.1 | ||||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101) | |||||||
3
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 thereunto duly authorized.
FIRST BUSEY CORPORATION | |||||||||||||||||
| Date: | October 24, 2023 | By: | /s/ Jeffrey D. Jones | ||||||||||||||
| Jeffrey D. Jones | |||||||||||||||||
Chief Financial Officer | |||||||||||||||||
4
FIRST BUSEY CORPORATION 100 W. UNIVERSITY AVE. CHAMPAIGN, IL 61820 October 20, 2023 Mr. Robin N. Elliott Dear Robin: As discussed, your employment with First Busey Corporation (“First Busey”) and its subsidiaries (collectively with First Busey, “Employer”) will end on December 31, 2023 (the “Separation Date”). This letter is being provided to you to (i) memorialize our understanding regarding your duties during the period between the date hereof and the Separation Date (the “Transition Period”) and (ii) describe amounts and the conditions on which severance payments and benefits will be provided to you. 1. Transition Period and Separation As of October 23, 2023, you resign from (i) your role as President and Chief Executive Officer of Busey Bank, (ii) your role as Chairman and Chief Executive Officer of FirsTech, Inc., and (iii) all boards, board committees, and other administrative positions you hold at or on behalf of Employer. During the Transition Period, you will remain employed by Employer as an at-will employee at your current base salary and will be expected to assist in the transition of your job duties and perform (or refrain from performing) such other duties and responsibilities as requested by Employer. During the Transition Period, to the extent permitted by law, you will remain bound by all of your duties and obligations to Employer, including (without limitation) your duties and obligations under the employment agreement entered into with First Busey and Busey Bank effective December 5, 2019 (the “Employment Agreement”) and other agreements or arrangements you may have with Employer, as applicable, and your duties and obligations as an employee or fiduciary under law, including the common law. At the close of business on the Separation Date, your employment with Employer will end automatically without further action by you or Employer. You agree to execute any further documentation Employer reasonably may request to evidence your resignation and termination of employment. 2. Payments and Benefits on Separation; Conditions to Payments and Benefits In connection with your termination of employment and subject to the terms and conditions described herein, you will be entitled to receive the payments and benefits described in Schedule 1 attached to the Release (as defined below) (the “Separation Payment Schedule”) in full satisfaction of all of Employer’s obligations to you under Section 6(b) of the Employment Agreement and, in addition, Employer will make a cash payment in respect of the pro rata value of restricted stock units that will be forfeited upon your termination of employment (collectively,
Mr. Robin N. Elliott October 20, 2023 Page 2 the “Separation Payments”). The Separation Payment Schedule details each of the Separation Payments. Employer also will pay you the “Accrued Benefits” (as defined in the Employment Agreement) in accordance with Section 6(a) of the Employment Agreement. The Separation Payments are conditioned on and subject to your execution, after the Separation Date, and non-revocation of a general release and waiver of claims in the form set forth on Exhibit A hereto (the “Release”) and your compliance with all other terms and conditions of the Release and the Employment Agreement, including the confidentiality, non-competition and non- solicitation provisions set forth in Sections 9 and 10 of the Employment Agreement. 3. No Other Benefits You acknowledge and agree that, except as set forth in Section 2 of this letter, you are not entitled to any severance or other payments or benefits under the Employment Agreement, equity award agreements or otherwise in connection with your termination of employment with Employer. 4. Additional This letter will be governed by and construed in accordance with the laws of the State of Illinois without reference to the law regarding of conflicts of law. Except as specifically provided herein, the terms of the Employment Agreement shall continue to apply. [Remainder of Page Intentionally Left Blank]
Mr. Robin N. Elliott October 20, 2023 Page 3 If you agree that this letter correctly memorializes our understandings, please sign and return this letter, which will become a binding agreement on our receipt. FIRST BUSEY CORPORATION and BUSEY BANK By: /s/ Van A. Dukeman Van A. Dukeman Chairman, President and Chief Executive Officer of First Busey Corporation and Busey Bank /s/ Robin N. Elliott Robin N. Elliott Date: 10.23.23 Date: 10.23.23
Exhibit A AGREEMENT AND RELEASE This Agreement and Release (this “Release”), is made and entered into by Robin N. Elliott (“Employee”) in favor of First Busey Corporation (“First Busey”) and its subsidiaries (collectively with First Busey, “Employer”) and its affiliates, stockholders, beneficial owners of its stock, its current or former officers, directors, employees, members, attorneys and agents, and their predecessors, successors and assigns, individually and in their official capacities (together, the “Released Parties”). WHEREAS, Employee has been employed as President & Chief Executive Officer of Busey Bank; WHEREAS, Employee’s employment with Employer will be terminated, effective as of December 31, 2023 (the “Termination Date”); WHEREAS, Employee is seeking certain payments under Section 6(b) of the employment agreement entered into with First Busey and Busey Bank effective December 5, 2019 (the “Employment Agreement”), that are conditioned on the effectiveness of this Release; NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the parties agree as follows: 1. General Release. Employee knowingly and voluntarily waives, terminates, cancels, releases and discharges forever the Released Parties from any and all suits, actions, causes of action, claims, allegations, rights, obligations, liabilities, demands, entitlements or charges (collectively, “Claims”) that Employee (or Employee’s heirs, executors, administrators, successors and assigns) has or may have, whether known, unknown or unforeseen, vested or contingent, by reason of any matter, cause or thing occurring at any time before and including the date of this Release, arising under or in connection with Employee’s employment or termination of employment with Employer, including, without limitation: Claims under United States federal, state or local law and the national or local law of any foreign country (statutory or decisional), for wrongful, abusive, constructive or unlawful discharge or dismissal, for breach of any contract, or for discrimination based upon race, color, ethnicity, sex, age, national origin, religion, disability, sexual orientation, or any other unlawful criterion or circumstance, including, without limitation, rights or Claims under the Age Discrimination in Employment Act of 1967 (“ADEA”), the Older Workers Benefit Protection Act of 1990 (“OWBPA”), violations of the Equal Pay Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act of 1991, the Employee Retirement Income Security Act of 1974 (“ERISA”), the Fair Labor Standards Act, the Worker Adjustment Retraining and Notification Act, the Family Medical Leave Act, including all amendments to any of the aforementioned acts; and violations of any other federal, state, or municipal fair employment statutes or laws, including, without limitation, violations of any other law, rule, regulation, or ordinance pertaining to employment, wages, compensation, hours worked, or any other Claims for compensation or bonuses, whether or not paid under any compensation plan or arrangement; breach of contract; tort and other common law Claims; defamation; libel; slander; impairment of economic opportunity defamation; sexual
Exhibit A-2 harassment; retaliation; attorneys’ fees; emotional distress; intentional infliction of emotional distress; assault; battery, pain and suffering; and punitive or exemplary damages (the “Released Matters”). In addition, in consideration of the provisions of this Release, Employee further agrees to waive any and all rights under the laws of any jurisdiction in the United States, or any other country, that limit a general release to those Claims that are known or suspected to exist in Employee’s favor as of the Effective Date (as defined below). 2. Surviving Claims. Notwithstanding anything herein to the contrary, this Release shall not: (i) release any Claims for payment of amounts payable under the Employment Agreement (including under Section 6(b) thereof) as set forth on Schedule 1 hereto; (ii) release any Claim for employee benefits under plans covered by ERISA to the extent any such Claim may not lawfully be waived or for any payments or benefits under any Employer plans that have vested according to the terms of those plans; (iii) release any Claim that may not lawfully be waived; (iv) release any Claim for indemnification and D&O insurance in accordance with the Employment Agreement and with applicable laws and the corporate governance documents of Employer; or (v) limit Employee’s rights under applicable law to provide truthful information to any governmental entity or to file a charge with or participate in an investigation conducted by any governmental entity. In addition, it is understood that this Release shall not require Employee to notify Employer of a request for information from any governmental entity or of Employee’s decision to file a charge with or participate in an investigation conducted by any governmental entity. Notwithstanding the foregoing, Employee agrees to waive Employee’s right to recover monetary damages in connection with any charge, complaint or lawsuit filed by Employee or anyone else on Employee’s behalf (whether involving a governmental entity or not); provided that Employee is not agreeing to waive, and this Release shall not be read as requiring Employee to waive, any right Employee may have to receive an award for information provided to any governmental entity. 3. Additional Representations. Employee further represents and warrants that Employee has not filed any civil action, suit, arbitration, administrative charge, or legal proceeding against any Released Party, nor has Employee assigned, pledged, or hypothecated as of the Effective Date any Claim to any person and no other person has an interest in the Claims that he is releasing. 4. Acknowledgements by Employee. Employee acknowledges and agrees that Employee has read this Release in its entirety and that this Release is a general release of all known and unknown Claims. Employee further acknowledges and agrees that: (i) this Release does not release, waive or discharge any rights or Claims that may arise for actions or omissions after the Effective Date of this Release and Employee
Exhibit A-3 acknowledges that he is not releasing, waiving or discharging any ADEA Claims that may arise after the Effective Date of this Release; (ii) Employee is entering into this Release and releasing, waiving and discharging rights or Claims only in exchange for consideration which Employee is not already entitled to receive; (iii) Employee has been advised, and is being advised by the Release, to consult with an attorney before executing this Release; Employee acknowledges that Employee has consulted with counsel of Employee’s choice concerning the terms and conditions of this Release; (iv) Employee has been advised, and is being advised by this Release, that Employee has been given at least forty-five (45) days within which to consider the Release, but Employee can execute this Release at any time prior to the expiration of such review period; [and] (v) Because this Release includes a release of claims under ADEA, Employee is being provided with the information contained in Schedule 2 hereto in accordance with the OWBPA; and (vi) Employee is aware that this Release shall become null and void if Employee revokes Employee’s agreement to this Release within seven (7) days following the date of execution of this Release. Employee may revoke this Release at any time during such seven-day period by delivering (or causing to be delivered) to Employer written notice of Employee’s revocation of this Release no later than 5:00 p.m. Central time on the seventh (7th) full day following the date of execution of this Release (the “Effective Date”). Employee agrees and acknowledges that a letter of revocation that is not received by such date and time will be invalid and will not revoke this Release. 5. Confidentiality. Employee understands and agrees that the existence and terms of this Release may be publicly disclosed in accordance with applicable law; provided, however, that the negotiations and discussions leading up to this Release are confidential and that neither Employee, nor Employee’s attorney, nor any individual acting on Employee’s behalf shall disclose any of these matters to any person or entity, except as expressly required by law. 6. Non-Waiver. Employer’s waiver of a breach of this Release by Employee shall not be construed or operate as a waiver of any subsequent breach by Employee of the same or of any other provision of this Release. 7. Non-Disparagement. Employer shall instruct in writing each member of the Board of Directors of First Busey and each executive officer of First Busey that at all times following the Termination Date, such individual shall not engage in any vilification of the Employee, and shall refrain from making any false, negative, critical or disparaging statements, implied or expressed, concerning Employee, including Employee’s management style, methods of doing business, the quality of Employee’s work or Employee’s role in the community. To the fullest extent permitted by law, at all times following the Termination Date, Employee shall not
Exhibit A-4 engage in any vilification of Employer and its officers and directors, and Employee shall refrain from making any false, negative, critical or disparaging statements, implied or expressed, concerning Employer and its officers and directors, including management style, methods of doing business, the quality of products and services, or role in the community. Employee shall do nothing that would damage Employer’s business reputation or good will. Nothing in this section is intended to, and shall not, restrict or limit Employee from exercising his protected rights under Sections 2 or 4 hereof or restrict or limit Employee from providing truthful information in response to a subpoena, other legal process or to a governmental or regulatory body or in the event of litigation between Employee and Employer or its affiliates, or to prohibit Employee from making statements or engaging in any other activities or conduct protected by the National Labor Relations Act. 8. Restrictive Covenants. Employee shall abide by the terms set forth in Sections 9 and 10 of the Employment Agreement. 9. Governing Law and Enforcement. To the extent not subject to federal law, this Release shall be construed and the legal relations of Employee and Employer shall be determined in accordance with the laws of the State of Illinois without reference to the law regarding conflicts of law. 10. Counterparts. This Release may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Release. 11. Construction. The provisions of Section 15(l) of the Employment Agreement shall apply to this Release, provided that the word “Release” shall take the place of the word “Agreement” in such Section 15(l), where applicable. [Remainder of Page Intentionally Left Blank]
Exhibit A-5 IN WITNESS WHEREOF, the parties have executed this Release as of dates set forth below their respective signatures below. FIRST BUSEY CORPORATION and BUSEY BANK EMPLOYEE By: Van A. Dukeman Chairman, President and Chief Executive Officer of First Busey Corporation and Busey Bank Robin N. Elliott Date: Date:
Exhibit A-6 SCHEDULE 1 Type of Payment or Benefit Amount Payment Cash severance equal to 100% of the sum of (A) annual base salary ($480,000) plus (B) the amount of the most recent performance bonus paid by Employer ($472,905). (Section 6(b)(i)) $952,905 Payable in substantially equal installments over a one (1)-year period in accordance with Employer’s regular payroll practices then in effect, commencing within 60 days following the Termination Date, subject to the effectiveness of the Release An amount equal to the annual performance bonus earned by Employee in respect of 2023 based on actual performance, prorated based upon the number of days elapsed in 2023 prior to the Termination Date. (Section 6(b)(ii)) Determined based on actual performance through December 31, 2023 Paid in a lump sum at the time such awards are paid in 2024, subject to the effectiveness of the Release Reimbursement for up to twelve (12) months for continuing coverage under Employer’s health insurance pursuant to the health care continuation rules of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), provided that Employee remains eligible for, and elects, such COBRA continuation for such period following the Termination Date. (Section 6(b)(iii)) N/A, as Employee has waived medical coverage through Employer and is not eligible to elect COBRA continuation coverage N/A Additional cash payment in respect of the pro rata value of restricted stock units that will be forfeited upon your termination of employment $1,007,526.35 Payable in substantially equal installments over a one (1)-year period in accordance with Employer’s regular payroll practices then in effect, commencing on March 1, 2024, subject to the effectiveness of the Release The provisions of Section 15(j) of the Employment Agreement, regarding Section 409A of the Internal Revenue Code of 1986, as amended (together with the applicable regulations thereunder, “Section 409A”), shall apply to this Schedule 1. Each payment made under this Schedule 1 will be treated as a separate payment for purposes of purposes of Section 409A. In no event may Employee, directly or indirectly, designate the calendar year of payment.
F I R S T B U S E Y C O R P O R A T I O N
A N N O U N C E S
2 0 2 3
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Q 3 | 2 0 2 3
October 24, 2023
First Busey Corporation Announces 2023 Third Quarter Earnings
CHAMPAIGN, IL – (GLOBE NEWSWIRE) – First Busey Corporation (Nasdaq: BUSE)
Net Income of $30.7 million
Diluted EPS of $0.54
Diluted EPS of $0.54
Third Quarter 2023 Highlights
•Net income excluding net securities losses1 of $30.9 million and adjusted diluted EPS excluding net securities gains and losses1 of $0.55
•Total deposits increased $269.6 million, or 2.7%, quarter-over-quarter, to $10.33 billion
•Short-term borrowings decreased to $12.0 million, compared to $212.0 million at the end of the second quarter of 2023 and $615.9 million at the end of the first quarter of 2023
•Non-performing assets declined 23.6% during the third quarter of 2023, to $12.1 million, now representing 0.10% of total assets
•Classified assets declined to $59.6 million, compared to $81.9 million at the close of the second quarter of 2023 and $103.9 million at the end of the first quarter of 2023
•Annualized net charge-off ratio of 0.01% in the quarter and 0.02% over the last twelve months2
•Noninterest income excluding net securities losses1 increased to $31.3 million, from $30.1 million in the second quarter of 2023, representing 28.7% of total revenue
•Wealth management segment revenue of $14.4 million in the third quarter of 2023, a 14.7% increase over the comparable period in 2022
•Annualized return on average assets of 1.0%, return on average tangible common equity1 of 14.3% and adjusted core efficiency ratio1 of 60.23%
•For additional information, please refer to the 3Q23 Earnings Investor Presentation
Message from our Chairman & CEO
Third Quarter Financial Results
Net income for First Busey Corporation (“Busey,” “Company,” “we,” “us,” or “our”) was $30.7 million for the third quarter of 2023, or $0.54 per diluted common share, compared to $29.4 million, or $0.52 per diluted common share, for the second quarter of 2023, and $35.7 million, or $0.64 per diluted common share, for the third quarter of 2022. Adjusted net income1 was $30.7 million, or $0.55 per diluted common share, for the third quarter of 2023. Non-operating adjustments to net income for the second quarter of 2023 were immaterial. Adjusted net income1 was $36.4 million, or $0.65 per diluted common share, for the third quarter of 2022.
Net income includes net losses on securities of $0.3 million for the third quarter of 2023, $2.1 million for the second quarter of 2023, which are largely unrealized, and an immaterial net gain for the third quarter of 2022. Net income excluding net securities losses1 for the third quarter of 2023 would have been $30.9 million, resulting in adjusted diluted EPS excluding net securities gains and losses1 of $0.55.
Annualized return on average assets and annualized return on average tangible common equity1 were 1.00% and 14.31%, respectively, for the third quarter of 2023.
1 See “Non-GAAP Financial Information” for a reconciliation.
2 For the quarterly period, average portfolio loans, the denominator in the net charge off ratio, is calculated on a daily average basis. For the last twelve-month period, average portfolio loans is calculated as the quarterly average of the average portfolio loans balances over the most recent four quarters.
First Busey Corporation | 2023 Q3 — 2
Pre-provision net revenue3 was $38.1 million for the third quarter of 2023, compared to $39.5 million for the second quarter of 2023 and $46.5 million for the third quarter of 2022. Adjusted pre-provision net revenue3 was $40.5 million for the third quarter of 2023, compared to $42.1 million for the second quarter of 2023 and $48.8 million for the third quarter of 2022. Pre-provision net revenue to average assets3 was 1.24% for the third quarter of 2023, compared to 1.30% for the second quarter of 2023, and 1.47% for the third quarter of 2022. Adjusted pre-provision net revenue to average assets3 was 1.32% for the third quarter of 2023, compared to 1.38% for the second quarter of 2023 and 1.54% for the third quarter of 2022.
The decline in pre-provision net revenue in the third quarter, compared to the second quarter, was largely the result of a $0.9 million decrease in net interest income, which is primarily the result of deposits migrating into higher cost offerings. Net interest margin declined from 2.86% in the second quarter of 2023 to 2.80% in the third quarter of 2023.
Our fee-based businesses continue to add revenue diversification. Noninterest income excluding net securities gains and losses3 was $31.3 million, or 28.7% of operating revenue4, during the third quarter of 2023, compared to $30.1 million, or 27.7% of total operating revenue, for the second quarter of 2023 and $30.9 million, or 26.4% of total operating revenue, for the third quarter of 2022.
During a time of decades-high inflation, we have effectively managed our noninterest expense, and have been purposeful in our efforts to rationalize our expense base given our economic outlook and our view on the future of banking. Noninterest expense was $70.9 million in the third quarter of 2023, compared to $69.2 million in the second quarter of 2023 and $70.7 million in the third quarter of 2022. Adjusted core expense3 was $66.0 million in the third quarter of 2023, compared to $64.0 million in the second quarter of 2023 and $65.6 million in the third quarter of 2022, reflecting a less than 1% year-over-year increase in quarterly adjusted core expenses. As we enter the last quarter of 2023, we expect to continue to prudently manage our expenses.
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.
Busey's growth trend for portfolio loans continued during the third quarter of 2023, with loans being originated at attractive spreads while maintaining our prudent underwriting standards. Loan growth was $50.9 million in the third quarter of 2023, compared to growth of $21.5 million in the second quarter of 2023 and $172.3 million in the third quarter of 2022. Over the last four quarters, Busey has generated $186.0 million in portfolio loan growth, equating to a year-over-year growth rate of 2.4%. Our reported loan growth has been reduced by a $22.2 million reduction in classified assets during the third quarter of 2023, largely attributable to pay-offs from customers in the manufacturing, nursing home, and senior housing industries, and a $47.5 million reduction in classified assets since the beginning of the year, a positive development and consistent with our prudent credit risk management philosophy, particularly given our outlook for the economy. Our loan to deposit ratio was 76.0% at the end of the third quarter of 2023, compared to 77.6% for the second quarter of 2023 and 72.4% for the third quarter of 2022.
The quality of our core deposit franchise is a critical value driver of our institution. Over the last two quarters our deposit base has grown by more than $530 million, allowing us to substantially reduce our exposure to higher cost wholesale borrowings. Our granular deposit base continues to position us well, and as of September 30, 2023 our estimated uninsured and uncollateralized deposits5 percentage was 28% and 96.6% of our deposits were core deposits3. Our retail deposit base was comprised of more than 257,000 accounts with an average balance of $21 thousand and an average tenure of 16.4 years as of September 30, 2023. Our commercial deposit base was comprised of more than 33,000 accounts with an average balance of $105 thousand and an average tenure of 12.3 years as of September 30, 2023. Furthermore, we have sufficient on- and off-balance sheet liquidity to manage deposit fluctuations and the liquidity needs of our customers.
3 See “Non-GAAP Financial Information” for a reconciliation.
4 Operating revenue consists of net interest income plus noninterest income, net of securities gains and losses.
5 Estimated uninsured and uncollateralized deposits consist of account balances in excess of the $250 thousand FDIC insurance limit, less intercompany accounts and collateralized accounts (including preferred deposits).
First Busey Corporation | 2023 Q3 — 3
Asset quality remains strong by both Busey’s historical and current industry trends. Non-performing assets saw a further 23.6% decline during the third quarter of 2023 to $12.1 million, now representing only 0.10% of total assets. We experienced our third consecutive quarter of declines in total classified assets. Total classified assets of $59.6 million at the end of the third quarter of 2023 now represent a historically low 3.9% of consolidated total capital. Busey’s results for the third quarter of 2023 include a $0.4 million provision expense for credit losses and an immaterial provision expense for unfunded commitments. The allowance for credit losses was $91.7 million as of September 30, 2023, representing 1.17% of total portfolio loans outstanding, and 763.8% of non-performing loans. Busey recorded net charge offs of $0.3 million in the third quarter of 2023, which equates to 0.01% of average loans on an annualized basis. As of September 30, 2023, our commercial real estate loan portfolio of investor-owned office properties within Central Business District6 areas remained low at $9.5 million. Our credit performance continues to reflect our highly diversified, conservatively underwritten loan portfolio, which has been originated predominantly to established customers with tenured relationships with our company.
The strength of our balance sheet is also reflected in our capital foundation. In the third quarter, Common Equity Tier 1 and Total Capital to Risk Weighted Assets ratios7 increased to 12.52% and 16.72%, respectively. In fact, our regulatory capital ratios continue to provide a buffer of more than $480 million above levels required to be designated well-capitalized. Our Tangible Common Equity ratio8 declined modestly to 7.06% during the third quarter of 2023 as a result of the impact of rising rates on the market value of our securities portfolio, but remains substantially above the 6.17% reported for the third quarter of 2022. During the third quarter of 2023, we paid a common share dividend of $0.24 and repurchased 65,123 shares of our common stock at a weighted average price of $19.63 per share.
Community Banking
Busey’s goal of being a strong community bank begins with outstanding associates. Busey is humbled to be named among the 2023 Best Banks to Work For by American Banker, the 2022 Best Places to Work in Money Management by Pensions and Investments, the 2023 Best Places to Work in Illinois by Daily Herald Business Ledger, and the 2023 Best Companies to Work For in Florida by Florida Trend magazine.
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. We remain cognizant of the evolving economic outlook and extremely focused on balance sheet strength, profitability, and growth, in that order. With our strong capital position, an attractive core funding base, and a sound credit foundation, we feel confident that we are well positioned to continue producing quality growth and profitability as we move into the final quarter of 2023 and into 2024.
Van A. Dukeman | ||||||||
Chairman, President & Chief Executive Officer | ||||||||
First Busey Corporation | ||||||||
6 Central Business District areas within Busey’s footprint include downtown St. Louis, downtown Indianapolis, and downtown Chicago.
7 Capital ratios for the third quarter of 2023 are not yet finalized, and are subject to change.
8 See “Non-GAAP Financial Information” for a reconciliation.
First Busey Corporation | 2023 Q3 — 4
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
(dollars in thousands, except per share amounts)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | |||||||||||||||||||||||||
| EARNINGS & PER SHARE AMOUNTS | |||||||||||||||||||||||||||||
| Net income | $ | 30,666 | $ | 29,364 | $ | 35,661 | $ | 96,816 | $ | 93,924 | |||||||||||||||||||
| Diluted earnings per common share | 0.54 | 0.52 | 0.64 | 1.72 | 1.67 | ||||||||||||||||||||||||
| Cash dividends paid per share | 0.24 | 0.24 | 0.23 | 0.72 | 0.69 | ||||||||||||||||||||||||
Pre-provision net revenue1, 2 | 38,139 | 39,536 | 46,498 | 125,593 | 122,133 | ||||||||||||||||||||||||
Revenue3 | 109,084 | 108,741 | 117,234 | 336,146 | 332,337 | ||||||||||||||||||||||||
| Net income by operating segments: | |||||||||||||||||||||||||||||
| Banking | 31,189 | 30,665 | 37,082 | 98,689 | 94,032 | ||||||||||||||||||||||||
| FirsTech | 317 | 226 | 353 | 505 | 1,300 | ||||||||||||||||||||||||
| Wealth Management | 4,781 | 4,932 | 3,756 | 14,571 | 14,688 | ||||||||||||||||||||||||
| AVERAGE BALANCES | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 252,730 | $ | 235,858 | $ | 331,397 | $ | 237,370 | $ | 455,545 | |||||||||||||||||||
| Investment securities | 3,148,759 | 3,255,741 | 3,667,753 | 3,254,054 | 3,825,265 | ||||||||||||||||||||||||
| Loans held for sale | 2,267 | 1,941 | 4,195 | 1,955 | 6,376 | ||||||||||||||||||||||||
| Portfolio loans | 7,834,285 | 7,755,618 | 7,617,918 | 7,767,378 | 7,387,582 | ||||||||||||||||||||||||
| Interest-earning assets | 11,118,167 | 11,130,298 | 11,497,783 | 11,142,780 | 11,550,887 | ||||||||||||||||||||||||
| Total assets | 12,202,783 | 12,209,865 | 12,531,856 | 12,225,232 | 12,547,816 | ||||||||||||||||||||||||
| Noninterest bearing deposits | 2,925,244 | 3,054,483 | 3,583,693 | 3,082,884 | 3,569,562 | ||||||||||||||||||||||||
| Interest-bearing deposits | 7,217,463 | 6,797,588 | 6,993,125 | 6,886,277 | 6,997,106 | ||||||||||||||||||||||||
| Total deposits | 10,142,707 | 9,852,071 | 10,576,818 | 9,969,161 | 10,566,668 | ||||||||||||||||||||||||
| Securities sold under agreements to repurchase and federal funds purchased | 190,112 | 201,020 | 233,032 | 207,014 | 246,481 | ||||||||||||||||||||||||
| Interest-bearing liabilities | 7,864,355 | 7,762,628 | 7,605,148 | 7,748,218 | 7,611,314 | ||||||||||||||||||||||||
| Total liabilities | 10,994,376 | 11,001,930 | 11,350,408 | 11,029,374 | 11,328,171 | ||||||||||||||||||||||||
| Stockholders' equity - common | 1,208,407 | 1,207,935 | 1,181,448 | 1,195,858 | 1,219,645 | ||||||||||||||||||||||||
Tangible common equity2 | 850,382 | 847,294 | 812,467 | 835,204 | 847,772 | ||||||||||||||||||||||||
| PERFORMANCE RATIOS | |||||||||||||||||||||||||||||
Pre-provision net revenue to average assets1, 2 | 1.24 | % | 1.30 | % | 1.47 | % | 1.37 | % | 1.30 | % | |||||||||||||||||||
| Return on average assets | 1.00 | % | 0.96 | % | 1.13 | % | 1.06 | % | 1.00 | % | |||||||||||||||||||
| Return on average common equity | 10.07 | % | 9.75 | % | 11.98 | % | 10.82 | % | 10.30 | % | |||||||||||||||||||
Return on average tangible common equity2 | 14.31 | % | 13.90 | % | 17.41 | % | 15.50 | % | 14.81 | % | |||||||||||||||||||
Net interest margin2, 4 | 2.80 | % | 2.86 | % | 3.00 | % | 2.93 | % | 2.71 | % | |||||||||||||||||||
Efficiency ratio2 | 62.38 | % | 60.87 | % | 57.62 | % | 59.97 | % | 60.30 | % | |||||||||||||||||||
Noninterest revenue as a % of total revenues3 | 28.69 | % | 27.65 | % | 26.38 | % | 27.91 | % | 30.10 | % | |||||||||||||||||||
| NON-GAAP FINANCIAL INFORMATION | |||||||||||||||||||||||||||||
Adjusted pre-provision net revenue1, 2 | $ | 40,491 | $ | 42,072 | $ | 48,800 | $ | 132,067 | $ | 129,421 | |||||||||||||||||||
Adjusted net income2 | 30,730 | 29,373 | 36,435 | 96,889 | 95,620 | ||||||||||||||||||||||||
Adjusted diluted earnings per share2 | 0.55 | 0.52 | 0.65 | 1.72 | 1.70 | ||||||||||||||||||||||||
Adjusted pre-provision net revenue to average assets2 | 1.32 | % | 1.38 | % | 1.54 | % | 1.44 | % | 1.38 | % | |||||||||||||||||||
Adjusted return on average assets2 | 1.00 | % | 0.96 | % | 1.15 | % | 1.06 | % | 1.02 | % | |||||||||||||||||||
Adjusted return on average tangible common equity2 | 14.34 | % | 13.90 | % | 17.79 | % | 15.51 | % | 15.08 | % | |||||||||||||||||||
Adjusted net interest margin2, 4 | 2.79 | % | 2.84 | % | 2.97 | % | 2.91 | % | 2.68 | % | |||||||||||||||||||
Adjusted efficiency ratio2 | 62.31 | % | 60.86 | % | 56.81 | % | 59.95 | % | 59.67 | % | |||||||||||||||||||
___________________________________________
1.Net interest income plus noninterest income, excluding securities gains and losses, less noninterest expense.
2.See “Non-GAAP Financial Information” for reconciliation.
3.Revenue consists of net interest income plus noninterest income, excluding securities gains and losses.
4.On a tax-equivalent basis, assuming a federal income tax rate of 21%.
First Busey Corporation | 2023 Q3 — 5
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(dollars in thousands, except per share amounts)
| As of | |||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 337,919 | $ | 232,703 | $ | 275,569 | $ | 227,164 | $ | 347,149 | |||||||||||||||||||
| Investment securities | 3,074,237 | 3,186,984 | 3,302,024 | 3,391,240 | 3,494,710 | ||||||||||||||||||||||||
| Loans held for sale | 3,051 | 1,545 | 2,714 | 1,253 | 4,546 | ||||||||||||||||||||||||
| Commercial loans | 5,824,800 | 5,793,426 | 5,815,703 | 5,766,496 | 5,724,137 | ||||||||||||||||||||||||
| Retail real estate and retail other loans | 2,031,360 | 2,011,858 | 1,968,105 | 1,959,206 | 1,945,977 | ||||||||||||||||||||||||
| Portfolio loans | 7,856,160 | 7,805,284 | 7,783,808 | 7,725,702 | 7,670,114 | ||||||||||||||||||||||||
| Allowance for credit losses | (91,710) | (91,639) | (91,727) | (91,608) | (90,722) | ||||||||||||||||||||||||
| Premises and equipment | 122,538 | 122,669 | 126,515 | 126,524 | 128,175 | ||||||||||||||||||||||||
| Goodwill and other intangible assets, net | 356,343 | 358,898 | 361,567 | 364,296 | 367,091 | ||||||||||||||||||||||||
| Right of use asset | 11,500 | 11,806 | 12,291 | 12,829 | 10,202 | ||||||||||||||||||||||||
| Other assets | 588,212 | 580,779 | 571,794 | 579,277 | 566,123 | ||||||||||||||||||||||||
| Total assets | $ | 12,258,250 | $ | 12,209,029 | $ | 12,344,555 | $ | 12,336,677 | $ | 12,497,388 | |||||||||||||||||||
| LIABILITIES & STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||||
| Noninterest bearing deposits | $ | 2,918,574 | $ | 3,086,885 | $ | 3,173,783 | $ | 3,393,666 | $ | 3,628,169 | |||||||||||||||||||
| Interest checking, savings, and money market deposits | 5,747,136 | 5,504,255 | 5,478,715 | 5,822,239 | 6,173,041 | ||||||||||||||||||||||||
| Time deposits | 1,666,652 | 1,471,615 | 1,148,671 | 855,375 | 800,187 | ||||||||||||||||||||||||
| Total deposits | $ | 10,332,362 | $ | 10,062,755 | $ | 9,801,169 | $ | 10,071,280 | $ | 10,601,397 | |||||||||||||||||||
| Securities sold under agreements to repurchase | $ | 183,702 | $ | 202,953 | $ | 210,977 | $ | 229,806 | $ | 234,597 | |||||||||||||||||||
| Short-term borrowings | 12,000 | 212,000 | 615,881 | 351,054 | 16,225 | ||||||||||||||||||||||||
| Long-term debt | 243,666 | 246,454 | 249,245 | 252,038 | 254,835 | ||||||||||||||||||||||||
| Junior subordinated debt owed to unconsolidated trusts | 71,946 | 71,900 | 71,855 | 71,810 | 71,765 | ||||||||||||||||||||||||
| Lease liability | 11,783 | 12,059 | 12,515 | 12,995 | 10,311 | ||||||||||||||||||||||||
| Other liabilities | 212,633 | 198,960 | 184,355 | 201,717 | 201,670 | ||||||||||||||||||||||||
| Total liabilities | 11,068,092 | 11,007,081 | 11,145,997 | 11,190,700 | 11,390,800 | ||||||||||||||||||||||||
| Total stockholders' equity | 1,190,158 | 1,201,948 | 1,198,558 | 1,145,977 | 1,106,588 | ||||||||||||||||||||||||
| Total liabilities & stockholders' equity | $ | 12,258,250 | $ | 12,209,029 | $ | 12,344,555 | $ | 12,336,677 | $ | 12,497,388 | |||||||||||||||||||
| SHARE AND PER SHARE AMOUNTS | |||||||||||||||||||||||||||||
| Book value per common share | $ | 21.51 | $ | 21.74 | $ | 21.68 | $ | 20.73 | $ | 20.04 | |||||||||||||||||||
Tangible book value per common share1 | $ | 15.07 | $ | 15.25 | $ | 15.14 | $ | 14.14 | $ | 13.39 | |||||||||||||||||||
| Ending number of common shares outstanding | 55,342,017 | 55,290,847 | 55,294,455 | 55,279,124 | 55,232,434 | ||||||||||||||||||||||||
___________________________________________
1.See “Non-GAAP Financial Information” for reconciliation.
First Busey Corporation | 2023 Q3 — 6
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(dollars in thousands, except per share amounts)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | |||||||||||||||||||||||||
| INTEREST INCOME | |||||||||||||||||||||||||||||
| Interest and fees on loans held for sale and portfolio | $ | 99,844 | $ | 94,804 | $ | 76,081 | $ | 284,423 | $ | 202,530 | |||||||||||||||||||
| Interest on investment securities | 21,234 | 20,784 | 18,249 | 62,360 | 49,852 | ||||||||||||||||||||||||
| Other interest income | 1,591 | 1,311 | 1,085 | 3,890 | 1,720 | ||||||||||||||||||||||||
| Total interest income | $ | 122,669 | $ | 116,899 | $ | 95,415 | $ | 350,673 | $ | 254,102 | |||||||||||||||||||
| INTEREST EXPENSE | |||||||||||||||||||||||||||||
| Interest on deposits | $ | 37,068 | $ | 26,768 | $ | 3,565 | $ | 78,576 | $ | 7,835 | |||||||||||||||||||
| Interest on securities sold under agreements to repurchase and federal funds purchased | 1,327 | 1,223 | 459 | 3,772 | 665 | ||||||||||||||||||||||||
| Interest on short-term borrowings | 1,964 | 5,741 | 190 | 12,527 | 426 | ||||||||||||||||||||||||
| Interest on long-term debt | 3,528 | 3,552 | 4,110 | 10,631 | 10,739 | ||||||||||||||||||||||||
| Junior subordinated debt owed to unconsolidated trusts | 991 | 945 | 786 | 2,849 | 2,148 | ||||||||||||||||||||||||
| Total interest expense | $ | 44,878 | $ | 38,229 | $ | 9,110 | $ | 108,355 | $ | 21,813 | |||||||||||||||||||
| Net interest income | $ | 77,791 | $ | 78,670 | $ | 86,305 | $ | 242,318 | $ | 232,289 | |||||||||||||||||||
| Provision for credit losses | 364 | 627 | 2,364 | 1,944 | 3,764 | ||||||||||||||||||||||||
| Net interest income after provision for credit losses | $ | 77,427 | $ | 78,043 | $ | 83,941 | $ | 240,374 | $ | 228,525 | |||||||||||||||||||
| NONINTEREST INCOME | |||||||||||||||||||||||||||||
| Wealth management fees | $ | 14,235 | $ | 14,562 | $ | 12,508 | $ | 43,594 | $ | 42,422 | |||||||||||||||||||
| Fees for customer services | 7,502 | 7,239 | 7,627 | 21,560 | 26,122 | ||||||||||||||||||||||||
| Payment technology solutions | 5,226 | 5,231 | 5,080 | 15,772 | 15,045 | ||||||||||||||||||||||||
| Mortgage revenue | 311 | 272 | 438 | 871 | 1,697 | ||||||||||||||||||||||||
| Income on bank owned life insurance | 1,001 | 1,029 | 958 | 3,682 | 2,716 | ||||||||||||||||||||||||
| Net securities gains (losses) | (285) | (2,059) | 4 | (2,960) | (2,324) | ||||||||||||||||||||||||
| Other noninterest income | 3,018 | 1,738 | 4,318 | 8,349 | 12,046 | ||||||||||||||||||||||||
| Total noninterest income | $ | 31,008 | $ | 28,012 | $ | 30,933 | $ | 90,868 | $ | 97,724 | |||||||||||||||||||
| NONINTEREST EXPENSE | |||||||||||||||||||||||||||||
| Salaries, wages, and employee benefits | $ | 39,677 | $ | 39,859 | $ | 39,762 | $ | 119,867 | $ | 117,226 | |||||||||||||||||||
| Data processing expense | 5,930 | 5,902 | 5,447 | 17,472 | 15,800 | ||||||||||||||||||||||||
| Net occupancy expense | 4,594 | 4,540 | 4,705 | 13,896 | 14,492 | ||||||||||||||||||||||||
| Furniture and equipment expense | 1,638 | 1,681 | 1,799 | 5,065 | 5,874 | ||||||||||||||||||||||||
| Professional fees | 1,542 | 973 | 1,579 | 4,573 | 4,693 | ||||||||||||||||||||||||
| Amortization of intangible assets | 2,555 | 2,669 | 2,871 | 7,953 | 8,833 | ||||||||||||||||||||||||
| Interchange expense | 1,786 | 1,870 | 1,574 | 5,509 | 4,606 | ||||||||||||||||||||||||
| FDIC insurance | 1,475 | 1,506 | 882 | 4,483 | 3,108 | ||||||||||||||||||||||||
| Other operating expenses | 11,748 | 10,205 | 12,117 | 31,735 | 35,572 | ||||||||||||||||||||||||
| Total noninterest expense | $ | 70,945 | $ | 69,205 | $ | 70,736 | $ | 210,553 | $ | 210,204 | |||||||||||||||||||
| Income before income taxes | $ | 37,490 | $ | 36,850 | $ | 44,138 | $ | 120,689 | $ | 116,045 | |||||||||||||||||||
| Income taxes | 6,824 | 7,486 | 8,477 | 23,873 | 22,121 | ||||||||||||||||||||||||
| Net income | $ | 30,666 | $ | 29,364 | $ | 35,661 | $ | 96,816 | $ | 93,924 | |||||||||||||||||||
| SHARE AND PER SHARE AMOUNTS | |||||||||||||||||||||||||||||
| Basic earnings per common share | $ | 0.55 | $ | 0.53 | $ | 0.64 | $ | 1.75 | $ | 1.70 | |||||||||||||||||||
| Diluted earnings per common share | $ | 0.54 | $ | 0.52 | $ | 0.64 | $ | 1.72 | $ | 1.67 | |||||||||||||||||||
| Average common shares outstanding | 55,486,700 | 55,440,277 | 55,349,547 | 55,441,980 | 55,399,424 | ||||||||||||||||||||||||
| Diluted average common shares outstanding | 56,315,492 | 56,195,801 | 56,073,164 | 56,230,624 | 56,123,756 | ||||||||||||||||||||||||
First Busey Corporation | 2023 Q3 — 7
Balance Sheet Strength
Our balance sheet remains a source of strength. Total assets were $12.26 billion as of September 30, 2023, compared to $12.21 billion as of June 30, 2023, and $12.50 billion as of September 30, 2022. Portfolio loans totaled $7.86 billion at September 30, 2023, compared to $7.81 billion at June 30, 2023, and $7.67 billion at September 30, 2022. During the third quarter of 2023, Busey Bank experienced its tenth consecutive quarter of core loan9 growth. Growth of $50.9 million in core loans was driven primarily by our northern and central regions. Overall, growth was tempered by a $22.2 million reduction of classified assets, largely attributable to pay-offs from customers in the manufacturing, nursing home, and senior housing industries. 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. This posture will impact loan growth in subsequent quarters.
Average portfolio loans were $7.83 billion for the third quarter of 2023, compared to $7.76 billion for the second quarter of 2023 and $7.62 billion for the third quarter of 2022. Average interest-earning assets were $11.12 billion for the third quarter of 2023, compared to $11.13 billion for the second quarter of 2023, and $11.50 billion for the third quarter of 2022.
Total deposits were $10.33 billion at September 30, 2023, compared to $10.06 billion at June 30, 2023, and $10.60 billion at September 30, 2022. Average deposits were $10.14 billion for the third quarter of 2023, compared to $9.85 billion for the second quarter of 2023 and $10.58 billion for the third quarter of 2022. Deposit growth in the third quarter of 2023 over the second quarter of 2023 was primarily driven by retail and business customers, and to a smaller extent public funds. Deposit fluctuations over the last several quarters were driven by a number of elements, including (1) seasonal factors, including ordinary course public fund flows and fluctuations in the normal course of business operations of certain core commercial customers, (2) the macroeconomic environment, including prevailing interest rates and anticipated future Federal Open Market Committee (“FOMC”) rate moves, as well as inflationary pressures, (3) depositors moving some funds to accounts at competitors offering above-market rates, including state-sponsored investment programs that provide rates in excess of where we can borrow in the wholesale marketplace, and (4) deposits moving within the Busey ecosystem from deposit accounts to our wealth management group. Core deposits9 accounted for 96.6% of total deposits as of September 30, 2023. Cost of deposits was 1.45% in the third quarter of 2023, which represents a 36 basis point increase from the second quarter of 2023. Excluding time deposits, Busey’s cost of deposits was 1.09% in the third quarter of 2023, a 28 basis point increase from June 30, 2023.
Short term borrowings decreased to $12.0 million as of September 30, 2023, compared to $212.0 million as of June 30, 2023 and $615.9 million as of March 31, 2023. We had no borrowings from the Federal Home Loan Bank (“FHLB”) at the end of the third quarter of 2023, compared to $200.0 million at the end of the second quarter and $603.9 million at the end of the first quarter. Average short-term borrowings decreased to $139.2 million in the third quarter of 2023, compared to $443.8 million in the second quarter of 2023. We have sufficient on- and off-balance sheet liquidity10 to manage deposit fluctuations and the liquidity needs of our customers. As of September 30, 2023, our available sources of on- and off-balance sheet liquidity totaled $6.49 billion. We increased deposit campaigns starting in the first quarter of 2023 to attract term funding and savings accounts at a lower rate than our marginal cost of funds. In addition, we instituted a company-wide incentive campaign to drive new customer account openings. Our time deposit campaigns generated increased traction and production throughout the second and third quarters and we expect to continue to implement prudent and measured strategies to generate deposit growth. New certificate of deposit production in the third quarter of 2023 had a weighted average term of 9.2 months at a rate of 4.45%, 82 basis points below our average marginal wholesale funding cost during the quarter. Furthermore, our balance sheet liquidity profile continues to be aided by the cash flows we expect from our relatively short-duration securities portfolio. Those cash flows were $72.9 million in the third quarter of 2023 and are expected to be approximately $82.6 million over the remainder of 2023 with a yield of 1.56%. For 2024, cash flows from our securities portfolio are expected to be approximately $355.9 million with a yield of 1.67%.
9 See “Non-GAAP Financial Information” for a reconciliation.
10 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 Federal Reserve Bank, and federal funds purchased lines.
First Busey Corporation | 2023 Q3 — 8
Asset Quality
Credit quality continues to be exceptionally strong. Loans 30-89 days past due totaled $5.9 million as of September 30, 2023, compared to $5.2 million as of June 30, 2023, and $6.3 million as of September 30, 2022. Non-performing loans were $12.0 million as of September 30, 2023, compared to $15.8 million as of June 30, 2023, and $16.7 million as of September 30, 2022. Continued disciplined credit management resulted in non-performing loans as a percentage of portfolio loans of 0.15% as of September 30, 2023, 0.20% as of June 30, 2023, and 0.22% as of September 30, 2022. Non-performing assets were 0.10% of total assets for third quarter of 2023, compared to 0.13% for the second quarter of 2023 and 0.14% for the third quarter of 2022. Our total classified assets declined from $81.9 million at June 30, 2023, to $59.6 million at September 30, 2023. The quarter-over-quarter decline in classified assets is largely attributable to pay-offs from customers in the manufacturing, nursing home, and senior housing industries. This $22.2 million reduction in classified assets during the third quarter of 2023 follows a reduction of $22.0 million during the second quarter of 2023. During the first three quarters of 2023, classified asset balances have declined by a total of $47.5 million, and total classified assets now represent only 3.9% of consolidated total capital.
Net charge-offs were $0.3 million for the third quarter of 2023, $0.7 million for the second quarter of 2023, and $0.4 million for the third quarter of 2022. Our ratio of net charge-offs to average loans was 0.01% during the third quarter of 2023 and 0.02% over the last twelve months11. The allowance as a percentage of portfolio loans was 1.17% as of both September 30, 2023 and June 30, 2023, compared to 1.18% as of September 30, 2022. The allowance as a percentage of non-performing loans was 763.8% as of September 30, 2023, compared to 580.8% as of June 30, 2023, and 544.7% as of September 30, 2022.
Busey maintains a well-diversified loan portfolio and, as a matter of policy and practice, limits concentration exposure in any particular loan segment.
11 For the quarterly period, average portfolio loans, the denominator in the net charge off ratio, is calculated on a daily average basis. For the last twelve month period, average portfolio loans is calculated as the quarterly average of the average portfolio loans balances over the most recent four quarters.
First Busey Corporation | 2023 Q3 — 9
ASSET QUALITY (unaudited)
(dollars in thousands)
| As of | |||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | |||||||||||||||||||||||||
| Total assets | $ | 12,258,250 | $ | 12,209,029 | $ | 12,344,555 | $ | 12,336,677 | $ | 12,497,388 | |||||||||||||||||||
| Portfolio loans | 7,856,160 | 7,805,284 | 7,783,808 | 7,725,702 | 7,670,114 | ||||||||||||||||||||||||
| Loans 30 – 89 days past due | 5,934 | 5,169 | 5,472 | 6,548 | 6,307 | ||||||||||||||||||||||||
| Non-performing loans: | |||||||||||||||||||||||||||||
| Non-accrual loans | 11,298 | 15,209 | 14,714 | 15,067 | 15,425 | ||||||||||||||||||||||||
| Loans 90+ days past due and still accruing | 709 | 569 | 500 | 673 | 1,229 | ||||||||||||||||||||||||
| Non-performing loans | $ | 12,007 | $ | 15,778 | $ | 15,214 | $ | 15,740 | $ | 16,654 | |||||||||||||||||||
| Non-performing loans, segregated by geography: | |||||||||||||||||||||||||||||
| Illinois / Indiana | $ | 7,951 | $ | 11,681 | $ | 10,416 | $ | 10,347 | $ | 10,531 | |||||||||||||||||||
| Missouri | 3,747 | 3,928 | 4,103 | 4,676 | 5,008 | ||||||||||||||||||||||||
| Florida | 309 | 169 | 695 | 717 | 1,115 | ||||||||||||||||||||||||
| Other non-performing assets | 96 | 68 | 759 | 850 | 1,219 | ||||||||||||||||||||||||
| Non-performing assets | $ | 12,103 | $ | 15,846 | $ | 15,973 | $ | 16,590 | $ | 17,873 | |||||||||||||||||||
| Allowance for credit losses | $ | 91,710 | $ | 91,639 | $ | 91,727 | $ | 91,608 | $ | 90,722 | |||||||||||||||||||
| RATIOS | |||||||||||||||||||||||||||||
| Non-performing loans to portfolio loans | 0.15 | % | 0.20 | % | 0.20 | % | 0.20 | % | 0.22 | % | |||||||||||||||||||
| Non-performing assets to total assets | 0.10 | % | 0.13 | % | 0.13 | % | 0.13 | % | 0.14 | % | |||||||||||||||||||
| Non-performing assets to portfolio loans and other non-performing assets | 0.15 | % | 0.20 | % | 0.21 | % | 0.21 | % | 0.23 | % | |||||||||||||||||||
| Allowance for credit losses to portfolio loans | 1.17 | % | 1.17 | % | 1.18 | % | 1.19 | % | 1.18 | % | |||||||||||||||||||
| Allowance for credit losses as a percentage of non-performing loans | 763.80 | % | 580.80 | % | 602.91 | % | 582.01 | % | 544.75 | % | |||||||||||||||||||
NET CHARGE-OFFS (RECOVERIES) AND PROVISION EXPENSE (RELEASE) (unaudited)
(dollars in thousands)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | |||||||||||||||||||||||||
| Net charge-offs (recoveries) | $ | 293 | $ | 715 | $ | 399 | $ | 1,842 | $ | 929 | |||||||||||||||||||
| Provision expense (release) | 364 | 627 | 2,364 | 1,944 | 3,764 | ||||||||||||||||||||||||
| Net charge-offs, annualized | 1,162 | 2,868 | 1,583 | 2,463 | 1,242 | ||||||||||||||||||||||||
| Average portfolio loans | 7,834,285 | 7,755,618 | 7,617,918 | 7,767,378 | 7,387,582 | ||||||||||||||||||||||||
| Net charge-off ratio | 0.01 | % | 0.04 | % | 0.02 | % | 0.03 | % | 0.02 | % | |||||||||||||||||||
Net Interest Margin12 and Net Interest Income
Net interest margin was 2.80% for the third quarter of 2023, compared to 2.86% for the second quarter of 2023 and 3.00% for the third quarter of 2022. Excluding purchase accounting accretion, adjusted net interest margin12 was 2.79% for the third quarter of 2023, compared to 2.84% in the second quarter of 2023 and 2.97% in the third quarter of 2022. Net interest income was $77.8 million in the third quarter of 2023, compared to $78.7 million in the second quarter of 2023 and $86.3 million in the third quarter of 2022.
12 See “Non-GAAP Financial Information” for a reconciliation.
First Busey Corporation | 2023 Q3 — 10
The FOMC raised rates by 25 basis points during the third quarter of 2023, and by a total of 525 basis points since the onset of the current FOMC tightening cycle that began in the first quarter of 2022. Rising rates initially have a positive impact on net interest margin, as assets, in particular commercial loans, reprice more quickly and to a greater extent than liabilities. As deposit and funding costs increase in response to the tightening rate cycle, and we experience deposit migration into higher cost offerings and funding alternatives, some of the net interest margin expansion is reversed, which we began to experience in the first quarter of 2023. Components of the 6 basis point decrease in net interest margin during the third quarter of 2023 include:
•Increased loan portfolio income contributed +16 basis points
•Reduced borrowing costs contributed +13 basis points
•Increases in the cash and securities portfolio yield contributed +2 basis points
•Increased non-maturity deposit funding costs contributed -22 basis points
•Increased time deposit funding costs contributed -14 basis points
•Reduced recognition of purchase accounting accretion contributed -1 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 1.6% over the subsequent twelve-month period. Market competition for deposits remains significant and deposit betas are likely to rise further, which is factored into our ALCO model. 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. We are committed to protecting our quality core deposit franchise and are in regular contact with our customers to proactively address their needs and concerns. Time deposit specials and retail incentive campaigns continue to provide sufficient funding flows and we maintained excess earning cash levels the majority of the quarter. As the tightening cycle advances and rotation into these higher cost of fund products has accelerated, deposit beta expectations have increased marginally. Since the onset of the current FOMC tightening cycle that began in the first quarter of 2022, our cumulative interest-bearing non-maturity deposit beta has been 31%. Our cycle-to-date total deposit beta has been 26% through September 30, 2023. Deposit betas are calculated based on an average federal funds rate of 5.43% during the third quarter of 2023, which is a 27 basis point increase over the second quarter of 2023 average federal funds rate of 5.16%.
Noninterest Income
Noninterest income was $31.0 million for the third quarter of 2023, as compared to $28.0 million for the second quarter of 2023 and $30.9 million for the third quarter of 2022. Revenues from wealth management fees and payment technology solutions activities represented 62.8% of Busey’s noninterest income for the quarter ended September 30, 2023, providing a balance to spread-based revenue from traditional banking activities.
Consolidated wealth management fees were $14.2 million for the third quarter of 2023, compared to $14.6 million for the second quarter of 2023 and $12.5 million for the third quarter of 2022. On a segment basis, Wealth Management generated $14.4 million in revenue during the third quarter of 2023, a 14.7% increase over the $12.5 million reported in the third quarter of 2022. The Wealth Management operating segment generated net income of $4.8 million in third quarter of 2023, compared to $4.9 million in the second quarter of 2023 and $3.8 million in the third quarter of 2022. Busey’s Wealth Management division ended the third quarter of 2023 with $11.55 billion in assets under care, compared to $11.48 billion at the end of the second quarter of 2023 and $10.75 billion at the end of the third quarter of 2022. Our portfolio management team continues to produce solid results in the face of volatile markets, and has outperformed its blended benchmark13 over the last twelve months, as well as over the last three years and the last five years.
13 The blended benchmark consists of 60% MSCI All Country World Index and 40% Bloomberg Intermediate US Government/Credit Total Return Index.
First Busey Corporation | 2023 Q3 — 11
Payment technology solutions revenue from FirsTech was $5.2 million for both the second and third quarters of 2023, compared to $5.1 million for the third quarter of 2022. Excluding intracompany eliminations, FirsTech generated revenue of $5.7 million during the third quarter of 2023, compared to $5.6 million in both the second quarter of 2023 and the third quarter of 2022. The FirsTech operating segment generated net income of $0.3 million in the third quarter of 2023, compared to $0.2 million in the second quarter of 2023 and $0.4 million in the third quarter of 2022.
Fees for customer services were $7.5 million for the third quarter of 2023, compared to $7.2 million in the second quarter of 2023 and $7.6 million in the third quarter of 2022.
Net securities losses were $0.3 million for the third quarter of 2023, which were comprised of an immaterial amount of realized net losses and $0.3 million of unrealized net losses on equity securities.
Other noninterest income was $3.0 million in the third quarter of 2023, compared to $1.7 million in the second quarter of 2023 and $4.3 million in the third quarter of 2022. Fluctuations between the second quarter of 2023 and the third quarter of 2023 were primarily the result of increases in venture capital investment values and gains on commercial loans sales.
Operating Efficiency
Noninterest expense was $70.9 million in the third quarter of 2023, compared to $69.2 million in the second quarter of 2023 and $70.7 million for the third quarter of 2022. The efficiency ratio14 was 62.38% for the third quarter of 2023, compared to 60.87% for the second quarter of 2023, and 57.62% for the third quarter of 2022. The adjusted core efficiency ratio14 was 60.23% for the third quarter of 2023, compared to 58.55% for the second quarter of 2023 and 55.67% for the third quarter of 2022. Busey remains focused on expense discipline.
Noteworthy components of noninterest expense are as follows:
•Salaries, wages, and employee benefits expenses were $39.7 million in the third quarter of 2023, compared to $39.9 million in the second quarter of 2023 and $39.8 million in the third quarter of 2022. Our associate-base consisted of 1,484 full-time equivalents as of September 30, 2023, compared to 1,477 as of June 30, 2023, and 1,513 as of September 30, 2022.
•Data processing expense was $5.9 million in the both the second and third quarters of 2023, compared to $5.4 million in the third 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 $1.5 million in the third quarter of 2023, compared to $1.0 million in the second quarter of 2023 and $1.6 million in the third quarter of 2022. The quarter-over-quarter increase resulted primarily from a second quarter recapture of legal expenses related to the pay-off of a large classified asset, partially offset by declines in consulting fees.
•Amortization of intangible assets was $2.6 million in the third quarter of 2023, compared to $2.7 million in the second quarter of 2023 and $2.9 million in the third quarter of 2022.
•FDIC insurance expense was $1.5 million in both the second and third quarter of 2023, compared to $0.9 million in the third quarter of 2022, as a result of an FDIC final rule to increase the initial base deposit insurance assessment rate applicable to all FDIC-insured depository institutions by two basis points beginning in 2023.
•Other operating expenses were $11.7 million for the third quarter of 2023, compared to $10.2 million in the second quarter of 2023 and $12.1 million in the third quarter of 2022. The quarter-over-quarter increase is attributable to multiple items, including fraud losses and card service expenses.
14 See “Non-GAAP Financial Information” for a reconciliation.
First Busey Corporation | 2023 Q3 — 12
Busey's effective tax rate for the third quarter of 2023 was 18.2%, 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.
Beginning in 2024, Busey intends to adopt ASU 2023-02, which allows entities to elect to account for equity investments made primarily for the purpose of receiving income tax credits using the proportional amortization method, regardless of the tax credit program through which the investment earns income tax credits, if certain conditions are met. The proportional amortization method results in the cost of the investment being amortized in proportion to the income tax credits and other income tax benefits received, with the amortization of the investment and the income tax credits being presented net in the income statement as a component of income tax expense as opposed to being presented on a gross basis on the income statement as a component of noninterest expense and income tax expense.
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 October 27, 2023, Busey will pay a cash dividend of $0.24 per common share to stockholders of record as of October 20, 2023. Busey has consistently paid dividends to its common stockholders since the bank holding company was organized in 1980.
As of September 30, 2023, Busey continued to exceed the capital adequacy requirements necessary to be considered “well-capitalized” under applicable regulatory guidelines. Busey’s Common Equity Tier 1 ratio is estimated15 to be 12.52% at September 30, 2023, compared to 12.35% at June 30, 2023, and 11.79% at September 30, 2022. Our Total Capital to Risk Weighted Assets ratio is estimated15 to be 16.72% at September 30, 2023, compared to 16.56% at June 30, 2023, and 15.98% at September 30, 2022.
Busey’s tangible common equity16 was $841.2 million at September 30, 2023, compared to $850.9 million at June 30, 2023, and $748.9 million at September 30, 2022. Tangible common equity16 represented 7.06% of tangible assets at September 30, 2023, compared to 7.18% at June 30, 2023, and 6.17% at September 30, 2022. Busey’s tangible book value per common share16 decreased from $15.25 at June 30, 2023, to $15.07 at September 30, 2023. The ratios of tangible common equity to tangible assets16 and tangible book value per common share have been impacted by the fair market valuation adjustment of Busey’s securities portfolio as a result of the current rate environment, which is reflected in the accumulated other comprehensive income (loss) component of shareholder’s equity.
During the third quarter of 2023, Busey purchased 65,123 shares of its common stock at a weighted average price of $19.63 per share for a total of $1.3 million under the Company’s stock repurchase plan. Repurchases were executed due to favorable pricing of Busey’s shares during the third quarter of 2023. As of September 30, 2023, Busey had 2,037,087 shares remaining on its stock repurchase plan available for repurchase.
3Q23 Earnings Investor Presentation
For additional information on Busey’s financial condition and operating results, please refer to the 3Q23 Earnings Investor Presentation furnished via Form 8-K on October 24, 2023, in connection with this earnings release.
15 Capital ratios for the third quarter of 2023 are not yet finalized, and are subject to change.
16 See “Non-GAAP Financial Information” for a reconciliation.
First Busey Corporation | 2023 Q3 — 13
Corporate Profile
As of September 30, 2023, First Busey Corporation (Nasdaq: BUSE) was a $12.26 billion financial holding company headquartered in Champaign, Illinois.
Busey Bank, a wholly-owned bank subsidiary of First Busey Corporation, had total assets of $12.23 billion as of September 30, 2023, and is headquartered in Champaign, Illinois. Busey Bank currently has 46 banking centers serving Illinois, eight banking centers serving Missouri, three banking centers serving southwest Florida, and one banking center in Indianapolis, Indiana.
Through Busey’s Wealth Management division, the Company provides asset management, investment, and fiduciary services to individuals, businesses, and foundations. Assets under care totaled $11.55 billion as of September 30, 2023.
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.
Busey Bank is honored to be named among America’s Best Banks by Forbes magazine for the second consecutive year. Ranked 26th overall in 2023, compared to 52nd in last year's rankings, Busey was once again the top-ranked bank headquartered in Illinois. Additionally, for the first time in 2023, Busey was named among DiversityInc’s Top Regional Companies. The DiversityInc Top 50 survey is the external validator for large U.S. employers that model fairness in their talent strategy, workplace and supplier diversity practices, and philanthropic engagement. We are honored to be consistently recognized nationally and locally for our engaged culture of integrity and commitment to community development.
For more information about us, visit busey.com.
Category: Financial
Source: First Busey Corporation
Source: First Busey Corporation
Contacts:
Jeffrey D. Jones, Chief Financial Officer
217-365-4130
217-365-4130
Ted Rosinus, EVP Investor Relations & Corporate Development
847-832-0392
847-832-0392
First Busey Corporation | 2023 Q3 — 14
Non-GAAP Financial Information
This earnings release contains certain financial information determined by methods other than U.S. Generally Accepted Accounting Principles (“GAAP”). Management uses these non-GAAP measures, together with the related GAAP measures, in analysis of Busey’s performance and in making business decisions, as well as for comparison to the Company’s peers. Busey believes the adjusted measures are useful for investors and management to understand the effects of certain non-core and non-recurring noninterest items and provide additional perspective on the Company’s performance over time.
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.
First Busey Corporation | 2023 Q3 — 15
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 | Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | ||||||||||||||||||||||||||||
| PRE-PROVISION NET REVENUE | ||||||||||||||||||||||||||||||||
| Net interest income | $ | 77,791 | $ | 78,670 | $ | 86,305 | $ | 242,318 | $ | 232,289 | ||||||||||||||||||||||
| Total noninterest income | 31,008 | 28,012 | 30,933 | 90,868 | 97,724 | |||||||||||||||||||||||||||
| Net security (gains) losses | 285 | 2,059 | (4) | 2,960 | 2,324 | |||||||||||||||||||||||||||
| Total noninterest expense | (70,945) | (69,205) | (70,736) | (210,553) | (210,204) | |||||||||||||||||||||||||||
| Pre-provision net revenue | 38,139 | 39,536 | 46,498 | 125,593 | 122,133 | |||||||||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
| Acquisition and other restructuring expenses | 79 | 12 | 957 | 91 | 2,095 | |||||||||||||||||||||||||||
| Provision for unfunded commitments | 13 | 265 | (320) | (357) | 525 | |||||||||||||||||||||||||||
| Amortization of New Markets Tax Credits | 2,260 | 2,259 | 1,665 | 6,740 | 4,668 | |||||||||||||||||||||||||||
| Adjusted pre-provision net revenue | $ | 40,491 | $ | 42,072 | $ | 48,800 | $ | 132,067 | $ | 129,421 | ||||||||||||||||||||||
| Pre-provision net revenue, annualized | [a] | $ | 151,312 | $ | 158,578 | $ | 184,476 | $ | 167,917 | $ | 163,291 | |||||||||||||||||||||
| Adjusted pre-provision net revenue, annualized | [b] | 160,644 | 168,750 | 193,609 | 176,573 | 173,035 | ||||||||||||||||||||||||||
| Average total assets | [c] | 12,202,783 | 12,209,865 | 12,531,856 | 12,225,232 | 12,547,816 | ||||||||||||||||||||||||||
Reported: Pre-provision net revenue to average assets1 | [a÷c] | 1.24 | % | 1.30 | % | 1.47 | % | 1.37 | % | 1.30 | % | |||||||||||||||||||||
Adjusted: Pre-provision net revenue to average assets1 | [b÷c] | 1.32 | % | 1.38 | % | 1.54 | % | 1.44 | % | 1.38 | % | |||||||||||||||||||||
___________________________________________
1.Annualized measure.
First Busey Corporation | 2023 Q3 — 16
Reconciliation Of Non-GAAP Financial Measures (unaudited)
| 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 | Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | ||||||||||||||||||||||||||||
| NET INCOME ADJUSTED FOR NON-OPERATING ITEMS | ||||||||||||||||||||||||||||||||
| Net income | [a] | $ | 30,666 | $ | 29,364 | $ | 35,661 | $ | 96,816 | $ | 93,924 | |||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
| Acquisition expenses: | ||||||||||||||||||||||||||||||||
| Salaries, wages, and employee benefits | — | — | — | — | 587 | |||||||||||||||||||||||||||
| Data processing | — | — | — | — | 214 | |||||||||||||||||||||||||||
| Professional fees, occupancy, and other | 79 | 12 | 4 | 91 | 242 | |||||||||||||||||||||||||||
| Other restructuring expenses: | ||||||||||||||||||||||||||||||||
| Loss on leases or fixed asset impairment | — | — | 877 | — | 976 | |||||||||||||||||||||||||||
| Professional fees, occupancy, and other | — | — | 76 | — | 76 | |||||||||||||||||||||||||||
Related tax benefit1 | (15) | (3) | (183) | (18) | (399) | |||||||||||||||||||||||||||
| Adjusted net income | [b] | $ | 30,730 | $ | 29,373 | $ | 36,435 | $ | 96,889 | $ | 95,620 | |||||||||||||||||||||
| DILUTED EARNINGS PER SHARE | ||||||||||||||||||||||||||||||||
| Diluted average common shares outstanding | [c] | 56,315,492 | 56,195,801 | 56,073,164 | 56,230,624 | 56,123,756 | ||||||||||||||||||||||||||
Reported: Diluted earnings per share | [a÷c] | $ | 0.54 | $ | 0.52 | $ | 0.64 | $ | 1.72 | $ | 1.67 | |||||||||||||||||||||
Adjusted: Diluted earnings per share | [b÷c] | $ | 0.55 | $ | 0.52 | $ | 0.65 | $ | 1.72 | $ | 1.70 | |||||||||||||||||||||
| RETURN ON AVERAGE ASSETS | ||||||||||||||||||||||||||||||||
| Net income, annualized | [d] | $ | 121,664 | $ | 117,779 | $ | 141,481 | $ | 129,443 | $ | 125,576 | |||||||||||||||||||||
| Adjusted net income, annualized | [e] | 121,918 | 117,815 | 144,552 | 129,540 | 127,844 | ||||||||||||||||||||||||||
| Average total assets | [f] | 12,202,783 | 12,209,865 | 12,531,856 | 12,225,232 | 12,547,816 | ||||||||||||||||||||||||||
Reported: Return on average assets2 | [d÷f] | 1.00 | % | 0.96 | % | 1.13 | % | 1.06 | % | 1.00 | % | |||||||||||||||||||||
Adjusted: Return on average assets2 | [e÷f] | 1.00 | % | 0.96 | % | 1.15 | % | 1.06 | % | 1.02 | % | |||||||||||||||||||||
| RETURN ON AVERAGE TANGIBLE COMMON EQUITY | ||||||||||||||||||||||||||||||||
| Average common equity | $ | 1,208,407 | $ | 1,207,935 | $ | 1,181,448 | $ | 1,195,858 | $ | 1,219,645 | ||||||||||||||||||||||
| Average goodwill and other intangible assets, net | (358,025) | (360,641) | (368,981) | (360,654) | (371,873) | |||||||||||||||||||||||||||
| Average tangible common equity | [g] | $ | 850,382 | $ | 847,294 | $ | 812,467 | $ | 835,204 | $ | 847,772 | |||||||||||||||||||||
Reported: Return on average tangible common equity2 | [d÷g] | 14.31 | % | 13.90 | % | 17.41 | % | 15.50 | % | 14.81 | % | |||||||||||||||||||||
Adjusted: Return on average tangible common equity2 | [e÷g] | 14.34 | % | 13.90 | % | 17.79 | % | 15.51 | % | 15.08 | % | |||||||||||||||||||||
___________________________________________
1.The year-to-date tax benefits were calculated by multiplying year-to-date acquisition expenses and other restructuring expenses by the effective tax rates for the year-to-date periods. The annual effective tax rates used in this calculation were 19.8% for the nine months ended September 30, 2023, and 19.1% for the nine months ended September 30, 2022. Quarterly tax benefits were calculated as the year-to-date amounts less the sum of amounts applied to previous quarters.
2.Annualized measure.
First Busey Corporation | 2023 Q3 — 17
Reconciliation Of Non-GAAP Financial Measures (unaudited)
| Net Income Excluding Net Securities Gains and Losses and Diluted Earnings Per Share Excluding Net Securities Gains and Losses | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | ||||||||||||||||||||||||||||
| Net income | [a] | $ | 30,666 | $ | 29,364 | $ | 35,661 | $ | 96,816 | $ | 93,924 | |||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
| Net securities (gains) losses | 285 | 2,059 | (4) | 2,960 | 2,324 | |||||||||||||||||||||||||||
Tax effect for net securities (gains) losses1 | (52) | (418) | 1 | (585) | (443) | |||||||||||||||||||||||||||
Net income excluding net securities (gains) losses2 | [b] | $ | 30,899 | $ | 31,005 | $ | 35,658 | $ | 99,191 | $ | 95,805 | |||||||||||||||||||||
| Diluted average common shares outstanding | [c] | 56,315,492 | 56,195,801 | 56,073,164 | 56,230,624 | 56,123,756 | ||||||||||||||||||||||||||
Reported: Diluted earnings per share | [a÷c] | $ | 0.54 | $ | 0.52 | $ | 0.64 | $ | 1.72 | $ | 1.67 | |||||||||||||||||||||
Adjusted: Diluted earnings per share, excluding net securities (gains) losses2 | [b÷c] | $ | 0.55 | $ | 0.55 | $ | 0.64 | $ | 1.76 | $ | 1.71 | |||||||||||||||||||||
___________________________________________
1.The 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 18.2%, 20.3%, and 19.2% for the three months ended September 30, 2023, June 30, 2023, and September 30, 2022, respectively, and were 19.8% and 19.1% for the nine months ended September 30, 2023, and September 30, 2022, respectively.
2.Tax-effected measure.
| Adjusted Net Interest Income and Adjusted Net Interest Margin | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | ||||||||||||||||||||||||||||
| Net interest income | $ | 77,791 | $ | 78,670 | $ | 86,305 | $ | 242,318 | $ | 232,289 | ||||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
Tax-equivalent adjustment1 | 553 | 561 | 543 | 1,672 | 1,635 | |||||||||||||||||||||||||||
| Tax-equivalent net interest income | 78,344 | 79,231 | 86,848 | 243,990 | 233,924 | |||||||||||||||||||||||||||
| Purchase accounting accretion related to business combinations | (277) | (413) | (830) | (1,093) | (2,588) | |||||||||||||||||||||||||||
| Adjusted net interest income | $ | 78,067 | $ | 78,818 | $ | 86,018 | $ | 242,897 | $ | 231,336 | ||||||||||||||||||||||
| Tax-equivalent net interest income, annualized | [a] | $ | 310,821 | $ | 317,795 | $ | 344,560 | $ | 326,214 | $ | 312,756 | |||||||||||||||||||||
| Adjusted net interest income, annualized | [b] | 309,722 | 316,138 | 341,267 | 324,752 | 309,295 | ||||||||||||||||||||||||||
| Average interest-earning assets | [c] | 11,118,167 | 11,130,298 | 11,497,783 | 11,142,780 | 11,550,887 | ||||||||||||||||||||||||||
Reported: Net interest margin2 | [a÷c] | 2.80 | % | 2.86 | % | 3.00 | % | 2.93 | % | 2.71 | % | |||||||||||||||||||||
Adjusted: Net interest margin2 | [b÷c] | 2.79 | % | 2.84 | % | 2.97 | % | 2.91 | % | 2.68 | % | |||||||||||||||||||||
___________________________________________
1.The tax-equivalent adjustments were calculated using an estimated federal income tax rate of 21%, applied to non-taxable interest income on investments and loans.
2.Annualized measure.
First Busey Corporation | 2023 Q3 — 18
Reconciliation Of Non-GAAP Financial Measures (unaudited)
| 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 | Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | ||||||||||||||||||||||||||||
| Net interest income | $ | 77,791 | $ | 78,670 | $ | 86,305 | $ | 242,318 | $ | 232,289 | ||||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
Tax-equivalent adjustment1 | 553 | 561 | 543 | 1,672 | 1,635 | |||||||||||||||||||||||||||
| Tax-equivalent net interest income | 78,344 | 79,231 | 86,848 | 243,990 | 233,924 | |||||||||||||||||||||||||||
| Total noninterest income | 31,008 | 28,012 | 30,933 | 90,868 | 97,724 | |||||||||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
| Net security (gains) losses | 285 | 2,059 | (4) | 2,960 | 2,324 | |||||||||||||||||||||||||||
| Noninterest income excluding net securities gains and losses | 31,293 | 30,071 | 30,929 | 93,828 | 100,048 | |||||||||||||||||||||||||||
| Tax-equivalent revenue | [a] | $ | 109,637 | $ | 109,302 | $ | 117,777 | $ | 337,818 | $ | 333,972 | |||||||||||||||||||||
| Total noninterest expense | $ | 70,945 | $ | 69,205 | $ | 70,736 | $ | 210,553 | $ | 210,204 | ||||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
| Amortization of intangible assets | [b] | (2,555) | (2,669) | (2,871) | (7,953) | (8,833) | ||||||||||||||||||||||||||
| Non-interest expense excluding amortization of intangible assets | [c] | 68,390 | 66,536 | 67,865 | 202,600 | 201,371 | ||||||||||||||||||||||||||
| Non-operating adjustments: | ||||||||||||||||||||||||||||||||
| Salaries, wages, and employee benefits | — | — | — | — | (587) | |||||||||||||||||||||||||||
| Data processing | — | — | — | — | (214) | |||||||||||||||||||||||||||
| Impairment, professional fees, occupancy, and other | (79) | (12) | (957) | (91) | (1,294) | |||||||||||||||||||||||||||
| Adjusted noninterest expense | [f] | 68,311 | 66,524 | 66,908 | 202,509 | 199,276 | ||||||||||||||||||||||||||
| Provision for unfunded commitments | (13) | (265) | 320 | 357 | (525) | |||||||||||||||||||||||||||
| Amortization of New Markets Tax Credits | (2,260) | (2,259) | (1,665) | (6,740) | (4,668) | |||||||||||||||||||||||||||
| Adjusted core expense | [g] | $ | 66,038 | $ | 64,000 | $ | 65,563 | $ | 196,126 | $ | 194,083 | |||||||||||||||||||||
| Noninterest expense, excluding non-operating adjustments | [f-b] | $ | 70,866 | $ | 69,193 | $ | 69,779 | $ | 210,462 | $ | 208,109 | |||||||||||||||||||||
Reported: Efficiency ratio | [c÷a] | 62.38 | % | 60.87 | % | 57.62 | % | 59.97 | % | 60.30 | % | |||||||||||||||||||||
Adjusted: Efficiency ratio | [f÷a] | 62.31 | % | 60.86 | % | 56.81 | % | 59.95 | % | 59.67 | % | |||||||||||||||||||||
Adjusted: Core efficiency ratio | [g÷a] | 60.23 | % | 58.55 | % | 55.67 | % | 58.06 | % | 58.11 | % | |||||||||||||||||||||
___________________________________________
1.The tax-equivalent adjustments were calculated using an estimated federal income tax rate of 21%, applied to non-taxable interest income on investments and loans.
First Busey Corporation | 2023 Q3 — 19
Reconciliation Of Non-GAAP Financial Measures (unaudited)
| Tangible Book Value and Tangible Book Value Per Common Share | ||||||||||||||||||||||||||||||||
| (dollars in thousands, except per share amounts) | ||||||||||||||||||||||||||||||||
| As of | ||||||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | ||||||||||||||||||||||||||||
| Total stockholders' equity | $ | 1,190,158 | $ | 1,201,948 | $ | 1,198,558 | $ | 1,145,977 | $ | 1,106,588 | ||||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
| Goodwill and other intangible assets, net | (356,343) | (358,898) | (361,567) | (364,296) | (367,091) | |||||||||||||||||||||||||||
| Tangible book value | [a] | $ | 833,815 | $ | 843,050 | $ | 836,991 | $ | 781,681 | $ | 739,497 | |||||||||||||||||||||
| Ending number of common shares outstanding | [b] | 55,342,017 | 55,290,847 | 55,294,455 | 55,279,124 | 55,232,434 | ||||||||||||||||||||||||||
| Tangible book value per common share | [a÷b] | $ | 15.07 | $ | 15.25 | $ | 15.14 | $ | 14.14 | $ | 13.39 | |||||||||||||||||||||
| Tangible Assets, Tangible Common Equity, and Tangible Common Equity to Tangible Assets | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||
| As of | ||||||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | ||||||||||||||||||||||||||||
| Total assets | $ | 12,258,250 | $ | 12,209,029 | $ | 12,344,555 | $ | 12,336,677 | $ | 12,497,388 | ||||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
| Goodwill and other intangible assets, net | (356,343) | (358,898) | (361,567) | (364,296) | (367,091) | |||||||||||||||||||||||||||
Tax effect of other intangible assets1 | 7,354 | 7,833 | 8,335 | 8,847 | 9,369 | |||||||||||||||||||||||||||
Tangible assets2 | [a] | $ | 11,909,261 | $ | 11,857,964 | $ | 11,991,323 | $ | 11,981,228 | $ | 12,139,666 | |||||||||||||||||||||
| Total stockholders' equity | $ | 1,190,158 | $ | 1,201,948 | $ | 1,198,558 | $ | 1,145,977 | $ | 1,106,588 | ||||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
| Goodwill and other intangible assets, net | (356,343) | (358,898) | (361,567) | (364,296) | (367,091) | |||||||||||||||||||||||||||
Tax effect of other intangible assets1 | 7,354 | 7,833 | 8,335 | 8,847 | 9,369 | |||||||||||||||||||||||||||
Tangible common equity2 | [b] | $ | 841,169 | $ | 850,883 | $ | 845,326 | $ | 790,528 | $ | 748,866 | |||||||||||||||||||||
Tangible common equity to tangible assets2 | [b÷a] | 7.06 | % | 7.18 | % | 7.05 | % | 6.60 | % | 6.17 | % | |||||||||||||||||||||
___________________________________________
1.Net of estimated deferred tax liability, calculated using the estimated statutory tax rate of 28%.
2.Tax-effected measure.
First Busey Corporation | 2023 Q3 — 20
Reconciliation Of Non-GAAP Financial Measures (unaudited)
| 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 | ||||||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | September 30, 2022 | ||||||||||||||||||||||||||||
| Portfolio loans | [a] | $ | 7,856,160 | $ | 7,805,284 | $ | 7,783,808 | $ | 7,725,702 | $ | 7,670,114 | |||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
| PPP loans amortized cost | (598) | (667) | (750) | (845) | (1,426) | |||||||||||||||||||||||||||
| Core loans | [b] | $ | 7,855,562 | $ | 7,804,617 | $ | 7,783,058 | $ | 7,724,857 | $ | 7,668,688 | |||||||||||||||||||||
| Total deposits | [c] | $ | 10,332,362 | $ | 10,062,755 | $ | 9,801,169 | $ | 10,071,280 | $ | 10,601,397 | |||||||||||||||||||||
| Non-GAAP adjustments: | ||||||||||||||||||||||||||||||||
| Brokered transaction accounts | (6,055) | (6,055) | (6,005) | (1,303) | (2,006) | |||||||||||||||||||||||||||
| Time deposits of $250,000 or more | (350,276) | (297,967) | (200,898) | (120,377) | (103,534) | |||||||||||||||||||||||||||
| Core deposits | [d] | $ | 9,976,031 | $ | 9,758,733 | $ | 9,594,266 | $ | 9,949,600 | $ | 10,495,857 | |||||||||||||||||||||
| RATIOS | ||||||||||||||||||||||||||||||||
| Core loans to portfolio loans | [b÷a] | 99.99 | % | 99.99 | % | 99.99 | % | 99.99 | % | 99.98 | % | |||||||||||||||||||||
| Core deposits to total deposits | [d÷c] | 96.55 | % | 96.98 | % | 97.89 | % | 98.79 | % | 99.00 | % | |||||||||||||||||||||
| Core loans to core deposits | [b÷d] | 78.74 | % | 79.98 | % | 81.12 | % | 77.64 | % | 73.06 | % | |||||||||||||||||||||
First Busey Corporation | 2023 Q3 — 21
Special Note Concerning Forward-Looking Statements
Statements made in this document, other than those concerning historical financial information, may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the Busey’s financial condition, results of operations, plans, objectives, future performance, and business. Forward-looking statements, which may be based upon beliefs, expectations, and assumptions of Busey’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 Busey undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond Busey’s ability to control or predict, could cause actual results to differ materially from those in Busey’s forward-looking statements. These factors include, among others, the following: (i) the strength of the local, state, national, and international economy (including effects of inflationary pressures and supply chain constraints); (ii) 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 Ukraine and the Israeli-Palestinian conflict); (iii) changes in state and federal laws, regulations, and governmental policies concerning Busey's general business (including changes in response to the recent failures of other banks); (iv) changes in accounting policies and practices; (v) changes in interest rates and prepayment rates of Busey’s assets (including the impact of the London Interbank Offered Rate phase-out and the recent and potential additional rate increases by the Federal Reserve); (vi) increased competition in the financial services sector (including from non-bank competitors such as credit unions and fintech companies) and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) the loss of key executives or associates; (ix) changes in consumer spending; (x) unexpected results of current and/or future acquisitions, which may include failure to realize the anticipated benefits of any acquisition and the possibility that transaction costs may be greater than anticipated; (xi) unexpected outcomes of existing or new litigation involving Busey; (xii) fluctuations in the value of securities held in our securities portfolio; (xiii) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xiv) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; (xv) the level of non-performing assets on our balance sheets; (xvi) interruptions involving our information technology and communications systems or third-party servicers; (xvii) breaches or failures of our information security controls or cybersecurity-related incidents; and (xviii) the economic impact of exceptional weather occurrences such as tornadoes, hurricanes, floods, blizzards, and droughts. 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 Busey and its business, including additional factors that could materially affect its financial results, is included in Busey’s filings with the Securities and Exchange Commission.
First Busey Corporation | 2023 Q3 — 22
First Busey Corporation
100 W. University Ave., Champaign, IL 61820
NASDAQ: BUSE
Busey 2023 | All Rights Reserved
Busey’s Financial Suite of Services
Member FDIC busey.com
Q3 2023 EARNINGS INVESTOR PRESENTATION October 24, 2023
2 23Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE Statements made in this presentation, other than those concerning historical financial information, may be considered 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 First Busey Corporation (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 presentation, 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 Company’s ability to control or predict, could cause actual results to differ materially from those in the Company’s forward-looking statements. These factors include, among others, the following: (i) the strength of the local, state, national, and international economy (including effects of inflationary pressures and supply chain constraints); (ii) 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 Ukraine and the Israeli-Palestinian conflict); (iii) changes in state and federal laws, regulations, and governmental policies concerning Busey's general business (including changes in response to the recent failures of other banks); (iv) changes in accounting policies and practices; (v) changes in interest rates and prepayment rates of Busey’s assets (including the impact of the London Interbank Offered Rate phase-out and the recent and potential additional rate increases by the Federal Reserve); (vi) increased competition in the financial services sector (including from non-bank competitors such as credit unions and fintech companies) and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) the loss of key executives or associates; (ix) changes in consumer spending; (x) unexpected results of current and/or future acquisitions, which may include failure to realize the anticipated benefits of any acquisition and the possibility that transaction costs may be greater than anticipated; (xi) unexpected outcomes of existing or new litigation involving Busey; (xii) fluctuations in the value of securities held in our securities portfolio; (xiii) concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; (xiv) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; (xv) the level of non-performing assets on our balance sheets; (xvi) interruptions involving our information technology and communications systems or third-party servicers; (xvii) breaches or failures of our information security controls or cybersecurity-related incidents; and (xviii) the economic impact of exceptional weather occurrences such as tornadoes, hurricanes, floods, blizzards, and droughts 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 its financial results, is included in the Company’s filings with the Securities and Exchange Commission. Special Note Concerning Forward-Looking Statements
3 33Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE Non-GAAP Financial Information This presentation contains certain financial information determined by methods other than U.S. Generally Accepted Accounting Principles (“GAAP”). Management uses these non-GAAP measures, together with the related GAAP measures, in analysis of Busey’s performance and in making business decisions, as well as for comparison to the Company’s peers. Busey believes the adjusted measures are useful for investors and management to understand the effects of certain non-core and non-recurring noninterest items and provide additional perspective on the Company’s performance over time. 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 in the appendix of this presentation. 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.
4 43Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE Table of Contents Overview of First Busey Corporation (BUSE) 5 Diversified Company with Comprehensive & Innovative Financial Solutions 6 Appendix: 29 Compelling Regional Operating Model 7 Experienced Management Team 30 Investment Highlights 8 Fully Integrated Wealth Platform 31 Fortress Balance Sheet 9 Continued Investment in Technology Enterprise-Wide 32 High Quality Loan Portfolio 10 Digital Banking Adoption 33 High Quality Portfolio: CRE 11 Busey Impact 34 Office Investor Owned CRE Portfolio 12 Non-GAAP Financial Information 35 High Quality Portfolio: C&I 13 Pristine Credit Quality 14 Reserve Supports Credit & Growth Profile 15 Top Tier Core Deposit Franchise 16 Granular, Stable Deposit Base 17 Deposit Cost Trends 18 Diversified and Significant Sources of Fee Income 19 Wealth Management 20 FirsTech 21 Net Interest Margin 22 Actively Managing Asset-Sensitive Balance Sheet 23 Focused Control on Expenses 24 Robust Capital Foundation 25 Balanced, Low-Risk, Short-Duration Investment Portfolio 26 3Q23 Earnings Review 27 Earnings Performance 28
5 53Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE Overview of First Busey Corporation (NASDAQ: BUSE) Regional operating model serving four regions Northern (IL) Central (IL/IN) Gateway (MO/IL) Florida Among the Best 155+ year old financial institution headquartered in Champaign, IL Price Per Share $18.97 Market Cap $1.0B Dividend Yield 5.1% Price/TBV 1.3x Price/NTM 3 9.7x Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 $16 $18 $20 $22 $24 $26 $28 $30 $ in millions 2021 2022 2023 YTD Total Assets $12,860 $12,337 $12,258 Total Loans $7,189 $7,726 $7,856 Total Deposits $10,769 $10,071 $10,332 Total Equity $1,319 $1,146 $1,190 NPA/Assets 0.17 % 0.13 % 0.10 % Net Interest Margin 1 2.49 % 2.84 % 2.93 % Adj. PPNR ROAA 1 1.35 % 1.44 % 1.44 % Adj. ROAA 1 1.15 % 1.06 % 1.06 % Adj. ROATCE 1 14.40 % 15.99 % 15.51 % BUSE Stock Price 2Financial Highlights 1 Non-GAAP calculation, see Appendix | 2 Market Data for BUSE updated to close on 10/23/23, per Nasdaq | 3 Based on consensus median net income of covering analysts as of 10/23/23
6 63Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE 1 Consolidated | 2 Busey Bank segment, excluding Wealth Management & FirsTech; excludes intracompany eliminations and consolidations | 3 Consolidated; Non-GAAP calculation, see Appendix 4 Wealth Management segment | 5 LTM total payments processed | 6 FirsTech segment, excludes intracompany eliminations $11 Billion +10% Payments Processed 5 3-Year CAGR Quarterly Revenue 6 Full suite of diversified financial products for individuals and businesses Wealth & asset management services for individuals and businesses Payment platform that enables the collection of payments across a variety of modules $12.2 Billion Assets 1 14.3% Adj. ROATCE (MRQ) 3 $11.5 Billion Assets Under Care 43.8% PT Margin (MRQ) $395.7 Million LTM Revenue 2 $57.0 Million LTM Revenue 4 $22.4 Million LTM Revenue 6 Diversified Company with Comprehensive & Innovative Financial Solutions
7 73Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE Compelling Regional Operating Model Loans Banking Centers Legacy Institutions Deposits NorthernGatewayCentral Florida 1025 20 3 $5.5 billion $1.8 billion$2.6 billion $451 million $3.3 billion Busey Main Street Herget South Side As of 9/30/23 AUC $8.1 billion $1.0 billion$1.4 billion $1.0 billion $2.0 billion $2.1 billion $439 million Pulaski Bank of Edwardsville First Community Glenview State Bank Busey Investors’ Security Trust Regions Integrated enterprise-wide go-to-market strategy focused on combining the power of commercial & wealth to provide a broad set of financial solutions to well-capitalized individuals and the companies they own & operate
8 83Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE ▪ 58 branches across four states: Illinois, Missouri, Indiana, and Florida ▪ Premier commercial bank, wealth management, and payment technology solutions for individuals and businesses ▪ Attractive core deposit to total deposit ratio (96.6%)1, low cost non-time deposits (109 bps) in 3Q23, and low level of uninsured & uncollateralized deposits2 (28%) at 9/30/23 ▪ Substantial investments in technology enterprise-wide, next generation leadership talent, and risk management infrastructure Attractive Franchise that Provides Innovative Financial Solutions Attractive Profitability and Returns ▪ Adjusted ROAA of 1.00% 1 & Adjusted ROATCE of 14.34% 1 for 3Q23 ▪ 3Q23 NIM of 2.80% 1 ▪ Adjusted Core Efficiency Ratio of 60.2% 1 for 3Q23 ▪ Adjusted diluted EPS of $0.55 1 for 3Q23 ▪ Quarterly dividend of $0.24 (5.1% yield) 5 Disciplined Growth Strategy Driven by Regional Operating Model ▪ Organic growth across key business lines driven by regional operating model that aligns commercial, wealth and FirsTech operations ▪ 10 consecutive quarters of relationship-driven core organic loan growth while maintaining pristine credit quality ▪ Efficient and right-sized branch network (average deposits per branch of $178 million) ▪ Leverage track record as proven successful acquirer to expand through disciplined M&A Powerful Combination of Three Business Lines Drives Strong Noninterest Income ▪ Significant revenue derived from diverse and complementary fee income sources ▪ Noninterest income / revenue (ex-securities gains/losses)4 of 28.7% for 3Q23 ▪ Wealth management and payment technology solutions account for 62.2% of noninterest income (ex-securities gains/losses) in 3Q23 ▪ Sizable business lines provide for a full suite of solutions for our clients across their lifecycle 1 Non-GAAP calculation, see Appendix | 2 Estimated uninsured & uncollateralized deposits consists of the excess of accounts over $250K FDIC insurance limit, less internal accounts and fully-collateralized accounts (incl. preferred deposits) 3 Ex-PPP; Non-GAAP calculation, see Appendix | 4 Non-GAAP, revenue consists of net interest income plus noninterest income, excluding security gains and losses | 5 Based on BUSE closing stock price on 10/23/23 Investment Highlights BUILT ON A FORTRESS BALANCE SHEET Pristine asset quality, highly diversified loan portfolio, & capital levels significantly in excess of well-capitalized minimums
9 93Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE ▪ Capital ratios significantly in excess of well-capitalized minimums ▪ Total RBC of 16.7% and CET1 ratio of 12.5% at 9/30/23 1 ▪ TCE/TA ratio of 7.06% at 9/30/23 2 ▪ TBV per share of $15.07 at 9/30/23 2 Robust Capital Foundation High Quality, Resilient Loan Portfolio ▪ Diversified portfolio, conservatively underwritten with low levels of concentration ▪ Non-performing (0.10% of total assets) and classified assets (4.1% of capital3) both remain near historically low levels ▪ Classified assets reduced $22 million, or 27%, in 3Q23 and $47 million, or 44%, YTD. ▪ Reserves remain above initial Day 1 CECL coverage of 1.06%: ACL/Loans: 1.17% | ACL/NPLs: 763.80% ▪ 100 / 300 Test: 37% C&D | 208% CRE ▪ Minimal office CRE located in metro central business districts; substantial majority of office properties are in suburban locations and 49% of the total office portfolio is medical office ▪ Robust holding company and bank-level liquidity ▪ Strong core deposit franchise ▪ 76.0% loan-to-deposit ratio, 96.6% core deposits2 ▪ 28.2% of total deposits are noninterest-bearing ▪ Low level of estimated uninsured & uncollateralized deposits4 at 28% of total deposits at 9/30/23 ▪ Cash & Equivalents + Available-For-Sale Securities carrying value represents 86% of estimated uninsured & uncollateralized deposits4 ▪ Substantial sources of available off-balance sheet contingent funding totaling $4.0 billion, representing an additional 1.4x coverage of estimated uninsured & uncollateralized deposits4 at 9/30/23 ▪ Untapped borrowing capacity ($4.0 billion in aggregate): $1.8 billion with FHLB, $0.7 billion with FRB discount window, $0.5 billion with Unsecured Fed Funds lines, and $1.0 billion brokered deposit capacity ▪ Brokered deposit market continues to remain untapped ▪ No borrowings from FHLB as of 9/30/23 ▪ No utilization of the Fed’s Bank Term Funding Program Strong Core Deposit Franchise & Ample Liquidity 1 Capital ratios are preliminary estimates | 2 Non-GAAP calculation, see Appendix | 3 Capital calculated as Bank Tier 1 Capital + Allowance for credit losses | 4 Estimated uninsured & uncollateralized deposits consists of the excess of accounts over $250K FDIC insurance limit, less internal accounts and fully-collateralized accounts (including preferred deposits) Fortress Balance Sheet
10 103Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE $2,062 $2,081 $1,973 $1,915 $1,934 $1,694 $1,721 $1,628 $1,568 $1,590 $368 $360 $345 $347 $344 52% 53% 51% 49% 49% Commercial Retail % Utilized (total) 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 Commercial & Industrial 25% Owner Occupied CRE 12% Non-Owner Occupied CRE 31% C&D 6% 1-4 Family Residential 19% HELOC 3% Other 4% 1 Capital is Bank Tier 1 Capital + Allowance for credit losses | 2 Based on loan origination | 3 Busey loans ex-PPP | 4 Excludes credit card & overdraft protection & includes tranche loan commitments/associated sub notes Central 42% Gateway 25% Northern 27% Florida 6% $7,669 $7,725 $7,783 $7,805 $7,856 $1,944 $1,974 $1,936 $1,899 $1,943 $3,279 $3,262 $3,325 $3,362 $3,354 $500 $530 $554 $532 $528 $1,946 $1,959 $1,968 $2,012 $2,031 C&I CRE Construction Retail Real Estate & Other 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 $ in millions$ in millions LTM Core Growth 3 LTM Commercial Growth 3 +2.4% +1.8% Total Loan Portfolio: $7.9 Billion MRQ Yield on Loans 5.07% 3Q23 Net New Funding Yield 7.24% Classified Loans / Capital 1 4.1% New Originations YTD ▪ Sept. net new funding yield of 7.60% (typically a 60-day lag from rate/loan approval to funding) ▪ ▪ Approx. 71% of new commercial production was due to growth within existing bank relationships ▪ New CRE-I originations had a weighted- avg LTV of 61% High Quality Loan Portfolio Funded Draws & Line Utilization Rate 4Ex-PPP Loans Trends Loan Portfolio Regional Segmentation 2Loan Portfolio Composition | 3Q23 Line utilization has declined $147 million YTD
11 113Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE 1 Investor owned CRE includes C&D, Multifamily and non-owner occupied CRE $ in thousands Property Type 9/30/23 Balances % of Total Loans 9/30/23 Classified Balances Apartments $620,231 7.9 % $0 Retail 525,818 6.7 % 5,818 Industrial/Warehouse 338,161 4.3 % 494 Traditional Office 282,829 3.6 % 889 Student Housing 268,875 3.4 % 3,848 Hotel 190,647 2.4 % 0 Medical Office 175,680 2.2 % 0 Senior Housing 170,970 2.2 % 0 LAD 149,421 1.9 % 0 Specialty 102,544 1.3 % 136 Restaurant 24,589 0.3 % 79 Nursing Homes 24,437 0.3 % 116 Health Care 20,000 0.3 % 0 1-4 Family 19,452 0.2 % 0 Other 556 0.0 % 0 Grand Total $2,914,210 37.1 % $11,380 Investor Owned CRE Portfolio 1 (CRE-I) ▪ Only 0.4% of total CRE-I loans are classified ▪ Payoff of $2.5 million classified senior housing credit and payoff of $2.9 million of classified nursing home balances during 3Q23 ▪ Low levels of concentrated exposure - continue to actively monitor CRE-I concentrations vs. internally-defined appetite thresholds ▪ 100/300 Test: 37% C&D | 208% CRE-I ▪ Apartments & Student Housing represents 31% of CRE-I ▪ 60% WAvg LTV & 58% long-term customers (4+ years) $ in thousands Property Type 9/30/23 Balances % of Total Loans 9/30/23 Classified Balances Industrial/Warehouse $377,312 4.8 % $4,636 Specialty 241,239 3.1 % 589 Office 113,299 1.4 % 446 Medical Office 100,995 1.3 % 0 Retail 60,477 0.8 % 1,548 Restaurant 43,951 0.6 % 49 Nursing Homes 1,513 0.0 % 0 Health Care 790 0.0 % 0 Hotel 603 0.0 % 0 Other 200 0.0 % 0 Apartments 150 0.0 % 0 Student Housing 100 0.0 % 0 Grand Total $940,629 12.0 % $7,268 Owner Occupied CRE Portfolio (OOCRE) ▪ Only 0.8% of total OOCRE loans are classified ▪ OOCRE properties are underwritten to operating cash flow and guidance requires a 1.20x FCCR ▪ OOCRE have lower risk profiles as they are underwritten to the primary occupying business and are not as exposed to lease turnover risks ▪ Industrial/Warehouse properties are the largest OOCRE segment, comprising 40% of the OOCRE portfolio while only 4.8% of total loans Owner Occupied CRE Loans by Property Type High Quality Loan Portfolio - CRE Investor Owned CRE Loans by Property Type 1
12 123Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE Weighted Average DSCR: Weighted Average Debt Yield: WAvg 1-Year Lease Rollover: WAvg 2-Year Lease Rollover: Top Ten Largest Office Loans 1.55 10.4% 6.0% 7.2% Downtown St. Louis 4 Properties with $9.1 million in balances Limited Metro Central Business District Exposure Downtown Chicago No outstanding Office CRE-I in Downtown Chicago Downtown Indy 1 Property with $0.4 million in balances All data as of 9/30/23 $ in thousands Metric Traditional Office Medical Office Top Ten Largest Office Loans CBD Office Exposure Total Balances $282,829 $170,970 $123,983 $9,455 % of CRE-I Portfolio 9.7 % 5.9 % 4.3 % 0.3 % % of Office CRE-I Portfolio 62.3 % 37.7 % 27.3 % 2.1 % # of Loans 221 78 10 5 Average Loan Size $1,280 $2,192 $12,398 $1,891 Total Classified Balances $889 $0 $0 $0 Weighted Avg Current LTV 57 % 65 % 66% 43% Office Investor Owned CRE Portfolio
13 133Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE $1,944 $1,974 $1,936 $1,899 $1,943 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 ▪ 24.6% of total loan portfolio (ex-PPP loans) ▪ All C&I loans are underwritten to 1.20x FCCR requirement and RLOCs greater than $1 million require a monthly borrowing base ▪ Diversified portfolio results in low levels of concentrated exposure ▪ Top concentration in one industry (manufacturing) is 16% of C&I loans, or 4% of total loans ▪ Only 1.8% of C&I loans are classified, down from 2.6% in 2Q23 ▪ Manufacturing classified balances declined by $13.6 million during 3Q23, mostly due to the payoff of one credit that had been downgraded from special mention to classified during 4Q22 1 Ex-PPP loan totals include purchase accounting, FASB, overdrafts, etc. High Quality Loan Portfolio: C&I C&I Loans by Sector Total C&I Loans Trend 1 $ in thousands NAICS Sector 9/30/23 Balances (ex-PPP) % of Total Loans 9/30/23 Classified Balances Manufacturing $310,314 3.9 % $17,038 Finance and Insurance 243,871 3.1 % 0 Real Estate Rental & Leasing 229,293 2.9 % 2,029 Wholesale Trade 201,625 2.6 % 0 Construction 183,601 2.3 % 865 Educational Services 135,758 1.7 % 83 Agriculture, Forestry, Fishing, Hunting 89,587 1.1 % 1,449 Transportation 86,836 1.1 % 0 Health Care and Social Assistance 77,404 1.0 % 5,564 Food Services and Drinking Places 76,413 1.0 % 0 Other Services (except Public Admin.) 68,336 0.9 % 135 Public Administration 62,595 0.8 % 0 Arts, Entertainment, and Recreation 57,038 0.7 % 214 Retail Trade 51,748 0.7 % 2,835 Professional, Scientific, & Tech. Svcs. 32,691 0.4 % 2,536 Administrative and Support Services 15,579 0.2 % 262 Mining, Quarrying, Oil & Gas Extract. 7,599 0.1 % 0 Waste Management Services 6,890 0.1 % 1,353 Information 3,426 0.0 % 0 Management of Cos. and Enterprises 1,125 0.0 % 0 Utilities 1,048 0.0 % 0 Grand Total $1,942,777 24.6 % $34,363
14 143Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE $6,470 $7,007 $6,970 $7,446 $7,834 0.11% 0.12% 0.03% 0.01% 0.01% Avg Loans Annualized NCOs/Avg Loans 2019 YE 2020 YE 2021 YE 2022 YE 2023 Q3 $1,099 $1,155 $1,329 $1,398 $1,448 9.7% 8.5% 6.9% 7.7% 4.1% Bank Tier 1 Capital + ALLL Classified/Capital 2019 YE 2020 YE 2021 YE 2022 YE 2023 Q3 ▪ Conservative underwriting leads to pristine credit quality ▪ CRE factors of DSCR, Debt Yield, & LTV stressed for effective gross income decline and interest & cap rate stress ▪ C&I factors including core, operating, traditional cash flows, working capital, and leverage ratios that each are stressed for rate hikes, historical revenue volatility, and a rigorous breakeven analysis ▪ Strong portfolio management that identifies early warning indicators and proactively engages the special assets group early in the credit review process (special assets group has remained intact since the 2008-2009 recession) ▪ Company-wide attention to changing economic environment and potential impact on credit ▪ NPAs reduced to $12.1 million (0.10% of assets) and classified assets reduced to $59.6 million (4.1% of Bank Tier 1 Capital + ALLL) ▪ LTM net charge-offs total $1.8 million, which equates to 0.02% of LTM average loans1 1 LTM average loans was calculated as the average of the ending portfolio loans balances over the most recent four quarters | 2 Capital calculated as Busey Bank Tier 1 Capital + Allowance for credit losses Pristine Credit Quality NPAs/ Assets Classifieds / Capital 2 NCOs / Average Loans $9,696 $10,544 $12,860 $12,337 $12,258 0.34% 0.27% 0.17% 0.13% 0.10% Assets % NPAs/Assets 2019 YE 2020 YE 2021 YE 2022 YE 2023 Q3 $ in millions $ in millions $ in millions NPAs ($) $32.6 $28.9 $21.3 $16.6 $12.1 NCOs ($) $7.3 $8.3 $2.2 $0.9 $0.3Classified Assets ($) $106.9 $97.8 $91.8 $107.1 $59.6
15 153Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE $6,687 $6,368 $7,114 $7,725 $7,856 0.80% 1.59% 1.24% 1.19% 1.17% Ex-PPP Loans Allowance/Ex-PPP Loans 2019 YE 2020 YE 2021 YE 2022 YE 2023 Q3 $29,507 $24,301 $16,852 $15,740 $12,007182% 416% 522% 582% 764% NPLs Allowance/NPLs 2019 YE 2020 YE 2021 YE 2022 YE 2023 Q3 $32,564 $28,872 $21,268 $16,590 $12,103165% 350% 413% 552% 758% NPAs Allowance/NPAs 2019 YE 2020 YE 2021 YE 2022 YE 2023 Q3 ▪ Reserve to loans of 1.17% (ex-PPP) ▪ Day 1 CECL coverage was 1.06% ▪ Non-performing loan balances decreased by $3.8 million QoQ ▪ OREO balances total $0.1 million ▪ Total NPAs declined by $3.7 million QoQ to $12.1 million ▪ Reduction driven primarily by payoff of one nursing home credit ▪ Reserves now equate to 764% of NPLs and 758% of NPAs Reserves Supports Credit & Growth Profile Allowance / Loans (ex-PPP) Allowance / NPLs Allowance / NPAs $ in millions $ in thousands$ in thousands
16 163Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE 1 Other deposits include brokered MMA, brokered CDs, ICS Demand & Savings, CDAR CDs | 2 Non-GAAP calculation, see Appendix 3Q23 Deposit Flows ▪ Significant inflow from commercial (up $185 million QoQ) accompanied by a meaningful increase in retail deposits (up $98 million QoQ) ▪ Public deposits were up $26 million QoQ and down $16 million YoY, demonstrating stability as well as typical seasonality. Over the next two quarters, expect seasonal public deposit outflows consistent with prior periods ▪ Experienced net deposit outflows into Busey Wealth Management as we continue to adapt to client needs while keeping clients in the Busey ecosystem ▪ Continued rotation from non-interest bearing (down $168 million QoQ) into interest-bearing nonmaturity accounts (up $243 million QoQ) ▪ Continue to generate production from CD campaigns, with time deposit balances up $195 million QoQ. New production in 3Q23 had a weighted average term of 9.2 months at a rate of 4.45%, 82 bps below our marginal wholesale funding cost during the quarter ▪ At 9/30/23, our spot deposit cost was 1.19% for non-maturity deposits and 1.59% for total deposits Non-Int DDA 28% Int DDA 28% Savings & MMDA 28% CD < 250k 13%CD > 250k 3% Core Deposits 97% MRQ Avg Cost of Total Deposits 1.45% MRQ Avg Cost of Non-Time Deposits 1.09% Avg Deposits per Branch $178 million Avg Non Maturity Acct Balance at 9/30/23 $34 thousand Total Deposits: $10.3 Billion $10,506 $10,577 $10,338 $9,910 $9,852 $10,143 72.1% 72.4% 76.7% 79.4% 77.6% 76.0% Retail Commercial Public Other ¹ Avg Deposits LDR 2022 Q2 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 $10,277 $10,496 $9,950 $9,594 $9,759 $9,976 $10,381 $10,468 $10,225 $9,760 $9,587 $9,812 98.9% 99.0% 98.8% 97.9% 97.0% 96.6% Core Deposits Avg Core Deposits Core/Total Deposits 2022 Q2 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 $ in millions Top Tier Core Deposit Franchise Deposit Portfolio Composition | 3Q23 Total Deposits & Loan-to-Deposit Ratio Core Deposits 2 / Total Deposits $10,397 $10,601 $10,071 $9,801 $10,063 $10,332 $ in millions
17 173Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE 64% 38% $5,313 $3,627 $901 $230 $5,313 $3,438 $794 $256 $5,312 $3,399 $1,065 $287 $5,410 $3,584 $1,091 $247 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Retail Commercial Public Other² 1 Estimated uninsured & uncollateralized deposits consists of the excess of accounts over $250K FDIC insurance limit, less internal accounts and fully-collateralized accounts (including preferred deposits) | 2 Other deposits include brokered MMA, brokered CDs, ICS Demand & Savings, CDAR CDs Customers with Account Balances totaling $250K+ Since 3/31/23, total deposits up +$531 million, or +5.4% Percentage of Est. FDIC Uninsured Deposits as reported in Call Report 2 / Total Deposits vs. Peer Group 3 Percentage of Cash + AFS / Est. FDIC Uninsured Deposits as reported in Call Report 2 vs. Peer Group 3 2023 Q3 Number of customers 5,603 Median account balance $401 thousand Median customer tenure 13.7 years 2023 Q3 Estimated Uninsured & Uncollateralized Deposits1 $2.9 billion Estimated Uninsured & Uncollateralized Deposits1 / Total Deposits 28% BUSE BUSE As of 9/30/23 Retail Commercial Number of Accounts 257,000+ 33,000+ Avg Balance per Account $21 thousand $105 thousand Avg Customer Tenure 16.4 years 12.3 years Granular, Stable Deposit Base Long-tenured Deposit Relationships that are very granular Deposit Flows by Type Less fully-collateralized deposits, BUSE is at 86% coverage
18 183Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE 1 Quarterly effective fed funds per FRED, Federal Reserve Bank of St. Louis. Average during quarter, not seasonally adjusted | 2 Deposit betas are calculated based on an average fed funds target rate of 0.92% during 2Q22, 2.35% (3Q22), 3.82% (4Q22), 4.69% (1Q23), 5.16% (2Q23), and 5.43% (3Q23). BUSE Cost of Deposits Effective Fed Funds Rate (Quarter Average) 1Q 15 2Q 15 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17 1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 4Q 22 1Q 23 2Q 23 3Q 23 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% C os t of D ep os it s (b p s) 136 116 256 165 109 Retail Commercial Public All IB Non-Maturity All Non-Time Deposits 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 — 20 40 60 80 100 120 140 160 180 200 220 240 260 +5% +10% +16% +24% +31% +3% +10% +17% +29% +37% +2% +6% +12% +20% +26% IB Non-Maturity All IB Deposits Total Deposits 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 Retail -1% +1% +6% +16% +24% Commercial +2% +7% +12% +18% +21% Public +14% +27% +33% +46% +48% IB Non- Maturity +5% +10% +16% +24% +31% All IB Deposits +3% +10% +17% +29% +37% Total Deposits +2% +6% +12% +20% +26% Historical Cost of Deposits, 2015 - 3Q23 1 Cumulative Deposit Betas 2 for Tightening Cycle-to-Date Quarterly Average Cost of Deposits Deposit Cost Trends IB Non-Maturity 0.17% 0.44% 0.78% 1.27% 1.65% Non-Time Deposits 0.11% 0.28% 0.49% 0.81% 1.09% Total Deposits 0.13% 0.32% 0.60% 1.09% 1.45% 0% +6% +28% +108% +108% +3% +14% +36% +67% +67% +17% +46% +62% +160% +160% +6% +18% +40% +102% +102% Retail Commercial Public All IB Non-Maturity 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3
19 193Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE ▪ Noninterest income represented 28.7% of revenue (ex-securities gains/losses) in 3Q23 ▪ Key businesses of wealth management and payment technology solutions contributed 62.2% of noninterest income (ex-securities gains/losses) in 3Q23 ▪ On a combined basis, 10.6% YoY growth in quarterly consolidated revenue from 3Q22 to 3Q23 in these two critical fee income business lines ▪ YoY decline in other noninterest income primarily attributable to lower swap origination fees 1 Includes net security gains and losses $117.2 $120.2 $117.7 $106.7 $108.8 $30.9 $29.1 $31.8 $28.0 $31.0 $86.3 $91.1 $85.9 $78.7 $77.8 26.4% 24.2% 27.1% 26.3% 28.5% Noninterest Income Net Interest Income Nonint. Inc. / Total Revenue 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 $ in millions Noninterest Income Detail 2022 Q3 2023 Q3 YoY Change Wealth Management Fees $12,508 $14,235 +14 % Fees for Customer Services 7,627 7,502 -2 % Payment Technology Solutions 5,080 5,226 +3 % Mortgage Revenue 438 311 -29 % Income on Bank Owned Life Insurance 958 1,001 +4 % Other Noninterest Income 4,318 3,018 -30 % Noninterest Income (ex-securities gains/losses) $30,929 $31,293 +1 % Net Securities Gains (Losses) 4 (285) NM Total Noninterest Income $30,933 $31,008 0 % $ in thousands Wealth Mgmt Fees 45% Payment Tech 17% Customer Service Fees 24% Mortgage Rev. 1% BOLI 3% Other Nonint. Inc. 10% Noninterest Income (ex-securities gains/losses) $31.3 Million Noninterest Income / Total Revenue 1 Sources of Noninterest Income Diversified and Significant Sources of Fee Income
20 203Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE $10,749 $11,062 $11,208 $11,478 $11,548 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 ▪ Assets Under Care (AUC) of $11.5 billion, a QoQ increase of $70 million ▪ Wealth revenue1 of $14.4 million, a YoY increase of 14.7% and pre-tax net income of $6.3 million, a YoY increase of 30.2% ▪ Pre-tax profit margin of 43.8% in 3Q23 and 42.4% over the last twelve months ▪ Our fully internalized investment team continues to produce excellent returns, outperforming benchmarks over multiple measurement periods ▪ The team’s blended portfolio has outperformed the blended benchmark2 over the last 12 months, over the last 3 years, and over the last 5 years ▪ Rate environment attracting more fixed income assets – our fixed income management capabilities are very deep and a real differentiator ▪ Bank + Wealth partnership allows us to better keep customer funds inside our overall ecosystem depending on client needs ▪ Recently completed fee structure initiatives positively impacting revenue at approximately $2.3 - $2.5 million annually 1 Wealth Management segment | 2 Blended benchmark consists of 60% MSCI All-Country World Index / 40% Bloomberg Intermediate Govt/Credit Index $ in millions $ in millions $12.5 $13.0 $14.9 $14.7 $14.4 $4.8 $5.0 $6.4 $6.5 $6.3 38.6% 38.2% 42.8% 44.1% 43.8% Revenue Pre-Tax Net Income Pre-Tax Profit Margin 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 Wealth Management Assets Under Care Wealth - Revenue and Pre-tax Income 1
21 213Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE ▪ LTM revenue of $22.4 million, an increase of 5% over the prior twelve-month period ▪ Key competencies of electronic payments and merchant services have been the primary drivers of growth YTD ▪ Targeted initiatives to improve profitability include shifting customers to fully integrate into the merchant services platform and optimization of existing customer fee structures ▪ Pipeline has been building in recent quarters – have honed our service & delivery to go-to-market with a full cohesive offering ▪ The value of customized payments-enabled software platforms from an ODFI2-sponsored company resonates with potential customers ▪ Targeting launch of a refreshed Loan Pay module featuring additional capabilities over the next couple quarters 1 Revenue equates to all revenue sources tied to FirsTech and excludes intracompany eliminations | 2 Originating Depository Financial Institution Revenue Growth 1 $22.4 million LTM 9/30/23 +5.0%$21.3 million LTM 9/30/22Transactions processed in last twelve months 40 million $11 billion Payments processed in last twelve months Average Revenue Per Processing Day Trend $65.8K $67.1K $79.6K $75.0K $78.5K $78.2K $87.5K $84.0K $87.2K $88.3K $91.5K $89.1K $89.9K 2020 Q3 2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 +11% 3-Year CAGR FirsTech
22 223Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE $86.8 $91.7 $86.4 $79.2 $78.3 $85.9 $91.2 $86.0 $78.8 $78.0 $0.8 $0.5 $0.4 $0.4 $0.3 Net Interest Income ¹ Accretion 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 3.31% 3.76% 4.05% 4.23% 4.40% 0.32% 0.53% 0.94% 1.42% 1.65% 3.00% 3.24% 3.13% 2.86% 2.80% 0.03% 0.02% 0.01% 0.02% 0.01% Earning Assets Cost of Funds NIM Accretion 2022 Q2 2022 Q3 2022 Q4 2023 Q1 2023 Q2 +2.86% +0.16% -0.01% -0.36% +0.13% +0.02% +2.80% 2Q23 NIM Loan Rate/ Volume Accretion Deposit Funding Costs Borrowing Costs Securities Yield 3Q23 NIM 1 Tax-equivalent adjusted amounts; Non-GAAP, see Appendix | 2 $0.1 million of PPP Income (net fees + coupon) in 2022 Q3 not charted $ in millions Yields on new loan volume were 102 bps higher than in 2Q23, while net new funding yields (inclusive of line utilization changes) were 70 bps higher Reduced borrowing needs due to increased deposits and investment cash flows, along with muted loan growth Continued rate pressure on interest-bearing deposits as the tightening cycle advances Increases in the securities portfolio yield Purchase accounting accretion recognition decreased by $0.1 million QoQ Net Interest Margin Bridge - Factors contributing to 6 bps NIM compression during quarter Net Interest Margin Trend 1Net Interest Income Trend 1 Net Interest Margin 2Manual roundi ng in 3Q22 chart; clear for 4Q23 deck
23 233Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE ▪ Balance sheet remains asset-sensitive, progressing towards becoming more rate neutral ▪ A +100 bps rate shock for Year 1 is down to +1.6% from +2.2% in 2Q23 ▪ A -100 bps rate shock for Year 1 is -1.9%; up from -2.6% in 2Q23 ▪ Continue to evaluate off-balance sheet hedging strategies as well as embedding rate protection in our asset originations to provide stabilization to net interest income in lower rate environments ▪ Vigilant focus on pricing discipline for both loans and deposits ▪ 7% of deposits are indexed/floating rate ▪ 38% of loan portfolio reprices in less than one year Balance sheet is projected over one- & two-year time horizons and net interest income is calculated under current market rates assuming permanent instantaneous shifts 1 Deposit betas are calculated based on an average fed funds target rate of 5.43% during 3Q23 Actively Managing Asset-Sensitive Balance Sheet Annual % Change in Net Interest Income under Shock Scenarios Repricing / Maturity Structures of Portfolio Loans Deposit Betas 1 in last Tightening Cycle vs. Current ALCO Model Forecast Rate Shock Year 1 Year 2 +200 bps +3.2 % +3.8 % +100 bps +1.6 % +1.9 % -100 bps -1.9 % -2.7 % -200 bps -3.7 % -5.3 % Within 1 Year 38% 1-2 Years 7% 2-3 Years 8% 3-5 Years 20% 5+ Years 27% 21% 31% 26% 26% IB Non-Maturity Beta Total Deposit Beta 3Q15 - 2Q19 (+225 bps move in FF) 1Q22 - 3Q23 (+525 bps move in FF) ALCO Model Forecast - Peak NM Deposits Beta, 41% ALCO Model Forecast - Peak Total Deposits Beta, 35% ▪ Peak IB NM deposit beta increased from 36% to 41% and peak total deposit beta increased from 32% to 35% ▪ Increase in estimated betas driven by continued shift in deposit mix and persistent deposit competition ▪ Peak beta expected to occur in late 2024
24 243Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE 1 Non-GAAP, see Appendix; adjusted core expenses exclude amortization of intangible assets, provision for unfunded commitments, acquisition/restructuring related charges, and NMTC amortization ▪ Adjusted core expenses1 of $66.0 million in 3Q23, up from $65.6 million in 3Q22, a less than 1% increase in quarterly expense YoY ▪ Continue to be mindful and diligent on expenses, restricting new hires by targeting critical replacements and selective adds; focusing on harvesting investments made over the last several quarters ▪ YoY increase in adjusted core expense less than 1% despite higher FDIC insurance costs (FDIC rule that increased assessment rate by 2 bps), data processing costs (investments in tech enhancements and inflation- driven price increases), and reduced FAS 91 offset to compensation expense as a result of lower loan production volumes ▪ Over the prior 2+ years, we have been purposeful in our efforts to rationalize our expense base, including: ▪ During 4Q22, implemented a targeted restructuring & efficiency optimization plan (generating annual salary & benefits savings of $4.0 to $4.1 million) ▪ Reduced branch count from 87 (proforma for Glenview State Bank) to 58, while increasing average deposits per branch from $113 million at 9/30/20 to $178 million at 9/30/23 ▪ $7.5 million of average earning assets per employee for 3Q23 Full-Time Equivalents (FTE) $70.7 $73.7 $70.4 $69.2 $70.9 55.7% 55.8% 55.6% 58.6% 60.2% Expenses ex-Acq. Acq./Restructuring Exp. Adj. Core Efficiency Ratio¹ 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 $ in millions 1,531 1,346 1,463 1,497 1,484 2019 YE 2020 YE 2021 YE 2022 YE 2023 Q3 Noninterest Exp. $70.7 $73.7 $70.4 $69.2 $70.9 Unfunded Provision -$0.3 -$0.5 -$0.6 $0.3 $0.0 Acq./Restructuring Exp. $1.0 $2.4 $0.0 $0.0 $0.1 Intangible Amort. $2.9 $2.8 $2.7 $2.7 $2.6 NMTC Amort. $1.7 $1.7 $2.2 $2.3 $2.3 Adj. Core Exp.(1) $65.6 $67.2 $66.1 $64.0 $66.0 Noninterest Expense Focused Control on Expenses
25 253Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE Tangible Common Equity 1 & CET1 Ratios 2 1 Non-GAAP calculation, see Appendix | 2 3Q23 capital ratios are preliminary estimates $749 $791 $845 $851 $841 6.2% 6.6% 7.1% 7.2% 7.1% 11.8% 12.0% 12.2% 12.4% 12.5% TCE TCE Ratio CET1 Ratio 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 $1,431 $1,458 $1,487 $1,507 $1,528 $896 $904 $907 $910 $914 $535 $554 $580 $597 $614 16.0% 16.1% 16.4% 16.6% 16.7% 10.0% Well Cap Min Excess over Min Total Capital Ratio Min Ratio 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 $1,130 $1,156 $1,178 $1,198 $1,218 9.1% 9.5% 9.7% 9.9% 10.1% 4.0% Tier 1 Capital Leverage Ratio Min Ratio 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 $ in millions Common Equity Tier 1 Ratio Tier 1 Capital Ratio Total Capital Ratio Capital Ratio 12.5 % 13.3 % 16.7 % Minimum Well Capitalized Ratio 6.5 % 8.0 % 10.0 % Amount of Capital $1,144 $1,218 $1,528 Well Capitalized Minimum $594 $731 $914 Excess over Well Capitalized Minimum $550 $487 $614 $ in millions $ in millions $ in millions Robust Capital Foundation Total Capital Ratio 2 Leverage Ratio 2 Consolidated Capital as of 9/30/23 2 Note: 2022 Q3 had roundi ng for Excess over Min; clear upon 4Q23 deck
26 263Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE ▪ BUSE carried $883 million in held-to-maturity (HTM) securities as of 9/30/23 ▪ Transferred a portion of the portfolio comprised of Agency RMBS & CMBS from available-for-sale (AFS) to HTM during 1Q22 ▪ The duration of the securities portfolio including HTM is 4.0 years and our fair value duration, which excludes the HTM portfolio, is 3.7 years ▪ After-tax net AFS unrealized loss position of $239 million ▪ Projected AOCI burn down through the end of 2024 is $65 million, or 22% of total AOCI at 9/30/23 ($10 million burn down in 4Q23 and $55 million in 2024) ▪ Carrying value of investment portfolio is 25% of total assets ▪ Projected remaining 2023 roll off cash flow (based on static rates) of $83 million at ~1.56% yield. Proj. 2024 roll off cash flow of $356 million at ~1.67% yield. ▪ Over the last four quarters, the size of the investment portfolio has decreased by $416 million as balance sheet rotation into loans continues Balanced, Low-Risk, Short Duration Investment Portfolio Securities Portfolio - Amortized Cost vs. TE Yield Investment Portfolio Composition | 3Q23 ■All Mortgage-Backed Securities & Collateralized Mortgage Obligations are Agency ■91% of Municipal holdings rated AA or better and 8% rated A ■100% of Corporate holdings are investment grade ■Collateralized Loan Obligation portfolio consists of 86% rated AAA and 14% rated AA U.S. Treasuries & Agencies 2% Municipals 8% CMOs 31% Residential MBS 21% Commercial MBS 17% CLOs 14% Corporate 7% Total Securities (Amortized Cost): $3.4 Billion $ in millions AFS % of Amortized Cost 74% HTM % of Amortized Cost 26% $3,824 $3,702 $3,582 $3,484 $3,409 $2,888 $2,784 $2,674 $2,590 $2,526 $936 $918 $908 $894 $883 2.13% 2.34% 2.48% 2.60% 2.67% Amortized Cost AFS Amortized Cost HTM Tax Equivalent Yield 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 3Q23 Adjus ted for round ing
27 273Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE ▪ Net interest income was $77.8 million in 3Q23 vs. $78.7 million in 2Q23 and $86.3 million in 3Q22 ▪ Net interest margin1 was 2.80% in 3Q23, a decrease of 6 bps vs. 2.86% in 2Q23 ▪ The primary factor contributing to the quarter’s NIM compression was increased funding costs on interest-bearing deposits (36 bps decrease), offset partially by higher new volume rates & repricing rates (16 bps increase) and decreased borrowing costs (13 bps increase) Net Interest Income Noninterest Income ▪ Noninterest income (ex-securities gains/losses)1 of $31 million in 3Q23, representing 29% of revenue ▪ Wealth management fees of $14.2 million in 3Q23, down from $14.6 million in 2Q23 but +14% YoY ▪ Payment tech solutions revenue of $5.2 million in 3Q23, flat from $5.2 million in 2Q23 but +3% YoY ▪ Fees for customer services of $7.5 million in 3Q23, up from $7.2 million in 2Q23 and down 2% YoY ▪ Adjusted noninterest expense1 (ex-amortization of intangibles, one-time acquisition and restructuring related items) of $68.3 million in 3Q23, resulting in a 62.3% adjusted efficiency ratio1 ▪ Adjusted core expense1 of $66.0 million (ex-amortization of intangible assets, one-time items, unfunded commitment provision, and NMTC amortization) in 3Q23, equating to 60.2% adjusted core efficiency ratio1 Noninterest Expense Provision ▪ $0.4 million loan loss provision expense ▪ Immaterial provision for unfunded commitments (captured in other noninterest expense) ▪ Net charge offs of $0.3 million in 3Q23 ▪ Adjusted net income of $30.7 million or $0.55 per diluted share1 ▪ Adjusted pre-provision net revenue of $40.5 million (1.32% PPNR ROAA) in 3Q23 1 ▪ 1.00% Adjusted ROAA and 14.34% Adjusted ROATCE in 3Q23 1 Earnings 1 Non-GAAP, see Appendix Taxes ▪ 3Q23 effective tax rate of 18.2% 3Q23 Earnings Review
28 283Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE $48.8 $50.0 $49.5 $42.1 $40.5 1.54% 1.61% 1.64% 1.38% 1.32% Adj. PPNR Adj. PPNR / Avg Assets 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 17.8% 19.0% 18.5% 13.9% 14.3% 1.15% 1.17% 1.22% 0.96% 1.00% Adj. ROATCE Adj. ROAA 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 $36.4 $36.3 $36.8 $29.4 $30.7 $0.65 $0.65 $0.65 $0.52 $0.55 Adj. Net Income Adj. EPS 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 1 Non-GAAP calculation, see Appendix | 2 Per FRED, Federal Reserve Bank of St. Louis Earnings Performance Adjusted Net Income & Earnings Per Share 1 Adjusted ROAA & Adjusted ROATCE 1 Adjusted Pre-Provision Net Revenue / Avg. Assets 1 Historical Key Rates 2 $ in millions $ in millions 2.98% 4.30% 4.87% 5.09% 5.31% 4.22% 4.41% 4.06% 4.87% 5.03% 4.06% 3.99% 3.60% 4.13% 4.60% 3.83% 3.88% 3.48% 3.81% 4.59% SOFR 2-yr UST 5-yr UST 10-Yr UST 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23
Appendix
30 303Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE Has served as President & CEO of First Busey since 2007 and became Chairman of the Board effective July 2020. Additionally, he serves as Chairman, President & CEO of Busey Bank. Mr. Dukeman was President & CEO of Main Street Trust from 1998 until its merger with First Busey in 2007. His 40 years of diverse financial services experience and extensive board involvement brings a conservative operating philosophy and a management style that focuses on Busey’s associates, customers, communities and shareholders. Joined Busey in January 2020 with nearly 25 years of financial leadership experience. Previously, Ms. Bowe served as Senior Director of Operational Risk Program Management at KeyBank. Ms. Bowe offers experience in M&A due diligence, effective navigation of key risk areas and dedication to continuous improvement towards enterprise-wide risk management strategies. Monica L. Bowe EVP & Chief Risk Officer Joined Busey in December 2011 and has over 40 years of legal experience. Prior to joining Busey, he was a partner in the law firm of Meyer Capel, where he specialized in serving the financial services industry. John J. Powers EVP & General Counsel Joined Busey in 2008 and now leads many areas, including: human resources, executive administration, branding, corporate communications and the Busey experience, as well as consumer & digital banking, technology services & business operating systems, and FirsTech, the company’s payment processing subsidiary. Prior to joining Busey, Mrs. Randolph worked for 10+ years with CliftonLarsonAllen LLP. Amy L. Randolph EVP & COO Joined Busey in 1984, serving in the role of Vice Chairman of Credit, Chief Banking Officer or Chief Credit Officer since 2010 and chairing all Credit Committees. Mr. Plecki previously served as COO, President & CEO of Busey Wealth Management, and EVP of the Florida and Champaign markets. Prior to the 2007 merger with First Busey, he served in various management roles at Main Street Trust. Joined Busey in 2011 and has over 15 years of experience in the banking industry. Before being named President of Credit and Bank Administration in 2022, he served as Co-Chief Banking Officer for two years. Mr. Jorstad has also held the role of Regional President for Commercial Banking – overseeing business banking efforts, including Agricultural, Commercial, Construction and Real Estate financing. Chip Jorstad EVP & President of Credit and Bank Administration Joined Busey in 2021, leading the team that provides asset management, investment and fiduciary services to individuals, businesses and foundations. Mr. Burgess formerly served as President of Commerce Brokerage Services, Inc., and was Director of Business Development for the east region of Commerce Trust Company. Previously, he served as Vice President of Sales Operations for Fisher Investments in Woodside, California. Jeff D. Burgess EVP & President of Busey Wealth Management Joined Busey in August 2019, bringing his nearly 20 years of investment banking and financial services experience to Busey. Mr. Jones previously served as Managing Director and Co-Head of Financial Institutions at Stephens Inc. Mr. Jones began his career in the Banking Supervision and Regulation division of the Federal Reserve. Jeffrey D. Jones EVP & CFO Joined Busey in June 2022 to lead the Consumer, Community, Mortgage and Digital Banking teams. Mr. Sheils’ nearly 25 years of banking experience includes serving as the Head of Retail Banking at MB Financial. Prior to his shift to retail, he led teams in Commercial Banking at MB Financial and at LaSalle Bank. Mr. Sheils brings seasoned expertise in consumer and small business strategy, call center management, retail operations, deposit and income growth, product development and enhancing digital options. Joseph A. Sheils EVP & President of Consumer and Digital Banking Van A. Dukeman Chairman, President & CEO Experienced Management Team Robert F. Plecki, Jr. EVP & Vice Chairman of Credit
31 313Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE $11.5 Billion Assets Under Care LTM Revenue $57.0 Million PT Margin MRQ 43.8% 7 Distinct Teams for preserving & growing wealth Core Principles I. Client-Focused Strategy Trusted fiduciaries that identify prudent financial solutions to meet client-specific needs and objectives and help clients make better decisions about their wealth II. Team-Based Approach Collaborative team of experienced, credentialed professionals with broad resources that excels in developing unique solutions for clients III. Comprehensive Wealth Management Fully internalized investment office and an investment philosophy that uses a tailored approach to provide proactive advice, empowering clients to make appropriate financial choices to meet their goals in every aspect of their financial health INVESTMENT MANAGEMENT ▪ Preserving and growing wealth with enhanced asset allocation & tax efficient strategies As of 9/30/23 Fully Integrated Wealth Platform PERSONAL SERVICES ▪ Family Office ▪ High Net Worth ▪ Mass Affluent and Emerging Wealth INSTITUTIONAL SERVICES ▪ Retirement Plans ▪ Corporations & Municipalities ▪ Foundations and Endowments ▪ Not-for-Profit Organizations Wealth Client Segments TAX PLANNING & PREPARATION ▪ Deduction maximization, capital event planning, tax-advantaged savings & investment strategies FIDUCIARY ADMINISTRATION ▪ Trust services, estate planning, and philanthropic advisory PRIVATE CLIENT ▪ Concierge banking with one point of contact that coordinates all banking needs AG SERVICES ▪ Farm management and brokerage RETIREMENT PLANNING ▪ Goal-based advisory including life insurance, long-term care, executive stock option strategies Integrated Core Capabilities to Service Personal & Institutional Clients
32 323Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE Implemented software & hardware management databases, enhancing monitoring of assets & licenses and automating ongoing maintenance & ordering Enhanced Customer Experience Investment Legend Scale & Efficiency Upgrades Debuted an incentivized program that allows associates to “pitch” their ideas for efficiency improvements to Busey leaders, who will select winning applicants each quarter 2023 Future Pending Projects Completed final phase of disaster recovery environment migration to the cloud Procure and implement a robotic process automation tool to automate manual & repetitive processes, freeing up resources and improving associate & customer experience Migrated all telephony infrastructure to the cloud, enhancing video & audio quality and reducing telecom expenses & the amount of internal hardware/resources needed to support our telephony system 2022 Continued Investment in Technology Enterprise-Wide LTM Tech Investment Highlights Implement a virtual service agent to expand self-service opportunities and improve chat capabilities for retail customer care Introduce advanced reporting and analytics that will empower our business lines to offer better solutions by providing associates with enhanced knowledge of their customers' behaviors Launched “always on” VPN for associates, streamlining computer remote worker onboarding and software update processes enterprise-wide Implemented automated doc, imaging, & indexing solution that further reduces reliance on manual intervention for organizing documents Completed Phase 1 enhancements for nCino platform optimization, continually improving our commercial lending and treasury management processes Consolidated ATM fleet to a single hardware and service provider, which included updating ATMs to a modern user interface, further enhancing security and functionality Upgraded 117 network switches, achieving a substantial reduction in power consumption that translates into approximately $30 thousand in annual cost savings, while also supporting our continuing commitment to environmental sustainability
33 333Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE Online Banking MAU 108,834 110,689 112,230 111,486 111,757 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 Total Consumer 1,082,055 1,048,859 1,061,547 1,096,214 1,091,971 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 Online Banking QAU 2,512 2,526 2,538 2,508 2,521 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 Mobile QAU 581 618 671 714 717 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 Mobile MAU 85,481 86,762 88,358 88,862 95,287 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 Total Consumer Mobile & Online activity includes remote deposits, transfers, bill pay, and Zelle transactions Customer base increasingly relying on self-service features 1 Customer has logged in at least once in the 30 days preceding period-end | 2 Customer has logged in at least once in the 90 days preceding period-end +23% Mobile engagement of customers continues growth trajectory as online banking reaches maturity stage +3% +1% —% 489 thousand total IVR calls over the last 12 months, handling a wide array of customer inquires immediately & efficiently 60% of mortgage closings completed via eClose since launch of offering in 2Q22 - eClosings greatly enhance CX, reducing avg closing time to 10 minutes vs. 1 hour Digital Banking Adoption Commercial Quarterly Active Users 2 Consumer Monthly Active Users 1 Consumer Mobile & Online Transaction Activity (counts, actual) Interactive Voice Response Activity Mortgage eClosings +11%
34 343Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE Building on 155 Years of Civic Engagement, Corporate Responsibility and Positive Impacts ▪ Providing over $25 million in green financing since 2021, including energy efficiency improvements, historic preservation and commercial solar development. ▪ Through its robust Corporate Sustainability Program, between 2021 and 2022 First Busey recycled over 16,000 pounds of waste and conserved over 60,000 gallons of water. ▪ First Busey participated in several climate change initiatives, including installing solar panel systems at 11 First Busey facilities, avoiding over 800 tons of carbon emissions over the past decade. ▪ Through many philanthropic efforts, including many associate-driven initiatives, annual charitable donations total over $1.6 million. ▪ In 2021 and 2022, associates generously gave over 25,000 hours of their time to hundreds of causes. ▪ First Busey boasts a high level of associate engagement, scoring a 4.28 (out of 5) in 2022 based on 12 critical measures of engagement. ▪ First Busey launched the Busey Bank Bridge in 2022, a community collective in Peoria, IL, offering fundamental access to economic opportunity for all individuals and small businesses. ▪ Leadership at the Board and Executive level includes a team of diverse backgrounds. Women comprise one-third of the executive team. ▪ Executives, Directors and Officers are expected to follow a stringent code of ethics. ▪ Leadership prioritizes strong corporate governance, employing processes, policies, and customs that exceed industry metrics on risk management, data security and more. ▪ First Busey boasts over 7% of First Busey common stock beneficially owned by directors and insiders. To view the full 2022 Busey Impact Report, visit busey.com/impact *Further information on all cited metrics can be found in the 2022 Busey Impact Report With a strong and unwavering commitment to our Pillars—associates, customers, shareholders and communities—First Busey is committed to strong ethics and governance, social responsibility and environmental sustainability. 3Q23 Featured Impact | Community Banking Team Launches New, BankON Certified Checking and Savings Products: Busey’s Community Banking team introduced 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. Commitment to our Planet Commitment to our People Commitment to Strong Governance Busey Impact: ESG and Corporate Responsibility
35 353Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE 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 Nine Months Ended September 30, 2023 June 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 PRE-PROVISION NET REVENUE Net interest income $ 77,791 $ 78,670 $ 86,305 $ 242,318 $ 232,289 Total noninterest income 31,008 28,012 30,933 90,868 97,724 Net security (gains) losses 285 2,059 (4) 2,960 2,324 Total noninterest expense (70,945) (69,205) (70,736) (210,553) (210,204) Pre-provision net revenue 38,139 39,536 46,498 125,593 122,133 Non-GAAP adjustments: Acquisition and other restructuring expenses 79 12 957 91 2,095 Provision for unfunded commitments 13 265 (320) (357) 525 Amortization of New Markets Tax Credits 2,260 2,259 1,665 6,740 4,668 Adjusted pre-provision net revenue $ 40,491 $ 42,072 $ 48,800 $ 132,067 $ 129,421 Pre-provision net revenue, annualized [a] $ 151,312 $ 158,578 $ 184,476 $ 167,917 $ 163,291 Adjusted pre-provision net revenue, annualized [b] 160,644 168,750 193,609 176,573 173,035 Average total assets [c] 12,202,783 12,209,865 12,531,856 12,225,232 12,547,816 Reported: Pre-provision net revenue to average assets1 [a÷c] 1.24 % 1.30 % 1.47 % 1.37 % 1.30 % Adjusted: Pre-provision net revenue to average assets1 [b÷c] 1.32 % 1.38 % 1.54 % 1.44 % 1.38 % ___________________________________________ 1. Annualized measure. Non-GAAP Financial Information
36 363Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE 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 Nine Months Ended September 30, 2023 June 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 NET INCOME ADJUSTED FOR NON-OPERATING ITEMS Net income [a] $ 30,666 $ 29,364 $ 35,661 $ 96,816 $ 93,924 Non-GAAP adjustments: Acquisition expenses: Salaries, wages, and employee benefits — — — — 587 Data processing — — — — 214 Professional fees, occupancy, and other 79 12 4 91 242 Other restructuring expenses: Loss on leases or fixed asset impairment — — 877 — 976 Professional fees, occupancy, and other — — 76 — 76 Related tax benefit1 (15) (3) (183) (18) (399) Adjusted net income [b] $ 30,730 $ 29,373 $ 36,435 $ 96,889 $ 95,620 DILUTED EARNINGS PER SHARE Diluted average common shares outstanding [c] 56,315,492 56,195,801 56,073,164 56,230,624 56,123,756 Reported: Diluted earnings per share [a÷c] $ 0.54 $ 0.52 $ 0.64 $ 1.72 $ 1.67 Adjusted: Diluted earnings per share [b÷c] $ 0.55 $ 0.52 $ 0.65 $ 1.72 $ 1.70 RETURN ON AVERAGE ASSETS Net income, annualized [d] $ 121,664 $ 117,779 $ 141,481 $ 129,443 $ 125,576 Adjusted net income, annualized [e] 121,918 117,815 144,552 129,540 127,844 Average total assets [f] 12,202,783 12,209,865 12,531,856 12,225,232 12,547,816 Reported: Return on average assets2 [d÷f] 1.00 % 0.96 % 1.13 % 1.06 % 1.00 % Adjusted: Return on average assets2 [e÷f] 1.00 % 0.96 % 1.15 % 1.06 % 1.02 % RETURN ON AVERAGE TANGIBLE COMMON EQUITY Average common equity $ 1,208,407 $ 1,207,935 $ 1,181,448 $ 1,195,858 $ 1,219,645 Average goodwill and other intangible assets, net (358,025) (360,641) (368,981) (360,654) (371,873) Average tangible common equity [g] $ 850,382 $ 847,294 $ 812,467 $ 835,204 $ 847,772 Reported: Return on average tangible common equity2 [d÷g] 14.31 % 13.90 % 17.41 % 15.50 % 14.81 % Adjusted: Return on average tangible common equity2 [e÷g] 14.34 % 13.90 % 17.79 % 15.51 % 15.08 % ___________________________________________ 1. The year-to-date tax benefits were calculated by multiplying year-to-date acquisition expenses and other restructuring expenses by the effective tax rates for the year-to-date periods. The annual effective tax rates used in this calculation were 19.8% for the nine months ended September 30, 2023, and 19.1% for the nine months ended September 30, 2022. Quarterly tax benefits were calculated as the year-to-date amounts less the sum of amounts applied to previous quarters. 2. Annualized measure. Non-GAAP Financial Information
37 373Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE Non-GAAP Financial Information Net Income Excluding Net Securities Gains and Losses and Diluted Earnings Per Share Excluding Net Securities Gains and Losses (dollars in thousands) Three Months Ended Nine Months Ended September 30, 2023 June 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net income [a] $ 30,666 $ 29,364 $ 35,661 $ 96,816 $ 93,924 Non-GAAP adjustments: Net securities (gains) losses 285 2,059 (4) 2,960 2,324 Tax effect for net securities (gains) losses1 (52) (418) 1 (585) (443) Net income excluding net securities (gains) losses2 [b] $ 30,899 $ 31,005 $ 35,658 $ 99,191 $ 95,805 Diluted average common shares outstanding [c] 56,315,492 56,195,801 56,073,164 56,230,624 56,123,756 Reported: Diluted earnings per share [a÷c] $ 0.54 $ 0.52 $ 0.64 $ 1.72 $ 1.67 Adjusted: Diluted earnings per share, excluding net securities (gains) losses2 [b÷c] $ 0.55 $ 0.55 $ 0.64 $ 1.76 $ 1.71 ___________________________________________ 1. The 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 18.2%, 20.3%, and 19.2% for the three months ended September 30, 2023, June 30, 2023, and September 30, 2022, respectively, and were 19.8% and 19.1% for the nine months ended September 30, 2023, and September 30, 2022, respectively. 2. Tax-effected measure.
38 383Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE Adjusted Net Interest Income and Adjusted Net Interest Margin (dollars in thousands) Three Months Ended Nine Months Ended September 30, 2023 June 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net interest income $ 77,791 $ 78,670 $ 86,305 $ 242,318 $ 232,289 Non-GAAP adjustments: Tax-equivalent adjustment1 553 561 543 1,672 1,635 Tax-equivalent net interest income 78,344 79,231 86,848 243,990 233,924 Purchase accounting accretion related to business combinations (277) (413) (830) (1,093) (2,588) Adjusted net interest income $ 78,067 $ 78,818 $ 86,018 $ 242,897 $ 231,336 Tax-equivalent net interest income, annualized [a] $ 310,821 $ 317,795 $ 344,560 $ 326,214 $ 312,756 Adjusted net interest income, annualized [b] 309,722 316,138 341,267 324,752 309,295 Average interest-earning assets [c] 11,118,167 11,130,298 11,497,783 11,142,780 11,550,887 Reported: Net interest margin2 [a÷c] 2.80 % 2.86 % 3.00 % 2.93 % 2.71 % Adjusted: Net interest margin2 [b÷c] 2.79 % 2.84 % 2.97 % 2.91 % 2.68 % ___________________________________________ 1. The tax-equivalent adjustments were calculated using an estimated federal income tax rate of 21%, applied to non-taxable interest income on investments and loans. 2. Annualized measure. Non-GAAP Financial Information
39 393Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE 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 Nine Months Ended September 30, 2023 June 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net interest income $ 77,791 $ 78,670 $ 86,305 $ 242,318 $ 232,289 Non-GAAP adjustments: Tax-equivalent adjustment1 553 561 543 1,672 1,635 Tax-equivalent net interest income 78,344 79,231 86,848 243,990 233,924 Total noninterest income 31,008 28,012 30,933 90,868 97,724 Non-GAAP adjustments: Net security (gains) losses 285 2,059 (4) 2,960 2,324 Noninterest income excluding net securities gains and losses 31,293 30,071 30,929 93,828 100,048 Tax-equivalent revenue [a] $ 109,637 $ 109,302 $ 117,777 $ 337,818 $ 333,972 Total noninterest expense $ 70,945 $ 69,205 $ 70,736 $ 210,553 $ 210,204 Non-GAAP adjustments: Amortization of intangible assets [b] (2,555) (2,669) (2,871) (7,953) (8,833) Non-interest expense excluding amortization of intangible assets [c] 68,390 66,536 67,865 202,600 201,371 Non-operating adjustments: Salaries, wages, and employee benefits — — — — (587) Data processing — — — — (214) Impairment, professional fees, occupancy, and other (79) (12) (957) (91) (1,294) Adjusted noninterest expense [f] 68,311 66,524 66,908 202,509 199,276 Provision for unfunded commitments (13) (265) 320 357 (525) Amortization of New Markets Tax Credits (2,260) (2,259) (1,665) (6,740) (4,668) Adjusted core expense [g] $ 66,038 $ 64,000 $ 65,563 $ 196,126 $ 194,083 Noninterest expense, excluding non-operating adjustments [f-b] $ 70,866 $ 69,193 $ 69,779 $ 210,462 $ 208,109 Reported: Efficiency ratio [c÷a] 62.38 % 60.87 % 57.62 % 59.97 % 60.30 % Adjusted: Efficiency ratio [f÷a] 62.31 % 60.86 % 56.81 % 59.95 % 59.67 % Adjusted: Core efficiency ratio [g÷a] 60.23 % 58.55 % 55.67 % 58.06 % 58.11 % Non-GAAP Financial Information ___________________________________________ 1. The tax-equivalent adjustments were calculated using an estimated federal income tax rate of 21%, applied to non-taxable interest income on investments and loans.
40 403Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE Tangible Book Value and Tangible Book Value Per Common Share (dollars in thousands, except per share amounts) As of September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Total stockholders' equity $ 1,190,158 $ 1,201,948 $ 1,198,558 $ 1,145,977 $ 1,106,588 Goodwill and other intangible assets, net (356,343) (358,898) (361,567) (364,296) (367,091) Tangible book value [a] $ 833,815 $ 843,050 $ 836,991 $ 781,681 $ 739,497 Ending number of common shares outstanding [b] 55,342,017 55,290,847 55,294,455 55,279,124 55,232,434 Tangible book value per common share [a÷b] $ 15.07 $ 15.25 $ 15.14 $ 14.14 $ 13.39 Tangible Assets, Tangible Common Equity, and Tangible Common Equity to Tangible Assets (dollars in thousands) As of September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Total assets $ 12,258,250 $ 12,209,029 $ 12,344,555 $ 12,336,677 $ 12,497,388 Non-GAAP adjustments: Goodwill and other intangible assets, net (356,343) (358,898) (361,567) (364,296) (367,091) Tax effect of other intangible assets1 7,354 7,833 8,335 8,847 9,369 Tangible assets2 [a] $ 11,909,261 $ 11,857,964 $ 11,991,323 $ 11,981,228 $ 12,139,666 Total stockholders' equity $ 1,190,158 $ 1,201,948 $ 1,198,558 $ 1,145,977 $ 1,106,588 Non-GAAP adjustments: Goodwill and other intangible assets, net (356,343) (358,898) (361,567) (364,296) (367,091) Tax effect of other intangible assets1 7,354 7,833 8,335 8,847 9,369 Tangible common equity2 [b] $ 841,169 $ 850,883 $ 845,326 $ 790,528 $ 748,866 Tangible common equity to tangible assets2 [b÷a] 7.06 % 7.18 % 7.05 % 6.60 % 6.17 % ___________________________________________ 1. Net of estimated deferred tax liability, calculated using the estimated statutory tax rate of 28%. 2. Tax-effected measure. Non-GAAP Financial Information
41 413Q23 Earnings Investor Presentation First Busey Corporation | Ticker: BUSE 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 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022 Portfolio loans [a] $ 7,856,160 $ 7,805,284 $ 7,783,808 $ 7,725,702 $ 7,670,114 Non-GAAP adjustments: PPP loans amortized cost (598) (667) (750) (845) (1,426) Core loans [b] $ 7,855,562 $ 7,804,617 $ 7,783,058 $ 7,724,857 $ 7,668,688 Total deposits [c] $ 10,332,362 $ 10,062,755 $ 9,801,169 $ 10,071,280 $ 10,601,397 Non-GAAP adjustments: Brokered transaction accounts (6,055) (6,055) (6,005) (1,303) (2,006) Time deposits of $250,000 or more (350,276) (297,967) (200,898) (120,377) (103,534) Core deposits [d] $ 9,976,031 $ 9,758,733 $ 9,594,266 $ 9,949,600 $ 10,495,857 RATIOS Core loans to portfolio loans [b÷a] 99.99 % 99.99 % 99.99 % 99.99 % 99.98 % Core deposits to total deposits [d÷c] 96.55 % 96.98 % 97.89 % 98.79 % 99.00 % Core loans to core deposits [b÷d] 78.74 % 79.98 % 81.12 % 77.64 % 73.06 % Non-GAAP Financial Information