UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 22, 2008
FIRST BUSEY CORPORATION
(Exact Name of Registrant as Specified in Charter)
|
Nevada |
0-15959 |
37-1078406 | |
|
(State or Other |
(Commission |
(I.R.S. Employer | |
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201 West Main Street, Urbana, IL |
61801 | ||
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(Address of Principal Executive Offices) |
(Zip Code) | ||
Registrant’s telephone number, including area code: (217) 365-4516
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N/A |
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(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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[ ] |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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[ ] |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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[ ] |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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[ ] |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
- 2 -
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ITEM 2.02 |
RESULTS OF OPERATIONS AND FINANCIAL CONDITION. |
On Tuesday, April 22, 2008, the Registrant issued a press release disclosing
financial results for the quarter ended March 31, 2008. The press release is made part of this Form and is attached as Exhibit 99.1.
The press release made a part of this Form includes forward looking statements that are intended to be covered by the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward looking statements include but are not limited to comments with respect to the objectives and strategies, financial condition, results of operations and business of the Registrant.
These forward looking statements involve numerous assumptions, inherent risks
and uncertainties, both general and specific, and the risk that predictions and other forward looking statements will not be achieved. The Registrant cautions you not to place undue reliance on these forward looking statements as a number of important factors could cause actual future results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward looking statements.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
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(d) |
Exhibits: |
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99.1 |
Press Release, dated April 22, 2008. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Dated: April 22, 2008 |
FIRST BUSEY CORPORATION |
By: /s/ Barbara J. Harrington
|
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Name: Barbara J. Harrington |
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|
Title: Chief Financial Officer |
- 2 -
First Busey Announces First Quarter 2008 Earnings
URBANA, Ill., April 22 /PRNewswire-FirstCall/ - - First Busey Corporation (Nasdaq: BUSE) consolidated net income for the quarter ended March 31, 2008 was $10.0 million compared to $7.7 million for the same period in 2007. Consolidated net income per fully-diluted share for the quarter ended March 31, 2008 totaled $0.28 compared to $0.36 per fully-diluted share for the same period in 2007. Excluding after-tax amortization, net income was $10.7 million or $0.30 per fully-diluted share. In January 2008, we paid a dividend of $0.20 per share or $7.2 million total.
The decline in first quarter per share net income was primarily due to credit related costs. During the first quarter of 2008, we added $1.3 million, after tax, to our provision for loan losses, which represented $0.04 per fully-diluted share. The increase in provision brought our total allowance for loan losses to $42.9 million or 1.37% of loans. Our non-performing loans totaled $32.0 million, which included $26.7 million in non-accrual loans. Once a loan is placed on non-accrual status, we no longer record interest income on the loan, which represents another aspect of credit cost. Our allowance to non-performing loans coverage ratio was 134.3% at March 31, 2008. Net charge offs in the quarter totaled $1.8 million.
FirsTech, Inc., our payment processing subsidiary, continues to perform very well with net income of $0.6 million in the first quarter, which includes $0.1 million of amortization expense, after tax. FirsTech’s return on average equity was 16.6% and return on average tangible equity was 98.0%. Although FirsTech is a small piece of our current organization, you can see why we are excited about FirsTech’s potential.
We have continued to experience deterioration in our loan portfolio, primarily in southwest Florida. Our talented group of management and associates, both in Illinois and Florida, are working diligently to guide your Company through this challenging credit environment. We expect that the credit issues could continue to weigh on our financial performance through 2008 and into 2009. However, we continue to position ourselves to come through this difficult earnings environment ready to take advantage of the opportunities that we hope will follow.
Our strong position is rooted in our quality balance sheet. In addition to our allowance for loan losses, we have maintained our capital, for the organization and our banks, above the minimum standards for a “well capitalized” institution.
The primary strength of our organization is our customers. Our great customers combined with all of our associates in the First Busey organization is an inspiring combination that will lead us through these challenging times, well positioned for future growth. As always, your input and comments are welcome.
Corporate Profile
First Busey Corporation is a $4.3 billion financial holding company headquartered in Urbana, Illinois. First Busey Corporation has two wholly-owned banks with locations in three states. Busey Bank is headquartered in Champaign, Illinois and has forty-five banking centers serving downstate Illinois. Busey Bank has a banking center in Indianapolis, Indiana, and a loan production office in Fort Myers, Florida. As of March 31, 2008, Busey Bank had total assets of $3.8 billion. Busey Bank, N.A. is headquartered in Fort Myers, Florida, with nine banking centers serving southwest Florida. Busey Bank, N.A. had total assets of $477.3 million as of March 31, 2008.
Busey Wealth Management is a wholly-owned subsidiary of First Busey Corporation. Through Busey Trust Company, Busey Wealth Management delivers trust, asset management, retail brokerage and insurance products and services. As of March 31, 2008, Busey Wealth Management had approximately $4.1 billion in assets under care.
First Busey Corporation owns a retail payment processing subsidiary, FirsTech, Inc., which processes over 27 million transactions per year through online bill payments, lockbox processing and walk-in payments through its 4,000 agent locations in 36 states.
Busey provides electronic delivery of financial services through our website, http://www.busey.com.
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SELECTED FINANCIAL HIGHLIGHTS |
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(amounts in thousands, except ratios and per share data) |
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Three Months Ended |
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March 31, |
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December 31, |
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March 31, |
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2008 |
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2007 |
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2007 |
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EARNINGS & PER SHARE DATA |
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Net income |
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$ |
10,004 |
|
$ |
4,367 |
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$ |
7,736 |
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Basic earnings per share |
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$ |
0.28 |
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$ |
0.12 |
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$ |
0.36 |
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Weighted average shares of common stock outstanding |
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35,949 |
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36,519 |
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21,458 |
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Fully-diluted earnings per share |
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$ |
0.28 |
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$ |
0.12 |
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$ |
0.36 |
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Weighted average shares of common stock and dilutive |
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potential common shares outstanding |
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36,130 |
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36,783 |
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21,540 |
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Market price per share at period end |
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$ |
21.12 |
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$ |
19.86 |
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$ |
21.43 |
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Price to book ratio |
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144.96 |
% |
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136.16 |
% |
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245.16 |
% |
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Price to earnings ratio1 |
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18.75 |
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41.72 |
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14.68 |
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Cash dividends paid per share |
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$ |
0.20 |
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$ |
0.18 |
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$ |
0.23 |
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Book value per share |
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$ |
14.57 |
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$ |
14.59 |
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$ |
8.74 |
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Tangible book value per share |
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$ |
6.77 |
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$ |
6.86 |
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$ |
6.04 |
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Common shares outstanding |
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35,858 |
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36,316 |
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21,462 |
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AVERAGE BALANCES |
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Assets |
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$ |
4,196,079 |
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$ |
4,154,710 |
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$ |
2,473,712 |
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Investment securities |
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625,479 |
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626,310 |
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335,007 |
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Gross loans |
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3,056,701 |
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2,993,724 |
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1,949,238 |
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Earning assets |
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3,693,418 |
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3,651,718 |
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2,296,780 |
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Deposits |
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3,230,782 |
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3,209,772 |
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1,996,040 |
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Interest-bearing liabilities |
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3,505,574 |
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3,297,075 |
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2,033,481 |
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Stockholders' equity |
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521,701 |
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535,911 |
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185,442 |
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PERIODIC FINANCIAL DATA |
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Tax equivalized net interest income |
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$ |
31,858 |
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$ |
33,150 |
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$ |
19,774 |
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Gross loans |
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3,131,878 |
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3,053,225 |
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1,952,664 |
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Allowance for loan losses |
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42,924 |
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42,560 |
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23,658 |
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PERFORMANCE RATIOS |
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Return on average assets1 |
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0.96 |
% |
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0.42 |
% |
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1.27 |
% |
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Return on average equity1 |
|
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7.71 |
% |
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3.23 |
% |
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16.92 |
% |
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Net interest margin1 |
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3.47 |
% |
|
3.60 |
% |
|
3.49 |
% |
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Net interest spread |
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3.31 |
% |
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3.24 |
% |
|
3.03 |
% |
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Efficiency ratio2 |
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59.17 |
% |
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63.22 |
% |
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55.12 |
% |
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Non-interest revenue as a % of total revenues3 |
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30.49 |
% |
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29.50 |
% |
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25.03 |
% |
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Allowance for loan losses to loans |
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1.37 |
% |
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1.39 |
% |
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1.21 |
% |
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Allowance as a percentage of non-performing loans |
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134.29 |
% |
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211.95 |
% |
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214.24 |
% |
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Ratio of average loan to average deposits |
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94.61 |
% |
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93.27 |
% |
|
97.66 |
% |
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Ratio of tangible capital to tangible equity |
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6.11 |
% |
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6.37 |
% |
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5.29 |
% |
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ASSET QUALITY |
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Net charge-offs |
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$ |
1,786 |
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$ |
7,287 |
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$ |
230 |
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Non-performing loans |
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31,964 |
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20,080 |
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|
11,043 |
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Other non-performing assets |
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|
2,476 |
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|
2,028 |
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|
1,381 |
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1 |
Quarterly ratios annualized |
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2 |
Net of security gains and amortization |
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3 |
Net of interest expense, excludes security gains |
Net income was $10.0 million, or $0.28 per fully-diluted share, for the quarter ended March 31, 2008, as compared to $7.7 million, or $0.36 per fully-diluted share, for the comparable period in 2007. Earnings per fully-diluted share decreased 22.2% for the first quarter of 2008 as compared to the same period in 2007. As compared to the fourth quarter of 2007, earnings per fully-diluted share increased 133.3% from $0.12. The increase in net income from first quarter of 2008 over the same period of 2007 related to a full quarter of earnings contribution from the Main Street merger. The improvement from first quarter of 2008 over fourth quarter 2007 was largely due to decreased credit costs.
Busey Bank’s net income was $11.6 million for the first quarter of 2008, as compared to $7.9 million for the same period in 2007, an increase of 46.8%. The increase in net income as compared to prior year was primarily due to a full quarter of net income contribution from the merger with Main Street Bank & Trust. During the first quarter of 2008, Busey Bank recorded $0.4 million, after tax, of loan loss provision as compared to $0.2 million, after tax, of loan loss provision recorded during 2007. Additionally, Busey Bank recorded $0.4 million gain, after tax, arising from the VISA IPO in the first quarter of 2008.
Busey Bank, N.A.’s net loss was $1.1 million, exclusive of FirsTech’s net income of $0.6 million, for the first quarter of 2008, as compared to $0.4 million of net income for the same period in 2007. The net loss position was primarily related to the loan loss provision of $0.9 million, after tax, recorded during the first quarter of 2008 as compared to no loan loss provision recorded during 2007. Busey Bank, N.A. experienced additional credit related costs through the management of non-accrual loans and other real estate owned (OREO), which total $0.2 million, after-tax, for 2008. Many non-accrual loans and OREO require the banks to pay maintenance, taxes and insurance on the underlying collateral, which is expensed as incurred.
FirsTech, Inc., a wholly-owned subsidiary of Busey Bank, N.A., had net income of $0.6 million for the first quarter of 2008, an increase of $0.2 million from the fourth quarter of 2007.
Busey Wealth Management’s net income was $0.4 million for the first quarter of 2008, which was the first full quarter of our combined wealth management group. Despite a 7.55% decline in the Dow Jones Industrial Average in the first quarter of 2008, Busey Wealth Management ended March with $4.1 billion in assets under care, representing only a 2.38% decline.
Loan Portfolio Quality: The Company experienced continued deterioration in its loan portfolio during the first quarter of 2008. Total non-performing assets were $34.5 million at March 31, 2008, compared to $22.1 million at December 31, 2007 and $21.0 million on a pro-forma combined basis with Main Street at March 31, 2007. Busey Bank and Busey Bank, N.A. had $18.7 million and $15.7 million in non-performing assets, respectively. Total non-performing assets in Florida were $17.4 million, with $1.7 million in Busey Bank and $15.7 in Busey Bank, N.A. The remaining $17.0 million of non-performing assets were primarily within the downstate Illinois market.
Non-accrual loans totaled $26.7 million, or 0.9% of gross loans, at March 31, 2007. Non-accrual loans primarily consisted of commercial non-accruals of $17.4 million and personal real estate loans of $9.3 million. Geographically, $15.6 million of non-accrual loans were in Florida with the remainder primarily located in downstate Illinois.
The Company’s 90+ days past due loans totaled $5.3 million, or 0.2% of gross loans, at March 31, 2007. Commercial accruing loans 90+ days past due were $3.8 million at March 31, 2008. The portion of 90+ days past due loans related to personal residential real estate loans was $1.5 million at March 31, 2008.
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Other real estate owned totaled $2.5 million at March 31, 2008. Geographically, $1.6 million of OREO was located in southwest Florida with the remainder primarily in downstate Illinois at |
Net charge offs for the first quarter of 2008 were $1.8 million, compared with $7.3 million for the fourth quarter of 2007 and $1.5 million on a pro-forma combined basis with Main Street at March 31, 2007.
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Provision for loan losses was $2.2 million during the first quarter of 2008 compared to $11.7 million in the fourth quarter of 2007 and $0.3 million in the comparable period of 2007. |
As a percentage of total outstanding loans, the allowance for loan losses was 1.37% at March 31, 2008 and 1.39% at December 31, 2007, and 1.21% as of March 31, 2007. Total allowance for loan losses was $42.9 million at March 31, 2008, representing 134.3% coverage of non-performing loans.
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Condensed Consolidated Balance Sheets |
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(Unaudited, in thousands, except per share data) |
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March 31, |
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December 31, |
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March 31, |
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|||
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2008 |
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2007 |
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2007 |
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Assets |
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Cash and due from banks |
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$ |
123,068 |
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$ |
125,228 |
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$ |
48,977 |
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Federal funds sold |
|
|
— |
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|
459 |
|
|
57,701 |
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Investment securities |
|
|
600,953 |
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|
610,422 |
|
|
328,004 |
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Net loans |
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|
3,088,954 |
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|
3,010,665 |
|
|
1,929,006 |
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Premises and equipment |
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|
81,269 |
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|
80,400 |
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|
40,452 |
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Goodwill and other intangibles |
|
|
279,982 |
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|
280,487 |
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|
57,877 |
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Other assets |
|
|
77,596 |
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|
85,264 |
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|
48,495 |
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Total assets |
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$ |
4,251,822 |
|
$ |
4,192,925 |
|
$ |
2,510,512 |
|
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Liabilities & Stockholders' Equity |
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Non-interest bearing deposits |
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$ |
395,115 |
|
$ |
389,672 |
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$ |
246,124 |
|
|
Interest-bearing deposits |
|
|
2,853,193 |
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|
2,817,526 |
|
|
1,796,253 |
|
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Total deposits |
|
$ |
3,248,308 |
|
$ |
3,207,198 |
|
$ |
2,042,377 |
|
|
Federal funds purchased & securities |
|
|
|
|
|
|
|
|
|
|
|
sold under agreements to repurchase |
|
|
142,496 |
|
|
203,119 |
|
|
55,855 |
|
|
Short-term borrowings |
|
|
116,000 |
|
|
10,523 |
|
|
1,000 |
|
|
Long-term debt |
|
|
127,910 |
|
|
150,910 |
|
|
148,650 |
|
|
Junior subordinated debt owed to unconsolidated trusts |
|
|
55,000 |
|
|
55,000 |
|
|
55,000 |
|
|
Other liabilities |
|
|
39,487 |
|
|
36,478 |
|
|
20,022 |
|
|
Total liabilities |
|
$ |
3,729,201 |
|
$ |
3,663,228 |
|
$ |
2,322,904 |
|
|
Total stockholders' equity |
|
$ |
522,621 |
|
$ |
529,697 |
|
$ |
187,608 |
|
|
Total liabilities & stockholders' equity |
|
$ |
4,251,822 |
|
$ |
4,192,925 |
|
$ |
2,510,512 |
|
|
Per Share Data |
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
14.57 |
|
$ |
14.59 |
|
$ |
8.74 |
|
|
Tangible book value per share |
|
$ |
6.77 |
|
$ |
6.86 |
|
$ |
6.04 |
|
|
Ending number of shares outstanding |
|
|
35,858 |
|
|
36,316 |
|
|
21,462 |
|
|
Condensed Consolidated Statements of Income |
|
|
|
|
|
||
|
(Unaudited, in thousands, except per share data) |
|
Three Months Ended March 31, |
|
||||
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|
|
2008 |
|
2007 |
|
||
|
Interest and fees on loans |
|
$ |
51,651 |
|
$ |
35,515 |
|
|
Interest on investment securities |
|
|
6,801 |
|
|
3,761 |
|
|
Other interest income |
|
|
105 |
|
|
159 |
|
|
Total interest income |
|
$ |
58,557 |
|
$ |
39,435 |
|
|
Interest on deposits |
|
|
22,847 |
|
|
16,586 |
|
|
Interest on short-term borrowings |
|
|
1,759 |
|
|
705 |
|
|
Interest on long-term debt |
|
|
1,730 |
|
|
1,884 |
|
|
Junior subordinated debt owed to unconsolidated trusts |
|
|
959 |
|
|
999 |
|
|
Total interest expense |
|
$ |
27,295 |
|
$ |
20,174 |
|
|
Net interest income |
|
$ |
31,262 |
|
$ |
19,261 |
|
|
Provision for loan losses |
|
|
2,150 |
|
|
300 |
|
|
Net interest income after provision for loan losses |
|
$ |
29,112 |
|
$ |
18,961 |
|
|
Fees for customer services |
|
|
3,851 |
|
|
2,666 |
|
|
Trust fees |
|
|
3,073 |
|
|
1,710 |
|
|
Remittance processing |
|
|
2,947 |
|
|
— |
|
|
Commissions and brokers' fees |
|
|
702 |
|
|
585 |
|
|
Gain on sales of loans |
|
|
1,160 |
|
|
656 |
|
|
Net security gains |
|
|
472 |
|
|
503 |
|
|
Other |
|
|
1,979 |
|
|
812 |
|
|
Total non-interest income |
|
$ |
14,184 |
|
$ |
6,932 |
|
|
Salaries and wages |
|
|
11,512 |
|
|
6,655 |
|
|
Employee benefits |
|
|
3,136 |
|
|
1,642 |
|
|
Net occupancy expense |
|
|
2,464 |
|
|
1,463 |
|
|
Furniture and equipment expense |
|
|
1,917 |
|
|
824 |
|
|
Data processing expense |
|
|
1,688 |
|
|
534 |
|
|
Amortization expense |
|
|
1,130 |
|
|
255 |
|
|
Other operating expenses |
|
|
6,246 |
|
|
3,325 |
|
|
Total non-interest expense |
|
$ |
28,093 |
|
$ |
14,698 |
|
|
Income before income taxes |
|
$ |
15,203 |
|
$ |
11,195 |
|
|
Income taxes |
|
|
5,199 |
|
|
3,459 |
|
|
Net income |
|
$ |
10,004 |
|
$ |
7,736 |
|
|
Per Share Data |
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.28 |
|
$ |
0.36 |
|
|
Fully-diluted earnings per share |
|
$ |
0.28 |
|
$ |
0.36 |
|
|
Diluted average shares outstanding |
|
|
36,130 |
|
|
21,540 |
|
Special Note Concerning Forward-Looking Statements
This document may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of the Company’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) the strength of the local and national economy; (ii) the economic impact of any future terrorist threats or attacks; (iii) changes in state and federal laws, regulations and governmental policies concerning the Company’s general business; (iv) changes in interest rates and prepayment rates of the Company’s assets; (v) increased competition in the financial services sector and the inability to attract new customers; (vi) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (vii) the loss of key executives or employees; (viii) changes in consumer spending; (ix) unexpected results of acquisitions; (x) unexpected outcomes of existing or new litigation involving the Company; and (xi) changes in accounting policies and practices. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company’s financial results, is included in the Company’s filings with the Securities and Exchange Commission.
Special Note Concerning Goodwill and Identifiable Intangibles
The excess purchase price resulting from the merger with Main Street Trust, Inc. has been allocated to goodwill and identifiable intangibles assets in accordance with current accounting guidance, to the extent that supportable documentation was available at March 31, 2008. Such amounts are subject to adjustment in the near term as additional analysis is performed or obtained from third party sources.
CONTACT: Barbara Harrington, EVP & CFO of First Busey Corporation,
217-365-4516