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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):

October 21, 2008

FIRST BUSEY CORPORATION

 

(Exact Name of Registrant as Specified in Charter)

 

Nevada

0-15959

37-1078406

(State or Other
Jurisdiction of Incorporation

(Commission
File Number)

(I.R.S. Employer
Identification No.)

201 West Main Street, Urbana, IL

61801

(Address of Principal Executive Offices)

(Zip Code)

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

 

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 (see General Instruction A.2. below):

 

[ ]

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))

 

 

ITEM 2.02

RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

 

On Tuesday, October 21, 2008, the Registrant issued a press release disclosing

financial results for the quarter ended September 30, 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

 

 

(d)

Exhibits:

 

99.1

Press Release, dated October 21, 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.

Dated: October 23, 2008

FIRST BUSEY CORPORATION

By: /s/ Barbara J. Harrington

 

Name: Barbara J. Harrington

 

Title: Chief Financial Officer

 

 

 

 

Message from our CEO

Van A. Dukeman, President & CEO

 

First Busey Corporation’s (Nasdaq: BUSE) consolidated net income for the quarter ended September 30, 2008 was $8.8 million, or $0.25 per fully-diluted share, compared to $11.5 million, or $0.36 per fully-diluted share, for the same period in 2007. Year-to-date consolidated net income was $23.4 million, or $0.65 per fully-diluted share, compared to $27.1 million, or $1.09 per fully-diluted share, in the same period of 2007. While many companies in our industry are experiencing losses and shrinking, we are pleased to show growth in our balance sheet and profitability, despite our provision related credit costs, which totaled $22.5 million year-to-date and $8.0 million for the third quarter.

 

As we reflect upon 2008 and look forward into 2009, our most significant goals are as follows:

 

-

Maintaining the Busey Promise. We will maintain our promise to the customer to provide the knowledge and convenience to fulfill their financial needs. Whether it be deposit accounts and retirement planning, or commercial lines of credit, cash management products and retirement plan administration, we promise to meet our customers’ financial needs.

 

-

Building our Capital Position. First Busey and its subsidiary banks are well-capitalized. However, given our growth opportunities and the difficult credit market, we believe that it is prudent for us to raise additional capital. Tough economic times present us with both challenges and opportunities. Additional capital will allow us to take advantage of organic and external growth opportunities. While we had planned to offer $30.0 million of Trust Preferred Securities, we do not plan to move forward with the public offering until we determine to what extent we will participate in the US Treasury’s Capital Purchase Program.

 

-

Credit Resolutions. Our organization has devoted significant time and resources toward resolving credit issues. We will continue with the same level of determination until we have put these significant credit issues behind us and anticipate devoting significant resources to credit issues beyond 2008.

 

-

Non-interest Revenue Growth. A significant component of our value resides in our non-interest bearing revenue channels, primarily Busey Wealth Management and FirsTech. Growth in the non-interest revenue channels will benefit our customers and our Company through increased access to products and earnings diversification.

 

-

Merging of our Banking Subsidiaries. We are currently working to consolidate our two banking subsidiaries. Our banking operations are highly centralized with effectively the same management team overseeing both banks. It makes sense for us from a strategy standpoint and a cost standpoint to merge our banks into one bank. The resulting bank will be larger and, we believe, more efficient due to the lack of duplicate costs and processes. Additionally, our goal is to create a brand and a culture in our Florida franchise that is consistent with our franchise in downstate Illinois.


 

Our management team is working to meet these significant goals throughout the remainder of 2008 and into 2009. In addition to these goals, other challenges and opportunities will arise and we are ready to take advantage of them. Our strong customer base, great team of associates and solid balance sheet provides us with the base to succeed. As always, your input and questions are welcome. Thank you for your continued support.

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 September 30, 2008, Busey Bank had total assets of $3.9 billion. Busey Bank, N.A. is headquartered in Fort Myers, Florida, with eight banking centers serving southwest Florida. Busey Bank, N.A. had total assets of $449.8 million as of September 30, 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 September 30, 2008, Busey Wealth Management had approximately $3.8 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, www.busey.com.

 

 

 

 

 

Increased FDIC Insurance

 

The FDIC insurance coverage has been increased from $100,000 to $250,000 on deposit relationships until December 31, 2009. IRAs and certain other retirement accounts’ FDIC also are covered up to $250,000.

 

The increased coverage provides our customers with a low-risk, alternative investment opportunity, especially as the end of the year retirement plan contribution decisions are upon us.

 

Additionally, we intend to participate in the FDIC’s program to insure all non-interest bearing transaction deposit accounts, regardless of dollar amount until December 31, 2009. The insurance coverage on noninterest-bearing transaction deposit accounts is over and above the $250,000 in coverage provided to a customer already. As a general example, if a customer has $500,000 in a noninterest-bearing transaction deposit account and $250,000 in a certificate of deposit, the FDIC would fully insure the entire $750,000.

 

Please contact any of our personal bankers to discuss the new FDIC coverage limits and how you can take advantage of the increased coverage in your particular situation.

 

Emergency Economic Stabilization Act

 

“The Emergency Economic Stabilization Act (the “Act”) put forth by Congress provides the US Treasury with broad authority to protect and restore liquidity to the financial markets. The tools of the Act announced to date include direct investment into financial institutions and purchases of troubled assets. Busey is awaiting final direction from the US Treasury on how the Act’s tools will be implemented. Upon initial review, it appears the Act will provide Busey with opportunities that will benefit our customers and shareholders.” – Barbara Harrington, Chief Financial Officer, First Busey Corporation

 

As mentioned previously, while we are analyzing the US Treasury’s Capital Purchase Program, we have delayed the sales process of our Trust Preferred Securities offering.

 

10th Anniversary of NASDAQ Listing

 

First Busey Corporation celebrated its 10th Anniversary of being listed on the NASDAQ Stock Market under the symbol “BUSE”. On October 1, 1998, “BUSE” closed at a stock split adjusted $13.17 per share and on October 1, 2008, “BUSE” closed at $18.03 per share. The cumulative total return for the ten year period is 86.1%.

 

Difficult Markets - Busey Wealth Management Can Help

 

“Times like this really do reinforce the need for a plan that addresses your unique goals and objectives. Assistance with decision making becomes more important than ever, as there is a lot of confusion as to whether you should ‘stay the course’ or ‘stray from the course’.” – Donna Greene, President, Busey Wealth Management

 

The advisors at Busey Wealth Management have accumulated over 575 years of experience in this industry, with over 485 of those years in this organization. Our capabilities bridge asset allocation and investments, taxes, trust administration and estate planning, retirement savings and income planning; over 10,000 families have taken advantage of our expertise and trusted us with their assets and goal-based needs. We have been through great, terrible and average markets and through it all, our philosophy has been consistent, and our experience and depth of talent has made a difference to our clients.

 

Thank you to our many valued customers for allowing us to continue to do all we can to help you achieve your goals. If you have further questions or concerns, please don’t hesitate to call us for a review, or the opportunity to take advantage of our further specializations. If you’re not already a customer of Busey Wealth Management, stop by one of our offices or call one of our advisors. We’re prepared to exceed your expectations.

 

 

 

 

 

 

 

Revenue Contribution - 2008

 

Net interest income .............................................. 68.4%

 

Loan income .............. .............................. . 88.6%
 

 

Investment .................................................. 11.4%

 

Customer service fees.............................................8.9%

Trust fees.............................................................. 7.3%

Remittance processing............................................6.6%

Commissions and brokers’ fees................................1.6%

Gain on sales of loans.............................................2.5%

Other.....................................................................4.7%

 

New Format

 

In the next quarter, look for a new format of our investor’s report designed to provide a balanced qualitative and quantitative overview of First Busey.

 

SELECTED FINANCIAL HIGHLIGHTS

 

(dollars in thousands, except per share data)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

 

 

 

2008

 

2008

 

2007

 

2008

 

2007

 

EARNINGS & PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

8,817

 

$

4,591

 

$

11,510

 

$

23,412

 

$

27,110

 

Revenue3

 

 

47,311

 

 

45,481

 

 

40,959

 

 

137,766

 

 

93,282

 

Fully—diluted earnings per share

 

 

0.25

 

 

0.13

 

 

0.36

 

 

0.65

 

 

1.09

 

Cash dividends paid per share

 

 

0.20

 

 

0.20

 

 

0.18

 

 

0.60

 

 

0.59

 

Net income (loss) by operating segment4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Busey Bank

 

$

8,064

 

$

6,395

 

$

11,240

 

$

26,061

 

$

27,258

 

Busey Bank, N.A.

 

 

(1,393

)

 

(2,002

)

 

366

 

 

(4,442

)

 

1,008

 

Busey Wealth Management

 

 

766

 

 

871

 

 

575

 

 

2,083

 

 

1,739

 

FirsTech

 

 

705

 

 

703

 

 

306

 

 

2,037

 

 

306

 

AVERAGE BALANCES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

$

4,301,126

 

$

4,235,000

 

$

3,639,161

 

$

4,243,769

 

$

2,869,749

 

Earning assets

 

 

3,804,205

 

 

3,733,761

 

 

3,304,265

 

 

3,743,959

 

 

2,631,312

 

Deposits

 

 

3,312,634

 

 

3,200,098

 

 

2,909,176

 

 

3,247,767

 

 

2,299,752

 

Interest—bearing liabilities

 

 

3,375,151

 

 

3,289,370

 

 

2,873,767

 

 

3,306,097

 

 

2,312,805

 

Stockholders' equity

 

 

513,385

 

 

517,936

 

 

370,902

 

 

517,594

 

 

258,346

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets1

 

 

0.81

%

 

0.43

%

 

1.25

%

 

0.74

%

 

1.26

%

Return on average equity1

 

 

6.81

%

 

3.56

%

 

12.31

%

 

6.04

%

 

14.03

%

Net interest margin1

 

 

3.34

%

 

3.46

%

 

3.67

%

 

3.43

%

 

3.58

%

Efficiency ratio2

 

 

54.83

%

 

56.46

%

 

56.70

%

 

56.77

%

 

55.10

%

Non—interest revenue as a % of total revenues3

 

 

33.54

%

 

30.68

%

 

26.73

%

 

31.60

%

 

26.10

%

ASSET QUALITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross loans

 

$

3,229,394

 

$

3,166,705

 

$

3,040,881

 

 

 

 

 

 

 

Allowance for loan losses

 

 

48,674

 

 

48,579

 

 

38,198

 

 

 

 

 

 

 

Net charge—offs

 

 

7,905

 

 

6,645

 

 

630

 

 

16,336

 

 

1,063

 

Allowance for loan losses to loans

 

 

1.51

%

 

1.53

%

 

1.26

%

 

 

 

 

 

 

Allowance as a percentage of non—performing loans

 

 

68.37

%

 

82.84

%

 

159.74

%

 

 

 

 

 

 

Non—performing loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non—accrual loans

 

 

59,347

 

 

53,155

 

 

17,847

 

 

 

 

 

 

 

Loans 90+ days past due

 

 

11,847

 

 

5,486

 

 

6,065

 

 

 

 

 

 

 

Geographically

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Downstate Illinois/ Indiana

 

 

16,041

 

 

18,639

 

 

21,924

 

 

 

 

 

 

 

Florida

 

 

55,153

 

 

40,002

 

 

1,988

 

 

 

 

 

 

 

Other non—performing assets

 

 

4,846

 

 

3,095

 

 

2,138

 

 

 

 

 

 

 
1 Quarterly ratios annualized.
2 Net of security gains and amortization.
3 Net of interest expense, excludes security gains.
4 September 30, 2007 reflects two months of results following the merger with Main Street. Main Street Bank & Trust 2007 results have been combined with Busey Bank. Busey Wealth Management results    
exclude the results of Main Street Bank & Trust's trust operations for the 2007 periods presented.
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.

 

Condensed Consolidated Balance Sheets

 

 

 

 

 

 

 

 

(Unaudited, in thousands, except per share data)

September 30,

 

June 30,

 

December 31,

 

September 30,

 

 

2008

 

2008

 

2007

 

2007

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

93,443

 

$

124,639

 

$

125,228

 

$

108,037

 

Federal funds sold

 

—

 

 

—

 

 

459

 

 

43,000

 

Investment securities

 

619,984

 

 

580,891

 

 

610,422

 

 

697,802

 

Net loans

 

3,180,720

 

 

3,118,126

 

 

3,010,665

 

 

3,002,683

 

Premises and equipment

 

81,979

 

 

82,198

 

 

80,400

 

 

70,128

 

Goodwill and other intangibles

 

277,980

 

 

278,835

 

 

280,487

 

 

274,688

 

Other assets

 

85,113

 

 

80,742

 

 

85,264

 

 

91,812

 

Total assets

$

4,339,219

 

$

4,265,431

 

$

4,192,925

 

$

4,288,150

 

Liabilities & Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

Non—interest bearing deposits

$

359,028

 

$

376,452

 

$

389,672

 

$

454,875

 

Interest—bearing deposits

 

2,939,343

 

 

2,797,511

 

 

2,817,526

 

 

2,912,933

 

Total deposits

$

3,298,371

 

$

3,173,963

 

$

3,207,198

 

$

3,367,808

 

Federal funds purchased & securities sold under agreements to repurchase

 

227,386

 

 

217,734

 

 

203,119

 

 

137,463

 

Short—term borrowings

 

72,000

 

 

117,000

 

 

10,523

 

 

21,023

 

Long—term debt

 

134,910

 

 

151,910

 

 

150,910

 

 

135,825

 

Junior subordinated debt owed to unconsolidated trusts

 

55,000

 

 

55,000

 

 

55,000

 

 

55,000

 

Other liabilities

 

37,692

 

 

36,301

 

 

36,478

 

 

32,757

 

Total liabilities

$

3,825,359

 

$

3,751,908

 

$

3,663,228

 

$

3,749,876

 

Total stockholders' equity

$

513,860

 

$

513,523

 

$

529,697

 

$

538,274

 

Total liabilities & stockholders equity

$

4,339,219

 

$

4,265,431

 

$

4,192,925

 

$

4,288,150

 

Per Share Data

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

$

14.36

 

$

14.35

 

$

14.58

 

$

14.71

 

Tangible book value per share

$

6.59

 

$

6.56

 

$

6.86

 

$

7.20

 

Ending number of shares outstanding

 

35,788

 

 

35,787

 

 

36,332

 

 

36,585

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Income

 

 

 

 

 

 

 

 

(Unaudited, in thousands, except per share data)

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2008

 

2007

 

2008

 

2007

 

Interest and fees on loans

$

48,771

 

$

51,190

 

$

149,033

 

$

122,937

 

Interest on investment securities

 

6,058

 

 

6,909

 

 

18,938

 

 

14,490

 

Other interest income

 

65

 

 

703

 

 

173

 

 

990

 

Total interest income

$

54,894

 

$

58,802

 

$

168,144

 

$

138,417

 

Interest on deposits

 

19,680

 

 

24,521

 

 

61,701

 

 

58,028

 

Interest on short—term borrowings

 

1,433

 

 

1,508

 

 

4,948

 

 

3,018

 

Interest on long—term debt

 

1,494

 

 

1,748

 

 

4,615

 

 

5,420

 

Junior subordinated debt owed to unconsolidated trusts

 

846

 

 

1,013

 

 

2,651

 

 

3,015

 

Total interest expense

$

23,453

 

$

28,790

 

$

73,915

 

$

69,481

 

Net interest income

$

31,441

 

$

30,012

 

$

94,229

 

$

68,936

 

Provision for loan losses

 

8,000

 

 

1,795

 

 

22,450

 

 

2,775

 

Net interest income after provision for loan losses

$

23,441

 

$

28,217

 

$

71,779

 

$

66,161

 

Fees for customer services

 

4,405

 

 

3,433

 

 

12,250

 

 

9,022

 

Trust fees

 

3,342

 

 

2,691

 

 

10,113

 

 

6,090

 

Remittance processing

 

3,114

 

 

1,746

 

 

9,089

 

 

1,746

 

Commissions and brokers' fees

 

792

 

 

707

 

 

2,180

 

 

1,949

 

Gain on sales of loans

 

1,082

 

 

994

 

 

3,448

 

 

2,414

 

Net security gains

 

7

 

 

2,065

 

 

509

 

 

2,995

 

Other

 

3,135

 

 

1,376

 

 

6,457

 

 

3,125

 

Total non—interest income

$

15,877

 

$

13,012

 

$

44,046

 

$

27,341

 

Salaries and wages

 

11,534

 

 

11,698

 

 

34,897

 

 

25,397

 

Employee benefits

 

2,708

 

 

2,058

 

 

8,430

 

 

4,995

 

Net occupancy expense

 

2,326

 

 

1,988

 

 

7,115

 

 

4,814

 

Furniture and equipment expense

 

1,989

 

 

1,370

 

 

6,256

 

 

3,049

 

Data processing expense

 

1,570

 

 

1,715

 

 

4,886

 

 

2,731

 

Amortization expense

 

1,129

 

 

876

 

 

3,388

 

 

1,385

 

Other operating expenses

 

6,123

 

 

4,690

 

 

17,652

 

 

11,244

 

Total non—interest expense

$

27,379

 

$

24,395

 

$

82,624

 

$

53,615

 

Income before income taxes

$

11,939

 

$

16,834

 

$

33,201

 

$

39,887

 

Income taxes

 

3,122

 

 

5,324

 

 

9,789

 

 

12,777

 

Net income

$

8,817

 

$

11,510

 

$

23,412

 

$

27,110

 

Per Share Data

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

$

0.25

 

$

0.37

 

$

0.65

 

$

1.09

 

Fully—diluted earnings per share

$

0.25

 

$

0.36

 

$

0.65

 

$

1.09

 

Diluted average shares outstanding

 

35,856

 

 

31,655

 

 

35,972

 

 

24,939