UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 27, 2009
FIRST BUSEY CORPORATION
(Exact Name of Registrant as Specified in Charter)
|
Nevada |
0-15959 |
37-1078406 |
|
|
(State or Other |
(Commission |
(I.R.S. Employer |
|
|
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) |
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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)) |
|
ITEM 2.02 |
RESULTS OF OPERATIONS AND FINANCIAL CONDITION. |
On Tuesday, January 27, 2009, the Registrant issued a press release disclosing
financial results for the quarter and year ended December 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
|
|
(d) |
Exhibits: |
|
|
99.1 |
Press Release, dated January 27, 2009. |
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: January 29, 2009 |
FIRST BUSEY CORPORATION |
By: /s/ Barbara J. Harrington
|
|
Name: Barbara J. Harrington |
|
|
Title: Chief Financial Officer |
First Busey Announces 2008 Year-end Results
Message from our President & CEO
Urbana, IL - First Busey Corporation’s (Nasdaq: BUSE) consolidated net loss for the year ended December 31, 2008 was $15.3 million, or $0.43 per fully-diluted share, compared to net income of $31.5 million, or $1.13 per fully-diluted share, for the year ended December 31, 2007. The consolidated net loss is primarily due to $98.3 million in provision for loan losses recorded during 2008, including $75.8 million in the fourth quarter of 2008. In comparison, we recorded $14.5 million in provision for loan losses during 2007.
We ended the year with an allowance for loan losses of $98.7 million, which represents 117% coverage of non-performing loans at December 31, 2008 as compared to 68% coverage of non-performing loans at September 30, 2008. Approximately 79% of our $42.1 million of net charge offs in 2008 were attributable to southwest Florida loans.
This increased allowance for loan losses positions us well for future earnings performance. During the past year, we have continued to diligently evaluate our loan portfolio, with an emphasis on our southwest Florida loan portfolio. The southwest Florida loan portfolio represents 22.7% of our combined loan portfolio, but 72.7% of our non-performing loans. The action we took in the fourth quarter is a result of this thorough evaluation.
In addition, as you may recall from my comments at our 2008 annual meeting, and in various press releases, I said that we would continue to see elevated credit risk, particularly in the southwest Florida loan portfolio. While our downstate Illinois and Indianapolis markets are experiencing some softening, the markets remain remarkably stable in terms of asset performance. The southwest Florida market has yet to show tangible signs of economic improvement. The duration and depth of the current economic challenges are unknown. We will continue to take a conservative approach and proactively address issues within our loan portfolio.
Despite the overall challenging economic times, there are many positives to report about Busey.
Our banks are well capitalized. Under regulatory standards, our banks continue to be well capitalized. Well capitalized is a greater regulatory standard than adequately capitalized. Although the challenging economic environment has made it difficult to build capital, we are committed to maintaining the highest regulatory standard of well capitalized for our banks.
Our core earnings are strong. Despite the challenging economy during 2008, including some of the lowest interest rates in the history of the United States, our core earnings improved over 2007. Absent the $83.8 million, $50.5 million after-tax, of increased provision expense recorded in 2008 as compared to 2007, our net income would have increased to $35.2 million in 2008 as compared to $31.5 million in 2007. This improvement was in spite of a challenging credit and net interest margin environment and additional costs to achieve the efficiencies inherent in the merger. These core earnings, coupled with additional synergies from our recent merger and our significant allocation of capital to our allowance for loan losses, positions us well for future earnings results.
Downstate Illinois growth remains strong. While it is widely noted in the national press that banks are not lending, Busey is lending when it sees good opportunity. We grew our loan portfolio in excess of $200 million during 2008, due to a strong supply of growth opportunities in downstate Illinois. While we did not grow our loan portfolio in southwest Florida, the blend of strong agricultural, manufacturing, academia and healthcare prevalent in our downstate Illinois markets demanded growth from our communities throughout 2008. This provided Busey Bank with many opportunities to fund quality loans, whereby we assisted our communities at a time of economic contraction.
We have a diversified revenue stream. A significant component of our value resides in our non-interest bearing revenue channels, primarily Busey Wealth Management and FirsTech. Continued growth in the non-interest revenue channels will benefit our customers and shareholders through increased access to products and earnings diversification away from credit and interest related sources. Growth in these non-interest related areas is a priority for Busey.
Customers remain our first priority. Long before it was the trend or mandated by the popular press, we have been working with our customers in all of our markets to provide them a means to resolve their credit issues. We want our customers to succeed. During this challenging economy, it is good business practice to work with our customers who maintain a stable plan and have the means to successfully execute the plan.
2008 completed 14 Years of dividend growth. 2008 completed our 14th straight year of growth in dividends per share and our 29th year of at least a sustained dividend. Despite the economic challenges, our core earnings have allowed us to maintain our dividend throughout 2008. Further, we recently announced a $0.20 per share dividend will be paid on January 30, 2009 to shareholders of record on January 27, 2009. A sustained dividend is one way we continue to deliver long-term returns to our shareholders.
In summary, our banks are well capitalized, core earnings are strong, we have a diversified revenue stream that mitigates the effects of challenging interest rate environments, we have maintained our dividend through the first quarter of 2009 and we allocated significant capital to our allowance for loan losses to position us well for the future.
As always, your input and questions are welcome. Thank you for your continued support.
\s\ Van A. Dukeman
Corporate Profile
First Busey Corporation is a $4.5 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 December 31, 2008, Busey Bank had total assets of $4.0 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 $452.4 million as of December 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 December 31, 2008, Busey Wealth Management had approximately $3.5 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.
|
SELECTED FINANCIAL HIGHLIGHTS |
|
|||||||||||||||
|
(dollars in thousands, except per share data) |
|
|||||||||||||||
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|||||||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|||||
|
|
|
2008 |
|
2008 |
|
2007 |
|
2008 |
|
2007 |
|
|||||
|
EARNINGS & PER SHARE DATA |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net income/(loss) |
|
$ |
(38,758 |
) |
$ |
8,817 |
|
$ |
4,367 |
|
$ |
(15,346 |
) |
$ |
31,477 |
|
|
Revenue3 |
|
|
41,385 |
|
|
47,311 |
|
|
46,190 |
|
|
179,151 |
|
|
139,472 |
|
|
Fully—diluted earnings per share |
|
|
(1.08 |
) |
|
0.25 |
|
|
0.12 |
|
|
(0.43 |
) |
|
1.13 |
|
|
Cash dividends paid per share |
|
|
0.20 |
|
|
0.20 |
|
|
0.18 |
|
|
0.80 |
|
|
0.77 |
|
|
Net income (loss) by operating segment4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Busey Bank |
|
$ |
(24,747 |
) |
$ |
8,064 |
|
$ |
7,830 |
|
$ |
1,314 |
|
$ |
35,088 |
|
|
Busey Bank, N.A. |
|
|
(13,290 |
) |
|
(1,393 |
) |
|
(3,589 |
) |
|
(17,732 |
) |
|
(2,581 |
) |
|
Busey Wealth Management |
|
|
457 |
|
|
766 |
|
|
669 |
|
|
2,540 |
|
|
2,408 |
|
|
FirsTech |
|
|
490 |
|
|
705 |
|
|
438 |
|
|
2,527 |
|
|
744 |
|
|
AVERAGE BALANCES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
$ |
4,399,387 |
|
$ |
4,301,126 |
|
$ |
4,154,710 |
|
$ |
4,282,466 |
|
$ |
3,186,582 |
|
|
Earning assets |
|
|
3,892,209 |
|
|
3,804,205 |
|
|
3,651,718 |
|
|
3,781,169 |
|
|
2,891,348 |
|
|
Deposits |
|
|
3,376,011 |
|
|
3,312,634 |
|
|
3,209,772 |
|
|
3,279,867 |
|
|
2,530,800 |
|
|
Interest—bearing liabilities |
|
|
3,485,063 |
|
|
3,375,151 |
|
|
3,297,075 |
|
|
3,351,212 |
|
|
2,575,915 |
|
|
Stockholders’ equity |
|
|
504,329 |
|
|
513,385 |
|
|
535,911 |
|
|
513,800 |
|
|
318,155 |
|
|
PERFORMANCE RATIOS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets1 |
|
|
(3.50 |
%) |
|
0.81 |
% |
|
0.42 |
% |
|
(0.36 |
%) |
|
0.99 |
% |
|
Return on average equity1 |
|
|
(30.57 |
%) |
|
6.81 |
% |
|
3.23 |
% |
|
(2.99 |
%) |
|
9.89 |
% |
|
Net interest margin1 |
|
|
3.04 |
% |
|
3.34 |
% |
|
3.60 |
% |
|
3.33 |
% |
|
3.58 |
% |
|
Efficiency ratio2 |
|
|
68.31 |
% |
|
54.83 |
% |
|
63.22 |
% |
|
59.44 |
% |
|
57.78 |
% |
|
Non—interest revenue as a % of total revenues3 |
|
|
29.67 |
% |
|
33.54 |
% |
|
29.50 |
% |
|
31.16 |
% |
|
27.23 |
% |
|
ASSET QUALITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross loans |
|
$ |
3,257,581 |
|
$ |
3,229,394 |
|
$ |
3,053,225 |
|
|
|
|
|
|
|
|
Allowance for loan losses |
|
|
98,671 |
|
|
48,674 |
|
|
42,560 |
|
|
|
|
|
|
|
|
Net charge—offs |
|
|
25,803 |
|
|
7,905 |
|
|
7,287 |
|
|
42,139 |
|
|
8,350 |
|
|
Allowance for loan losses to loans |
|
|
3.03 |
% |
|
1.51 |
% |
|
1.39 |
% |
|
|
|
|
|
|
|
Allowance as a percentage of non—performing loans |
|
|
117.20 |
% |
|
68.37 |
% |
|
211.95 |
% |
|
|
|
|
|
|
|
Non—performing loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non—accrual loans |
|
|
68,347 |
|
|
59,347 |
|
|
15,370 |
|
|
|
|
|
|
|
|
Loans 90+ days past due |
|
|
15,845 |
|
|
11,847 |
|
|
4,710 |
|
|
|
|
|
|
|
|
Geographically |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Downstate Illinois/ Indiana |
|
|
22,986 |
|
|
16,041 |
|
|
11,013 |
|
|
|
|
|
|
|
|
Florida |
|
|
61,206 |
|
|
55,153 |
|
|
9,067 |
|
|
|
|
|
|
|
|
Other non—performing assets |
|
|
15,794 |
|
|
4,846 |
|
|
2,028 |
|
|
|
|
|
|
|
|
1 |
Quarterly ratios annualized. |
|
2 |
Net of security gains and amortization. |
|
3 |
Net of interest expense, excludes security gains. |
|
4 |
Year ended December 31, 2007 reflects five 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 include two months of results of Main Street Bank & Trust's trust operations for the 2007 periods presented. |
|
Condensed Consolidated Balance Sheets |
|
|
|
|
|
|
|
|||
|
(Unaudited, in thousands, except per share data) |
|
December 31, |
|
September 30, |
|
December 31, |
|
|||
|
|
|
2008 |
|
2008 |
|
2007 |
|
|||
|
Assets |
|
|
|
|
|
|
|
|||
|
Cash and due from banks |
|
$ |
190,113 |
|
$ |
93,443 |
|
$ |
125,228 |
|
|
Federal funds sold |
|
|
— |
|
|
— |
|
|
459 |
|
|
Investment securities |
|
|
654,130 |
|
|
619,984 |
|
|
610,422 |
|
|
Net loans |
|
|
3,158,910 |
|
|
3,180,720 |
|
|
3,010,665 |
|
|
Premises and equipment |
|
|
81,732 |
|
|
81,979 |
|
|
80,400 |
|
|
Goodwill and other intangibles |
|
|
279,469 |
|
|
277,980 |
|
|
280,487 |
|
|
Other assets |
|
|
118,340 |
|
|
85,113 |
|
|
85,264 |
|
|
Total assets |
|
$ |
4,482,694 |
|
$ |
4,339,219 |
|
$ |
4,192,925 |
|
|
Liabilities & Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
Non—interest bearing deposits |
|
$ |
378,007 |
|
$ |
359,028 |
|
$ |
389,672 |
|
|
Interest—bearing deposits |
|
|
3,128,686 |
|
|
2,939,343 |
|
|
2,817,526 |
|
|
Total deposits |
|
$ |
3,506,693 |
|
$ |
3,298,371 |
|
$ |
3,207,198 |
|
|
Federal funds purchased & securities |
|
|
|
|
|
|
|
|
|
|
|
sold under agreements to repurchase |
|
|
182,980 |
|
|
227,386 |
|
|
203,119 |
|
|
Short—term borrowings |
|
|
83,000 |
|
|
72,000 |
|
|
10,523 |
|
|
Long—term debt |
|
|
134,493 |
|
|
134,910 |
|
|
150,910 |
|
|
Junior subordinated debt owed to unconsolidated trusts |
|
|
55,000 |
|
|
55,000 |
|
|
55,000 |
|
|
Other liabilities |
|
|
43,110 |
|
|
37,692 |
|
|
36,478 |
|
|
Total liabilities |
|
$ |
4,005,276 |
|
$ |
3,825,359 |
|
$ |
3,663,228 |
|
|
Total stockholders' equity |
|
$ |
477,418 |
|
$ |
513,860 |
|
$ |
529,697 |
|
|
Total liabilities & stockholders' equity |
|
$ |
4,482,694 |
|
$ |
4,339,219 |
|
$ |
4,192,925 |
|
|
Per Share Data |
|
|
|
|
|
|
|
|
|
|
|
Book value per share |
|
$ |
13.33 |
|
$ |
14.36 |
|
$ |
14.58 |
|
|
Tangible book value per share |
|
$ |
5.53 |
|
$ |
6.59 |
|
$ |
6.86 |
|
|
Ending number of shares outstanding |
|
|
35,815 |
|
|
35,788 |
|
|
36,332 |
|
|
Condensed Consolidated Statements of Income |
|
Three Months Ended |
|
Twelve Months Ended |
|
|||||||||||
|
(Unaudited, in thousands, except per share data) |
|
December 31, |
|
December 31, |
|
|||||||||||
|
|
|
2008 |
|
2007 |
|
2008 |
|
2007 |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Interest and fees on loans |
|
$ |
46,088 |
|
$ |
55,763 |
|
$ |
195,121 |
|
$ |
178,700 |
|
|||
|
Interest on investment securities |
|
|
6,237 |
|
|
7,375 |
|
|
25,175 |
|
|
21,865 |
|
|||
|
Other interest income |
|
|
15 |
|
|
348 |
|
|
188 |
|
|
1,338 |
|
|||
|
Total interest income |
|
$ |
52,340 |
|
$ |
63,486 |
|
$ |
220,484 |
|
$ |
201,903 |
|
|||
|
Interest on deposits |
|
|
19,507 |
|
|
26,169 |
|
|
81,208 |
|
|
84,197 |
|
|||
|
Interest on short—term borrowings |
|
|
1,370 |
|
|
1,745 |
|
|
6,318 |
|
|
4,763 |
|
|||
|
Interest on long—term debt |
|
|
1,519 |
|
|
1,987 |
|
|
6,134 |
|
|
7,407 |
|
|||
|
Junior subordinated debt owed to unconsolidated trusts |
|
|
837 |
|
|
1,023 |
|
|
3,488 |
|
|
4,038 |
|
|||
|
Total interest expense |
|
$ |
23,233 |
|
$ |
30,924 |
|
$ |
97,148 |
|
$ |
100,405 |
|
|||
|
Net interest income |
|
$ |
29,107 |
|
$ |
32,562 |
|
$ |
123,336 |
|
$ |
101,498 |
|
|||
|
Provision for loan losses |
|
|
75,800 |
|
|
11,700 |
|
|
98,250 |
|
|
14,475 |
|
|||
|
Net interest income (loss) after provision for loan losses |
|
$ |
(46,693 |
) |
$ |
20,862 |
|
$ |
25,086 |
|
$ |
87,023 |
|
|||
|
Fees for customer services |
|
|
4,371 |
|
|
3,923 |
|
|
16,621 |
|
|
12,945 |
|
|||
|
Trust fees |
|
|
3,332 |
|
|
3,951 |
|
|
13,445 |
|
|
10,041 |
|
|||
|
Remittance processing |
|
|
3,026 |
|
|
2,720 |
|
|
12,115 |
|
|
4,466 |
|
|||
|
Commissions and brokers' fees |
|
|
584 |
|
|
604 |
|
|
2,764 |
|
|
2,553 |
|
|||
|
Gain on sales of loans |
|
|
909 |
|
|
818 |
|
|
4,357 |
|
|
3,232 |
|
|||
|
Net security gains |
|
|
96 |
|
|
723 |
|
|
605 |
|
|
3,718 |
|
|||
|
Other |
|
|
56 |
|
|
1,612 |
|
|
6,513 |
|
|
4,737 |
|
|||
|
Total non—interest income |
|
$ |
12,374 |
|
$ |
14,351 |
|
$ |
56,420 |
|
$ |
41,692 |
|
|||
|
Salaries and wages |
|
|
11,964 |
|
|
11,914 |
|
|
46,861 |
|
|
37,311 |
|
|||
|
Employee benefits |
|
|
2,269 |
|
|
3,362 |
|
|
10,699 |
|
|
8,357 |
|
|||
|
Net occupancy expense |
|
|
2,485 |
|
|
2,635 |
|
|
9,600 |
|
|
7,449 |
|
|||
|
Furniture and equipment expense |
|
|
1,976 |
|
|
1,785 |
|
|
8,232 |
|
|
4,834 |
|
|||
|
Data processing expense |
|
|
1,969 |
|
|
2,568 |
|
|
6,855 |
|
|
5,299 |
|
|||
|
Amortization expense |
|
|
1,129 |
|
|
1,118 |
|
|
4,517 |
|
|
2,503 |
|
|||
|
Other operating expenses |
|
|
8,004 |
|
|
7,308 |
|
|
25,656 |
|
|
18,552 |
|
|||
|
Total non—interest expense |
|
$ |
29,796 |
|
$ |
30,690 |
|
$ |
112,420 |
|
$ |
84,305 |
|
|||
|
Income (loss) before income taxes |
|
$ |
(64,115 |
) |
$ |
4,523 |
|
$ |
(30,914 |
) |
$ |
44,410 |
|
|||
|
Income taxes |
|
|
(25,357 |
) |
|
156 |
|
|
(15,568 |
) |
|
12,933 |
|
|||
|
Net income (loss) |
|
$ |
(38,758 |
) |
$ |
4,367 |
|
$ |
(15,346 |
) |
$ |
31,477 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Per Share Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Basic earnings (loss) per share |
|
$ |
(1.08 |
) |
$ |
0.12 |
|
$ |
(0.43 |
) |
$ |
1.13 |
|
|||
|
Fully—diluted earnings (loss) per share |
|
$ |
(1.08 |
) |
$ |
0.12 |
|
$ |
(0.43 |
) |
$ |
1.13 |
|
|||
|
Diluted average shares outstanding |
|
|
35,893 |
|
|
36,783 |
|
|
35,952 |
|
|
27,924 |
|
|||