SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended 6/30/2002 Commission File No. 0-15950 FIRST BUSEY CORPORATION (Exact name of registrant as specified in its charter) Nevada 37-1078406 - ---------------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification Incorporation or organization) No.) 201 W. Main St., Urbana, Illinois 61801 - ---------------------------------------- ------------------------------------ (Address of principal (Zip Code) executive offices) Registrant's telephone number, including area code: (217) 365-4556 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date. Class Outstanding at August 1, 2002 - ------------------------------------------------------------------------------- Common Stock, without par value 13,612,920 1 of 25

PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS 2 of 25

FIRST BUSEY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2002 AND DECEMBER 31, 2001 (UNAUDITED)

June 30, 2002 December 31, 2001 ------------------- --------------------- (Dollars in thousands) ASSETS Cash and due from banks $ 43,893 $ 41,580 Federal funds sold 27,700 20,000 Securities available for sale (amortized cost 2002, $203,262; 2001, $197,398) 218,482 210,869 Loans 1,009,151 978,106 Allowance for loan losses (13,810) (13,688) ------------------ --------------------- Net loans $ 995,341 $ 964,418 Premises and equipment 28,258 29,081 Goodwill 9,293 9,293 Other intangible assets 987 1,211 Cash surrender value of bank owned life insurance 10,791 10,111 Other assets 21,820 14,126 ------------------ --------------------- Total assets $ 1,356,565 $ 1,300,689 ================== ===================== LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Deposits: Noninterest bearing $ 134,671 $ 138,685 Interest bearing 1,001,141 967,314 ------------------ --------------------- Total deposits $ 1,135,812 $ 1,105,999 Securities sold under agreements to repurchase 5,021 9,767 Short-term borrowings - 2,000 Long-term debt 70,021 47,021 Company obligated mandatorily redeemable preferred securities 25,000 25,000 Other liabilities 9,940 5,112 ------------------ --------------------- Total liabilities $ 1,245,794 $ 1,194,899 ------------------ --------------------- STOCKHOLDERS' EQUITY Preferred stock $ - $ - Common stock 6,291 6,291 Surplus 20,906 21,170 Retained earnings 86,764 81,861 Accumulated other comprehensive income 9,182 8,128 ------------------ --------------------- Total stockholders' equity before treasury stock, unearned ESOP shares and deferred compensation for stock grants $ 123,143 $ 117,450 Treasury stock, at cost (10,205) (9,639) Unearned ESOP shares and deferred compensation for stock grants (2,167) (2,021) ------------------ --------------------- Total stockholders' equity $ 110,771 $ 105,790 ------------------ --------------------- Total liabilities and stockholders' equity $ 1,356,565 $ 1,300,689 ================== ===================== Common Shares outstanding at period end 13,650,920 13,677,688 ================== =====================
See notes to unaudited consolidated financial statements. 3 of 25

FIRST BUSEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (UNAUDITED)

2002 2001 ------------------- ------------------ (Dollars in thousands, except per share amounts) INTEREST INCOME: Interest and fees on loans $ 32,637 $ 40,513 Interest and dividends on investment securities: Taxable interest income 3,659 5,278 Non-taxable interest income 977 1,038 Dividends 61 59 Interest on federal funds sold 86 749 ------------------ ------------------ Total interest income $ 37,420 $ 47,637 ------------------ ------------------ INTEREST EXPENSE: Deposits $ 12,366 $ 23,083 Short-term borrowings 265 1,457 Long-term debt 1,405 1,393 Company obligated mandatorily redeemable preferred securities 1,125 72 ------------------ ------------------ Total interest expense $ 15,161 $ 26,005 ------------------ ------------------ Net interest income $ 22,259 $ 21,632 Provision for loan losses 1,480 895 ------------------ ------------------ Net interest income after provision for loan losses $ 20,779 $ 20,737 ------------------ ------------------ OTHER INCOME: Trust $ 2,499 $ 2,406 Commissions and brokers fees, net 1,095 1,164 Service charges on deposit accounts 3,411 2,907 Other service charges and fees 862 815 Security gains, net 473 872 Gain on sales of loans 1,356 966 Net commissions from travel services - 526 Other operating income 1,354 1,448 ------------------ ------------------ Total other income $ 11,050 $ 11,104 ------------------ ------------------ OTHER EXPENSES: Salaries and wages $ 8,640 $ 8,641 Employee benefits 1,823 1,803 Net occupancy expense of premises 1,557 1,533 Furniture and equipment expenses 1,672 1,968 Data processing 417 391 Stationery, supplies and printing 490 541 Amortization of intangible assets 224 715 Other operating expenses 3,572 3,538 ------------------ ------------------ Total other expenses $ 18,395 $ 19,130 ------------------ ------------------ Income before income taxes $ 13,434 $ 12,711 Income taxes 4,457 4,586 ------------------ ------------------ NET INCOME $ 8,977 $ 8,125 ================== ================== BASIC EARNINGS PER SHARE $ 0.66 $ 0.60 ================== ================== DILUTED EARNINGS PER SHARE $ 0.66 $ 0.60 ================== ================== DIVIDENDS DECLARED PER SHARE OF COMMON STOCK $ 0.30 $ 0.26 ================== ==================
See notes to unaudited consolidated financial statements. 4 of 25

FIRST BUSEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE QUARTERS ENDED JUNE 30, 2002 AND 2001 (UNAUDITED)

2002 2001 ------------------- ------------------ (Dollars in thousands, except per share amounts) INTEREST INCOME: Interest and fees on loans $ 16,233 $ 19,945 Interest and dividends on investment securities: Taxable interest income 1,873 2,554 Non-taxable interest income 493 520 Dividends 30 29 Interest on federal funds sold 28 240 ------------------ ------------------ Total interest income $ 18,657 $ 23,288 ------------------ ------------------ INTEREST EXPENSE: Deposits $ 6,101 $ 11,056 Short-term borrowings 126 664 Long-term debt 750 632 Company obligated mandatorily redeemable preferred securities 562 72 ------------------ ------------------ Total interest expense $ 7,539 $ 12,424 ------------------ ------------------ Net interest income $ 11,118 $ 10,864 Provision for loan losses 915 495 ------------------ ------------------ Net interest income after provision for loan losses $ 10,203 $ 10,369 ------------------ ------------------ OTHER INCOME: Trust $ 1,249 $ 1,255 Commissions and brokers fees, net 554 567 Service charges on deposit accounts 1,855 1,528 Other service charges and fees 440 418 Security gains, net 199 221 Gains on sales of pooled loans 559 533 Net commissions from travel services - 254 Other operating income 730 936 ------------------ ------------------ Total other income $ 5,586 $ 5,712 ------------------ ------------------ OTHER EXPENSES: Salaries and wages $ 4,342 $ 4,377 Employee benefits 892 835 Net occupancy expense of premises 782 731 Furniture and equipment expenses 840 997 Data processing 222 201 Stationary, supplies and printing 257 284 Amortization of intangible assets 112 357 Other operating expenses 1,953 2,020 ------------------ ------------------ Total other expenses $ 9,400 $ 9,802 ------------------ ------------------ Income before income taxes $ 6,389 $ 6,279 Income taxes 2,102 2,252 ------------------ ------------------ NET INCOME $ 4,287 $ 4,027 ================== ================== BASIC EARNINGS PER SHARE $ 0.32 $ 0.30 ================== ================== DILUTED EARNINGS PER SHARE $ 0.32 $ 0.30 ================== ================== DIVIDENDS DECLARED PER SHARE OF COMMON STOCK $ 0.15 $ 0.13 ================== ==================
See notes to unaudited consolidated financial statements. 5 of 25

FIRST BUSEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (UNAUDITED)

2002 2001 ------------------ ------------------ (Dollars in thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 8,977 $ 8,125 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation 57 3 Depreciation and amortization 1,961 2,767 Provision for loan losses 1,480 895 Provision for deferred income taxes 766 (1,533) Amortization of investment security discounts (212) (543) Gain on sales of investment securities, net (473) (872) Proceeds from sales of loans 100,922 98,391 Loans originated for sale (89,363) (118,109) Gain on sale of loans (1,356) (966) Gain on sale and disposition of premises and equipment (28) (1) Change in assets and liabilities: Increase in other assets (1,904) (723) Increase in accrued expenses 3,104 1,184 Increase (decrease) in interest payable 264 (1,031) Decrease in income taxes receivable 22 172 Increase in income taxes payable - 251 ----------------- ------------------ Net cash provided by (used in) operating activities $ 24,217 $ (11,990) ----------------- ------------------ CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of securities classified available for sale 17,544 3,213 Proceeds from maturities of securities classified available for sale 36,020 73,762 Purchase of securities classified available for sale (58,744) (67,104) Increase in federal funds sold (7,700) (7,800) (Increase) decrease in loans (48,418) 35,103 Increase in cash surrender value of bank owned life insurance (336) - Proceeds from sale of premises and equipment 106 2 Purchases of premises and equipment (992) (875) Increase in investment in bank owned life insurance (344) - ----------------- ------------------ Net cash (used in) provided by investing activities $ (62,864) $ 36,301 ----------------- ------------------ CASH FLOWS FROM FINANCING ACTIVITIES Net increase (decrease) in certificates of deposit $ 36,320 $ (25,074) Net (decrease) increase in demand, money market and saving deposits (6,507) 11,102 Cash dividends paid (4,074) (3,494) Purchase of treasury stock (1,796) (2,454) Proceeds from sale of treasury stock 763 2,886 Net decrease in securities sold under agreement to repurchase & federal funds purchased (4,746) (2,488) Proceeds from short-term borrowings 500 2,500 Principal payments on short-term borrowings (2,500) (27,500) Proceeds from issuance of long-term debt 31,000 - Proceeds from issuance of trust preferred securities - 25,000 Principal payments on long-term borrowings (8,000) (9,976) ----------------- ------------------ Net cash provided by (used in) financing activities $ 40,960 $ (29,498) ----------------- ------------------ Net increase (decrease) in cash and due from banks $ 2,313 $ (5,187) Cash and due from banks, beginning 41,580 $ 58,585 ----------------- ------------------ Cash and due from banks, ending $ 43,893 $ 53,398 ================= ==================
6 of 25

FIRST BUSEY CORPORATION AND SUBSIDIARIES SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001 (UNAUDITED)

2002 2001 ------------------ ------------------ (Dollars in thousands) ---------------------------------------- Other real estate acquired in settlement of loans $ 5,812 $ - ================= ================== See notes to unaudited consolidated financial statements.
FIRST BUSEY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
2002 2001 ------------------- ------------------ (Dollars in thousands, except per share amounts) Net income $ 8,977 $ 8,125 ------------------ ------------------ Other comprehensive income, before tax: Unrealized gains on securities: Unrealized holding gains arising during period $ 2,221 $ 2,874 Less reclassification adjustment for gains included in net income (473) (872) ------------------ ------------------ Other comprehensive income, before tax $ 1,748 $ 2,002 Income tax expense related to items of other comprehensive income 694 794 ------------------ ------------------ Other comprehensive income, net of tax $ 1,054 $ 1,208 ------------------ ------------------ Comprehensive income $ 10,031 $ 9,333 ================== ==================
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FIRST BUSEY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: INTERIM FINANCIAL STATEMENTS The consolidated interim financial statements of First Busey Corporation and Subsidiaries are unaudited, but in the opinion of management reflect all necessary adjustments, consisting only of normal recurring accruals, for a fair presentation of results as of the dates and for the periods covered by the financial statements. In preparing the consolidated financial statements, the Corporation's management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from those estimates. The results for the interim periods are not necessarily indicative of the results of operations that may be expected for the fiscal year. NOTE 2: LOANS The major classifications of loans at June 30, 2002 and December 31, 2001 were as follows:

June 30, 2002 December 31, 2001 ------------------------------------------------ (Dollars in thousands) Commercial $ 117,379 $ 121,694 Real estate construction 96,482 83,701 Real estate - farmland 12,991 14,414 Real estate - 1-4 family residential mortgage 383,031 371,154 Real estate - multifamily mortgage 53,972 54,265 Real estate - non-farm nonresidential mortgage 268,061 253,932 Installment 56,873 57,924 Agricultural 20,362 21,022 ----------------------------------------------- $ 1,009,151 $ 978,106 Less: Allowance for loan losses (13,810) (13,688) ----------------------------------------------- Net loans $ 995,341 $ 964,418 ===============================================
The real estate-mortgage category includes loans held for sale with carrying values of $11,681,000 at June 30, 2002 and $21,884,000 at December 31, 2001; these loans had fair market values of $11,866,000 and $22,069,000 respectively. The following table sets forth the maturities of the loan portfolio:
1 year or less Over 1 year Over 5 years Total through 5 years ------------------- ------------------- ------------------- -------------------- (Dollars in thousands) Commercial and agricultural $ 87,310 $ 33,397 $ 17,034 $ 137,741 Real Estate 159,987 329,710 324,840 814,537 Installment 12,613 41,182 3,078 56,873 ------------------ ------------------- ------------------- -------------------- $ 259,910 $ 404,289 $ 344,952 $ 1,009,151 ================== =================== =================== ==================== Fixed Rate $ 89,456 $ 265,514 $ 86,310 $ 441,280 Floating Rate 170,454 138,775 258,642 567,871 ------------------ ------------------- ------------------- -------------------- $ 259,910 $ 404,289 $ 344,952 $ 1,009,151 ================== =================== =================== ====================
8 of 25

FIRST BUSEY CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS NOTE 3: EARNINGS PER SHARE Net income per common share has been computed as follows:

Three Months Ended Six Months Ended June 30, June 30, 2002 2001 2002 2001 ------------------------------------------------------------- Net income $ 4,287,000 $ 4,027,000 $ 8,977,000 $ 8,125,000 Shares: Weighted average common shares outstanding 13,564,129 13,500,603 13,572,538 13,435,161 Dilutive effect of outstanding options, as determined by the application of the treasury stock method 78,589 51,339 77,066 161,879 ------------------------------------------------------------ Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation 13,642,718 13,551,942 13,649,604 13,597,040 ============================================================ Basic earnings per share $ 0.32 $ 0.30 $ 0.66 $ 0.60 ============================================================ Diluted earnings per share $ 0.32 $ 0.30 $ 0.66 $ 0.60 ============================================================
NEW ACCOUNTING PRONOUNCEMENTS Effective January 1, 2002, First Busey Corporation applied FASB Statement No. 142, Goodwill and Other Intangible Assets. Among its provisions is a requirement to disclose what reported net income would have been in all periods presented exclusive of amortization expense, net of related income tax effects, recognized in those periods related to goodwill, intangible assets no longer being amortized, and changes in amortization periods for intangible assets that will continue to be amortized together with related per share amounts.
Three Months Ended Six Months Ended June 30, June 30, 2002 2001 2002 2001 ------------- ------------ ------------ ----------- Reported net income $ 4,287 $ 4,027 $ 8,977 $ 8,125 Add goodwill amortization - 234 - 467 ------------- ------------ ------------ ----------- Adjusted net income $ 4,287 $ 4,261 $ 8,977 $ 8,592 ============= ============ ============ =========== BASIC EARNINGS PER SHARE Reported net income $ 0.32 $ 0.30 $ 0.66 $ 0.60 Goodwill amortization - 0.02 - 0.04 ------------- ------------ ------------ ----------- Adjusted net income $ 0.32 $ 0.32 $ 0.66 $ 0.64 ============= ============ ============ =========== DILUTED EARNINGS PER SHARE Reported net income $ 0.32 $ 0.30 $ 0.66 $ 0.60 Goodwill amortization - 0.01 - 0.03 ------------- ------------ ------------ ----------- Adjusted net income $ 0.32 $ 0.31 $ 0.66 $ 0.63 ============= ============ ============ ===========
In June, 2001, Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations," was issued to address financial reporting and obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This Statement applies to all entities and to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development or normal operations of a long-lived asset, except for certain obligations of lessees. Statement No. 143 is effective for financial statements issued for fiscal years beginning after June 15, 2002. The Corporation does not believe the adoption of the Standard will have a material impact on the consolidated financial statements. 9 of 25

In August, 2001, Statement on Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-lived Assets," was issued to supercede Statement No. 121, "Accounting for Impairment and for Long-lived Assets to Be Disposed Of," and the accounting and reporting provisions of APB Opinion No. 30, "Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions." Statement No. 144 is effective for financial statements issued for fiscal years beginning after December 15, 2002, and interim periods within those fiscal years, with early application encouraged. The Corporation does not believe the adoption of the Standard will have a material impact on the consolidated financial statements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management's discussion and analysis of the financial condition of First Busey Corporation and Subsidiaries ("Corporation") at June 30, 2002 (unaudited) as compared with December 31, 2001 and the results of operations for the six months ended June 30, 2002 and 2001 (unaudited) and the results of operations for the three months ended June 30, 2002 and 2001 (unaudited). This discussion and analysis should be read in conjunction with the Corporation's consolidated financial statements and notes thereto appearing elsewhere in this quarterly report. The accompanying unaudited financial statements should be read in conjunction with the First Busey Corporation consolidated financial statements and related notes appearing in the 2001 annual report previously filed on Form 10-K. FINANCIAL CONDITION AT JUNE 30, 2002 AS COMPARED TO DECEMBER 31, 2001 Total assets increased $55,876,000 or 4.3%, to $1,356,565,000 at June 30, 2002 from $1,300,689,000 at December 31, 2001. Securities available for sale increased $7,613,000, or 3.6%, to $218,482,000 at June 30, 2002 from $210,869,000 at December 31, 2001. Loans increased $31,045,000, or 3.2%, to $1,009,151,000 at June 30, 2002 from $978,106,000 at December 31, 2001, primarily due to increases in real estate construction, 1-4 family mortgages, and non-farm nonresidential mortgages. These increases were partially offset by a decrease in commercial loan balances. Total deposits increased $29,813,000, or 2.7%, to $1,135,812,000 at June 30, 2002 from $1,105,999,000 at December 31, 2001. Noninterest-bearing deposits decreased 2.9% to $134,671,000 at June 30, 2002 from $138,685,000 at December 31, 2001. Interest-bearing deposits increased 3.5% to $1,001,141,000 at June 30, 2002 from $967,314,000 at December 31, 2001. There were no short-term borrowings as of June 30, 2002 as compared to $2,000,000 at December 31, 2001. Long-term debt increased $23,000,000 or 48.9% to $70,021,000 at June 30, 2002, as compared to $47,021,000 at December 31, 2001. The increase in long-term debt is due to increases in Federal Home Loan Bank (FHLB) advances outstanding which were used primarily to fund loan growth. In the first six months of 2002, the Corporation repurchased 84,868 shares of its common stock at an aggregate cost of $1,796,000. The Corporation is purchasing shares for the treasury as they become available in order to meet future issuance requirements of previously granted non-qualified stock options. As of June 30, 2002, there were 236,200 outstanding options currently exercisable. There were an additional 353,192 stock options outstanding but not currently exercisable. 10 of 25

ASSET QUALITY The following table sets forth the components of non-performing assets and past due loans.

June 30, 2002 December 31, 2001 --------------------- ----------------------- (Dollars in thousands) Non-accrual loans $ 1,169 $ 1,265 Loans 90 days past due, still accruing 484 959 Restructured loans - - Other real estate owned 5,281 30 Non-performing other assets 1 1 --------------------- ----------------------- Total non-performing assets $ 6,935 $ 2,255 ===================== ======================= Total non-performing assets as a percentage of total assets 0.51% 0.17% ===================== ======================= Total non-performing assets as a percentage of loans plus non-performing assets 0.68% 0.23% ===================== =======================
The ratio of non-performing assets to loans plus non-performing assets increased to 0.68% at June 30, 2002, from 0.23% at December 31, 2001. This was due to an increase in other real estate owned. The increase in other real estate owned was due primarily to the addition of $4 million for one large commercial credit in the hotel industry. Busey Bank became mortgagee in possession on June 28, 2002, and will remain so pending the completion of foreclosure proceedings. Loans 90 days past due and still accruing at June 30, 2002, were $484,000 or 0.05% of total loans, compared to $959,000, or 0.10% of total loans as of December 31, 2001. These loans are in the process of collection, and management believes that sufficient collateral value securing these loans exists to cover contractual interest and principal payments on the loans. RESERVE FOR LOAN LOSSES The Corporation maintains its allowance for loan losses at a level management believes will be adequate to absorb estimated losses on existing loans based on an evaluation of the collectibility of loans and prior loss experience. The allowance is calculated using a risk rating system which involves judgments, estimates, and uncertainties that are susceptible to change. This risk rating system is based on continuous credit reviews of the loan portfolio and considers changes in the nature and volume of the loan portfolio, overall portfolio quality, loan concentrations, specific problem loans, current and anticipated economic conditions that may affect the borrowers' ability to pay, historical loan loss experience and other factors, which, in management's opinion, deserve current recognition in estimating loan losses. Changes in these factors or conditions could have significant impact on the Corporation's financial condition or results of operation. POTENTIAL PROBLEM LOANS Potential problem loans are those loans which are not categorized as impaired, non-accrual, past due or restructured, but where current information indicates that the borrower may not be able to comply with present loan repayment terms. Management assesses the potential for loss on such loans as it would with other problem loans and has considered the effect of any potential loss in determining its provision for possible loan losses. Potential problem loans totaled $534,000 at June 30, 2002. There are no other loans identified which management believes represent or result from trends or uncertainties which management reasonably expects will materially impact future operating results, liquidity or capital resources. There are no other credits identified about which management is aware of any information which causes management to have serious doubts as to the ability of such borrower(s) to comply with the loan repayment terms. 11 of 25

RESULTS OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2002 AS COMPARED TO JUNE 30, 2001 SUMMARY Net income for the six months ended June 30, 2002 increased 10.5% to $8,977,000 as compared to $8,125,000 for the comparable period in 2001. Year-to-date diluted earnings per share increased 10.0% to $.66 at June 30, 2002 as compared to $.60 for the same period in 2001. Operating earnings, which exclude security gains and the related tax expense, were $8,692,000, or $.64 per share for the six months ended June 30, 2002, as compared to $7,599,000, or $.56 per share for the same period in 2001. The Corporation's return on average assets was 1.40% for the six months ended June 30, 2002, as compared to 1.24% for the comparable period in 2001. The return on average assets from operations of 1.35% for the six months ended June 30, 2002 was 19 basis points higher than the 1.16% level achieved in the comparable period of 2001. During the six months ended June 30, 2002, the Corporation recognized net security gains of approximately $285,000, after income taxes, representing 3.2% of net income. During the same period in 2001, net security gains of $526,000, after income taxes, were recognized, representing 6.5% of net income. EARNING ASSETS, SOURCES OF FUNDS, AND NET INTEREST MARGIN The Corporation's net interest margin expressed as a percentage of average earning assets stated on a fully taxable equivalent basis, was 3.82% for the six months ended June 30, 2002, as compared to 3.61% for the same period in 2001. The net interest margin expressed as a percentage of average total assets, also on a fully taxable equivalent basis, was 3.56% for the six months ended June 30, 2002, compared to 3.40% for the same period in 2001. Interest income, on a tax equivalent basis, for the six months ended June 30, 2002 decreased $10,255,000 or 21.2% to $38,056,000 from $48,311,000 for the comparable period in 2001. The decrease in interest income resulted partially from a decrease in average earning assets but more significantly in the rates paid on average earning assets for the period ended June 30, 2002, as compared to the same period of 2001. The average yield on interest-earning assets decreased from 7.83% for the six months ended June 30, 2001 to 6.35% for the same period in 2002 due to decreases in the yields on all categories of interest-earning assets. Average earnings assets for the first six months of 2002 were $1,208,862,000, down $35,764,000 or 2.9% from $1,244,626,000 for the same period in 2001. Average interest-bearing liabilities were $1,050,672,000 for the six months ending June 30, 2002, a decrease of $53,246,000 or 4.8% from $1,103,918,000 for the same period in 2001. Runoff in higher-costing time deposit category was replaced by growth in savings and money market deposits. Total interest expense decreased $10,844,000 or 41.7% for the six months ended June 30, 2002 as compared to the prior year period. This decrease resulted from changes in the mix of funding sources primarily from the lower rates paid on all categories of interest-bearing liabilities. PROVISION FOR LOAN LOSSES The provision for loan losses of $1,480,000 for the six months ended June 30, 2002 is $585,000 higher than the provision for the comparable period in 2001. The provision and expense level of net charge-offs for the period resulted in the reserve representing 1.37% of total loans and 835% of non-performing loans at June 30, 2002, as compared to the reserve representing 1.40% of total loans and 615% of non-performing loans at December 31, 2001. The adequacy of the reserve for loan losses is consistent with management's consideration of the 12 of 25

composition of the portfolio, non-performing asset levels, recent credit quality experience, historic charge-off trends, prevailing economic conditions among other factors. The net chargeoff ratio (net chargeoffs as percentage of average loans) was 0.14% for the six months ending June 30, 2002, which increased from 0.02% for the same period in 2001. Like many other financial institutions, the corporation is concerned about the continued weakening of the economy in 2002. Should the economic climate continue to deteriorate, borrowers may experience difficulty, and the level of non-performing loans, charge-offs, and delinquencies could rise and require further increases in the provision for loan losses which may cause the Corporation's net income to decrease. OTHER INCOME, OTHER EXPENSE AND INCOME TAXES Total other income, excluding security gains, increased $345,000 or 3.4% for the six months ended June 30, 2002 as compared to the same period in 2001. Growth in service charge income and gains on the sale of loans offset declines in commissions and brokers' fees and net commissions from travel services. In December, 2001, the Corporation sold the customer list of its travel agency subsidiary. As a result of this sale, no commissions from travel services were recognized in the six months ending June 30, 2002, as compared to $526,000 for the comparable period in 2001. Gains of $1,356,000 were recognized on the sale of $99,566,000 of loans for the six months ended June 30, 2002 as compared to gains of $966,000 on the sale of $97,425,000 of pooled loans in the prior year period. Management anticipates continued sales from the current mortgage loan production in order to maintain the asset/liability structure that the Corporation is trying to effect. The Corporation may realize gains and/or losses on these sales dependent upon interest rate movements and upon how receptive the debt markets are to mortgage backed securities. Total other expenses decreased 3.8% or $735,000 to $18,395,000 for the six months ended June 30, 2002 as compared to $19,130,000 for the same period in 2001. Salaries and wages expense remained relatively constant for the first six months of 2002 as compared to the same period in 2001. Employee benefits expense increased $20,000 to $1,823,000 for the first six months of 2002 as compared to $1,803,000 in the same period in 2001. The Corporation had 473 and 502 full-time equivalent employees as of June 30, 2002 and 2001, respectively. Occupancy and furniture and equipment expenses decreased 7.8% to $3,229,000 for the six months ended June 30, 2002 from $3,501,000 in the prior year period. The Corporation's net overhead expense, total non-interest expense less non-interest income divided by average assets, decreased to 1.14% for the six months ended June 30, 2002 from 1.22% in the prior year period as a result of the changes in the income and expense items described above. The Corporation's efficiency ratio is defined as operating expenses divided by net revenue. (More specifically it is defined as non interest expense expressed as a percentage of the sum of tax equivalent net interest income and non interest income, excluding security gains). The consolidated efficiency ratio for the six months ended June 30, 2002, was 55.0% as compared to 58.8% for the same period in 2001. Income taxes for the six months ended June 30, 2002 decreased to $4,457,000 as compared to $4,586,000 for the comparable period in 2001. As a percent of income before taxes, the provision for income taxes decreased to 33.2% for the six months ended June 30, 2002 from 36.1% for the same period in 2001. The provision for income taxes as a percentage of income before taxes has decreased due to the addition of income from bank owned life insurance which is nontaxable to the Corporation and to the reduction in nondeductible amortization expense. 13 of 25

RESULTS OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2002 AS COMPARED TO JUNE 30, 2001 SUMMARY Net income for the three months ended June 30, 2002 increased 6.5% to $4,287,000 as compared to $4,027,000 for the comparable period in 2001. Diluted earnings per share increased 6.7% to $.32 at June 30, 2002 as compared to $.30 for the same period in 2001. Operating earnings, which exclude security gains and the related tax expense, were $4,167,000, or $.31 per share for the three months ended June 30, 2002, as compared to $3,894,000, or $.29 per share for the same period in 2001. The Corporation's return on average assets was 1.32% for the three months ended June 30, 2002, as compared to 1.23% achieved for the comparable period in 2001. The return on average assets from operations for the three months ended June 30, 2002 of 1.28% was nine basis points higher than the 1.19% level achieved in the comparable period of 2001. EARNING ASSETS, SOURCES OF FUNDS, AND NET INTEREST MARGIN The net interest margin expressed as a percentage of average earning assets was 3.77% for the three months ended June 30, 2002, an increase of 14 basis points from the level achieved for the like period in 2001. The net interest margin expressed as a percentage of average total assets increased 10 basis points to 3.52% for the three months ended June 30, 2002, compared to 3.42% for the same period in 2001. The increase in the net interest margin resulted from a 140 basis point decrease in the yield on interest-earning assets offset by a 154 basis point decrease in the rates paid on interest-bearing liabilities. Interest income on a fully taxable equivalent basis decreased $4,654,000, or 19.7% for the three months ended June 30, 2002 from the same period in 2001. The decrease resulted primarily from the decline in market interest rates. Total interest expense decreased $4,885,000 or 39.3% for the three months ended June 30, 2002 as compared to the prior year period. This decline is primarily due to the decline in rates paid on interest-bearing liabilities combined with a change in the mix of funding sources. OTHER INCOME, OTHER EXPENSE AND INCOME TAXES During the three months ended June 30, 2002, the Corporation recognized security gains of approximately $120,000, after income taxes, representing 2.8% of net income. During the same period in 2001, security gains of approximately $133,000, after income taxes, were recognized, representing 3.3% of net income. Total other income, excluding security transactions, decreased 1.9% to $5,387,000 for the three months ended June 30, 2002 as compared to $5,491,000 for the same period in 2001. This was a combination of the loss of net commissions from travel services, and lower other income offset by an increase in service charge income. Gains of $559,000 were recognized on the sale of $39,844,000 of pooled loans for the three months ended June 30, 2002 as compared to gains of $533,000 on the sale of $62,019,000 of pooled loans in the prior year period. Total other expense decreased 4.1% or $402,000 to $9,400,000 for the three months ended June 30, 2002 as compared to the same period in 2001. Salaries and wages expense decreased $35,000 or 0.8% and employee benefits expense increased $57,000 or 6.8% for the three months ended June 30, 2002, as compared to the same period last year. Occupancy and furniture and equipment expenses decreased 6.1% to $1,622,000 for the three months ended June 30, 2002 from $1,728,000 in the prior year period. 14 of 25

The consolidated efficiency ratio for the three months ended June 30, 2002 was 55.9% as compared to 58.7% for the prior year period. The change in the current year efficiency ratio is due to the income and expense items noted above. Income taxes for the three months ended June 30, 2002 decreased to $2,102,000 as compared to $2,252,000 for the comparable period in 2001. As a percent of income before taxes, the provision for income taxes decreased to 32.9% for the three months ended June 30, 2001 from 35.9% for the same period in 2001. The provision for income taxes as a percentage of income before taxes has decreased due to the addition of income from bank owned life insurance which is nontaxable to the Corporation and to the reduction in nondeductible amortization expense. REPORTABLE SEGMENTS AND RELATED INFORMATION First Busey Corporation has three reportable segments, Busey Bank, Busey Bank Florida and First Busey Trust & Investment Co. Busey Bank provides a full range of banking services to individual and corporate customers through its branch network in Champaign, McLean and Ford Counties in Illinois, through its branch in Indianapolis, Indiana, and through its loan production office in Fort Myers, Florida. In November, 2001, Busey Bank fsb transferred its charter to Florida, and changed its name to Busey Bank Florida. Simultaneously, the Illinois assets of Busey Bank fsb were merged into Busey Bank. Busey Bank Florida provides a full range of banking services to individual and corporate customers in Fort Myers, Florida. First Busey Trust & Investment Company provides trust and asset management services to individual and corporate customers throughout central Illinois. The Corporation's three reportable segments are strategic business units that are separately managed as they offer different products and services and have different marketing strategies. The segment financial information provided below has been derived from the internal profitability reporting system used by management to monitor and manage the financial performance of the Corporation. The accounting policies of the three segments are the same as those described in the summary of significant accounting policies in the annual report. The Corporation accounts for intersegment revenue and transfers at current market value.

June 30, 2002 ------------------------------------------------------------------------------------------------------------- First Busey Busey Bank, Trust & Consolidated Busey Bank Florida Investment Co. All Other Totals Eliminations Totals - ------------------------------------------------------------------------------------------------------------------------------------ Interest income $ 35,917 $ 1,366 $ 79 $ 1,209 $ 38,571 $ (1,151) $ 37,420 Interest expense 13,327 674 - 2,297 16,298 (1,137) 15,161 Other income 7,356 172 2,520 12,766 22,814 (11,764) 11,050 Net income 9,134 48 763 10,095 20,040 (11,063) 8,977 Total assets 1,287,848 56,103 3,642 179,975 1,527,568 (171,003) 1,356,565
June 30, 2001 ------------------------------------------------------------------------------------------------------------- First Busey Busey Bank, Trust & Consolidated Busey Bank Florida Investment Co. All Other Totals Eliminations Totals - ------------------------------------------------------------------------------------------------------------------------------------ Interest income $ 36,229 $ 11,288 $ 92 $ 143 $ 47,752 $ (115) $ 47,637 Interest expense 18,213 6,722 - 1,133 26,068 26,005 (63) Other income 6,616 1,206 2,431 10,804 21,057 11,104 (9,953) Net income 7,143 948 769 8,381 17,241 8,125 (9,116) Total assets 1,030,811 300,300 3,614 163,568 1,498,293 (163,746) 1,334,547
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LIQUIDITY Liquidity is the availability of funds to meet all present and future financial obligations arising in the daily operations of the business at a minimal cost. These financial obligations consist of needs for funds to meet extensions of credit, deposit withdrawals and debt servicing. The sources of short-term liquidity utilized by the Corporation consist of non-reinvested asset maturities, deposits, borrowed funds, and capital funds. Long-term liquidity needs will be satisfied primarily through retention of capital funds. The Corporation does not deal in or use brokered deposits as a source of liquidity. Additional liquidity is provided by bank lines of credit, repurchase agreements and the ability to borrow from the Federal Reserve Bank and the Federal Home Loan Bank of Chicago. The Corporation has an operating line with American National Bank and Trust Company of Chicago in the amount of $10,000,000 with $10,000,000 available as of June 30, 2002. The Corporation's dependence on large liabilities (defined as time deposits over $100,000 and short-term borrowings) increased to 9.1% at June 30, 2002 from 8.6% at December 31, 2001. This is the ratio of total large liabilities to total liabilities. Large liabilities increased $9,858,000 to $112,942,000 as of June 30, 2002, as compared to $103,084,000 as of December 31, 2001. Total liabilities grew $50,895,000 to $1,245,794,000 as of June 30, 2002, as compared to $1,194,899,000 as of December 31, 2001. CAPITAL RESOURCES Other than from the issuance of common stock, the Corporation's primary source of capital is retained net income. During the six months ended June 30, 2002, the Corporation earned $8,977,000 and paid dividends of $4,074,000 to stockholders, resulting in a retention of current earnings of $4,903,000. The Corporation's dividend payout for the six months ended June 30, 2002 was 45.4%. The Corporation and the Banks are subject to regulatory capital requirements administered by federal and state banking agencies. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Corporation and the Banks must meet specific capital guidelines that involve the quantitative measure of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Quantitative measures established by regulation to ensure capital adequacy require the Corporation and the Banks to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and Tier 1 capital (as defined) to average assets (as defined). Management believes, as of June 30, 2002, that the Corporation and the Banks meet all capital adequacy requirements to which they are subject.

As of June 30, 2002: Total Capital (to Risk Weighted Assets) Consolidated $ 132,810 13.71% $ 77,525 8.0% N/A N/A Busey Bank $ 103,948 11.25% $ 73,918 8.0% $ 92,397 10.0% Busey Bank Florida $ 11,737 33.86% $ 2,773 8.0% $ 3,467 10.0% Tier I Capital (to Risk Weighted Assets) Consolidated $ 116,184 11.99% $ 38,763 4.0% N/A N/A Busey Bank $ 88,250 9.55% $ 36,959 4.0% $ 55,439 6.0% Busey Bank Florida $ 11,308 32.62% $ 1,387 4.0% $ 2,080 6.0% Tier I Capital (to Average Assets) Consolidated $ 116,184 9.09% $ 51,139 4.0% N/A N/A Busey Bank $ 88,250 7.28% $ 48,516 4.0% $ 60,645 5.0% Busey Bank Florida $ 11,308 32.62% $ 2,056 4.0% $ 2,570 5.0%
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As of December 31, 2001: Total Capital (to Risk Weighted Assets) Consolidated $ 128,017 13.63% $ 75,143 8.0% N/A N/A Busey Bank $ 99,927 11.14% $ 71,747 8.0% $ 89,683 10.0% Busey Bank Florida $ 11,610 41.50% $ 2,238 8.0% $ 2,798 10.0% Tier I Capital (to Risk Weighted Assets) Consolidated $ 112,067 11.93% $ 37,572 4.0% N/A N/A Busey Bank $ 84,927 9.47% $ 35,874 4.0% $ 53,810 6.0% Busey Bank Florida $ 11,260 40.25% $ 1,119 4.0% $ 1,679 6.0% Tier I Capital (to Average Assets) Consolidated $ 112,067 8.78% $ 51,080 4.0% N/A N/A Busey Bank $ 84,927 7.62% $ 44,597 4.0% $ 55,746 5.0% Busey Bank Florida $ 11,260 7.34% $ 7,666 4.0% $ 7,666 5.0%
RATE SENSITIVE ASSETS AND LIABILITIES Interest rate sensitivity is a measure of the volatility of the net interest margin as a consequence of changes in market rates. The rate-sensitivity chart shows the interval of time in which given volumes of rate-sensitive, earning assets and rate-sensitive, interest bearing liabilities would be responsive to changes in market interest rates based on their contractual maturities or terms for repricing. It is, however, only a static, single-day depiction of the Corporation's rate sensitivity structure, which can be adjusted in response to changes in forecasted interest rates. 17 of 25

The following table sets forth the static rate-sensitivity analysis of the Corporation as of June 30, 2002.

Rate Sensitive Within ----------------------------------------------------------------------------------- 1-30 31-90 91-180 181 Days - Over Days Days Days 1 Year 1 Year Total ----------------------------------------------------------------------------------- (Dollars in thousands) Interest-bearing deposits $ 67 $ - $ - $ - $ - $ 67 Federal funds sold 27,700 - - - - 27,700 Investment securities U.S. Governments 1,001 13,067 9,136 45,783 78,620 147,607 Obligations of states and political subdivisions 1,097 - 2,430 2,039 40,656 46,222 Other securities 10,775 1,003 - - 12,875 24,653 Loans (net of unearned int.) 372,045 65,819 72,993 125,998 372,296 1,009,151 ------------------------------------------------------------------------------------- Total rate-sensitive assets $ 412,685 $ 79,889 $ 84,559 $ 173,820 $ 504,447 $ 1,255,400 ------------------------------------------------------------------------------------- Interest bearing transaction Deposits $ 23,056 $ - $ - $ - $ - $ 23,056 Savings deposits 96,632 - - - - 96,632 Money market deposits 395,114 - - - - 395,114 Time deposits 73,933 62,522 71,316 126,811 151,757 486,339 Short term borrowings 5,021 - - - - 5,021 Long-term debt 8,000 12,000 2,021 5,000 43,000 70,021 Company obligated mandatorily redeemable preferred securities - - - - 25,000 25,000 ------------------------------------------------------------------------------------- Total rate-sensitive liabilities $ 601,756 $ 74,522 $ 73,337 $ 131,811 $ 219,757 $ 1,101,183 ------------------------------------------------------------------------------------- Rate-sensitive assets less rate-sensitive liabilities $ (189,071) $ 5,367 $ 11,222 $ 42,009 $ 284,690 $ 154,217 ------------------------------------------------------------------------------------- Cumulative Gap $ (189,071) $ (183,704) $ (172,482) $ (130,473) $ 154,217 ===================================================================================== Cumulative amounts as a percentage of total rate-sensitive assets -15.06% -14.63% -13.74% -10.39% 12.28% ===================================================================================== Cumulative ratio 0.69 0.73 0.77 0.85 1.14 =====================================================================================
The foregoing table shows a negative (liability sensitive) rate-sensitivity gap of $189.1 million in the 1-30 day as there were more liabilities subject to repricing in that time period than there were assets subject to repricing within that same time period. The volume of assets subject to repricing exceeds the volume of liabilities subject to repricing for all time periods beyond 30 days. On a cumulative basis, however, the gap remains liability sensitive through one year. The composition of the gap structure at June 30, 2002, will benefit the Corporation more if interest rates decrease during the next year by allowing the net interest margin to grow as liability rates would reprice more quickly than rates on rate-sensitive assets. After 1 year, a rate increase would benefit the Corporation because the volume of rate-sensitive assets subject to repricing would exceed the volume of rate-sensitive liabilities subject to repricing. 18 of 25

FIRST BUSEY CORPORATION AND SUBSIDIARIES AVERAGE BALANCE SHEETS AND INTEREST RATES SIX MONTHS ENDED JUNE 30, 2002 AND 2001

2002 2001 --------------------------------------- --------------------------------------- Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate --------------------------------------- --------------------------------------- (Dollars in thousands) ASSETS Federal funds sold $ 10,878 $ 86 1.59% $ 28,339 $ 749 5.33% Investment securities U.S. Government obligations 143,451 3,294 4.63% 159,023 4,543 5.76% Obligations of states and political subdivisions (1) 42,925 1,503 7.06% 43,741 1,597 7.36% Other securities 24,350 426 3.53% 37,017 794 4.33% Loans (net of unearned interest) (1) (2) 987,258 32,747 6.69% 976,506 40,628 8.39% -------------------------- -------------------------- Total interest earning assets $ 1,208,862 $ 38,056 6.35% $ 1,244,626 $ 48,311 7.83% ============ ============= Cash and due from banks 33,596 31,422 Premises and equipment 28,679 30,728 Reserve for possible loan losses (13,814) (12,545) Other assets 38,134 28,344 -------------- ------------- Total Assets $ 1,295,457 $ 1,322,575 ============== ============= LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing transaction deposits $ 13,456 $ 65 0.97% $ 37,576 $ 477 2.56% Savings deposits 97,168 550 1.14% 89,086 1,225 2.77% Money market deposits 401,638 2,622 1.32% 338,982 5,347 3.18% Time deposits 446,130 9,129 4.13% 542,634 16,034 5.96% Short-term borrowings 13,821 265 3.87% 44,207 1,457 6.65% Long-term debt 53,459 1,405 5.30% 49,841 1,393 5.64% Company obligated mandatorily redeemable preferred securities 25,000 1,125 9.07% 1,592 72 9.12% -------------------------- -------------------------- Total interest-bearing liabilities $ 1,050,672 $ 15,161 2.91% $ 1,103,918 $ 26,005 4.75% ============ ============= Net interest spread 3.44% 3.08% ============= ============= Demand deposits 127,455 113,240 Other liabilities 9,715 10,155 Stockholders' equity 107,615 95,262 -------------- ------------- Total Liabilities and Stockholders' Equity $ 1,295,457 $ 1,322,575 ============== ============= Interest income / earning assets (1) $ 1,208,862 $ 38,056 6.35% $ 1,244,626 $ 48,311 7.83% Interest expense / earning assets $ 1,208,862 $ 15,161 2.53% $ 1,244,626 $ 26,005 4.22% ------------------------- -------------------------- Net interest margin (1) $ 22,895 3.82% $ 22,306 3.61% ========================= ==========================
(1) On a tax-equivalent basis, assuming a federal income tax rate of 35% for 2002 and 2001. (2) Non-accrual loans have been included in average loans, net of unearned interest. 19 of 25

FIRST BUSEY CORPORATION AND SUBSIDIARIES CHANGES IN NET INTEREST INCOME SIX MONTHS ENDED JUNE 30, 2002 AND 2001

Change due to(1) Average Average Total Volume Yield/Rate Change ----------------------------------------------- (Dollars in thousands) Increase (decrease) in interest income: Federal funds sold $ (310) $ (353) $ (663) Investment securities: U.S. Government obligations (416) (833) (1,249) Obligations of states and political subdivisions (2) (29) (65) (94) Other securities (241) (127) (368) Loans (2) 453 (8,334) (7,881) ------------------------------------------------- Change in interest income (2) $ (543) $ (9,712) $ (10,255) ------------------------------------------------- Increase (decrease) in interest expense: Interest-bearing transaction deposits $ (209) $ (203) $ (412) Savings deposits 123 (798) (675) Money market deposits 1,255 (3,980) (2,725) Time deposits (2,531) (4,374) (6,905) Short-term borrowings (648) (544) (1,192) Long-term debt 67 (55) 12 Company obligated mandatorily redeemable preferred securities 1,053 - 1,053 ------------------------------------------------- Change in interest expense $ (890) $ (9,954) $ (10,844) ------------------------------------------------- Increase in net interest income (2) $ 347 $ 242 $ 589 =================================================
(1) Changes due to both rate and volume have been allocated proportionally. (2) On a tax-equivalent basis, assuming a federal income tax rate of 35% for 2002 and 2001. 20 of 25

FIRST BUSEY CORPORATION AND SUBSIDIARIES AVERAGE BALANCE SHEETS AND INTEREST RATES QUARTERS ENDED JUNE 30, 2002 AND 2001

2002 2001 --------------------------------------- --------------------------------------- Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate --------------------------------------- --------------------------------------- (Dollars in thousands) ASSETS Federal funds sold $ 6,702 $ 28 1.68% $ 21,818 $ 240 5.33% Investment securities U.S. Government obligations 151,329 1,676 4.44% 155,875 2,205 5.67% Obligations of states and political subdivisions (1) 43,697 758 6.96% 44,028 800 7.29% Other securities 24,556 227 3.71% 38,107 378 3.98% Loans (net of unearned interest) (1) (2) 989,895 16,282 6.60% 978,028 20,002 8.20% -------------------------- -------------------------- Total interest earning assets $ 1,216,179 $ 18,971 6.26% $ 1,237,856 $ 23,625 7.66% ============ ============= Cash and due from banks 34,255 30,174 Premises and equipment 28,514 30,449 Reserve for possible loan losses (13,940) (12,694) Other assets 39,075 28,355 -------------- ------------- Total Assets $ 1,304,083 $ 1,314,140 ============== ============= LIABILITIES AND STOCKHOLDERS' EQUITY Interest-bearing transaction deposits $ 12,143 $ 27 0.89% $ 36,915 $ 203 2.21% Savings deposits 97,569 283 1.16% 90,213 577 2.57% Money market deposits 397,706 1,289 1.30% 342,150 2,518 2.95% Time deposits 451,244 4,502 4.00% 532,056 7,758 5.85% Short-term borrowings 14,956 126 3.38% 41,640 664 6.40% Long-term debt 59,066 750 5.09% 46,083 632 5.50% Company obligated mandatorily redeemable preferred securities 25,000 562 9.02% 3,165 72 9.12% -------------------------- -------------------------- Total interest-bearing liabilities $ 1,057,684 $ 7,539 2.86% $ 1,092,222 $ 12,424 4.56% ============ ============= Net interest spread 3.40% 3.10% ============= ============= Demand deposits 127,052 115,491 Other liabilities 10,640 9,793 Stockholders' equity 108,707 96,634 -------------- ------------- Total Liabilities and Stockholders' Equity $ 1,304,083 $ 1,314,140 ============== ============= Interest income / earning assets (1) $ 1,216,179 $ 18,971 6.26% $ 1,237,856 $ 23,625 7.66% Interest expense / earning assets $ 1,216,179 $ 7,539 2.49% $ 1,237,856 $ 12,424 4.03% ------------------------- -------------------------- Net interest margin (1) $ 11,432 3.77% $ 11,201 3.63% ========================= ==========================
(1) On a tax-equivalent basis, assuming a federal income tax rate of 35% for 2002 and 2001. (2) Non-accrual loans have been included in average loans, net of unearned interest. 21 of 25

FIRST BUSEY CORPORATION AND SUBSIDIARIES CHANGES IN NET INTEREST INCOME QUARTERS ENDED JUNE 30, 2002 AND 2001

Change due to(1) Average Average Total Volume Yield/Rate Change -------------------------------------------- (Dollars in thousands) Increase (decrease) in interest income: Federal funds sold $ (112) $ (100) $ (212) Investment securities: U.S. Government obligations (63) (466) (529) Obligations of states and political subdivisions (2) (6) (36) (42) Other securities (128) (23) (151) Loans (2) 246 (3,966) (3,720) ------------------------------------------- Change in interest income (2) $ (63) $ (4,591) $ (4,654) ------------------------------------------- Increase (decrease) in interest expense: Interest-bearing transaction deposits $ (93) $ (83) $ (176) Savings deposits 51 (345) (294) Money market deposits 502 (1,731) (1,229) Time deposits (1,058) (2,198) (3,256) Short-term borrowings (282) (256) (538) Long-term debt 160 (42) 118 Company obligated mandatorily redeemable preferred securities 490 - 490 ------------------------------------------- Change in interest expense $ (230) $ (4,655) $ (4,885) ------------------------------------------- Increase in net interest income (2) $ 167 $ 64 $ 231 ===========================================
(1) Changes due to both rate and volume have been allocated proportionally. (2) On a tax-equivalent basis, assuming a federal income tax rate of 35% for 2002 and 2001. 22 of 25

FORWARD LOOKING STATEMENTS This presentation 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 Corporation. 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 Corporation 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. These risks, uncertainties and other factors include the general state of the economy, both on a local and national level, the ability of the Corporation to successfully complete acquisitions, the continued growth of geographic regions served by the Corporation, and the retention of individuals who currently are very important in the management structure of the Corporation. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Market risk is the risk of change in asset values due to movements in underlying market rates and prices. Interest rate risk is the risk to earnings and capital arising from movements in interest rates. Interest rate risk is the most significant market risk affecting the Corporation as other types of market risk, such as foreign currency exchange rate risk and commodity price risk, do not arise in the normal course of the Corporation's business activities. The Corporation's subsidiary banks, Busey Bank and Busey Bank Florida have asset-liability committees which meet at least quarterly to review current market conditions and attempt to structure the banks' balance sheets to ensure stable net interest income despite potential changes in interest rates with all other variables constant. The asset-liability committee uses gap analysis to identify mismatches in the dollar value of assets and liabilities subject to repricing within specific time periods. The Funds Management Policy established by the asset-liability committee and approved by the Corporation's board of directors establishes guidelines for maintaining the ratio of cumulative rate-sensitive assets to rate-sensitive liabilities within prescribed ranges at certain intervals. A summary of the Corporation's gap analysis is summarized on page 18. The committee does not rely solely on gap analysis to manage interest-rate risk as interest rate changes do not impact all categories of assets and liabilities equally or simultaneously. The asset-liability committee supplements gap analysis with balance sheet and income simulation analysis to determine the potential impact on net interest income of changes in market interest rates. In these simulation models the balance sheet is projected out over a one-year period and net interest income is calculated under current market rates, and then assuming permanent instantaneous shifts in the yield curve of +/- 100 basis point, + 200 basis points, and -175 basis points. These interest-rate scenarios indicate the interest rate risk of the Corporation over a one-year time horizon due to changes in interest rates, as of June 30, 2002, is as follows:

Basis Point Changes --------------------------------------------------- -175 -100 +100 +200 ----------- ----------- ----------- --------------- Percentage change in net interest income due to an immediate change in interest over a one-year period 1.88% 2.20% -0.28% -0.61%
These results do not differ materially from those reported as of December 31, 2002. 23 of 25

PART II - OTHER INFORMATION ITEM 1: Legal Proceedings Not Applicable ITEM 2: Changes in Securities and Use of Proceeds Not Applicable ITEM 3: Defaults Upon Senior Securities Not Applicable ITEM 4: Submission of Matters to a Vote of Security Holders The annual meeting of the stockholders of First Busey Corporation was held on April 15, 2002. Please refer to the Corporation's quarterly report filed on Form 10-Q for the period ending March 31, 2002 for the results of the matters approved by the stockholders. ITEM 5: Other Information Not Applicable ITEM 6: Exhibits and Reports on Form 8-K (a.) EXHIBITS (b.) REPORTS ON FORM 8-K On July 18, 2002, the Corporation filed a report on Form 8-K (Item 5) dated July 18, 2002, revising information contained in its press release dated and issued July 15, 2002. 24 of 25

SIGNATURES 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 (REGISTRANT) By: //Barbara J. Jones// --------------------------------------------------- Barbara J. Jones Chief Financial Officer (Principal financial and accounting officer) By: //Douglas C. Mills// --------------------------------------------------- Douglas C. Mills Chairman of the Board and Chief Executive Officer Date: August 14, 2002 (Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 accompanies this filing as separate correspondence.) 25 of 25