URBANA, Ill., July 21, 2009 (GLOBE NEWSWIRE) -- First Busey Corporation's (Nasdaq:BUSE) consolidated net loss for the quarter ended June 30, 2009 was $20.5 million, or $0.57 per fully-diluted common share, compared to net income of $4.6 million, or $0.13 per fully-diluted common share, for the quarter ended June 30, 2008. On a year-to-date basis, consolidated net loss was $15.0 million, or $0.42 per fully-diluted share in 2009 as compared to net income of $14.6 million, or $0.41 per fully-diluted share in 2008.
The decline in net income was primarily due to increased provision for loan losses. We recorded $47.5 million in provision for loan losses in the second quarter of 2009 as compared to $12.3 million in the same period of 2008. Year-to-date, our provision for loan losses was $57.5 million, as compared to $14.5 million in 2008. Additionally, downward pressure on the net interest margin primarily attributable to lost interest income on non-accrual loans and loans charged-off, and increased FDIC insurance have negatively affected our earnings.
Our Illinois markets continue to perform remarkably well. Our credit challenges are primarily within our Indianapolis and Florida markets. In Illinois, the non-performing loans/ loans ratio is 1.1% ($25.5 million/$2.31 billion), whereas the ratio is 6.1% ($11.2 million/$182.1 million) in Indiana and 13.6% ($90.4 million/$0.67 billion) in Florida. Additionally, more than half of our Illinois non-performing loans consist of two relationships that we believe to have fully provided for the potential losses.
Our core market is performing very well and we are executing the operational discipline necessary to return to solid profitability levels once we emerge from our credit issues. A review of our core operating results (pre-tax, pre-provision operating profit), follows:
* Net interest income increased to $28.4 million in the second quarter of 2009 as compared to $27.6 million in the first quarter of 2009, our first quarterly increase since the second quarter of 2008. The increase in net interest income is attributable to lower funding costs as income from earning assets declined by $0.7 million, whereas interest expense from interest-bearing liabilities declined by $1.5 million. * Non-interest income increased $1.4 million in the second quarter of 2009 as compared to the first quarter of 2009, primarily due to income from the sale of mortgage loans and increased remittance processing revenue. * Non-interest expense increased $4.3 million to $30.1 million in the second quarter of 2009 as compared to $25.8 million in the first quarter of 2009. This increase was due primarily to increased FDIC insurance of $2.6 million, increased commissions from mortgage loans of $1.6 million and losses from foreclosed real estate of $0.8 million. After accounting for these increases, our non-interest expense decreased $0.7 million from the first quarter of 2009.
As noted in our first quarter earnings release, we are committed to the priorities of Balance Sheet Strength, Profitability and Growth-- in that order. While significant provisioning certainly impacts our current earnings position, our priority is to emerge from these challenging economic times equipped to capitalize on profitable growth opportunities. While we believe to have adequately provided for our loan losses to date, as noted in our past releases and discussed at our 2008 and 2009 shareholder meetings, we expected to experience larger than normal levels of nonperforming assets in 2008 and throughout 2009. We are not finished with the issues within our loan portfolio; you can expect additional provisioning in the future.
Despite the earnings challenges, our banks are well-capitalized. Our holding company and our banks exceed the regulatory definition of well-capitalized, the highest regulatory standard. In addition to working to maintain our strong capital position, we have remained focused on liquidity. We have reduced our non-deposit funding by $90.9 million since December 31, 2008, including paying down of $32 million of debt at our holding company. Our non-interest bearing deposits have increased $80.6 million over the same period. Although our cash position has declined by $99.3 million, interest-bearing deposits were reduced by $243.3 million since December 31, 2008, most of which were higher cost certificates-of-deposit.
On July 24, 2009, we will pay a dividend of $0.08 per common share to shareholders of record on July 21, 2009. We analyzed this dividend payment decision very carefully to ensure it was consistent with our capital plan and our earnings. Although we recorded a net loss for the quarter, our core operating results and current capital position supported the dividend payment. We will continue to review the dividend payment in subsequent quarters.
The Busey Strategy is built upon fulfilling The Busey Promise to our four pillars -- customers, associates, communities and shareholders. We will grow by successfully executing our mission of exceeding the service needs of our customers, investing in our associates and communities and delivering long-term value to you, our shareholders. Busey associates not only possess significant financial expertise, but positive attitudes and commitment to an extra-ordinary service philosophy. This combination allows us to remain customer-focused and retain market share despite challenging economic times. We thank our associates for their efforts, our customers for their business and our shareholders for their continued support of Busey.
As always, your input and questions are welcome.
\s\ Van A. Dukeman
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 thirty-four 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 June 30, 2009, Busey Bank had total assets of $3.8 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 $420.1 million as of June 30, 2009.
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 June 30, 2009, Busey Wealth Management had approximately $3.1 billion in assets under care.
First Busey Corporation owns a retail payment processing subsidiary, FirsTech, Inc., which processes over 32 million transactions per year through online bill payments, lockbox processing and walk-in payments through its 4,700 agent locations in 40 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 Six Months Ended
--------------------------------- ----------------------
June 30, March 31, June 30, June 30, June 30,
2009 2009 2008 2009 2008
---------------------------------------------- ----------------------
EARNINGS &
PER SHARE
DATA
Net income/
(loss)(1) $ (20,472) $ 5,506 $ 4,591 $ (14,966) $ 14,595
Revenue(2) 45,872 43,641 45,266 89,480 90,320
Fully-
diluted
earnings
per share (0.57) 0.15 0.13 (0.42) 0.41
Cash
dividends
paid per
share 0.08 0.20 0.20 0.28 0.40
Net income
(loss) by
operating
segment
Busey Bank $ (14,074) $ 6,584 $ 6,395 $ (7,490) $ 17,997
Busey Bank,
N.A (6,061) (714) (2,002) (6,775) (3,049)
Busey
Wealth
Management 717 562 871 1,279 1,317
FirsTech 847 822 703 1,669 1,322
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AVERAGE
BALANCES
Assets $4,419,839 $4,410,790 $4,235,000 $4,412,282 $4,214,780
Earning
assets 3,971,923 3,966,968 3,733,761 3,969,384 3,713,522
Deposits 3,436,870 3,488,527 3,200,098 3,462,467 3,215,248
Interest-
bearing
liabilities 3,372,323 3,455,020 3,289,370 3,416,464 3,271,299
Stock-
holders'
equity -
common 446,600 452,327 517,936 449,146 519,418
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PERFORMANCE
RATIOS
Return on
average
assets(3) (1.86%) 0.51% 0.44% (0.68%) 0.70%
Return on
average
common
equity(3) (18.39%) 4.94% 3.56% (6.72%) 5.65%
Net interest
margin(3) 2.92% 2.88% 3.46% 2.90% 3.47%
Efficiency
ratio(4) 62.61% 56.26% 56.26% 59.40% 57.75%
Non-interest
revenue as
a % of
total
revenues(2) 38.09% 36.77% 30.35% 37.42% 30.48%
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ASSET QUALITY
Gross loans $3,162,007 $3,261,440 $3,166,705
Allowance
for loan
losses 88,549 88,498 48,579
Net
charge-offs 47,449 20,173 6,645 67,622 8,431
Allowance
for loan
losses to
loans 2.80% 2.71% 1.53%
Allowance
as a
percentage
of non-
performing
loans 69.65% 73.03% 82.84%
Non-
performing
loans
Non-accrual
loans 122,595 105,424 53,155
Loans 90+
days past
due 4,540 15,752 5,486
Geographically
Downstate
Illinois/
Indiana 36,714 36,653 18,639
Florida 90,421 84,523 40,002
Other non-
performing
assets 14,787 16,957 3,095
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(1) Available to common stockholders, net of preferred dividend and
TARP warrant accretion.
(2) Net of interest expense, excludes security gains.
(3) Quarterly ratios annualized and calculated on net income (loss)
available to common stockholders.
(4) Net of security gains and intangible charges.
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)
June 30, March 31, Dec. 31, June 30,
2009 2009 2008 2008
----------------------------------------------
Assets
Cash and due from
banks $ 90,797 $ 138,413 $ 190,113 $ 124,639
Investment securities 648,891 708,112 654,130 580,891
Net loans 3,073,458 3,172,942 3,158,910 3,118,126
Premises and equipment 80,082 80,890 81,732 82,198
Goodwill and other
intangibles 254,675 255,765 256,868 278,835
Other assets 128,611 114,353 118,340 80,742
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Total assets $4,276,514 $4,470,475 $4,460,093 $4,265,431
=====================================================================
Liabilities &
Stockholders' Equity
Non-interest bearing
deposits $ 458,647 $ 458,332 $ 378,007 $ 376,452
Interest-bearing
deposits 2,885,426 3,031,869 3,128,686 2,797,511
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Total deposits $3,344,073 $3,490,201 $3,506,693 $3,173,963
Federal funds purchased
& securities sold
under agreements to
repurchase 154,099 143,635 182,980 217,734
Short-term borrowings 30,000 58,000 83,000 117,000
Long-term debt 125,493 132,743 134,493 151,910
Junior subordinated
debt owed to
unconsolidated trusts 55,000 55,000 55,000 55,000
Other liabilities 38,893 39,208 43,110 36,301
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Total liabilities $3,747,558 $3,918,787 $4,005,276 $3,751,908
---------------------------------------------------------------------
Total stockholders'
equity $ 528,956 $ 551,688 $ 454,817 $ 513,523
---------------------------------------------------------------------
Total liabilities &
stockholders' equity $4,276,514 $4,470,475 $4,460,093 $4,265,431
=====================================================================
Per Share Data
---------------------------------------------------------------------
Book value per share $ 11.98 $ 12.65 $ 12.70 $ 14.35
Tangible book value
per share $ 4.87 $ 5.51 $ 5.53 $ 6.56
Ending number of
shares outstanding 35,816 35,816 35,815 35,787
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------------
2009 2008 2009 2008
--------------------------------------
Interest and fees on loans $ 41,607 $ 48,611 $ 83,747 $100,262
Interest on investment
securities 6,021 6,079 12,188 12,880
Other interest income -- 3 -- 108
---------------------------------------------------------------------
Total interest income $ 47,628 $ 54,693 $ 95,935 $113,250
---------------------------------------------------------------------
Interest on deposits 16,498 19,174 34,315 42,021
Interest on short-term
borrowings 683 1,756 1,526 3,515
Interest on long-term debt 1,306 1,391 2,580 3,121
Junior subordinated debt owed
to unconsolidated trusts 742 846 1,519 1,805
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Total interest expense $ 19,229 $ 23,167 $ 39,940 $ 50,462
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Net interest income $ 28,399 $ 31,526 $ 55,995 $ 62,788
Provision for loan losses 47,500 12,300 57,500 14,450
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Net interest income (loss)
after provision for loan
losses $(19,101) $ 19,226 $ (1,505) $ 48,338
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Fees for customer services 4,292 3,994 8,289 7,845
Trust fees 3,348 3,698 6,553 6,771
Remittance processing 3,381 3,028 6,635 5,975
Commissions and brokers' fees 428 686 947 1,388
Gain on sales of loans 3,715 1,206 6,133 2,366
Net security gains 54 30 75 502
Other 2,309 1,128 4,928 3,187
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Total non-interest income $ 17,527 $ 13,770 $ 33,560 $ 28,034
---------------------------------------------------------------------
Salaries and wages 10,792 11,851 21,421 23,363
Employee benefits 2,754 2,586 5,571 5,722
Net occupancy expense 2,396 2,325 4,971 4,789
Furniture and equipment expense 1,823 2,350 3,759 4,267
Data processing expense 1,930 1,628 3,662 3,316
Amortization expense 1,090 1,130 2,180 2,259
Other operating expenses 9,371 5,067 14,415 11,394
---------------------------------------------------------------------
Total non-interest expense $ 30,156 $ 26,937 $ 55,979 $ 55,110
---------------------------------------------------------------------
Income (loss) before income
taxes $(31,730) $ 6,059 $(23,924) $ 21,262
Income taxes (12,601) 1,468 (10,688) 6,667
---------------------------------------------------------------------
Net income (loss) $(19,129) $ 4,591 $(13,236) $ 14,595
---------------------------------------------------------------------
Preferred stock dividends and
TARP warrant accretion $ 1,343 $ -- $ 1,730 $ --
---------------------------------------------------------------------
Income (loss) available for
common stockholders $(20,472) $ 4,591 $(14,966) $ 14,595
=====================================================================
Per Share Data
---------------------------------------------------------------------
Basic earnings (loss) per
share $ (0.57) $ 0.13 $ (0.42) $ 0.41
Fully-diluted earnings (loss)
per share $ (0.57) $ 0.13 $ (0.42) $ 0.41
Diluted average shares
outstanding 35,816 35,931 35,816 36,031