• First Busey Announces 2021 Fourth Quarter Earnings

    Source: Nasdaq GlobeNewswire / 25 Jan 2022 17:00:01   America/New_York

    CHAMPAIGN, Ill., Jan. 25, 2022 (GLOBE NEWSWIRE) -- First Busey Corporation (Nasdaq: BUSE)

    Message from our Chairman & CEO

    Fourth Quarter 2021 Highlights:

    • Fourth quarter 2021 net income of $29.9 million and diluted EPS of $0.53
    • Fourth quarter 2021 adjusted net income1 of $34.3 million and adjusted diluted EPS1 of $0.61
    • Full year 2021 net income of $123.4 million and diluted EPS of $2.20
    • Full year 2021 adjusted net income1 of $137.1 million and adjusted diluted EPS1 of $2.45
    • Core loan growth, excluding Paycheck Protection Program (“PPP”) loans, of $141.6 million, or 2.0%, in the fourth quarter
    • Wealth management assets under care of $12.73 billion at December 31, 2021, up from $12.36 billion at September 30, 2021, and $10.23 billion at December 31, 2020, which represents 24.5% year-over-year growth
    • FirsTech revenue2 of $4.9 million for the fourth quarter of 2021, up from $4.3 million for the fourth quarter of 2020, representing 16.4% year-over-year growth
    • Noninterest income, excluding security gains, accounted for 32.9% of total revenue in the fourth quarter of 2021, compared to 28.9% in the fourth quarter of 2020, supported by continued growth in wealth management, payment technology solutions, and customer service fees
    • Completed previously announced service center closures in November 2021 as part of our Personal Banking Transformation Plan, which resulted in the consolidation of 17 branches across our various markets. As a result, our average deposits per branch increased to approximately $185.7 million in the fourth quarter of 2021, compared to $144.2 million in the third quarter of 2021.
    • For additional information, please refer to the 4Q21 Quarterly Earnings Supplement

    Fourth Quarter Financial Results
    Net income for First Busey Corporation (“First Busey” or the “Company”) for the fourth quarter of 2021 was $29.9 million, or $0.53 per diluted common share, compared to $25.9 million, or $0.46 per diluted common share, for the third quarter of 2021, and $28.3 million, or $0.52 per diluted common share, for the fourth quarter of 2020. Adjusted net income1 for the fourth quarter of 2021 was $34.3 million, or $0.61 per diluted common share, compared to $32.8 million, or $0.58 per diluted common share, for the third quarter of 2021, and $34.3 million, or $0.62 per diluted common share, for the fourth quarter of 2020.   For the fourth quarter of 2021, annualized return on average assets and annualized return on average tangible common equity1 were 0.92% and 12.49%, respectively. Based on adjusted net income1, annualized return on average assets was 1.05% and annualized return on average tangible common equity1 was 14.30% for the fourth quarter of 2021.

    Pre-provision net revenue1 for the fourth quarter of 2021 was $34.0 million, compared to $30.5 million for the third quarter of 2021 and $38.5 million for the fourth quarter of 2020. Adjusted pre-provision net revenue1 for the fourth quarter of 2021 was $41.1 million, compared to $39.4 million for the third quarter of 2021 and $47.2 million for the fourth quarter of 2020. Pre-provision net revenue to average assets1 for the fourth quarter of 2021 was 1.04%, compared to 0.95% for the third quarter of 2021, and 1.47% for the fourth quarter of 2020. Adjusted pre-provision net revenue to average assets1 for the fourth quarter of 2021 was 1.27%, compared to 1.23% for the third quarter of 2021 and 1.80% for the fourth quarter of 2020.

    The Company experienced its third consecutive quarter of strong core loan growth, principally in commercial lending segments. Loan growth (excluding PPP loans) of $141.6 million in the fourth quarter of 2021 follows $177.1 million in the third quarter and $142.0 million in the second quarter. Over the last three quarters, the Company has generated $460.7 million in core loan growth (excluding PPP loans), equating to an annualized growth rate of 9.8%.

    The Company’s fourth quarter 2021 results include a provision release of $4.7 million for credit losses and a $0.3 million provision expense for unfunded commitments, reflecting forecasted improvements in macroeconomic conditions and asset quality, partially offset by core loan growth. The total allowance for credit losses was $87.9 million at December 31, 2021, representing 1.22% of total portfolio loans outstanding and 1.24% of portfolio loans excluding PPP loans. Net charge-offs remain exceptionally low at $0.2 million in the fourth quarter of 2021, representing 0.01% of average loans on an annualized basis.

    Our fee-based businesses continue to add dynamic revenue diversification. In the fourth quarter of 2021, wealth management fees were $13.8 million, compared to $13.7 million in the third quarter of 2021, representing a 29.3% increase from $10.6 million in the fourth quarter of 2020. Revenue from payment technology solutions from the Company’s subsidiary FirsTech remained steady at $4.6 million, for both the third and fourth quarters of 2021, an increase of 15.7% from $4.0 million in the fourth quarter of 2020. Fees for customer services were $9.7 million in the fourth quarter of 2021, compared to $9.3 million in the third quarter of 2021, representing a 17.8% increase from $8.2 million in the fourth quarter of 2020.

    The Company views certain non-operating items, including acquisition-related and other restructuring charges, as adjustments to net income reported under U.S. generally accepted accounting principles (“GAAP”). Non-operating pretax adjustments for the fourth quarter of 2021 included $2.2 million of expenses related to the acquisition of Cummins-American Corp. (“CAC”), the holding company for Glenview State Bank (“GSB”), and $3.4 million in restructuring expenses related to the previously announced Personal Banking Transformation Plan. The Company believes that non-GAAP measures—including pre-provision net revenue, adjusted pre-provision net revenue, pre-provision net revenue to average assets, adjusted pre-provision net revenue to average assets, adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted net interest margin, adjusted noninterest expense, efficiency ratio, adjusted efficiency ratio, tangible common equity, tangible common equity to tangible assets, tangible book value per common share, and return on average tangible common equity—facilitate the assessment of its financial results and peer comparability. A reconciliation of these non-GAAP measures is included in tabular form at the end of this release.

    Coronavirus Disease 2019 (“COVID-19”) Update
    The Company continues to navigate the economic environment caused by COVID-19 effectively and prudently and remains resolute in its focus on serving its customers, communities, and associates while protecting its balance sheet.   To alleviate some of the financial hardships faced as a result of COVID-19, First Busey offered an internal Financial Relief Program to qualifying customers. As of December 31, 2021, the Company had no loans remaining on full payment deferral and 32 commercial loans remaining on interest only payment deferrals, representing $128.7 million in loans.

    First Busey served as a bridge for the PPP, actively helping existing and new business clients sign up for this important financial resource.   At December 31, 2021, First Busey had $76.9 million in total PPP loans outstanding, with an amortized cost of $75.0 million, down from $183.1 million in total PPP loans outstanding, with an amortized cost of $178.2 million, at September 30, 2021, and $451.5 million in PPP loans outstanding, with an amortized cost of $446.4 million, at December 31, 2020.

    Community Banking
    First Busey’s goal of being a strong community bank begins with outstanding associates. The Company is honored to be named among the 2021 Best Banks to Work For by American Banker, the 2021 Best Places to Work in Illinois by Daily Herald Business Ledger, the 2021 Best Companies to Work For in Florida by Florida Trend magazine, the 2021 Best Place to Work in Indiana by the Indiana Chamber of Commerce, and the 2021 Best Places to Work in Money Management by Pensions and Investments.

    As we reflect back on 2021 and look ahead to 2022, the Company remains steadfast in our commitment to the customers and communities we serve. The Company reported solid fourth quarter results, which are reflective of our strategic growth plans. Despite headwinds related to the COVID-19 Omicron variant, supply chain issues, and inflation, the economy continues to improve, and we feel confident that we are well positioned to produce growth and profitability as we move forward.

    /s/ Van A. Dukeman
    Chairman, President & Chief Executive Officer
    First Busey Corporation


                           
    SELECTED FINANCIAL HIGHLIGHTS (Unaudited) 
    (dollars in thousands, except per share data) 
                           
      As of and for the  As of and for the 
      Three Months Ended   Year Ended  
      December 31, September 30, June 30, March 31, December 31, December 31, December 31, 
         2021    2021    2021    2021    2020    2021    2020    
    EARNINGS & PER SHARE DATA                      
    Net income $29,926 $25,941 $29,766 $37,816 $28,345 $123,449 $100,344 
    Diluted earnings per share  0.53  0.46  0.53  0.69  0.52  2.20  1.83 
    Cash dividends paid per share  0.23  0.23  0.23  0.23  0.22  0.92  0.88 
    Pre-provision net revenue 1, 2  33,954  30,470  34,030  40,198  38,507  138,652  165,672 
    Revenue 3  105,123  103,957  96,655  94,697  102,580  400,432  399,869 
                           
    Net income by operating segments:                      
    Banking  27,955  25,124  29,237  35,528  28,573  117,844  101,226 
    FirsTech  313  384  401  429  406  1,527  2,372 
    Wealth Management  4,285  4,718  4,885  4,682  3,334  18,570  13,181 
                           
    AVERAGE BALANCES                      
    Cash and cash equivalents $857,694 $1,009,750 $647,465 $536,457 $551,844 $764,398 $607,525 
    Investment securities  4,087,813  3,721,740  3,031,250  2,561,680  2,077,284  3,355,819  1,840,100 
    Loans held for sale  18,073  15,589  22,393  31,373  52,745  21,803  82,106 
    Portfolio loans  7,113,963  7,133,108  6,889,551  6,736,664  6,990,414  6,969,807  7,006,946 
    Interest-earning assets  11,947,653  11,730,637  10,448,417  9,752,294  9,557,265  10,978,116  9,417,938 
    Total assets  12,895,049  12,697,795  11,398,655  10,594,245  10,419,364  11,904,935  10,292,256 
                           
    Noninterest bearing deposits  3,531,345  3,365,823  2,970,890  2,688,845  2,545,830  3,142,155  2,364,442 
    Interest-bearing deposits  7,276,237  7,253,242  6,432,336  6,033,613  5,985,020  6,753,643  6,077,539 
    Total deposits  10,807,582  10,619,065  9,403,226  8,722,458  8,530,850  9,895,798  8,441,981 
                           
    Securities sold under agreements to repurchase  262,004  221,813  204,417  184,694  194,610  218,454  187,811 
    Interest-bearing liabilities  7,898,627  7,842,805  6,966,046  6,521,195  6,482,475  7,312,409  6,554,428 
    Total liabilities  11,566,357  11,346,379  10,055,884  9,318,551  9,158,066  10,580,073  9,051,882 
    Stockholders' equity - common  1,328,692  1,351,416  1,342,771  1,275,694  1,261,298  1,324,862  1,240,374 
    Average tangible common equity 2  950,867  970,531  974,062  913,001  896,178  952,269  871,750 
                           
    PERFORMANCE RATIOS                      
    Pre-provision net revenue to average assets 1, 2  1.04% 0.95% 1.20% 1.54% 1.47% 1.16% 1.61%
    Return on average assets  0.92% 0.81% 1.05% 1.45% 1.08% 1.04% 0.97%
    Return on average common equity  8.94% 7.62% 8.89% 12.02% 8.94% 9.32% 8.09%
    Return on average tangible common equity 2  12.49% 10.60% 12.26% 16.80% 12.58% 12.96% 11.51%
    Net interest margin 2, 4  2.36% 2.41% 2.50% 2.72% 3.06% 2.49% 3.03%
    Efficiency ratio 2  64.42% 67.27% 61.68% 54.67% 59.70% 62.19% 55.68%
    Noninterest revenue as a % of total revenues 3  32.93% 31.94% 33.22% 31.47% 28.90% 32.40% 29.24%
                           
    NON-GAAP FINANCIAL INFORMATION                   
    Adjusted pre-provision net revenue 1, 2 $41,144 $39,409 $37,486 $42,753 $47,156 $160,792 $180,516 
    Adjusted net income 2  34,277  32,845  31,921  38,065  34,255  137,108  108,728 
    Adjusted diluted earnings per share 2  0.61  0.58  0.57  0.69  0.62  2.45  1.98 
    Adjusted pre-provision net revenue to average assets 2  1.27% 1.23% 1.32% 1.64% 1.80% 1.35% 1.75%
    Adjusted return on average assets 2  1.05% 1.03% 1.12% 1.46% 1.31% 1.15% 1.06%
    Adjusted return on average tangible common equity 2  14.30% 13.43% 13.14% 16.91% 15.21% 14.40% 12.47%
    Adjusted net interest margin 2, 4  2.31% 2.35% 2.43% 2.63% 2.96% 2.42% 2.92%
    Adjusted efficiency ratio 2  59.09% 58.97% 58.89% 54.33% 52.39% 57.89% 53.02%
                           
    1 Net interest income plus noninterest income, excluding security gains and losses, less noninterest expense. 
    2 See “Non-GAAP Financial Information” for reconciliation. 
    3 Revenue consists of net interest income plus noninterest income, excluding security gains and losses. 
    4 On a tax-equivalent basis, assuming a federal income tax rate of 21%. 


    CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
    (dollars in thousands, except per share data)
                    
      December 31, September 30, June 30, March 31, December 31,
         2021    2021    2021    2021    2020
    ASSETS               
    Cash and cash equivalents $836,095  $883,845  $920,810  $404,802  $688,537 
    Investment securities  3,994,822   4,010,256   3,478,467   2,804,101   2,266,717 
                    
    Loans held for sale  23,875   20,225   17,834   38,272   42,813 
                    
    Commercial loans  5,449,689   5,431,342   5,475,461   5,402,970   5,368,897 
    Retail real estate and retail other loans  1,739,309   1,719,293   1,710,189   1,376,330   1,445,280 
    Portfolio loans  7,188,998   7,150,635   7,185,650   6,779,300   6,814,177 
                    
    Allowance for credit losses  (87,887)  (92,802)  (95,410)  (93,943)  (101,048)
    Premises and equipment  136,147   142,031   145,437   132,669   135,191 
    Goodwill and other intangibles  375,924   378,891   381,795   361,120   363,521 
    Right of use asset  10,533   11,068   8,228   7,333   7,714 
    Other assets  381,182   395,181   372,638   325,909   326,425 
    Total assets $12,859,689  $12,899,330  $12,415,449  $10,759,563  $10,544,047 
                    
    LIABILITIES & STOCKHOLDERS' EQUITY               
    Noninterest bearing deposits $3,670,267  $3,453,906  $3,186,650  $2,859,492  $2,552,039 
    Interest checking, savings, and money market deposits  6,162,661   6,337,026   6,034,871   4,991,887   5,006,462 
    Time deposits  935,649   1,026,935   1,115,596   1,022,468   1,119,348 
    Total deposits $10,768,577  $10,817,867  $10,337,117  $8,873,847  $8,677,849 
                    
    Securities sold under agreements to repurchase $270,139  $241,242  $207,266  $210,132  $175,614 
    Short-term borrowings  17,678   17,673   30,168   4,663   4,658 
    Long-term debt  268,773   271,780   274,788   226,797   226,792 
    Junior subordinated debt owed to unconsolidated trusts  71,635   71,593   71,551   71,509   71,468 
    Lease liability  10,591   11,120   8,280   7,380   7,757 
    Other liabilities  133,184   134,979   140,588   99,413   109,840 
    Total liabilities $11,540,577  $11,566,254  $11,069,758  $9,493,741  $9,273,978 
    Total stockholders' equity $1,319,112  $1,333,076  $1,345,691  $1,265,822  $1,270,069 
    Total liabilities & stockholders' equity $12,859,689  $12,899,330  $12,415,449  $10,759,563  $10,544,047 
                    
    SHARE DATA               
    Book value per common share $23.80  $23.88  $23.89  $23.29  $23.34 
    Tangible book value per common share 1 $17.01  $17.09  $17.11  $16.65  $16.66 
    Ending number of common shares outstanding  55,434,910   55,826,984   56,330,616   54,345,379   54,404,379 
                    
    1 See "Non-GAAP Financial Information" for reconciliation. Excludes tax effect of other intangible assets.


    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
    (dollars in thousands, except per share data)
                    
      Three Months Ended  Years Ended
      December 31, September 30, December 31, December 31, December 31,
         2021    2021    2020 2021 2020
    INTEREST INCOME               
    Interest and fees on loans held for sale and portfolio $62,965  $65,163  $71,525 $252,097  $284,959
    Interest on investment securities  13,658   12,239   9,651  45,552   39,916
    Other interest income  294   462   127  1,151   1,723
    Total interest income $76,917  $77,864  $81,303 $298,800  $326,598
                    
    INTEREST EXPENSE               
    Interest on deposits $2,497  $3,059  $4,638 $12,583  $30,691
    Interest on securities sold under agreements to repurchase  50   60   64  227   660
    Interest on short-term borrowings  84   112   19  279   234
    Interest on long-term debt  3,123   3,150   2,906  12,173   9,118
    Junior subordinated debt owed to unconsolidated trusts  655   728   740  2,840   2,960
    Total interest expense $6,409  $7,109  $8,367 $28,102  $43,663
                    
    Net interest income $70,508  $70,755  $72,936 $270,698  $282,935
    Provision for loan losses  (4,736)  (1,869)  3,141  (15,101)  38,797
    Net interest income after provision for loan losses $75,244  $72,624  $69,795 $285,799  $244,138
                    
    NONINTEREST INCOME               
    Wealth management fees $13,751  $13,749  $10,632 $53,086  $42,928
    Fees for customer services  9,668   9,288   8,204  35,604   31,604
    Payment technology solutions  4,576   4,620   3,954  18,347   15,628
    Mortgage revenue  1,086   1,740   3,159  7,239   13,038
    Income on bank owned life insurance  1,727   999   1,019  5,166   5,380
    Net security gains (losses)  474   57   855  3,070   1,331
    Other  3,807   2,806   2,676  10,292   8,356
    Total noninterest income $35,089  $33,259  $30,499 $132,804  $118,265
                    
    NONINTEREST EXPENSE               
    Salaries, wages, and employee benefits $38,090  $41,949  $31,322 $145,312  $126,719
    Data processing expense  4,981   7,782   4,043  21,862   16,426
    Net occupancy expense  4,740   4,797   4,188  18,346   17,607
    Furniture and equipment expense  2,001   2,208   2,239  8,301   9,550
    Professional fees  1,932   1,361   2,888  7,549   8,396
    Amortization expense  3,074   3,149   2,439  11,274   10,008
    Interchange expense  1,432   1,434   1,220  5,792   4,810
    Other operating expenses  14,919   10,807   15,734  43,344   40,681
    Total noninterest expense $71,169  $73,487  $64,073 $261,780  $234,197
                    
    Income before income taxes $39,164  $32,396  $36,221 $156,823  $128,206
    Income taxes  9,238   6,455   7,876  33,374   27,862
    Net income $29,926  $25,941  $28,345 $123,449  $100,344
                    
    SHARE DATA               
    Basic earnings per common share $0.54  $0.46  $0.52 $2.23  $1.84
    Fully-diluted earnings per common share $0.53  $0.46  $0.52 $2.20  $1.83
    Average common shares outstanding  55,705,169   56,227,816   54,532,705  55,369,476   54,567,429
    Diluted average common shares outstanding  56,413,026   56,832,518   54,911,458  56,008,805   54,826,939

    Balance Sheet Growth

    Our balance sheet remains a source of strength. Total assets were $12.86 billion at December 31, 2021, $12.90 billion at September 30, 2021, and $10.54 billion at December 31, 2020. At December 31, 2021, portfolio loans were $7.19 billion, compared to $7.15 billion as of September 30, 2021, and $6.81 billion as of December 31, 2020.   Amortized costs of PPP loans of $75.0 million, $178.2 million, and $446.4 million are included in the December 31, 2021, September 30, 2021, and December 31, 2020, portfolio loan balances, respectively.   During the fourth quarter of 2021, Busey Bank experienced another strong quarter of core loan growth of $141.6 million, consisting of growth in commercial balances3 (excluding PPP loans) of $121.6 million and growth in retail real estate and retail other balances of $20.0 million. Growth was principally driven by our Northern, Central, and Gateway regions. Loan growth (excluding PPP loans) of $141.6 million in the fourth quarter of 2021 follows $177.1 million in the third quarter and $142.0 million in the second quarter. Over the last three quarters, the Company has generated $460.7 million in core loan growth (excluding PPP loans), equating to an annualized growth rate of 9.8%.

    Average portfolio loans were $7.11 billion for the fourth quarter of 2021, compared to $7.13 billion for the third quarter of 2021 and $6.99 billion for the fourth quarter of 2020. The average balance of PPP loans for the fourth quarter of 2021 was $123.5 million, compared to $291.8 million for the third quarter of 2021 and $608.9 million for the fourth quarter of 2020. Average interest-earning assets for the fourth quarter of 2021 were $11.95 billion, compared to $11.73 billion for the third quarter of 2021, and $9.56 billion for the fourth quarter of 2020.

    Total deposits were $10.77 billion at December 31, 2021, compared to $10.82 billion at September 30, 2021, and $8.68 billion at December 31, 2020. Fluctuations in deposit balances can be attributed to the retention of PPP loan funding in customer deposit accounts, the impacts of economic stimulus, other core deposit4 growth, and the seasonality of public funds. The Company remains funded substantially through core deposits with significant market share in its primary markets. Core deposits now account for 98.7% of total deposits. Cost of deposits declined to 0.09% in the fourth quarter, a 2 basis point reduction compared to September 30, 2021.

    Net Interest Margin1 and Net Interest Income

    Net interest margin for the fourth quarter of 2021 was 2.36%, compared to 2.41% for the third quarter of 2021, and 3.06% for the fourth quarter of 2020. Excluding purchase accretion, adjusted net interest margin1 was 2.31% for the fourth quarter of 2021, compared to 2.35% in the third quarter of 2021, and 2.96% in the fourth quarter of 2020.  Net interest income was $70.5 million in the fourth quarter of 2021 compared to $70.8 million in the third quarter of 2021, and $72.9 million in the fourth quarter of 2020.   Net interest income excluding PPP net fee contribution was $67.8 million in the fourth quarter of 2021 compared to $66.2 million in the third quarter of 2021, and $64.1 in the fourth quarter of 2020.

    The Federal Open Market Committee rate cuts during the first quarter of 2020 have contributed to the decline in net interest margin over the past year, as assets, in particular commercial loans, repriced more quickly and to a greater extent than liabilities. The net interest margin has also been negatively impacted by the sizeable balance of lower-yielding PPP loans, significant growth in the Company’s liquidity position, and the issuance of debt. Those impacts were partially offset by the Company’s efforts to lower deposit funding costs as well as the fees recognized related to PPP loans. Factors contributing to the 5 basis point decline in net interest margin during the fourth quarter of 2021 include:

    • Reduced volume of PPP loan forgiveness which contributed -7 basis points
    • Reduced recognition of purchase accounting accretion which contributed -1 basis points
    • Funding cost improvements which contributed +3 basis points

    The deceleration of PPP loan forgiveness was the largest driver of net interest margin dilution during the fourth quarter. SBA loan forgiveness and customer paydowns of $106.2 million resulted in deferred net fee recognition of $2.9 million versus SBA loan forgiveness and customer paydowns of $216.6 million during the third quarter resulting in deferred net fee recognition of $4.4 million. As of December 31, 2021, the PPP loan portfolio was down to $76.9 million of principal balances and net deferred fees remaining of $1.9 million.

    Net interest margin excluding purchase accretion and the contribution from PPP loans was stable from the third quarter to the fourth quarter of 2021. The contribution of core loan portfolio growth and the further reduction of funding costs helped to offset loan yield compression that results from the natural repricing dynamics of our asset sensitive balance sheet in this persistent low-rate environment.   Based on a static balance sheet, a +100 basis point parallel shift in rates would improve net interest income by 8.8%.

    Asset Quality

    Credit quality continues to be exceptionally strong. Loans 30-89 days past due were $6.3 million as of December 31, 2021, compared to $6.4 million as of September 30, 2021, and $7.6 million as of December 31, 2020. Non-performing loans totaled $16.9 million as of December 31, 2021, compared to $25.9 million as of September 30, 2021, and $24.3 million as of December 31, 2020. The fourth quarter decrease includes a $4.9 million sale of non-performing retail real estate loans. Continued disciplined credit management resulted in non-performing loans as a percentage of total loans of 0.23% at December 31, 2021, compared to 0.36% at both September 30, 2021, and December 31, 2020. Excluding the amortized cost of PPP loans, non-performing loans as a percentage of total loans was 0.24% at December 31, 2021, compared to 0.37% at September 30, 2021, and 0.38% at December 31, 2020. Meanwhile, non-performing assets finished the year at 0.17% of total assets.

    Net charge-offs totaled $0.2 million for the quarter ended December 31, 2021, compared to $0.7 million and $0.9 million for the quarters ended September 30, 2021, and December 31, 2020, respectively.   The annualized ratio of fourth quarter net charge-offs to average loans was 0.01%. The allowance as a percentage of portfolio loans was 1.22% at December 31, 2021, compared to 1.30% at September 30, 2021, and 1.48% at December 31, 2020. Excluding the amortized cost of PPP loans, the allowance as a percentage of portfolio loans was 1.24% at December 31, 2021. The allowance as a percentage of non-performing loans was 521.52% at December 31, 2021, compared to 358.86% at September 30, 2021, and 415.82% at December 31, 2020.

    The Company maintains a well-diversified loan portfolio and, as a matter of policy and practice, limits concentration exposure in any particular loan segment.

    ASSET QUALITY (Unaudited)
    (dollars in thousands)
                     
      As of and for the Three Months Ended
      December 31, September 30, June 30, March 31, December 31,
         2021    2021    2021    2021    2020
                     
    ASSET QUALITY                
    Portfolio loans $7,188,998  $7,150,635  $7,185,650  $6,779,300  $6,814,177 
    Portfolio loans excluding amortized cost of PPP loans  7,114,040   6,972,404   6,795,255   6,257,196   6,367,774 
    Loans 30-89 days past due  6,261   6,446   3,888   9,929   7,578 
    Non-performing loans:                
    Non-accrual loans  15,946   25,369   27,725   21,706   22,930 
    Loans 90+ days past due and still accruing  906   491   590   1,149   1,371 
    Total non-performing loans $16,852  $25,860  $28,315  $22,855  $24,301 
    Total non-performing loans, segregated by geography:                
    Illinois / Indiana $10,450  $17,824  $21,398  $15,457  $16,234 
    Missouri  5,349   6,736   5,645   6,170   6,764 
    Florida  1,053   1,300   1,272   1,228   1,303 
    Other non-performing assets  4,416   3,184   3,137   4,292   4,571 
    Total non-performing assets $21,268  $29,044  $31,452  $27,147  $28,872 
                     
    Total non-performing assets to total assets  0.17%   0.23%   0.25%   0.25%   0.27%
    Total non-performing assets to portfolio loans and non-performing assets  0.30%   0.41%   0.44%   0.40%   0.42%
    Allowance for credit losses to portfolio loans  1.22%   1.30%   1.33%   1.39%   1.48%
    Allowance for credit losses to portfolio loans, excluding PPP  1.24%   1.33%   1.40%   1.50%   1.59%
    Allowance for credit losses as a percentage of non-performing loans  521.52%   358.86%   336.96%   411.04%   415.82%
    Net charge-offs (recoveries) $179  $739  $1,011  $309  $934 
    Provision  (4,736)  (1,869)  (1,700)  (6,796)  3,141 

    Noninterest Income

    Total noninterest income increased to $35.1 million for the fourth quarter of 2021, compared to $33.3 million for the third quarter of 2021 and $30.5 million for the fourth quarter of 2020. Revenues from wealth management fees and payment technology solutions activities represented 52.2% of the Company’s noninterest income for the quarter ended December 31, 2021, providing a balance to spread-based revenue from traditional banking activities. On a combined basis, revenue from these two critical operating areas increased by 25.6% compared to the fourth quarter of 2020.

    Wealth management fees were $13.8 million for the fourth quarter of 2021, compared to $13.7 million for the third quarter of 2021 and $10.6 million for the fourth quarter of 2020, a 29.3% increase from the comparable period in 2020. Net income from the Wealth Management segment was $4.3 million for the fourth quarter of 2021, compared to $4.7 million for the third quarter of 2021, and $3.3 million in the fourth quarter of 2020, a 28.5% increase from the comparable period in 2020. First Busey’s Wealth Management division ended the fourth quarter of 2021 with $12.73 billion in assets under care, compared to $12.36 billion at the end of the third quarter of 2021, and $10.23 billion at the end of the fourth quarter of 2020, a 24.5% increase from the comparable period in 2020.

    Payment technology solutions revenue from FirsTech was $4.6 million for the fourth quarter of 2021, consistent with the third quarter of 2021, and a 15.7% increase from $4.0 million for the fourth quarter of 2020. The FirsTech operating segment generated net income of $0.3 million in the fourth quarter of 2021, a decrease from $0.4 million in both the third quarter of 2021 and the fourth quarter of 2020. FirsTech generated revenue of $19.7 million5 during 2021, compared to $16.6 million5 during 2020, representing an increase of 18.5%. The Company is currently making strategic investments in FirsTech to further enhance future growth including further upgrades to the product and engineering teams to build an application programming interface (“API”) first cloud-based platform to provide for fully integrated payment capabilities as well as the continued development of our Banking as a Service (“BaaS”) platform.

    Fees for customer services increased to $9.7 million for the fourth quarter of 2021, compared to $9.3 million in the third quarter of 2021 and $8.2 million in the fourth quarter of 2020, a 17.8% increase from the comparable period in 2020. Fees for customer services have been impacted since early 2020 by changing customer behaviors resulting from COVID-19 and government stimulus programs, and continue to rebound with improving economic conditions and customer activity levels.

    Mortgage revenue was $1.1 million in the fourth quarter of 2021, a decrease from $1.7 million in the third quarter of 2021, and $3.2 million in the fourth quarter of 2020. Sold-loan mortgage volume declined in the fourth quarter of 2021 compared to the same quarter in 2020 due to a higher share of portfolio loan production in 2021. Further, net gain on sale spreads declined from historically high levels seen earlier in 2021.

    Operating Efficiency

    Total noninterest expense was $71.2 million in the fourth quarter of 2021, compared to $73.5 million in the third quarter of 2021, and $64.1 million in the fourth quarter of 2020. Noninterest expense including amortization of intangibles but excluding non-operating adjustment items6 was $65.5 million in the fourth quarter of 2021, compared to $64.8 million in the third quarter of 2021, and $56.5 million in the fourth quarter of 2020.   As a result, the efficiency ratio6 was 64.42% for the quarter ended December 31, 2021, compared to 67.27% for the quarter ended September 30, 2021, and 59.70% for the quarter ended December 31, 2020. The adjusted efficiency ratio6 was 59.09% for the quarter ended December 31, 2021, 58.97% for the quarter ended September 30, 2021, and 52.39% for the quarter ended December 31, 2020. The Company remains focused on expense discipline and realized synergies in the fourth quarter of 2021 from the GSB merger and Personal Banking Transformation Plan.

    Noteworthy components of noninterest expense are as follows:

    • Salaries, wages, and employee benefits were $38.1 million in the fourth quarter of 2021, a decrease from $41.9 million in the third quarter of 2021, and an increase from $31.3 million in the fourth quarter of 2020. Total full-time equivalents numbered 1,463 at December 31, 2021, compared to 1,462 at September 30, 2021, and 1,346 at December 31, 2020.   The Company recorded $2.0 million of non-operating salaries, wages, and employee benefit expenses in the fourth quarter of 2021 largely related to the GSB merger, compared to $4.7 million in the third quarter of 2021, and $0.1 million in the fourth quarter of 2020.

    • Data processing expense was $5.0 million in the fourth quarter of 2021, a decrease from $7.8 million in the third quarter of 2021, and an increase from $4.0 million in the fourth quarter of 2020. The Company recorded $0.1 million of non-operating data processing expenses in the fourth quarter of 2021, compared to $3.2 million in the third quarter of 2021 and $0.1 million in the fourth quarter of 2020.   Non-operating data processing costs related to the acquisition of GSB, and were higher in the third quarter of 2021 due to the integration of GSB into Busey Bank.

    • Professional fees were $1.9 million in the fourth quarter of 2021, an increase from $1.4 million in the third quarter of 2021, and a decrease from $2.9 million in the fourth quarter of 2020. The Company recorded $0.2 million of non-operating professional fees in the fourth quarter of 2021, compared to $0.1 million in the third quarter of 2021 and $0.5 million in the fourth quarter of 2020.

    • Amortization expense was $3.1 million in the fourth quarter of 2021, consistent with the third quarter of 2021, and an increase from $2.4 million in the fourth quarter of 2020. The year-over-year increase is attributable to the acquisition of GSB, completed in the second quarter of 2021.

    • Other operating expenses were $14.9 million for the fourth quarter of 2021, an increase from $10.8 million in the third quarter of 2021, and a decrease from $15.7 million in the fourth quarter of 2020.   The Company recorded $3.3 million of non-operating expenses within the other operating expense line in the fourth quarter of 2021, which included $3.2 million of fixed asset impairment related to the 2021 service center closures, compared to $0.6 million non-operating expenses recorded in the third quarter of 2021 and $6.9 million in the fourth quarter of 2020. Higher business development and marketing expenses accounted for $0.6 million of the quarter-over-quarter increase in other operating expenses, excluding non-operating expenses.

    Capital Strength

    The Company's strong capital levels, coupled with its earnings, have allowed First Busey to provide a steady return to its stockholders through dividends. The Company will pay a cash dividend on January 28, 2022, of $0.23 per common share to stockholders of record as of January 21, 2022. The Company has consistently paid dividends to its common stockholders since the bank holding company was organized in 1980.

    As of December 31, 2021, the Company continued to exceed the capital adequacy requirements necessary to be considered “well-capitalized” under applicable regulatory guidelines. The Company’s tangible common equity6 was $959.4 million at December 31, 2021, compared to $971.3 million at September 30, 2021, and $921.1 million at December 31, 2020. Tangible common equity represented 7.68% of tangible assets at December 31, 2021, compared to 7.75% at September 30, 2021, and 9.03% at December 31, 2020.6

    During the fourth quarter of 2021, the Company purchased 418,000 shares of its common stock at a weighted average price of $26.33 per share for a total of $11.0 million under the Company’s stock repurchase plan.   Total share repurchases in 2021 were 1,323,000 shares at a weighted average price of $24.98 per share. As of December 31, 2021, the Company had 535,824 shares remaining on its stock repurchase plan available for repurchase.

    4Q21 Quarterly Earnings Supplement

    For additional information on the Company’s financial condition, operating results, and response to COVID-19, please refer to the 4Q21 Quarterly Earnings Supplement presentation furnished via Form 8-K on January 25, 2022, in connection with this earnings release.

    (1) A Non-GAAP financial measure.  See “Non-GAAP Financial Information” for reconciliation.

    Corporate Profile

    As of December 31, 2021, First Busey Corporation (Nasdaq: BUSE) was a $12.86 billion financial holding company headquartered in Champaign, Illinois.

    Busey Bank, a wholly-owned bank subsidiary of First Busey Corporation, had total assets of $12.83 billion as of December 31, 2021, and is headquartered in Champaign, Illinois. Busey Bank currently has 46 banking centers serving Illinois, eight banking centers serving Missouri, three banking centers serving southwest Florida, and one banking center in Indianapolis, Indiana.

    Busey Bank owns a retail payment processing subsidiary, FirsTech, which processes approximately 30 million transactions for a total of $9.5 billion on an annual basis. FirsTech operates across the United States and Canada, providing payment solutions that include, but are not limited to, electronic payments, mobile payments, phone payments, remittance processing, in person payments, and merchant services. In addition, FirsTech continues to grow its new BaaS platform. More information about FirsTech can be found at firstechpayments.com.

    Through the Company’s Wealth Management division, the Company provides asset management, investment, and fiduciary services to individuals, businesses, and foundations. As of December 31, 2021, assets under care were $12.73 billion.

    First Busey has been named a Best Place to Work across the company footprint since 2016 by Best Companies Group. We are honored to be consistently recognized by national and local organizations for our engaged culture of integrity and commitment to community development.

    For more information about us, visit busey.com.

    Category: Financial
    Source: First Busey Corporation

    Contacts:

    Jeffrey D. Jones, Chief Financial Officer
    217-365-4130

    Non-GAAP Financial Information

    This earnings release contains certain financial information determined by methods other than GAAP. These measures include pre-provision net revenue, adjusted pre-provision net revenue, pre-provision revenue to average assets, adjusted pre-provision net revenue to average assets, adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted net interest margin, adjusted noninterest expense, efficiency ratio, adjusted efficiency ratio, tangible common equity, tangible common equity to tangible assets, tangible book value per common share, and return on average tangible common equity. Management uses these non-GAAP measures, together with the related GAAP measures, in analysis of the Company’s performance and in making business decisions. Management also uses these measures for peer comparisons.

    A reconciliation to what management believes to be the most direct compared GAAP financial measures, specifically total net interest income in the case of pre-provision net revenue, adjusted pre-provision net revenue, pre-provision net revenue to average assets, and adjusted pre-provision net revenue to average assets; net income in the case of adjusted net income, adjusted diluted earnings per share, and adjusted return on average assets; total net interest income in the case of adjusted net interest margin; total noninterest income and total noninterest expense in the case of adjusted noninterest expense, efficiency ratio, and adjusted efficiency ratio; and total stockholders’ equity in the case of tangible common equity, tangible common equity to tangible assets, tangible book value per common share, and return on average tangible common equity, appears below. The Company believes the adjusted measures are useful for investors and management to understand the effects of certain non-recurring noninterest items and provide additional perspective on the Company’s performance over time as well as comparison to the Company’s peers.

    These non-GAAP disclosures have inherent limitations and are not audited. They should not be considered in isolation or as a substitute for the results reported in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Tax effected numbers included in these non-GAAP disclosures are based on estimated statutory rates or effective rates as appropriate.


    Reconciliation of Non-GAAP Financial Measures – Pre-Provision Net Revenue, Adjusted Pre-Provision Net Revenue,
    Pre-Provision Net Revenue to Average Assets, and Adjusted Pre-Provision Net Revenue to Average Assets (Unaudited)
    (dollars in thousands)
                    
      Three Months Ended Year Ended
      December 31, September 30, December 31, December 31, December 31,
         2021    2021    2020    2021    2020
    Net interest income $70,508  $70,755  $72,936  $270,698  $282,935 
    Noninterest income  35,089   33,259   30,499   132,804   118,265 
    Less securities (gains) and losses, net  (474)  (57)  (855)  (3,070)  (1,331)
    Noninterest expense  (71,169)  (73,487)  (64,073)  (261,780)  (234,197)
    Pre-provision net revenue  33,954   30,470   38,507   138,652   165,672 
                    
    Adjustments to pre-provision net revenue:               
    Acquisition and other restructuring expenses  5,641   8,677   7,550   17,351   10,711 
    Provision for unfunded commitments  294   (978)  (12)  (774)  1,822 
    New Market Tax Credit amortization  1,255   1,240   1,111   5,563   2,311 
    Adjusted pre-provision net revenue $41,144  $39,409  $47,156  $160,792  $180,516 
                    
    Average total assets $12,895,049  $12,697,795  $10,419,364  $11,904,935  $10,292,256 
                    
    Reported: Pre-provision net revenue to average assets 1  1.04%   0.95%  1.47%   1.16%   1.61% 
    Adjusted: Pre-provision net revenue to average assets 1  1.27%   1.23%   1.80%   1.35%   1.75% 
                    
    1 For quarterly periods, measures are annualized.               


    Reconciliation of Non-GAAP Financial Measures – Adjusted Net Income, Adjusted Diluted Earnings Per Share, and
    Adjusted Return on Average Assets (Unaudited)
    (dollars in thousands, except per share data)
                    
      Three Months Ended Year Ended
      December 31, September 30, December 31, December 31, December 31,
         2021    2021    2020    2021    2020
    Net income $29,926  $25,941  $28,345  $123,449  $100,344 
                    
    Adjustments to net income:               
    Acquisition expenses:               
    Salaries, wages, and employee benefits  1,760   4,462   —   7,347   — 
    Data processing  143   3,182   56   3,700   56 
    Lease or fixed asset impairment  —   —   245   —   479 
    Professional fees, occupancy, and other  290   776   479   2,599   864 
    Other restructuring costs:               
    Salaries, wages, and employee benefits  215   257   113   472   2,470 
    Lease or fixed asset impairment  3,227   —   6,657   3,227   6,657 
    Professional fees, occupancy, and other  6   —   —   6   185 
    Related tax benefit  (1,290)  (1,773)  (1,640)  (3,692)  (2,327)
    Adjusted net income $34,277  $32,845  $34,255  $137,108  $108,728 
                    
    Dilutive average common shares outstanding  56,413,026   56,832,518   54,911,458   56,008,805   54,826,939 
    Reported: Diluted earnings per share $0.53  $0.46  $0.52  $2.20  $1.83 
    Adjusted: Diluted earnings per share $0.61  $0.58  $0.62  $2.45  $1.98 
                    
    Average total assets $12,895,049  $12,697,795  $10,419,364  $11,904,935  $10,292,256 
                    
    Reported: Return on average assets 1  0.92%   0.81%   1.08%   1.04%   0.97% 
    Adjusted: Return on average assets 1  1.05%   1.03%   1.31%   1.15%   1.06% 
                    
    1 For quarterly periods, measures are annualized.               


    Reconciliation of Non-GAAP Financial Measures – Adjusted Net Interest Margin (Unaudited)
    (dollars in thousands)
                    
      Three Months Ended Year Ended
      December 31, September 30, December 31, December 31, December 31,
         2021    2021    2020    2021    2020
    Net interest income $70,508  $70,755  $72,936  $270,698  $282,935 
                    
    Adjustments to net interest income:               
    Tax-equivalent adjustment  577   598   655   2,355   2,740 
    Purchase accounting accretion related to business combinations  (1,469)  (1,799)  (2,469)  (7,151)  (10,391)
    Adjusted net interest income $69,616  $69,554  $71,122  $265,902  $275,284 
                    
    Average interest-earning assets $11,947,653  $11,730,637  $9,557,265  $10,978,116  $9,417,938 
                    
    Reported: Net interest margin 1  2.36%    2.41%   3.06%    2.49%    3.03% 
    Adjusted: Net interest margin 1  2.31%   2.35%   2.96%    2.42%    2.92% 
                    
    1 For quarterly periods, measures are annualized.               


    Reconciliation of Non-GAAP Financial Measures – Adjusted Noninterest Expense, Efficiency Ratio, and Adjusted Efficiency Ratio (Unaudited)
    (dollars in thousands)
                    
      Three Months EndedYear Ended
      December 31, September 30, December 31, December 31, December 31,
         2021    2021    2020    2021    2020
    Net interest income $70,508  $70,755  $72,936  $270,698  $282,935 
    Tax-equivalent adjustment  577   598   655   2,355   2,740 
    Tax equivalent interest income $71,085  $71,353  $73,591  $273,053  $285,675 
                    
    Noninterest income $35,089  $33,259  $30,499  $132,804  $118,265 
    Less security (gains) and losses, net  (474)  (57)  (855)  (3,070)  (1,331)
    Adjusted noninterest income $34,615  $33,202  $29,644  $129,734  $116,934 
                    
    Noninterest expense $71,169  $73,487  $64,073  $261,780  $234,197 
    Non-operating adjustments:               
    Salaries, wages, and employee benefits  (1,975)  (4,719)  (113)  (7,819)  (2,470)
    Data processing  (143)  (3,182)  (56)  (3,700)  (56)
    Impairment, professional fees, occupancy, and other  (3,523)  (776)  (7,381)  (5,832)  (8,185)
    Noninterest expense, excluding non-operating adjustments  65,528   64,810   56,523   244,429   223,486 
    Amortization of intangible assets  (3,074)  (3,149)  (2,439)  (11,274)  (10,008)
    Adjusted noninterest expense $62,454  $61,661  $54,084  $233,155  $213,478 
                    
    Reported: Efficiency ratio  64.42%   67.27%   59.70%   62.19%   55.68% 
    Adjusted: Efficiency ratio  59.09%   58.97%    52.39%   57.89%    53.02% 


    Reconciliation of Non-GAAP Financial Measures – Tangible Common Equity, Tangible Common Equity to Tangible Assets,
    Tangible Book Value Per Common Share, Return on Average Tangible Common Equity (Unaudited)
    (dollars in thousands)
                    
      As of and for the Three Months Ended  For the Year Ended
      December 31, September 30, December 31, December 31, December 31,
         2021    2021    2020    2021    2020
    Total assets $12,859,689  $12,899,330  $10,544,047       
    Goodwill and other intangible assets, net  (375,924)  (378,891)  (363,521)      
    Tax effect of other intangible assets, net  16,254   17,115   14,556       
    Tangible assets $12,500,019  $12,537,554  $10,195,082       
                    
    Total stockholders’ equity $1,319,112  $1,333,076  $1,270,069       
    Goodwill and other intangible assets, net  (375,924)  (378,891)  (363,521)      
    Tax effect of other intangible assets, net  16,254   17,115   14,556       
    Tangible common equity $959,442  $971,300  $921,104       
                    
    Ending number of common shares outstanding  55,434,910   55,826,984   54,404,379       
                    
    Tangible common equity to tangible assets 1  7.68%   7.75%   9.03%       
    Tangible book value per common share $17.01  $17.09  $16.66       
                    
    Average common equity $1,328,692  $1,351,416  $1,261,298  $1,324,862  $1,240,374 
    Average goodwill and other intangible assets, net  (377,825)  (380,885)  (365,120)  (372,593)  (368,624)
    Average tangible common equity $950,867  $970,531  $896,178  $952,269  $871,750 
                    
    Reported: Return on average tangible common equity 2  12.49%   10.60%   12.58%   12.96%    11.51% 
    Adjusted: Return on average tangible common equity 2, 3  14.30%   13.43%   15.21%   14.40% %  12.47% 
                    
    1 Tax-effected measure, 28% estimated deferred tax rate.               
    2 For quarterly periods, measures are annualized.               
    3 Calculated using adjusted net income.               

    Special Note Concerning Forward-Looking Statements

    Statements made in this document, other than those concerning historical financial information, may be considered 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 Company’s ability to control or predict, could cause actual results to differ materially from those in the Company’s forward-looking statements.   These factors include, among others, the following: (i) the strength of the local, state, national, and international economy; (ii) the economic impact of any future terrorist threats or attacks, widespread disease or pandemics (including the COVID-19 pandemic), or other adverse external events that could cause economic deterioration or instability in credit markets; (iii) changes in state and federal laws, regulations, and governmental policies concerning the Company’s general business; (iv) changes in accounting policies and practices; (v) changes in interest rates and prepayment rates of the Company’s assets (including the impact of The London Inter-bank Offered Rate phase-out); (vi) increased competition in the financial services sector and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) the loss of key executives or associates; (ix) changes in consumer spending; (x) unexpected results of current and/or future acquisitions, which may include failure to realize the anticipated benefits of any acquisition and the possibility that transaction costs may be greater than anticipated; (xi) unexpected outcomes of existing or new litigation involving the Company; and (xii) the economic impact of exceptional weather occurrences such as tornadoes, hurricanes, floods, and blizzards.   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 its financial results, is included in the Company’s filings with the Securities and Exchange Commission.

    1 See “Non-GAAP Financial Information” for reconciliation.
    2 Revenue from the Company’s subsidiary, FirsTech, Inc. (“FirsTech”), excluding consolidations and eliminations.
    3 Commercial balances include commercial, commercial real estate, and real estate construction loans.
    4 Core deposits include non-brokered transaction accounts, money market deposit accounts, and time deposits of $250,000 or less.
    5 Revenue equates to all revenue sources tied to FirsTech, excluding intracompany eliminations and consolidations.
    6 A Non-GAAP financial measure. See “Non-GAAP Financial Information” for reconciliation.


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