URBANA, Ill., Jan. 22 /PRNewswire-FirstCall/ -- First Busey Corporation consolidated net income for the quarter was $4.4 million compared to $7.3 million for the same period in 2006. Consolidated net income per fully-diluted share for the quarter ended December 31, 2007 totaled $0.12 compared to $0.34 per fully-diluted share for the same period in 2006. On an annual basis, consolidated net income was $31.5 million for 2007 as compared to $28.9 million for 2006. Consolidated net income per fully-diluted share was $1.13 for 2007 as compared to $1.35 per fully-diluted share for 2006.
The decline in fourth quarter net income was primarily due to two factors: one-time merger related expenses totaling approximately $1.8 million, after tax, from our recent business combination with Main Street Trust, Inc. and a significant addition to our provision for loan losses of $7.0 million, after tax. The increase in provision brought our total allowance for loan losses to $42.6 million or 1.39% of loans. Our non-performing loans totaled $20.1 million, which resulted in an allowance to non-performing loans coverage ratio of 212%. Net charge offs in the quarter totaled $7.3 million.
As discussed last quarter, we have continued to experience deterioration in our loan portfolio, primarily in southwest Florida. We have provided additional information in this report under the section Loan Portfolio Quality.
On a positive note, this quarter we are pleased to report the completion of our merger of Main Street Bank & Trust with and into Busey Bank, which coincided with the launch of our updated Busey brand. In addition to the Illinois bank merger, we also completed the combination of our wealth management units, which formed Busey Wealth Management, Inc.
The first quarter 2008 dividend is $0.20 per share, which represents an 11.1% per share increase. The dividend will be paid on January 25, 2008.
We appreciate the extra hard work and diligence our Associates exhibited in getting us through these mergers and systems conversions. We also would like to truly thank our customers for their loyalty and patience as we completed the merger.
With our team of terrific associates and loyal customers, I am very excited about the future! As always, your input and comments are welcome.
SELECTED FINANCIAL HIGHLIGHTS (amounts in thousands, except ratios and per share data) Three Months Ended Twelve Months Ended Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, 2007 2007 2006 2007 2006 Earnings & Per Share Data Net income $4,367 $11,510 $7,344 $31,477 $28,888 Basic earnings per share $0.12 $0.37 $0.34 $1.13 $1.35 Weighted average shares of common stock outstanding 36,519 31,464 21,359 27,779 21,349 Fully-diluted earnings per share $0.12 $0.36 $0.34 $1.13 $1.35 Weighted average shares of common stock and dilutive potential common shares outstanding 36,783 31,655 21,428 27,924 21,406 Market price per share at period end $19.86 $21.91 $23.05 Price to book ratio 136.16% 161.70% 266.93% Price to earnings ratio(1) 41.72 15.34 17.10 17.58 17.07 Cash dividends paid per share $0.18 $0.18 $0.16 $0.77 $0.64 Book value per share $14.59 $14.71 $8.64 Tangible book value per share $6.86 $7.20 $5.93 Common shares outstanding 36,316 36,585 21,456 Average Balances Assets $4,154,710 $3,639,161 $2,466,696 $3,185,603 $2,344,552 Investment securities 626,310 556,842 345,447 457,935 330,235 Gross loans 2,993,724 2,689,472 1,932,835 2,405,583 1,832,800 Earning assets 3,651,718 3,304,265 2,290,816 2,891,348 2,170,446 Deposits 3,209,772 2,909,176 1,974,574 2,529,807 1,867,058 Interest- bearing liabi- lities 3,297,075 2,873,767 2,029,894 2,575,915 1,910,218 Stockholders' equity 535,911 370,902 181,373 318,155 174,824 END OF PERIOD FINANCIAL DATA Tax equivalized net interest income $33,150 $30,556 $19,905 $103,593 $78,630 Gross loans 3,053,225 3,040,881 1,956,927 Allowance for loan losses 42,560 38,198 23,588 PERFORMANCE RATIOS Return on average assets(1) 0.42% 1.25% 1.18% 0.99% 1.23% Return on average equity(1) 3.23% 12.31% 16.06% 9.89% 16.52% Net interest margin(1) 3.60% 3.67% 3.45% 3.58% 3.62% Net interest spread 3.24% 3.16% 3.00% 3.16% 3.18% Efficiency ratio(2) 63.22% 56.67% 61.72% 57.78% 56.70% Non-interest revenue as a % of total revenues(3) 29.50% 26.73% 25.18% 27.23% 24.56% Allowance for loan losses to loans 1.39% 1.26% 1.21% Allowance as a percentage of non- performing loans 211.95% 159.74% 303.77% Ratio of average loan to average deposits 93.27% 92.45% 97.89% 95.09% 98.17% ASSET QUALITY Net charge-offs $7,287 $630 $264 $8,350 $902 Non-performing loans 20,080 23,912 7,765 Other non- performing assets 2,028 2,138 721 (1) Quarterly ratios annualized (2) Net of security gains and amortization (3) Net of interest expense, excludes security gains
Net income was $4.4 million for the quarter ended December 31, 2007, as compared to $7.3 million for the comparable period in 2006. For the quarter ended December 31, 2007, earnings per share on a fully-diluted basis were $0.12 as compared to the $0.34 per fully-diluted share for the comparable period in 2006. Net income was $31.5 million for 2007 as compared to $28.9 million for 2006. Earnings per share on a fully-diluted basis for 2007 were $1.13, a decrease of $0.22 or 16.3% from $1.35 for 2006.
Busey Bank's net income was $35.1 million for 2007, as compared to $29.5 million for 2006, an increase of 19.0%. During 2007, Busey Bank recorded $4.9 million, after tax, of loan loss provision as compared to $0.7 million, after tax, of loan loss provision recorded during 2006. Additionally, Busey Bank recorded $1.3 million, after tax, in one-time merger related expenses during the fourth quarter of 2007.
Busey Bank, N.A.'s net loss was $1.8 million for 2007, as compared to $3.5 million of net income for 2006. The net loss position was primarily related to loan loss provision of $3.9 million, after tax, recorded during 2007 as compared to $0.1 million, after tax, loan loss provision recorded during 2006. Busey Bank, N.A.'s net loss was partially offset by FirsTech, Inc.'s, its wholly-owned subsidiary, net income of $0.7 million for the five months following the merger with Main Street Trust, Inc. FirsTech's results include $0.2 million of expenses related to enhancement of processing controls, which will allow FirsTech to compete in the larger volume processing marketplace.
Net one-time charges during the fourth quarter totaled $1.8 million, after tax. The charges were primarily related to the merger with Main Street and included employee costs, rebranding related costs and system conversion costs.
Loan Portfolio Quality: As was the case during the third quarter of 2007, the Company experienced continued deterioration in its loan portfolio during the fourth quarter. Total non-performing assets were $22.1 million at December 31, 2007, compared to $26.0 million at September 30, 2007 and $17.2 million on a pro-forma combined basis with Main Street Trust, Inc. at December 31, 2006. Busey Bank and Busey Bank, N.A. have $13.9 million and $8.2 million in non-performing assets, respectively. Total non-performing assets in Florida were $10.4 million, with $2.2 million in Busey Bank and $8.2 in Busey Bank, N.A. The remaining $11.7 million of non-performing assets were primarily within the downstate Illinois market.
Non-accrual loans totaled $15.4 million, or 0.5% of gross loans, at December 31, 2007. Non-accrual loans primarily consisted of commercial non-accruals of $10.1 million and personal real estate loans of $5.3 million. Geographically, $7.2 million of non-accural loans were in Florida with the remainder primarily located in downstate Illinois.
The Company's 90+ days past due loans totaled $4.7 million, or 0.2% of gross loans, at December 31, 2007. Commercial accruing loans 90+ days past due were $3.3 million at December 31, 2007. The portion of 90+ days past due loans related to personal residential real estate loans was $1.4 million at December 31, 2007.
Other real estate owned totaled $2.0 million at December 31, 2007.
Net charge offs for the fourth quarter and the year ended December 31, 2007 were $7.3 million and $8.4 million, respectively.
Provision for loan losses was $11.7 million during the fourth quarter of 2007 compared to $0.3 million in the comparable period of 2006. The provision was $14.5 million for 2007, versus $1.3 million for 2006. As a percentage of total outstanding loans, the allowance for loan losses was 1.39% as of December 31, 2007, and 1.21% as of December 31, 2006. Total allowance for loan losses was $42.6 million at December 31, 2007, representing 212.0% coverage of non-performing loans.
The Company has been and continues to carefully evaluate its loan portfolios on a proactive basis. Once problem loans are identified, adjustments to the provision are made based upon all information available at that time. The increase in provision reflects managements' analysis of amounts necessary to cover potential losses in our loan portfolios. However, additional losses may be identified in our loan portfolio as new information is obtained. The Company may need to provide for additional loan losses in the future as management continues to identify potential problem loans and gain further information concerning existing problem loans. This is particularly the case in the weak economic climate in southwest Florida.
Condensed Consolidated Balance Sheets (Unaudited, in thousands, except per share data) Dec. 31, Sept. 30, Dec. 31, 2007 2007 2006 Assets Cash and due from banks $125,228 $108,037 $63,316 Federal funds sold 459 43,000 - Investment securities 610,422 691,831 365,608 Net loans 3,010,665 3,002,683 1,933,339 Premises and equipment 80,400 70,128 41,001 Goodwill and other intangibles 280,487 274,688 58,132 Other assets 85,264 97,783 48,118 Total assets $4,192,925 $4,288,150 $2,509,514 Liabilities & Stockholders' Equity Non-interest bearing deposits $389,672 $454,875 $246,440 Interest-bearing deposits 2,817,526 2,912,933 1,768,399 Total deposits $3,207,198 $3,367,808 $2,014,839 Federal funds purchased & securities sold under agreements to repurchase 203,119 137,463 54,770 Short-term borrowings 10,523 21,023 25,000 Long-term debt 150,910 135,825 156,650 Junior subordinated debt owed to unconsolidated trusts 55,000 55,000 55,000 Other liabilities 36,478 32,757 17,981 Total liabilities $3,663,228 $3,749,876 $2,324,240 Total stockholders' equity $529,697 $538,274 $185,274 Total liabilities & stockholders' equity $4,192,925 $4,288,150 $2,509,514 Per Share Data Book value per share $14.59 $14.71 $8.64 Tangible book value per share $6.86 $7.20 $5.93 Ending number of shares outstanding 36,316 36,585 21,456 Condensed Consolidated Statements of Income (Unaudited, in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2007 2006 2007 2006 Interest and fees on loans $55,763 $35,860 $178,700 $132,861 Interest on investment securities 7,375 3,677 21,865 13,156 Other interest income 348 161 1,338 349 Total interest income $63,486 $39,698 $201,903 $146,366 Interest on deposits 26,169 16,449 84,197 55,046 Interest on short-term borrowings 1,745 846 4,763 3,011 Interest on long-term debt 1,987 2,027 7,407 7,734 Junior subordinated debt owed to unconsolidated trusts 1,023 1,011 4,038 4,060 Total interest expense $30,924 $20,333 $100,405 $69,851 Net interest income $32,562 $19,365 $101,498 $76,515 Provision for loan losses 11,700 300 14,475 1,300 Net interest income after provision for loan losses $20,862 $19,065 $87,023 $75,215 Fees for customer services 3,941 2,890 12,963 11,088 Trust fees 3,951 1,550 10,041 6,020 Remittance processing 2,720 - 4,466 - Commissions and brokers' fees 586 666 2,535 2,653 Gain on sales of loans 818 585 3,232 2,443 Net security gains 723 1,667 3,718 3,547 Other 1,612 825 4,737 2,710 Total non-interest income $14,351 $8,183 $41,692 $28,461 Salaries and wages 11,914 6,553 37,311 26,431 Employee benefits 3,362 3,723 8,357 8,180 Net occupancy expense 2,635 1,307 7,449 5,121 Furniture and equipment expense 1,785 761 4,834 3,438 Data processing expense 2,568 409 5,299 1,753 Amortization expense 1,118 319 2,503 1,376 Other operating expenses 7,308 3,554 18,552 13,788 Total non-interest expense $30,690 $16,626 $84,305 $60,087 Income before income taxes $4,523 $10,622 $44,410 $43,589 Income taxes 156 3,278 12,933 14,701 Net income $4,367 $7,344 $31,477 $28,888 Per Share Data Basic earnings per share $0.12 $0.34 $1.13 $1.35 Fully-diluted earnings per share $0.12 $0.34 $1.13 $1.35 Diluted average shares outstanding 36,783 21,428 27,924 21,406 Corporate Profile
First Busey Corporation is a $4.2 billion financial holding company headquartered in Urbana, Illinois. First Busey Corporation has two wholly-owned banks with locations in three states. Busey Bank is headquartered in Champaign, Illinois and has forty-five banking centers serving downstate Illinois. Busey Bank has a banking center in Indianapolis, Indiana, and a loan production office in Fort Myers, Florida. On December 31, 2007, Busey Bank had total assets of $3.7 billion. Busey Bank, N.A. is headquartered in Fort Myers, Florida, with nine banking centers serving southwest Florida. Busey Bank, N.A. had total assets of $470.5 million as of December 31, 2007.
Busey Wealth Management is a wholly-owned subsidiary of First Busey Corporation. Through Busey Trust Company, Busey Wealth Management delivers trust, asset management, retail brokerage, and insurance products and services. As of December 31, 2007, Busey Wealth Management had approximately $4.2 billion in assets under care.
First Busey Corporation owns a retail payment processing subsidiary -- FirsTech, Inc. -- which processes over 27 million transactions per year through online bill payments, lockbox processing and walk-in payments through its 4,000 agent locations in 36 states.
Busey provides electronic delivery of financial services through Busey e-bank, http://www.busey.com/.
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.
Special Note Concerning Goodwill and Identifiable Intangibles
The excess purchase price resulting from the merger with Main Street Trust, Inc. has been allocated to goodwill and identifiable intangibles assets in accordance with current accounting guidance, to the extent that supportable documentation was available at December 31, 2007. Such amounts are subject to adjustment in the near term as additional analysis is performed or obtained from third party sources.
