First Busey Earnings 2019-06-30

BUSE 10Q Quarterly Report

Balance Sheet	Income Statement	Cash Flow

Table of Contents

UNITED STATES 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 6/30/2019


☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

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 incorporation or organization)		(I.R.S. Employer Identification No.)

100 W. University Ave. Champaign, Illinois		61820
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (217) 365-4544

N/A

(Former name, former address and former fiscal year, if changed since last report)

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 þ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☑	Accelerated filer ☐
Non-accelerated filer	☐	Smaller reporting company ☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol (s)	Name of each exchange on which registered
Common Stock, $.001 par value	BUSE	The Nasdaq Stock Market LLC

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class		Outstanding at August 7, 2019
Common Stock, $.001 par value		55,386,636

Table of Contents

FIRST BUSEY CORPORATION

FORM 10-Q

June 30, 2019

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Table of Contents

FIRST BUSEY CORPORATION and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30, 2019		December 31, 2018
	(dollars in thousands)
Assets
Cash and due from banks	$	113,346	$	128,838
Interest-bearing deposits		306,861		111,135
Total cash and cash equivalents		420,207		239,973

Debt securities available for sale		1,848,073		697,685
Debt securities held to maturity (fair value 2019 $15,934; 2018 $603,360)		15,708		608,660
Equity securities		5,362		6,169
Loans held for sale, at fair value		39,607		25,895
Portfolio loans (net of allowance for loan losses 2019 $51,375; 2018 $50,648)		6,480,751		5,517,780
Premises and equipment, net		149,726		117,672
Right of use asset		10,426		—
Goodwill		314,343		267,685
Other intangible assets, net		60,984		32,873
Cash surrender value of bank owned life insurance		173,150		128,491
Other assets		94,330		59,474
Total assets	$	9,612,667	$	7,702,357
Liabilities and Stockholders’ Equity
Liabilities
Deposits:
Noninterest-bearing	$	1,766,681	$	1,464,700
Interest-bearing		6,066,541		4,784,621
Total deposits		7,833,222		6,249,321

Securities sold under agreements to repurchase		190,846		185,796
Short-term borrowings		30,761		—
Long-term debt		86,772		50,000
Senior notes, net of unamortized issuance costs		39,607		39,539
Subordinated notes, net of unamortized issuance costs		59,197		59,147
Junior subordinated debt owed to unconsolidated trusts		71,230		71,155
Lease liability		10,531		—
Other liabilities		86,893		52,435
Total liabilities		8,409,059		6,707,393

Outstanding commitments and contingent liabilities (see Note 10)

Stockholders’ Equity
Common stock, $.001 par value, authorized 66,666,667 shares; 55,910,733 shares issued 2019 and 49,185,581 shares issued 2018		56		49
Additional paid-in capital		1,246,160		1,080,084
Accumulated deficit		(44,878)		(72,167)
Accumulated other comprehensive income (loss)		14,627		(6,812)
Total stockholders’ equity before treasury stock		1,215,965		1,001,154

Treasury stock, at cost (2019 524,097 shares; 2018 310,745 shares)		(12,357)		(6,190)
Total stockholders’ equity		1,203,608		994,964
Total liabilities and stockholders’ equity	$	9,612,667	$	7,702,357

Common shares outstanding at period end		55,386,636		48,874,836

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

FIRST BUSEY CORPORATION and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,
		2019		2018		2019		2018
	(dollars in thousands, except per share amounts)
Interest income:
Interest and fees on loans	$	78,031	$	62,290	$	149,820	$	123,250
Interest and dividends on investment securities:
Taxable interest income		11,152		6,323		21,336		12,313
Non-taxable interest income		1,200		1,204		2,276		2,464
Other interest income		1,083		508		2,315		931
Total interest income		91,466		70,325		175,747		138,958
Interest expense:
Deposits		14,154		6,904		26,654		12,891
Federal funds purchased and securities sold under agreements to repurchase		627		372		1,210		713
Short-term borrowings		494		457		685		933
Long-term debt		741		213		1,320		377
Senior notes		399		399		799		799
Subordinated notes		731		794		1,462		1,587
Junior subordinated debt owed to unconsolidated trusts		892		814		1,806		1,529
Total interest expense		18,038		9,953		33,936		18,829
Net interest income		73,428		60,372		141,811		120,129
Provision for loan losses		2,517		2,258		4,628		3,266
Net interest income after provision for loan losses		70,911		58,114		137,183		116,863
Non-interest income:
Fees for customer services		9,696		7,290		17,793		14,236
Trust fees		8,318		6,735		16,433		14,249
Commissions and brokers’ fees, net		1,170		883		2,084		1,979
Remittance processing		3,717		3,566		7,497		6,958
Mortgage revenue		2,851		1,573		4,796		3,216
Net (losses) gains on sales of securities		(10)		160		(184)		160
Unrealized (losses) gains recognized on equity securities		(1,016)		—		(800)		—
Other income		3,170		2,595		6,222		4,490
Total non-interest income		27,896		22,802		53,841		45,288
Non-interest expense:
Salaries, wages and employee benefits		34,268		25,472		66,609		54,291
Net occupancy expense of premises		4,511		3,689		8,713		7,510
Furniture and equipment expenses		2,352		1,790		4,447		3,703
Data processing		5,616		4,030		10,017		8,375
Amortization of intangible assets		2,412		1,490		4,506		3,005
Other expense		18,861		10,834		30,891		21,461
Total non-interest expense		68,020		47,305		125,183		98,345
Income before income taxes		30,787		33,611		65,841		63,806
Income taxes		6,702		8,749		16,287		17,027
Net income	$	24,085	$	24,862	$	49,554	$	46,779

Basic earnings per common share	$	0.43	$	0.51	$	0.91	$	0.96
Diluted earnings per common share	$	0.43	$	0.51	$	0.90	$	0.95
Dividends declared per share of common stock	$	0.21	$	0.20	$	0.42	$	0.40

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

FIRST BUSEY CORPORATION and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
	(dollars in thousands)
Net income	$	24,085	$	24,862	$	49,554	$	46,779
Other comprehensive income (loss), before tax:
Debt securities available for sale:
Unrealized net gains/(losses) on securities:
Unrealized net holding gains (losses) arising during period		18,214		(1,666)		25,014		(10,420)
Unrealized gains on debt securities transferred from held to maturity to available for sale		—		—		4,780		—
Reclassification adjustment for losses (gains) included in net income		10		—		193		—
Other comprehensive income (loss), before tax		18,224		(1,666)		29,987		(10,420)
Income tax expense (benefit) related to items of other comprehensive income		5,192		(475)		8,548		(2,970)
Other comprehensive income (loss), net of tax		13,032		(1,191)		21,439		(7,450)
Comprehensive income	$	37,117	$	23,671	$	70,993	$	39,329

See accompanying notes to unaudited consolidated financial statements.

Table of Contents

FIRST BUSEY CORPORATION and Subsidiaries

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(dollars in thousands, except per share amounts)


								Accumulated
				Additional				Other
		Common		Paid-in		Accumulated		Comprehensive		Treasury
	Shares	Stock		Capital		(Deficit)		Income (loss)		Stock		Total
Balance, March 31, 2019	55,624,627	$	56	$	1,247,340	$	(57,125)	$	1,595	$	(5,725)	$	1,186,141
Net income	—		—		—		24,085		—		—		24,085
Other comprehensive income	—		—		—		—		13,032		—		13,032
Repurchase of stock	(333,334)		—		—		—		—		(8,433)		(8,433)
Issuance of treasury stock for employee stock purchase plan	4,419		—		29		—		—		84		113
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax	81,962		—		(2,364)		—		—		174		(2,190)
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax	8,962		—		(19)		—		—		1,543		1,524
Cash dividends common stock at $0.21 per share	—		—		—		(11,681)		—		—		(11,681)
Stock dividend equivalents restricted stock units at $0.21 per share	—		—		157		(157)		—		—		—
Stock-based compensation	—		—		1,017		—		—		—		1,017
Balance, June 30, 2019	55,386,636	$	56	$	1,246,160	$	(44,878)	$	14,627	$	(12,357)	$	1,203,608

Balance, December 31, 2018	48,874,836	$	49	$	1,080,084	$	(72,167)	$	(6,812)	$	(6,190)	$	994,964
Net income	—		—		—		49,554		—		—		49,554
Other comprehensive income	—		—		—		—		21,439		—		21,439
Stock issued in acquisition of Banc Ed, net of stock issuance costs	6,725,152		7		166,274		—		—		—		166,281
Repurchase of stock	(333,334)		—		—		—		—		(8,433)		(8,433)
Issuance of treasury stock for employee stock purchase plan	16,150		—		79		—		—		306		385
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax	91,032

Closing Price ($)	Shares Out (MM)	Market Cap ($MM)
$25.28	56	$1,406

10-Q	2019-06-30	Quarter: 2019-06-30
10-Q	2019-03-31	Quarter: 2019-03-31
10-K	2018-12-31	Annual: 2018-12-31
10-Q	2018-09-30	Quarter: 2018-09-30
10-Q	2018-06-30	Quarter: 2018-06-30
10-Q	2018-03-31	Quarter: 2018-03-31
10-K	2017-12-31	Annual: 2017-12-31
10-Q	2017-09-30	Quarter: 2017-09-30
10-Q	2017-06-30	Quarter: 2017-06-30
10-Q	2017-03-31	Quarter: 2017-03-31
10-K	2016-12-31	Annual: 2016-12-31
10-Q	2016-09-30	Quarter: 2016-09-30
10-Q	2016-06-30	Quarter: 2016-06-30
10-Q	2016-03-31	Quarter: 2016-03-31
10-K	2015-12-31	Annual: 2015-12-31
10-Q	2015-09-30	Quarter: 2015-09-30
10-Q	2015-06-30	Quarter: 2015-06-30
10-Q	2015-03-31	Quarter: 2015-03-31
10-K	2014-12-31	Annual: 2014-12-31
10-Q	2014-09-30	Quarter: 2014-09-30
10-Q	2014-06-30	Quarter: 2014-06-30
10-Q	2014-03-31	Quarter: 2014-03-31
10-K	2013-12-31	Annual: 2013-12-31

8-K	2019-10-08	Other Events
8-K	2019-09-25	Officers, Exhibits
8-K	2019-09-03	Regulation FD, Exhibits
8-K	2019-07-26	Officers, Exhibits
8-K	2019-07-23	Earnings, Exhibits
8-K	2019-07-09	Other Events
8-K	2019-05-22	Shareholder Vote, Other Events
8-K	2019-05-13	Regulation FD, Exhibits
8-K	2019-04-22	Earnings, Officers, Exhibits
8-K	2019-04-09	Other Events
8-K	2019-03-14	Officers
8-K	2019-01-30	M&A, Officers, Regulation FD, Exhibits
8-K	2019-01-29	Enter Agreement, Off-BS Arrangement, Exhibits
8-K	2019-01-29	Earnings, Exhibits
8-K	2019-01-15	Other Events
8-K	2019-01-10	Other Events
8-K	2019-01-04	Other Events
8-K	2018-10-23	Earnings, Exhibits
8-K	2018-10-09	Other Events
8-K	2018-08-21	Enter Agreement, Regulation FD, Exhibits, Enter Agreement
8-K	2018-07-24	Earnings, Exhibits
8-K	2018-07-10	Other Events
8-K	2018-05-23	Shareholder Vote
8-K	2018-04-30	Enter Agreement, Off-BS Arrangement, Exhibits
8-K	2018-04-24	Earnings, Exhibits
8-K	2018-04-10	Other Events
8-K	2018-03-28	Officers
8-K	2018-01-30	Earnings, Exhibits
8-K	2018-01-16	Other Events

CMA	Comerica	9,486
BANR	Banner	1,937
PRK	Park National	1,505
BDGE	Bridge Bancorp	533
HBMD	Howard Bancorp	281
CHMG	Chemung Financial	199
MFNC	Mackinac Financial	150
BKSC	Bank of South Carolina	116
BOTJ	Bank of The James Financial Group	62
WCFB	WCF Bancorp	22

EX-31.1	buse-20190630ex3111b08b3.htm
EX-31.2	buse-20190630ex3126c2ad4.htm
EX-32.1	buse-20190630ex3215b9a91.htm
EX-32.2	buse-20190630ex322c6b8b2.htm


Part I	FINANCIAL INFORMATION

Item 1.	FINANCIAL STATEMENTS	3
	CONSOLIDATED BALANCE SHEETS	4
	CONSOLIDATED STATEMENTS OF INCOME	5
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	6
	CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	7
	CONSOLIDATED STATEMENTS OF CASH FLOWS	9
	NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS	11
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	39
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	57
Item 4.	CONTROLS AND PROCEDURES	58

Part II	OTHER INFORMATION

Item 1.	LEGAL PROCEEDINGS	58
Item 1A.	RISK FACTORS	58
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	59
Item 3.	DEFAULTS UPON SENIOR SECURITIES	59
Item 4.	MINE SAFETY DISCLOSURES	59
Item 5.	OTHER INFORMATION	59
Item 6.	EXHIBITS	60
	SIGNATURES	61