First Busey(BUSE) - 2025 Q3 - Quarterly Results

Financial Performance - Third quarter 2025 net income was $57.1 million, or $0.58 per diluted share, compared to $47.4 million, or $0.52 per diluted share in Q2 2025, and $32.0 million, or $0.55 per diluted share in Q3 2024[5]. - Adjusted net income available to common stockholders was $57.4 million, or $0.64 per diluted share, for Q3 2025, compared to $57.2 million, or $0.63 per diluted share in Q2 2025, and $32.9 million, or $0.57 per diluted share in Q3 2024[10]. - Pre-provision net revenue was $76.6 million for Q3 2025, compared to $64.2 million in Q2 2025 and $42.2 million in Q3 2024[11]. - Adjusted net income (Non-GAAP) for Q3 2025 reached $62,496 thousand, compared to $57,394 thousand in Q2 2025 and $32,928 thousand in Q3 2024, reflecting a year-over-year growth of 89.8%[62]. - Net income for Q3 2025 was $57,098 thousand, an increase of 20.4% from $47,404 thousand in Q2 2025 and a significant rise from $32,004 thousand in Q3 2024[62]. Interest Income and Margin - Total interest income for Q3 2025 was $244.5 million, while total interest expense was $89.4 million, resulting in net interest income of $155.1 million[8]. - Net interest margin expanded by 9 basis points to 3.58% in Q3 2025, driven by the runoff of $794.6 million high-cost deposits[4]. - Net interest income (GAAP) for Q3 2025 was $155,137 thousand, up from $153,183 thousand in Q2 2025 and significantly higher than $82,647 thousand in Q3 2024[64]. - The adjusted net interest margin (Non-GAAP) for Q3 2025 was 3.45%, compared to 3.33% in Q2 2025 and 2.97% in Q3 2024, indicating improved efficiency in interest income generation[64]. Asset Quality and Credit Metrics - Credit quality improved with classified assets as a percentage of capital falling to 7.0% and net charge-offs at 0.17%[4]. - Net charge-offs for the three months ended September 30, 2025, were $5.8 million, a decrease from $12.9 million in the previous quarter, and an increase from $0.2 million in the same quarter of 2024[32]. - The allowance for credit losses was $174.2 million as of September 30, 2025, representing 1.28% of total portfolio loans, with a coverage ratio of 3.67 times non-performing loans[31]. - Non-performing assets represented 0.32% of total assets as of September 30, 2025, a slight increase from 0.31% as of June 30, 2025, and a significant increase from 0.07% as of September 30, 2024[30]. Deposits and Borrowings - Total deposits were $15,070.2 million as of September 30, 2025, down from $15,801.8 million as of June 30, 2025, and up from $9,943.2 million as of September 30, 2024[37]. - Core deposits accounted for 93.8% of total deposits as of September 30, 2025, with an estimated 35% being uninsured and uncollateralized[38]. - Total borrowings increased by 2.3% compared to the second quarter of 2025, totaling $272.9 million, but decreased by 9.7% compared to the third quarter of 2024[39]. Operational Efficiency - Total noninterest expense decreased by 6.1% to $120.02 million in Q3 2025 compared to Q2 2025, but increased by 58.9% compared to Q3 2024[19]. - The efficiency ratio improved to 58.5% in Q3 2025 from 63.9% in Q2 2025 and 61.8% in Q3 2024[20]. - The adjusted efficiency ratio (Non-GAAP) improved to 58.51% in Q3 2025 from 61.81% in Q3 2024, indicating enhanced operational efficiency[67]. Capital and Liquidity - Common Equity Tier 1 Capital grew to 12.33%, with tangible common equity to tangible assets increasing to 9.9%[4]. - Busey's common equity Tier 1 capital to risk-weighted assets ratio was 12.33% as of September 30, 2025, providing a buffer of over $810 million above required levels[42]. - As of September 30, 2025, Busey's available liquidity sources totaled $7.85 billion, with cash flows from maturing securities expected to be approximately $90.5 million for Q4 2025 and $305.9 million for 2026[41]. Wealth Management and Noninterest Income - Noninterest income totaled $41.20 million in Q3 2025, a decrease of 8.2% from Q2 2025, but an increase of 14.9% compared to Q3 2024[16]. - Wealth management fees increased by 2.4% to $17.18 million in Q3 2025, with assets under care growing to $14.96 billion from $14.10 billion in Q2 2025[17]. - Total noninterest income (GAAP) for Q3 2025 was $41,198,000, compared to $35,845,000 in Q3 2024, reflecting a 14.5% increase[67]. Strategic Initiatives - The company expects balance sheet optimization to be largely complete by year-end, aiming for stability in loans and deposits[4]. - The company expects to realize 50% of the $25 million annual pre-tax expense synergies from the CrossFirst acquisition in 2025 and 100% in 2026[19]. - The company has expanded its footprint into new states as part of its growth strategy, which includes adjustments related to the CrossFirst acquisition[63]. Stockholder Returns - During Q3 2025, Busey paid dividends of $0.25 per share on common stock and $20.00 per share on Series A Non-Cumulative Perpetual Preferred Stock[44]. - In Q3 2025, Busey repurchased 580,000 shares of common stock at a weighted average price of $23.36 per share, totaling $13.5 million[45].