First Busey(US:BUSE)2021-11-03 16:00Part I - Financial Information Financial Statements (Unaudited) The unaudited consolidated financial statements detail the company's financial position, performance, and cash flows as of September 30, 2021 Consolidated Balance Sheets Total assets grew to $12.90 billion funded by a significant rise in deposits, reflecting increases in debt securities and portfolio loans Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Total Assets | $12,899,330 | $10,544,047 | | Total cash and cash equivalents | $883,845 | $688,537 | | Debt securities available for sale | $3,997,244 | $2,261,187 | | Portfolio loans, net | $7,057,833 | $6,713,129 | | Goodwill | $317,766 | $311,536 | | Total Liabilities | $11,566,254 | $9,273,978 | | Total deposits | $10,817,867 | $8,677,849 | | Total Stockholders' Equity | $1,333,076 | $1,270,069 | Consolidated Statements of Income Net income for the nine-month period rose to $93.5 million, driven by a significant decrease in the provision for credit losses Income Statement Summary (in thousands, except per share data) | Metric | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net Interest Income | $200,190 | $209,999 | | Provision for credit losses | $(10,365) | $35,656 | | Total Noninterest Income | $97,715 | $87,766 | | Total Noninterest Expense | $190,611 | $170,124 | | Net Income | $93,523 | $71,999 | | Diluted EPS | $1.67 | $1.31 | Notes to Unaudited Consolidated Financial Statements Notes detail accounting policies, the Cummins-American Corp acquisition, and the composition of portfolios, capital, and segments - The company operates in three segments: Banking, Remittance Processing, and Wealth Management32 - The company participated in the Paycheck Protection Program (PPP), originating or acquiring over $1.09 billion in loans, with $183.1 million outstanding as of September 30, 20213840 - On May 31, 2021, the company completed its acquisition of Cummins-American Corp (CAC), the holding company for Glenview State Bank (GSB), for total consideration of $129.5 million, resulting in $6.2 million of goodwill4347 Management's Discussion and Analysis of Financial Condition and Results of Operations Management analyzes financial performance, noting impacts from COVID-19, the CAC acquisition, and a compressed net interest margin - The company continues to navigate the COVID-19 economic environment, with $116.6 million in commercial loans remaining on interest-only deferrals180183185 - A plan was announced to close and consolidate 17 banking centers in Q4 2021 to improve operational efficiency191 - The tax-equivalent net interest margin compressed to 2.41% for Q3 2021 from 2.86% in Q3 2020, impacted by rate cuts and liquidity growth201203 Financial Condition Total assets reached $12.9 billion, a 22.3% increase, driven by the CAC acquisition and strong growth in loans and deposits Balance Sheet Changes (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | % Change | | :--- | :--- | :--- | :--- | | Total Assets | $12,899,330 | $10,544,047 | 22.3% | | Portfolio loans, net | $7,057,833 | $6,713,129 | 5.1% | | Total Deposits | $10,817,867 | $8,677,849 | 24.7% | | Total Stockholders' Equity | $1,333,076 | $1,270,069 | 5.0% | Asset Quality Ratios | Metric | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Non-performing loans to portfolio loans | 0.36% | 0.36% | | ACL to portfolio loans | 1.30% | 1.48% | | ACL to non-performing loans | 358.86% | 415.82% | Liquidity The company maintains a strong liquidity position funded by core deposits, with significant additional borrowing capacity available - Primary sources of funds include deposits, investment maturities, loan repayments, and capital261 - As of September 30, 2021, the company had additional borrowing capacity of $1.2 billion from the FHLB and $603.6 million from the Federal Reserve261 Capital Resources Capital ratios remain well in excess of regulatory 'well-capitalized' requirements, with a CET1 ratio of 11.95% Capital Ratios as of September 30, 2021 | Ratio | First Busey Corp. | Busey Bank | Minimum with Buffer | | :--- | :--- | :--- | :--- | | Total Capital to Risk Weighted Assets | 15.91% | 15.87% | 10.50% | | Tier 1 Capital to Risk Weighted Assets | 12.84% | 15.04% | 8.50% | | CET1 Capital to Risk Weighted Assets | 11.95% | 15.04% | 7.00% | Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate risk, with simulations showing an asset-sensitive position Net Interest Income Sensitivity to Interest Rate Changes | Rate Change | Year-One Change (Sep 30, 2021) | Year-One Change (Dec 31, 2020) | | :--- | :--- | :--- | | +100 bps | +8.44% | +7.40% | | +200 bps | +16.43% | +14.16% | | +300 bps | +24.32% | +20.20% | Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the period306 - No material changes in internal control over financial reporting were identified during the third quarter of 2021307 Part II - Other Information Legal Proceedings The company is not involved in any material pending litigation outside the ordinary course of business - There is no material pending litigation, other than ordinary routine litigation incidental to its business311 Risk Factors No material changes were reported to the risk factors previously disclosed in the 2020 Annual Report - No material changes to the risk factors disclosed in the 2020 Annual Report were reported313 Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 625,000 shares in Q3 2021, with 953,824 shares remaining available under the current plan Share Repurchases in Q3 2021 | Period | Total Shares Purchased | Average Price Paid | | :--- | :--- | :--- | | July 2021 | 137,000 | $23.84 | | August 2021 | 288,000 | $23.73 | | September 2021 | 200,000 | $23.45 | | Total Q3 | 625,000 | $23.66 | - As of September 30, 2021, 953,824 shares may still be purchased under the existing repurchase plan314315 Exhibits This section lists exhibits filed with the Form 10-Q, including certifications and interactive data files