First Busey Corporation · NASDAQ:BUSE
First Busey — Q3 2022 Earnings Presentation
39 slides from First Busey's earnings presentation, Oct 25, 2022
Slide 1: 3Q22 Quarterly Earnings Supplement
3Q22 QUARTERLY EARNINGS SUPPLEMENT October 25, 2022
Slide 2: Special Note Concerning Forward-Looking Statements
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 co
Slide 3: Non-GAAP Financial Information
Non-GAAP Financial Information This document contains certain financial information determined by methods other than GAAP. Management uses these non- GAAP measures, together with the related GAAP measures, in analysis of the Company’s performance and in making business decisions, as well as comparis
Slide 4: Table of Contents
Table of Contents Overview of First Busey Corporation (BUSE) 5 Sizable Business Lines Provide for Innovative Solutions 6 Investment Highlights 7 Experienced Management Team 8 Strong Regional Operating Model 9 High Quality Loan Portfolio 10 Top Tier Core Deposit Franchise 11 Diversified and Significa
Slide 5: Overview of First Busey Corporation (BUSE)
Overview of First Busey Corporation (BUSE) Company Overview + 150+ year old financial institution headquartered in CHAMPAIGN, IL Regional operating model serving 4 regions: NORTHERN, CENTRAL, GATEWAY, FLORIDA AMONG THE BEST Commercial Banking Wealth Management Payment Tech Solutions Unwavering Focus
Slide 6: Sizable Business Lines Provide for Innovative Solutions
Sizable Business Lines Provide for Innovative Solutions Diversified financial holding company with comprehensive and innovative financial solutions for individuals and businesses Full suite of diversified financial Wealth & asset management services Payment platform that enables the products for ind
Slide 7: Investment Highlights
Investment Highlights ▪ 58 branches across four states: Illinois, Missouri, Indiana, and Florida Attractive Franchise ▪ Premier commercial bank, wealth management, and payment technology solutions for that Provides Innovative individuals and businesses ▪ Attractive core deposit to total deposit rati
Slide 8: Experienced Management Team
Experienced Management Team Van A. Dukeman Robin N. Elliott Jeffrey D. Jones Chairman, President & CEO, President & CEO, Busey Bank EVP & CFO First Busey Corp. Has served as President & CEO of First Busey since Joined Busey in 2006 and led various finance Joined Busey in August 2019, bringing his ne
Slide 9: Strong Regional Operating Model
Strong Regional Operating Model Our go-to-market strategy utilizes a regional operating model where we combine the power of commercial & wealth to provide a broad set of solutions for our customers Northern Gateway Banking Banking Centers: Centers: 10 20 Deposits: Deposits: $1.9 billion $2.8 billion
Slide 10: High Quality Loan Portfolio
High Quality Loan Portfolio Loan Portfolio Composition – Q3 2022 Loan Portfolio Regional Segmentation (2) MRQ Yield on Florida Loans 5% 3.98% Classified Lns / Northern Capital (1) 25% Central 7.4% 43% New Originations YTD 2022 ■ New CRE-I originations had a Gateway weighted-avg LTV of 62% 27% ■ New
Slide 11: Top Tier Core Deposit Franchise
Top Tier Core Deposit Franchise Deposit Portfolio Composition – Q3 2022 Total Deposits & Loan to Deposit Ratio $11,000 $ in millions $ in millions 3Q22 Growth driven by NIB & IB Checking; principally in 120.0% $10,800 Commercial Accounts $10,818 $10,769 $10,600 100.0% $10,592 $10,601 $10,400 $10,397
Slide 12: Diversified and Significant Sources of Fee Income
Diversified and Significant Sources of Fee Income ▪ Noninterest income represented 26.4% of revenue Noninterest Income / Total Revenue (1) (ex-securities gains/losses) in 3Q22 $120.0 $ in millions $117.2 90.0% $105.6 $105.9 $106.9 $104.1 $86.3 ▪ Key businesses of wealth management and payment 80.0%
Slide 13: Fully Integrated Wealth Management Platform
Fully Integrated Wealth Management Platform Six Distinct Teams Our wealth management business provides effective and high-touch solutions for high-net-worth individuals. Our clients work with a dedicated team of financial Private Wealth Advisor professionals, with each team member bringing their spe
Slide 14: Wealth Management
Wealth Management Wealth - Assets Under Care ▪ Assets under care of $10.8 billion, a QoQ $ in millions $12,731 $12,364 $12,329 decrease of $705 million, predominantly due to reduction in market valuations during $11,454 3Q22 $10,749 ▪ Wealth revenue of $12.5 million, a YoY decrease of 9.0% and pre-t
Slide 15: Scalable Payment Technology Solutions Platform
Scalable Payment Technology Solutions Platform Renew & Expand Core Business Innovating for Growth ▪ Money movement that allows our customers to accelerate BaaS Solution SMB Vertical revenue realization ▪ Out-of-the-box customized ▪ Turnkey application ▪ Frictionless payments across FirsTech’s omnich
Slide 16: FirsTech
FirsTech ▪ LTM revenue of $21.3 million, an increase of 12% over the prior twelve-month period $11 Payments processed annually (1) 34 Transactions processed per year (2) billion million ▪ Finalized upgrades of IVR solution for customers during 3Q22; new tech provides superior experience Revenue Grow
Slide 17: Net Interest Margin
Net Interest Margin Net Interest Income (1) Net Interest Margin (1) 3.31% in millions 2.91% , 3.00% 2.65% 2.66% 2.99% 5, 2.57% 2.68% . 2.41% 2.45% , . 2.36% 2.66% 2.41% 2.30% 2.28% 5, . NIM ex-PPP up , 5.2 . . .5 . 33 bps vs. 2Q22 5, . .2 5. , 5. . 55, . . 0.25% 0.32% 5 , 0.22% 0.22% 0.24% 5, 0.06%
Slide 18: Focused Control on Expenses
Focused Control on Expenses Noninterest Expense ▪ Adjusted core expenses(1) of $65.6 million in 3Q22 $80.0 $80.0 $ in millions $73.5 ▪ Continued investment in talent across our business lines, $71.2 $70.4 $70.7 Noninterest Exp. $70.0 $69.1 $70.0 risk management infrastructure and organic growth oppo
Slide 19: Continued Investment in Technology Enterprise-Wide
Continued Investment in Technology Enterprise-Wide 2022 Tech Investment Highlights Investment Legend FirsTech launched new one-time Enhanced payments platform for Busey Bank Customer customers Experience Scale & Efficiency Upgrades Launched integrated payables platform, offering commercial clients a
Slide 20: Rising Digital Banking Adoption
Rising Digital Banking Adoption Digital engagement of customers continues growth trajectory Consumer Monthly Active Users (1) Commercial Quarterly Active Users (2) Mobile QAU Online Banking QAU Mobile MAU Online Banking MAU 600 581 2,700 90,000 120 , 00 580 2,650 88,000 85,481 115 , 00 560 2,600 86,
Slide 21: Fortress Balance Sheet
Fortress Balance Sheet ▪ Capital ratios significantly in excess of well-capitalized minimums ▪ Total RBC of 16.0% and CET1 ratio of 11.8% at 9/30/22 (1) Robust Capital ▪ TCE/TA ratio of 6.17% at 9/30/22 (2) Foundation ▪ TBV per share of $13.39 at 9/30/22 (2) ▪ $100 million of subordinated debt raise
Slide 22: Robust Capital Foundation
Robust Capital Foundation Tangible Common Equity (1) & CET1 Ratios (2) Total Capital Ratio (2) $ in millions $ in millions $1, 000 13. 0% 12.0% 11.8% 11.9% 11.8% 11.8% 16.6% $950 $971 12. 0% 15.9% 15.7% 15.8% 16.0% $959 11. 0% $900 $494 $577 $535 $479 10. 0% $850 $488 $856 9.0% $800 $802 8.0% $750 1
Slide 23: Pristine Credit Quality
Pristine Credit Quality ▪ Conservative underwriting leads to pristine credit quality NPAs / Assets ▪ CRE factors of DSCR, Debt Yield, & LTV stressed for effective $ in millions gross income decline and interest & cap rate stress $12,860 $12,497 ▪ C&I factors including core, operating, traditional ca
Slide 24: Reserve Supports Credit & Growth Profile
Reserve Supports Credit & Growth Profile Allowance / Loans (ex-PPP) $ in millions ▪ Reserve to loans of 1.18% (ex-PPP) 1.59% ▪ Day 1 CECL coverage was 1.06% $7,669 $7,114 $6,687 $6,368 $5,568 ▪ Non-performing loan balances remain near 1.24% historically low levels and decreased by 1.18% $0.8 million
Slide 25: Balanced, Low-Risk, Short-Duration Investment Portfolio
Balanced, Low-Risk, Short-Duration Investment Portfolio Investment Portfolio Composition – Q3 2022 ▪ BUSE carried $936 million in held-to-maturity (HTM) securities as of 9/30/22 ▪ Transferred a portion of the portfolio comprised of Agency RMBS & CMBS from available-for-sale (AFS) to HTM during 1Q22
Slide 26: Actively Managing Asset-Sensitive Balance Sheet
Actively Managing Asset-Sensitive Balance Sheet Annual % Change in Net Interest Income ▪ Balance sheet remains materially asset-sensitive under Shock Scenarios ▪ Vigilant focus on pricing discipline for both loans and deposits Rate Shock Year 1 Year 2 +300 bps +13.8% +16.8% ▪ 40% of loan portfolio r
Slide 27: Quarterly Earnings Review
Quarterly Earnings Review ▪ Net interest income was $86.3 million in 3Q22 vs. $75.9 million in 2Q22 and $70.8 million in 3Q21 ▪ Net interest margin (1) was 3.00% in 3Q22, an increase of 32 bps vs. 2.68% in 2Q22 ▪ Adjusted net interest margin (1) (ex-PAA) was 2.97% in 3Q22, an increase of 31 bps vs.
Slide 28: Earnings Performance
Earnings Performance Adjusted Net Income & Earnings Per Share (1) Adjusted ROAA & Adjusted ROATCE (1) $40.0 $ in millions $1. 00 20. 0% $ in millions 1.70% $0. 90 18. 0% $36.4 $35.0 17.8% 1.50% $34.3 $0. 80 16. 0% $30.0 $32.8 $30.1 1.30% 14. 0% 14.6% $0. 70 $29.1 14.3% $25.0 $0. 60 12. 0% 13.4% 13.0
Slide 29: Environmental, Social and Governance Responsibility
Environmental, Social and Governance Responsibility Building on 150 Years of Excellence | Advancing a Comprehensive ESG Strategy Launched Thrive, a high-performance Partnered with the Ecology Action Center, associate development series dedicated to a local environmental nonprofit, planting support c
Slide 30: Appendix
APPENDIX FIRST BUSEY CORPORATION
Slide 31: Hurricane Ian Response
Hurricane Ian Response On September 28, 2022, Hurricane Ian made landfall in southwest Florida, impacting our operations in the region, and we continue to assess the effects. We are focused on assisting our customers and associates as they navigate the challenges posed from this historic storm. ▪ Qu
Slide 32: High Quality Loan Portfolio: C&I
High Quality Loan Portfolio: C&I ▪ 25.3% of total loan portfolio (ex-PPP loans) C&I Loans by Sector (ex-PPP) $ in thousands 9/30/22 % of Total 9/30/22 ▪ All C&I loans are underwritten to 1.20x FCCR requirement and Balances Loans Classified RLOCs greater than $1 million require a monthly borrowing ba
Slide 33: High Quality Loan Portfolio: CRE
High Quality Loan Portfolio: CRE Owner Occupied CRE Loans by Property Type Investor Owned CRE Loans by Property Type (1) $ in thousands % of Total 9/30/22 $ in thousands % of Total 9/30/22 9/30/22 Loans Classified 9/30/22 Loans Classified Property Type Balances (ex-PPP) Balances Property Type Balanc
Slide 34: Non-GAAP Financial Information
Non-GAAP Financial Information 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 (dollars in thousands) Three Months Ended Nine Months Ended September 30, June 30, September 30, Septemb
Slide 35: Non-GAAP Financial Information
Non-GAAP Financial Information Adjusted Net Income, Adjusted Diluted Earnings Per Share, Adjusted Return on Average Assets, Return on Average Tangible Common Equity, and Adjusted Return on Average Tangible Common Equity (dollars in thousands, except per share amounts) Three Months Ended Nine Months
Slide 36: Non-GAAP Financial Information
Non-GAAP Financial Information Adjusted Net Interest Income and Adjusted Net Interest Margin (dollars in thousands) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2022 2022 2021 2022 2021 Net interest income $ 86,305 $ 75,928 $ 70,755 $ 232,289
Slide 37: Non-GAAP Financial Information
Non-GAAP Financial Information Adjusted Noninterest Expense, Adjusted Core Expense, Efficiency Ratio, Adjusted Efficiency Ratio, and Adjusted Core Efficiency Ratio (dollars in thousands) Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2022 2022 2
Slide 38: Non-GAAP Financial Information
Non-GAAP Financial Information Tangible Book Value Per Common Share (dollars in thousands, except per share amounts) As of September 30, June 30, March 31, December 31, September 30, 2022 2022 2022 2021 2021 Total stockholders' equity $ 1,106,588 $ 1,161,957 $ 1,218,025 $ 1,319,112 $ 1,333,076 Goodw
Slide 39: Non-GAAP Financial Information
Non-GAAP Financial Information Core Loans, Core Loans to Portfolio Loans, Core Deposits, Core Deposits to Total Deposits, and Core Loans to Core Deposits (dollars in thousands) As of September 30, June 30, March 31, December 31, September 30, 2022 2022 2022 2021 2021 Portfolio loans [a] $ 7,670,114