First Busey Corporation · NASDAQ:BUSE
First Busey — Investor Presentation (September 2020)
33 slides from First Busey's investor presentation, Sep 22, 2020
Slide 1: September 2020 Investor Presentation
September 2020 INVESTOR PRESENTATION
Slide 2: Special Note Concerning Forward-Looking Statements
2 2 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 finan
Slide 3: Non-GAAP Financial Measures
3 3 Non - GAAP Financial Measures This document contains financial information determined other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management uses these “non - GAAP” measures in its analysis of the Company’s performance. Managem
Slide 4: Table of Contents
4 4 Table of Contents Overview of First Busey Corporation (BUSE) 5 Diversified Business Model 6 Geographical Footprint 7 Management Team 8 Investment Highlights 9 Protecting a Strong Balance Sheet 10 Robust Capital Foundation 11 High Quality Loan Portfolio 12 Update on COVID - Related Deferral & Mod
Slide 5: Overview of First Busey Corporation (BUSE)
5 5 Overview of First Busey Corporation (BUSE) Company Overview Branch Map Primary Business Segments Financial Highlights Commercial Banking Wealth Management Retail Payment Processing • Illinois state chartered bank, organized in 1868 • Bank offers full suite of diversified financial products and s
Slide 6: Diversified Business Model
6 6 Online Banking Credit and Debit Cards Checking Services Consumer Loans Commercial Lending Business Saving Services Personal Business Mortgage Banking Mobile Banking Diversified Business Model Investment Services Investment Management Financial Goals Private Client Business Planning Business Chec
Slide 7: Attractive Geographic Footprint
7 7 Attractive Geographic Footprint Four Distinct Operating Regions provide for attractive mix of customers and demographic opportunities Northern Gateway Central Florida Banking Centers: 10 Deposits: $857MM Median HHI: $74,285 Banking Centers: 29 Deposits: $2.6B 2020 Pop.: 2.8 Million Banking Cente
Slide 8: Experienced Management Team
8 8 Experienced Management Team Van A. Dukeman President & Chief Executive Officer, First Busey Corporation Robin N. Elliott President & CEO, Busey Bank Jeffrey D. Jones EVP & CFO Robert F. Plecki, Jr. EVP, Chief Credit Officer John J. Powers EVP & General Counsel Monica L. Bowe EVP & Chief Risk Off
Slide 9: Investment Highlights
9 9 Investment Highlights • Established in 1868 , with more than 150 years of commitment to local communities and businesses • Operating with 80 branches across four states: Illinois , Missouri, Indiana, and Florida • Experienced and proven management team • Attractive and diverse business strategy
Slide 10: Protecting a Strong Balance Sheet
10 10 • Capital ratios significantly in excess of well - capitalized minimums • Regulatory capital relief on CECL implementation and PPP loans • TCE/TA ratio of 8.43% at 6/30/20 • Total RBC of 16.23% at 6/30/20 ($125mm sub - debt raise in 2Q20) • Suspended share repurchase program on March 16, 2020
Slide 11: Robust Capital Foundation
11 11 Robust Capital Foundation Tangible Common Equity Ratio (1) Leverage Ratio Total Capital Ratio Consolidated Capital as of 6/30/2020* (1) Non - GAAP calculation, see Appendix ($ in millions) $638 $703 $865 $864 $884 8.4% 9.5% 9.3% 9.2% 8.4% 2017 Q4 2018 Q4 2019 Q4 2020 Q1 2020 Q2 TCE TCE Ratio $
Slide 12: High Quality Loan Portfolio
12 12 High Quality Loan Portfolio Loan Portfolio Composition as of 6/30/2020 Loan Geographic Segmentation Funded Draws & Line Utilization Rate (1) (1) Excludes Credit Card and Overdraft Protection $ in millions MRQ Yield on Loans (ex-PPP) = 4.02% Loan Portfolio (ex-PPP) = $6.5 billion MRQ Yield on L
Slide 13: High Quality Loan Portfolio: C&I
13 13 High Quality Loan Portfolio: C&I Total C&I Loans (1) C&I Portfolio Overview ▪ 25% of total loan portfolio (ex - PPP loans) ▪ Diversified portfolio results in low levels of concentrated exposure ▪ Top concentration in one industry (manufacturing) is 15%, or 4% of total loans ▪ Only 3% of loans
Slide 14: Loan Portfolio: Low Levels of Concentrated Exposure – Manufacturing
14 14 Loan Portfolio: Low Levels of Concentrated Exposure Manufacturing Loans Total Manufacturing Loans: $253 Million or 3 .9% of Loan Portfolio (ex - PPP loans) 6.2% Classified Loans Diversified exposure across 20 industry subsectors results in no single level of high concentration No subsector acc
Slide 15: High Quality Loan Portfolio: CRE
15 15 High Quality Loan Portfolio: CRE CRE Portfolio Overview ▪ 50% of total loan portfolio ▪ 28% of CRE loans are owner - occupied ▪ Only 1.4% of CRE loans are classified ▪ Low Levels of Concentrated Exposure ▪ Industrial/Warehouse top concentration at 16% of total CRE portfolio Investor Owned CRE
Slide 16: Loan Portfolio: Retail and Traveler Accommodation
16 16 Loan Portfolio: Low Levels of Concentrated Exposure Total Retail Loans: $612 million or 9.4% of Lo an Portfolio Total Traveler Accommodation Loans: $186 Million or 2.9 % of Loan Portfolio $ in thousands Subsector 6/30/20 Balances (ex-PPP) % of Total Loans (ex-PPP) 9/11/20 Active Deferral Balan
Slide 17: Loan Portfolio: Food Services and Agriculture
17 17 Loan Portfolio: Low Levels of Concentrated Exposure Total Food Services Loans: $139 Million or 2 .1% of Loan Portfolio $ in thousands Total Agriculture Loans: $139 Million or 2 .1% of Loan Portfolio Food Services Type 6/30/20 Balances (ex-PPP) % of Total Loans (ex-PPP) 9/11/20 Active Deferral
Slide 18: Update on COVID-Related Deferral & Modification Trends: Commercial
18 18 Update on COVID – Related Deferral & Modification Trends Commercial and Small Business Clients ▪ Busey is offering several options to Busey’s qualifying business customers to help them through this period of economic disru pti on. Various six - month modification programs with opt - ins from t
Slide 19: Update on COVID-Related Deferral & Modification Trends: Personal
Update on COVID –Related Deferral & Modification Trends Personal Loan and Mortgage Customers Retail Payment Relief Program Mortgage & Retail portfolio loans (1) # of Loans 9/10/20 $ Balances Total Portfolio Loans 21,829 $1,228,666 All Loans that took a deferral (A + B) 968 $132,195 4/1/20 $ Balances
Slide 20: Participating in the CARES Act Paycheck Protection Program
20 20 ▪ As part of the CARES Act, Congress appropriated approximately $349 billion for the creation of the Paycheck Protection Program (PPP) as well as approving on April 24, 2020 an additional $310 billion for the PPP. This program provides payroll assistance for the nation’s nearly 30 million smal
Slide 21: Entering Credit Cycle from Position of Strength
21 21 Entering Credit Cycle from Position of Strength NPAs / Assets Classifieds / Capital (1) NCOs / Average Loans (2) $ in millions Overview ▪ C onservative underwriting and strong asset quality allow t he Company to enter the economic downturn well - prepared ▪ Non - performing a ssets have decrea
Slide 22: Current Expected Credit Loss (CECL) Model
22 22 Current Expected Credit Loss (CECL) Model ▪ On January 1, 2020, the Company adopted ASU 2016 - 13 (Topic 326), “Measurement of Credit Losses on Financial Instruments,” commonly referenced as the CECL model. Upon adoption of CECL, we recognized: - $16.8 million increase in our allowance for cre
Slide 23: Adoption of CECL Fortifies Loan Loss Reserves
23 23 Adoption of CECL Fortifies Loan Loss Reserves Allowance / Loans (ex - PPP) Allowance / NPAs Allowance / NPLs Provision Coverage / Net Charge - offs (1) 4Q17 provision expense was $5.303 million and net recoveries were $0.484 million 0.6x 1.4x 6.5x FY 2017 FY 2018 FY 2019 YTD 2020 Provision Mul
Slide 24: Ample Sources of Liquidity
24 24 Ample Sources of Liquidity Total Deposits & Loan to Deposit Ratio $6,126 $6,249 $7,902 $7,973 $8,910 90.8% 88.7% 84.8% 84.6% 81.1% 2017 Q4 2018 Q4 2019 Q4 2020 Q1 2020 Q2 Total Deposits Loan to Deposit Ratio $ in millions ($ in millions) Core Deposits (1) / Total Deposits $5,600 $5,705 $7,587
Slide 25: Quarterly Earnings Review
25 25 • Net Interest Income increased from $69.4 million in Q1 to $70.8 million in Q2 • Net Interest Margin decreased 17 bps vs Q1 from 3.20% to 3.03% • NIM impacted by late Q1 Fed rate actions, PPP loan funding and corresponding deposit retention as well as $125mm sub - debt issuance on June 1, 202
Slide 26: Core Earnings Power
26 26 Core Earnings Power Core Net Income & Earnings Per Share (1) Core ROAA & ROATCE (1) Core Pre - Provision Net Revenue / Avg. Assets (1) Net Interest Margin (1) Non - GAAP calculation, see Appendix 14.5% 14.5% 14.9% 7.4% 12.2% 1.24% 1.25% 1.30% 0.64% 1.02% 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2
Slide 27: Net Interest Margin
27 27 Net Interest Margin • Net impact of PPP loans and corresponding excess liquidity drove down NIM 9 bps during the quarter • Subordinated debt issuance of $125mm on June 1, 2020 impacted quarterly NIM by 4 bps Historical Key Rates 5.50% 5.50% 5.00% 4.75% 3.25% 3.25% 2.47% 2.39% 2.02% 1.76% 0.99%
Slide 28: Diversified and Significant Sources of Fee Income
28 28 Overview ▪ Anchored by wealth management and payment processing, fee income represented approximately 29% of total income over the last 12 months ▪ Strong source of revenue synergies as the Company’s balance sheet continues to grow both organically as well as through M&A ▪ New Markets Tax Cred
Slide 29: Resilient Wealth Management Platform
29 29 Resilient Wealth Management Platform Overview ▪ Provides a full range of asset management, investment and fiduciary services to individuals, businesses and foundations, tax preparation, philanthropic advisory services and farm and brokerage services Q2 2020 Summary ▪ New account activity stren
Slide 30: Focused Control on Expenses
30 30 Focused Control on Expenses (1) Non - GAAP calculation, see Appendix Overview ▪ The Company continues to manage its efficiency ratio by limiting nominal costs, as well as leveraging efficiencies throughout its branch network as a result of its successful M&A strategy and strong top - line grow
Slide 31: Appendix
APPENDIX FIRST BUSEY CORPORATION
Slide 32: Use of Non-GAAP Financial Measures
32 32 Use of Non - GAAP Financial Measures (1) Annualized measure ($ in thousands) Net interest income $ 70,813 $ 69,433 $ 71,936 $ 73,476 $ 73,428 Non-interest income 27,964 27,517 31,638 30,936 27,896 Less net losses/gains on sales of securities and unrealized losses/gains recognized on equity sec
Slide 33: Use of Non-GAAP Financial Measures
33 33 Use of Non - GAAP Financial Measures (1) Tax - effected measure (2) Annualized measure (3) Calculated using adjusted net income Total Assets $ 10,835,965 $ 9,721,405 $ 9,695,729 $ 9,753,760 $ 9,612,667 Goodwill and other intangible assets, net (368,053) (370,572) (373,129) (381,323) (375,327)