First Busey Corporation · NASDAQ:BUSE
First Busey — Q1 2020 Earnings Presentation
22 slides from First Busey's earnings presentation, Apr 28, 2020
Slide 1: 1Q20 Quarterly Supplement
1Q20 QUARTERLY SUPPLEMENT April 28, 2020
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
Slide 3: Table of Contents
Table of Contents Protecting the Well - Being of Associates and Customers 4 Supporting Financial Needs of Customers 5 Participation in the CARES Act Paycheck Protection Program 6 Protecting a Strong Balance Sheet 7 Robust Capital Foundation 8 Entering Credit Cycle from Position of Strength 9 Current
Slide 4: Protecting the Well-Being of Associates and Customers
Protecting the Well - Being of Associates and Customers ▪ Established COVID - 19 crisis leadership team who meets daily to assess, refine, and continually execute on the various phases and challenges related to this pandemic ▪ Remote Workforce Rollout - Enabled nearly 60% of Busey’s workforce to wor
Slide 5: Supporting Financial Needs of Customers
Supporting Financial Needs of Customers COVID - 19 Response Actions ▪ We are offering several options to Busey’s qualifying business customers to help them through this period of economic disruption. Various six - month modification programs with opt - ins from the customer in 90 - day intervals are
Slide 6: Participating in the CARES Act Paycheck Protection Program
Participating in the CARES Act Paycheck Protection Program ▪ 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 payro
Slide 7: Protecting a Strong Balance Sheet
• Capital ratios significantly in excess of well - capitalized minimums • Regulatory capital relief on CECL implementation and PPP loans • TCE/TA ratio of 9.22% at 3/31/20 • Suspended our share repurchase program on March 16, 2020 • TBV per share of $15.57 at 3/31/20, up 7.2% year - over - year • Di
Slide 8: Robust Capital Foundation
Robust Capital Foundation FBC Tangible Common Equity Ratio ($ in millions) 638.0 703.0 864.6 863.5 8.43% 9.49% 9.26% 9.22% 12/31/17 12/31/18 12/31/19 3/31/20 TCE TCE Ratio 8 FBC Leverage Ratio ($ in millions) 718.1 783.9 922.4 921.8 9.78% 10.36% 9.88% 9.89% 4% 12/31/17 12/31/18 12/31/19 3/31/20 Tier
Slide 9: Entering Credit Cycle from Position of Strength
NPAs / Assets ($ in millions) 7,861 7,702 9,696 9,721 0.36% 0.48% 0.34% 0.32% 12/31/17 12/31/18 12/31/19 3/31/20 Assets %NPAs/Assets Loan Portfolio Credit Quality ($ in thousands) 3/31/19 12/31/19 3/31/20 Delinquencies (30-89) 10,780 14,271 10,150 NPLs 36,586 29,507 27,212 OREO 921 3,057 3,553 NPAs
Slide 10: Current Expected Credit Loss (CECL) Implementation
Current Expected Credit Loss (CECL) Implementation ▪ 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
Slide 11: Adoption of CECL Fortifies Loan Loss Reserves
Adoption of CECL Fortifies Loan Loss Reserves Provision Coverage / Net Charge-offs (Provision / NCO multiple) *4Q17 provision expense was $5.303mm and net recoveries were $.484mm 0.6 1.4 5.0 FY 2017* FY 2018 FY 2019 1Q 2020 x x x N/A* x 11 Allowance / Loans ($ in millions) 5,520 5,568 6,687 6,745 0.
Slide 12: Ample Sources of Liquidity
Ample Sources of Liquidity Core Deposits / Total Deposits ($ in millions) 5,487 5,721 7,592 7,648 90% 92% 96% 96% 12/31/17 12/31/18 12/31/19 3/31/20 Core Deposits Core/Total Deposits Total Deposits & Loan to Deposit Ratio ($ in millions) 6,126 6,249 7,902 7,973 90.8% 88.7% 84.8% 84.6% 12/31/17 12/31
Slide 13: Additional Loan Portfolio Detail
ADDITIONAL LOAN PORTFOLIO DETAIL 13
Slide 14: Diversified Loan Portfolio
Diversified Loan Portfolio Loan Portfolio as of 03/31/2020 ($ in millions) Commercial & Industrial 1,767 26% Owner Occupied CRE 911 14% Non - Owner Occupied CRE 1,914 28% Construction & Development 448 7% 1 - 4 Family Residential 1,247 18% HELOCs 410 6% Other 48 1% Geographic Segmentation as of 03/3
Slide 15: Low Levels of Concentrated Exposure
Low Levels of Concentrated Exposure 15 Portfolio Segmentation as of 3/31/2020 ($ in millions) Balances Traveler Accommodations 183.7 2.7% 1.9 1.0% 0.0 0.0% Restaurant & Dining Establishments 90.4 1.3% 0.0 0.1% 2.1 2.3% Agriculture, Forestry, Fishing and Hunting 144.4 2.1% 1.7 1.2% 0.0 0.0% Arts, Ent
Slide 16: Quarterly Financial Performance
QUARTERLY FINANCIAL PERFORMANCE 16
Slide 17: 1Q20 Earnings Review
1Q20 Earnings Review • Net Interest Margin impacted by Fed rate cuts of 150 bps during the quarter • NIM decreased 7 bps vs 4Q19 from 3.27% to 3.20% • 15 bps decline in asset yields offset by 8 bps improvement in funding costs • Accretion income accounted for 13 bps of NIM, in line with expectations
Slide 18: Net Interest Margin
Net Interest Margin Historical Key Rates 5.50% 5.50% 5.00% 4.75% 3.25% 2.47% 2.39% 2.02% 1.76% 0.99% 2.41% 2.00% 1.68% 1.92% 0.70% 2.50% 2.50% 2.00% 1.75% 0.25% 3/31/19 6/30/19 9/30/19 12/31/19 3/31/20 Prime 1m LIBOR 10-Yr Treasury Fed Funds Target Net Interest Margin 4.26% 4.18% 4.03% 3.88% 0.84% 0
Slide 19: Diversified and Significant Sources of Fee Income
Diversified and Significant Sources of Fee Income 19 Sources of Non-Interest Income ($ in millions) Wealth Management fees 11,555 42% Fees for customer services 8,361 30% Remittance processing 3,753 14% Mortgage revenue 1,381 5% Gain/Loss Securities 587 2% Other 1,880 7% Non-Interest Income / Operat
Slide 20: Focused Control on Expenses
Focused Control on Expenses ▪ Core adjusted expenses of $56.8mm in 1Q20 excluding amortization, acquisition / restructuring related charges and CECL (unfunded reserve) ▪ Lowest level since 2Q19, which was the first full quarter of combined operations following the acquisition of TheBANK of Edwardsvi
Slide 21: Core Earnings Power
Core Earnings Power Dividend and Dividend Payout Ratio ($ in thousands) 44% 49% 47% 40% 79% 0.21 0.21 0.21 0.21 0.22 1Q19 2Q19 3Q19 4Q19 1Q20 Dividend Payout Ratio Dividend Non-GAAP ROAA and ROATCE ($ in thousands) 14.3% 14.5% 14.5% 14.9% 7.4% 1.22% 1.24% 1.25% 1.30% 0.64% 1Q19 2Q19 3Q19 4Q19 1Q20 R
Slide 22: Wealth Management
Wealth Management Text here ▪ Conducted a successful core system conversion of Investors Securities Trust in 1Q20 (acquisition closed in 3Q19) ▪ Conducted an aggressive client communication program in February and March which included webinars, email blasts, podcasts, social media and a robust outbo