First Busey Corporation · NASDAQ:BUSE
First Busey — Investor Day (May 2023)
47 slides from First Busey's investor day presentation, May 10, 2023
Slide 1: Investor & Analyst Day
INVESTOR & ANALYST DAY MAY 10, 2023 | NASDAQ: BUSE = ~~ ———___ gasteuse¥corroanion
Slide 2: Agenda
BUSE Investor & Analyst Day 2023 Agenda 2 Agenda Time Topic Speakers 1:00 – 1:30 pm One Busey Van Dukeman Chairman, President & CEO, First Busey Corp. Robin Elliott President & CEO, Busey Bank | CEO, FirsTech 1:30 – 2:00 pm Regional Operating Model and Commercial Banking Strategy Willie Mayberry Pre
Slide 3: Disclosures: Forward-Looking Statements
BUSE Investor & Analyst Day 2023 Disclosures 3 Special Note Concerning Forward-Looking Statements Statements made in this presentation, other than those concerning historical financial information, may be considered forward-looking statements within the meaning of the Private Securities Litigation R
Slide 4: Disclosures: Non-GAAP Financial Information
BUSE Investor & Analyst Day 2023 Disclosures 4 Non-GAAP Financial Information This presentation 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
Slide 5: One Busey
One Busey Van Dukeman Chairman, President & CEO, First Busey Corp. Robin Elliott President & CEO, Busey Bank CEO, FirsTech
Slide 6: One Busey Overview
BUSE Overview • 155+ year-old institution headquartered in Champaign, IL • Diversified financial holding company with comprehensive and innovative financial solutions for individuals and businesses • Successfully integrated 7 M&A transactions since 2015 – seasoned and deep leadership team well-verse
Slide 7: Fortress Balance Sheet at Attractive Valuation
Peer Group Metrics CET1 Ratio Total Capital Ratio NPAs / Assets LTM Fee Income / Operating Revenue Dividend Yield ¹ 75th Percentile 11.7% 14.9% 0.22% 24.5% 4.9% Median 11.0% 13.4% 0.28% 18.4% 3.9% 25th Percentile 9.9% 12.5% 0.36% 16.2% 2.5% BUSE 12.2% 16.4% 0.13% 26.8% 5.3% BUSE Rank (out of 20) 5 2
Slide 8: One Busey: Forging the Franchise
$3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 BUSE Investor & Analyst Day 2023 One Busey 8 Forging the Franchise 1868 Busey Brothers & Company Bank opens its doors on January 13 in Urbana, IL. 2007 First Busey and Main Street Trust finalize MOE in July - Main Street President & CEO Van A. Dukeman is named Pr
Slide 9: One Busey Integrated Enterprise-wide Go-to-Market Strategy
BUSE Investor & Analyst Day 2023 One Busey 9 Integrated Enterprise-wide Go-to-Market Strategy Enterprise-wide sales structure is organized by region – bringing the complete Busey experience to each community through local leadership and autonomy This regional operating model is built to deliver the
Slide 10: Focused on Service: Net Promoter Scores
BUSE Investor & Analyst Day 2023 Regional Operating Model and Commercial Banking Strategy 10 Focused on Service Overall Net Promoter Scores – Q1 2023 (higher is better) • Corporate NPS is more than double the bank industry¹ average score of 22.4 ² • Wealth segment NPS is more than double the investm
Slide 11: Regions
Regions BUSE Investor & Analyst Day 2023 One Busey 11 Loans Banking Centers Legacy Institutions Leadership Deposits NorthernGatewayCentral Florida 1025 20 3 Regional President Martin O’Donnell; started with Busey in 2014 as CRE Rel. Mgr. Regional President Sean Gallagher, legacy First Community Fina
Slide 12: Regional Operating Model & Commercial Banking Strategy
Regional Operating Model & Commercial Banking Strategy Willie Mayberry President of Regional Banking Sean Gallagher Regional President, Northern Region
Slide 13: Regional Operating Model
BUSE Investor & Analyst Day 2023 Regional Operating Model and Commercial Banking Strategy 13 Regional Operating Model • Each Region is equipped to handle all customer needs with staffing across Commercial, Wealth Management and Consumer Banking services • Targeted regional hires that are experts acr
Slide 14: Culture Development
BUSE Investor & Analyst Day 2023 Regional Operating Model and Commercial Banking Strategy 14 Culture Development • An integral component of adopting the Regional Operating Model and bringing together associates from many different organizational backgrounds is the development of an integrated sales
Slide 15: Incentives Fully Aligned
BUSE Investor & Analyst Day 2023 Regional Operating Model and Commercial Banking Strategy 15 Incentives Fully Aligned • Other financial institutions have competing components by segment – our regionalization plan broadens the view for each business segment and increases collaboration • Expertise is
Slide 16: Regional Operating Model in Action
BUSE Investor & Analyst Day 2023 Regional Operating Model and Commercial Banking Strategy 16 Regional Operating Model in Action *Data as of 3/31/2023 Banking Centers Regional Model encourages collaboration on New Relationships as well as expanding Existing Relationships • 73% of New Commercial Loans
Slide 17: Wealth Management Strategy
Wealth Management Strategy Jeff Burgess President of Busey Wealth Management Zach Hillard Chief Investment Officer Derek Sasveld Director of Investment Research and Strategy
Slide 18: Fully Integrated Wealth Management Platform
Fully Integrated Wealth Management Platform BUSE Investor & Analyst Day 2023 Wealth Management Strategy 18 $11.2 Billion Assets Under Care LTM Revenue $54.5 Million PT Margin LTM 41.7% 7 Distinct Segments for preserving & growing wealth 3 Core Principles I. Client-Focused Strategy • Trusted fiduciar
Slide 19: Capabilities & Service Excellence Positioned for Success
BUSE Investor & Analyst Day 2023 Wealth Management Strategy 19 Capabilities & Service Excellence Positioned for Success Broadening relationship share with individuals and their businesses: A Busey Wealth Management relationship comes with access to full array of banking services $11B AUC Boutique In
Slide 20: Fully Internalized Investment Office
Fully Internalized Investment Office BUSE Investor & Analyst Day 2023 Wealth Management Strategy 20 Core Fixed Income Strategy Large Cap Core Equity Strategy (1) Blended benchmark consists of 60% MSCI All-Country World Index / 40% Bloomberg Intermediate Govt/Credit Index Investment Philosophy: ▪ Pro
Slide 21: Wealth Management Services
Wealth Management Services BUSE Investor & Analyst Day 2023 Wealth Management Strategy 21 Target Market Mass Affluent & Emerging Wealth • Core segment, built upon our dedicated team of experts & proactive bespoke financial advice • Central focus on the client experience and building out the tech pla
Slide 22: Laser-Focused on Priorities
Laser-Focused on Priorities BUSE Investor & Analyst Day 2023 Wealth Management Strategy 22 OpportunityObjective Continue to protect and grow our high-value account wealth clients • 42 Wealth Relationships with $20 million+ AUC • 91 Lending Relationships with $20 million+ Net Commitment • 37 of the 9
Slide 23: FirsTech Strategy
FirsTech Strategy Robin Elliott President & CEO, Busey Bank CEO, FirsTech
Slide 24: FirsTech Story
FirsTech Story BUSE Investor & Analyst Day 2023 FirsTech Strategy 24 2020 $16.6 million 2021 $19.7 million 2022 $21.8 million FirsTech Key Leadership Revenue Growth • FirsTech was founded in 1984 as lockbox processing facility and our core service has evolved into eLockbox, now providing online bank
Slide 25: FirsTech System
FirsTech System BUSE Investor & Analyst Day 2023 FirsTech Strategy 25 Exceptional Customer Experience Comprehensive Single Vendor Relationship Frictionless Payments Core Integration
Slide 26: Innovation & Core Business
Innovation & Core Business BUSE Investor & Analyst Day 2023 FirsTech Strategy 26 Community Banks & Credit Unions Target Industries Small & Medium-Sized Businesses Utilities Insurance TelecomMunicipalities Top Customers by Revenue Company Description 2022 Company Revenue National Telecom Company $4.8
Slide 27: Credit Discipline
Credit Discipline Bob Plecki Vice Chairman of Credit
Slide 28: Conservative Approach to Credit
Conservative Approach to Credit BUSE Investor & Analyst Day 2023 Credit Discipline 28 NCOs / Average Loans Strong Asset Quality Regional Banking’s go-to-market focus on well-capitalized individuals & their businesses deftly complements our conservative credit culture Relationship Lending Philosophy
Slide 29: Well-Diversified & Conservatively Underwritten Portfolio
Well-Diversified & Conservatively Underwritten Portfolio BUSE Investor & Analyst Day 2023 Credit Discipline 29 Loan Portfolio at 3/31/23 Lending to well-capitalized individuals and their companies across diverse industries All C&I loans are underwritten to 1.20x FCCR¹ requirement and RLOCs² greater
Slide 30: Deeper Dive: Apartments, Student Housing & Manufacturing
Deeper Dive into Portfolios: Apartments, Student Housing & Manufacturing BUSE Investor & Analyst Day 2023 Credit Discipline 30 8.7% 62% 74% Largest current Student Housing Balances by School Enrollment 5-Year Enrollment Growth Rate 56,644 +14.8% 20,683 +0.2% 47,005 +8.1% • Substantial diversificatio
Slide 31: Office & Retail CRE-I
Office & Retail CRE-I BUSE Investor & Analyst Day 2023 Credit Discipline 31 Weighted Average DSCR: Weighted Average Debt Yield: WAvg 1-Year Lease Rollover: Wavg 2-Year Lease Rollover: Top Ten Largest Office Loans 1.57 10.1% 9.4% 10.9% Weighted Average LTV: Weighted Average DSCR: Weighted Average Deb
Slide 32: Vigilant, High-Touch Portfolio Management
Vigilant, High-Touch Portfolio Management BUSE Investor & Analyst Day 2023 Credit Discipline 32 2022 portfolio-level stress testing of the CRE-I portfolio reported improving or stable weighted-average DSCRs for each property type under the severe stress scenario compared to the 2021 testing results.
Slide 33: Financial Performance & Investment Thesis
Financial Performance & Investment Thesis Jeff Jones CFO Ted Rosinus Head of Corporate Development and Investor Relations
Slide 34: Attractive Returns on a Fortress Balance Sheet, Priced at a Discount
BUSE Investor & Analyst Day 2023 34 Attractive Returns on a Fortress Balance Sheet, Priced at a Discount Financial Performance & Investment Thesis Consistent positive trends in PPNR, EPS, and TBV (ex AOCI) + dividends At/Above median risk-adjusted returns Diversified & growing revenue streams Proact
Slide 35: Consistent Growth in Returns
0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% Median of KRE Components⁴ BUSE $14 $15 $16 $17 $18 $19 $20 $21 2020 Q1 2021 Q1 2022 Q1 2023 Q1 Consistent Growth in Returns BUSE Investor & Analyst Day 2023 Financial Performance & Investment Thesis 35 $29.1 $30.1 $36.4 $36.3 $36.8 $0.52 $0.54 $0.65 $0
Slide 36: Diversified Revenue Streams
2.66% 2.91% 3.31% 3.76% 4.05% 2.45% 2.68% 3.00% 3.24% 3.13% 2.41% 2.66% 2.99% 0.22% 0.24% 0.32% 0.53% 0.94% 0.04% 0.02% 0.03% 0.02% 0.01% 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 Q1 Earning Assets NIM Ex-PPP NIM(2) Cost of Funds Accretion $68.1 $75.3 $85.9 $91.2 $86.0 $1.2 $0.6 $0.8 $0.5 $0.4 $1.3 $0.6
Slide 37: Focused Control on Expenses
$70.4 $69.1 $70.7 $73.7 $70.4 59.9% 59.0% 55.7% 55.8% 55.6% 50 .0 0 52 .0 0 54 .0 0 56 .0 0 58 .0 0 60 .0 0 62 .0 0 64 .0 0 66 67 68 69 70 71 72 73 74 75 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 Q1 Expenses ex-Acq. Acq./Restructuring Exp. Adj. Core Efficiency Ratio ¹ Focused Control on Expenses BUSE Inv
Slide 38: Substantial Liquidity and a Stable, Granular Deposit Base
Substantial Liquidity and a Stable, Granular Deposit Base BUSE Investor & Analyst Day 2023 38Financial Performance & Investment Thesis (1) Non-GAAP calculation, see Appendix (2) Estimated uninsured deposits consists of excess of accounts >$250K, less internal accounts and collateralized accounts (in
Slide 39: Robust Capital Foundation
Robust Capital Foundation BUSE Investor & Analyst Day 2023 39Financial Performance & Investment Thesis $856 $802 $749 $791 $845 7.0% 6.7% 6.2% 6.6% 7.1% 11.9% 11.8% 11.8% 12.0% 12.2% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10. 0% 11. 0% 12. 0% 13. 0% $600 $650 $700 $750 $800 $850 $900 2022 Q1 2022 Q2 2022 Q3
Slide 40: Sum-of-the-Parts Valuation
BUSE Investor & Analyst Day 2023 40 (1) Median consensus for those analysts that estimate consolidated Wealth Management fees; grossed up $0.5 million (1Q23 intracompany eliminations annualized) for segment-level revenue (2) Range of 25th – 75% percentile of EV to FY23 EBITDA multiples as of 5/5/23
Slide 41: Appendix
Appendix Busey , FIRST BUSEY CORPORATION
Slide 42: Appendix: Non-GAAP Financial Information
BUSE Investor & Analyst Day 2023 Appendix: Non-GAAP Financial Information 42 Non-GAAP Financial Information ___________________________________________ 1. Annualized measure. Pre-Provision Net Revenue, Adjusted Pre-Provision Net Revenue, Pre-Provision Net Revenue to Average Assets, and Adjusted Pre-
Slide 43: Appendix: Non-GAAP Financial Information
BUSE Investor & Analyst Day 2023 Appendix: Non-GAAP Financial Information 43 Non-GAAP Financial Information ___________________________________________ 1. Annualized measure. Adjusted Net Income, Adjusted Diluted Earnings Per Share, Adjusted Return on Average Assets, Average Tangible Common Equity,
Slide 44: Appendix: Non-GAAP Financial Information
BUSE Investor & Analyst Day 2023 Appendix: Non-GAAP Financial Information 44 Non-GAAP Financial Information ___________________________________________ 1. Annualized measure. Adjusted Net Interest Income and Adjusted Net Interest Margin (dollars in thousands) Three Months Ended March 31, 2023 Decemb
Slide 45: Appendix: Non-GAAP Financial Information
BUSE Investor & Analyst Day 2023 Appendix: Non-GAAP Financial Information 45 Non-GAAP Financial Information Noninterest Expense Excluding Amortization of Intangible Assets, Adjusted Noninterest Expense, Adjusted Core Expense, Noninterest Expense Excluding Non-operating Adjustments, Efficiency Ratio,
Slide 46: Appendix: Non-GAAP Financial Information
BUSE Investor & Analyst Day 2023 Appendix: Non-GAAP Financial Information 46 Non-GAAP Financial Information ___________________________________________ 1. Net of estimated deferred tax liability. 2. Tax-effected measure. Tangible Book Value and Tangible Book Value Per Common Share (dollars in thousa
Slide 47: Appendix: Non-GAAP Financial Information
BUSE Investor & Analyst Day 2023 Appendix: Non-GAAP Financial Information 47 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 March 31, 2023 December 31, 2022 Septemb