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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended 9/30/2003 Commission File No. 0-15950
FIRST BUSEY CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 37-1078406
- ------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
Incorporation or organization) No.)
201 W. Main St.,
Urbana, Illinois 61801
- ------------------------------- -------------------------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (217) 365-4556
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined by Rule 12b-2 of the Act)
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding at October 31, 2003
- ------------------------------------------------------------------------------
Common Stock, without par value 13,662,977
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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FIRST BUSEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2003 AND DECEMBER 31, 2002
(UNAUDITED)
September 30, 2003 December 31, 2002
------------------ -----------------
(Dollars in thousands)
ASSETS
Cash and due from banks $ 44,024 $ 47,645
Federal funds sold - -
Securities available for sale (amortized cost 2003, $234,241;
2002, $216,801) 251,369 233,830
Loans 1,144,846 1,101,043
Allowance for loan losses (16,731) (15,460)
------------ -----------
Net loans $ 1,128,115 $ 1,085,583
Premises and equipment 22,163 27,359
Cash surrender value of bank owned life insurance 16,593 11,109
Goodwill 7,380 7,380
Other intangible assets 2,205 2,464
Other assets 22,336 20,208
------------ -----------
Total assets $ 1,494,185 $ 1,435,578
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest bearing $ 162,616 $ 151,105
Interest bearing 1,050,063 1,062,500
------------ -----------
Total deposits $ 1,212,679 $ 1,213,605
Federal funds purchased and securities sold under agreements to repurchase 34,500 2,467
Long-term debt 87,759 71,759
Company obligated mandatorily redeemable preferred securities 25,000 25,000
Other liabilities 9,010 7,584
------------ -----------
Total liabilities $ 1,368,948 $ 1,320,415
------------ -----------
STOCKHOLDERS' EQUITY
Preferred stock $ - $ -
Common stock 6,291 6,291
Surplus 20,932 20,862
Retained earnings 100,237 91,639
Accumulated other comprehensive income 10,322 10,276
------------ -----------
Total stockholders' equity before treasury stock, unearned ESOP
shares and deferred compensation for stock grants $ 137,782 $ 129,068
Treasury stock, at cost (10,731) (12,050)
Unearned ESOP shares and deferred compensation for stock grants (1,814) (1,855)
------------ -----------
Total stockholders' equity $ 125,237 $ 115,163
------------ -----------
Total liabilities and stockholders' equity $ 1,494,185 $ 1,435,578
============ ===========
Common shares outstanding at period end 13,649,520 13,568,220
============ ===========
See notes to unaudited consolidated financial statements.
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FIRST BUSEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
2003 2002
-------- --------
(Dollars in thousands, except per share amounts)
INTEREST INCOME:
Interest and fees on loans $ 49,225 $ 49,606
Interest and dividends on investment securities:
Taxable interest income 4,567 5,406
Non-taxable interest income 1,543 1,500
Dividends 140 92
Interest on federal funds sold 114 168
-------- --------
Total interest income $ 55,589 $ 56,772
-------- --------
INTEREST EXPENSE:
Deposits $ 15,192 $ 18,552
Short-term borrowings 127 340
Long-term debt 2,604 2,318
Company obligated mandatorily redeemable preferred securities 1,688 1,688
-------- --------
Total interest expense $ 19.611 $ 22,898
-------- --------
Net interest income $ 35,978 $ 33,874
Provision for loan losses 1,378 2,055
-------- --------
Net interest income after provision for loan losses $ 34,600 $ 31,819
-------- --------
OTHER INCOME:
Trust $ 3,467 $ 3,682
Commissions and brokers fees, net 1,541 1,658
Service charges on deposit accounts 5,427 5,204
Other service charges and fees 1,433 1,338
Security gains, net 322 569
Gain on sales of loans 5,833 2,383
Increase in cash surrender value of life insurance 484 498
Other operating income 557 1,154
-------- --------
Total other income $ 19,064 $ 16,486
-------- --------
OTHER EXPENSES:
Salaries and wages $ 14,585 $ 13,076
Employee benefits 2,818 2,693
Net occupancy expense of premises 2,326 2,279
Furniture and equipment expenses 1,899 2,239
Data processing 1,326 1,084
Stationery, supplies and printing 813 733
Amortization of intangible assets 309 495
Other operating expenses 6,313 5,369
-------- --------
Total other expenses $ 30,389 $ 27,968
-------- --------
Income before income taxes $ 23,275 $ 20,337
Income taxes 7,767 6,788
-------- --------
NET INCOME $ 15,508 $ 13,549
======== ========
BASIC EARNINGS PER SHARE $ 1.14 $ 1.00
======== ========
DILUTED EARNINGS PER SHARE $ 1.13 $ 0.99
======== ========
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK $ 0.51 $ 0.45
======== ========
See notes to unaudited consolidated financial statements.
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FIRST BUSEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE QUARTERS ENDED SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
2003 2002
-------- --------
(Dollars in thousands, except per share amounts)
INTEREST INCOME:
Interest and fees on loans $ 16,386 $ 16,969
Interest and dividends on investment securities:
Taxable interest income 1,418 1,747
Non-taxable interest income 512 523
Dividends 64 31
Interest on federal funds sold 37 82
-------- --------
Total interest income $ 18,417 $ 19,352
-------- --------
INTEREST EXPENSE:
Deposits $ 4,592 $ 6,186
Short-term borrowings 30 75
Long-term debt 933 913
Company obligated mandatorily redeemable preferred securities 563 563
-------- --------
Total interest expense $ 6,118 $ 7,737
-------- --------
Net interest income $ 12,299 $ 11,615
Provision for loan losses 448 575
-------- --------
Net interest income after provision for loan losses $ 11,851 $ 11,040
-------- --------
OTHER INCOME:
Trust $ 1,176 $ 1,071
Commissions and brokers fees, net 565 563
Service charges on deposit accounts 1,898 1,793
Other service charges and fees 478 476
Security gains, net 23 96
Gains on sales of loans 1,359 1,027
Increase in cash surrender value of life insurance 157 162
Other operating income 62 248
-------- --------
Total other income $ 5,718 $ 5,436
-------- --------
OTHER EXPENSES:
Salaries and wages $ 4,949 $ 4,436
Employee benefits 934 870
Net occupancy expense of premises 797 722
Furniture and equipment expenses 589 758
Data processing 447 374
Stationary, supplies and printing 294 243
Amortization of intangible assets 103 271
Other operating expenses 1,910 1,899
-------- --------
Total other expenses $ 10,023 $ 9,573
-------- --------
Income before income taxes $ 7,546 $ 6,903
Income taxes 2,236 2,331
-------- --------
NET INCOME $ 5,310 $ 4,572
======== ========
BASIC EARNINGS PER SHARE $ 0.39 $ 0.34
======== ========
DILUTED EARNINGS PER SHARE $ 0.38 $ 0.33
======== ========
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK $ 0.17 $ 0.15
======== ========
See notes to unaudited consolidated financial statements.
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FIRST BUSEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
2003 2002
---------- ----------
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 15,508 $ 13,549
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation 41 86
Depreciation and amortization 2,753 3,116
Provision for loan losses 1,378 2,055
Provision for deferred income taxes 435 (512)
Stock dividends (379) (224)
Accretion of security discounts (241) (335)
Gain on sales of investment securities, net (322) (569)
Gain on sale of pooled loans (5,833) (2,383)
Gain on sale and disposition of premises and equipment (421) (36)
Gain on sale of OREO properties (75) (45)
Market valuation adjustment on OREO properties 694 -
Change in assets and liabilities:
Increase in other assets (2,083) (2,118)
Increase in accrued expenses 2,165 3,769
Decrease in interest payable (835) (405)
(Increase) decrease in income taxes receivable (953) 1,139
(Decrease) increase in income taxes payable (392) 768
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES BEFORE
LOAN ORIGINATIONS AND SALES $ 11,440 $ 17,855
---------- ----------
Loans originated for sale (364,547) (170,300)
Proceeds from sales of loans 399,718 156,607
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 46,611 $ 4,162
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of securities classified available for sale 13,451 20,887
Proceeds from maturities of securities classified available for sale 165,362 52,212
Purchase of securities classified available for sale (195,311) (89,070)
Increase in federal funds sold - (10,600)
Increase in loans (73,639) (56,319)
Proceeds from sale of premises and equipment 6,160 109
Purchases of premises and equipment (2,987) (1,180)
Proceeds from sale of OREO properties 630 903
Increase in investment in bank owned life insurance (5,000) (343)
Increase in cash surrender value of bank owned life insurance (484) (498)
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES $ (91,818) $ (83,899)
---------- ----------
(continued)
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FIRST BUSEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
2003 2002
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) increase in certificates of deposit $ (31,263) $ 51,116
Net increase in demand, money market and saving deposits 30,337 13,663
Cash dividends paid (6,910) (6,102)
Purchase of treasury stock (2,193) (3,353)
Proceeds from sale of treasury stock 3,582 763
Net increase (decrease) in securities sold under agreement to repurchase 32,033 (6,133)
Proceeds from short-term borrowings - 500
Principal payments on short-term borrowings - (2,500)
Proceeds from issuance of long-term debt 16,000 41,000
Principal payments on long-term debt - (8,000)
--------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES $ 41,586 $ 80,954
--------- --------
NET (DECREASE) INCREASE IN CASH AND DUE FROM BANKS $ (3,621) $ 1,217
Cash and due from banks, beginning 47,645 $ 41,580
--------- --------
Cash and due from banks, ending $ 44,024 $ 42,797
========= ========
See notes to unaudited consolidated financial statements.
FIRST BUSEY CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
2003 2002
----- -------
(Dollars in thousands)
Other real estate acquired in settlement of loans $ 391 $ 5,823
FIRST BUSEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
Nine Months Ended
September 30,
2003 2002
-------- --------
(Dollars in thousands)
Net income $ 15,508 $ 13,549
-------- --------
Other comprehensive income, before tax:
Unrealized gains on securities:
Unrealized holding gains arising during period $ 421 $ 3,759
Less reclassification adjustment for gains included
in net income (322) (569)
-------- --------
Other comprehensive income, before tax $ 99 $ 3,190
Income tax expense related to items of other
comprehensive income 53 1,265
-------- --------
Other comprehensive income, net of tax $ 46 $ 1,925
-------- --------
Comprehensive income $ 15,554 $ 15,474
======== ========
See notes to unaudited consolidated financial statements.
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FIRST BUSEY CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: INTERIM FINANCIAL STATEMENTS
The consolidated interim financial statements of First Busey Corporation and
Subsidiaries are unaudited, but in the opinion of management reflect all
necessary adjustments, consisting only of normal recurring accruals, for a fair
presentation of results as of the dates and for the periods covered by the
financial statements. The consolidated financial statements have been prepared
in accordance with accounting principles generally accepted within the United
States of America for interim financial data and with the instructions to Form
10-Q and Article 10 of Regulation S-X. The results for the interim periods are
not necessarily indicative of the results of operations that may be expected for
the fiscal year.
In preparing the consolidated financial statements, the Corporation's management
is required to make estimates and assumptions that affect the reported amounts
of assets and liabilities as of the date of the financial statements and the
reported amounts of revenues and expenses for the reporting period. Actual
results could differ from those estimates.
NOTE 2: LOANS
The major classifications of loans as of September 30, 2003 and December 31,
2002 were as follows:
September 30, 2003 December 31, 2002
------------------ -----------------
(Dollars in thousands)
Commercial $ 126,426 $ 118,004
Real estate construction 157,084 129,872
Real estate - farmland 12,301 13,421
Real estate - 1-4 family residential mortgage 401,307 430,189
Real estate - multifamily mortgage 83,293 57,559
Real estate - non-farm nonresidential mortgage 284,032 274,153
Installment 58,499 55,811
Agricultural 21,904 22,034
---------------------------------
$ 1,144,846 $ 1,101,043
Less:
Allowance for loan losses 16,731 15,460
---------------------------------
Net loans $ 1,128,115 $ 1,085,583
=================================
The real estate-mortgage category includes loans held for sale with carrying
values of $31,423,000 at September 30, 2003 and $60,761,000 at December 31,
2002; these loans had fair market values of $31,443,000 and $61,685,000
respectively.
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NOTE 3: EARNINGS PER SHARE
Net income per common share has been computed as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
--------------------------------------------------------
Net income $ 5,310,000 $ 4,572,000 $15,508,000 $13,549,000
Shares:
Weighted average common shares outstanding 13,555,070 13,517,312 13,559,239 13,553,927
Diluted effect of outstanding options, as determined
by the application of the treasury stock method 145,314 84,333 126,824 79,515
----------- ----------- ----------- -----------
Weighted average common shares outstanding,
as adjusted for diluted earnings per share calculation 13,700,384 13,601,645 13,686,063 13,633,442
=========== =========== =========== ===========
Basic earnings per share $ 0.39 $ 0.34 $ 1.14 $ 1.00
=========== =========== =========== ===========
Diluted earnings per share $ 0.38 $ 0.33 $ 1.13 $ 0.99
=========== =========== =========== ===========
FIRST BUSEY CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4: STOCK-BASED COMPENSATION
First Busey Corporation applies Accounting Principles Board Opinion No. 25 in
accounting for stock options and discloses the fair value of options granted as
permitted by SFAS No. 123. The Corporation has recorded no compensation expense
associated with stock options as all options granted under its plan had an
exercise price equal to the market value of the common stock when granted.
The following summarizes the pro-forma effects assuming compensation expense had
been recorded based upon the estimated fair value:
Three Months Ended Nine Months Ended
September 30, September 30,
(dollars in thousands, except per share)
2003 2002 2003 2002
------- ------- -------- --------
Net income as reported $ 5,310 $ 4,572 $ 15,508 $ 13,549
Less compensation expense determined under fair value
method for all options granted, net of related tax effects 65 76 193 162
------- ------- -------- --------
Pro-forma net income $ 5,245 $ 4,496 $ 15,315 $ 13,387
======= ======= ======== ========
BASIC EARNINGS PER SHARE
Reported net income $ 0.39 $ 0.34 $ 1.14 $ 1.00
Less compensation expense - 0.01 0.01 0.01
------- ------- -------- --------
Pro-forma net income $ 0.39 $ 0.33 $ 1.13 $ 0.99
======= ======= ======== ========
DILUTED EARNINGS PER SHARE
Reported net income $ 0.38 $ 0.33 $ 1.13 $ 0.99
Less compensation expense - - 0.01 0.01
------- ------- -------- --------
Pro-forma net income $ 0.38 $ 0.33 $ 1.12 $ 0.98
======= ======= ======== ========
The Corporation has not granted any stock options during 2003.
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NOTE 5: OUTSTANDING COMMITMENTS
The Corporation is a party to financial instruments with off-balance sheet risk
in the normal course of business to meet the financing needs of its customers in
the way of commitments to extend credit. They involve, to varying degrees,
elements of credit risk in excess of the amount recognized in the balance
sheets.
The Corporation's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit is
represented by the contractual amount of those instruments. The corporation uses
the same credit policies in making commitments and conditional obligations as
they do for on-balance-sheet instruments.
A summary of the contractual amount of the Corporation's exposure to off-balance
sheet risk follows:
September 30, 2003 December 31, 2002
----------------------------------------
(Dollars in thousands)
Financial instruments whose contract amounts represent
credit risk:
Commitments to extend credit $ 237,255 $ 222,407
Standby letters of credit 11,561 13,138
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. These
commitments are generally at variable interest rates and generally have fixed
expiration dates or other termination clauses and may require payment of a fee.
Since many of the commitments are expected to expire without being drawn upon,
the total commitment amounts do not necessarily represent future cash
requirements. The customer's credit worthiness is evaluated on a case-by-case
basis. The amount of collateral obtained, if it is deemed necessary by the
Corporation upon extension of credit, is based on management's credit evaluation
of the counterparty. Collateral held varies but may include accounts receivable,
inventory, property and equipment and income-producing commercial properties.
Standby letters of credit are conditional commitments issued by the Corporation
to guarantee the performance of a customer to a third party. Those guarantees
are primarily issued to support public and private borrowing arrangements,
including bond financing and similar transactions and primarily have terms of
one year or less. The credit risk involved in issuing letters of credit is
essentially the same as that involved in extending loan facilities to customers.
The Corporation holds collateral, which may include accounts receivable,
inventory, property and equipment, income producing properties, supporting those
commitments if deemed necessary. In the event the customer does not perform in
accordance with the terms of the agreement with the third party, the Corporation
would be required to fund the commitment. The maximum potential amount of future
payments the Corporation could be required to make is represented by the
contractual amount shown in the summary above. If the commitment is funded, the
Corporation would be entitled to seek recovery from the customer. As of
September 30 2003, and December 31, 2002, no amounts have been recorded as
liabilities for the Corporation's potential obligations under these guarantees.
FORWARD LOOKING STATEMENTS
This presentation includes forward looking statements that are intended to be
covered by the safe-harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward looking statements include but are not limited
to comments with respect to the objectives and strategies, financial condition,
results of operations and business of First Busey Corporation.
These forward looking statements involve numerous assumptions, inherent risks
and uncertainties, both general and specific, and the risk that predictions and
other forward looking statements will not be achieved. The Corporation cautions
you not to place undue reliance on these forward looking statements as a number
of important factors could cause actual future results to differ materially from
the plans, objectives, expectations, estimates and intentions expressed in such
forward looking statements.
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These risks, uncertainties and other factors include the general state of the
economy, both on a local and national level, the ability of the Corporation to
successfully complete acquisitions, the continued growth of geographic regions
served by the Corporation, and the retention of key individuals in the
Corporation's management structure.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of the financial condition
of First Busey Corporation and Subsidiaries ("Corporation") at September 30,
2003 (unaudited), as compared with December 31, 2002 and the results of
operations for the nine months ended September 30, 2003 and 2002 (unaudited),
and the results of operations for the three months ended September 30, 2003 and
2002 (unaudited). This discussion and analysis should be read in conjunction
with the Corporation's consolidated financial statements and notes thereto
appearing elsewhere in this quarterly report.
Certain reclassifications have been made to the balances, with no effect on net
income, as of and for the nine and three months ending September 30, 2002, to be
consistent with the classifications adopted as of and for the nine and three
months ending September 30, 2003.
FINANCIAL CONDITION AT SEPTEMBER 30, 2003 AS COMPARED TO DECEMBER 31, 2002
Total assets increased $58,607,000 or 4.1% to $1,494,185,000 at September 30,
2003, from $1,435,578,000 at December 31, 2002. Securities available for sale
increased $17,539,000 or 7.5% to $251,369,000 at September 30, 2003, from
$233,830,000 at December 31, 2002. Loans increased $43,803,000 or 4.0% to
$1,144,846,000 at September 30, 2003, from $1,101,043,000 at December 31, 2002,
primarily due to growth in the commercial, real estate construction,
multi-family mortgage, non-farm nonresidential mortgage categories. Growth in
these categories was offset partially by a decline in the balance of outstanding
1-4 family residential mortgage loans.
In August, 2003, First Busey sold Busey Plaza, an office building with a book
value of $4,514,000 located in downtown Urbana, Illinois. The building was
occupied entirely by unaffiliated tenants and was no longer used in the
operations of the Corporation. Busey Bank increased its investment bank owned
life insurance by $5,000,000.
The balance of total deposits as of September 30, 2003, was comparable to the
balance as of December 31, 2002, although there were changes in the deposit mix.
Noninterest-bearing deposits increased $11,511,000 or 7.6% to $162,616,000 as of
September 30, 2003, from $151,105,000 at December 31, 2002. Interest-bearing
deposits declined $12,437,000 or 1.2% to $1,050,063,000 at September 30, 2003,
from $1,062,500,000 as of December 31, 2002.
Securities sold under agreements to repurchase increased $5,033,000 to
$7,500,000 at September 30, 2003, compared to $2,467,000 at December 31, 2002.
The Corporation had $27,500,000 in Federal funds purchased as of September 30,
2003, and had no Federal funds purchased as of December 31, 2002. Long-term debt
increased $16,0000,000 or 22.3% to $87,759,000 as of September 30, 2003,
compared to $71,759,000 as of December 31, 2002. The increase in long-term debt
is due to increases in Federal Home Loan Bank (FHLB) advances outstanding. The
increases in Federal funds purchased and securities sold under agreements to
repurchase and long-term debt were used to fund growth in loans and securities
available for sale.
In the first nine months of 2003, First Busey repurchased 86,800 shares of its
common stock at an aggregate cost of $2,193,000. The Corporation's board of
directors approved a stock purchase plan on March 20, 2001, for the repurchase
of 500,000 shares of common stock Through September 30, 2003, the Corporation
had repurchased 340,256 shares of common stock under this plan.
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ASSET QUALITY
The following table sets forth the components of non-performing assets and past
due loans.
September 30, 2003 December 31, 2002
------------------ -----------------
(Dollars in thousands)
Non-accrual loans $ 2,607 $ 1,265
Loans 90 days past due, still accruing 2,817 963
Restructured loans - -
Other real estate owned 5,460 5,724
Non-performing other assets 1 1
--------- -------
Total non-performing assets $ 10,885 $ 7,953
========= =======
Total non-performing assets as a percentage of total assets 0.73% 0.55%
========= =======
Total non-performing assets as a percentage of loans plus non-performing assets 0.94% 0.72%
========= =======
Loans 90 days past due and still accruing were $2,817,000 or 0.25% of total
loans as of September 30, 2003, compared to $963,000 or 0.09% of total loans as
of December 31, 2002. The balance of other real estate owned decreased to
$5,460,000 as of September 30, 2003, compared to $5,724,000 as of December 31,
2002. This decrease is attributable primarily to the recording of valuation
adjustments totaling $694,000 by Busey Bank in connection with the carrying
values of OREO properties.
Busey Bank became mortgage in possession of a hotel property in the McLean
County market on June 28, 2002, and took ownership of the property on September
13, 2003. Through the first nine months of 2003, the hotel property has reported
an operating loss of $123,000 which is included as a component of other
operating expenses on the Corporation's consolidated income statement.
ALLOWANCE FOR LOAN LOSSES
First Busey Corporation has established an allowance for loan losses which
represents the corporation's estimate of the probable losses that have occurred
as of the date of the consolidated financial statements.
Management has established an allowance for loan losses which reduces the total
loans outstanding by an estimate of uncollectible loans. Loans deemed
uncollectible are charged against and reduce the allowance. Periodically, a
provision for loan losses is charged to current expense. This provision acts to
replenish the allowance for loan losses and to maintain the allowance at a level
that management deems adequate.
There is no precise method of predicting specific loan losses or amounts which
ultimately may be charged off on segments of the loan portfolio. The
determination that a loan may become uncollectible, in whole or in part, is a
matter of judgment. Similarly, the adequacy of the allowance for loan losses can
be determined only on a judgmental basis, after full review, including (a)
consideration of economic conditions and their effect on particular industries
and specific borrowers; (b) a review of borrowers' financial data, together with
industry data, the competitive situation, the borrowers' management capabilities
and other factors; (c) a continuing evaluation of the loan portfolio, including
monitoring by lending officers and staff credit personnel of all loans which are
identified as being of less than acceptable quality; (d) an in-depth appraisal,
on a monthly basis, of all impaired (loans are considered to be impaired when
based on current information and events, it is probable the Corporation will not
be able to collect all amounts due); and (e) an evaluation of the underlying
collateral for secured lending, including the use of independent appraisals of
real estate properties securing loans.
Periodic provisions for loan losses are determined by management based upon the
size and the quality of the loan portfolio measured against prevailing economic
conditions and historical loan loss experience and also based on specific
exposures in the portfolio. Management has instituted a formal loan review
system supported by an effective credit analysis and control process. The
Corporation will maintain the allowance for loan losses at a level sufficient to
absorb estimated uncollectible loans and, therefore, expects to make periodic
additions to the allowance for loan losses.
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The Corporation maintains its allowance for loan losses at a level management
believes will be adequate to absorb estimated losses on existing loans based on
an evaluation of the collectibility of loans and prior loss experience. The
allowance is calculated using a risk rating system which involves judgments,
estimates, and uncertainties that are susceptible to change. This risk rating
system is based on continuous credit reviews of the loan portfolio and considers
changes in the nature and volume of the loan portfolio, overall portfolio
quality, loan concentrations, specific problem loans, current and anticipated
economic conditions that may affect the borrowers' ability to pay, historical
loan loss experience and other factors, which, in management's opinion, deserve
current recognition in estimating loan losses. Changes in these factors or
conditions could have significant impact on the Corporation's financial
condition or results of operation.
POTENTIAL PROBLEM LOANS
Potential problem loans are those loans which are not categorized as impaired,
non-accrual, past due or restructured, but where current information indicates
that the borrower may not be able to comply with present loan repayment terms.
Management assesses the potential for loss on such loans as it would with other
problem loans and has considered the effect of any potential loss in determining
its provision for loan losses. Potential problem loans totaled $913,000 at
September 30, 2003 as compared to $1,053,000 as of December 31, 2002. There are
no other loans identified which management believes represent or result from
trends or uncertainties which management reasonably expects will materially
impact future operating results, liquidity or capital resources. There are no
other credits identified about which management is aware of any information
which causes management to have serious doubts as to the ability of such
borrower(s) to comply with the loan repayment terms.
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2003 AS COMPARED TO SEPTEMBER 30, 2002
SUMMARY
Net income for the nine months ended September 30, 2003, increased $1,959,000 or
14.5% to $15,508,000 as compared to $13,549,000 for the comparable period in
2002. Year-to-date diluted earnings per share increased $0.14 or 14.1% to $1.13
for the nine months ending September 30, 2003 as compared to $0.99 for the same
period in 2002.
The Corporation's return on average assets was 1.43% for the nine months ended
September 30, 2003, as compared to 1.38% for the comparable period in 2002. The
corporation's return on average shareholders' equity was 17.20% for the nine
months ended September 30, 2003, as compared to 16.67% for the same period in
2002.
EARNING ASSETS, SOURCES OF FUNDS, AND NET INTEREST MARGIN
Average earning assets increased $134,686,000 or 11.0% to $1,363,369,000 for the
nine months ending September 30, 2003, as compared to $1,228,683,000 for the
same period last year. This is due primarily to growth in the average balances
of loans outstanding, U.S. Government obligations, and obligations of states and
political subdivisions.
Interest-bearing liabilities averaged $1,177,816,000 during the first nine
months of 2003, an increase of $108,267,000 or 10.1% from the average balance of
$1,069,549,000 for the same period in 2002. This growth is due to increases in
the average balances of all categories of interest-bearing deposit accounts and
long-term debt.
Income on interest-earning assets is accrued based on the effective yield of the
underlying financial instruments. A loan is considered to be impaired when,
based on current information and events, it is probable the Corporation will not
be able to collect all amounts due. The accrual of interest income on impaired
loans is discontinued when there is reasonable doubt as to the borrower's
ability to meet contractual payments of interest or principal.
13 of 29
Net interest income, on a fully taxable equivalent basis, increased $2,091,000
or 6.0% to $36,933,000 for the nine months ended September 30, 2003, compared to
$34,842,000 for the same period in 2002. Net interest margin, the corporation's
net interest income expressed as a percentage of average earning assets stated
on a fully-taxable equivalent basis, was 3.62% for the nine months ended
September 30, 2003, as compared to 3.79% for the same period in 2002. Net
interest margin expressed as a percentage of average total assets, also on a
fully taxable equivalent basis, was 3.40% for the nine months ended September
30, 2003, compared to 3.54% for the same period in 2002.
Interest income, on a tax equivalent basis, for the nine months ended September
30, 2003, was $56,544,000, which is $1,196,000 or 2.1% lower than the
$57,740,000 earned during the same nine-month period in 2002. The average yield
on interest-earning assets declined 73 basis points to 5.55% for the nine-month
period ending September 30, 2003, compared to 6.28% for the same period in 2002.
Declines in the yields on all categories of interest-earning assets offset the
growth in the average balances of all categories of interest-earning assets.
Interest expense for the nine-month period ended September 30, 2003, was
$19,611,000, which is $3,287,000 or 14.4% lower than the $22,898,000 paid during
the same period in 2002. The average rate paid on interest-bearing liabilities
declined 63 basis points to 2.23% for the nine months ending September 30, 2003,
as compared to 2.86% for the same period in 2002. Declines in the average rates
paid on all categories of interest-bearing liabilities more than offset the
growth in the average balances of all deposit categories, short-term borrowings,
and long-term debt.
PROVISION FOR LOAN LOSSES
The Corporation's provision for loan losses of $1,378,000 during the nine months
ended September 30, 2003, is $677,000 less than the $2,055,000 recorded during
the comparable period in 2002. The provision and net charge-offs of $107,000 for
the nine-month period ending September 30, 2003, resulted in the allowance
representing 1.46% of total loans and 308% of non-performing loans as of
September 30, 2003, as compared to the allowance representing 1.40% of
outstanding loans and 694% of non-performing loans as of December 31, 2002. Net
charge-offs for the first nine months of 2003 were $107,000 compared to
$1,476,000 for the comparable period in 2002. The net chargeoff ratio (net
charge-offs as a percentage of average loans) was 0.01% for the nine-month
period ending September 30, 2003, reflecting a decrease from 0.20% for the same
period in 2002. The adequacy of the allowance for loan losses is consistent with
management's consideration of the composition of the portfolio, non-performing
asset levels, recent credit quality experience, historic charge-off trends, and
prevailing economic conditions among other factors.
OTHER INCOME, OTHER EXPENSE, AND INCOME TAXES
Total other income, excluding security gains, increased $2,825,000 or 17.7% to
$$18,742,000 for the nine months ended September 30, 2003, compared to
$15,917,000 for the same period in 2002. Growth in service charges and gains on
the sale of loans were partially offset by declines in trust fees, commissions
and brokers' fees, and other operating income.
Income recognized on service charges, trust fees, commissions, and loan gains is
recognized based on contractual terms and are accrued based on estimates, or are
recognized as transactions occur or services are provided. Income from the
servicing of sold loans is recognized based on estimated asset valuations and
transactions volumes. While these estimates and assumptions may be considered
complex, First Busey has implemented controls and processes to ensure the
accuracy of these accruals.
During the first nine months of 2003 the Corporation recognized $5,833,000 on
the sale of $393,885,000 compared to $2,383,000 on the sale of $154,224,000 of
loans during the prior year period. The increase in gains on the sale of loans
and the principal balances sold can be attributed to the interest-rate
environment experienced during the nine months ending September 30, 2003, as
customers refinanced existing home mortgages at lower interest rates. Management
anticipates continued sales from the current mortgage loan production of the
Corporation if mortgage loan originations allow and the sales of loans necessary
to maintain the Corporation's
14 of 29
desired asset/liability structure. The Corporation may realize gains and/or
losses on these sales dependent upon interest rate movements and upon how
receptive the debt markets are to mortgage-backed securities.
In this low interest rate environment customers have prepaid loans in the
corporation's sold loan portfolio more rapidly than anticipated when the loans
were sold. This has resulted in more rapid amortization of the Corporation's
mortgage servicing asset. During the second quarter of 2003, the Corporation
recorded a valuation allowance of $215,000 to the carrying value of its mortgage
servicing assets. Mortgage servicing asset amortization of $1,392,000 and the
valuation allowance of $215,000 have been recorded as charges against the
servicing income on sold mortgage loans and are included in other operating
income.
During the nine months ending September 30, 2003, the Corporation recognized
security gains of approximately $194,000 after income taxes, representing 1.3%
of net income. During the same period in 2002, security gains of approximately
$343,000 after income taxes were recognized, representing 2.5% of net income.
The Corporation owns a position in a qualified equity security with substantial
appreciated value. First Busey's Board of Directors has authorized an orderly
liquidation of this asset over a six-year period.
Total other expenses increased $2,421,000 or 8.7% to $30,389,000 for the nine
months ending September 30, 2003, compared to $27,968,000 for the comparable
period in 2002.
Salaries and wage expense increased $1,509,000 or 11.5% to $14,585,000 for the
nine months ended September 30, 2003, as compared to $13,076,000 during the same
period last year. Growth in the salary expense is due primarily to increases in
commissions and other incentive compensation for associates involved in
originating, processing, and selling mortgage loans held for sale. Growth in the
Florida market also contributed to the increase in salary and wage expense as
Busey Bank Florida opened a branch in Cape Coral, Florida, during the fourth
quarter of 2002 and added a second branch in Cape Coral during the third quarter
of 2003. The Corporation had 495 and 470 full-time equivalent employees as of
September 30, 2003, and September 30, 2002, respectively.
Occupancy and furniture and equipment expenses decreased $293,000 or 6.5% to
$4,225,000 for the nine-month period ending September 30, 2003, compared to
$4,518,000 during the comparable period in 2002. Data processing expenses
increased $242,000 due to costs associated with the upgrade of Busey Bank's
image capture system. These expenses were incurred during the first quarter of
2003. Other operating expenses increased $838,000 or 12.7% to $7,435,000 for the
nine month period ending September 30, 2003, compared to $6,597,000 for the
comparable period in 2002. Of this increase, $694,000 is associated with the
recording of valuation adjustments by Busey Bank on the carrying value of
properties held in its other real estate owned inventory.
Income taxes for the nine months ended September 30, 2003, increased to
$7,767,000 as compared to $6,788,000 for the comparable period in 2002. As a
percentage of income before taxes, the provision for income taxes was 33.4% for
the nine months ended September 30, 2003, as well as for the comparable period
in 2002.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2003, AS COMPARED TO SEPTEMBER 30, 2002
SUMMARY
Net income for three months ended September 30, 2003, increased $738,000 or
16.1% to $5,310,000 as compared to $4,572,000 for the three months ending
September 30, 2002. Diluted earnings per share increased $0.05 or 15.2% to $0.38
for the three months ending September 30, 2003 as compared to $0.33 for the
comparable period in 2002.
The Corporation's return on average assets was 1.42% for the three month period
ending September 30, 2003, compared to 1.34% for the comparable period in 2002.
The return on average shareholders' equity increased to 17.07% for the three
month period ending September 30, 2003, compared to 16.33% for the comparable
period in 2002.
15 of 29
EARNING ASSETS, SOURCES OF FUNDS, AND NET INTEREST MARGIN
Average earning assets increased $129,996,000 or 10.3% to $1,397,700,000 for the
three months ending September 30, 2003, as compared to $1,267,704,000 for same
period last year. This is due primarily to growth in the average balances of
U.S. Government obligations and outstanding loans.
Interest-bearing liabilities averaged $1,200,448,000 during the three months
ending September 30, 2003, an increase of $93,888,000 or 8.5% from the average
balance of $1,106,560,000 for the same period in 2002. This growth is due to
increases in the average balances of long-term debt and all categories of
interest-bearing deposit accounts. Busey Bank Florida's interest-bearing
deposits averaged $76,061,000 for the three months ending September 30, 2003, as
compared to $45,783,000 for the comparable period in 2002.
Net interest income, on a fully taxable equivalent basis, increased $664,000 or
5.6% to $12,611,000 for the three months ended September 30, 2003, compared to
$11,947,000 for the same period in 2002. Net interest margin, the Corporation's
net interest income, expressed as a percentage of average earning assets stated
on a fully taxable equivalent basis, was 3.58% for the three months ending
September 30, 2003, as compared to 3.74% for the comparable period in 2002. The
net interest margin expressed as a percentage of average total assets, also on a
fully taxable equivalent basis, was 3.36% for the three months ended September
30, 2003, compared to 3.49% for comparable period in 2002.
Interest income, on a tax equivalent basis, for the three-month period ending
September 30, 2003, was $18,729,000, which is $955,000 or 4.9% lower than the
$19,684,000 earned during the same period in 2002. The average yield on
interest-earning assets declined 84 basis points to 5.32% for the three-month
period ended September 30, 2003, compared to 6.16% for the same period in 2002.
Declines in the yields on all categories of interest-earning assets with the
exception of other securities offset the growth in the average balances of
investment securities and loans.
Interest expense for the three months ending September 30, 2003, was $6,118,000,
which is $1,619,000 or 20.9% lower than for the same period in 2002. The average
rate paid on interest-bearing liabilities declined 75 basis points to 2.02% for
the three months ended September 30, 2003, as compared to 2.77% for the same
period in 2002. Declines in the average rate paid on all categories of
interest-bearing liabilities offset growth in the average balances of all
categories of interest-bearing liabilities.
OTHER INCOME, OTHER EXPENSE, AND INCOME TAXES
Total other income, excluding security transactions, increased $355,000 or 6.6%
to $5,695,000 for the three months ended September 30, 2003, compared to
$5,340,000 for the same period in 2002. Growth in trust fees, service charges
and gains on the sale of loans were partially offset by declines in other
operating income. Gains of $1,359,000 were recognized on the sale of
$156,556,000 of mortgage loans during the three months ending September 30,
2003, compared to gains of $1,027,000 on the sale of $54,658,000 in mortgage
loans during the prior year period.
During the three-month period ending September 30, 2003, the Corporation
recognized security gains of approximately $14,000, after income taxes,
representing 0.3% of net income. During the comparable period in 2002, security
gains of approximately $58,000, after income taxes, were recognized,
representing 1.3% of net income.
Total other expenses increased $450,000 or 4.7% to $10,023,000 for the three
months ending September 30, 2003, compared to $9,573,000 for the comparable
period in 2002.
Salaries and wage expense increased $513,000 or 11.6% to $4,949,000 for the
three months ended September 30, 2003, as compared to $4,436,000 during the same
period last year. Again, the growth in salary and wage expense is due to
increases in compensation programs for associates involved in originating,
processing, and selling mortgage loans held for sale combined with the addition
of the branch offices in Cape Coral, Florida. Occupancy
16 of 29
and furniture and equipment expenses decreased $94,000 or 6.4% to $1,386,000 for
the three-month period ending September 30, 2003, compared to $1,480,000 during
the comparable period in 2002.
Income taxes for the three-month period ending September 30, 2003, decreased to
$2,236,000 as compared to $2,331,000 for the comparable period in 2002. As a
percentage of income before taxes, the provision for income taxes decreased to
29.6% for the three months ended September 30, 2003 from 33.8% for the
comparable period in 2002 due to a change in the estimated refunds due from
Federal and state taxing authorities on the corporations 2002 tax calculation.
NEW ACCOUNTING PRONOUNCEMENTS
Financial Accounting Standards Board Interpretation (FIN) No. 46 "Consolidation
of Variable Interest Entities, an interpretation of Accounting Research Bulletin
No. 51." FIN 46 establishes accounting guidance for consolidation of variable
interest entities (VIE) that function to support the activities of the primary
beneficiary. The primary beneficiary of a VIE entity is the entity that absorbs
a majority of the VIE's expected losses, receives a majority of the VIE's
expected residual returns, or both, as a result of ownership, controlling
interest, contractual relationship or other business relationship with a VIE.
Prior to the implementation of FIN 46, VIEs were generally consolidated by an
enterprise when the enterprise had a controlling financial interest through
ownership of a majority of voting interest in the entity. The provisions of FIN
46 were effective immediately for all arrangements entered into after January
31, 2003. If a VIE existed prior to February 1, 2003, FIN 46 was effective at
the beginning of the first interim period beginning after June 15, 2003.
However, on October 8, 2003, the Financial Accounting Standards Board (FASB)
deferred the implementation date of FIN 46 until the first period ending after
December 15, 2003.
The Corporation expects to adopt FIN 46 in connection with its consolidated
financial statements for the year ended December 31, 2003. In its current form,
FIN 46 may require the Corporation to de-consolidate its investment in First
Busey Capital Trust I in future financial statements. The potential
de-consolidation of subsidiary trusts of bank holding companies formed in
connection with the issuance of trust preferred securities, like First Busey
Capital Trust I, appears to be an unintended consequence of FIN 46. It is
currently unknown if, or when, the FASB will address this issue. In July, 2003,
the Board of Governors of the Federal Reserve System issued a supervisory letter
instructing bank holding companies to continue to include the trust preferred
securities in their Tier I capital for regulatory capital purposes until notice
is given to the contrary. The Federal Reserve intends to review the regulatory
implications of any accounting treatment changes and, if necessary or warranted,
provide further appropriate guidance. There can be no assurance that the Federal
Reserve will continue to permit institutions to include trust preferred
securities in Tier I capital for regulatory capital purposes. As of September
30, 2003, assuming the Corporation was not permitted to include the $25 million
in trust preferred securities issued by First Busey Capital Trust I in its Tier
1 capital, the Corporation would still exceed the regulatory required minimums
for capital adequacy purposes. If the trust preferred securities were no longer
permitted to be included in Tier 1 capital, the Corporation would also be
permitted to redeem the capital securities, which bear interest at 9.00%,
without penalty.
The interpretations of FIN 46 and its application to various transaction types
and structures are evolving. Management continuously monitors emerging issues
related to FIN 46, some of which could potentially impact the Corporation's
financial statements.
In April, 2003, Statement on Financial Accounting Standards No. 149, Amendment
of Statement 133 on Derivative Instruments and Hedging Activities, was issued.
This statement amends and clarifies financial accounting and reporting for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives) and for hedging
activities under FASB Statement No. 133, Accounting for Derivative Instruments
and Hedging Activities. This Statement is effective for contracts entered into
or modified after June 30, 2003, except as stated below and for hedging
relationships designated after June 30, 2003. In addition, except as stated
below, all provisions of this Statement should be applied prospectively. The
provisions of this Statement that relate to Statement 133 Implementation issues
that have been effective for fiscal quarters that began prior to June 15, 2003,
should continue to be applied in accordance with their respective effective
dates. In addition, paragraphs 7(a) and 23(a), which related to forward
purchases or sales of
17 of 29
when-issued securities or other securities that do not yet exist, should be
applied to both existing contracts and new contracts entered into after June 30,
2003. The Corporation does not anticipate this statement will have a significant
impact upon the operations of First Busey or its subsidiaries.
In May, 2003, Statement on Financial Accounting Standards No. 150 Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity was issued. This Statement establishes standards for how an issuer
classifies and measures certain financial instruments with characteristics of
both liabilities and equity. It requires that an issuer classify a financial
instrument that is within its scope as a liability (or an asset in some
circumstances). Many of those instruments were previously classified as equity.
This Statement requires an issuer to classify the following instruments as
liabilities (or assets in some circumstances):
- A financial instrument issued in the form of shares that is
mandatorily redeemable - that embodies an unconditional
obligation requiring the issuer to redeem it by transferring
its assets at a specified or determinable date (or dates) or
upon an event that is certain to occur
- A financial instrument, other than an outstanding share, that,
at inception, embodies an obligation to repurchase the
issuer's equity shares, or is indexed to such an obligation,
and that requires or may require the issuer to settle the
obligation by transferring assets (for example, a forward
purchase contract or written put option on the issuer's equity
shares that is to be physically settled or net cash settled)
- A financial instrument that embodies an unconditional
obligation, or a financial instrument other than an
outstanding share that embodies a conditional obligation, that
the issuer must or may settle by issuing a variable number of
its equity shares, if, at inception, the monetary value f the
obligation is based solely or predominantly on any of the
following:
- A fixed monetary amount known at inception,
for example, a payable settleable with a
variable number of the issuer's equity
shares.
- Variations in something other than the fair
value of the issuer's equity shares, for
example, a financial instrument indexed to
the S&P and settleable with a variable
number of the issuer's equity shares.
- Variations inversely related to changes in
the fair value of the issuer's equity
shares, for example, a written put option
that could be net share settled.
The requirements of this Statement apply to issuer's classification and
measurement of freestanding financial instruments, including that that comprise
more than one option or forward contract.
This Statement is effective for financial instruments entered into or modified
after May 31, 2003, and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003. It is to be implemented by
reporting the cumulative effect of a change in an accounting principle for
financial instruments created before the issuance date of the Statement and
still existing at the beginning of the interim period of adoption. Restatement
is not permitted.
First Busey Corporation does not anticipate this Statement will have a
significant impact upon the operations of the Corporation or its subsidiaries.
REPORTABLE SEGMENTS AND RELATED INFORMATION
First Busey Corporation has three reportable segments, Busey Bank, Busey Bank
Florida and First Busey Trust & Investment Co. Busey Bank provides a full range
of banking services to individual and corporate customers through its branch
network in Champaign, McLean and Ford Counties in Illinois, through its branch
in Indianapolis, Indiana, and through its loan production office in Fort Myers,
Florida. Busey Bank Florida provides a full range of banking services to
individual and corporate customers in Fort Myers, Florida. First
18 of 29
Busey Trust & Investment Company provides trust and asset management services to
individual and corporate customers throughout central Illinois.
The Corporation's three reportable segments are strategic business units that
are separately managed as they offer different products and services and have
different marketing strategies.
The segment financial information provided below has been derived from the
internal profitability reporting system used by management to monitor and manage
the financial performance of the Corporation. The accounting policies of the
three segments are the same as those described in the summary of significant
accounting policies in the annual report. The Corporation accounts for
intersegment revenue and transfers at current market value.
September 30, 2003
---------------------------------------------------------------------------------------------------------
First Busey
Busey Bank Trust & Consolidated
Busey Bank Florida Investment Co. All Other Totals Eliminations Totals
---------------------------------------------------------------------------------------------------------
(Dollars in thousands)
Interest income $ 52,166 $ 3,235 $ 105 $ 1,803 $ 57,309 $ (1,720) $ 55,589
Interest expense 16,374 1,541 - 3,417 21,332 (1,721) 19,611
Other income 14,163 430 3,191 20,399 38,183 (19,119) 19,064
Net income 15,348 169 970 16,992 33,479 (17,971) 15,508
Total assets 1,376,114 107,657 3,293 192,419 1,679,483 (185,298) 1,494,185
September 30, 2002
----------------------------------------------------------------------------------------------------
First Busey
Busey Bank Trust & Consolidated
Busey Bank Florida Investment Co. All Other Totals Eliminations Totals
----------------------------------------------------------------------------------------------------
(Dollars in thousands)
Interest income $ 54,438 $ 2,136 $ 117 $ 1,810 $ 58,501 $ (1,729) $ 56,772
Interest expense 20,057 1,106 - 3,437 24,600 (1,702) 22,898
Other income 11,403 247 3,553 19,208 34,411 (17,925) 16,486
Net income 13,932 18 1,078 15,222 30,250 (16,701) 13,549
Total assets 1,321,563 64,446 3,878 180,098 1,569,985 (167,897) 1,402,088
LIQUIDITY
Liquidity management is the process by which the Corporation ensures that
adequate liquid funds are available to meet the present and future cash flow
obligations arising in the daily operations of the business. These financial
obligations consist of needs for funds to meet commitments to borrowers for
extensions of credit, funding capital expenditures, withdrawals by customers,
maintaining deposit reserve requirements, servicing debt, paying dividends to
shareholders, and paying operating expenses.
The Corporation's most liquid assets are cash and due from banks,
interest-bearing bank deposits, and Federal funds sold. The balances of these
assets are dependent on the Corporation's operating, investing, lending and
financing activities during any given period.
The Corporation's primary sources of funds, consists of deposits, investment
maturities and sales, loan principal repayment, deposits, and capital funds.
Additional liquidity is provided by bank lines of credit, repurchase agreements
and the ability to borrow from the Federal Reserve Bank and the Federal Home
Loan Bank. The Corporation has not dealt in or used brokered deposits as a
source of liquidity. The Corporation has an operating line with Bank One in the
amount of $10,000,000, all of which was available as of September 30, 2003.
Long-term liquidity needs will be satisfied primarily through retention of
capital funds.
19 of 29
An additional source of liquidity that can be managed for short-term and
long-term needs is the Corporation's ability to securitize or package loans
(primarily mortgage loans) for sale. During the first nine months of 2003 the
Corporation originated $364,547,000 and sold $393,885,000 in mortgage loans for
sale compared to originations of $170,300,000 and sales of $154,224,000 during
the first nine months of 2002. As of September 30, 2003, the Corporation held
$31,423,000 in loans held for sale. Management intends to sell these loans
during the fourth quarter of 2003.
The objective of liquidity management by the Corporation is to ensure that funds
will be available to meet demand in a timely and efficient manner. Based upon
the level of investment securities that reprice within 30 days and 90 days,
management currently believes that adequate liquidity exists to meet all
projected cash flow obligations. The Corporation achieves a satisfactory degree
of liquidity through actively managing both assets and liabilities. Asset
management guides the proportion of liquid assets to total assets, while
liability management monitors future funding requirements and prices liabilities
accordingly.
The Corporation's banking subsidiaries routinely enter into commitments to
extend credit in the normal course of their business. As of September 30, 2003,
and 2002, the Corporation had outstanding loan commitments including lines of
credit of $237,255,000 and $236,290,000, respectively. The balance of
commitments to extend credit represents future cash requirement and some of
these commitments may expire without being drawn upon. The Corporation
anticipates it will have sufficient funds available to meet its current loan
commitments, including loan applications received and in process prior to the
issuance of firm commitments.
The Corporation has entered into certain contractual obligations and other
commitments. Such obligations generally relate to funding of operations through
deposits, debt issuance, and property and equipment leases. The following table
summarizes significant contractual obligations and other commitments as of
September 30, 2003:
Company
Obligated
Mandatorily
Short- and Redeemable
Certificates Long-term Preferred
Due Within of Deposit Borrowing Leases Securities Total
- -----------------------------------------------------------------------------------------------------------------
(Dollars in thousands)
1 year $ 283,357 $ 262 $ 776 $ - $284,395
2 years 84,066 16,262 723 - 101,051
3 years 43,438 14,262 704 - 58,404
4 years 50,994 15,262 663 - 66,919
5 years 21,545 37,237 522 - 59,304
Thereafter 46 4,474 495 25,000 30,015
-----------------------------------------------------------------------------------
Total $ 483,446 $ 87,759 $3,883 $25,000 $600,088
===================================================================================
Commitments to extend credit $237,255
========
CAPITAL RESOURCES
Other than from the issuance of common stock, the Corporation's primary source
of capital is retained net income. During the nine months ended September 30,
2003 the Corporation earned $15,508,000 and paid dividends of $6,910,000 to
stockholders, resulting in a retention of current earnings of $8,598,000. The
Corporation's dividend payout for the nine months ended September 30, 2003 was
44.6%.
The Corporation and the Banks are subject to regulatory capital requirements
administered by federal and state banking agencies. Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, the
Corporation and the Banks must meet specific capital guidelines that involve the
quantitative measure of their assets, liabilities, and certain off-balance-sheet
items as calculated under regulatory accounting practices.
20 of 29
Quantitative measures established by regulation to ensure capital adequacy
require the Corporation and the Banks to maintain minimum amounts and ratios
(set forth in the table below) of total and Tier I capital (as defined in the
regulations) to risk-weighted assets (as defined), and Tier 1 capital (as
defined) to average assets (as defined). Management believes, as of September
30, 2003, that the Corporation and the Banks meet all capital adequacy
requirements to which they are subject.
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
---------------------------------------------------------------------------
Amount Ratio Amount Ratio Amount Ratio
---------------------------------------------------------------------------
(Dollars in thousands)
AS OF SEPTEMBER 30, 2003:
Total Capital (to Risk Weighted Assets)
Consolidated $ 149,177 13.81% $ 86,425 8.00% N/A N/A
Busey Bank $ 115,532 11.65% $ 79,365 8.00% $ 99,206 10.00%
Busey Bank Florida $ 12,093 16.04% $ 6,033 8.00% $ 7,541 10.00%
Tier I Capital (to Risk Weighted Assets)
Consolidated $ 130,097 12.04% $ 43,213 4.00% N/A N/A
Busey Bank $ 98,403 9.92% $ 39,683 4.00% $ 59,524 6.00%
Busey Bank Florida $ 11,395 15.11% $ 3,017 4.00% $ 4,525 6.00%
Tier I Capital (to Average Assets)
Consolidated $ 130,097 8.90% $ 58,473 4.00% N/A N/A
Busey Bank $ 98,403 7.26% $ 54,219 4.00% $ 67,774 5.00%
Busey Bank Florida $ 11,395 11.98% $ 3,804 4.00% $ 4,755 5.00%
AS OF DECEMBER 31, 2002:
Total Capital (to Risk Weighted Assets)
Consolidated $ 137,796 13.31% $ 82,830 8.00% N/A N/A
Busey Bank $ 108,321 11.13% $ 77,846 8.00% $ 97,307 10.00%
Busey Bank Florida $ 11,802 25.47% $ 3,708 8.00% $ 4,634 10.00%
Tier I Capital (to Risk Weighted Assets)
Consolidated $ 119,897 11.58% $ 41,415 4.00% N/A N/A
Busey Bank $ 91,826 9.44% $ 38,923 4.00% $ 58,385 6.00%
Busey Bank Florida $ 11,280 24.34% $ 1,854 4.00% $ 2,781 6.00%
Tier I Capital (to Average Assets)
Consolidated $ 119,897 8.66% $ 55,389 4.00% N/A N/A
Busey Bank $ 91,826 7.03% $ 52,244 4.00% $ 65,305 5.00%
Busey Bank Florida $ 11,280 16.50% $ 2,736 4.00% $ 3,420 5.00%
21 of 29
RATE SENSITIVE ASSETS AND LIABILITIES
Interest rate sensitivity is a measure of the volatility of the net interest
margin as a consequence of changes in market rates. The rate-sensitivity chart
shows the interval of time in which given volumes of rate-sensitive, earning
assets and rate-sensitive, interest bearing liabilities would be responsive to
changes in market interest rates based on their contractual maturities or terms
for repricing. It is, however, only a static, single-day depiction of the
Corporation's rate sensitivity structure, which can be adjusted in response to
changes in forecasted interest rates.
The following table sets forth the static rate-sensitivity analysis of the
Corporation as of September 30, 2003.
Rate Sensitive Within
-----------------------------------------------------------------------------------
1-30 31-90 91-180 181 Days - Over
Days Days Days 1 Year 1 Year Total
-----------------------------------------------------------------------------------
(Dollars in thousands)
Interest-bearing deposits $ 21 $ - $ - $ - $ - $ 21
Investment securities:
U.S. Governments 12,002 11,038 20,100 38,280 91,395 172,815
Obligations of states and
political subdivisions 2,338 2,849 2,123 1,414 42,975 51,699
Other securities 12,006 100 - 762 13,987 26,855
Loans (net of unearned int.) 476,511 58,369 76,424 121,989 411,553 1,144,846
-----------------------------------------------------------------------------------
Total rate-sensitive assets $ 502,878 $ 72,356 $ 98,647 $ 162,445 $ 559,910 $1,396,236
-----------------------------------------------------------------------------------
Interest bearing transaction
Deposits $ 44,292 $ - $ - $ - $ - $ 44,292
Savings deposits 106,126 - - - - 106,126
Money market deposits 416,199 - - - - 416,199
Time deposits 44,785 53,043 80,825 108,192 196,601 483,446
Federal funds purchased 27,000 - - - - 27,000
Securities sold under agreements to
repurchase 7,500 - - - - 7,500
Long-term debt - - 1,759 - 86,000 87,759
Company obligated mandatorily - -
redeemable preferred securities - - - - 25,000 25,000
-----------------------------------------------------------------------------------
Total rate-sensitive
liabilities $ 645,902 $ 53,043 $ 82,584 $ 108,192 $ 307,601 $1,197,322
-----------------------------------------------------------------------------------
Rate-sensitive assets less
rate-sensitive liabilities $ (143,024) $ 19,313 $ 16,063 $ 54,253 $ 252,309 $ 198,914
-----------------------------------------------------------------------------------
Cumulative Gap $ (143,024) $ (123,711) $ (107,648) $ (53,395) $ 198,914
===================================================================================
Cumulative amounts as a percentage
of total rate-sensitive assets -10.24% -8.86% -7.71% -3.82% 14.25%
===================================================================================
Cumulative ratio 0.78 0.82 0.86 0.94 1.17
===================================================================================
The foregoing table shows a negative (liability sensitive) rate-sensitivity gap
of $143 million in the 1-30 day as there were more liabilities subject to
repricing in that time period than there were assets subject to repricing within
that same time period. The volume of assets subject to repricing exceeds the
volume of liabilities subject to repricing for all time periods beyond 30 days.
On a cumulative basis, however, the gap remains liability-sensitive through one
year. The composition of the gap structure at September 30, 2003, will benefit
the Corporation more if interest rates decrease during the next year by allowing
the net interest margin to grow as liability rates would reprice more quickly
than rates on rate-sensitive assets. After 1 year, a rate increase would benefit
the Corporation because the volume of rate-sensitive assets subject to repricing
would exceed the volume of rate-sensitive liabilities subject to repricing.
22 of 29
FIRST BUSEY CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS AND INTEREST RATES
NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
2003 2002
-------------------------------------- --------------------------------
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
-------------------------------------- --------------------------------
(Dollars in thousands)
ASSETS
Federal funds sold $ 14,194 $ 114 1.07% $ 13,779 $ 168 1.63%
Investment securities
U.S. Government obligations 166,149 4,050 3.26% 146,984 4,881 4.44%
Obligations of states and political
subdivisions (1) 51,934 2,374 6.11% 44,625 2,307 6.91%
Other securities 26,455 657 3.32% 24,242 618 3.41%
Loans (net of unearned interest) (1) (2) 1,104,637 49,349 5.97% 999,053 49,766 6.66%
------------------------- -----------------------
Total interest earning assets $ 1,363,369 $ 56,544 5.55% $1,228,683 $ 57,740 6.28%
======== ========
Cash and due from banks 37,373 33,845
Premises and equipment 25,666 28,495
Allowance for loan losses (16,069) (13,839)
Other assets 43,719 39,425
------------- ----------
Total Assets $ 1,454,058 $1,316,609
============= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing transaction deposits $ 17,956 $ 70 0.52% $ 13,893 $ 107 1.03%
Savings deposits 105,308 578 0.73% 96,691 824 1.14%
Money market deposits 440,993 2,616 0.79% 401,966 3,836 1.28%
Time deposits 499,267 11,928 3.19% 459,957 13,785 4.01%
Short-term borrowings:
Federal funds purchased 3,349 36 1.44% 2,292 34 1.98%
Repurchase agreements 7,495 91 1.62% 6,722 291 5.79%
Other - - - 600 15 3.34%
Long-term debt 78,448 2,604 4.44% 62,428 2,318 4.96%
Company obligated mandatorily
redeemable preferred securities 25,000 1,688 9.03% 25,000 1,688 9.03%
------------------------- -----------------------
Total interest-bearing liabilities $ 1,177,816 $ 19,611 2.23% $1,069,549 $ 22,898 2.86%
======== ========
Net interest spread 3.32% 3.42%
==== ====
Demand deposits 146,336 128,469
Other liabilities 9,362 9,909
Stockholders' equity 120,544 108,682
------------- ----------
Total Liabilities and Stockholders' Equity $ 1,454,058 1,316,609
============= ==========
Interest income / earning assets (1) $ 1,363,369 $ 56,544 5.55% $1,228,683 $ 57,740 6.28%
Interest expense / earning assets $ 1,363,369 $ 19,611 1.93% $1,228,683 $ 22,898 2.49%
-------------------- ----------------
Net interest margin (1) $ 36,933 3.62% $ 34,842 3.79%
==================== ================
(1) On a tax-equivalent basis, assuming a federal income tax rate of 35% for
2003 and 2002.
(2) Non-accrual loans have been included in average loans, net of unearned
interest.
23 of 29
FIRST BUSEY CORPORATION AND SUBSIDIARIES
CHANGES IN NET INTEREST INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
Change due to(1)
Average Average Total
Volume Yield/Rate Change
-----------------------------------------
(Dollars in thousands)
Increase (decrease) in interest income:
Federal funds sold $ 5 $ (59) $ (54)
Investment securities:
U.S. Government obligations 799 (1,630) (831)
Obligations of states and political
subdivisions (2) 228 (161) 67
Other securities 54 (15) 39
Loans (2) 4,985 (5,402) (417)
-----------------------------------------
Change in interest income (2) $ 6,071 $ (7,267) $ (1,196)
-----------------------------------------
Increase (decrease) in interest expense:
Interest-bearing transaction deposits $ 53 $ (90) $ (37)
Savings deposits 82 (328) (246)
Money market deposits 344 (1,564) (1,220)
Time deposits 1,352 (3,209) (1,857)
Short-term borrowings:
Federal funds purchased 5 (3) 2
Repurchase agreements 38 (238) (200)
Other (15) - (15)
Long-term debt 487 (201) 286
Company obligated mandatorily redeemable preferred securities - - -
-----------------------------------------
Change in interest expense $ 2,346 $ (5,633) $ (3,287)
-----------------------------------------
Increase in net interest income (2) $ 3,725 $ (1,634) $ 2,091
=========================================
(1) Changes due to both rate and volume have been allocated proportionally.
(2) On a tax-equivalent basis, assuming a federal income tax rate of 35% for
2003 and 2002.
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FIRST BUSEY CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS AND INTEREST RATES
QUARTERS ENDED SEPTEMBER 30, 2003 AND 2002
2003 2002
------------------------------------ --------------------------------------
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
------------------------------------ --------------------------------------
(Dollars in thousands)
ASSETS
Federal funds sold $ 15,653 $ 37 0.94% $ 19,485 $ 82 1.67%
Investment securities
U.S. Government obligations 170,708 1,229 2.86% 153,933 1,587 4.09%
Obligations of states and political
subdivisions (1) 52,219 788 5.99% 47,970 804 6.65%
Other securities 28,321 253 3.54% 24,016 192 3.17%
Loans (net of unearned interest) (1) (2) 1,130,799 16,422 5.76% 1,022,300 17,019 6.60%
----------------------- -------------------------
Total interest earning assets $ 1,397,700 $ 18,729 5.32% $ 1,267,704 $ 19,684 6.16%
======== ========
Cash and due from banks 36,998 34,374
Premises and equipment 24,150 28,120
Allowance for loan losses (16,439) (13,888)
Other assets 46,350 42,099
----------- ------------
Total Assets $ 1,488,759 $ 1,358,409
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing transaction deposits $ 17,855 $ 19 0.42% $ 14,753 $ 42 1.13%
Savings deposits 107,243 149 0.55% 95,753 274 1.14%
Money market deposits 466,244 788 0.67% 402,576 1,214 1.20%
Time deposits 488,651 3,636 2.95% 487,164 4,656 3.79%
Short-term borrowings:
Federal funds purchased 3,093 10 1.28% 478 3 2.49%
Repurchase agreements 7,864 20 1.01% 4,739 72 6.03%
Other - - - - - 0.00%
Long-term debt 84,498 933 4.38% 76,097 913 4.76%
Company obligated mandatorily
redeemable preferred securities 25,000 563 8.93% 25,000 563 8.93%
----------------------- -------------------------
Total interest-bearing liabilities $ 1,200,448 $ 6,118 2.02% $ 1,106,560 $ 7,737 2.77%
======== ========
Net interest spread 3.30% 3.39%
==== ====
Demand deposits 156,258 130,288
Other liabilities 8,668 10,490
Stockholders' equity 123,385 111,071
----------- ------------
Total Liabilities and Stockholders' Equity $ 1,488,759 $ 1,358,409
=========== ============
Interest income / earning assets (1) $ 1,397,700 $ 18,729 5.32% $ 1,267,704 $ 19,684 6.16%
Interest expense / earning assets $ 1,397,700 $ 6,118 1.74% $ 1,267,704 $ 7,737 2.42%
-------------------- --------------------
Net interest margin (1) $ 12,611 3.58% $ 11,947 3.74%
==================== ====================
(1) On a tax-equivalent basis, assuming a federal income tax rate of 35% for
2003 and 2002.
(2) Non-accrual loans have been included in average loans, net of unearned
interest.
25 of 29
FIRST BUSEY CORPORATION AND SUBSIDIARIES
CHANGES IN NET INTEREST INCOME
QUARTERS ENDED SEPTEMBER 30, 2003 AND 2002
Change due to(1)
Average Average Total
Volume Yield/Rate Change
--------------------------------------
(Dollars in thousands)
Increase (decrease) in interest income:
Federal funds sold $ (14) $ (31) $ (45)
Investment securities:
U.S. Government obligations 202 (560) (358)
Obligations of states and political
subdivisions (2) 127 (143) (16)
Other securities 37 24 61
Loans (2) 2,944 (3,541) (597)
--------------------------------------
Change in interest income (2) $ 3,296 $ (4,251) $ (955)
--------------------------------------
Increase (decrease) in interest expense:
Interest-bearing transaction deposits $ 12 $ (35) $ (23)
Savings deposits 38 (163) (125)
Money market deposits 170 (596) (426)
Time deposits 14 (1,034) (1,020)
Short-term borrowings:
Federal funds purchased 9 (2) 7
Repurchase agreements 30 (82) (52)
Other - - -
Long-term debt 72 (52) 20
Company obligated mandatorily redeemable preferred securities - - -
--------------------------------------
Change in interest expense $ 345 $ (1,964) $ (1,619)
--------------------------------------
Increase in net interest income (2) $ 2,951 $ (2,287) $ 664
======================================
(1) Changes due to both rate and volume have been allocated proportionally.
(2) On a tax-equivalent basis, assuming a federal income tax rate of 35% for
2003 and 2002.
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ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURE ABOUT MARKET RISK
Market risk is the risk of change in asset values due to movements in underlying
market rates and prices. Interest rate risk is the risk to earnings and capital
arising from movements in interest rates. Interest rate risk is the most
significant market risk affecting the Corporation as other types of market risk,
such as foreign currency exchange rate risk and commodity price risk, do not
arise in the normal course of the Corporation's business activities.
The Corporation's subsidiary banks, Busey Bank and Busey Bank Florida have
asset-liability committees which meet at least quarterly to review current
market conditions and attempt to structure the banks' balance sheets to ensure
stable net interest income despite potential changes in interest rates with all
other variables constant.
The asset-liability committee uses gap analysis to identify mismatches in the
dollar value of assets and liabilities subject to repricing within specific time
periods. The Funds Management Policy established by the asset-liability
committee and approved by the Corporation's board of directors establishes
guidelines for maintaining the ratio of cumulative rate-sensitive assets to
rate-sensitive liabilities within prescribed ranges at certain intervals. A
summary of the Corporation's gap analysis is summarized on page 22.
The committee does not rely solely on gap analysis to manage interest-rate risk
as interest rate changes do not impact all categories of assets and liabilities
equally or simultaneously. The asset-liability committee supplements gap
analysis with balance sheet and income simulation analysis to determine the
potential impact on net interest income of changes in market interest rates. In
these simulation models the balance sheet is projected out over a one-year
period and net interest income is calculated under current market rates, and
then assuming permanent instantaneous shifts in the yield curve of +/- 100 basis
point, + 200 basis points. These interest-rate scenarios indicate the interest
rate risk of the Corporation over a one-year time horizon due to changes in
interest rates, as of September 30, 2003, is as follows:
Basis Point Changes
-------------------------------
-100 +100 +200
-------------------------------
Percentage change in net interest income due to an
immediate change in interest over a one-year period (4.72%) 2.27% 5.01%
These results do not differ materially from those reported as of December 31,
2002.
ITEM 4: CONTROLS AND PROCEDURES
Within the 90-day period prior to the filing of this report, an evaluation was
carried out under the supervision and with the participation of the
Corporation's management, including its Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the Corporation's disclosure controls
and procedures (as defined in Rule 13a-14(c) and 15d-14(c) under the Securities
Exchange Act of 1934). Based on their evaluation, the Corporation's Chief
Executive Officer and Chief Financial Officer have concluded that the
Corporation's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Corporation in reports that it files
or submits under the Exchange Act is recorded, processed, summarized, and
reported within the time periods specified in Securities and Exchange Commission
rules and forms.
In addition, since their evaluation, there have been no significant changes to
the Corporation's internal controls or in other factors that could significantly
affect these controls, including any corrective actions with regard to
significant deficiencies and material weaknesses.
27 of 29
PART II - OTHER INFORMATION
ITEM 1: Legal Proceedings
Not Applicable
ITEM 2: Changes in Securities and Use of Proceeds
Not Applicable
ITEM 3: Defaults Upon Senior Securities
Not Applicable
ITEM 4: Submission of Matters to a Vote of Security Holders
Not Applicable
ITEM 5: Other Information
Not Applicable
ITEM 6: Exhibits and Reports on Form 8-K
(a.) Exhibits
31.1 Certification of Principal Executive Officer
31.2 Certification of Principal Financial Officer
32.1 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, from the Corporation's Chief Executive Officer.
32.2 Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, from the Corporation's Chief Financial Officer.
(b.) Reports on Form 8-K
On October 21, 2003, First Busey Corporation filed a report on
Form 8-K (Item 12) dated October 20, 2003, releasing its
financial results for the three months ending September 30,
2003.
28 of 29
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST BUSEY CORPORATION
(REGISTRANT)
By: //Douglas C. Mills//
--------------------------------
Douglas C. Mills
Chairman of the Board and Chief Executive
Officer
By: //Barbara J. Harrington//
---------------------------------
Barbara J. Harrington
Chief Financial Officer
(Principal financial and accounting officer)
Date: November 14, 2003
29 of 29