First Busey Corporation reports a first quarter net loss, aims for positive impacts post-acquisition

From GlobeNewswire: 2025-04-22 17:00:00

First Busey Corporation reports first quarter results following the acquisition of CrossFirst Bankshares, Inc. First quarter net income was a loss of $30.0 million, with diluted earnings per share of $(0.44). The transformative partnership aims to combine commercial banking with Busey’s core deposit franchise and payment technology solutions, resulting in positive financial impacts.

The acquisition of CrossFirst Bankshares, Inc. was completed on March 1, 2025, making First Busey Corporation a premier commercial bank in 10 states. Each share of CrossFirst common stock converted to 0.6675 of a share of Busey’s common stock. The acquisition was accretive to tangible book value and exceeded initial projections.

First Busey Corporation’s financial results for the first quarter of 2025 show a net loss of $(30.0) million. Adjusted net income, excluding non-GAAP adjustments, was $39.9 million. Pre-provision net revenue was $25.6 million. The objective of adjusted earnings is to allow investors to identify core earnings performance trends more clearly.

Chairman and CEO Van A. Dukeman expressed gratitude for the opportunities presented by the Busey and CrossFirst partnership. The combined entity operates under the First Busey Corporation name and will continue to trade on the Nasdaq under the “BUSE” ticker symbol. The merger of CrossFirst Bank with Busey Bank is expected to occur on June 20, 2025. In the first quarter of 2025, Busey reported a pre-provision net revenue to average assets of 0.70%, down from 1.28% in the previous quarter and 1.55% in the same quarter last year. Adjusted pre-provision net revenue was $54.7 million, up from $42.0 million in the previous quarter and $38.6 million in the first quarter of 2024.

Net interest income for the first quarter of 2025 was $103.7 million, up from $81.6 million in the previous quarter and $75.9 million in the first quarter of 2024. Net interest margin was 3.16%, compared to 2.95% in the previous quarter and 2.79% in the first quarter of 2024.

Factors contributing to the 21 basis point increase in net interest margin in the first quarter of 2025 included increased loan portfolio and held for sale loan yields, purchase accounting accretion, decreased borrowing expense, and more. Busey continues to evaluate strategies to stabilize net interest income in lower rate environments and expects further margin expansion in the second quarter of 2025.

Noninterest income for the first quarter of 2025 totaled $21.2 million, a decrease of 39.7% from the previous quarter and 39.2% from the first quarter of 2024. Excluding certain impacts, adjusted noninterest income increased by 4.4% to $37.0 million, with fee-based businesses like wealth management contributing significantly.

Wealth management fees increased by 3.4% compared to the previous quarter and 11.7% compared to the first quarter of 2024. Payment technology solutions revenue decreased slightly, while fees for customer services increased. Busey’s Wealth Management division ended the quarter with $13.68 billion in assets under care and reported record high revenue for the period. Busey’s first quarter results show a 14.8% increase in noninterest income compared to Q4 2024 and a 39.1% increase compared to Q1 2024. Total noninterest expense increased by 47.3% from Q4 2024 and 62.7% from Q1 2024 due to acquisition expenses and operating costs. Annual pre-tax expense synergy estimates from the CrossFirst acquisition remain on track at $25 million.

Adjusted noninterest expense, which excludes certain expenses, was $82.9 million in Q1 2025. Noteworthy increases include salaries, wages, and employee benefits, data processing expense, professional fees, and amortization of intangible assets. Busey’s efficiency ratio was 79.3% in Q1 2025, with adjusted efficiency at 58.7%.

Busey’s total assets were $19.46 billion as of March 31, 2025, compared to $12.05 billion in December 31, 2024. Average interest-earning assets were $13.36 billion in Q1 2025. Portfolio loans totaled $13.87 billion at the end of Q1 2025, reflecting a conservative approach to underwriting and pricing.

Busey’s financial strength remains rooted in a conservative operating approach. The company’s focus on managing expenses and operating efficiently is evident in its financial performance. Portfolio loans have increased significantly, reflecting the bank’s cautious underwriting and pricing strategies in the current economic climate. Busey Bank’s portfolio loans increased by $133.6 million in the first quarter of 2025, mainly in the commercial category. CrossFirst Bank added $6.04 billion in loans to Busey’s portfolio as of March 31, 2024. Average portfolio loans were $9.84 billion, compared to $7.74 billion in the previous quarter.

Asset quality remains strong, with Busey Bank and CrossFirst Bank having similar policies to limit concentration exposure. Non-performing loans and assets increased compared to previous quarters. Busey’s non-performing loans were $6.8 million, while CrossFirst Bank’s were $47.9 million as of March 31, 2025.

Net charge-offs increased by $28.6 million in the first quarter of 2025, including $29.6 million related to acquired loans. Busey recorded a $42.5 million provision for credit losses, establishing an initial allowance for non-acquired loans. Total deposits were $16.46 billion, with core deposits accounting for 89.7%.

Busey Bank held $16.7 million of long-term Federal Home Loan Bank borrowings as of March 31, 2025, while CrossFirst Bank had $11.2 million of short-term and $61.9 million of long-term FHLB borrowings. Busey assumed trust preferred securities with a recorded balance of $2.2 million from the CrossFirst acquisition.

Available sources of on- and off-balance sheet liquidity totaled $8.55 billion as of March 31, 2025. Cash flows from the securities portfolio were approximately $119.7 million in the first quarter of 2025, contributing to the balance sheet liquidity profile. First Busey Corporation expects cash flows of $302.3 million for 2025 and $308.1 million for 2026 from maturing securities in its portfolio, with current book yields of 2.55% and 2.59%, respectively. The company’s strong capital foundation is evident, with regulatory capital ratios well above required levels as of March 31, 2025.

Busey’s tangible common equity was $1.68 billion at the end of March 2025, with a tangible book value per common share of $18.62. The company paid a dividend of $0.25 per share in the first quarter of 2025, representing a 4.2% increase from the previous quarter.

During the first quarter of 2025, Busey resumed stock repurchases, buying 220,000 shares at a weighted average price of $21.98 per share. As of March 31, 2025, the company had 1,699,275 shares remaining on its stock repurchase plan.

First Busey Corporation, a $19.46 billion financial holding company, is the parent company of Busey Bank, which had total assets of $11.98 billion as of March 31, 2025. Additionally, Busey Bank currently operates 62 banking centers in various markets.

Busey Bank’s subsidiary, FirsTech, provides payment technology solutions for businesses and financial institutions. Busey has been recognized by Forbes as one of America’s Best Banks for the fourth consecutive year and has received various other accolades for its workplace culture and community engagement. Busey finds adjusted measures beneficial for investors and management to understand non-core and non-recurring items’ effects on performance. The tables reconcile non-GAAP measures with GAAP for clarity. However, these disclosures have limitations and may not be comparable to other companies’ measures. Tax-effected numbers in disclosures are based on estimated rates.

For the quarter ending March 31, 2025, the provision for unfunded commitments included a $3.139 million Day 2 expense related to the CrossFirst acquisition. Adjusted net income, tangible common equity, and related ratios show adjustments for various expenses and gains. Diluted earnings per share and return on assets are also highlighted.

Tax-equivalent net interest income and margin figures show adjustments for tax rates and purchase accounting accretion. The efficiency ratios and average assets are analyzed to provide a comprehensive view of Busey’s financial performance. Tax-equivalent adjustments are calculated using a federal income tax rate of 21%.

Adjusted noninterest income, expenses, and efficiency ratios illustrate Busey’s revenue streams and operational costs. The efficiency ratio and average assets are calculated to assess Busey’s performance accurately. The provision for unfunded commitments is included in the adjustments for better clarity on expenses.

Tangible assets, common equity, and related ratios showcase Busey’s financial health and stability. The tangible common equity to tangible assets ratio provides insights into the company’s strength. Book value and tangible book value per common share are included to assess the value of Busey’s shares accurately. Tax adjustments are excluded in the revised calculations for 2025. As of March 31, 2025, Busey’s total deposits reached $16,459,470, with core deposits at $14,769,899, making up 89.73% of total deposits. Forward-looking statements in the press release caution about factors impacting the financial sector, including economic changes, regulatory policies, and technological advancements. Busey emphasizes risk management and factors affecting liquidity, capital, and credit risk.



Read more at GlobeNewswire:: First Busey Corporation Announces 2025 First Quarter