CHAMPAIGN, Ill., April 23, 2024 (GLOBE NEWSWIRE) -- First Busey Corporation (NASDAQ:BUSE)   Net Income of $26.2 millionDiluted EPS of $0.46   FIRST QUARTER 2024 HIGHLIGHTS Adjusted net income1 of $26.5 million, or $0.47 per diluted common share Net interest margin1 increased by 5 basis points during the first quarter of 2024 to 2.79% Executed a two-part balance sheet repositioning expected to be both capital and earnings accretive Adjusted noninterest income1 of $33.9 million, or 30.9% of operating revenue2 Record high revenue for FirsTech during the first quarter of 2024, and second-best quarter in Wealth Management division history Received regulatory and shareholder approvals needed to finalize the acquisition of Merchants & Manufacturers Bank Corporation and its wholly owned subsidiary Merchants & Manufacturers Bank, which was completed on April 1, 2024 Tangible book value per common share1 of $16.84 at March 31, 2024, compared to $16.62 at December 31, 2023, and $15.14 at March 31, 2023, a year-over-year increase of 11.2% Tangible common equity1 increased to 8.12% of tangible assets at March 31, 2024, compared to 7.75% at December 31, 2023, and 7.05% at March 31, 2023 For additional information, please refer to the 1Q24 Earnings Investor Presentation MESSAGE FROM OUR CHAIRMAN & CEO First Quarter Financial Results Net income for First Busey Corporation ("Busey," "Company," "we," "us," or "our") was $26.2 million for the first quarter of 2024, or $0.46 per diluted common share, compared to $25.7 million, or $0.46 per diluted common share, for the fourth quarter of 2023, and $36.8 million, or $0.65 per diluted common share, for the first quarter of 2023. Adjusted net income1 was $26.5 million, or $0.47 per diluted common share, for the first quarter of 2024, compared to $29.1 million, or $0.52 per diluted common share, for the fourth quarter of 2023, and $36.8 million, or $0.65 per diluted common share, for the first quarter of 2023. Annualized return on average assets and annualized return on average tangible common equity1 were 0.88% and 11.43%, respectively, for the first quarter of 2024. Annualized adjusted return on average assets1 and annualized adjusted return on average tangible common equity1 were 0.89% and 11.56%, respectively, for the first quarter of 2024. Pre-provision net revenue1 was $46.4 million for the first quarter of 2024, compared to $32.9 million for the fourth quarter of 2023 and $47.9 million for the first quarter of 2023. Pre-provision net revenue to average assets1 was 1.55% for the first quarter of 2024, compared to 1.06% for the fourth quarter of 2023, and 1.58% for the first quarter of 2023. The $13.5 million increase in pre-provision net revenue in the first quarter, compared to the fourth quarter, was primarily the result of a $7.5 million gain on sale of mortgage servicing rights realized in connection with our strategic two-part balance sheet repositioning completed during the first quarter of 2024, as well as a decrease of $4.2 million in noninterest expense. Adjusted pre-provision net revenue1 was $38.6 million for the first quarter of 2024, compared to $40.2 million for the fourth quarter of 2023 and $49.5 million for the first quarter of 2023. Adjusted pre-provision net revenue to average assets1 was 1.29% for the first quarter of 2024, compared to 1.30% for the fourth quarter of 2023 and 1.64% for the first quarter of 2023. Our fee-based businesses continue to add revenue diversification. Total noninterest income was $35.0 million for the first quarter of 2024, compared to $31.5 million for the fourth quarter of 2023 and $31.8 million for the first quarter of 2023. Adjusted noninterest income1 was $33.9 million, or 30.9% of operating revenue2, during the first quarter of 2024, compared to $30.8 million, or 28.5% of total operating revenue, for the fourth quarter of 2023 and $32.5 million, or 27.4% of total operating revenue for the first quarter of 2023. Wealth management fees and payment technology solutions contributed $15.5 million and $5.7 million, respectively, to our consolidated noninterest income for the first quarter of 2024, representing 60.7% of noninterest income on a combined basis. Busey views certain non-operating items, including acquisition-related and other restructuring charges, as adjustments to net income reported under U.S. generally accepted accounting principles ("GAAP"). Non-operating pretax adjustments for acquisition and other restructuring charges in the first quarter of 2024 were $0.4 million. Busey believes that the following non-GAAP measures facilitate the assessment of its financial results and peer comparability: pre-provision net revenue, adjusted pre-provision net revenue, pre-provision net revenue to average assets, adjusted pre-provision net revenue to average assets, adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, return on average tangible common equity, adjusted return on average tangible common equity, further adjusted net income, further adjusted diluted earnings per share, adjusted net interest income, adjusted net interest margin, adjusted noninterest income, adjusted noninterest expense, adjusted core expense, efficiency ratio, adjusted efficiency ratio, adjusted core efficiency ratio, tangible book value per common share, tangible common equity, tangible common equity to tangible assets, core deposits, and core deposits to total deposits. A reconciliation of these non-GAAP measures is included in tabular form at the end of this release (see "Non-GAAP Financial Information"). We have effectively managed our noninterest expense during a time of decades-high inflation and have been purposeful in our efforts to rationalize our expense base given our economic outlook and our view on the future of banking. Noninterest expense was $70.8 million in the first quarter of 2024, compared to $75.0 million in the fourth quarter of 2023 and $70.4 million in the first quarter of 2023. Adjusted noninterest expense1, which excludes the amortization of intangible assets and acquisition and restructuring related expenses, was $68.0 million in the first quarter of 2024, compared to $68.3 million in the fourth quarter of 2023 and $67.7 million in the first quarter of 2023. Throughout 2024, we expect to continue to prudently manage our expenses. Acquisition of Merchants and Manufacturers Bank Corporation Completed April 1, 2024 Effective April 1, 2024, Busey completed its previously announced acquisition (the "Merger") of Merchants and Manufacturers Bank Corporation, an Illinois corporation ("M&M"), pursuant to an Agreement and Plan of Merger, dated November 27, 2023, between Busey and M&M (the "Merger Agreement"). Upon completion of the Merger, each share of M&M common stock converted to the right to receive, at the election of each stockholder and subject to proration and adjustment, either (1) $117.74 in cash ("Cash Election"), (2) 5.7294 shares of Busey common stock ("Share Election"), or (3) mixed consideration of $34.55 in cash and 4.0481 shares of Busey common stock ("Mixed Election"). Most of the M&M common stockholders who submitted an election form by the election deadline made the Share Election to receive their Merger consideration solely in the form of shares of Busey common stock. As a result of the elections of M&M common stockholders, and in accordance with the proration and adjustment provisions of the Merger Agreement, the Merger consideration paid to M&M common stockholders was comprised of an aggregate of approximately 1,429,304 shares of Busey common stock and an aggregate of approximately $12.2 million in cash, allocated as follows for each share of M&M stock: (1) $117.74 in cash for the Cash Election, (2) $5.3966 in cash and 5.4668 shares of Busey common stock for the Share Election, and (3) $34.55 in cash and 4.0481 shares of Busey common stock for the Mixed Election. Pursuant to the terms of the Merger Agreement, M&M common stockholders that did not make an election or submit a properly completed election form by the election deadline of March 29, 2024, received cash consideration of $117.74 for each share of M&M common stock held. No fractional shares were issued in the Merger. Fractional shares were paid in cash at the rate of $23.32 per share. Busey incurred one-time acquisition-related expenses of $0.3 million in the first quarter of 2024. Late in the second quarter of 2024, M&M Bank will be merged with and into Busey Bank (the "Bank Merger"). At the time of the Bank Merger, M&M Bank's banking centers will become banking centers of Busey Bank, except for M&M's banking center located at 990 Essington Rd., Joliet, Illinois, which is expected to be closed in connection with the Bank Merger. This partnership adds M&M's Life Equity Loan® products to Busey's existing suite of services and expands Busey's presence in the Chicago Metropolitan Statistical Area. Busey executed a two-part balance sheet repositioning strategy During the first quarter of 2024, Busey sold the mortgage servicing rights on approximately $923.5 million of one- to four-family mortgage loans for an estimated pre-tax gain of $7.5 million, which enabled us to sell available-for-sale investment securities with a book value of approximately $108.2 million for a pre-tax loss of $6.8 million with no resulting impact to tangible capital. At the time of the sale, the securities sold yielded a weighted average rate of 1.98% and had a weighted-average life of 2.3 years. Proceeds from the repositioning were deposited into an interest-bearing account at the Federal Reserve yielding 5.40%. Busey anticipates reinvesting the proceeds into higher yielding organic growth opportunities over time. The increased net interest spread as a result of the two-part repositioning is expected to increase net interest income by approximately $3.3 million on an annualized basis and improve the net interest margin run rate by 3 basis points. In addition, execution of these transactions further bolsters Busey's liquidity position and balance sheet flexibility, while also strengthening its capital position. In combination, the gain generated from the sale of mortgage servicing rights and the loss generated from the sale of securities had an immediate positive impact on consolidated stockholders' equity and book value per share. Risk-based regulatory capital ratios increased modestly as a result of the repositioning proceeds rotating into lower risk-weighted assets. Busey expects the above transactions to be accretive to capital and earnings per share in future periods. Busey's Conservative Banking Strategy Busey's financial strength is built on a long-term conservative operating approach. That focus will not change now or in the future. The quality of our core deposit franchise is a critical value driver of our institution. Our granular deposit base continues to position us well and as of March 31, 2024, our estimated uninsured and uncollateralized deposits3 percentage was 29%, and 96.7% of our deposits were core deposits1. Our retail deposit base was comprised of more than 253,000 accounts with an average balance of $22 thousand and an average tenure of 16.6 years as of March 31, 2024. Our commercial deposit base was comprised of more than 33,000 accounts with an average balance of $98 thousand and an average tenure of 12.4 years as of March 31, 2024. We have sufficient on- and off-balance sheet liquidity to manage deposit fluctuations and the liquidity needs of our customers. Asset quality remains strong by both Busey's historical and current industry trends. Non-performing assets increased to $17.6 million during the first quarter of 2024, still representing only 0.15% of total assets. Busey's results for the first quarter of 2024 include a $5.0 million provision expense for credit losses and a $0.7 million provision release for unfunded commitments. The allowance for credit losses was $91.6 million as of March 31, 2024, representing 1.21% of total portfolio loans outstanding, and 521.6% of non-performing loans. Busey recorded net charge offs of $5.2 million in the first quarter of 2024. The increase in non-performing assets and provision expense for credit losses during the first quarter of 2024, as well as the majority of the net charge-offs, were primarily in connection with a single commercial credit relationship. As of March 31, 2024, our commercial real estate loan portfolio of investor-owned office properties within Central Business District4 areas remained low at $4.7 million. Our credit performance continues to reflect our highly diversified, conservatively underwritten loan portfolio, which has been originated predominantly to established customers with tenured relationships with our company. The strength of our balance sheet is also reflected in our capital foundation. In the first quarter of 2024, Common Equity Tier 1 and Total Capital to Risk Weighted Assets ratios5 increased to 13.45% and 17.95%, respectively. In fact, our regulatory capital ratios continue to provide a buffer of more than $540 million above levels required to be designated well-capitalized. Our Tangible Common Equity ratio1 increased to 8.12% during the first quarter of 2024, compared to 7.75% for the fourth quarter of 2023 and 7.05% for the first quarter of 2023. Busey's tangible book value per common share1 increased to $16.84 at March 31, 2024, from $16.62 at December 31, 2023 and $15.14 at March 31, 2023, reflecting an 11.2% year-over-year increase. During the first quarter of 2024, we paid a common share dividend of $0.24. Community Banking Busey's focus has always been—and will always be—on doing the right thing for our Pillars: our associates, customers, communities, and shareholders. This commitment is the defining aspect of our culture, a vision that is brought to life each day by associates throughout our organization who understand the importance of exceeding customer needs and bettering our vibrant communities. The Busey Impact Report features that purposeful action and civic responsibility. To view the latest Busey Impact Report, visit busey.com/impact. As we build upon Busey's forward momentum, we are grateful for the opportunities to consistently earn the business of our customers, based on the contributions of our talented associates and the continued support of our loyal shareholders. We are excited to welcome our M&M colleagues into the Busey family and feel confident that the transaction and our continued efforts will lead to attractive financial returns in future periods.     Van A. Dukeman   Chairman and Chief Executive Officer   First Busey Corporation   SELECTED FINANCIAL HIGHLIGHTS (unaudited) (dollars in thousands, except per share amounts)               Three Months Ended   March 31,2024   December 31,2023   March 31,2023 EARNINGS & PER SHARE AMOUNTS           Net income $ 26,225     $ 25,749     $ 36,786   Diluted earnings per common share   0.46       0.46       0.65   Cash dividends paid per share   0.24       0.24       0.24   Pre-provision net revenue1, 2   46,373       32,909       47,918   Operating revenue3   109,677       107,888       118,321               Net income by operating segments:           Banking   26,492       25,164       36,835   FirsTech   86       325       (38 ) Wealth Management   4,998       4,233       4,858               AVERAGE BALANCES           Cash and cash equivalents $ 594,193     $ 608,647     $ 223,196   Investment securities   2,907,144       2,995,223       3,359,985   Loans held for sale   4,833       1,679       1,650   Portfolio loans   7,599,316       7,736,010       7,710,876   Interest-earning assets   10,999,903       11,229,326       11,180,562   Total assets   12,024,208       12,308,491       12,263,718               Noninterest bearing deposits   2,708,586       2,827,696       3,272,745   Interest-bearing deposits   7,330,105       7,545,234       6,637,405   Total deposits   10,038,691       10,372,930       9,910,150               Securities sold under agreements to repurchase and federal funds purchased   178,659       182,735       230,351   Interest-bearing liabilities   7,831,655       8,054,663       7,614,930   Total liabilities   10,748,484       11,106,074       11,092,899   Stockholders' equity - common   1,275,724       1,202,417       1,170,819   Tangible common equity2   922,710       846,948       807,465               PERFORMANCE RATIOS           Pre-provision net revenue to average assets1, 2, 4   1.55 %     1.06 %     1.58 % Return on average assets4   0.88 %     0.83 %     1.22 % Return on average common equity4   8.27 %     8.50 %     12.74 % Return on average tangible common equity2, 4   11.43 %     12.06 %     18.48 % Net interest margin2, 5   2.79 %     2.74 %     3.13 % Efficiency ratio2   58.13 %     66.89 %     56.93 % Adjusted noninterest income2 as a % of operating revenue3   30.92 %     28.51 %     27.44 %             NON-GAAP FINANCIAL INFORMATION           Adjusted pre-provision net revenue1, 2 $ 38,638     $ 40,223     $ 49,504   Adjusted net income2   26,531       29,123       36,786   Adjusted diluted earnings per share2   0.47       0.52       0.65   Adjusted pre-provision net revenue to average assets2, 4   1.29 %     1.30 %     1.64 % Adjusted return on average assets2, 4   0.89 %     0.94 %     1.22 % Adjusted return on average tangible common equity2, 4   11.56 %     13.64 %     18.48 % Adjusted net interest margin2, 5   2.78 %     2.73 %     3.12 % Adjusted efficiency ratio2   61.70 %     62.98 %     56.93 % ___________________________________________ Net interest income plus noninterest income, excluding securities gains and losses, less noninterest expense. See "Non-GAAP Financial Information" for reconciliation. Operating revenue consists of net interest income plus noninterest income excluding securities gains and losses and excluding gain on sale of mortgage servicing rights. For quarterly periods, measures are annualized. On a tax-equivalent basis, assuming a federal income tax rate of 21%.   CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (dollars in thousands, except per share amounts)               As of   March 31,2024   December 31,2023   March 31,2023 ASSETS           Cash and cash equivalents $ 591,071     $ 719,581     $ 275,569   Debt securities available for sale   1,898,072       2,087,571       2,383,550   Debt securities held to maturity   862,218       872,628       907,559   Equity securities   9,790       9,812       10,915   Loans held for sale   6,827       2,379       2,714               Commercial loans   5,606,241       5,635,048       5,815,703   Retail real estate and retail other loans   1,981,836       2,015,986       1,968,105   Portfolio loans   7,588,077       7,651,034       7,783,808               Allowance for credit losses   (91,562 )     (91,740 )     (91,727 ) Premises and equipment   121,506       122,594       126,515   Goodwill and other intangible assets, net   351,455       353,864       361,567   Right of use asset   10,590       11,027       12,291   Other assets   539,414       544,665       571,794   Total assets $ 11,887,458     $ 12,283,415     $ 12,344,555               LIABILITIES & STOCKHOLDERS' EQUITY           Liabilities           Noninterest bearing deposits $ 2,784,338     $ 2,834,655     $ 3,173,783   Interest checking, savings, and money market deposits   5,598,675       5,637,227       5,478,715   Time deposits   1,577,178       1,819,274       1,148,671   Total deposits   9,960,191       10,291,156       9,801,169               Securities sold under agreements to repurchase   147,175       187,396       210,977   Short-term borrowings   —       12,000       615,881   Long-term debt   223,100       240,882       249,245   Junior subordinated debt owed to unconsolidated trusts   72,040       71,993       71,855   Lease liability   10,896       11,308       12,515   Other liabilities   191,405       196,699       184,355   Total liabilities   10,604,807       11,011,434       11,145,997               Stockholders' equity           Retained earnings   248,412       237,197       191,924   Accumulated other comprehensive income (loss)   (222,190 )     (218,803 )     (245,784 ) Other1   1,256,429       1,253,587       1,252,418   Total stockholders' equity   1,282,651       1,271,981       1,198,558   Total liabilities & stockholders' equity $ 11,887,458     $ 12,283,415     $ 12,344,555               SHARE AND PER SHARE AMOUNTS           Book value per common share $ 23.19     $ 23.02     $ 21.68   Tangible book value per common share2 $ 16.84     $ 16.62     $ 15.14   Ending number of common shares outstanding   55,300,008       55,244,119       55,294,455   ___________________________________________ Net balance of common stock ($0.001 par value), additional paid-in capital, and treasury stock. See "Non-GAAP Financial Information" for reconciliation.   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (dollars in thousands, except per share amounts)               Three Months Ended   March 31,2024   December 31,2023   March 31,2023 INTEREST INCOME           Interest and fees on loans $ 99,325     $ 101,425   $ 89,775   Interest on investment securities   19,937       20,634     20,342   Other interest income   6,471       6,641     988   Total interest income $ 125,733     $ 128,700   $