First Busey Corporation Announces Fourth Quarter Earnings

Message from our CEO Van A. Dukeman, President & CEO

URBANA, Ill., Jan. 22 /PRNewswire-FirstCall/ -- First Busey Corporation
(Nasdaq: BUSE) consolidated net income for the quarter was $4.4 million
compared to $7.3 million for the same period in 2006. Consolidated net income
per fully-diluted share for the quarter ended December 31, 2007 totaled $0.12
compared to $0.34 per fully-diluted share for the same period in 2006. On an
annual basis, consolidated net income was $31.5 million for 2007 as compared
to $28.9 million for 2006. Consolidated net income per fully-diluted share
was $1.13 for 2007 as compared to $1.35 per fully-diluted share for 2006.
The decline in fourth quarter net income was primarily due to two factors:
one-time merger related expenses totaling approximately $1.8 million, after
tax, from our recent business combination with Main Street Trust, Inc. and a
significant addition to our provision for loan losses of $7.0 million, after
tax. The increase in provision brought our total allowance for loan losses to
$42.6 million or 1.39% of loans. Our non-performing loans totaled $20.1
million, which resulted in an allowance to non-performing loans coverage ratio
of 212%. Net charge offs in the quarter totaled $7.3 million.
As discussed last quarter, we have continued to experience deterioration
in our loan portfolio, primarily in southwest Florida. We have provided
additional information in this report under the section Loan Portfolio
Quality.
On a positive note, this quarter we are pleased to report the completion
of our merger of Main Street Bank & Trust with and into Busey Bank, which
coincided with the launch of our updated Busey brand. In addition to the
Illinois bank merger, we also completed the combination of our wealth
management units, which formed Busey Wealth Management, Inc.
The first quarter 2008 dividend is $0.20 per share, which represents an
11.1% per share increase. The dividend will be paid on January 25, 2008.
We appreciate the extra hard work and diligence our Associates exhibited
in getting us through these mergers and systems conversions. We also would
like to truly thank our customers for their loyalty and patience as we
completed the merger.
With our team of terrific associates and loyal customers, I am very
excited about the future! As always, your input and comments are welcome.

SELECTED FINANCIAL HIGHLIGHTS
(amounts in thousands, except ratios and per share data)

Three Months Ended Twelve Months Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2007 2007 2006 2007 2006
Earnings & Per
Share Data
Net income $4,367 $11,510 $7,344 $31,477 $28,888
Basic earnings
per share $0.12 $0.37 $0.34 $1.13 $1.35
Weighted average
shares of
common stock
outstanding 36,519 31,464 21,359 27,779 21,349
Fully-diluted
earnings per
share $0.12 $0.36 $0.34 $1.13 $1.35
Weighted average
shares of
common stock
and dilutive
potential
common shares
outstanding 36,783 31,655 21,428 27,924 21,406
Market price
per share at
period end $19.86 $21.91 $23.05
Price to book
ratio 136.16% 161.70% 266.93%
Price to
earnings
ratio(1) 41.72 15.34 17.10 17.58 17.07
Cash dividends
paid per share $0.18 $0.18 $0.16 $0.77 $0.64
Book value per
share $14.59 $14.71 $8.64
Tangible book
value per
share $6.86 $7.20 $5.93
Common shares
outstanding 36,316 36,585 21,456

Average
Balances
Assets $4,154,710 $3,639,161 $2,466,696 $3,185,603 $2,344,552
Investment
securities 626,310 556,842 345,447 457,935 330,235
Gross loans 2,993,724 2,689,472 1,932,835 2,405,583 1,832,800
Earning
assets 3,651,718 3,304,265 2,290,816 2,891,348 2,170,446
Deposits 3,209,772 2,909,176 1,974,574 2,529,807 1,867,058
Interest-
bearing
liabi-
lities 3,297,075 2,873,767 2,029,894 2,575,915 1,910,218
Stockholders'
equity 535,911 370,902 181,373 318,155 174,824

END OF PERIOD
FINANCIAL DATA
Tax equivalized
net interest
income $33,150 $30,556 $19,905 $103,593 $78,630
Gross loans 3,053,225 3,040,881 1,956,927
Allowance
for loan
losses 42,560 38,198 23,588

PERFORMANCE
RATIOS
Return on
average
assets(1) 0.42% 1.25% 1.18% 0.99% 1.23%
Return on
average
equity(1) 3.23% 12.31% 16.06% 9.89% 16.52%
Net interest
margin(1) 3.60% 3.67% 3.45% 3.58% 3.62%
Net interest
spread 3.24% 3.16% 3.00% 3.16% 3.18%
Efficiency
ratio(2) 63.22% 56.67% 61.72% 57.78% 56.70%
Non-interest
revenue as a
% of total
revenues(3) 29.50% 26.73% 25.18% 27.23% 24.56%
Allowance for
loan losses
to loans 1.39% 1.26% 1.21%
Allowance as
a percentage
of non-
performing
loans 211.95% 159.74% 303.77%
Ratio of
average loan
to average
deposits 93.27% 92.45% 97.89% 95.09% 98.17%

ASSET QUALITY
Net
charge-offs $7,287 $630 $264 $8,350 $902
Non-performing
loans 20,080 23,912 7,765
Other non-
performing
assets 2,028 2,138 721

(1) Quarterly ratios annualized
(2) Net of security gains and amortization
(3) Net of interest expense, excludes security gains

Net income was $4.4 million for the quarter ended December 31, 2007, as
compared to $7.3 million for the comparable period in 2006. For the quarter
ended December 31, 2007, earnings per share on a fully-diluted basis were
$0.12 as compared to the $0.34 per fully-diluted share for the comparable
period in 2006. Net income was $31.5 million for 2007 as compared to $28.9
million for 2006. Earnings per share on a fully-diluted basis for 2007 were
$1.13, a decrease of $0.22 or 16.3% from $1.35 for 2006.
Busey Bank's net income was $35.1 million for 2007, as compared to $29.5
million for 2006, an increase of 19.0%. During 2007, Busey Bank recorded $4.9
million, after tax, of loan loss provision as compared to $0.7 million, after
tax, of loan loss provision recorded during 2006. Additionally, Busey Bank
recorded $1.3 million, after tax, in one-time merger related expenses during
the fourth quarter of 2007.
Busey Bank, N.A.'s net loss was $1.8 million for 2007, as compared to $3.5
million of net income for 2006. The net loss position was primarily related
to loan loss provision of $3.9 million, after tax, recorded during 2007 as
compared to $0.1 million, after tax, loan loss provision recorded during 2006.
Busey Bank, N.A.'s net loss was partially offset by FirsTech, Inc.'s, its
wholly-owned subsidiary, net income of $0.7 million for the five months
following the merger with Main Street Trust, Inc. FirsTech's results include
$0.2 million of expenses related to enhancement of processing controls, which
will allow FirsTech to compete in the larger volume processing marketplace.
Net one-time charges during the fourth quarter totaled $1.8 million, after
tax. The charges were primarily related to the merger with Main Street and
included employee costs, rebranding related costs and system conversion costs.
Loan Portfolio Quality: As was the case during the third quarter of 2007,
the Company experienced continued deterioration in its loan portfolio during
the fourth quarter. Total non-performing assets were $22.1 million at
December 31, 2007, compared to $26.0 million at September 30, 2007 and $17.2
million on a pro-forma combined basis with Main Street Trust, Inc. at December
31, 2006. Busey Bank and Busey Bank, N.A. have $13.9 million and $8.2 million
in non-performing assets, respectively. Total non-performing assets in Florida
were $10.4 million, with $2.2 million in Busey Bank and $8.2 in Busey Bank,
N.A. The remaining $11.7 million of non-performing assets were primarily
within the downstate Illinois market.
Non-accrual loans totaled $15.4 million, or 0.5% of gross loans, at
December 31, 2007. Non-accrual loans primarily consisted of commercial
non-accruals of $10.1 million and personal real estate loans of $5.3 million.
Geographically, $7.2 million of non-accural loans were in Florida with the
remainder primarily located in downstate Illinois.
The Company's 90+ days past due loans totaled $4.7 million, or 0.2% of
gross loans, at December 31, 2007. Commercial accruing loans 90+ days past
due were $3.3 million at December 31, 2007. The portion of 90+ days past due
loans related to personal residential real estate loans was $1.4 million at
December 31, 2007.
Other real estate owned totaled $2.0 million at December 31, 2007.
Net charge offs for the fourth quarter and the year ended December 31,
2007 were $7.3 million and $8.4 million, respectively.
Provision for loan losses was $11.7 million during the fourth quarter of
2007 compared to $0.3 million in the comparable period of 2006. The provision
was $14.5 million for 2007, versus $1.3 million for 2006. As a percentage of
total outstanding loans, the allowance for loan losses was 1.39% as of
December 31, 2007, and 1.21% as of December 31, 2006. Total allowance for
loan losses was $42.6 million at December 31, 2007, representing 212.0%
coverage of non-performing loans.
The Company has been and continues to carefully evaluate its loan
portfolios on a proactive basis. Once problem loans are identified,
adjustments to the provision are made based upon all information available at
that time. The increase in provision reflects managements' analysis of
amounts necessary to cover potential losses in our loan portfolios. However,
additional losses may be identified in our loan portfolio as new information
is obtained. The Company may need to provide for additional loan losses in
the future as management continues to identify potential problem loans and
gain further information concerning existing problem loans. This is
particularly the case in the weak economic climate in southwest Florida.

Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except per
share data) Dec. 31, Sept. 30, Dec. 31,
2007 2007 2006
Assets
Cash and due from banks $125,228 $108,037 $63,316
Federal funds sold 459 43,000 -
Investment securities 610,422 691,831 365,608
Net loans 3,010,665 3,002,683 1,933,339
Premises and equipment 80,400 70,128 41,001
Goodwill and other intangibles 280,487 274,688 58,132
Other assets 85,264 97,783 48,118
Total assets $4,192,925 $4,288,150 $2,509,514

Liabilities & Stockholders' Equity
Non-interest bearing deposits $389,672 $454,875 $246,440
Interest-bearing deposits 2,817,526 2,912,933 1,768,399
Total deposits $3,207,198 $3,367,808 $2,014,839

Federal funds purchased & securities
sold under agreements to repurchase 203,119 137,463 54,770
Short-term borrowings 10,523 21,023 25,000
Long-term debt 150,910 135,825 156,650
Junior subordinated debt owed to
unconsolidated trusts 55,000 55,000 55,000
Other liabilities 36,478 32,757 17,981
Total liabilities $3,663,228 $3,749,876 $2,324,240
Total stockholders' equity $529,697 $538,274 $185,274
Total liabilities & stockholders'
equity $4,192,925 $4,288,150 $2,509,514

Per Share Data
Book value per share $14.59 $14.71 $8.64
Tangible book value per share $6.86 $7.20 $5.93
Ending number of shares outstanding 36,316 36,585 21,456

Condensed Consolidated Statements of Income
(Unaudited, in thousands, except
per share data) Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006

Interest and fees on loans $55,763 $35,860 $178,700 $132,861
Interest on investment securities 7,375 3,677 21,865 13,156
Other interest income 348 161 1,338 349
Total interest income $63,486 $39,698 $201,903 $146,366

Interest on deposits 26,169 16,449 84,197 55,046
Interest on short-term borrowings 1,745 846 4,763 3,011
Interest on long-term debt 1,987 2,027 7,407 7,734
Junior subordinated debt owed to
unconsolidated trusts 1,023 1,011 4,038 4,060
Total interest expense $30,924 $20,333 $100,405 $69,851

Net interest income $32,562 $19,365 $101,498 $76,515
Provision for loan losses 11,700 300 14,475 1,300
Net interest income after provision
for loan losses $20,862 $19,065 $87,023 $75,215

Fees for customer services 3,941 2,890 12,963 11,088
Trust fees 3,951 1,550 10,041 6,020
Remittance processing 2,720 - 4,466 -
Commissions and brokers' fees 586 666 2,535 2,653
Gain on sales of loans 818 585 3,232 2,443
Net security gains 723 1,667 3,718 3,547
Other 1,612 825 4,737 2,710
Total non-interest income $14,351 $8,183 $41,692 $28,461

Salaries and wages 11,914 6,553 37,311 26,431
Employee benefits 3,362 3,723 8,357 8,180
Net occupancy expense 2,635 1,307 7,449 5,121
Furniture and equipment expense 1,785 761 4,834 3,438
Data processing expense 2,568 409 5,299 1,753
Amortization expense 1,118 319 2,503 1,376
Other operating expenses 7,308 3,554 18,552 13,788
Total non-interest expense $30,690 $16,626 $84,305 $60,087

Income before income taxes $4,523 $10,622 $44,410 $43,589
Income taxes 156 3,278 12,933 14,701
Net income $4,367 $7,344 $31,477 $28,888

Per Share Data
Basic earnings per share $0.12 $0.34 $1.13 $1.35
Fully-diluted earnings per share $0.12 $0.34 $1.13 $1.35
Diluted average shares outstanding 36,783 21,428 27,924 21,406

Corporate Profile
First Busey Corporation is a $4.2 billion financial holding company
headquartered in Urbana, Illinois. First Busey Corporation has two
wholly-owned banks with locations in three states. Busey Bank is headquartered
in Champaign, Illinois and has forty-five banking centers serving downstate
Illinois. Busey Bank has a banking center in Indianapolis, Indiana, and a loan
production office in Fort Myers, Florida. On December 31, 2007, Busey Bank had
total assets of $3.7 billion. Busey Bank, N.A. is headquartered in Fort Myers,
Florida, with nine banking centers serving southwest Florida. Busey Bank, N.A.
had total assets of $470.5 million as of December 31, 2007.
Busey Wealth Management is a wholly-owned subsidiary of First Busey
Corporation. Through Busey Trust Company, Busey Wealth Management delivers
trust, asset management, retail brokerage, and insurance products and
services. As of December 31, 2007, Busey Wealth Management had approximately
$4.2 billion in assets under care.
First Busey Corporation owns a retail payment processing subsidiary --
FirsTech, Inc. -- which processes over 27 million transactions per year
through online bill payments, lockbox processing and walk-in payments through
its 4,000 agent locations in 36 states.
Busey provides electronic delivery of financial services through Busey
e-bank, http://www.busey.com.
Special Note Concerning Forward-Looking Statements
This document may contain, forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 with respect to the
financial condition, results of operations, plans, objectives, future
performance and business of the Company. Forward-looking statements, which
may be based upon beliefs, expectations and assumptions of the Company's
management and on information currently available to management, are generally
identifiable by the use of words such as "believe," "expect," "anticipate,"
"plan," "intend," "estimate," "may," "will," "would," "could," "should" or
other similar expressions. Additionally, all statements in this document,
including forward-looking statements, speak only as of the date they are made,
and the Company undertakes no obligation to update any statement in light of
new information or future events. A number of factors, many of which are
beyond the ability of the Company to control or predict, could cause actual
results to differ materially from those in its forward-looking statements.
These factors include, among others, the following: (i) the strength of the
local and national economy; (ii) the economic impact of any future terrorist
threats or attacks; (iii) changes in state and federal laws, regulations and
governmental policies concerning the Company's general business; (iv) changes
in interest rates and prepayment rates of the Company's assets; (v) increased
competition in the financial services sector and the inability to attract new
customers; (vi) changes in technology and the ability to develop and maintain
secure and reliable electronic systems; (vii) the loss of key executives or
employees; (viii) changes in consumer spending; (ix) unexpected results of
acquisitions; (x) unexpected outcomes of existing or new litigation involving
the Company; and (xi) changes in accounting policies and practices. These
risks and uncertainties should be considered in evaluating forward-looking
statements and undue reliance should not be placed on such statements.
Additional information concerning the Company and its business, including
additional factors that could materially affect the Company's financial
results, is included in the Company's filings with the Securities and Exchange
Commission.
Special Note Concerning Goodwill and Identifiable Intangibles
The excess purchase price resulting from the merger with Main Street
Trust, Inc. has been allocated to goodwill and identifiable intangibles assets
in accordance with current accounting guidance, to the extent that supportable
documentation was available at December 31, 2007. Such amounts are subject to
adjustment in the near term as additional analysis is performed or obtained
from third party sources.
SOURCE First Busey Corporation

Barbara Harrington, EVP & CFO of First Busey Corporation, +1-217-365-4528