First Busey (BUSE) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $27.4 million, down 6.8% year-over-year but up from Q1 2024; adjusted net income was $29.0 million ($0.50/share), and further adjusted net income (excluding a one-time tax adjustment) was $30.5 million ($0.53/share).

• Completed the acquisition and integration of Merchants & Manufacturers Bank Corp. (M&M) in April 2024, expanding the regional footprint and adding $418.7 million in loans and $392.8 million in deposits.

• Asset quality remains strong, with non-performing loans at 0.11% of portfolio loans and allowance for credit losses covering 936% of non-performing loans.

• Wealth management and payment technology segments delivered record revenues, supporting diversified fee income.

• Core deposits represent 96.4% of total deposits, supporting robust liquidity and funding.

Financial highlights

• Net interest income was $82.4 million in Q2 2024, up from $75.8 million in Q1 2024 and $78.7 million in Q2 2023; net interest margin rose to 3.03%, up 24 bps sequentially.

• Adjusted net income was $29.0 million ($0.50 per diluted share); excluding a one-time Illinois tax law change, EPS was $0.53.

• Adjusted ROAA was 0.97% and adjusted ROATCE was 12.21% for Q2 2024.

• Adjusted noninterest income was $33.9 million, representing 29.1% of operating revenue.

• Adjusted core efficiency ratio was 60.9% for Q2 2024; reported efficiency ratio was 62.3%.

Outlook and guidance

• Quarterly pre-tax expense synergies from the M&M acquisition are expected to reach $1.6–$1.7 million per quarter by Q1 2025, with 30% of savings realized in Q2 2024.

• Management expects modest loan growth in coming quarters, maintaining a conservative underwriting approach.

• Ongoing focus on expense management and realization of further M&M acquisition synergies in the second half of 2024.

• New Illinois tax regulations are expected to lower ongoing tax obligations in future periods.