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FIRST BUSEY CORP /NV/ (BUSE)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 GAAP EPS was $0.49 (adj. EPS $0.53), down QoQ on slightly lower NII/NIM and higher non-operating costs, but up YoY on stronger fee income and PPNR; NIM contracted 7 bps QoQ to 2.95% as lower loan yields outweighed deposit-cost tailwinds .
  • Noninterest income stayed resilient at $35.2m (30.3% of operating revenue ex securities), with Wealth Management posting record quarterly revenue of $17.0m and assets under care of $13.83b; fee mix diversification continues to offset spread pressures .
  • Credit remained solid though NPLs rose on one office CRE credit moved to nonaccrual (remaining balance $15.0m); ACL/loans was 1.08% with coverage of 3.59x NPLs; net charge-offs were $2.9m in Q4 .
  • Capital/liquidity robust: CET1 14.10%, Total RBC 18.53%, TCE/TA 8.76%; dividend raised 4.2% to $0.25; pending CrossFirst merger targeted to close Mar 1, 2025, a medium-term catalyst for EPS accretion and scale benefits .

What Went Well and What Went Wrong

  • What Went Well
    • Record Wealth Management quarter and year: Q4 segment revenue $17.0m (+22.7% YoY) with AUC at $13.83b; Wealth segment net income $5.9m (vs. $4.2m YoY) .
    • Deposit costs began easing: cost of deposits fell 10 bps QoQ to 1.75% (non-time down 12 bps to 1.38%); spot total deposit cost fell to 1.67% (from 1.80%) .
    • Strong capital and raised dividend: CET1 14.10%, Total RBC 18.53%, TCE/TA 8.76%; quarterly dividend up to $0.25 (+4.2%) .
    • Management quote: “We feel confident that we are well positioned to produce quality growth and profitability... excited to welcome our CrossFirst colleagues” — Van A. Dukeman, Chairman & CEO .
  • What Went Wrong
    • NIM pressure: Net interest margin decreased 7 bps QoQ to 2.95% (adjusted 2.92%); lower loan yields drove -20 bps in the NIM bridge, partially offset by deposit repricing benefits .
    • Higher non-operating costs: noninterest expense rose to $78.2m (vs. $75.9m), including $1.9m merger and $1.1m restructuring professional fees in Q4; adjusted core expense rose QoQ .
    • Credit normalization on single office CRE: NPLs increased to $23.2m (0.30% of loans) driven by one office loan moved to nonaccrual; Q4 charge-off of $3.0m with $15.0m remaining balance .

Financial Results

Metric (USD unless noted)Q2 2024Q3 2024Q4 2024
Net Income ($m)27.4 32.0 28.1
Diluted EPS ($)0.47 0.55 0.49
Adjusted Net Income ($m)29.0 33.5 30.7
Adjusted Diluted EPS ($)0.50 0.58 0.53
Operating Revenue ($m)116.3 117.7 117.0
Net Interest Income ($m)82.4 82.5 81.6
Noninterest Income ($m)33.8 36.0 35.2
Net Interest Margin (TE, %)3.03 3.02 2.95
Adjusted NIM (TE, %)3.00 2.97 2.92
Efficiency Ratio (%)62.32 62.15 64.45
Adjusted Efficiency Ratio (%)60.57 60.50 61.40
PPNR ($m)41.1 41.7 38.8
Adjusted PPNR ($m)42.6 44.1 42.0
Provision for Credit Losses ($m)2.3 ≈0.0 (insignificant) 1.3
Net Charge-offs ($m)9.9 0.2 2.9
ROAA (%)0.91 1.06 0.93
Adj. ROAA (%)0.97 1.11 1.01
Adj. ROATCE (%)12.21 13.41 11.87

Segment net income (quarterly)

Segment ($m)Q2 2024Q3 2024Q4 2024
Banking26.7 33.2 30.9
FirsTech0.03 (0.06) (0.72)
Wealth Management5.56 5.62 5.85

Key KPIs

KPIQ2 2024Q3 2024Q4 2024
Cost of Deposits (avg, %)1.75 1.85 1.75
Non-time Deposit Cost (%)1.36 1.50 1.38
Core Deposits / Total Deposits (%)96.42 96.46 96.52
CET1 Ratio (%)13.19 13.78 14.10
Total RBC Ratio (%)17.49 18.19 18.53
TCE/TA (%)8.36 8.96 8.76
TBV/Share ($)16.97 18.19 17.88
NPLs / Loans (%)0.11 0.11 0.30
ACL / Loans (%)1.07 1.09 1.08

Guidance Changes

MetricPeriodPrevious Guidance (Q3’24)Current Guidance (Q4’24)Change
M&M expense synergiesRun-rate$1.6–$1.7m pretax per qtr; ~79% achieved; full run-rate by Q1’25 $1.6–$1.7m pretax per qtr; ~86% achieved; full run-rate by Q1’25 Maintained; execution progressing
Rate sensitivity (NI impact, +100 bps)Next 12 mo+2.1% +2.0% Slightly lower
Deposit betas in easing cycle2025 pathTarget 25–30% IB non-maturity; 20–25% total within few quarters, then ~30% long-run Target 30–35% total by mid-year; ~30% long-run total beta Higher near-term total beta target
DividendQuarterly$0.24 declared 10/25/24 $0.25 payable 1/31/25 (+4.2%) Raised
CrossFirst merger timingClose/IntegrationClose 1H25; bank merger mid-2025 (subject to approvals) Regulatory approval received; legal close targeted 3/1/25; bank merger mid-2025 Timing firmed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2–Q3 2024)Current Period (Q4 2024)Trend
Deposit costs and betasFunding costs stabilized in 1H; core deposit ratio ~96%; spot costs rising into Q3; easing cycle began Sept’24; total beta ~34% through tightening Avg cost down 10 bps QoQ; spot total deposit cost 1.67%; planning for 30–35% total beta by mid-2025; 58% of non-maturity at rack rate 1 bp Improving funding tailwind
NIM trajectory+24 bps in Q2 on loan yields and repositioning; -1 bp in Q3 as non-maturity costs rose -7 bps in Q4; loan yield headwind (-20 bps) offset by deposit repricing (+9 bps) Mildly negative near term
Credit (CRE office)Minimal CBD office exposure; NPLs low; Q2 charge-off tied to one C&I credit NPLs up on one office CRE moved to nonaccrual; Q4 NCOs $2.9m; ACL/loans 1.08% Normalizing but contained
Fee diversificationRecord Wealth and strong FirsTech in Q2–Q3; noninterest ~30% of revenue Wealth record quarter; fee mix 30.3% of operating revenue (adj.) Positive/structural
Capital & dividendsCET1 13.2–13.8% in Q2–Q3; $0.24 dividends CET1 14.10%; dividend raised to $0.25 Strengthening
M&A integrationM&M synergies tracking to Q1’25 run-rate M&M synergies ~86% achieved; CrossFirst approvals obtained; close planned 3/1/25 On track

Management Commentary

  • “We feel confident that we are well positioned to produce quality growth and profitability... The pending CrossFirst transaction fits with our acquisition strategy and we are excited to welcome our CrossFirst colleagues into the Busey family.” — Van A. Dukeman, Chairman & CEO .
  • On deposit repricing and NIM: “Beginning in September we began lowering rates on special priced deposit accounts and other managed rate products… Reduced non-maturity deposit funding costs contributed +9 bps [to NIM], increased cash and securities yield +6 bps, while decreased loan yields contributed -20 bps.” .
  • On capital and shareholder returns: “On January 31, 2025, Busey will pay a cash dividend of $0.25 per common share… Busey’s CET1 ratio is estimated to be 14.10% at December 31, 2024.” .

Q&A Highlights

  • No earnings call transcript was furnished for Q4 2024; therefore, there are no public Q&A disclosures to summarize for this quarter [ListDocuments shows none].

Estimates Context

  • Wall Street quarterly consensus (S&P Global) for EPS and revenue was unavailable at the time of analysis due to data access limits; as a result, we cannot assess beat/miss versus consensus for Q4 2024.* Values retrieved from S&P Global.

Key Takeaways for Investors

  • Core earnings resilience: Despite a modest NIM downtick, adjusted PPNR remained solid at $42.0m and fee income reached 30% of revenue, reducing reliance on spread income .
  • Funding tailwind building: Deposit costs declined sequentially with plan to further reprice in an easing environment; non-time deposit spot costs fell to 1.31%/total 1.67% .
  • Credit risk contained and idiosyncratic: Higher NPLs were driven by one office CRE credit; overall NPA ratio remains low (0.19% of assets) with ACL coverage of 3.59x NPLs .
  • Capital ample with dividend growth: CET1 at 14.10% and dividend increased to $0.25 (4.2% raise), supporting both organic growth and M&A .
  • CrossFirst is a catalyst: Regulatory approvals received and close targeted for Mar 1, 2025; management highlights EPS accretion, scale, and efficiency improvements post-close .
  • Near-term watch items: NIM trajectory (loan yield pressure vs. deposit repricing), execution on expense control as synergies fully materialize by Q1’25, and performance of CRE office credit .
  • Trading implication: Stable to improving funding trends and fee strength offset near-term NIM pressure; merger timeline clarity and dividend increase are potential positive sentiment drivers .

Other Relevant Press Releases (Q4 2024)

  • Shareholders of both First Busey and CrossFirst approved the merger on Dec 20, 2024; companies guided to closing in Q1/Q2 2025 (later updated to Mar 1, 2025 after Fed approval on Jan 17, 2025) .

Notes: All results reflect GAAP unless otherwise marked as adjusted per company’s non-GAAP reconciliations. Non-GAAP items primarily exclude acquisition/restructuring costs and securities/MSR gains/losses with detailed reconciliations provided in the exhibits .