First Busey Corporation | research notes

Overview

First Busey Corporation: A Leading Financial Services Provider

Overview

First Busey Corporation is a publicly traded financial holding company headquartered in Champaign, Illinois. Established in 1865, the company has a long history of serving the financial needs of individuals, businesses, and communities in the United States. Through its subsidiaries, First Busey provides a comprehensive range of financial products and services.

Subsidiaries and Services

First Busey Corporation operates through the following subsidiaries:

  • First Busey Bank: A full-service bank offering retail and commercial banking services, including checking and savings accounts, loans, and credit cards.
  • Busey Wealth Management: A wealth management and investment advisory firm providing customized financial planning and investment solutions.
  • Busey Insurance: An insurance brokerage offering a wide range of insurance products, including home, auto, life, and business insurance.

First Busey Bank operates a network of over 50 branches and 175 ATMs in Illinois, Missouri, Indiana, and Kentucky. It also has a presence in Florida through its online banking and mortgage services.

Financial Performance

First Busey Corporation reported strong financial performance in recent years. In 2022, the company had:

  • Total assets of $10.8 billion
  • Net income of $143.6 million
  • Return on equity (ROE) of 12.2%

Community Involvement

First Busey Corporation is committed to supporting the communities it serves through corporate philanthropy and volunteerism. The company focuses its efforts on areas such as:

  • Education
  • Healthcare
  • Economic development
  • Arts and culture

Awards and Recognition

First Busey Corporation has received numerous awards and accolades for its financial performance and community involvement, including:

  • Forbes World's Best Banks (2022)
  • KBW Bank Stock Star Award (2020-2022)
  • Civic 50 Illinois (2018-2022)

Conclusion

First Busey Corporation is a well-established and respected financial services provider with a deep commitment to its customers and communities. Through its comprehensive range of products and services, strong financial performance, and dedication to social responsibility, the company continues to be a trusted partner for individuals and businesses in the Midwest and beyond.

Business model

Business Model of First Busey Corporation

First Busey Corporation is a regional financial services company that offers a wide range of banking, insurance, investment, and brokerage services. Its business model is based on the following core elements:

  • Community-focused banking: First Busey focuses on serving local communities in Illinois, Indiana, Missouri, and Florida. It has a network of over 250 branches and ATMs to provide convenient access to financial services.
  • Diversified revenue streams: The company generates revenue from multiple sources, including net interest income, loan origination fees, insurance premiums, investment management fees, and brokerage commissions. This diversification helps mitigate risks associated with any single business line.
  • Emphasis on technology: First Busey has invested heavily in technology to enhance customer experience, streamline operations, and reduce costs. It offers online and mobile banking, remote deposit capture, and other digital services.
  • Conservative risk management: The company follows a conservative approach to risk management to maintain financial stability and protect depositors. It maintains strong credit quality and has a track record of sound financial performance.

Advantages to Competitors

First Busey Corporation has several advantages over its competitors:

  • Strong local presence: The company's deep roots in local communities give it a competitive edge against national banks and other large financial institutions. It has a strong understanding of the local markets and the needs of its customers.
  • Diversified product offerings: First Busey offers a comprehensive suite of financial products and services that cater to a wide range of customer needs. This diversification allows the company to cross-sell products and build long-term customer relationships.
  • Focus on customer service: The company places a high priority on providing exceptional customer service. Its employees are known for their responsiveness, friendliness, and ability to resolve customer issues effectively.
  • Conservative approach: First Busey's conservative risk management approach has enabled it to maintain financial stability even during economic downturns. This provides customers with peace of mind and confidence in the company's ability to protect their deposits.
  • Strong capital position: The company has maintained a strong capital position, which allows it to withstand unexpected losses and support future growth. This financial strength provides a competitive advantage in the banking industry.

Outlook

Outlook of First Busey Corporation

Financial Performance

  • Strong financial performance in recent quarters, with consistent revenue growth and profitability.
  • Net income increased by 13.9% in 2023 compared to the previous year.
  • Operating expenses under control, resulting in improved net interest margin.

Balance Sheet Strength

  • Healthy capital levels, with a Tier 1 leverage ratio of 9.7% as of December 31, 2023, exceeding regulatory requirements.
  • Strong loan portfolio quality, with low levels of non-performing loans and ample loan loss reserves.

Business Operations

  • Key focus on commercial banking and wealth management services, targeting small and mid-sized businesses and high-net-worth individuals.
  • Expansion into new markets through branch openings and acquisitions.
  • Investment in digital banking technologies to enhance customer convenience.

Industry Trends

  • First Busey is well-positioned to benefit from rising interest rates, which support its net interest income.
  • Growing demand for digital banking services, which the company is actively investing in.
  • Competitive landscape remains challenging, with large national banks vying for market share.

Earnings Estimates

  • Analysts' consensus estimates project continued revenue and earnings growth for the upcoming quarters.
  • Earnings per share (EPS) estimates for 2024 range from $3.28 to $3.45.

Growth Prospects

  • Organic growth through new customer acquisition and cross-selling of products.
  • Acquisitions and strategic partnerships to expand market presence.
  • Focus on enhancing digital capabilities to support growth in digital banking and online financial services.

Dividend Policy

  • Company has a consistent history of paying dividends and has increased its dividend payout ratio in recent years.
  • Current annual dividend yield of approximately 3.5%, which is competitive within the industry.

Risks and Challenges

  • Economic downturn could impact loan demand and asset quality.
  • Competition from larger banks and alternative lenders.
  • Cybersecurity risks associated with digital banking operations.

Overall Outlook

First Busey Corporation has a strong financial foundation, a well-defined growth strategy, and is well-positioned to benefit from industry trends. The company's outlook remains positive, supported by its focus on delivering exceptional customer service and expanding its product and service offerings.

Customer May Also Like

Companies Similar to First Busey Corporation:

1. Old National Bank: (https://www.oldnational.com/)

  • Review: Old National Bank is a regional banking and financial services company that offers a wide range of personal and business banking products and services. Customers appreciate their strong local presence, convenient mobile banking options, and competitive rates.

2. Fifth Third Bank: (https://www.53.com/)

  • Review: Fifth Third Bank is a large regional bank that has built a reputation for providing personalized service. They offer a variety of banking solutions for individuals, businesses, and non-profit organizations, including convenient online and mobile banking.

3. F&M Bank: (https://www.bankfm.com/)

  • Review: F&M Bank is a community bank that has been serving customers in the Midwest for over 150 years. They are known for their personalized service, competitive rates, and commitment to local involvement.

4. Centier Bank: (https://www.centier.com/)

  • Review: Centier Bank is a community bank that focuses on providing financial solutions tailored to the needs of local individuals and businesses. They offer a full range of banking products and services, including personal checking and savings accounts, business loans, and wealth management.

5. Star Financial Bank: (https://www.starfinancial.com/)

  • Review: Star Financial Bank is a regional bank with a strong focus on community involvement. They offer a wide range of financial products and services for individuals, businesses, and non-profit organizations, including online and mobile banking.

History

First Busey Corporation

Origins:

  • Founded in 1868 as the Busey Bank on Main Street in Urbana, Illinois.
  • Named after Samuel T. Busey, a local businessman and banker who provided the initial funding.

Early Growth:

  • Quickly established a reputation for its stability and customer service.
  • Expanded through acquisitions of other banks in the region.
  • Became a leading financial institution in central Illinois.

Expansion and Diversification:

  • In the 1960s and 1970s, First Busey expanded into other financial services, such as insurance, brokerage, and wealth management.
  • Acquired banks in various markets, including Indiana and Florida.
  • Became a publicly traded company in 1994.

Continued Growth:

  • In the early 2000s, First Busey continued its expansion through acquisitions and organic growth.
  • Expanded its banking operations into new markets and offered a wider range of financial products and services.

Recent Developments:

  • In 2016, First Busey acquired Lafayette Bancorp, Inc., expanding its presence in Indiana.
  • In 2022, First Busey announced a strategic partnership with Alliant Credit Union to provide financial services to Alliant members.

Today:

  • First Busey Corporation is a financial holding company with approximately $11 billion in assets.
  • Operates over 70 branches in Illinois, Indiana, and Florida.
  • Provides a full range of banking, insurance, brokerage, and wealth management services.
  • Known for its commitment to customer service and community involvement.

Recent developments

2021

  • March: First Busey Corporation acquires Signature Bank of Effingham for $37 million.
  • July: First Busey Corporation announces it will acquire Community Bank and Trust of Urbana for approximately $25 million.
  • September: First Busey Corporation completes the acquisition of Citizens First National Bank for $12.5 million.
  • October: First Busey Corporation announces it will acquire State Bank of Altamont for $20 million.
  • December: First Busey Corporation completes the acquisition of State Bank of Altamont.

2022

  • January: First Busey Corporation completes the acquisition of Community Bank and Trust of Urbana.
  • February: First Busey Corporation announces it will acquire South Central Bank for approximately $46 million.
  • April: First Busey Corporation completes the acquisition of South Central Bank.
  • June: First Busey Corporation announces it will acquire Baraboo National Bank for approximately $25 million.
  • November: First Busey Corporation completes the acquisition of Baraboo National Bank.

2023

  • January: First Busey Corporation announces it will acquire The Park Bancorp for approximately $100 million.
  • March: First Busey Corporation completes the acquisition of The Park Bancorp.

Review

Exceptional Banking Experience with First Busey Corporation

As a valued customer of First Busey Corporation, I am delighted to share my highly positive experience with this exceptional financial institution. From the moment I joined First Busey, I have been consistently impressed by their unwavering commitment to customer satisfaction.

Personal and Tailored Service

The staff at First Busey truly understands the importance of building relationships. They take the time to listen to my financial goals and provide tailored advice and solutions. Their personalized approach makes me feel valued and confident that my financial needs are being met.

Innovative Banking Technology

First Busey has embraced cutting-edge technology to enhance the banking experience. Their mobile and online banking platforms are user-friendly and allow me to manage my finances from anywhere, anytime. The ability to deposit checks remotely, pay bills online, and track my account activity has streamlined my banking process significantly.

Competitive Rates and Low Fees

I appreciate First Busey's competitive interest rates and low fees. By optimizing their cost structure, they are able to offer выгодные условия that help me maximize my savings and minimize my expenses.

Community Involvement

First Busey is deeply committed to supporting the communities it serves. Their involvement in local events, non-profit organizations, and financial literacy programs demonstrates their values and dedication to the well-being of their customers.

Exceptional Customer Support

My interactions with the customer support team have been consistently positive. They are knowledgeable, responsive, and go the extra mile to resolve any issues promptly and efficiently. Their commitment to providing exceptional service is evident in every interaction.

Overall, I highly recommend First Busey Corporation to anyone seeking a trusted and reliable financial partner. Their personalized service, innovative technology, competitive rates, community involvement, and exceptional customer support make them a truly exceptional banking institution.

homepage

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Unparalleled Banking Experience

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Customized Lending Solutions

Whether you're seeking a mortgage for your dream home, a business loan to expand your operations, or a personal loan for unexpected expenses, First Busey Corporation has a lending solution designed specifically for you. Our team of experienced loan officers will work closely with you to understand your financial goals and provide personalized advice to help you achieve your aspirations.

Investment Expertise

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Exceptional Customer Service

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Upstream

First Busey Corporation's Main Suppliers

Name: Fiserv, Inc. Website: https://www.fiserv.com

Services Provided:

  • Core banking software: Fiserv provides First Busey Corporation with its core banking system, which manages all aspects of the bank's operations, including account processing, loan processing, and customer relationship management.
  • Payment processing: Fiserv processes credit and debit card transactions for First Busey Corporation.
  • Digital banking: Fiserv provides First Busey Corporation with online and mobile banking services, allowing customers to access their accounts and conduct transactions from anywhere.
  • Wealth management: Fiserv provides First Busey Corporation with wealth management tools and services to help its clients manage their investments.
  • Data analytics: Fiserv provides First Busey Corporation with data analytics tools to help it understand its customers' needs and improve its operations.

Fiserv is a leading global provider of financial technology solutions. It serves over 10,000 institutions in over 100 countries. Fiserv has a strong track record of providing innovative and reliable solutions to help its clients succeed.

Importance of Supplier Relationships

First Busey Corporation relies on its suppliers to provide essential services that allow it to operate its business. A strong relationship with Fiserv is critical to the success of First Busey Corporation. By working closely with its suppliers, First Busey Corporation can ensure that it is receiving the best possible products and services at the most competitive prices.

Downstream

Main Customers (Downstream Companies) of First Busey Corporation

First Busey Corporation, headquartered in Champaign, Illinois, is a publicly traded financial holding company with approximately $19.5 billion in assets. Its primary subsidiary is First Busey Bank, which offers a range of financial services to individuals, businesses, and municipalities throughout Illinois, Missouri, and Indiana.

First Busey's Main Banking Customers

The majority of First Busey's revenue is generated from its banking operations, which serve a diverse customer base including:

  • Individuals: Personal banking, loans, mortgages, investment services
  • Small businesses: Business loans, cash management, payroll services
  • Middle-market businesses: Commercial loans, treasury management, M&A advisory
  • Municipalities: Debt issuance, investment services, financial advisory

Specific Downstream Companies

While First Busey does not publicly disclose a list of its specific downstream customers, its annual reports and financial statements provide insights into the industries and sectors it serves. Some notable industries and companies that are likely to be among First Busey's main customers include:

  • Agriculture: Farmers, ranchers, agribusinesses
  • Healthcare: Hospitals, clinics, medical practices
  • Education: Schools, colleges, universities
  • Manufacturing: Industrial companies, manufacturers, distributors
  • Retail: Retailers, wholesalers, e-commerce businesses

Notable Partnerships and Collaborations

First Busey has established partnerships and collaborations with various organizations and businesses, indicative of its reach and influence in the markets it serves:

  • Illinois State University: Provides banking and financial services to the university and its students
  • University of Illinois at Urbana-Champaign: Partnered for a student loan program and other financial services
  • Illinois Chamber of Commerce: Member and active participant in supporting the state's business community
  • Federal Home Loan Bank of Chicago: Collaborates on affordable housing and community development programs

Website

First Busey Corporation's website: https://www.firstbusey.com/

income

Key Revenue Streams of First Busey Corporation

First Busey Corporation is a financial holding company headquartered in Champaign, Illinois. Its primary revenue streams include:

1. Net Interest Income (Estimated Annual Revenue: $469.6 million)

  • Interest earned on loans, leases, and other interest-bearing assets
  • Interest expense on deposits and other interest-bearing liabilities

2. Non-Interest Income (Estimated Annual Revenue: $180.1 million)

  • Service charges on deposit accounts: Fees for account maintenance, electronic transfers, and other services
  • Other income: Includes income from trust and fiduciary services, foreign exchange trading, and mortgage banking

3. Mortgage Banking Income (Estimated Annual Revenue: $60.1 million)

  • Origination fees, servicing fees, and other income related to mortgage lending activities

4. Trust and Estate Services (Estimated Annual Revenue: $31.4 million)

  • Fees for managing trusts and estates, including investment advice, asset management, and tax planning

5. Other Fee Income (Estimated Annual Revenue: $21.6 million)

  • Credit card fees, debit card fees, wire transfer fees, and other non-interest-related fees

Estimated Annual Revenue Breakdown:

  • Net Interest Income: 63.8%
  • Non-Interest Income: 24.4%
  • Mortgage Banking Income: 8.1%
  • Trust and Estate Services: 4.3%
  • Other Fee Income: 2.9%

Note: These revenue estimates are based on the company's financial statements for the year ended December 31, 2022. Actual revenue may vary in subsequent years.

Partner

Key Partners of First Busey Corporation:

1. Busey Bank

  • Website: www.busey.com
  • Provides a full range of banking services to individuals and businesses, including checking and savings accounts, loans, mortgages, and investment services.

2. First Busey Investment Services, Inc.

3. First Busey Trust Company

4. Farmers State Bank of Bluffs

5. Interlinc Mortgage Services, LLC

6. Tecumseh Bank

7. The Bank of Alma

8. The First National Bank of Pana

  • Website: www.fnpana.com
  • A community bank serving the Pana, Illinois area.

9. The First National Bank of Thomasboro

10. The First National Bank of Waterloo

11. The State Bank of Casey

These key partners collaborate with First Busey Corporation to provide a comprehensive suite of financial services to its customers, including retail banking, investment management, trust and estate planning, mortgage lending, and more.

Cost

Key Cost Structure of First Busey Corporation

1. Interest Expense:

  • Estimated annual cost: $100-$125 million
  • This expense represents the interest paid on outstanding debt obligations, primarily consisting of interest on deposits and borrowings from the Federal Home Loan Bank.

2. Salaries, Wages, and Benefits:

  • Estimated annual cost: $125-$150 million
  • This expense covers compensation for employees, including salaries, wages, bonuses, and benefits such as health insurance, retirement plans, and employee stock ownership plans.

3. Occupancy Expense:

  • Estimated annual cost: $25-$30 million
  • This expense includes rent or lease payments for office space, branches, and other facilities, as well as utilities, maintenance, and property taxes.

4. Data Processing Expense:

  • Estimated annual cost: $20-$25 million
  • This expense covers the costs associated with maintaining and operating information systems and technology infrastructure, including hardware, software, maintenance, and data storage.

5. Marketing and Advertising Expense:

  • Estimated annual cost: $15-$20 million
  • This expense includes advertising campaigns, promotions, and marketing initiatives designed to attract and retain customers.

6. Insurance Expense:

  • Estimated annual cost: $10-$15 million
  • This expense covers insurance premiums for various types of coverage, such as general liability, directors and officers liability, and property and casualty insurance.

7. Professional Services Expense:

  • Estimated annual cost: $10-$15 million
  • This expense includes fees paid to external consultants, attorneys, auditors, and other professional service providers for services such as legal advice, financial reporting, and technology consulting.

8. Loss Provision Expense:

  • Estimated annual cost: $10-$20 million
  • This expense reflects the estimated amount of future loan losses that the company anticipates based on its assessment of loan portfolio risk.

9. Equipment and Software Expense:

  • Estimated annual cost: $5-$10 million
  • This expense includes purchases, leases, and maintenance costs for office equipment, technology devices, and software.

10. Other Operating Expenses:

  • Estimated annual cost: $15-$20 million
  • This category encompasses a variety of miscellaneous expenses, such as postage and shipping, travel, training, and employee benefits not included elsewhere.

Sales

Sales Channels

First Busey Corporation primarily operates through the following sales channels:

  • Branches: First Busey has 47 branches located in Illinois, Indiana, and Missouri. These branches offer a full range of banking and financial services, including checking and savings accounts, loans, mortgages, and investments. Estimated annual sales through branches: $1.5 billion
  • Online Banking: First Busey's online banking platform allows customers to conduct banking transactions anytime, anywhere. Customers can access their accounts, pay bills, transfer funds, and apply for loans online. Estimated annual sales through online banking: $800 million
  • Mobile Banking: First Busey's mobile banking app provides customers with the convenience of banking on their smartphones. Customers can deposit checks, view balances, and make payments using the app. Estimated annual sales through mobile banking: $600 million
  • ATMs: First Busey has over 200 ATMs located throughout its service area. Customers can use these ATMs to withdraw cash, deposit checks, and make balance inquiries. Estimated annual sales through ATMs: $200 million
  • Wealth Management: First Busey provides wealth management services through its First Busey Wealth Management division. These services include investment management, financial planning, and trust services. Estimated annual sales through wealth management: $400 million

Total Estimated Annual Sales

Based on the estimated sales figures for each sales channel, First Busey Corporation's total estimated annual sales are $3.5 billion.

Sales

Customer Segments of First Busey Corporation

1. Individuals (Estimated Annual Sales: $1.6 billion)

  • Individuals seeking personal banking services: checking and savings accounts, loans, mortgages
  • Individuals investing in wealth management services: brokerage accounts, mutual funds, financial planning
  • Individuals using First Busey's trust and estate services

2. Small Businesses (Estimated Annual Sales: $600 million)

  • Small businesses with annual revenues under $5 million
  • Small businesses seeking business banking services: commercial loans, lines of credit, treasury management
  • Small businesses using First Busey's merchant services: payment processing, point-of-sale systems

3. Commercial Clients (Estimated Annual Sales: $450 million)

  • Commercial entities with annual revenues over $5 million
  • Commercial clients seeking commercial banking services: loans, lines of credit, trade finance
  • Commercial clients accessing First Busey's capital markets services: debt and equity offerings

4. Public Sector Entities (Estimated Annual Sales: $200 million)

  • State and local government agencies
  • Non-profit organizations
  • Public sector entities needing banking services: cash management, investment management, public finance

5. Wealth Management Clients (Estimated Annual Sales: $150 million)

  • High-net-worth individuals and families
  • Wealth management clients seeking investment management, financial planning, estate planning, and trust services
  • Wealth management clients accessing First Busey's private banking services: customized financial solutions, personal concierge services

6. Financial Professionals (Estimated Annual Sales: $50 million)

  • Investment advisors
  • Independent financial advisors
  • Financial professionals who utilize First Busey's custody and clearing services
  • Financial professionals accessing First Busey's brokerage platform

7. Institutional Investors (Estimated Annual Sales: $25 million)

  • Institutional investors, such as pension funds, foundations, and insurance companies
  • Institutional investors seeking investment management and trust services

Total Estimated Annual Sales: $3.075 billion

Value

Value Proposition of First Busey Corporation

First Busey Corporation is a diversified financial services company headquartered in Champaign, Illinois. The company provides a wide range of financial products and services including:

  • Banking: First Busey offers a full range of banking services including checking, savings, and money market accounts, as well as loans, mortgages, and credit cards.
  • Insurance: First Busey offers a variety of insurance products including auto, home, life, and health insurance.
  • Investments: First Busey offers a variety of investment products and services including mutual funds, stocks, and bonds.
  • Trust and estate services: First Busey offers a variety of trust and estate services including estate planning, trust administration, and investment management.

First Busey's value proposition is based on the following key factors:

  • Customer focus: First Busey is committed to providing its customers with the highest level of service. The company's employees are dedicated to helping customers achieve their financial goals.
  • Financial strength: First Busey is a well-capitalized company with a strong financial track record. The company has been in business for over 100 years and has a proven track record of success.
  • Local expertise: First Busey has a deep understanding of the local markets it serves. The company's employees are knowledgeable about the local economy and can provide customers with tailored financial advice.
  • Convenience: First Busey offers a variety of convenient banking options including online banking, mobile banking, and ATMs. The company also has a network of branches and offices throughout the Midwest.

First Busey's value proposition is based on its commitment to providing customers with the highest level of service, financial strength, local expertise, and convenience. The company's unique combination of products and services makes it a valuable partner for customers who are looking for a comprehensive financial solution.

Risk

First Busey Corporation Risk Assessment

Company Overview

First Busey Corporation is a publicly traded financial holding company headquartered in Champaign, Illinois. The company provides a range of financial services, including banking, wealth management, and insurance. As of December 31, 2022, First Busey had total assets of $18.9 billion and deposits of $14.7 billion.

Key Risks

First Busey Corporation faces a number of risks, including:

  • Credit risk: The risk that borrowers will default on their loans. This is a significant risk for First Busey, as the company has a large portfolio of loans to both individuals and businesses.
  • Interest rate risk: The risk that changes in interest rates will negatively impact the company's earnings. This is a particular risk for First Busey, as the company has a significant amount of interest-rate-sensitive assets.
  • Liquidity risk: The risk that the company will not be able to meet its short-term obligations. This is a concern for First Busey, as the company has a relatively short-term funding profile.
  • Operational risk: The risk of losses due to errors, fraud, or other operational issues. This is a concern for First Busey, as the company operates a complex and interconnected network of systems and processes.
  • Reputational risk: The risk that the company's reputation will be damaged by negative events or publicity. This is a concern for First Busey, as the company relies heavily on customer trust and loyalty.

Risk Management

First Busey Corporation has implemented a number of risk management strategies to mitigate these risks, including:

  • Maintaining a strong capital position: First Busey has a strong capital position, which provides a buffer against potential losses.
  • Diversifying its loan portfolio: First Busey has a diversified loan portfolio, which reduces the risk of losses due to defaults by any one borrower.
  • Managing its interest rate risk: First Busey uses a variety of hedging strategies to manage its interest rate risk.
  • Investing in technology and cybersecurity: First Busey invests heavily in technology and cybersecurity to reduce the risk of operational losses.
  • Building a strong compliance culture: First Busey has a strong compliance culture, which helps to reduce the risk of reputational damage.

Overall Risk Assessment

First Busey Corporation is a well-managed financial institution with a strong risk management framework. The company faces a number of risks, but these risks are mitigated by its strong capital position, diversified loan portfolio, and other risk management strategies. Overall, First Busey is a low-risk financial institution.

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