Nevada
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0-15959
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37-1078406
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 5.02.
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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99.1
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Press Release issued by the Company, dated October 30, 2012.
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Date: October 30, 2012
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First Busey Corporation
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·
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Non-performing loans decreased to $25.2 million at September 30, 2012 from $33.8 million at June 30, 2012 and $38.5 million at December 31, 2011.
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o
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Illinois/Indiana non-performing loans decreased to $17.4 million at September 30, 2012 from $25.3 million at June 30, 2012 and $27.7 million at December 31, 2011.
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o
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Florida non-performing loans decreased to $7.8 million at September 30, 2012 from $8.5 million at June 30, 2012 and $10.8 million at December 31, 2011.
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·
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Loans 30-89 days past due increased to $7.9 million at September 30, 2012 from $4.2 million at June 30, 2012 and $4.7 million at December 31, 2011. The increase primarily related to a few large commercial credits that are actively being pursued for collection. Loans 30-89 days past due as a percentage of gross loan balances at September 30, 2012 were 0.39%, which compares favorably to peer averages per publically available Federal Reserve System Bank Holding Company Performance Reports.
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·
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Other non-performing assets, primarily consisting of other real estate owned, increased to $8.5 million at September 30, 2012 from $7.8 million at June 30, 2012, but remained consistent with the amount recorded at December 31, 2011. The increase in other real estate owned and the decline in non-performing loans in the third quarter of 2012 were interrelated due to the foreclosure of a large commercial property. This property was previously classified as a non-performing loan in the second quarter of 2012.
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·
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The ratio of non-performing assets to total loans plus other non-performing assets at September 30, 2012 decreased to 1.65% from 2.05% at June 30, 2012 and 2.28% at December 31, 2011.
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·
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The allowance for loan losses to non-performing loans ratio increased to 195.38% at September 30, 2012 from 150.42% at June 30, 2012 and 151.91% at December 31, 2011.
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·
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The allowance for loan losses to total loans ratio decreased to 2.42% at September 30, 2012 compared to 2.52% at June 30, 2012 and 2.85% at December 31, 2011.
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·
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Net charge-offs of $5.2 million recorded in the third quarter of 2012 were lower than the $7.5 million recorded in the second quarter of 2012 and the $10.4 million recorded in the third quarter of 2011.
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·
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Provision expense decreased to $3.5 million in the third quarter of 2012 from $4.5 million recorded in the second quarter of 2012 and $5.0 million recorded in the third quarter of 2011.
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·
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Net interest income slightly increased to $25.5 million in the third quarter of 2012 compared to $25.3 million for the second quarter of 2012, but decreased from $27.7 million for the third quarter of 2011. Positive inflection from the prior quarter in average loan volumes of $29.9 million and decreasing funding costs created a small improvement in both net interest income and the net interest margin. Net interest income for the first nine months of 2012 was $76.5 million compared to $83.9 million for the same period of 2011. Net interest income declines from prior year were driven by decreases in average loan volumes, which have prompted initiatives to foster quality asset growth. Additional liquidity generated by our growing deposit base has primarily been deployed into our investment portfolio over the past year.
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·
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Net interest margin modestly increased to 3.25% for the third quarter of 2012 as compared to 3.21% for the second quarter of 2012, but decreased from 3.57% for the third quarter of 2011. The net interest margin for the first nine months of 2012 decreased to 3.26% compared to 3.55% for the same period of 2011. The Company continued to experience downward pressure on its yield on interest-earning assets resulting from a protracted period of historically low rates and heightened competition for assets, which has been experienced throughout the banking industry.
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·
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Residential mortgage loans posted another strong quarter of gains from sales totaling $3.3 million in the third quarter of 2012 compared to $3.3 million in the second quarter of 2012 and $3.0 million in the third quarter of 2011. During the first nine months of 2012, gains on sales of mortgage loans increased to $8.9 million compared to $7.4 million for the first nine months of 2011 resulting from an active market for refinancing.
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·
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Other non-interest income declined to $0.9 million in the third quarter of 2012 from $1.4 million for the second quarter of 2012, but slightly increased from $0.8 million for the third quarter of 2011. Other non-interest income for the first nine months of 2012 increased to $5.7 million from $2.8 million for the comparable period of 2011. As discussed in previous releases, the Company recorded a net gain of $2.1 million in the first quarter of 2012 from income earned on private equity funds. The majority of this gain was non-ordinary; therefore, a decline in non-interest income for the second and third quarters of 2012 was expected.
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·
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Salaries and wages and employee benefits increased to $16.5 million in the third quarter of 2012 compared to $16.3 million in the second quarter of 2012 and $13.6 million in the third quarter of 2011. In the first nine months of 2012, salaries and wages and employee benefits totaled $47.8 million as compared to $38.4 million for the same period of 2011. As discussed in prior earnings releases, the planned increase in 2012 represents our investment in talent to drive future business expansion.
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·
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Data processing expense increased to $3.6 million in the third quarter of 2012 from $2.6 million for the second quarter of 2012 and $2.1 million for the third quarter of 2011. In the first nine months of 2012, data processing expense totaled $8.4 million as compared to $6.4 million for the comparable period of 2011. The majority of the quarterly and year-over-year increase resulted from our core system conversion in mid-September of 2012. In the months leading up to conversion, we incurred various costs to implement our new core system. These costs consisted of conversion fees of $0.3 million, deconversion and licensing fees to our prior provider of $0.7 million, and $0.3 million to enhance/upgrade certain non-core systems for compatibility with the new core system. The remaining increase was attributable to additional vendor fees related to the growth in online and mobile banking as well as enhancements to our internet banking service. Some continued elevation in conversion-related expenses are anticipated in the fourth quarter of 2012, but at a significantly lower level than the third quarter.
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·
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Other operating expense for the third quarter of 2012 remained fairly consistent with the amounts recorded for both the second quarter of 2012 and the third quarter of 2011. However, in the first nine months of 2012, other operating expense increased to $15.7 million as compared to $14.2 million for the comparable period of 2011. The majority of the increase was due to additional marketing and business development costs. These costs support our previously announced growth strategy initiatives. In addition, employee recruiting expense increased by $0.4 million on a year-over-year basis. This increase is in line with the increase in salaries and employee benefits as it represents our investment in talent.
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·
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Our quarterly efficiency ratio increased to 71.71% for the third quarter of 2012 from 69.68% for the second quarter of 2012 and 57.87% for the third quarter of 2011 due to the planned expense increases discussed in the preceding paragraphs. The efficiency ratio for the first nine months of 2012 was 66.90%, as compared to 57.16% for the same period of 2011. Peer data from Federal Reserve system sources suggests that the Company has historically compared favorably to similarly-sized companies in terms of efficiency ratios, with averages for peers ranging between 65% and 67% during 2011 and the second quarter of 2012.
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SELECTED FINANCIAL HIGHLIGHTS
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||||||||
(dollars in thousands, except per share data)
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||||||||
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As of and for the
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As of and for the
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||||||
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Three Months Ended
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Nine Months Ended
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||||||
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September 30,
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June 30,
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September 30,
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September 30,
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September 30,
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|||
2012
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2012
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2011
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2012
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2011
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Net income
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$ 4,909
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$ 4,888
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$ 7,570
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$ 17,440
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$ 24,127
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Income available to common shareholders1
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4,000
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3,980
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6,521
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14,715
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20,019
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Revenue2
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40,623
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40,980
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42,445
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125,181
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127,920
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Fully-diluted earnings per share
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0.05
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0.05
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0.08
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0.17
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0.24
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Cash dividends paid per share
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0.04
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0.04
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0.04
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0.12
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0.12
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Net income by operating segment
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||||||||
Busey Bank
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$ 4,642
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$ 4,187
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$ 7,068
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$ 14,859
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$ 22,984
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Busey Wealth Management
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780
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1,004
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749
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2,647
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2,417
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FirsTech
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237
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244
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381
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746
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1,253
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AVERAGE BALANCES
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Assets
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$ 3,488,429
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$ 3,521,800
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$ 3,420,878
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$ 3,491,863
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$ 3,500,121
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Earning assets
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3,204,169
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3,239,363
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3,138,274
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3,208,909
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3,213,540
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Deposits
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2,866,727
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2,878,173
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2,769,255
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2,853,610
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2,829,830
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Interest-bearing liabilities
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2,538,168
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2,559,924
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2,505,838
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2,541,382
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2,576,049
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Shareholders' equity - common
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342,833
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340,575
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331,387
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340,367
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315,643
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Tangible shareholders' equity – common3
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308,095
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305,012
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293,243
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304,806
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276,624
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PERFORMANCE RATIOS
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Return on average assets4
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0.46%
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0.45%
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0.76%
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0.56%
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0.76%
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Return on average common equity4
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4.64%
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4.70%
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7.81%
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5.77%
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8.48%
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Return on average tangible common equity4
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5.16%
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5.25%
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8.82%
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6.45%
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9.68%
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Net interest margin4
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3.25%
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3.21%
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3.57%
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3.26%
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3.55%
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Efficiency ratio5
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71.71%
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69.68%
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57.87%
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66.90%
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57.16%
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Non-interest revenue as a % of total revenues2
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37.12%
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38.33%
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34.68%
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38.87%
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34.40%
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ASSET QUALITY
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Gross loans
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$ 2,035,319
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$ 2,021,931
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$ 2,099,314
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|||||
Allowance for loan losses
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49,213
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50,866
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63,915
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Net charge-offs
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5,153
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7,469
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10,414
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22,293
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27,123
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Allowance for loan losses to loans
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2.42%
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2.52%
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3.04%
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|||||
Allowance as a percentage of non-performing loans
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195.38%
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150.42%
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148.73%
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Non-performing loans
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Non-accrual loans
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25,129
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33,760
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41,987
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Loans 90+ days past due
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59
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57
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986
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Geographically
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Illinois/ Indiana
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17,377
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25,365
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29,733
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Florida
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7,811
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8,452
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13,240
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Loans 30-89 days past due
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7,895
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4,240
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8,247
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Other non-performing assets
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8,486
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7,783
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11,577
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1
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Net income, net of preferred dividends and discount accretion
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|||||||
2
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Total revenue, net of interest expense and security gains
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|||||||
3
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Average common equity less average goodwill and intangibles (not tax effected)
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4
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Quarterly ratios annualized and calculated on net income available to common shareholders
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5
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Net of security gains and intangible charges
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Condensed Consolidated Balance Sheets
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||||||||||||
(Unaudited, in thousands, except per share data)
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September 30,
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December 31,
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September 30,
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|||||||||
2012
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2011
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2011
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Assets
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Cash and due from banks
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$ | 328,308 | $ | 315,053 | $ | 289,144 | ||||||
Investment securities
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964,187 | 831,749 | 795,403 | |||||||||
Net loans, including loans held for sale
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1,986,106 | 1,992,838 | 2,035,399 | |||||||||
Premises and equipment
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72,214 | 69,398 | 70,179 | |||||||||
Goodwill and other intangibles
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34,223 | 36,704 | 37,589 | |||||||||
Other assets
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144,626 | 156,380 | 165,171 | |||||||||
Total assets
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$ | 3,529,664 | $ | 3,402,122 | $ | 3,392,885 | ||||||
Liabilities & Shareholders' Equity
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Non-interest bearing deposits
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$ | 510,146 | $ | 503,118 | $ | 467,775 | ||||||
Interest-bearing deposits
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2,382,378 | 2,260,336 | 2,288,686 | |||||||||
Total deposits
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$ | 2,892,524 | $ | 2,763,454 | $ | 2,756,461 | ||||||
Securities sold under agreements to repurchase
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131,753 | 127,867 | 129,905 | |||||||||
Long-term debt
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7,417 | 19,417 | 19,834 | |||||||||
Junior subordinated debt owed to unconsolidated trusts
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55,000 | 55,000 | 55,000 | |||||||||
Other liabilities
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25,649 | 27,117 | 24,219 | |||||||||
Total liabilities
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$ | 3,112,343 | $ | 2,992,855 | $ | 2,985,419 | ||||||
Total shareholders' equity
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$ | 417,321 | $ | 409,267 | $ | 407,466 | ||||||
Total liabilities & shareholders' equity
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$ | 3,529,664 | $ | 3,402,122 | $ | 3,392,885 | ||||||
Per Share Data
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Book value per common share
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$ | 3.98 | $ | 3.89 | $ | 3.87 | ||||||
Tangible book value per common share1
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$ | 3.58 | $ | 3.46 | $ | 3.43 | ||||||
Ending number of common shares outstanding
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86,644 | 86,617 | 86,597 |
Condensed Consolidated Statements of Operations
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||||||||||||||||
(Unaudited, in thousands, except per share data)
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Three Months Ended September 30,
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Nine Months Ended September 30,
|
||||||||||||||
2012
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2011
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2012
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2011
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|||||||||||||
|
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Interest and fees on loans
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$ | 24,412 | $ | 28,243 | $ | 74,450 | $ | 87,924 | ||||||||
Interest on investment securities
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4,599 | 4,568 | 13,882 | 13,666 | ||||||||||||
Total interest income
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$ | 29,011 | $ | 32,811 | $ | 88,332 | $ | 101,590 | ||||||||
Interest on deposits
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2,960 | 4,457 | 10,026 | 14,536 | ||||||||||||
Interest on short-term borrowings
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71 | 96 | 243 | 327 | ||||||||||||
Interest on long-term debt
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106 | 230 | 552 | 1,212 | ||||||||||||
Junior subordinated debt owed to unconsolidated trusts
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329 | 301 | 994 | 1,600 | ||||||||||||
Total interest expense
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$ | 3,466 | $ | 5,084 | $ | 11,815 | $ | 17,675 | ||||||||
Net interest income
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$ | 25,545 | $ | 27,727 | $ | 76,517 | $ | 83,915 | ||||||||
Provision for loan losses
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3,500 | 5,000 | 13,000 | 15,000 | ||||||||||||
Net interest income after provision for loan losses
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$ | 22,045 | $ | 22,727 | $ | 63,517 | $ | 68,915 | ||||||||
Trust fees
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3,960 | 3,460 | 13,245 | 11,765 | ||||||||||||
Commissions and brokers' fees
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508 | 495 | 1,578 | 1,415 | ||||||||||||
Fees for customer services
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4,384 | 4,624 | 12,892 | 13,476 | ||||||||||||
Remittance processing
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2,068 | 2,335 | 6,346 | 7,119 | ||||||||||||
Gain on sales of loans
|
3,255 | 2,977 | 8,924 | 7,444 | ||||||||||||
Net security gains (losses)
|
511 | - | 575 | (2 | ) | |||||||||||
Other
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903 | 827 | 5,679 | 2,786 | ||||||||||||
Total non-interest income
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$ | 15,589 | $ | 14,718 | $ | 49,239 | $ | 44,003 | ||||||||
Salaries and wages
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13,707 | 11,090 | 38,966 | 30,678 | ||||||||||||
Employee benefits
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2,773 | 2,494 | 8,791 | 7,759 | ||||||||||||
Net occupancy expense
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2,237 | 2,211 | 6,598 | 6,762 | ||||||||||||
Furniture and equipment expense
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1,276 | 1,294 | 3,858 | 3,958 | ||||||||||||
Data processing expense
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3,568 | 2,145 | 8,366 | 6,425 | ||||||||||||
Amortization expense
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827 | 885 | 2,481 | 2,653 | ||||||||||||
Regulatory expense
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623 | 497 | 1,869 | 3,652 | ||||||||||||
OREO expense
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273 | 112 | 788 | 459 | ||||||||||||
Other operating expenses
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5,110 | 4,996 | 15,658 | 14,228 | ||||||||||||
Total non-interest expense
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$ | 30,394 | $ | 25,724 | $ | 87,375 | $ | 76,574 | ||||||||
Income before income taxes
|
$ | 7,240 | $ | 11,721 | $ | 25,381 | $ | 36,344 | ||||||||
Income taxes
|
2,331 | 4,151 | 7,941 | 12,217 | ||||||||||||
Net income
|
$ | 4,909 | $ | 7,570 | $ | 17,440 | $ | 24,127 | ||||||||
Preferred stock dividends and discount accretion
|
$ | 909 | $ | 1,049 | $ | 2,725 | $ | 4,108 | ||||||||
Income available for common shareholders
|
$ | 4,000 | $ | 6,521 | $ | 14,715 | $ | 20,019 | ||||||||
Per Share Data
|
||||||||||||||||
Basic earnings per common share
|
$ | 0.05 | $ | 0.08 | $ | 0.17 | $ | 0.24 | ||||||||
Fully-diluted earnings per common share
|
$ | 0.05 | $ | 0.08 | $ | 0.17 | $ | 0.24 | ||||||||
Diluted average common shares outstanding
|
86,662 | 86,608 | 86,643 | 84,880 |