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EX-23.1 - EX-23.1 - FIRST BUSEY CORP /NV/a17-21471_1ex23d1.htm
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Exhibit 99.3

 

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

The following tables show selected unaudited pro forma condensed combined financial information about the financial condition and results of operations of First Busey Corporation (“First Busey”), including per share data, after giving effect to the merger with First Community Financial Partners, Inc. (“First Community”) and other pro forma adjustments. The selected unaudited pro forma condensed combined financial information assumes that the merger is accounted for under the acquisition method of accounting for business combinations in accordance with GAAP, and that the assets and liabilities of First Community will be recorded by First Busey at their respective fair values as of the date the merger is completed. The unaudited pro forma condensed combined balance sheet gives effect to the transactions as if the transactions had occurred on March 31, 2017. The unaudited pro forma condensed combined income statements for the three months ended March 31, 2017, and the year ended December 31, 2016, give effect to the transactions as if the transactions had become effective at January 1, 2016.

 

The unaudited pro forma condensed combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined company had the companies actually been combined at the beginning of each period presented. The unaudited pro forma condensed combined financial information also does not consider any expense efficiencies, increased revenue or other potential financial benefits of the merger. The fair values are estimates as of the date hereof and actual amounts are still in the process of being finalized.  Fair values are subject to refinement for up to one year after the closing date as additional information regarding the closing date fair values becomes available.

 



 

Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2017
(dollars in thousands, except per share data)

 

 

 

First Busey
Corporation

 

First
Community
Financial
Partners, Inc.

 

Pro Forma
Adjustments

 

 

 

Pro Forma
Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

439,511

 

$

26,234

 

$

 

 

 

$

465,745

 

Investment securities

 

743,876

 

200,758

 

(64

)

(1)

 

944,570

 

Loans held for sale

 

96,444

 

78

 

 

 

 

96,522

 

Portfolio loans

 

3,872,952

 

1,063,832

 

(19,613

)

(1)

 

4,917,171

 

Allowance for loan losses

 

(48,442

)

(11,951

)

11,951

 

(2)

 

(48,442

)

Premises and equipment, net

 

77,967

 

21,948

 

(3,647

)

(3)

 

96,268

 

Goodwill

 

102,814

 

 

120,396

 

(4)

 

223,210

 

Core deposit and other intangible assets, net

 

17,255

 

730

 

13,249

 

(5)

 

31,234

 

Other assets

 

136,558

 

35,140

 

(414

)

(6)

 

171,284

 

Total assets

 

$

5,438,935

 

$

1,336,769

 

$

121,858

 

 

 

$

6,897,562

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

4,485,543

 

$

1,108,246

 

$

(229

)

(7)

 

$

5,593,560

 

Borrowings

 

243,081

 

104,598

 

31,019

 

(8)

 

378,698

 

Trust preferred securities

 

70,903

 

 

 

 

70,903

 

Other liabilities

 

37,061

 

3,161

 

8,964

 

(9)(10)

 

49,186

 

Total liabilities

 

4,836,588

 

1,216,005

 

$

39,754

 

 

 

6,092,347

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stockholders’ equity

 

602,347

 

120,764

 

82,104

 

(11)(12)

 

805,215

 

Total liabilities and stockholders’ equity

 

$

5,438,935

 

$

1,336,769

 

$

121,858

 

 

 

$

6,897,562

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per common share

 

$

15.75

 

$

6.79

 

 

 

 

 

$

17.72

 

Shares outstanding

 

38,243

 

17,775

 

(10,574

)

(12)

 

45,444

 

 



 

Unaudited Pro Forma Condensed Combined Statement of Income for the

Three Months Ended March 31, 2017

(dollars in thousands, except per share data)

 

 

 

First Busey
Corporation

 

First
Community
Financial
Partners, Inc.

 

Pro Forma
Adjustments

 

 

 

Pro Forma
Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest income

 

$

44,927

 

$

12,205

 

$

1,588

 

(13)

 

$

58,720

 

Total interest expense

 

2,914

 

1,577

 

315

 

(14)(15)

 

4,806

 

Net interest income

 

42,013

 

10,628

 

1,273

 

 

 

53,914

 

Provision for loan losses

 

500

 

375

 

 

 

 

875

 

Net interest income after provision for loan losses

 

41,513

 

10,253

 

1,273

 

 

 

53,039

 

Non-interest income

 

20,014

 

957

 

 

 

 

20,971

 

Non-interest expense

 

37,619

 

7,438

 

449

 

(16)

 

45,506

 

Income before income taxes

 

23,908

 

3,772

 

824

 

 

 

28,504

 

Income taxes

 

8,738

 

366

 

289

 

(17)

 

9,393

 

Net income

 

$

15,170

 

$

3,406

 

$

535

 

 

 

$

19,111

 

Basic

 

$

0.40

 

$

0.19

 

 

 

 

$

0.42

 

Diluted

 

$

0.39

 

$

0.19

 

 

 

 

$

0.42

 

Average shares for basic earnings per share

 

38,293

 

17,534

 

7,201

 

 

 

45,494

 

Average shares for diluted earnings per share

 

38,754

 

18,214

 

7,224

 

(18)

 

45,978

 

 



 

Unaudited Pro Forma Condensed Combined Statement of Income for the Year Ended

December 31, 2016
(dollars in thousands, except per share data)

 

 

 

First Busey
Corporation

 

First
Community
Financial
Partners, Inc.

 

Pro Forma
Adjustments

 

 

 

Pro Forma
Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest income

 

$

164,889

 

$

42,777

 

$

6,002

 

(13)

 

$

213,668

 

Total interest expense

 

10,229

 

5,701

 

1,216

 

(14)(15)

 

17,146

 

Net interest income

 

154,660

 

37,076

 

4,786

 

 

 

196,522

 

Provision for loan losses

 

5,550

 

1,066

 

 

 

 

6,616

 

Net interest income after provision for loan losses

 

149,110

 

36,010

 

4,786

 

 

 

189,906

 

Non-interest income

 

75,169

 

5,467

 

 

 

 

80,636

 

Non-interest expense

 

147,862

 

26,046

 

1,797

 

(16)

 

175,705

 

Income before income taxes

 

76,417

 

15,431

 

2,989

 

 

 

94,837

 

Income taxes

 

26,723

 

4,324

 

1,046

 

(17)

 

32,093

 

Net income

 

$

49,694

 

$

11,107

 

$

1,943

 

 

 

$

62,744

 

Basic

 

$

1.42

 

$

0.65

 

 

 

 

 

$

1.48

 

Diluted

 

$

1.40

 

$

0.64

 

 

 

 

 

$

1.47

 

Average shares for basic earnings per share

 

35,081

 

17,184

 

7,201

 

 

 

42,282

 

Average shares for diluted earnings per share

 

35,413

 

17,631

 

7,210

 

(18)

 

42,623

 

 

Notes to Unaudited Pro Forma Condensed Combined Balance Sheet and Statement of Income

 

Note 1—Basis of Presentation

 

First Busey acquired First Community on July 2, 2017, with total consideration a mix of approximately 90% common stock and 10% cash.  At the effective time of the merger, each share of First Community common stock converted to the right to receive 0.396 shares of common stock of First Busey and $1.35 in cash.  The acquisition is accounted for under the acquisition method of accounting and, accordingly, the assets and liabilities of First Community presented in these pro forma condensed combined financial statements have been adjusted to their estimated fair values based upon conditions as of the merger date and as if the transaction had been effective on January 1, 2016 for statement of income data. Since these are pro forma statements, we cannot assure that the amounts reflected in these financial statements would have been representative of the actual amounts earned had the companies been combined at that time. The fair values are estimates as of the date hereof and actual amounts are still in the process of being finalized.  Fair values are subject to refinement for up to one year after the closing date as additional information regarding the closing date fair values becomes available.

 


Note 2—Pro Forma Adjustments Footnotes

 

(1)                    To adjust interest-earning assets of First Community to approximate fair value, consisting of a decrease to investments by $0.1 million and a decrease to loans by $19.6 million.  The investment fair value adjustment is expected to be accreted over the life of the investments and the impact to the pro forma income statement is insignificant.  The loan fair value adjustment includes a $20.4 million discount to adjust for market interest rates and credit deterioration of the acquired portfolio, offset by a $0.5 million loan valuation adjustment related to a prior acquisition and a $0.3 million adjustment of net deferred loan fees.  $15.0 million is expected to be accreted over an estimated 4 year remaining life of the respective loans in a manner that approximates level yield.

 



 

(2)                    To eliminate First Community’s allowance for loan losses of $12.0 million.

 

(3)                    To record the fair value adjustment to decrease premises and equipment by $3.6 million.  The reduction in depreciation expense will be recorded using the straight-line method over the estimated useful life associated with each type of premises and equipment adjusted.

 

(4)                    To record goodwill of $120.4 million resulting from the difference between the purchase price and identifiable net assets as follows:

 

(dollars in thousands)

 

 

 

Total Purchase Price

 

$

242,581

 

 

 

 

 

Allocated to:

 

 

 

Historical book value of First Community’s assets and liabilities

 

120,764

 

 

 

 

 

Adjustments to record assets and liabilities at fair value:

 

 

 

Investments, fair value adjustment

 

(64

)

Portfolio loans, fair value adjustment

 

(19,613

)

Eliminate First Community’s allowance for loan losses

 

11,951

 

Premises and equipment, fair value adjustment

 

(3,647

)

Eliminate First Community’s core deposit intangible asset

 

(730

)

Core deposit intangible asset

 

13,979

 

Other real estate owned, fair value adjustment

 

(193

)

Deposit, fair value interest rate adjustment

 

229

 

Borrowings, fair value adjustment

 

(280

)

Deferred taxes

 

63

 

Other assets, fair value adjustment

 

(284

)

Other liabilities, fair value adjustment

 

10

 

Resulting goodwill

 

$

120,396

 

 

(5)                    To eliminate First Community’s core deposit intangible asset of $0.7 million.  To record core deposit intangible asset relating to this acquisition of $14.0 million.  Amount to be amortized using a sum of years digits method over a 14 year useful life.

 

(6)                    To record the fair value adjustment to reduce other real estate owned by $0.2 million, reduce other assets by $0.3 million and increase deferred taxes by $0.1 million.

 

(7)                    To record the fair value adjustment to decrease time deposits by $0.2 million.  Amount to be accreted over 2 years in a manner that approximates the level yield method.

 

(8)                    To record the fair value adjustment to increase borrowings by $0.3 million.  Amount to be accreted over the 15 month remaining life of the debt in a manner that approximates the level yield method.  To record estimated borrowings totaling $30.7 million used to fund the cash portion of the merger consideration.  The $30.7 million consists of the 10% cash component for merger consideration, cash in lieu of fractional shares and cash exchanged for employee and director restricted stock awards and stock options.  The interest expense on borrowings used to fund the cash portion of the merger consideration is estimated at a rate of 4.25%.

 



 

(9)                    To record estimated transaction costs to be incurred totaling $13.1 million, net of tax of $9.0 million, for vendor termination costs, employee related costs and professional fees.  For purposes of the pro forma presentation, the aggregate amount of these transaction costs is excluded from the pro forma income statements, which is consistent with applicable guidance.

 

(10)             To record fair value adjustments to reduce other liabilities by an insignificant amount.

 

(11)             To eliminate First Community’s stockholders’ equity of $120.8 million.  The adjustment also includes a $9.0 million decrease in retained earnings to record transaction costs, net of tax.

 

(12)             To record the issuance of 7.2 million shares of First Busey’s common stock at $29.32 per share totaling $211.1 million.  The purchase price is also adjusted for the fair value of outstanding First Community’s stock options.

 

(13)             To record accretion on the credit adjustment and interest rate adjustment on the loan portfolio.

 

(14)             To record accretion on interest rate adjustment on time deposits.

 

(15)             To record accretion on interest rate adjustment on borrowings and to record interest expense on borrowings used to fund the cash portion of the merger consideration.

 

(16)             To record amortization of core deposit intangible and a reduction in depreciation expense on premises and equipment.

 

(17)             To record tax effects at an effective rate of 35%.

 

(18)             Includes estimated 23,000 shares and 9,000 shares of equivalent roll over diluted options for First Community’s existing option awards as of March 31, 2017 and December 31, 2016, respectively.