Acquisitions (Tables)

9 Months Ended

Sep. 30, 2017

Schedule of assets acquired and liabilities assumed and their initial fair value estimates

The following table presents the assets acquired and liabilities assumed of Pulaski as of April 30, 2016 and their fair value estimates (dollars in thousands):

	As Recorded by Pulaski		Fair Value Adjustments			As Recorded by First Busey
Assets acquired:
Cash and cash equivalents	$	25,580	$	—		$	25,580
Securities	47,895		105		(a)	48,000
Loans held for sale	184,856		—			184,856
Portfolio loans	1,243,913		(14,452		)(b)	1,229,461
Premises and equipment	17,236		(667		)(c)	16,569
OREO	5,022		(2,534		)(d)	2,488
Goodwill	3,939		(3,939		)(e)	—
Other intangible assets	—		15,468		(f)	15,468
Other assets	70,365		(122		)(g)	70,243

Total assets acquired	1,598,806		(6,141		)	1,592,665


Liabilities assumed:
Deposits	1,226,906		1,102		(h)	1,228,008
Other borrowings	205,840		906		(i)	206,746
Trust preferred securities	19,589		(3,805		)(j)	15,784
Other liabilities	24,594		(612		)(k)	23,982

Total liabilities assumed	1,476,929		(2,409		)	1,474,520


Net assets acquired	$	121,877	$	(3,732	)	$	118,145


Consideration paid:
Cash						$	5
Common stock						192,990
Fair value of stock options assumed						2,454

Total consideration paid						195,449


Goodwill						$	77,304

Explanation:

(a)

Fair value adjustments of the securities portfolio as of the acquisition date.

(b)

Fair value adjustments based on the Company’s evaluation of the acquired loan portfolio, write-off of net deferred loan costs and elimination of the allowance for loan losses recorded by Pulaski. $16.9 million is expected to be accreted over the estimated four year remaining life of the respective loans in a manner that approximates the level yield method.

(c)

Fair value adjustments based on the Company’s evaluation of the acquired premises and equipment. 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.

(d)

Fair value adjustment based on the Company’s evaluation of the acquired OREO portfolio.

(e)

Eliminate Pulaski’s existing goodwill.

(f)

Recording of the core deposit intangible asset on the acquired core deposit accounts. Amount to be amortized using a sum of years digits method over a 14 year useful life.

(g)

Fair value adjustment of other assets at the acquisition date.

(h)

Fair value adjustment to time deposits. Amount to be amortized over two years in a manner that approximates the level yield method.

(i)

Fair value adjustment to the FHLB borrowings. Such borrowings were repaid shortly after the acquisition date, so there was no premium amortization.

(j)

Fair value adjustment to the trust preferred securities at the acquisition date. Amount to be accreted over the weighted average remaining life of 18 years in a manner that approximates the level yield method.

(k)

Fair value adjustment of other liabilities at the acquisition date.

Schedule of unaudited pro forma results of operations for the acquisition

Only the acquisition related expenses that had been recognized are included in net income in the table below (dollars in thousands):

	Pro Forma
	Nine Months Ended
	September 30, 2016
Total revenues (net interest income plus non-interest income)	$	184,677
Net income	36,408
Diluted earnings per common share	0.94

First Community

Schedule of assets acquired and liabilities assumed and their initial fair value estimates

The following table presents the First Community assets acquired and liabilities assumed as of July 2, 2017 and their fair value estimates (dollars in thousands):

	As Recorded by First Community		Fair Value Adjustments			As Recorded by First Busey
Assets acquired:
Cash and cash equivalents	$	60,686	$	—		$	60,686
Securities	166,046		(203		)(a)	165,843
Loans held for sale	905		—			905
Portfolio loans, net	1,103,987		(7,404		)(b)	1,096,583
Premises and equipment	21,682		(3,588		)(c)	18,094
OREO	915		(193		)(d)	722
Other intangible assets	701		13,278		(e)	13,979
Other assets	41,644		111		(f)	41,755

Total assets acquired	1,396,566		2,001			1,398,567


Liabilities assumed:
Deposits	1,134,584		(229		)(g)	1,134,355
Other borrowings	125,471		280		(h)	125,751
Other liabilities	11,503		359		(i)	11,862

Total liabilities assumed	1,271,558		410			1,271,968


Net assets acquired	$	125,008	$	1,591		$	126,599


Consideration paid:
Cash						$	24,557
Cash payout of options and restricted stock units						6,182
Common stock						211,120
Fair value of stock options assumed						722

Total consideration paid						242,581


Goodwill						$	115,982

Explanation:

(a)

Fair value adjustments of the securities portfolio as of the acquisition date.

(b)

Fair value adjustments based on the Company’s evaluation of the acquired loan portfolio, write-off of net deferred loan costs and elimination of the allowance for loan losses recorded by First Community. $15.0 million is expected to be accreted over the estimated four year remaining life of the respective loans in a manner that approximates the level yield method.

(c)

(d)

Fair value adjustment based on the Company’s evaluation of the acquired OREO portfolio.

(e)

Elimination of First Community’s existing core deposit intangible asset and recording of the core deposit intangible asset on the acquired core deposit accounts. Amount to be amortized using a sum of years digits method over a 14 year useful life.

(f)

Fair value adjustment of other assets at the acquisition date.

(g)

Fair value adjustment to time deposits. Amount to be accreted over two years in a manner that approximates the level yield method.

(h)

Fair value adjustment to borrowings. Amount to be amortized over the 15 month remaining life of debt in a manner that approximates the level yield method.

(i)

Fair value adjustment of other liabilities at the acquisition date.

Schedule of unaudited pro forma results of operations for the acquisition

Only the merger related expenses that have been recognized are included in net income in the table below (dollars in thousands):

	Pro Forma				Pro Forma
	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Total revenues (net interest income plus non-interest income)	$	75,952	$	77,624	$	227,858	$	220,558
Net income	14,854		19,360		54,478		46,836
Diluted earnings per common share	0.32		0.42		1.19		1.02