CHAMPAIGN — Busey Bank plans to spend more on employees in order to generate growth, the bank's holding company reaffirmed in its annual report to shareholders.
First Busey Corp. consciously shrank over the past four years — from $4.4 billion to $3.4 billion in assets — while it cleaned up problem loans, many of which were related to the collapse of real estate in southwest Florida.
"While we believe this approach served us well to get through the recent economic cycle, it is not a sustainable, long-term model for success," the company stated in its recently issued annual report.
"In 2012, we plan to invest in talent to drive future business expansion," the company added.
Specifically, the company said it plans to invest in its commercial banking and cash-management businesses, as well as in its subsidiaries — Busey Wealth Management and FirsTech.
Already, there's evidence Busey is beefing up its ranks. The company had 888 full-time-equivalent employees at the end of 2011 — up from 866 at the end of 2010, but down from 912 at the end of 2009.
Meanwhile, the company — which has 33 banking offices in Illinois, seven in southwest Florida and one in Indianapolis — said its financial metrics are getting better. Nonperforming loans were down for the eighth consecutive quarter in all the bank's geographic areas.
First Busey said the geographic markets it serves did not deteriorate economically in 2011. But it said southwest Florida will take "a number of years" to return to the strength it had a few years ago.
"During 2011, southwest Florida showed small signs of improvement in areas such as unemployment and home sales," the company said.
But because southwest Florida is so dependent on tourism and retirees, declines in discretionary spending triggered by the 2008 collapse "caused significant damage to that economy," First Busey stated.
The company also cautioned that Illinois' financial condition "is among the most troubled of any state in the United States, with severe pension underfunding, chronic bill-payment delays and budget gaps."
If the state allows further lapses in payments to universities, health care providers and other vendors, it could have "significant, negative effects on our primary market areas," the company said.
Citing data from the Federal Deposit Insurance Corp., the report said Busey Bank ranked first in deposits in Champaign County and second in Macon, Ford and Shelby counties as of June 30, 2011.
The bank ranked fifth in deposits in McLean County and 10th in deposits in Peoria County.
The annual report also disclosed that real estate mortgages make up 74 percent of Busey Bank's loan portfolio.
Commercial loans make up another 20 percent, and construction loans account for another 5 percent. Other loans, including consumer installment loans, make up the remaining 1 percent.
Total loans decreased by 13 percent in 2011, with the largest declines in retail and commercial real estate, the company said.
First Busey said it intends to "grow loans through relationship banking," implying borrowers will need to have deposits at the bank.