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Thursday - Stephens analysts have adjusted the price target for First Busey Corporation (NASDAQ:BUSE) shares, decreasing it to $26.00 from the previous $29.00, while keeping an Equal Weight rating on the stock. The revision follows the company’s fourth-quarter results, which saw higher-than-expected fee income. Wealth management fees climbed by 22.4% year-over-year to $16.8 million, surpassing the forecasted $15.6 million. With a market capitalization of $1.36 billion and an attractive dividend yield of 4.19%, First Busey has maintained dividend payments for 37 consecutive years, according to InvestingPro. Despite subdued loan growth during the last quarter leading to a slight miss in the net interest margin (NIM), deposit trends showed positive signs, with a 1.75% average cost of total deposits in the fourth quarter of 2024.
The Federal Reserve has given the green light to Busey’s pending merger with CrossFirst, which was approved on January 17, 2025, 143 days after the announcement. The merger is anticipated to conclude by March 1, 2025. Analysts have expressed confidence in Busey’s proven ability to integrate acquisitions, particularly highlighting the technical aspects of the conversion set for late June. InvestingPro data shows the company maintains a GOOD financial health score, suggesting strong positioning for the merger integration.
Investors have shown some caution regarding the merger, noting potential challenges in reconciling differing credit and pricing cultures between the two entities. This cautious stance is expected to persist for a few quarters until these issues are resolved. Post-merger, share repurchase activities could serve as a catalyst for the stock, especially if Busey’s shares continue to trade at a discount compared to its peers. Trading at a P/E ratio of 11.84 and below its Fair Value according to InvestingPro’s analysis, the stock appears undervalued, with analysts maintaining price targets ranging from $25 to $33.
In other recent news, First Busey Corporation has seen a series of significant developments. DA Davidson recently adjusted its outlook on First Busey, lowering the price target from $28.00 to $25.00, while maintaining a neutral rating. This follows several less favorable trends observed in the fourth quarter of 2024, including a decrease in Net Interest Margin, loan runoff, and an increase in non-performing assets. However, there is an expectation of improvement on each front early in 2025, partly due to the upcoming completion of the acquisition of CrossFirst Bankshares (NASDAQ:CFB) in early March.
Further, First Busey’s financial stability is highlighted by its recent decision to raise its quarterly cash dividend by 4.2% to $0.25 per share. This move suggests a firm financial footing and anticipates positive impacts on the company’s financial results. DA Davidson’s analysis also noted First Busey’s solid asset quality trends, which allowed for a reduction in provision expenses, compensating for stagnant spread income figures.
Lastly, the company is expected to gain momentum in 2025, according to DA Davidson, with fee income diversity contributing positively to the company’s financials. However, the firm has adjusted its earnings per share estimate for 2025 downward, citing lower loan balances at the beginning of the year. These are among the recent developments shaping First Busey Corporation’s financial landscape.
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