FIRST BUSEY CORP /NV/ (BUSE) stock intrinsic value fair value estimate & owner earnings analysis

First Busey is a commercial bank holding company with about $18.2 billion of assets, $15.1 billion of deposits and $13.6 billion of loans. In March 2025 it roughly doubled in size by acquiring CrossFirst Bankshares, adding Kansas, Texas, Colorado, Oklahoma and Arizona to its long-standing Illinois, Missouri, Indiana and Florida base. The loan book is 41% commercial real estate, 8% construction, 31% commercial and industrial and 20% consumer and residential. It also carries $222.75 million of 8.25% non-cumulative preferred stock, whose dividends (about $18 million a year) come out of earnings before we count anything as belonging to common shareholders. HOW WE MEASURED EARNINGS. For a bank, interest paid to depositors is a cost of doing business, so we value profit left for common shareholders after interest, after preferred dividends and after deducting the cost of stock paid to employees. On that basis the record is $1.35 per share in 2016, $1.39 in 2017, $1.93 in 2018, $1.79 in 2019, $1.70 in 2020, $2.06 in 2021, $2.13 in 2022, $2.06 in 2023 and $1.84 in 2024. 2025 shows $1.27, but that year absorbed $54.6 million of acquisition and restructuring costs, a $45.6 million one-time loan-loss charge on the acquired portfolio and accelerated stock compensation; it is not the normal earning power. The combined bank began earning in its present form in March 2025, so we measure it only from the quarters after the deal: the second half of 2025 produced about $108 million for common shareholders before stock compensation, the first half of 2026 about $104 million, and the second quarter of 2026 alone about $58.6 million as operating expenses fell from $127.8 million to $112.6 million a quarter while net interest income held near $152 million. The second quarter also had an unusually light $2.2 million loan-loss provision, so we do not annualize it. We put normal earning power at about $2.30 per share (roughly $195 million after preferred dividends and stock compensation on about 84 million shares), assuming loan losses at a normal 0.2% to 0.25% of loans. Roughly $20.9 million of 2025 earnings came from purchase-accounting accretion on acquired loans; that is small enough not to distort the level and fades by design. No interest-bearing debt is subtracted because borrowing and deposits are the raw material of the business and interest is already charged; the only debt-like items, $99.6 million of subordinated notes and a trust preferred issue slated for redemption in June 2026, are small. GROWTH. The last full year (2025) fell 31% from 2024 because of the merger charges above, so there is no trailing growth to extend. Year one of the base case therefore assumes zero growth from the $2.30 level, and the return to that level after the one-time charges is not counted as growth. After that we credit only retention-driven growth: Busey pays about $0.96 per share in dividends, keeps roughly $1.30 a year, and has repurchased shares from its own cash ($69.9 million in 2025 and $129.9 million in the first half of 2026). We credit 2% a year for years 2 to 5 and 1% for years 6 to 10, below the demonstrated pace, and nothing beyond. Left out: further cost savings beyond what the second quarter already shows, margin expansion, new markets, share gains in Kansas, Texas and Colorado, and any further acquisitions. After year 10 earnings are held flat, because the deposit franchise (Busey Bank dates to 1868) and a profit in every year from 2016 through 2025, including 2020, are the only things we can evidence continuing. BEAR CASE, about $25.25 per share. A full credit cycle like 2008 to 2011 arrives in years 3 to 6. The book is 49% commercial real estate and construction, the categories that lost most then: peak annual losses of roughly 2.2% on commercial real estate, 5% on construction, 1.8% on commercial and industrial and 1.5% on consumer loans blend to about 2.1% of loans at the worst point. Over four years that is about 5% above normal, or roughly $680 million before tax and $6.2 per share after tax, enough to push earnings to about minus $0.20 and minus $0.10 per share in the two worst years. Earnings then recover only to $1.50 to $1.70, permanently below today because capital has been consumed and deposit costs stay elevated, and $1.70 is held thereafter. Beginning earnings are also cut to $2.15 and $2.10 in the first two years as acquisition accretion and expense savings erode. Capital of 12.4% common equity (about $1.9 billion) absorbs the losses without a raise, but the dividend would be cut and buybacks would stop; 43% of deposits ($6.5 billion) are uninsured, which is the structural weak point in a stressed year. The bank owes no debt that needs separate deduction, so the business is worth about $25.25 and the owners' share is the same. That is above tangible book value of about $20 per share because tangible book stays near $20 even at the trough in this path: pre-loss earnings of roughly $2 a year continue to accumulate, and the franchise has not had a loss year in the last decade. BASE CASE, about $41.80 per share. Earnings start at $2.30, are flat in year one, grow 2% a year for four years, then 1% a year. We include one moderate downturn in year 5 (earnings down 25%, then 10% the following year), larger than anything Busey posted since 2010 (down 11% in 2024 and 5% in 2020), because a ten-year median path for a commercial-real-estate-heavy lender will almost certainly include one. Earnings then recover to about $2.54 and are held flat. On that story the business is worth about $41.80 per share with nothing to subtract for borrowings. BULL CASE, about $53.80 per share. The second-quarter expense reduction and light credit costs persist, giving $2.55 in year one, and earnings grow 3.5% a year for nine years as the company's own buyback pace (about 5% of shares in the last 18 months, from its own cash) and retained earnings compound, with only a mild year-5 dip of 8%. Earnings are held flat after year 10 at about $3.48. This relies on named, observed levers (the expense run rate and the repurchase record) and not on market conditions or new acquisitions. WHAT CHANGED SINCE THE LAST REVIEW. The first half of 2026 confirmed the post-merger level: two quarters of results near $2.30 to $2.75 per share annualized, operating expenses down 12% from a year earlier, problem assets low (non-performing assets 0.32% of total assets at year-end), and shares outstanding down to 83.2 million from 87.6 million. Our earlier figures of $18.50, $32.50 and $42 used a shorter view of how long earnings persist and are not comparable to these. HOW SURE WE ARE, AND THE MARGIN-OF-SAFETY PRICE. We are fairly confident the earnings level is $2.20 to $2.40, because the four quarters since closing line up (about $54 million a quarter for common shareholders after the one-time costs fell away), but the second quarter had the lightest provision and net interest income has been flat year over year. The worst plausible outcomes are a commercial real estate downturn combined with a funding scare on the $6.5 billion of uninsured deposits; the structure survives both because capital is strong, borrowings are small and the preferred dividend is non-cumulative, but the share price would fall hard along the way, and the 2025 charge-offs ($55.9 million, 0.44% of loans, including $36.2 million on acquired loans) show the acquired book is not yet fully proven. If we are wrong about the earnings level by 15% (about $1.95) and the cycle arrives early, value falls to the low $30s in the base story and the bear case governs. The price assumes a three-to-five-year holding period, during which the dividend pays about $0.96 per share. The margin-of-safety price is $16.50 per share, a level below tangible book value that stays below the book value the bear path ends with. From that price the dividend alone is almost 6% a year, retained earnings of roughly $1.30 a year add to book value, and a mid-cycle recovery in the share price toward book value would complete the 20% annual target even if earnings only match the bear case's first two years. UNRECONCILED ITEMS. We worked from the 2025 annual filing and the structured second-quarter 2026 data; the full second-quarter text was not available, so quarterly provisions and expense detail are taken from the reported totals and the split of the $54.6 million 2025 merger charges by quarter could not be fully traced.