FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 2003
Commission File No. 0-15950 (First Busey Corporation)
Commission File No. 33-30095 (First Busey Corporation Profit Sharing Plan and
Trust)
Commission File No. 33-60402 (First Busey Corporation Employee Stock Ownership
Plan and Trust)
A. Full Title of the plans and the address of the plans, if different from
that of the issuer named before:
FIRST BUSEY CORPORATION PROFIT SHARING PLAN AND TRUST
FIRST BUSEY CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
B. Name of the issuer of the securities held pursuant to the plans and the
address of its principle executive officer:
FIRST BUSEY CORPORATION
201 WEST MAIN STREET
URBANA, IL 61801
FIRST BUSEY CORPORATION
PROFIT SHARING PLAN AND TRUST
FINANCIAL STATEMENTS
December 31, 2003 and 2002
FIRST BUSEY CORPORATION PROFIT SHARING PLAN AND TRUST
Urbana, Illinois
FINANCIAL STATEMENTS
December 31, 2003 and 2002
CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM......................... 1
CONSENT OF INDEPENDENT ACCOUNTANTS.............................................. 2
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS............................ 3
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS.................. 4
NOTES TO FINANCIAL STATEMENTS.............................................. 5
SUPPLEMENTAL SCHEDULE
SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)........... 10
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Profit Sharing Committee and Participants
First Busey Corporation Profit Sharing Plan and Trust
Urbana, Illinois
We have audited the accompanying statement of net assets available for benefits
of First Busey Corporation Profit Sharing Plan and Trust ("the Plan") as of
December 31, 2003, and the related statement of changes in net assets available
for benefits for the year then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the 2003 financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan as
of December 31, 2003, and the changes in net assets available for benefits for
the year then ended in conformity with U.S. generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the basic 2003
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) is presented for the purpose of additional analysis and is not a
required part of the basic financial statements, but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
//Crowe Chizek and Company LLC//
----------------------------------
Crowe Chizek and Company LLC
Oak Brook, Illinois
April 8, 2004
1
[McGLADREY & PULLEN LOGO]
Certified Public Accountants
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 (File No. 33-30095) under the Securities Act of 1933 of First Busey
Corporation of our report dated April 8, 2003 on our audit of the financial
statements of First Busey Corporation Profit Sharing Plan and Trust as of
December 31, 2002, and for the years ended December 31, 2002 and 2001, which is
included in the Annual Report on Form 11-K for the year ended December 31, 2003.
/s/ McGladrey & Pullen, LLP
McGladrey & Pullen, LLP
Champaign, Illinois
June 24, 2004
McGladrey & Pullen, LLP is a member firm of RSM International - an affiliation
of separate and independent legal entities.
2.
FIRST BUSEY CORPORATION PROFIT SHARING PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2003 and 2002
2003 2002
---- ----
ASSETS
Investments (Note 3) $31,683,937 $27,512,602
Receivables
Accrued interest and dividends 28,216 46,210
Participants' contributions 45,877 1,660
----------- -----------
74,093 47,870
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $31,758,030 $27,560,472
=========== ===========
See accompanying notes to financial statements.
3.
FIRST BUSEY CORPORATION PROFIT SHARING PLAN AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2003
ADDITIONS TO NET ASSETS ATTRIBUTED TO
Investment income
Net appreciation in fair value of investments (Note 3) $ 5,151,423
Interest and dividends 624,784
-----------
5,776,207
Contributions:
Employers 880,000
Participants 1,142,234
Participants' contribution rollovers 44,364
-----------
2,066,598
-----------
Total additions 7,842,805
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO
Benefits paid to participants 3,494,174
Administrative expenses 151,073
-----------
Total deductions 3,645,247
-----------
NET INCREASE 4,197,558
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 27,560,472
-----------
End of year $31,758,030
===========
See accompanying notes to financial statements.
4.
FIRST BUSEY CORPORATION PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
NOTE 1 - PLAN DESCRIPTION
The following description of the First Busey Corporation Profit Sharing Plan and
Trust ("the Plan") provides only general information. Participants should refer
to the plan agreement for a more complete description of the Plan's provisions.
General: The Plan is a defined contribution plan covering substantially all
employees of First Busey Corporation and its subsidiaries ("the Employers") who
have attained the minimum age of twenty-one, and have completed one year of
service. It is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
Contributions: Each year, participants may contribute a percentage of their
pretax annual compensation, as defined in the plan, subject to limitations of
the Internal Revenue Code. Participants may also contribute amounts representing
distributions from other qualified plans. Eligible participants may also make
catch-up contributions to the Plan.
The Employers' contributions to the Plan are determined annually by the Board of
Directors. The Employers may make matching contributions to the Plan equal to a
percentage of the first 6% of total compensation that a participant contributes
to the Plan. The Employers may also make profit sharing contributions as
determined by the Board of Directors each year. Contributions are subject to
certain limitations.
Participants direct the investment of the contributions into their account into
the various investment options offered by the Plan, including First Busey
Corporation common stock.
Participant Accounts: Each participant's account is credited with the
participant's contributions and an allocation of the Employers' contributions
and the Plan's earnings and is charged with an allocation of administrative
expenses. Allocations are based on participant earnings, participant
contributions, or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
Vesting: Participants are immediately vested in their voluntary contributions,
the Employers' matching contributions, and the respective plan earnings on those
contributions.
Vesting in the Employers' profit sharing contributions portion of their accounts
is based on years of continuous service. A participant is 100% vested after
seven years of credited service.
A participant is 100% vested upon retirement, death, or disability regardless of
years of service.
(Continued)
5.
FIRST BUSEY CORPORATION PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
NOTE 1 - PLAN DESCRIPTION (Continued)
Participant Loans: Participants may borrow from their fund accounts a minimum of
$1,000 up to a maximum of $50,000 or 50% of their vested account balance,
whichever is less. The loans are secured by the balance in the participant's
account and bear interest at the prime rate. Interest rates are fixed over the
term of the loan. Principal and interest is paid ratably through payroll
deductions.
Payment of Benefits: Upon termination of service, a participant may elect to
receive the value of their vested interest in his or her account either as a
lump-sum amount or as installments over a period not longer than the life
expectancy of the participant.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting: The financial statements of the Plan have been prepared
using the accrual basis of accounting.
Use of Estimates: The preparation of financial statements in conformity with
U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures, and
actual results may differ from those estimates. It is at least reasonably
possible that a significant change may occur in the near term for the estimates
of investment valuation.
Investment Valuation and Income Recognition: The Plan's investments are stated
at fair value. Securities traded on any recognized stock exchange are valued at
the last reported sales price at the valuation date. Securities not listed on an
exchange and securities for which no sale has been reported on that day are
valued at the closing bid price or at fair value as determined by the custodian.
Certificates of deposit and participant loans are valued at cost, which
approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
Payment of Benefits: Benefits are recorded when paid.
Concentration of Credit Risk: At December 31, 2003, approximately 34% of the
Plan's assets were invested in First Busey Corporation common stock.
(Continued)
6.
FIRST BUSEY CORPORATION PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Risks and Uncertainties: The Plan provides for various investment options. The
underlying investment securities are exposed to various risks such as interest
rate, market, and credit risks. Due to the level of risk associated with certain
investment securities and the level of uncertainty related to changes in the
value of investment securities, it is at least reasonably possible that changes
in risks in the near term could materially affect participants' account balances
and the amounts reported in the statement of net assets available for benefits.
NOTE 3 - INVESTMENTS
The following table presents investments that represent 5% or more of the Plan's
net assets at December 31:
2003 2002
---- ----
INVESTMENTS AT FAIR MARKET VALUE
Common and preferred stock:
First Busey Corporation common stock $10,687,680 $ 8,144,216
Shares of mutual funds:
Northern Institutional Small Company Index A 2,621,782 3,598,318
Vanguard Index 500 Admiral Shares 3,628,809 2,821,389
INVESTMENTS AT ESTIMATED FAIR VALUE
Short-term investments:
Certificate of deposit, Busey Bank 2,062,369 2,477,525
During the year ended December 31, 2003, the Plan's investments (including
investments bought, sold and held during the year) appreciated/(depreciated) in
value by $5,151,423 as follows:
Common stocks $ 2,111,852
Preferred stock -
Shares of mutual funds 3,055,700
Corporate bonds, notes, and commercial paper (15,848)
Taxable municipal bonds -
U.S. Treasury and federal agency securities (281)
-----------
$ 5,151,423
===========
(Continued)
7.
FIRST BUSEY CORPORATION PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
NOTE 4 - SHORT-TERM INVESTMENTS
Short-term investments at December 31, 2003 and 2002 include certificates of
deposit at Busey Bank, a subsidiary of First Busey Corporation, with an interest
rate of 1.5% and 1.75%, respectively, and a three-month maturity. These deposits
include approximately $2,000,000 and $2,400,000 that are in excess of federally
insured limits at December 31, 2003 and 2002, respectively.
NOTE 5 - PARTY IN INTEREST TRANSACTIONS
Parties-in-interest are defined under Department of Labor's regulations as any
fiduciary of the plan, any party rendering service to the plan, the employer and
certain others.
The Plan paid fees to the following parties-in-interest for the year ended
December 31, 2003:
2003
----
First Busey Trust & Investment Co. Trustee $ 104,853
Benefit Planning Consultants, Inc. Recordkeeper 38,620
McGladrey & Pullen, LLP Auditor 7,600
The Plan held the following investments with parties-in-interest at December 31:
2003 2002
---- ----
First Busey Corporation Certificate of deposit $ 2,062,369 $ 2,477,525
First Busey Corporation Common stock 10,687,680 8,144,216
Participants Participant loans 239,352 275,717
Certain administrative functions are performed by officers or employees of the
Employers. No such officer or employee receives compensation from the Plan.
(Continued)
8.
FIRST BUSEY CORPORATION PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
NOTE 6 - INCOME TAX STATUS
The Internal Revenue Service has determined and informed First Busey Corporation
by a letter dated August 30, 2001 that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code ("IRC").
Although the Plan has been amended since receiving the determination letter, the
plan administrator believes that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC.
NOTE 7 - PLAN TERMINATION
Although it has not expressed any intent to do so, the Employers have the right
under the Plan to discontinue their contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of the Plan's
termination, participants will become 100% vested in their accounts.
9.
SUPPLEMENTAL SCHEDULE
FIRST BUSEY CORPORATION PROFIT SHARING PLAN AND TRUST
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2003
Name of Plan Sponsor: First Busey Corporation Profit Sharing Plan and Trust
Employer Identification Number: 37-1078406
Three-digit Plan Number: 002
(c)
Description of
(b) Investment
Identity of Issue, Including Maturity Date, (e)
Borrower, Lessor, Rate of Interest, Collateral, (d) Current
(a) or Similar Party Par or Maturity Value Cost Value
--- ---------------- --------------------- ---- -----
COMMON STOCK
Abbott Laboratories Common stock # $ 49,769
Alcoa, Inc. Common stock # 65,892
American International Group Common stock # 77,084
Analog Devices, Inc. Common stock # 43,824
Bank of America Corp. Common stock # 43,110
Bellsouth Corp. Common stock # 15,282
BP PLC Sponsored ADR Common stock # 49,350
Bristol Myers Squibb Co. Common stock # 19,448
Burlington Resources Common stock # 69,225
Cardinal Health, Inc. Common stock # 56,940
Century Tel, Inc. Common stock # 13,864
Cisco Systems, Inc. Common stock # 63,967
Citigroup, Inc. Common stock # 57,035
Darden Restaurants Common stock # 54,767
Disney Common stock # 44,234
DuPont (E.I.) deNemours & Co. Common stock # 39,833
Expiditors International of Wash. Common stock # 43,347
Exxon Mobil Corp Common stock # 58,794
Federal National Mortgage Association Common stock # 50,440
* First Busey Corporation Common stock # 10,687,680
First Data Corp. Common stock # 65,539
General Dynamics Corp. Common stock # 51,974
General Electric Co. Common stock # 58,738
Home Depot Inc. Common stock # 40,743
International Business Machines Common stock # 46,340
Intuit, Inc Common stock # 44,350
Kohl's Corp. Common stock # 57,703
Kroger Co. Common stock # 37,020
(Continued)
10.
FIRST BUSEY CORPORATION PROFIT SHARING PLAN AND TRUST
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2003
Name of Plan Sponsor: First Busey Corporation Profit Sharing Plan and Trust
Employer Identification Number: 37-1078406
Three-digit Plan Number: 002
(c)
Description of
(b) Investment
Identity of Issue, Including Maturity Date, (e)
Borrower, Lessor, Rate of Interest, Collateral, (d) Current
(a) or Similar Party Par or Maturity Value Cost Value
--- ---------------- --------------------- ---- -----
COMMON STOCK
McDonald's Corp. Common stock # $ 51,944
Merck & Co., Inc. Common stock # 31,370
Microsoft Corporation Common stock # 58,024
Nike Inc. C1 'B' Common stock # 42,377
Noble Energy Inc. Common stock # 57,759
Pepsico Common stock # 54,033
Pfizer, Inc. Common stock # 38,863
Procter & Gamble Common stock # 68,318
Royal Dutch Petroleum
1.25 Guilder Shares Common stock # 50,294
Sara Lee Corp Common stock # 51,670
State Street Corp. Common stock # 57,600
Teva Pharmaceutical Ind Ltd ADR Common stock # 56,710
United Technologies Corp. Common stock # 69,372
Wal-Mart Stores, Inc. Common stock # 48,010
Wells Fargo & Co New Common stock # 62,718
Westwood One, Inc. Common stock # 34,210
Wyeth Common stock # 16,001
------------
12,855,565
(Continued)
11.
Name of Plan Sponsor: First Busey Corporation Profit Sharing Plan and Trust
Employer Identification Number: 37-1078406
Three-digit Plan Number: 002
(c)
Description of
(b) Investment
Identity of Issue, Including Maturity Date, (e)
Borrower, Lessor, Rate of Interest, Collateral, (d) Current
(a) or Similar Party Par or Maturity Value Cost Value
--- ---------------- --------------------- ---- -----
MUTUAL FUNDS
ABN AMRO Asset
Management ABN AMRO/Montag & Caldwell
Growth Fund (N) # $ 818,751
American Century American Century International
Growth Investors Fund # 830,729
Dodge & Cox Dodge & Cox Stock Fund # 834,299
Fidelity Investments Fidelity Advisor Equity Growth
(Class I) # 829,536
Fidelity Investments Fidelity Advisor Small Cap
(Class I) # 91,275
Franklin Templeton
Investments Mutual Shares Fund (Class Z) # 852,090
JPMorgan Fleming Asset
Management JPMorgan Fleming Emerging
Markets Equity Select Fund # 81,849
Northern Trust Northern Institutional
Intermediate Bond Fund (A) # 617,183
Northern Trust Northern Institutional Small
Company Index (A) # 2,621,782
Pacific Investment
Management Company PIMCO GNMA Institutional Fund # 199,275
Rainier Investment
Management Rainier Core Equity Portfolio # 830,516
Scudder Kemper Investments Scudder International Fund
(Class S) # 803,693
T. Rowe Price T. Rowe Price Mid Cap Growth # 849,855
Vanguard Vanguard Index 500 Admiral Shares # 3,628,809
Vanguard Vanguard Inflation Protected Secs # 621,017
------------
14,510,659
(Continued)
12.
Name of Plan Sponsor: First Busey Corporation Profit Sharing Plan and Trust
Employer Identification Number: 37-1078406
Three-digit Plan Number: 002
(c)
Description of
(b) Investment
Identity of Issue, Including Maturity Date, (e)
Borrower, Lessor, Rate of Interest, Collateral, (d) Current
(a) or Similar Party Par or Maturity Value Cost Value
--- ---------------- --------------------- ---- -----
CORPORATE BONDS, NOTES,
AND COMMERCIAL PAPER
Abbey National PLC Medium Term $50,000, 6.69%, due 10/17/05 # $ 54,075
Abbott Labs $30,000, 5.125%, due 7/1/04 # 30,559
AIG SunAmerica Global Finance $50,000, 5.85%, due 8/1/08 # 54,483
Bank One Corp. Notes $50,000, 6.875%, due 8/1/06 # 55,292
Chemical Bank $50,000, 6.625%, due 8/15/05 # 53,416
Federal Home Loan Banks $50,000, 3.25%, due 8/15/05 # 51,234
Ford Motor Credit Corp. $50,000, 6.125%, due 1/9/06 # 51,958
Goldman Sachs Group Inc. $50,000, 7.625%, due 8/17/05 # 54,648
Household Finance Corp. $50,000, 5.875%, due 9/25/04 # 51,627
Loews Corp. $150,000, 6.750%, due 12/15/06 # 162,314
Merrill Lynch & Co. Inc. $100,000, 6.55%, due 8/1/04 # 102,979
Merrill Lynch & Co. Inc. $50,000, 6%, due 11/15/04 # 51,946
Merrill Lynch & Co. Inc. $50,000, 6%, due 7/15/05 # 53,502
Morgan Stanley Dean Witter $50,000, 6.875%, due 3/1/07 # 56,264
NationsBank Corp. $50,000, 6.125%, due 7/15/04 # 51,254
NationsBank Corp. $75,000, 6.375%, due 2/15/08 # 83,097
------------
1,018,648
SHORT-TERM INVESTMENTS
* Busey Bank Certificate of deposit, 1.5%,
due March 31, 2004 # 2,062,369
Northern Trust Northern Institutional
Governmental Portfolio # 997,344
------------
3,059,713
NOTES RECEIVABLE PARTICIPANTS
* Participant loans Interest rates ranging from
4.25% to 9.5% 239,352
------------
$ 31,683,937
============
* Represents party-in-interest transaction.
# Investments are participant-directed; therefore, cost information is not
disclosed.
13.
FIRST BUSEY CORPORATION
EMPLOYEES' STOCK OWNERSHIP PLAN
FINANCIAL STATEMENTS
December 31, 2003 and 2002
14.
FIRST BUSEY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
Urbana, Illinois
FINANCIAL STATEMENTS
December 31, 2003 and 2002
CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM......................... 16
CONSENT OF INDEPENDENT ACCOUNTANTS.............................................. 17
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS............................ 18
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS.................. 19
NOTES TO FINANCIAL STATEMENTS.............................................. 20
SUPPLEMENTAL SCHEDULES
SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)........... 27
SCHEDULE H, LINE 4(j) - SCHEDULE OF REPORTABLE TRANSACTIONS................ 28
15.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Administrative Committee and Participants
First Busey Corporation Employees' Stock Ownership Plan
Urbana, Illinois
We have audited the accompanying statement of net assets available for benefits
of the First Busey Corporation Employees' Stock Ownership Plan ("the Plan") as
of December 31, 2003, and the related statement of changes in net assets
available for benefits for the year then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2003, and the changes in net assets available for benefits for the
year then ended in conformity with U.S. generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) and schedule of reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements, but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
//Crowe Chizek and Company LLC//
-----------------------------------
Crowe Chizek and Company LLC
Oak Brook, Illinois
April 6, 2004
16.
[McGLADREY & PULLEN LOGO]
Certified Public Accountants
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 (File No. 33-60402) under the Securities Act of 1933 of First Busey
Corporation of our report dated April 8, 2003 on our audit of the financial
statements of First Busey Corporation Employee Stock Ownership Plan as of
December 31, 2002, and for the years ended December 31, 2002 and 2001, which is
included in the Annual Report on Form 11-K for the year ended December 31, 2003.
/s/ McGladrey & Pullen, LLP
McGladrey & Pullen, LLP
Champaign, Illinois
June 24, 2004
McGladrey & Pullen, LLP is a member firm of RSM International - an affiliation
of separate and independent legal entities.
17.
FIRST BUSEY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2003 and 2002
2003 2002
---- ----
Allocated Unallocated Total Allocated Unallocated Total
--------- ----------- ----- --------- ----------- -----
ASSETS
Investment in First Busey Corporation
common stock, at fair value (Note 5) $20,839,194 $ 3,132,000 $23,971,194 $17,940,772 $ 1,798,680 $19,739,452
Money market fund 2,826 - 2,826 - - -
----------- ----------- ----------- ----------- ----------- -----------
Total investments 20,842,020 3,132,000 23,974,020 17,940,772 1,798,680 19,739,452
RECEIVABLES
Accrued interest receivable 27 - 27 24 - 24
Employer contributions receivable - - - 27 - 27
----------- ----------- ----------- ----------- ----------- -----------
27 - 27 51 - 51
----------- ----------- ----------- ----------- ----------- -----------
Total assets 20,842,047 3,132,000 23,974,047 17,940,823 1,798,680 19,739,503
LIABILITIES
Notes payable (Note 6) - 2,853,500 2,853,500 - 1,759,000 1,759,000
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $20,842,047 $ 278,500 $21,120,547 $17,940,823 $ 39,680 $17,980,503
=========== =========== =========== =========== =========== ===========
See accompanying notes to financial statements.
18.
FIRST BUSEY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2003
Allocated Unallocated Total
--------- ----------- -----
Investment income:
Net unrealized appreciation in market
value of investments $ 3,022,441 $ 301,271 $ 3,323,712
Interest 174 - 174
Dividends 522,945 53,040 575,985
Employer contributions 57,998 262,000 319,998
Allocation of 12,000 shares of First Busey Corporation
common stock, at market value 324,000 - 324,000
----------- ----------- -----------
3,927,558 616,311 4,543,869
Interest expense - 53,491 53,491
Administrative expenses 54,307 - 54,307
Distributions to participants:
Cash 949 - 949
Stock (18,182 shares) 448,471 - 448,471
Dividend distributions to participants 522,607 - 522,607
Allocation of 12,000 shares of First Busey Corporation
common stock, at market value - 324,000 324,000
----------- ----------- -----------
1,026,334 377,491 1,403,825
Net increase 2,901,224 238,820 3,140,044
Net assets available for benefits:
Beginning of year 17,940,823 39,680 17,980,503
----------- ----------- -----------
End of year $20,842,047 $ 278,500 $21,120,547
=========== =========== ===========
See accompanying notes to financial statements.
19.
FIRST BUSEY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
NOTE 1 - PLAN DESCRIPTION AND BASIS OF PRESENTATION
The following brief description of the First Busey Corporation Employees' Stock
Ownership Plan (the Plan) is provided for general information purposes only.
Participants should refer to the Plan Agreement for complete information.
General: First Busey Corporation (the Corporation) established the Plan
effective as of January 1, 1984. The Plan operates as a leveraged employee stock
ownership plan (ESOP), and is designed to comply with Section 4975(e)(7) and the
regulations thereunder of the Internal Revenue Code of 1986, as amended (the
Code), and is subject to the applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended (ERISA). The Plan is administered by the
Corporation. First Busey Trust & Investment Co., a subsidiary of the
Corporation, is the Plan's Trustee.
The Plan purchased Corporation common shares using the proceeds of bank
borrowings (see Note 6) guaranteed by the Corporation, and holds the stock in a
trust established under the Plan. The borrowings are to be repaid over a five to
ten year period by fully deductible Corporation contributions to the trust fund.
As the Plan makes each payment of principal, an appropriate percentage of stock
will be allocated to eligible employees' accounts in accordance with applicable
regulations under the Code.
The bank borrowings are collateralized by the unallocated shares of stock and
are guaranteed by the Corporation. The lender has no rights against shares once
they are allocated under the ESOP. Accordingly, the financial statements of the
Plan present separately the assets and liabilities and changes therein
pertaining to the accounts of employees with vested rights in allocated stock
(Allocated) and stock not yet allocated to employees (Unallocated).
Eligibility: Employees of the Corporation and its participating subsidiaries are
generally eligible to participate in the Plan after attaining the minimum age of
twenty-one and after one year of service providing they worked at least 1,000
hours during such Plan year. Participants who do not have at least 1,000 hours
of service during such Plan year or are not employed on the last working day of
a Plan year are generally not eligible for an allocation of Corporation
contributions for such year.
Payment of Benefits: No distributions from the Plan will be made until a
participant retires, dies (in which case, payment shall be made to his or her
beneficiary or, if none, his or her legal representatives), or otherwise
terminates employment with the Corporation and its participating subsidiaries.
Distributions are made in the form of Corporation common stock plus cash for any
fractional share.
(Continued)
20.
FIRST BUSEY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
NOTE 1 - PLAN DESCRIPTION AND BASIS OF PRESENTATION (Continued)
Voting Rights: Each participant is entitled to exercise voting rights
attributable to the shares allocated to his or her account and is notified by
the Trustee prior to the time that such rights are to be exercised. If the
Trustee does not timely receive voting directions from a Participant, the
Trustee votes in the same proportions as the participants voted the allocated
shares. The Trustee is required, however, to vote any unallocated shares on
behalf of the collective best interests of Plan participants and beneficiaries.
Termination: The Corporation reserves the right to terminate the Plan at any
time, subject to Plan provisions. Upon such termination of the Plan, the
interest of each participant in the trust fund will be distributed to such
participant or his or her beneficiary at the time prescribed by the Plan, and
the Code. Upon termination of the Plan, the Corporation shall direct the Trustee
to pay all liabilities and expenses of the trust fund and to sell shares of
financed stock held in the loan suspense account to the extent it determines
such sale to be necessary in order to repay the loan. In the event of plan
termination, participants would become 100 percent vested in their accounts.
PARTICIPANTS' ACCOUNTS: THE PLAN IS A DEFINED CONTRIBUTION PLAN UNDER WHICH A
SEPARATE INDIVIDUAL ACCOUNT IS ESTABLISHED FOR EACH PARTICIPANT. EACH
PARTICIPANT'S ACCOUNT IS CREDITED AS OF THE LAST DAY OF THE PLAN YEAR WITH AN
ALLOCATION OF SHARES OF THE CORPORATION'S COMMON STOCK RELEASED BY THE TRUSTEE
FROM THE UNALLOCATED ACCOUNT AND FORFEITURES OF TERMINATED PARTICIPANTS'
NONVESTED ACCOUNTS. ONLY THOSE PARTICIPANTS WHO ARE ELIGIBLE EMPLOYEES OF THE
CORPORATION AS OF THE LAST DAY OF THE PLAN YEAR WILL RECEIVE AN ALLOCATION.
ALLOCATIONS OF COMMON STOCK ARE BASED ON THE ELIGIBLE COMPENSATION OF EACH
PARTICIPANT RELATIVE TO TOTAL ELIGIBLE COMPENSATION.
Vesting: Vesting in the participants' accounts is based on years of service with
the Corporation and its subsidiaries. A participant is 100 percent vested after
seven years of credited service.
Diversification: Diversification is offered to participants close to retirement
age so that they may have the opportunity to move part of the value of their
investment in Corporation stock into investments which are more diversified.
Participants who are at least age 55 with at least 10 years of participation in
the Plan may elect to diversify a portion of their account. Diversification is
offered to each eligible participant over a six-year period. In each of the
first five years, a participant may diversify up to 25 percent of the number of
post-1986 shares allocated to his or her account, less any shares previously
diversified. In the sixth year, the percentage changes to 50 percent.
Participants who elect to diversify may receive distributions in the form of
Corporation common stock plus cash for any fractional share, receive a cash
distribution or contribute cash from the sale of Corporation common stock to
another qualified defined contribution plan.
(Continued)
21.
FIRST BUSEY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
NOTE 1 - PLAN DESCRIPTION AND BASIS OF PRESENTATION (Continued)
Dividends: Dividends on common stock allocated to participants' accounts are
distributed directly to the participant so that the dividends result in income
tax deductions for the Corporation.
Dividends on common stock not allocated to participants' accounts are used by
the Plan to pay interest and administrative expenses.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting: The financial statements of the Plan are prepared using the
accrual basis of accounting.
Use of Estimates: The preparation of financial statements in conformity with
U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures, and
actual results may differ from those estimates. It is at least reasonably
possible that a significant change may occur in the near term to the estimates
of investment valuation.
Investment Valuation and Income Recognition: The common stock of the Corporation
is valued at fair value on December 31, 2003 and 2002. The Corporation's common
stock is traded on the NASDAQ Exchange. Fair value of the common stock is
determined by quoted market prices.
Dividend income is accrued on the ex-dividend date.
Purchases and sales of securities are recorded on a trade-date basis. Realized
gains and losses from security transactions are reported on the specific
identification cost method.
Risks and Uncertainties: The Plan invests in common stock of the Corporation.
These securities are exposed to various risks, such as interest rate, market and
credit risks. Due to the level of risk associated with investment securities and
the level of uncertainty related to changes in the value of investment
securities, it is at least reasonably possible that changes in risks in the near
term could materially affect participants' account balances and the amounts
reported in the statement of net assets available for benefits.
(Continued)
22.
FIRST BUSEY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
NOTE 3 - CONTRIBUTIONS
The Corporation is obligated to make contributions in cash to the Plan which,
when aggregated with the Plan's dividends and interest earnings, are equal to
the amount necessary to enable the Plan to make its regularly scheduled payments
of principal and interest due on its term loans.
The Corporation may also make discretionary contributions in cash to the Plan.
The Corporation made a discretionary contribution of $57,998 for the Plan year
ended December 31, 2003. Participant contributions to the Plan are not permitted
under the terms of the Plan.
NOTE 4 - ADMINISTRATION OF PLAN ASSETS
The Plan's assets, which consist principally of First Busey Corporation common
stock, are held by the Trustee of the Plan.
Company contributions are held and managed by the Trustee, which invests cash
received, interest, and dividend income and makes distributions to participants.
The Trustee also administers the payment of interest and principal on the loans,
which are reimbursed to the Trustee through contributions as determined by the
Corporation.
Certain administrative functions are performed by officers or employees of the
Corporation or its subsidiaries. No such officer or employee receives
compensation from the Plan. Administrative expenses for the Trustee's fees are
paid directly by the Plan.
NOTE 5 - INVESTMENTS
The Plan's investments consist solely of First Busey Corporation common stock as
follows:
2003 2002
---- ----
Allocated Unallocated Allocated Unallocated
--------- ----------- --------- -----------
Number of shares 771,822 116,000 778,004 78,000
=========== =========== =========== ===========
Cost $ 4,221,693 $ 2,381,900 $ 4,240,122 $ 425,100
=========== =========== =========== ===========
Fair value $20,839,194 $ 3,132,000 $17,940,772 $ 1,798,680
=========== =========== =========== ===========
(Continued)
23.
FIRST BUSEY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
NOTE 6 - NOTES PAYABLE
Notes payable consist of:
2003 2002
---- ----
Bank One, principal payment of $25,000 due annually on December 15, final
payment due December 15, 2006. $ 75,000 $ 100,000
Bank One, principal payment of $237,000 due annually on December 15,
final payment due December 15, 2009. 1,422,000 1,659,000
Bank One, principal payment of $135,650 due annually on December 31,
beginning in 2004, final payment due December 15, 2013. 1,356,500 -
---------- ----------
$2,853,500 $1,759,000
========== ==========
Shares of First Busey Corporation common stock secured as collateral. 116,000 78,000
========== ==========
As of December 31, 2003, the interest rates on the above notes payable are at
one year LIBOR plus 1.40%. The effective rate was 2.85% at December 31, 2003 and
3.6875% at December 31, 2002. Interest on the above notes is paid quarterly.
As of December 31, 2003, the scheduled maturities of the notes payable are as
follows:
2004 $ 397,650
2005 397,650
2006 397,650
2007 372,650
2008 372,650
Thereafter 915,250
----------
$2,853,500
==========
NOTE 7 - TAX STATUS
The Internal Revenue Service has determined and informed First Busey Corporation
by a letter dated May 15, 2003, that the Plan is qualified and the trust
established under the Plan is tax-exempt, under the appropriate sections of the
Code. The Plan has been amended since receiving the determination letter.
However, the Plan administrator believes that the Plan is currently designed and
is being operated in compliance with the applicable requirements of the Code.
Therefore, the Plan administrator believes that the Plan was qualified and the
related trust was tax-exempt as of the financial statement date.
(Continued)
24.
FIRST BUSEY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2003 and 2002
NOTE 8 - PARTY IN INTEREST TRANSACTIONS
Parties-in-interest are defined under Department of Labor's regulations as any
fiduciary of the plan, any party rendering service to the plan, the Corporation
and certain others. The Plan holds Corporation stock as assets, which qualifies
as a party-in-interest investment.
The Plan paid fees to the following parties-in-interest for the years ended
December 31, 2003:
First Busey Trust & Investment Co. Trustee $ 30,000
Benefit Planning Consultants, Inc. Recordkeeper 16,601
McGladrey & Pullen, LLP Auditor 7,000
25.
SUPPLEMENTAL SCHEDULES
26.
FIRST BUSEY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2003
Name of Plan Sponsor: First Busey Corporation Employees' Stock Ownership Plan
Employer Identification Number: 37-1078406
Three-Digit Plan Number: 001
(c)
Description of
Investment Including
Maturity Date,
(b) Rate of Interest, (e)
Identity of Issue, Borrower, Collateral, Par or (d) Fair
(a) or Similar Party Maturity Value Cost Value
--- ---------------- -------------- ---- -----
* First Busey Corporation Common Stock $ 6,603,593 $ 23,971,194
* - Represents a party-in-interest investment
27.
FIRST BUSEY CORPORATION EMPLOYEES' STOCK OWNERSHIP PLAN
SCHEDULE H, LINE 4(j) - SCHEDULE OF REPORTABLE TRANSACTIONS
December 31, 2003
Name of Plan Sponsor: First Busey Corporation Employees' Stock Ownership Plan
Employer Identification Number: 37-1078406
Three-Digit Plan Number: 001
(f) (h)
(a) Expense Current Value
Identity of (c) (d) (e) Incurred (g) of Asset on (i)
Party (b) Purchase Selling Lease With Cost Transaction Net Gain
Involved Description of Asset Price Price Rental Transaction of Asset Date (Loss)
-------- -------------------- ----- ----- ------ ----------- -------- ---- ------
First Busey
Corporation
(1 transaction) Common Stock $ 1,356,500 $ - $ - $ - $ 1,356,500 $ 1,356,500 $ -
First Busey
Corporation
(55 transactions) Common Stock $ - $ 448,471 $ - $ - $ 46,544 $ 448,471 $ 401,927
28.
SIGNATURES
The Plan, pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
/s/ Jama R. Grotelueschen
--------------------------------------
First Busey Corporation Profit Sharing
Plan and Trust
The Plan, pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
/s/ Jama R. Grotelueschen
--------------------------------------
First Busey Corporation Employee Stock
Ownership Plan
29.
Exhibits
23.1 Consent of Independent Public Accountants - First Busey Profit Sharing Plan
and Trust
23.2 Consent of Independent Public Accountants - First Busey Employee Stock
Ownership Plan
99.1 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes -Oxley Act of 2002 from the Plan Administrator
99.2 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes - Oxley Act of 2002 from the Plan Administrator
30.