FIRST BUSEY CORPORATION (BUSE): what the price requires

At today's price, FIRST BUSEY CORPORATION (BUSE) is priced for 9.6% return on equity. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/BUSE

Headline

FieldValue
TickerBUSE
CompanyFIRST BUSEY CORPORATION
Current price$29.34/sh
CompositionBanking 87% / Wealth Management 10% / FirsTech 3%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisfinancials
Return on equity needed9.6%
Return on equity now5.1%
ROE gap+4.5pp
Price-to-book1.03x

Solve inputs: computed at a 9.5% cost of equity with 4% terminal growth over a 5-year stage, on common book equity (FY2026); each 1pp of cost of equity moves the implied ROE ~1pp.

How unusual the bet is: within-range

ReferenceValue
vs own history+0.99σ
cohort percentile (of 119 peers)9
sustained it ~10 years at this level77%
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset1.11x3expensive
Earnings0.75x2justifies
Relative0.34x3justifies
Growth0.67x3justifies

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.9%); the inversion above states its own rate.

Per-Model Detail (n=11)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
Bank Fair Value (P/TBV)—$19.161.53xyesTBVPS $22.06 × 0.87x (ROE (TTM) 8.9% / CoE 9.3%, g=5.0% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption), credit 1.27% allowance/loans → ×0.94)
Relative ValuationRelative$29.401.00xyesP/E 10x (static sector reference · 2026-04), scenarios: 8.0x / 10.0x / 12.0x (bear / base = reference held flat / bull), EV/EBITDA N/Ax
Simple DDMGrowth$408.420.07xyesDPS $1.24, g=8.9% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3%
Two-Stage DDMGrowth$43.930.67xyesStage 1: 20% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$26.491.11xyesBV/sh $27.47, ROE (TTM) 8.9%, ke 9.3%
Two-Stage Excess ReturnAsset$26.021.13xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$22.811.29xyesRev $0.8B, growth 30% (input: historical growth; tapered), Terminal P/S: 2.6x / 3.3x / 3.9x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair ValueRelative$85.050.34xyesEPS $2.43, growth 35% (input: historical EPS growth), PEG=0.34 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset——no—
Graham NumberAsset$38.760.76xyes√(22.5 × EPS $2.43 × BVPS $27.47) — Graham's conservative floor
EV/EBITDA RelativeRelative——no—
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$78.410.37xyesEPS $2.43 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative——no—
PEG Fair ValueRelative$91.120.32xyesEPS $2.43 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$26.271.12xyesEPS $2.43 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Share count CAGR (dilution)11.8%

Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).

Bullet Takeaways

At about $28, First Busey trades near 1 times book value, which for a bank inverts into an assumption that it sustains a return on equity around 9.5%. That is within reach of its history and would be a step up from the depressed returns of the last year, which were weighed down by merger costs that are now clearing.

The transformative event is the CrossFirst acquisition, completed in early 2025. It roughly doubled the franchise and dragged reported earnings through integration charges, but the first quarter of 2026 showed the turn: adjusted EPS of $0.67, a net interest margin of 3.77%, and acquisition expenses falling sharply.

The valuation is supported across the board. The asset-based, earnings-power, relative-multiple, and growth-DCF methods all land at or above the price, and the bank pays a roughly 4.2% dividend yield it just raised. The risks are the usual bank risks: interest rates, credit quality, and commercial real estate exposure.

Bull Case

Start with the competitive moat, because for a bank the moat is the deposit franchise and the fee businesses bolted onto it. First Busey is not a pure spread lender. The 10-K describes a three-part business: a community bank funded by deposits, a full-service Wealth Management arm, and FirsTech, a payments-technology operation, where the bank earns "technology solutions revenue" alongside traditional net interest income (FY2025 10-K, accession 0000314489-26-000013). Wealth Management and payments are fee businesses that do not consume balance-sheet capital and do not rise and fall with the rate cycle the way pure lending does. That diversification is a real structural advantage: it gives Busey a more stable, higher-quality revenue mix than a plain community bank, and the wealth and payments fees help fund the franchise through rate cycles.

The numbers behind the moat are turning the right way after the merger. First Busey completed its acquisition of CrossFirst Bankshares in early 2025, a transformative deal that roughly doubled the franchise and extended it into faster-growing Sun Belt markets. The integration dragged reported earnings through 2025, but the first quarter of 2026 showed the payoff: adjusted net income of $58.6 million, or $0.67 per diluted share, a net interest margin that expanded to 3.77%, and an efficiency ratio improving to 54.8% from 58.7% a year earlier as synergies landed and acquisition expenses fell from $71.6 million to about $5.2 million. Credit quality is pristine, with nonperforming assets at just 0.28%, and capital is strong with a CET1 ratio of 12.31% even after $65.6 million of buybacks.

The valuation and the income round out the case. At about $28 the price is roughly 1 times book value, which implies a sustained return on equity around 9.5%, within reach of what the combined bank can earn now that the merger drag is clearing. Every valuation family, asset, earnings-power, relative, and growth-DCF, lands at or above the price, and the excess-return methods anchored in the bank's book value and returns sit just above the quote. The bank pays a dividend of about $1.04 a year, recently raised 4%, for a yield near 4.2%, and is buying back stock. A diversified community bank trading around book, with a clean credit book, strong capital, a rising dividend, and merger synergies still flowing through, is the kind of value-and-income setup the supportive methods are pointing at.

Bear Case

The structural fragility for any bank lives in the balance sheet, and First Busey's centers on the loan book and the rate environment. A bank earns its spread by funding loans with deposits, and that spread is exposed on both sides. On the asset side, the 10-K is candid that commercial loans carry real uncertainty: collateral "may depreciate over time, be difficult to accurately value, or fluctuate in response to changes in the borrower's financial condition," and borrowers under "financial stress, cash flow constraints, or operational disruptions" may not repay (FY2025 10-K, accession 0000314489-26-000013). Credit quality looks excellent today at 0.28% nonperforming assets, but credit is a lagging indicator: it looks best right before a cycle turns, and a commercial-real-estate or regional-economic downturn would test the combined book the merger created. The price assumes a sustained 9.5% return on equity; a credit cycle would pull that down fast.

The rate side is the other half of the fragility. Net interest margin of 3.77% is healthy now, but it depends on the gap between what the bank earns on loans and pays on deposits. If short rates fall, asset yields can reprice down faster than the bank can cut deposit costs, squeezing the margin; if rates stay high, deposit competition raises funding costs and pressures the spread from the other direction. The 2023 regional-bank stress showed how quickly deposit flight and unrealized securities losses can threaten even well-run community banks, and Busey is not immune to a confidence shock in the regional-bank space regardless of its own fundamentals.

Then there is the merger-integration risk and the modest upside in the price. The CrossFirst deal roughly doubled the company, and integrating two banks, systems, cultures, and loan books, is where many acquisitive banks stumble. The first quarter showed synergies landing, but salaries and benefits were still elevated as the company executed on additional cost cuts, and a misjudged credit mark on the acquired portfolio could surface later. On valuation, while the methods support the price, the relative read lands near $29 and analyst targets cluster around $27 to $28 (June 27, 2026), close to the current price, which means the easy re-rating from the merger is largely captured. The bet is that Busey sustains its returns, keeps credit clean, and holds its margin through the rate cycle. If credit normalizes, the margin compresses, or integration costs linger, a bank trading at book with limited upside in the price has little cushion, and the value support thins quickly.

Valuation

A bank is worth the return it earns on its capital, so First Busey is valued off price-to-book rather than an operating multiple. At about $28 the stock trades near 1 times book value, which inverts into an assumption that the bank sustains a return on equity around 9.5%. That is within reach of its history, and it would be an improvement on the depressed returns of the last year, which were dragged down by the costs of integrating the CrossFirst acquisition. For reference, those merger charges held trailing returns well below the normalized level the price assumes, so the implied ROE is a recovery assumption, not a heroic one.

The method families are broadly supportive. The excess-return methods, which build value from book equity plus the spread of return on equity over the cost of equity, land just above the price near $26, consistent with a bank earning close to its cost of capital. The price-to-tangible-book model lands lower near $19 because it applies a discount for the current sub-cost-of-equity return, while the relative-valuation read on a sector P/E lands near $29, right at the price. A dividend-growth read lands well above on the strength of the payout. The blend across applicable methods sits near $37, above the current price, though that is lifted by the more optimistic growth-based reads. Taken together, the price sits in the middle of a supportive range.

The honest conclusion: First Busey is priced roughly at book for a bank whose returns should recover as the merger drag clears. The bet is that the combined franchise sustains a return on equity near its cost of capital or better, keeps its credit book clean, and holds its net interest margin through the rate cycle, in which case a bank at book with a 4.2% dividend offers value and income. The risk is the standard bank risk: a credit downturn, a margin squeeze, or lingering integration costs would pull the return below the 9.5% the price assumes, and with analyst targets and the relative method clustered near the current price, the upside is modest while the downside in a credit cycle is real.

Catalysts

The defining event is the CrossFirst integration. First Busey completed the transformative acquisition of CrossFirst Bankshares effective in early 2025, which roughly doubled the franchise. (GlobeNewswire) The first quarter of 2026 showed the integration paying off: GAAP net income of $50.0 million ($0.52 per diluted share), adjusted net income of $58.6 million ($0.67), net interest margin of 3.77%, and an efficiency ratio improving to 54.8%. Acquisition-related expenses fell to about $5.24 million from $71.60 million a year earlier, removing a major drag. (stocktitan)

Capital return and credit are the steady signals. First Busey raised its quarterly common dividend about 4% to $0.26 (roughly $1.04 a year, near a 4.2% yield), repurchased $65.6 million of stock in the quarter, and maintained strong capital with a CET1 ratio of 12.31%. (TipRanks) Credit quality is clean, with nonperforming assets at 0.28%.

Analyst sentiment is balanced, with a consensus price target around $27 to $28, close to the current price, and a mix of Buy and Hold ratings. (Benzinga) The things to watch over the coming quarters: whether the net interest margin holds or expands as the rate environment shifts, whether the remaining CrossFirst cost synergies land and the efficiency ratio keeps improving, the trajectory of credit quality and any commercial-real-estate stress, the pace of buybacks and dividend growth, and deposit trends in a competitive funding market.

Peer Cohorts (Per Segment, With Filing Citations)

Banking (reported)

Wealth Management (reported)

FirsTech (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive BUSE report on boothcheck