FCFP First Community Financial Partners, Inc.

First Quarter 2017 Highlights

First Community Financial Partners, Inc. (NASDAQ:FCFP) (“First Community” or the “Company”), the parent company of First Community Financial Bank (the “Bank”), today reported financial results as of and for the three months ended March 31, 2017.

Net income applicable to shareholders for the quarter ended March 31, 2017 was $3.4 million, or $0.19 per diluted share, compared with $2.7 million, or $0.15 per diluted share, for the quarter ended December 31, 2016 and $2.0 million, or $0.12 per diluted share, for the quarter ended March 31, 2016.  First quarter results were positively impacted by an increase in net interest income and reduced income tax expense from the benefit related to stock incentive compensation, offset by increased professional fees in connection with the announced pending merger with First Busey.

“We are seeing positive trends across most of our key metrics including strong balance sheet growth, an expanding net interest margin and improving credit quality,” said Roy Thygesen, Chief Executive Officer of First Community.  “We continue to successfully attract new commercial customers to the Bank, which helped drive organic loan growth of 29% in the first quarter.  We are executing well and looking forward to completing our merger with First Busey Corporation, which we believe will enhance our ability to serve our customers’ needs through an expanded offering of financial products and services.”

First Quarter 2017 Financial Results

Loans

At March 31, 2017, total loans were $1.1 billion, an increase of  $72.1 million, or 7.30%, since December 31, 2016 and $286.2 million, or 36.96%, year-over-year.

Commercial loans grew $14.5 million, or 5.15%, since year end 2016 and $115.2 million, or 63.58%, year-over-year.  Commercial real estate loans increased $48.1 million, or 11.30%, since year end 2016, and $95.7 million, or 25.31%, year-over-year.  Residential real estate loans grew $5.4 million, or 3.10%, since year end 2016 and $42.2 million, or 30.33% year-over-year.  Construction loans were up $3.7 million, or 7.92%, since year end 2016 and $23.3 million, or 83.77%, year-over-year. 

Deposits and Other Borrowings

At March 31, 2017, total deposits were $1.11 billion, an increase of $25.1 million, or 2.32%, since December 31, 2016 and $229.3 million, or 26.08%, year-over-year.

Noninterest bearing demand deposits increased $13.7 million, or 5.52%, since December 31, 2016 and $57.1 million, or 27.94%, year-over-year. Interest bearing transactional accounts (NOW, savings and money market accounts) increased $20.6 million, or 4.05%, during the first quarter of 2017 and $148.5 million, or 39.03%, year-over-year.  Time deposits decreased $9.2 million, or 2.80%, during the first quarter, but increased $23.6 million, or 8.04%, year-over-year.   The ratio of time deposits to total deposits was 28.67% at March 31, 2017, down from 30.18% at December 31, 2016 and 30.36% at March 31, 2016.  Other borrowings increased $38.1 million, or 74.57%, since the end of the fourth quarter of 2016, and $32.4 million, or 56.84%, year-over-year, as a result of higher reliance on FHLB borrowings in order to fund loan growth.

Net Interest Income and Margin

First quarter 2017 net interest income was up $387,000, or 3.78%, from the fourth quarter of 2016. The increase was primarily attributable to an increase in average loan balances and higher net interest margin. 

The Company’s net interest margin was 3.50% for the first quarter of 2017, compared to 3.40% in the fourth quarter of 2016.  The increase was primarily attributable to two prime rate increases since mid December 2016 in response to the Federal Reserve increasing the targeted Federal Funds rate by 25 basis points in December 2016 and again in March 2017.

Noninterest Income and Expense

First quarter 2017 noninterest income increased $59,000, or 6.57%, from the fourth quarter of 2016.  The increase was primarily related to increases in service charges on deposits and other non-interest income.

Service charges on deposits increased $24,000, or 8.42%, from the fourth quarter of 2016, which was primarily the result of higher account analysis fees. Mortgage income was down $98,000, or 45.79%, for the first quarter of 2017, as compared to the fourth quarter of 2016, as a result of lower mortgage sale volumes. The increase in other non-interest income of $142,000 was primarily the result of a $144,000 fee earned on a swap transaction that closed in the first quarter of 2017 offset by lower income related to letter of credit fees, lease referral income and other miscellaneous income.

First quarter 2017 noninterest expense increased $521,000, or 7.53%, from the fourth quarter of 2016. The increase from the fourth quarter was primarily related to an increase in professional fees related to our pending merger with First Busey and an increase in data processing fees as a result of accrual reversals booked in the fourth quarter of 2016.

Income Taxes

Income taxes for the first quarter of 2017 were $365,000, or 9.68%, of income before income taxes as compared to $1.4 million, or 33.64%, of income before income taxes for the fourth quarter of 2016.  The decrease in effective tax rate was largely related to $936,000 in excess tax benefit on stock-based compensation, which is recognized as a credit to income tax expense by way of the adoption of ASU 2016-09.

Asset Quality

Total nonperforming assets decreased $225,000, or 3.42%, to $6.4 million at March 31, 2017 from December 31, 2016.  The ratio of nonperforming assets to total assets was 0.48% at March 31, 2017 compared to 0.52% at December 31, 2016.  The decrease in total nonperforming assets was the result of charge-offs and the return of one loan to accrual status during the first quarter.  In addition, one loan was moved to other real estate owned during the first quarter. 

The Company had net charge-offs on loans of $108,000 in the first quarter of 2017, compared to net charge-offs of $783,000 in the fourth quarter of 2016.

The ratios of the Company’s allowance for loan losses to nonperforming loans and allowance for loan losses to total loans were 219.65% and 1.12% at March 31, 2017, respectively.

The Company recorded a provision for loan losses in the first quarter of 2017 of $375,000 compared to $0 for the same period in 2016.  The current year provision was the result of the loan growth experienced during the first quarter of 2017.

About First Community Financial Partners, Inc.: First Community Financial Partners, Inc., headquartered in Joliet, Illinois, is a bank holding company whose common stock trades on the NASDAQ Capital Market (NASDAQ:FCFP). First Community Financial Partners has one bank subsidiary, First Community Financial Bank. First Community Financial Bank, based in Joliet, Illinois, has locations in Joliet, Plainfield, Homer Glen, Channahon, Naperville, Burr Ridge, Mazon, Braidwood, and Diamond, Illinois. The Bank is dedicated to its founding principles by being actively involved in the communities it serves and providing exceptional personal service delivered by experienced local professionals.

Additional InformationThis document does not constitute an offer to sell or the solicitation of an offer to buy any securities.  First Busey has filed a registration statement on Form S-4 with the SEC in connection with the proposed merger. The registration statement includes a proxy statement of First Community that also constitutes a prospectus of First Busey, which will be sent to the shareholders of First Community. First Community’s shareholders are advised to read the proxy statement/prospectus because it will contain important information about First Busey, First Community and the proposed merger. This document and other documents relating to the merger filed by First Busey and First Community can be obtained free of charge from the SEC’s website at www.sec.gov. These documents also can be obtained free of charge by accessing First Busey’s website at www.busey.com under the tab “Investors Relations” and then under “SEC Filings” or by accessing First Community’s website at www.fcbankgroup.com under “Investor Relations” and then under “SEC Filings.” Alternatively, these documents, when available, can be obtained free of charge from First Busey upon written request to First Busey Corporation, Corporate Secretary, 100 W. University Avenue, Champaign, Illinois 61820 or by calling (217) 365-4544, or from First Community, upon written request to First Community Financial Partners, Inc., Corporate Secretary, 2801 Black Road, Joliet, Illinois 60435 or by calling (815) 725-1885.

Participations in the SolicitationFirst Busey, First Community and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from shareholders in connection with the proposed merger under the rules of the SEC. Information about these participants may be found in the definitive proxy statement of First Busey relating to its 2017 Annual Meeting of Stockholders filed with the SEC on April 13, 2017 and the Annual Report on Form 10-K of First Community filed with the SEC on March 8, 2017, as amended by Amendment No. 1 to Form 10-K filed with the SEC on April 13, 2017.  These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants will also be included in the proxy statement/prospectus regarding the proposed merger when it becomes available.

Special Note Concerning Forward-Looking Statements

---------------------------------------------------------------------

Any statements in this release other than statements of historical facts, including statements about management’s beliefs and expectations, are forward-looking statements and should be evaluated as such. These statements are made on the basis of management’s views and assumptions regarding future events and business performance. Words such as “estimate,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “target,” “project,” “should,” “may,” “will” and similar expressions are intended to identify forward-looking statements. Forward-looking statements (including oral representations) involve risks and uncertainties that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. These risks and uncertainties involve a number of factors related to the businesses of First Community and its wholly owned bank subsidiary, including: risks associated with First Community’s proposed merger with First Busey, including possible termination of the Agreement and Plan of Merger; unexpected results of acquisitions; economic conditions in First Community’s, and its wholly owned bank subsidiary’s service areas; system failures; losses of large customers; disruptions in relationships with third party vendors; losses of key management personnel and the inability to attract and retain highly qualified management personnel in the future; the impact of legislation and regulatory changes on the banking industry; losses related to cyber-attacks; and liability and compliance costs regarding banking regulations; and changes in local, national and international economic conditions. These and other risks and uncertainties are discussed in more detail in First Community’s filings with the Securities and Exchange Commission (the “SEC”), including First Community’s Annual Report on Form 10-K filed on March 8, 2017, as amended by Amendment No. 1 to Form 10-K filed with the SEC on April 13, 2017.

Many of these risks are beyond management’s ability to control or predict. All forward-looking statements attributable to First Community, and its wholly owned bank subsidiary, or persons acting on behalf of each of them are expressly qualified in their entirety by the cautionary statements and risk factors contained in this communication. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, First Community does not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.

FINANCIAL SUMMARY
		March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Period-End Balance Sheet
(In thousands)(Unaudited)
Assets
Cash and due from banks		$	12,740		$	16,225		$	21,622		$	13,777		$	9,132
Interest-bearing deposits in banks		13,494			8,548			33,349			19,335			30,558
Securities available for sale		200,758			202,198			188,062			179,517			203,874
Mortgage loans held for sale		78			1,230			1,331			711			133
Loans held for sale		—			1,085			—				—		—
Leases, net		3,381			3,290			739			448			—
Commercial real estate		474,035			425,910			419,958			410,461			378,304
Commercial		296,309			281,804			274,889			239,038			181,142
Residential 1-4 family		181,426			175,978			167,388			143,908			139,208
Multifamily		36,040			36,703			31,880			30,809			31,511
Construction and land development		51,085			47,338			39,836			30,834			27,798
Farmland and agricultural production		11,892			12,628			12,985			9,235			9,060
Consumer and other		9,664			7,967			9,280			7,924			7,250
Total loans		1,060,451			988,328			956,216			872,209			774,273
Allowance for loan losses		11,951			11,684			12,284			12,044			11,335
Net loans		1,048,500			976,644			943,932			860,165			762,938
Other assets		57,818			58,990			57,563			51,409			54,227
Total Assets		$	1,336,769		$	1,268,210		$	1,246,598		$	1,125,362		$	1,060,862
Liabilities and Shareholders' Equity
Noninterest bearing deposits		$	261,532		$	247,856		$	246,262		$	203,258		$	204,414
Savings deposits		69,295			64,695			61,399			40,603			38,481
NOW accounts		165,696			160,862			151,243			103,324			104,136
Money market accounts		293,999			282,865			267,667			238,229			237,873
Time deposits		317,724			326,878			338,680			311,416			294,076
Total deposits		1,108,246			1,083,156			1,065,251			896,830			878,980
Total borrowings		104,598			66,419			61,879			114,701			72,237
Other liabilities		3,161			4,920			4,304			2,722			2,855
Total Liabilities		1,216,005			1,154,495			1,131,434			1,014,253			954,072
Shareholders’ equity		120,764			113,715			115,164			111,109			106,790
Total Shareholders’ Equity		120,764			113,715			115,164			111,109			106,790
Total Liabilities and Shareholders’ Equity		$	1,336,769		$	1,268,210		$	1,246,598		$	1,125,362		$	1,060,862

FINANCIAL SUMMARY
		Three months ended,
		March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Interest income:		(In thousands, except per share data)(Unaudited)
Loans, including fees		$	11,032		$	10,663		$	10,229		$	9,024		$	8,508
Securities		1,134			1,033			1,041			1,042			1,101
Federal funds sold and other		39			53			43			21			19
Total interest  income		12,205			11,749			11,313			10,087			9,628
Interest expense:
Deposits		1,211			1,150			1,081			957			940
Federal funds purchased and other borrowed funds		69			61			112			119			93
Subordinated debentures		297			297			297			297			297
Total interest expense		1,577			1,508			1,490			1,373			1,330
Net interest income		10,628			10,241			9,823			8,714			8,298
Provision for loan losses		375			183			383			500			—
Net interest income after provision for loan losses		10,253			10,058			9,440			8,214			8,298
Noninterest income:
Service charges on deposit accounts		309			285			289			207			204
Gain on sale of loans		—			9			—			7			—
Gain on sale of securities		—			—			14			603			—
Mortgage fee income		116			214			169			109			78
Bargain purchase gain		—			—			1,920			—			—
Other		532			390			381			315			273
Total noninterest income		957			898			2,773			1,241			555
Noninterest expenses:
Salaries and employee benefits		4,222			4,309			3,812			3,311			3,256
Occupancy and equipment expense		475			548			568			429			437
Data processing		420			267			700			690			257
Professional fees		734			286			369			375			392
Advertising and business development		210			245			328			262			215
Losses on sale and writedowns of foreclosed assets, net		—			—			1			31			16
Foreclosed assets expenses, net of rental income		19			26			(99		)	60			53
Other expense		1,359			1,237			1,380			974			1,310
Total noninterest expense		7,439			6,918			7,059			6,132			5,936
Income before income taxes		3,771			4,038			5,154			3,323			2,917
Income taxes		365			1,358			1,019			1,058			889
Net income applicable to common shareholders		$	3,406		$	2,680		$	4,135		$	2,265		$	2,028
Basic earnings per share		$	0.19		$	0.16		$	0.24		$	0.13		$	0.12
Diluted earnings per share		$	0.19		$	0.15		$	0.24		$	0.13		$	0.12

		Three months ended,
		March 31, 2017								December 31, 2016								March 31, 2016
		Average Balances			Income/ Expense			Yields/ Rates		Average Balances			Income/ Expense			Yields/ Rates		Average Balances			Income/ Expense			Yields/ Rates
Assets		(Dollars in thousands)(Unaudited)
Loans (1)		$	1,013,044		$	11,032		4.42	%	$	971,198		$	10,663		4.37	%	$	768,983		$	8,508		4.45	%
Investment securities (2)		203,886			1,134			2.26	%	199,940			1,033			2.06	%	206,535			1,101			2.14	%
Interest-bearing deposits with other banks		13,566			39			1.17	%	25,612			53			0.82	%	13,690			19			0.56	%
Total earning assets		$	1,230,496		$	12,205		4.02	%	$	1,196,750		$	11,749		3.91	%	$	989,208		$	9,628		3.91	%
Other assets		61,583								61,777								55,124
Total assets		$	1,292,079							$	1,258,527							$	1,044,332
Liabilities
NOW accounts		$	163,922		$	117		0.29	%	$	147,627		$	118		0.32	%	$	104,467		$	71		0.27	%
Money market accounts		284,043			270			0.39	%	279,110			203			0.29	%	234,455			162			0.28	%
Savings accounts		65,882			16			0.10	%	63,816			15			0.09	%	37,194			11			0.12	%
Time deposits		325,690			808			1.01	%	331,025			814			0.98	%	292,491			696			0.96	%
Total interest bearing deposits		839,537			1,211			0.58	%	821,578			1,150			0.56	%	668,607			940			0.57	%
Securities sold under agreements to repurchase		23,543			10			0.17	%	26,548			11			0.16	%	23,902			9			0.15	%
Secured borrowings		—			—			—	%	2,134			22			4.10	%	10,528			74			2.83	%
FHLB borrowings		31,398			59			0.76	%	21,764			28			0.51	%	12,067			10			0.33	%
Subordinated debentures		15,300			297			7.87	%	15,300			297			7.72	%	15,300			297			7.81	%
Total interest bearing liabilities		$	909,778		$	1,577		0.70	%	$	887,324		$	1,508		0.68	%	$	730,404		$	1,330		0.73	%
Noninterest bearing deposits		260,632								253,877								205,215
Other liabilities		4,370								3,817								3,051
Total liabilities		$	1,174,780							$	1,145,018							$	938,670
Total shareholders’ equity		$	117,299							$	113,509							$	105,662
Total liabilities and shareholders’ equity		$	1,292,079							$	1,258,527							$	1,044,332
Net interest income					$	10,628							$	10,241							$	8,298
Interest rate spread								3.32	%							3.23	%							3.18	%
Net interest margin								3.50	%					3.40	%							3.37	%
Footnotes:
(1) Average loans include nonperforming loans.
(2) No tax-equivalent adjustments were made, as the effect thereof was not material.

COMMON STOCK DATA
		2017			2016
		First Quarter			Fourth Quarter			Third Quarter			Second Quarter			First Quarter
		(Unaudited)
Market value (1):
End of period		$	12.75		$	11.70		$	9.52		$	8.80		$	8.70
High		13.65			12.15			9.55			9.10			8.84
Low		10.70			9.10			8.35			8.18			7.00
Book value (end of period)		6.79			6.59			6.68			6.47			6.22
Tangible book value (end of period)		6.73			6.53			6.62			6.47			6.22
Shares outstanding (end of period)		17,774,886			17,242,645			17,237,845			17,183,780			17,175,864
Average shares outstanding		17,533,867			17,239,897			17,189,113			17,182,197			17,125,928
Average diluted shares outstanding		18,213,720			17,860,017			17,565,667			17,550,547			17,451,354
(1)  The prices shown are as reported on the NASDAQ Capital Market.

ASSET QUALITY DATA
		March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
(Dollars in thousands)(Unaudited)
Loans identified as nonperforming		$	5,441		$	5,856		$	8,385		$	2,622		$	2,146
Other nonperforming loans		—			—			91			—			—
Total nonperforming loans		5,441			5,856			8,476			2,622			2,146
Foreclosed assets		915			725			725			2,211			5,231
Total nonperforming assets		$	6,356		$	6,581		$	9,201		$	4,833		$	7,377
Allowance for loan losses		$	11,951		$	11,684		$	12,284		$	12,044		$	11,335
Nonperforming assets to total assets		0.48		%	0.52		%	0.74		%	0.43		%	0.70		%
Nonperforming loans to total assets		0.41		%	0.46		%	0.68		%	0.23		%	0.20		%
Allowance for loan losses to nonperforming loans		219.65		%	199.52		%	144.93		%	459.34		%	528.19		%

ALLOWANCE FOR LOAN LOSSES ROLLFORWARD
(Dollars in thousands)(Unaudited)		Three months ended,
		March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Beginning balance		$	11,684		$	12,284		$	12,044		$	11,335		$	11,741
Charge-offs		206			1,363			340			193			506
Recoveries		98			580			197			402			100
Net charge-offs		108			783			143			(209		)	406
Provision for loan losses		375			183			383			500			—
Ending balance		$	11,951		$	11,684		$	12,284		$	12,044		$	11,335
Net charge-offs		$	108		$	783		$	143		$	(209	)	$	406
Net chargeoff percentage annualized		0.04		%	0.32		%	0.06		%	(0.11		)%	0.21		%

OTHER DATA
(Unaudited)
		Three months ended,
		March 31, 2017		December 31, 2016		September 30, 2016		June 30, 2016		March 31, 2016
Return on average assets		1.05	%	0.85	%	1.36	%	0.84	%	0.78	%
Return on average equity		11.61	%	9.44	%	14.50	%	8.36	%	7.68	%
Net interest margin		3.50	%	3.42	%	3.44	%	3.39	%	3.36	%
Average loans to assets		78.40	%	77.20	%	75.50	%	76.55	%	73.63	%
Average loans to deposits		92.08	%	90.49	%	90.92	%	94.16	%	88.00	%
Average noninterest bearing deposits to total deposits		23.52	%	23.44	%	22.51	%	22.75	%	23.35	%
COMPANY CAPITAL RATIOS
(Unaudited)		March 31, 2017		December 31, 2016		September 30, 2016		June 30, 2016		March 31, 2016
Tier 1 leverage ratio		9.26	%	9.10	%	9.15	%	9.77	%	9.72	%
Common equity tier 1 capital ratio		10.33	%	10.51	%	10.83	%	11.26	%	11.94	%
Tier 1 capital ratio		10.33	%	10.51	%	10.83	%	11.26	%	11.94	%
Total capital ratio		12.68	%	12.99	%	13.52	%	14.14	%	14.99	%
Tangible common equity to tangible assets		8.95	%	8.88	%	9.24	%	10.47	%	10.26	%

NON-GAAP MEASURES
Pre-tax pre-provision core income (1)
(In thousands)(Unaudited)
	For the three months ended,
	March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Pre-tax net income	$	3,771		$	4,038		$	5,154		$	3,323		$	2,917
Provision for loan losses	375			183			383			500			—
Gain on sale of securities	—			—			(14		)	(603		)	—
Merger related employee retention payments	232			—			—			—			—
Merger related expenses included in professional fees	417			—			24			26			100
Merger related expenses included in data processing fees	—			14			363			410			—
Severances paid in relation to the merger	—			—			92			—			—
Stock options included in other expense	—			—			165			—			—
Bargain purchase option	—			—			(1,920		)	—			—
Losses (gain) on sale and writedowns of foreclosed assets, net	—			—			1			31			16
Foreclosed assets expense, net of rental income	19			26			(99		)	60			53
Pre-tax pre-provision core income	$	4,814		$	4,261		$	4,149		$	3,747		$	3,086
(1)  This is a non-GAAP financial measure.  In compliance with applicable rules of the SEC, this non-GAAP measure is reconciled to pre-tax net income, which is the most directly comparable GAAP financial measure.  The Company’s management believes the presentation of pre-tax pre-provision core income provides investors with a greater understanding of the Company’s operating results, in addition to the results measured in accordance with GAAP.

Contact: Glen L. Stiteley, Chief Financial Officer - (815) 725-1885