Pre-earnings brief
Reports
Tue, Apr 22, 2008
Est. EPS
—
Est. revenue
—
Implied move
±11.6%
EPS beat rate
75%
First Busey Corporation is a regional bank that provides a range of financial services, including personal and commercial banking, wealth management, and mortgage lending. With a market cap of $2 billion, it plays a significant role in the financial sector, particularly in the Midwest, where it serves both individual and business clients.
Last quarter
In the last quarter, First Busey reported an EPS of $0.69, beating expectations by 6.81%. The stock reacted positively, gaining 1.61% the following day.
EPS beat streak
1Q
EPS beat rate
75%
Avg EPS surprise
-20.32%
Avg 1-day reaction
+0.83%
Overall, expectations for First Busey's upcoming earnings are mixed, with investors looking for signs of continued profitability and growth.
Bull case
If the company reports strong loan growth and maintains or improves its net interest margin, it could signal a healthy demand for banking services.
Bear case
Conversely, if the earnings report shows declining loan growth or a shrinking net interest margin, it may raise concerns about the bank's future profitability.
The print will turn on these.
Q1
What is the growth rate of loans compared to last quarter?
Loan growth is crucial for revenue generation, and a strong rate could indicate healthy demand and profitability.
Q2
How has the net interest margin changed this quarter?
Changes in net interest margin can significantly impact profitability, and investors will be keen to understand this trend.
Why consensus could be wrong
The Street may underestimate First Busey's ability to maintain a strong net interest margin despite economic pressures, given its regional focus and customer base.
Supporting evidence
The bank has consistently beaten EPS estimates in recent quarters, indicating strong management performance.
Options pricing suggests a significant move, reflecting uncertainty that could be mispriced relative to the bank's historical performance.
Key risk
If loan growth exceeds 5%, it could challenge the current bearish sentiment.
Pre-commit to what would confirm each case.
This quarter, the focus is on the bank's ability to grow its loan portfolio and maintain profitability through its net interest margin.
Bull confirmed if
Loan growth of 10% or better compared to the previous quarter, with net interest margin holding steady or increasing.
Bear confirmed if
Loan growth below 2% and a decrease in net interest margin compared to the previous quarter.
What the market is pricing for the move.
Implied Move
±13.29%
Historical Avg
±0.9%
The options market is pricing in a significant potential move, suggesting that investors expect volatility around the earnings report.
Options are pricing ±11.6% while BUSE has averaged ±0.9% over the last 8 prints — setup is pricing rich.
30d HV
13.4%
Cross-company pattern from 30 similar setups.
Prior-quarter beat + options rich in Financials
Fade rate: 15 of 30 (50%)
This setup has occurred 30 times across Financials in the last 2 years. 15 of 30 faded and 15 held — no strong directional bias after the initial reaction. The average absolute 1-day move is 5.0%, with a raw directional average of +1.5% (modestly positive historical bias).
Likely market behavior by outcome. Not investment advice.
Beat & raise
If First Busey beats expectations, history suggests a potential average move of +0.51% the following day, confirming a positive outlook.
In line / cautious
An in-line report may lead to a muted response, with the stock potentially moving around the historical average of ±0.91%.
Miss
If the company misses expectations, history suggests a potential average move of +1.77% the following day, indicating investor disappointment.
The lines on the call that would change the story.
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Est. EPS
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Est. Rev
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Impl. Move
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