First Busey (BUSE) reported solid first-quarter earnings last night. EPS was in line with expectations of $0.52 vs. $0.61 in the prior year, reflecting a decline in the negative credit provision from the prior year, which reduced EPS by $0.09 a share. Revenue trends were strong, with net interest income up 9% and the bank still growing its wealth management and payments businesses, although higher salary expenses limited profitability.

The next few quarters should also be strong ones for BUSE. Loan growth was solid at 7%, non-performing assets are a mere 0.13% of the total, and management indicated that the Fed rate increases should help interest margins. Concerns over the economy have hurt the stock, but for now, those concerns seem exaggerated given the strength of First Busey’s loan performance. Given the weakness in the market and regional banks, I am lowering my buy under price for BUSE to $25.50 and my target to $29. The 4% dividend yield will add to total returns.