First Busey (NASDAQ: BUSE) swings to Q1 2026 profit with solid capital
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
First Busey Corporation reported a strong turnaround for the quarter ended March 31, 2026. Net income was $49.98M, compared with a net loss of $29.99M a year earlier, and diluted earnings per common share were $0.52 versus a loss of $0.44.
Total assets were $18.04B, with portfolio loans of $13.46B and deposits of $14.74B. Net interest income rose to $153.97M as loan interest increased, while the provision for credit losses dropped to $3.06M from $45.59M. Noninterest income also grew, and acquisition-related expenses fell sharply.
Unrealized losses on securities and hedges reduced other comprehensive income by $11.08M, but total comprehensive income still reached $38.90M. Capital ratios remained strong, with First Busey’s common equity Tier 1 ratio at 12.31% and leverage ratio at 11.88%, both well above regulatory minimums.
Positive
- Return to profitability: Net income of $49.98M and diluted EPS of $0.52 replaced a prior-year net loss of $29.99M and EPS of −$0.44, aided by lower credit costs and reduced acquisition-related charges.
- Strong capital position: First Busey reported a common equity Tier 1 ratio of 12.31% and total capital ratio of 15.87%, comfortably exceeding “well capitalized” regulatory standards.
Negative
- None.
Insights
Results show a meaningful swing back to profitability with solid capital.
First Busey posted net income of $49.98M after a prior-year loss, driven by higher net interest income of $153.97M and a sharply lower credit-loss provision of $3.06M versus $45.59M a year earlier.
Noninterest income improved to $42.27M, while noninterest expense increased to $129.52M, reflecting ongoing integration and operating costs. Acquisition-related expenses tied to CrossFirst fell to $5.24M from $71.60M, removing a major prior-year drag on earnings.
Unrealized losses on securities and hedges drove $11.08M of negative other comprehensive income, but regulatory capital stayed robust: common equity Tier 1 at 12.31% and total capital at 15.87% for First Busey. These levels, along with a leverage ratio of 11.88%, keep the company well above “well capitalized” thresholds.
Key Figures
Net income: $49.98M
Net income prior-year quarter: −$29.99M
Diluted EPS: $0.52
+5 more
8 metrics
Net income
$49.98M
Three months ended March 31, 2026
Net income prior-year quarter
−$29.99M
Three months ended March 31, 2025
Diluted EPS
$0.52
Three months ended March 31, 2026
Net interest income
$153.97M
Three months ended March 31, 2026
Provision for credit losses
$3.06M
Three months ended March 31, 2026
Total assets
$18.04B
As of March 31, 2026
Common equity Tier 1 ratio
12.31%
First Busey as of March 31, 2026
Total deposits
$14.74B
As of March 31, 2026
Key Terms
Allowance for credit losses, Other comprehensive income, Non-cumulative perpetual preferred stock, Basel III, +2 more
6 terms
Allowance for credit losses financial
"Portfolio loans (net of ACL of $169,054 at March 31, 2026, and $174,023 at December 31, 2025)"
Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.
Other comprehensive income financial
"OCI | ( 11,080 ) | 34,229 Total comprehensive income | $ | 38,901 | $ | 4,239"
Other comprehensive income is a section of a company’s financial statements that records gains and losses not shown in the regular profit-and-loss line, such as paper gains or losses on certain investments, pension plan adjustments, and changes from converting foreign operations. These items don’t represent cash earned or spent today but change a company’s reported net worth, like value swings in things stored in a closet rather than money in your wallet, and help investors spot hidden strengths or risks to long-term financial health.
Non-cumulative perpetual preferred stock financial
"8.25% Fixed-Rate Series B Non-Cumulative Perpetual Preferred Stock, $0.001 par value"
Non-cumulative perpetual preferred stock is a type of investment that pays a fixed dividend forever, without a set end date. If the company skips some dividends in a year, you don’t get that money later, and it’s gone forever. It matters because investors get regular income but may miss out if the company faces financial trouble.
Basel III regulatory
"Basel III | 2010 capital accord adopted by the international Basel Committee on Banking Supervision"
An international set of banking rules that tells banks how much high-quality capital and readily available cash they must hold and how to manage risk, like a safety checklist for lenders. Investors care because these rules influence how safely banks can absorb losses, how much they can lend, and therefore their profits, dividend capacity and the chance of government support in a crisis — think of it as requirements that trade some short-term profit potential for longer-term financial stability.
Tier 1 capital regulatory
"Tier 1 capital to risk weighted assets First Busey | $ | 2,102,818 | 13.77 %"
Tier 1 capital is a bank’s core financial cushion—mainly common stock, retained earnings and certain reserves—that can absorb losses while the bank keeps operating. Investors care because it signals a lender’s ability to survive stress, meet regulatory requirements and continue lending or paying dividends; think of it as the engine’s safety margin that keeps a car running through bumps in the road.
Purchased credit deteriorated (PCD) financial
"A portion of acquired loans were PCD. The following table provides a reconciliation between the purchase price and the fair value of these financial assets"
TABLE OF CONTENTS
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||||
For the Quarterly Period Ended March 31, 2026
or
| Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||||
Commission File No. 0-15950
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) | (Zip code) | ||||
Registrant’s telephone number, including area code: (217) 365-4544
N/A
(Former name, former address, and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol (s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Accelerated filer ☐ | Non-accelerated filer ☐ | |||||||
Smaller reporting company | Emerging growth company | |||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at May 7, 2026 | |||||||
Common Stock, $0.001 par value | ||||||||
FIRST BUSEY CORPORATION
FORM 10-Q
MARCH 31, 2026
| Table of Contents | |||||
GLOSSARY | 3 | ||||
PART I—FINANCIAL INFORMATION | 5 | ||||
ITEM 1. FINANCIAL STATEMENTS | 5 | ||||
CONSOLIDATED BALANCE SHEETS (Unaudited) | 6 | ||||
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | 7 | ||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) | 8 | ||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) | 9 | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | 10 | ||||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) | 12 | ||||
Note 1. Significant Accounting Policies | 12 | ||||
Note 2. Business Combinations | 15 | ||||
Note 3. Debt Securities | 20 | ||||
Note 4. Portfolio Loans | 25 | ||||
Note 5. Leases | 33 | ||||
Note 6. Deposits | 36 | ||||
Note 7. Borrowings | 37 | ||||
Note 8. Regulatory Capital | 39 | ||||
Note 9. Tax Credit Investments and Other Investments in Unconsolidated Entities | 40 | ||||
Note 10. Stock-Based Compensation | 41 | ||||
Note 11. Outstanding Commitments and Contingent Liabilities | 42 | ||||
Note 12. Derivative Financial Instruments | 43 | ||||
Note 13. Fair Value Measurements | 49 | ||||
Note 14. Earnings Per Common Share | 55 | ||||
Note 15. Accumulated Other Comprehensive Income (Loss) | 55 | ||||
Note 16. Operating Segments and Related Information | 56 | ||||
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited) | 60 | ||||
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 92 | ||||
ITEM 4. CONTROLS AND PROCEDURES | 92 | ||||
PART II—OTHER INFORMATION | 93 | ||||
ITEM 1. LEGAL PROCEEDINGS | 93 | ||||
ITEM 1A. RISK FACTORS | 93 | ||||
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES | 93 | ||||
ITEM 3. DEFAULTS UPON SENIOR SECURITIES | 94 | ||||
ITEM 4. MINE SAFETY DISCLOSURES | 94 | ||||
ITEM 5. OTHER INFORMATION | 94 | ||||
ITEM 6. EXHIBITS | 95 | ||||
SIGNATURES | 96 | ||||
First Busey Corporation (BUSE) | 2
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GLOSSARY
Busey uses acronyms, abbreviations, and other terms throughout this Quarterly Report, as defined in the glossary below:
| Term | Definition | |||||||
| 2020 Equity Plan | First Busey Corporation Amended 2020 Equity Incentive Plan | |||||||
| ACL | Allowance for credit losses | |||||||
| Annual Report | Annual report filed with the SEC on Form 10-K pursuant to Section 13 or 15(d) of the Exchange Act | |||||||
| AOCI | Accumulated other comprehensive income (loss) | |||||||
| ASC | Accounting Standards Codification | |||||||
| ASU | Accounting Standards Update | |||||||
| Basel III | 2010 capital accord adopted by the international Basel Committee on Banking Supervision | |||||||
| Basel III Rule | Regulations promulgated by U.S. federal banking agencies—the OCC, the Federal Reserve, and the FDIC—to both enforce implementation of certain aspects of the Basel III capital reforms and effect certain changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act | |||||||
| bps | basis points | |||||||
Busey | First Busey Corporation, together with its wholly-owned consolidated subsidiaries; also, “First Busey,” and the “Company” | |||||||
Busey Series A Preferred Stock | Series A Non-Cumulative Perpetual Preferred Stock, $0.001 par value | |||||||
| Busey Series B Preferred Stock | 8.25% Fixed-Rate Series B Non-Cumulative Perpetual Preferred Stock, $0.001 par value | |||||||
C&I | Commercial and industrial | |||||||
CrossFirst | CrossFirst Bankshares, Inc. | |||||||
| DSU | Deferred stock unit | |||||||
ESPP | First Busey Corporation Employee Stock Purchase Plan | |||||||
| Exchange Act | Securities Exchange Act of 1934, as amended | |||||||
| Fair value | The price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date, as defined in ASC Topic 820 “Fair Value Measurement” | |||||||
| FASB | Financial Accounting Standards Board | |||||||
| FDIC | Federal Deposit Insurance Corporation | |||||||
| Federal Reserve | Board of Governors of the Federal Reserve System | |||||||
| FHLB | Federal Home Loan Bank | |||||||
| FirsTech | FirsTech, Inc. | |||||||
| GAAP | U.S. Generally Accepted Accounting Principles | |||||||
MD&A | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Unaudited), included in this Quarterly Report | |||||||
M&M | Merchants and Manufacturers Bank Corporation | |||||||
MSA | Metropolitan Statistical Area | |||||||
| Nasdaq | National Association of Securities Dealers Automated Quotations | |||||||
| N/A | Not applicable | |||||||
| OCI | Other comprehensive income (loss) | |||||||
| OREO | Other real estate owned | |||||||
First Busey Corporation (BUSE) | 3
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| Term | Definition | |||||||
| PCD | Purchased credit deteriorated | |||||||
| PSU | Performance stock unit | |||||||
| Quarterly Report | Quarterly report filed with the SEC on Form 10-Q pursuant to Section 13 or 15(d) of the Exchange Act | |||||||
| RSU | Restricted stock unit | |||||||
| SBA | U.S. Small Business Administration | |||||||
| SEC | U.S. Securities and Exchange Commission | |||||||
| SOFR | Secured Overnight Financing Rate published by the Federal Reserve | |||||||
SSAR | Stock-settled stock appreciation right | |||||||
| U.S. | United States of America | |||||||
| U.S. Treasury | U.S. Department of the Treasury | |||||||
First Busey Corporation (BUSE) | 4
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PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
First Busey Corporation (BUSE) | 5
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FIRST BUSEY CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
| As of | |||||||||||
| (dollars in thousands, except per share amounts) | March 31, 2026 | December 31, 2025 | |||||||||
| Assets | |||||||||||
| Cash and cash equivalents: | |||||||||||
| Cash and due from banks | $ | $ | |||||||||
| Interest-bearing deposits | |||||||||||
| Total cash and cash equivalents | |||||||||||
Interest-bearing time deposits in other banks | |||||||||||
| Debt securities available for sale | |||||||||||
| Debt securities held to maturity | |||||||||||
| Equity securities | |||||||||||
| Loans held for sale | |||||||||||
Portfolio loans (net of ACL of $ | |||||||||||
| Restricted bank stock | |||||||||||
| Premises and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Cash surrender value of bank owned life insurance | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and stockholders’ equity | |||||||||||
| Liabilities | |||||||||||
| Deposits: | |||||||||||
| Noninterest-bearing | $ | $ | |||||||||
| Interest-bearing | |||||||||||
| Total deposits | |||||||||||
| Securities sold under agreements to repurchase | |||||||||||
| Short-term borrowings | |||||||||||
| Long-term borrowings | |||||||||||
| Subordinated notes, net of unamortized issuance costs | |||||||||||
| Junior subordinated debt owed to unconsolidated trusts | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
Outstanding commitments and contingent liabilities (see Notes 5 and 11) | |||||||||||
| Stockholders’ equity | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| AOCI | ( | ( | |||||||||
| Total stockholders’ equity before treasury stock | |||||||||||
| Treasury stock at cost | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
| Shares | |||||||||||
Preferred shares issued and outstanding ( | |||||||||||
Common shares ( | |||||||||||
| Issued | |||||||||||
| Less: Treasury | |||||||||||
| Outstanding | |||||||||||
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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FIRST BUSEY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands, except per share amounts) | 2026 | 2025 | |||||||||
| Interest income | |||||||||||
| Interest and fees on loans | $ | $ | |||||||||
| Taxable interest income | |||||||||||
| Non-taxable interest income | |||||||||||
| Dividend income on bank stock | |||||||||||
| Other interest income | |||||||||||
| Total interest income | |||||||||||
| Interest expense | |||||||||||
| Deposits | |||||||||||
| Federal funds purchased and securities sold under agreements to repurchase | |||||||||||
| Short-term borrowings | |||||||||||
| Long-term borrowings | |||||||||||
| Subordinated notes | |||||||||||
| Junior subordinated debt owed to unconsolidated trusts | |||||||||||
| Total interest expense | |||||||||||
| Net interest income | |||||||||||
| Provision for credit losses | |||||||||||
| Net interest income after provision for credit losses | |||||||||||
| Noninterest income | |||||||||||
| Wealth management fees | |||||||||||
| Payment technology solutions | |||||||||||
| Treasury management services | |||||||||||
| Card services and ATM fees | |||||||||||
| Other service charges on deposit accounts | |||||||||||
| Mortgage revenue | |||||||||||
| Income on bank owned life insurance | |||||||||||
| Realized net gains (losses) on securities | ( | ||||||||||
| Unrealized net gains (losses) recognized on equity securities | ( | ( | |||||||||
| Other noninterest income | |||||||||||
| Total noninterest income | |||||||||||
| Noninterest expense | |||||||||||
| Salaries, wages, and employee benefits | |||||||||||
| Data processing | |||||||||||
| Net occupancy expense of premises | |||||||||||
| Furniture and equipment expenses | |||||||||||
| Professional fees | |||||||||||
| Amortization of intangible assets | |||||||||||
| Interchange expense | |||||||||||
| FDIC insurance | |||||||||||
| Other noninterest expense | |||||||||||
| Total noninterest expense | |||||||||||
| Income (loss) before income taxes | ( | ||||||||||
| Income taxes | ( | ||||||||||
| Net income (loss) | $ | $ | ( | ||||||||
| Dividends on preferred stock | $ | $ | |||||||||
| Net income (loss) available to common stockholders | $ | $ | ( | ||||||||
| Weighted average number of common shares outstanding | |||||||||||
| Basic | |||||||||||
| Diluted | |||||||||||
| Basic earnings (loss) per common share | $ | $ | ( | ||||||||
| Diluted earnings (loss) per common share | $ | $ | ( | ||||||||
See accompanying Notes to Consolidated Financial Statements (Unaudited).
First Busey Corporation (BUSE) | 7
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FIRST BUSEY CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
| Net income (loss) | $ | $ | ( | ||||||||
| OCI: | |||||||||||
| Unrealized/Unrecognized gains (losses) on debt securities: | |||||||||||
| Net unrealized holding gains (losses) on debt securities available for sale | ( | ||||||||||
| Reclassification adjustment for realized (gains) losses on debt securities available for sale included in net income | ( | ||||||||||
| Amortization of unrecognized losses on securities transferred to held to maturity | |||||||||||
| Tax effect | ( | ||||||||||
| Net change in unrealized/unrecognized gains (losses) on debt securities | ( | ||||||||||
| Unrealized gains (losses) on cash flow hedges: | |||||||||||
| Net unrealized holding gains (losses) on cash flow hedges | ( | ||||||||||
| Reclassification adjustment for realized (gains) losses on cash flow hedges included in net income | |||||||||||
| Tax effect | ( | ||||||||||
| Net change in unrealized gains (losses) on cash flow hedges | ( | ||||||||||
| OCI | ( | ||||||||||
| Total comprehensive income | $ | $ | |||||||||
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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FIRST BUSEY CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Stock | Additional Paid-in Capital | Retained Earnings | AOCI | Treasury Stock | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Preferred | Common | Preferred | Common | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| OCI, net of tax | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of stock, including excise tax | — | ( | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Net issuance of treasury stock for stock-based compensation plans | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends on preferred stock | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends on common stock | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividend equivalents on RSUs/PSUs/DSUs | — | — | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Stock | Additional Paid-in Capital | Retained Earnings | AOCI | Treasury Stock | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Preferred | Common | Preferred | Common | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| OCI, net of tax | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock issued in acquisition, net of stock issuance costs | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of stock, including excise tax | — | ( | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Net issuance of treasury stock for stock-based compensation plans | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends on common stock | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividend equivalents on RSUs/PSUs/DSUs | — | — | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements (Unaudited).
First Busey Corporation (BUSE) | 9
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FINANCIAL STATEMENTS
FIRST BUSEY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
| Cash flows provided by (used in) operating activities | |||||||||||
| Net income (loss) | $ | $ | ( | ||||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
| Provision for credit losses | |||||||||||
| Amortization of intangible assets | |||||||||||
| Amortization of mortgage servicing rights | |||||||||||
| Depreciation and amortization of premises and equipment | |||||||||||
| Net amortization (accretion) on portfolio loans | ( | ( | |||||||||
| Net amortization (accretion) of premium (discount) on investment securities | ( | ||||||||||
| Net amortization (accretion) of premium (discount) on time deposits | ( | ||||||||||
| Net amortization (accretion) of premium (discount) on FHLB advances and other borrowings | |||||||||||
| Impairment of fixed assets held for sale | |||||||||||
| Impairment of mortgage servicing rights | ( | ( | |||||||||
| Unrealized (gains) losses recognized on equity securities, net | |||||||||||
| (Gain) loss on sales of debt securities, net | ( | ||||||||||
| (Gain) loss on sales of loans, net | ( | ( | |||||||||
| (Gain) loss on sales of OREO and other repossessed assets | ( | ( | |||||||||
| (Gain) loss on sales of premises and equipment | ( | ||||||||||
| (Gain) loss on life insurance proceeds | ( | ||||||||||
| Increase in cash surrender value of bank owned life insurance | ( | ( | |||||||||
| Provision for deferred income taxes expense (benefit) | ( | ||||||||||
| Stock-based compensation expense | |||||||||||
| Mortgage loans originated for sale | ( | ( | |||||||||
| Proceeds from sales of mortgage loans | |||||||||||
| (Increase) decrease in other assets | ( | ||||||||||
| Decrease in other liabilities | ( | ( | |||||||||
| Net cash provided by operating activities | $ | $ | |||||||||
(continued)
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FINANCIAL STATEMENTS
FIRST BUSEY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Continued)
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
| Cash flows provided by (used in) investing activities | |||||||||||
Purchases of interest-bearing time deposits in other banks | $ | ( | $ | ( | |||||||
Proceeds from maturities of interest-bearing time deposits in other banks | |||||||||||
| Purchases of equity securities | ( | ||||||||||
| Proceeds from sales of equity securities | |||||||||||
| Purchases of debt securities available for sale | ( | ( | |||||||||
| Proceeds from sales of debt securities available for sale | |||||||||||
| Proceeds from paydowns and maturities of debt securities available for sale | |||||||||||
| Proceeds from paydowns and maturities of debt securities held to maturity | |||||||||||
| Purchases of restricted bank stock | ( | ( | |||||||||
| Proceeds from the redemption of restricted bank stock | |||||||||||
| Net (increase) decrease in loans | ( | ||||||||||
Net cash received in (paid for) acquisitions (see Note 2) | |||||||||||
| Cash paid for premiums on bank-owned life insurance | ( | ( | |||||||||
| Proceeds from life insurance | |||||||||||
| Purchases of premises and equipment | ( | ( | |||||||||
| Proceeds from disposition of premises and equipment | |||||||||||
| Net proceeds from OREO and other repossessed assets | |||||||||||
| Net cash provided by investing activities | $ | $ | |||||||||
| Cash flows provided by (used in) financing activities | |||||||||||
| Net decrease in deposits | $ | ( | $ | ( | |||||||
| Net decrease in federal funds purchased and securities sold under agreements to repurchase | ( | ( | |||||||||
Proceeds from short-term borrowings | |||||||||||
| Repayment of short-term borrowings | ( | ||||||||||
| Proceeds from other borrowings, net of debt issuance costs | |||||||||||
| Repayment of other borrowings | ( | ( | |||||||||
| Cash dividends paid | ( | ( | |||||||||
| Purchase of treasury stock | ( | ( | |||||||||
| Cash paid for withholding taxes on stock-based payments | ( | ( | |||||||||
| Issuance of treasury stock for the ESPP | |||||||||||
| Common stock issuance costs | ( | ||||||||||
| Net cash used in financing activities | $ | ( | $ | ( | |||||||
| Net increase in cash and cash equivalents | $ | $ | |||||||||
| Cash and cash equivalents, beginning of period | |||||||||||
| Cash and cash equivalents, ending of period | $ | $ | |||||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||||||||
| Cash payments for: | |||||||||||
| Interest | $ | $ | |||||||||
| Non-cash investing and financing activities: | |||||||||||
| OREO and other repossessed assets acquired in settlement of loans | $ | $ | |||||||||
| Transfer of loans held for sale to portfolio loans | |||||||||||
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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FIRST BUSEY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
First Busey Corporation, a Nevada corporation organized in 1980, is an $18.04 billion financial holding company headquartered in Leawood, Kansas. Busey’s stock is traded on The Nasdaq Global Select Market, with its common stock trading under the symbol “BUSE” and its depositary shares of Busey Series B Preferred Stock trading under the symbol “BUSEP.”
Busey operates and reports its business in three
•The Banking operating segment provides a full range of banking services to individual and corporate customers through its banking center network in Arizona, Colorado, Florida, Illinois, Indiana, Kansas, Missouri, New Mexico, Oklahoma, and Texas.
•The Wealth Management operating segment provides a full range of asset management, investment, brokerage, fiduciary, philanthropic advisory, tax preparation, and farm management services to individuals, businesses, and foundations.
•The FirsTech operating segment provides comprehensive and innovative payment technology solutions including online, mobile, and voice-recognition bill payments; money management and credit card networks; direct debit services; lockbox remittance processing for payments made by mail; and walk-in payments. FirsTech also provides additional tools to help clients with billing, reconciliation, bill reminders, and treasury services.
For additional information about Busey's operating segments, see “Note 16. Operating Segments and Related Information.”
Busey conducts its Banking and Wealth Management services through Busey Bank, and provides payment technology solutions through Busey Bank’s wholly owned subsidiary, FirsTech. Busey also has various other subsidiaries that are not significant to the consolidated entity.
Basis of Financial Statement Presentation
These unaudited consolidated financial statements and related notes should be read together with the audited consolidated financial statements included in Busey's 2025 Annual Report. These interim unaudited consolidated financial statements serve to update Busey’s 2025 Annual Report and may not include all information and notes necessary to constitute a complete set of financial statements.
Busey’s unaudited consolidated financial statements are prepared in conformity with GAAP, and reflect the elimination of intercompany accounts and transactions. Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications did not have a material impact on Busey’s consolidated financial condition or results of operations.
In the opinion of Busey’s management, the unaudited consolidated financial statements reflect all normal, recurring adjustments needed to present fairly Busey’s results for the interim periods. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period.
Use of Estimates
In preparing the accompanying unaudited consolidated financial statements in conformity with GAAP, Busey’s management is required to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the disclosures provided. Actual results could differ from those estimates. Critical accounting estimates which are particularly susceptible to significant change relate to the fair value of assets acquired and liabilities assumed in business combinations, goodwill, income taxes, and the determination of the ACL.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Trust Assets
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash items in process of collection, amounts due from other banks, and interest-bearing deposits held with other financial institutions with original maturities of three months or less. The carrying amount of these instruments is considered a reasonable estimate of fair value.
Restrictions on Cash and Cash Equivalents
At March 31, 2026, cash and cash equivalents included $13.6 million contractually restricted by a third-party service provider, $14.4 million pledged to secure obligations under derivative contracts, and $68.1 million of reserved cash subject to call by the Federal Reserve Bank, as a member of the Federal Reserve System.
Interest-bearing time deposits in other banks
Interest-bearing time deposits in other banks consist of certificates of deposit with original maturities greater than three months and are carried at amortized cost.
Income Taxes
Busey is subject to income taxes in U.S. federal and various state jurisdictions. First Busey Corporation and its subsidiaries file consolidated federal and state income tax returns with each subsidiary computing its taxes on a separate entity basis. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations, which requires significant judgment. Busey monitors evolving federal and state tax legislation and its potential impact on operations on an ongoing basis.
As of March 31, 2026, Busey remains under examination by the Illinois Department of Revenue for M&M's tax filings for the tax years ended December 31, 2022 and 2023.
Preferred Stock
The following table summarizes Busey’s preferred stock issuances as of both March 31, 2026, and December 31, 2025:
| Title of Each Issue | Shares Authorized | Shares Issued | Shares Outstanding | Par Value | ||||||||||||||||||||||
Preferred stock, $ | ||||||||||||||||||||||||||
| Series A Non-Cumulative Perpetual Preferred Stock | $ | |||||||||||||||||||||||||
| $ | ||||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Changes in preferred stock issued are presented in the following table:
| Three Months Ended March 31, | ||||||||||||||
| Title of Each Issue | 2026 | 2025 | ||||||||||||
Series A Non-Cumulative Perpetual Preferred Stock1 | $ | $ | ||||||||||||
| N/A | ||||||||||||||
1.Busey Series A Preferred Stock was issued on March 1, 2025.
2.Busey Series B Preferred Stock was issued on May 20, 2025.
Impact of Recently Adopted Accounting Standards
In July 2025, the FASB issued ASU 2025-05 “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets,” providing a practical expedient which, if elected, permits an entity to assume that current conditions as of the balance sheet date will remain static for the remaining life of the assets, removing the requirement to consider reasonable, supportable forecasts. This ASU was adopted prospectively for annual and interim reporting periods beginning January 1, 2026. Adoption of this standard did not have a material impact on Busey’s financial position or results of operations.
In November 2024, the FASB issued ASU 2024-04 “Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments” to clarify when certain settlements of convertible debt instruments should be accounted for as an induced conversion. This ASU was adopted on a prospective basis for annual and interim reporting periods beginning January 1, 2026. Because Busey does not currently have any convertible debt, adoption of this standard did not have a material impact on Busey’s financial position or results of operations.
Recently Issued Accounting Standards Not Yet Adopted
In November 2025, the FASB issued ASU 2025-09 “Derivatives and Hedging (Topic 815): Hedge Accounting Improvements” to expand the hedged risks permitted to be aggregated in a group of individual forecasted transactions, enabling entities to apply hedge accounting treatment to a broader portfolio of forecasted transactions. Under the amendments in this update, a group of individual forecasted transactions can be designated as a cash flow hedge if they have a similar risk exposure. Individual forecasted transactions are considered to have a similar risk exposure when the derivative used as the hedging instrument is highly effective against each hedged risk in the group. This update is to be applied on a prospective basis for all hedging relationships; there is an option to elect to adopt the amendments in this update for hedging relationships that exist as of the date of adoption. This update will be effective for Busey for annual and interim reporting periods beginning January 1, 2027. Early adoption is permitted. Busey is currently evaluating the effect this ASU may have on its financial position and results of operations.
In September 2025, the FASB issued ASU 2025-07 “Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract,” to reduce diversity in the application of derivative accounting practices. This update provides a scope limitation on the definition of a derivative subject to derivative accounting under ASC Topic 815, Derivatives and Hedging, to exclude certain non-exchange-traded contracts with contingencies based on operations or activities specific to one of the parties to the contract. In addition, this update clarifies that share-based noncash consideration from a customer that is contingent on the satisfaction of performance obligations should not be recognized at contract inception as a derivative asset or an equity security, but rather should be accounted for under the guidance in ASC Topic 606, Revenue from Contracts with Customers, and that guidance in other topics does not apply to share-based noncash consideration from a customer for the transfer of goods or services unless or until the entity’s right to receive or retain the share-based noncash consideration is unconditional under ASC Topic 606. The amendments in this update may be applied on either a prospective or modified retrospective basis, and will be effective for Busey for annual and interim reporting periods beginning January 1, 2027. Early adoption is permitted. Busey is currently evaluating the effect this ASU may have on its financial position and results of operations.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
In September 2025, the FASB issued ASU 2025-06 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software,” changing the criteria for capitalizing software costs to the following: (1) a commitment has been made to fund the software project, and (2) it is probable the project will be completed and used to perform its intended function. Under this update, software development stages are no longer a consideration in the determination of which costs are capitalized. The amendments in this update may be adopted on a prospective, modified transition, or retrospective basis, and will be effective for Busey for annual and interim reporting periods beginning January 1, 2028. Early adoption is permitted. Busey is currently evaluating the effect this ASU may have on its financial position and results of operations.
In November 2024, the FASB issued ASU 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” to require additional disclosures within the notes to the financial statements about certain expense items. Specifically, disaggregation of income statement captions that contain expenses within the following five categories is required: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization (“DD&A”) costs recognized as part of oil- and gas-producing activities or other amounts of depletion expense. Further, this update requires disclosure of the total amount of selling expenses and the entity’s definition of selling expenses. This update provides a practical expedient for banks and bank holding companies to continue presenting salaries and employee benefits in conformity with SEC Rule 210.9-04 instead of requiring those entities to apply the employee compensation definition included in Subtopic 220-40. The amendments in this update may be applied on either a prospective or retrospective basis and will be effective for Busey beginning with the annual reporting period ending December 31, 2027, and interim reporting periods beginning January 1, 2028. Early adoption is permitted. Because this update relates only to disclosure, Busey does not expect adoption of this ASU to have any impact on its financial position or results of operations.
In October 2023, the FASB issued ASU 2023‑06 “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” which aligns certain GAAP disclosure requirements with those of the SEC in order to better facilitate comparisons between SEC registrants and entities that are not subject to SEC reporting requirements. The amendments in this ASU should be applied prospectively, and the effective date will be the date on which the SEC removes the related disclosure from Regulation S‑X or Regulation S‑K. Early adoption is prohibited. If the SEC has not removed the related disclosures by June 30, 2027, the pending content of this update will be removed from the ASC and have no further effect. Because this update relates only to disclosure, Busey does not expect adoption of this ASU to have a material impact on its financial position or results of operations.
Subsequent Events
NOTE 2. BUSINESS COMBINATIONS
CrossFirst Bankshares, Inc.
On March 1, 2025, Busey completed its acquisition of CrossFirst (NASDAQ: CFB), the holding company for CrossFirst Bank, pursuant to an Agreement and Plan of Merger, dated August 26, 2024, by and between Busey and CrossFirst (the “CrossFirst Merger Agreement”). This partnership created a premier commercial bank spanning 10 states—Illinois, Missouri, Texas, Colorado, Florida, Kansas, Oklahoma, Arizona, Indiana, and New Mexico. The combined holding company operates under the First Busey Corporation name. Busey’s common stock continues to trade on the Nasdaq under the “BUSE” stock ticker symbol.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Merger of CrossFirst Bank into Busey Bank
CrossFirst Bank’s results of operations were included in Busey’s consolidated results of operations beginning March 1, 2025. Busey operated CrossFirst Bank as a separate banking subsidiary until it was merged with and into Busey Bank on June 20, 2025. At the time of the bank merger, CrossFirst Bank’s banking centers became banking centers of Busey Bank.
Merger Consideration for CrossFirst
Upon completion of the acquisition, each share of CrossFirst common stock converted into the right to receive 0.6675 of a share of Busey’s common stock. Cash was paid in lieu of fractional shares. The fair value of common shares issued in consideration of the CrossFirst acquisition was based on the closing price of Busey’s common stock on February 28, 2025.
Further, upon completion of the acquisition, each share of CrossFirst Series A Non-Cumulative Perpetual Preferred Stock converted to the right to receive one share of Busey Series A Preferred Stock. The fair value of Busey Series A Preferred Stock was based on the redemption price of $1,000 per share.
The total consideration paid also included the fair value of replacement equity awards related to past service totaling $6.0 million. Busey used a Monte Carlo simulation to estimate the fair value of SSARs and market-based awards. Other awards were valued based on Busey’s closing stock price on February 28, 2025.
Acquisition Accounting for CrossFirst
The CrossFirst acquisition was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair values as of March 1, 2025, the date of acquisition. Fair values, including initial accounting for deferred taxes, were subject to refinement for up to one year after the closing date as additional information regarding the closing date fair values became available. A final fair value adjustment for deferred taxes was recorded during the three months ended March 31, 2026, resulting in a $0.9 million increase to the fair value of net assets acquired. Fair values are now final.
As the total consideration paid for CrossFirst exceeded the estimated fair value of net assets acquired, goodwill of $48.6 million was recorded as a result of the acquisition. Goodwill recorded for this transaction reflects synergies expected from the acquisition and the greater revenue opportunities from Busey’s broader service capabilities in attractive new markets. Goodwill recorded for this transaction is not tax deductible and was assigned to the Banking operating segment.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Acquisition Date Fair Values
Acquisition-date fair values of the assets acquired and liabilities assumed, as well as the fair value of consideration transferred, were estimated as follows:
| As of | |||||
| March 1, 2025 | |||||
| (dollars in thousands) | (final) | ||||
| Assets acquired | |||||
| Cash and cash equivalents | $ | ||||
| Securities | |||||
| Portfolio loans, net of ACL | |||||
| Premises and equipment | |||||
Other intangible assets1 | |||||
| Other assets | |||||
| Total assets acquired | |||||
| Liabilities assumed | |||||
| Deposits | |||||
| Short-term borrowings | |||||
| Long-term borrowings | |||||
| Junior subordinated debt owed to unconsolidated trusts | |||||
| Other liabilities | |||||
| Total liabilities assumed | |||||
| Net assets acquired | $ | ||||
| Consideration paid | |||||
| Cash | $ | ||||
| Common stock | |||||
| Preferred stock | |||||
Replacement awards2 | |||||
| Total consideration paid | $ | ||||
| Goodwill | $ | ||||
___________________________________________
1.Other intangible assets are being amortized over a period of ten years .
2.Represents the fair value of replacement equity awards issued to CrossFirst associates attributable to pre-combination service.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Valuations of Loans
Estimated fair values for the loan portfolio acquired in the CrossFirst acquisition includes adjustments to certain receivables that were not considered PCD as of the acquisition date. These fair value adjustments were determined using a discounted cash flow model that applies various assumptions about coupon rates, remaining maturities, prepayment speeds, projected default probabilities, losses given default, and estimates of prevailing discount rates. These loans did not show signs of deterioration since origination, and therefore, at the acquisition date, were not subject to the guidance related to PCD loans. Receivables acquired in the CrossFirst acquisition that were not subject to these requirements include non-PCD loans with a fair value of $4.70 billion and gross contractual amounts receivable of $4.79 billion.
A portion of acquired loans were PCD. The following table provides a reconciliation between the purchase price and the fair value of these financial assets:
| As of | |||||
| (dollars in thousands) | March 1, 2025 | ||||
| PCD Financial Assets | |||||
Gross contractual receivable for PCD financial assets | $ | ||||
| ACL recorded for estimated uncollectible contractual cash flows specific to PCD financial assets | ( | ||||
| Interest premium (discount) specific to PCD financial assets | ( | ||||
| Loans previously charged-off prior to acquisition | ( | ||||
Fair value of PCD financial assets | $ | ||||
Pro Forma Results
The following unaudited pro forma information has been prepared as if the CrossFirst acquisition had occurred on January 1, 2024. The pro forma results combine CrossFirst’s historical results into Busey’s Consolidated Statements of Income (Unaudited), including the impact of estimated purchase accounting adjustments such as loan discount accretion, intangible assets amortization, and deposit accretion, net of taxes, which may not align with the timing of actual results. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2024. Further, pro forma information does not purport to be indicative of future financial operating results. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, expense efficiencies, or asset dispositions. Only the acquisition-related expenses that have been recognized are included in net income in the table below:
| (dollars in thousands) | Three Months Ended March 31, 2025 | ||||
| Revenue (net interest income plus noninterest income) | $ | ||||
| Net income | |||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Other Acquisition Costs
Busey incurred acquisition-related expenses as follows:
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
| Pre-tax acquisition expenses | |||||||||||
CrossFirst1 | $ | $ | |||||||||
M&M2 | |||||||||||
Pre-tax acquisition expenses | $ | $ | |||||||||
___________________________________________
1.During the three months ended March 31, 2026, Busey recorded acquisition expenses comprising salaries, wages, and employee benefits for multi-year retention agreements, replacement stock-based compensation awards, and relocation related to the CrossFirst acquisition; data processing; and professional fees. During the three months ended March 31, 2025, Busey recorded an initial provision to establish an ACL on non-PCD loans and unfunded commitments and multiple components of noninterest expense including salaries, wages and employee benefits (including equity compensation); data processing; and legal, professional, and consulting costs.
2.During the three months ended March 31, 2025, Busey recorded final acquisition expenses, comprising data processing and consulting expenses related to the acquisition of M&M, which was completed on April 1, 2024.
Of the total acquisition-related expenses, the following legal, professional, and consulting costs were incurred to consummate the merger:
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
| Pre-tax costs to consummate the merger | $ | $ | |||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 3. DEBT SECURITIES
Busey's portfolio of debt securities includes both available for sale and held to maturity securities. The tables below provide the amortized cost, unrealized or unrecognized gains and losses, and fair values of debt securities, summarized by major category:
| As of March 31, 2026 | |||||||||||||||||||||||
| (dollars in thousands) | Amortized Cost | Unrealized | Fair Value | ||||||||||||||||||||
Gross Gains | Gross Losses | ||||||||||||||||||||||
Debt securities available for sale1 | |||||||||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | $ | $ | ( | $ | ||||||||||||||||||
Obligations of states and political subdivisions | ( | ||||||||||||||||||||||
Asset-backed securities | ( | ||||||||||||||||||||||
Commercial mortgage-backed securities | ( | ||||||||||||||||||||||
Residential mortgage-backed securities | ( | ||||||||||||||||||||||
Corporate debt securities | ( | ||||||||||||||||||||||
| Total debt securities available for sale | $ | $ | $ | ( | $ | ||||||||||||||||||
Amortized Cost | Unrecognized | Fair Value | |||||||||||||||||||||
Gross Gains | Gross Losses | ||||||||||||||||||||||
| Debt securities held to maturity | |||||||||||||||||||||||
Commercial mortgage-backed securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Residential mortgage-backed securities | ( | ||||||||||||||||||||||
| Total debt securities held to maturity | $ | $ | $ | ( | $ | ||||||||||||||||||
___________________________________________
1.This table includes debt securities marked at par, with no gain or loss.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
| As of December 31, 2025 | |||||||||||||||||||||||
| (dollars in thousands) | Amortized Cost | Unrealized | Fair Value | ||||||||||||||||||||
Gross Gains | Gross Losses | ||||||||||||||||||||||
Debt securities available for sale1 | |||||||||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | $ | $ | ( | $ | ||||||||||||||||||
Obligations of states and political subdivisions | ( | ||||||||||||||||||||||
Asset-backed securities | ( | ||||||||||||||||||||||
Commercial mortgage-backed securities | ( | ||||||||||||||||||||||
Residential mortgage-backed securities | ( | ||||||||||||||||||||||
Corporate debt securities | ( | ||||||||||||||||||||||
Total debt securities available for sale | $ | $ | $ | ( | $ | ||||||||||||||||||
Amortized Cost | Unrecognized | Fair Value | |||||||||||||||||||||
Gross Gains | Gross Losses | ||||||||||||||||||||||
Debt securities held to maturity | |||||||||||||||||||||||
Commercial mortgage-backed securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Residential mortgage-backed securities | ( | ||||||||||||||||||||||
Total debt securities held to maturity | $ | $ | $ | ( | $ | ||||||||||||||||||
___________________________________________
1.This table includes debt securities marked at par, with no gain or loss.
Maturities of Debt Securities
Amortized cost and fair value of debt securities, by contractual maturity or pre-refunded date, are shown below. Mortgages underlying mortgage-backed securities and asset-backed securities may be called or prepaid; therefore, actual maturities could differ from the contractual maturities. All mortgage-backed securities were issued by U.S. government corporations and agencies.
| As of March 31, 2026 | |||||||||||
| (dollars in thousands) | Amortized Cost | Fair Value | |||||||||
| Debt securities available for sale | |||||||||||
| Due in one year or less | $ | $ | |||||||||
| Due after one year through five years | |||||||||||
| Due after five years through ten years | |||||||||||
| Due after ten years | |||||||||||
| Debt securities available for sale | $ | $ | |||||||||
| Debt securities held to maturity | |||||||||||
| Due in one year or less | $ | $ | |||||||||
| Due after one year through five years | |||||||||||
| Due after ten years | |||||||||||
| Debt securities held to maturity | $ | $ | |||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Gains and Losses on Debt Securities Available for Sale
Realized gains and losses related to sales and calls of debt securities available for sale are summarized as follows:
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
| Realized gains and losses on debt securities | |||||||||||
Gross gains on debt securities | $ | $ | |||||||||
Gross losses on debt securities1 | ( | ( | |||||||||
| Realized net gains (losses) on debt securities | $ | $ | ( | ||||||||
___________________________________________
1.During the first quarter of 2025, Busey sold available for sale debt securities with a book value of approximately $205.6 million for a pre-tax loss of $15.5 million and related estimated tax benefit of $4.3 million, as part of a balance sheet repositioning strategy.
Debt securities with carrying amounts of $723.0 million on March 31, 2026, and $744.2 million on December 31, 2025, were pledged as collateral for public deposits, securities sold under agreements to repurchase, and for other purposes as required.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Debt Securities in an Unrealized or Unrecognized Loss Position
The following information pertains to debt securities with gross unrealized or unrecognized losses, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:
| As of March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||
| (dollars in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||||||||||||
| Debt securities available for sale | |||||||||||||||||||||||||||||||||||
Obligations of U.S. government corporations and agencies1 | $ | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
Obligations of states and political subdivisions | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Asset-backed securities | ( | ( | |||||||||||||||||||||||||||||||||
| Commercial mortgage-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Residential mortgage-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Corporate debt securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Debt securities available for sale with gross unrealized losses | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
| Fair Value | Unrecognized Losses | Fair Value | Unrecognized Losses | ||||||||||||||||||||
| Debt securities held to maturity | |||||||||||||||||||||||
| Commercial mortgage-backed securities | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Residential mortgage-backed securities | ( | ( | |||||||||||||||||||||
| Debt securities held to maturity with gross unrecognized losses | $ | $ | ( | $ | $ | ( | |||||||||||||||||
___________________________________________
1.Losses on securities in a continuous loss position for 12 months or more were immaterial, rounding to zero thousand.
First Busey Corporation (BUSE) | 23
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
| As of December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||
| (dollars in thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||||||||||||||
| Debt securities available for sale | |||||||||||||||||||||||||||||||||||
Obligations of U.S. government corporations and agencies | $ | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
Obligations of states and political subdivisions | ( | ( | ( | ||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ( | |||||||||||||||||||||||||||||||||
Commercial mortgage-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Corporate debt securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Debt securities available for sale with gross unrealized losses | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
| Fair Value | Unrecognized Losses | Fair Value | Unrecognized Losses | ||||||||||||||||||||
| Debt securities held to maturity | |||||||||||||||||||||||
Commercial mortgage-backed securities | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Residential mortgage-backed securities | ( | ( | |||||||||||||||||||||
| Debt securities held to maturity with gross unrecognized losses | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Additional information about debt securities in an unrealized or unrecognized loss position is presented in the tables below:
| As of March 31, 2026 | |||||||||||||||||
| (dollars in thousands) | Available for Sale | Held to Maturity | Total | ||||||||||||||
| Debt securities with gross unrealized or unrecognized losses, fair value | $ | $ | $ | ||||||||||||||
| Gross unrealized or unrecognized losses on debt securities | |||||||||||||||||
| Ratio of gross unrealized or unrecognized losses to debt securities with gross unrealized or unrecognized losses | % | % | % | ||||||||||||||
| Count of debt securities | |||||||||||||||||
| Count of debt securities in an unrealized or unrecognized loss position | |||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
| As of December 31, 2025 | |||||||||||||||||
| (dollars in thousands) | Available for Sale | Held to Maturity | Total | ||||||||||||||
| Debt securities with gross unrealized or unrecognized losses, fair value | $ | $ | $ | ||||||||||||||
| Gross unrealized or unrecognized losses on debt securities | |||||||||||||||||
| Ratio of gross unrealized or unrecognized losses to debt securities with gross unrealized or unrecognized losses | % | % | % | ||||||||||||||
| Count of debt securities | |||||||||||||||||
| Count of debt securities in an unrealized or unrecognized loss position | |||||||||||||||||
Unrealized and unrecognized losses were related to changes in market interest rates and market conditions that do not represent credit-related impairments. Unless part of a corporate strategy or restructuring plan, Busey does not intend to sell securities that are in an unrealized or unrecognized loss position, and it is more likely than not that Busey will recover the amortized cost prior to being required to sell the debt securities. Full collection of the amounts due according to the contractual terms of the debt securities is expected; therefore, no ACL has been recorded in relation to debt securities, and the impairment related to noncredit factors on debt securities available for sale is recognized in AOCI, net of applicable taxes. As of March 31, 2026, Busey did not hold general obligation bonds of any single issuer that exceeded, in aggregate, 10% of Busey’s stockholders’ equity.
NOTE 4. PORTFOLIO LOANS
Loan Categories
Busey’s lending can be summarized in two primary categories: commercial and retail. Loans within these categories are further classified by lending activity: C&I and other commercial, commercial real estate, real estate construction, retail real estate, and retail other. Distributions of the loan portfolio by loan category and lending activity is presented in the following table:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Commercial loans | |||||||||||
| C&I and other commercial | $ | $ | |||||||||
| CRE | |||||||||||
| Real estate construction | |||||||||||
| Total commercial loans | |||||||||||
| Retail loans | |||||||||||
| Retail real estate | |||||||||||
| Retail other | |||||||||||
| Total retail loans | |||||||||||
| Total portfolio loans | |||||||||||
| ACL | ( | ( | |||||||||
| Portfolio loans, net | $ | $ | |||||||||
First Busey Corporation (BUSE) | 25
TABLE OF CONTENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Net deferred loan origination costs included in the balances above were $5.7 million as of March 31, 2026, compared to $7.0 million as of December 31, 2025. Net accretable purchase accounting adjustments included in the balances above reduced loans by $81.0 million as of March 31, 2026, and $86.6 million as of December 31, 2025. Deposit account overdrafts reported as loans totaled $6.1 million as of March 31, 2026, and $7.1 million as of December 31, 2025.
Busey did not execute any significant loan purchases or sales during the three months ended March 31, 2026. Other than loans assumed through acquisition activities, Busey did not execute any significant loan purchases or sales during the three months ended March 31, 2025.
Pledged Loans
Busey has executed a blanket lien with the FHLB. The principal balance of loans Busey has pledged as collateral with the FHLB and Federal Reserve Bank for liquidity, which Busey is able to borrow against, is set forth in the table below:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Pledged loans | |||||||||||
| FHLB | $ | $ | |||||||||
| Federal Reserve Bank | |||||||||||
| Total pledged loans | $ | $ | |||||||||
Risk Grading
Busey utilizes a loan grading scale to assign a risk grade to all of its loans. A description of the general characteristics of each grade is as follows:
•Pass – This category includes loans that are all considered acceptable credits, ranging from investment or near investment grade, to loans made to borrowers who exhibit credit fundamentals that meet or exceed industry standards.
•Watch – This category includes loans that warrant a higher-than-average level of monitoring to ensure that weaknesses do not cause the inability of the credit to perform as expected. These loans are not necessarily a problem due to other inherent strengths of the credit, such as guarantor strength, but have above average concern and monitoring.
•Special mention – This category is for “Other Assets Specially Mentioned” loans that have potential weaknesses, which may, if not checked or corrected, weaken the asset or inadequately protect Busey’s credit position at some future date.
•Substandard – This category includes “Substandard” loans, determined in accordance with regulatory guidelines, for which the accrual of interest has not been stopped. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that Busey will sustain some loss if the deficiencies are not corrected.
•Substandard non-accrual – This category includes loans that have all the characteristics of a “Substandard” loan with additional factors that make collection in full highly questionable and improbable. Such loans are placed on non-accrual status and may be dependent on collateral with a value that is difficult to determine.
All loans are graded at their inception. Commercial lending relationships that are $2.0 million or less are usually processed through an expedited underwriting process. Most commercial loans greater than $2.0 million are included in a portfolio review at least annually. Commercial loans greater than $0.35 million that have a grading of special mention or worse are typically reviewed on a quarterly basis. Interim reviews may take place if circumstances of the borrower warrant a more frequent review.
First Busey Corporation (BUSE) | 26
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Risk grades of portfolio loans and gross charge-offs are presented in the tables below by lending activity, further sorted by origination year:
| As of and For The Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| Risk Grade Ratings | Term Loans Amortized Cost Basis by Origination Year | Revolving Loans | Total | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | |||||||||||||||||||||||||||||||||||||||||
| C&I and other commercial | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Watch | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard non-accrual | |||||||||||||||||||||||||||||||||||||||||||||||
| Total C&I and other commercial | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| CRE | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Watch | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard non-accrual | |||||||||||||||||||||||||||||||||||||||||||||||
| Total CRE | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Real estate construction | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Watch | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard non-accrual | |||||||||||||||||||||||||||||||||||||||||||||||
| Total real estate construction | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Retail real estate | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Watch | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard non-accrual | |||||||||||||||||||||||||||||||||||||||||||||||
| Total retail real estate | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Retail other | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard non-accrual | |||||||||||||||||||||||||||||||||||||||||||||||
| Total retail other | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Total portfolio loans | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Total gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
First Busey Corporation (BUSE) | 27
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
| As of and For The Year Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Risk Grade Ratings | Term Loans Amortized Cost Basis by Origination Year | Revolving Loans | Total | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | Prior | |||||||||||||||||||||||||||||||||||||||||
| C&I and other commercial | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Watch | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard non-accrual | |||||||||||||||||||||||||||||||||||||||||||||||
| Total C&I and other commercial | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| CRE | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Watch | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard non-accrual | |||||||||||||||||||||||||||||||||||||||||||||||
| Total CRE | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Real estate construction | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Watch | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard non-accrual | |||||||||||||||||||||||||||||||||||||||||||||||
| Total real estate construction | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Retail real estate | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Watch | |||||||||||||||||||||||||||||||||||||||||||||||
| Special Mention | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard non-accrual | |||||||||||||||||||||||||||||||||||||||||||||||
| Total retail real estate | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Retail other | |||||||||||||||||||||||||||||||||||||||||||||||
| Pass | |||||||||||||||||||||||||||||||||||||||||||||||
| Substandard non-accrual | |||||||||||||||||||||||||||||||||||||||||||||||
| Total retail other | |||||||||||||||||||||||||||||||||||||||||||||||
| Gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||
| Total portfolio loans | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Total gross charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
First Busey Corporation (BUSE) | 28
TABLE OF CONTENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Past Due and Non-accrual Loans
An analysis of portfolio loans that were past due and still accruing, or on a non-accrual status, is presented in the table below:
| As of March 31, 2026 | |||||||||||||||||||||||||||||
| Loans Past Due, Still Accruing | Non-Accrual Loans | Non-Accrual Loans with No Allowance for Credit Losses | |||||||||||||||||||||||||||
| (dollars in thousands) | 30-59 Days | 60-89 Days | 90+Days | ||||||||||||||||||||||||||
| Commercial loans | |||||||||||||||||||||||||||||
| C&I and other commercial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| CRE | |||||||||||||||||||||||||||||
| Real estate construction | |||||||||||||||||||||||||||||
| Past due and non-accrual commercial loans | |||||||||||||||||||||||||||||
| Retail loans | |||||||||||||||||||||||||||||
| Retail real estate | |||||||||||||||||||||||||||||
| Retail other | |||||||||||||||||||||||||||||
| Past due and non-accrual retail loans | |||||||||||||||||||||||||||||
| Total past due and non-accrual loans | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||||||||
| Loans Past Due, Still Accruing | Non-Accrual Loans | Non-Accrual Loans with No Allowance for Credit Losses | |||||||||||||||||||||||||||
| (dollars in thousands) | 30-59 Days | 60-89 Days | 90+Days | ||||||||||||||||||||||||||
| Commercial loans | |||||||||||||||||||||||||||||
| C&I and other commercial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| CRE | |||||||||||||||||||||||||||||
| Real estate construction | |||||||||||||||||||||||||||||
| Past due and non-accrual commercial loans | |||||||||||||||||||||||||||||
| Retail loans | |||||||||||||||||||||||||||||
| Retail real estate | |||||||||||||||||||||||||||||
| Retail other | |||||||||||||||||||||||||||||
| Past due and non-accrual retail loans | |||||||||||||||||||||||||||||
| Total past due and non-accrual loans | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Gross interest income recorded on 90+ days past due loans, and that would have been recorded on non-accrual loans if they had been accruing interest in accordance with their original terms, was $1.1 million for the three months ended March 31, 2026, and was $0.2 million for the three months ended March 31, 2025. The amount of interest collected on those loans and recognized on a cash basis that was included in interest income was $0.6 million for the three months ended March 31, 2026, and was immaterial for the three months ended March 31, 2025.
First Busey Corporation (BUSE) | 29
TABLE OF CONTENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Loan Modifications for Borrowers Experiencing Financial Difficulty
The following tables present the amortized cost basis of loans that were modified—specifically in the form of (1) principal forgiveness, (2) an interest rate reduction, (3) an other-than-insignificant payment deferral, and/or (4) a term extension—for borrowers experiencing financial difficulty during the periods indicated, disaggregated by lending activity and the type of modification:
| Three Months Ended March 31, 2026 | |||||||||||||||||
| (dollars in thousands) | Payment Deferral | Term Extension | % of Total Class of Financing Receivable | ||||||||||||||
| Modified Loans | |||||||||||||||||
C&I and other commercial | $ | $ | % | ||||||||||||||
Total loans modified during the period1 | $ | $ | % | ||||||||||||||
1.Modifications were primarily for loans classified as substandard.
| Three Months Ended March 31, 2025 | |||||||||||||||||
| (dollars in thousands) | Payment Deferral | Term Extension | % of Total Class of Financing Receivable | ||||||||||||||
Modified Loans | |||||||||||||||||
C&I and other commercial | $ | $ | % | ||||||||||||||
CRE | % | ||||||||||||||||
Real estate construction | % | ||||||||||||||||
Total loans modified during the period1 | $ | $ | % | ||||||||||||||
1.All modifications were for loans classified as substandard.
The following table provides, as applicable for loan modifications made during the periods indicated for borrowers experiencing financial difficulty, the weighted average interest rate reductions and weighted average term extensions:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Weighted Average Term Extension | Weighted Average Term Extension | ||||||||||
| C&I and other commercial | |||||||||||
| CRE | — | ||||||||||
| Real estate construction | — | ||||||||||
| Aggregate effect | |||||||||||
Payment deferrals for borrowers experiencing financial difficulty can include deferrals of 3 or more payments to the end of the loan, accommodations to restructure the payment terms of the loan, or accommodations to allow for an interest-only period on the loan.
First Busey Corporation (BUSE) | 30
TABLE OF CONTENTS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Performance of Modified Loans
Busey closely monitors the performance of the loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the payment performance of loans modified during the last twelve months:
| As of March 31, 2026 | |||||||||||||||||||||||
| (dollars in thousands) | Current | 30-89 Days | 90+ Days | Non-accrual | |||||||||||||||||||
| Modified Loans | |||||||||||||||||||||||
| C&I and other commercial | $ | $ | $ | $ | |||||||||||||||||||
| CRE | |||||||||||||||||||||||
| Real estate construction | |||||||||||||||||||||||
| Loans modified during the last twelve months | $ | $ | $ | $ | |||||||||||||||||||
Busey had commitments of $15.1 million as of March 31, 2026, and $13.5 million as of December 31, 2025, to lend additional funds to debtors experiencing financial difficulty for whom Busey modified a loan within the past twelve months.
A default occurs when a loan is 90 days or more past due or transferred to non-accrual status. The following table presents loans that defaulted after having been modified during the twelve months before the default.
| Three Months Ended March 31, 2026 | |||||
| (dollars in thousands) | Term Extension | ||||
| Loans with Subsequent Defaults | |||||
| CRE | $ | ||||
| Modified loans with subsequent defaults | $ | ||||
No loans had a default during the three months ended March 31, 2025, after having been modified during the twelve months before that default for borrowers experiencing financial difficulty.
Collateral Dependent Loans
Management's evaluation as to the ultimate collectability of loans includes estimates regarding future cash flows from operations and the value of property, real and personal, pledged as collateral. These estimates are affected by changing economic conditions and the economic prospects of borrowers. Collateral dependent loans are loans in which repayment is expected to be provided solely by the operation or sale of the underlying collateral and there are no other available and reliable sources of repayment. Collateral dependent loans are secured by (1) business assets, for C&I and other commercial loans; (2) real estate, for CRE and retail real estate loans; and (3) vehicles and other personal assets, for retail other loans. Loans are written down to the lower of cost or fair value of the underlying collateral, less estimated costs to sell. Busey had $41.8 million and $47.8 million of collateral dependent loans as of March 31, 2026, and December 31, 2025, respectively.
OREO and Other Repossessed Assets
Busey held $0.1 million of commercial OREO, an immaterial amount of residential OREO, and $3.2 million of other repossessed assets, as of March 31, 2026. Busey’s recorded investment in residential real estate loans that were in the process of foreclosure was $1.2 million as of March 31, 2026. Busey follows Federal Housing Finance Agency guidelines on single-family foreclosures and real estate owned evictions on portfolio loans.
First Busey Corporation (BUSE) | 31
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Allowance for Credit Losses
The ACL is a valuation account that is deducted from the portfolio loans’ amortized cost bases to present the net amount expected to be collected on the portfolio loans. The ACL is established through the provision for credit losses charged to income. Portfolio loans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed. Recoveries are recognized up to the aggregate amount of previously charged-off balances.
Management estimates the ACL balance using relevant available information from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The ACL consists of three components: (1) specific allocations/individual reserves; (2) quantitative reserves; and (3) qualitative reserves.
•Specific allocations/individual reserves – When a loan no longer exhibits risk characteristics that are similar to other loans, that loan is individually evaluated. Individual reserves are calculated for loans that are on a non-accrual status that are greater than a defined dollar threshold or loans that have disparate risk characteristics. Reserves may be based on collateral, for collateral-dependent loans, or on quantitative and qualitative factors, including expected cash flow, market sentiment, and guarantor support.
•Quantitative reserves – Busey implemented a new non-discounted cash flow model in the second quarter of 2025 that used combined historical loan data from Busey Bank beginning in 2004 and CrossFirst Bank since its inception in 2007. The model incorporates various baseline forecast scenarios and national unemployment rates with either national gross domestic product, the national home price index, or the national commercial real estate price index. Further, prepayment and curtailment expectations are factored into the model. Due to the continued economic uncertainty in the markets in which the Company operates, Busey will continue to utilize a forecast period of 12 months with an immediate reversion to historical loss rates beyond this forecast period in its ACL estimate.
•Qualitative reserves – Busey uses qualitative factors to adjust the historical loss factors for current and forecasted conditions. Busey considers the ten qualitative factors identified in the Interagency Guidance and ASC Topic 326 at each reporting date.
The following tables summarize activity in the ACL attributable to each lending activity. Allocation of a portion of the ACL to one lending activity does not preclude its availability to absorb losses from other lending activities:
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | C&I and Other Commercial | CRE | Real Estate Construction | Retail Real Estate | Retail Other | Total | |||||||||||||||||||||||||||||
| ACL balance, December 31, 2025 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Provision for loan losses | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Charged-off | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Recoveries | |||||||||||||||||||||||||||||||||||
| ACL balance, March 31, 2026 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | C&I and Other Commercial | CRE | Real Estate Construction | Retail Real Estate | Retail Other | Total | |||||||||||||||||||||||||||||
| ACL balance, December 31, 2024 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Day 1 PCD1 | |||||||||||||||||||||||||||||||||||
Day 2 Provision for loan losses2 | |||||||||||||||||||||||||||||||||||
Provision for loan losses | ( | ( | ( | ||||||||||||||||||||||||||||||||
Charged-off3 | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Recoveries | |||||||||||||||||||||||||||||||||||
| ACL balance, March 31, 2025 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
1.The Day 1 PCD was attributable to the CrossFirst acquisition (see “Note 2. Business Combinations”), and represents the initial adjustment to the fair value of the PCD loans.
2.The Day 2 provision for loan losses was attributable to the CrossFirst acquisition (see “Note 2. Business Combinations”), and represents the initial provision for non-PCD loans.
3.Charged-off amounts included $29.6 million for PCD loans assumed in the CrossFirst acquisition, which were fully reserved at acquisition and did not require recording additional provision expense.
NOTE 5. LEASES
Busey as the Lessee
Busey’s leases consist primarily of real estate leases for banking centers, ATM locations, and office space, as well as equipment leases. The following table summarizes lease-related balances that Busey reported on its Consolidated Balance Sheets (Unaudited):
| As of | |||||||||||||||||
| (dollars in thousands) | Location | March 31, 2026 | December 31, 2025 | ||||||||||||||
| Lease balances | |||||||||||||||||
| Right of use assets: | |||||||||||||||||
Operating leases | Other assets | $ | $ | ||||||||||||||
Finance leases1 | Premises and equipment, net | ||||||||||||||||
Total right of use assets | $ | $ | |||||||||||||||
| Lease liabilities: | |||||||||||||||||
Operating leases | Other liabilities | $ | $ | ||||||||||||||
Finance leases | Long-term borrowings | ||||||||||||||||
Total lease liabilities | $ | $ | |||||||||||||||
1.Balances are presented net of accumulated amortization of $0.3 million and $0.3 million at March 31, 2026, and December 31, 2025, respectively.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Lease terms are summarized as follows:
| As of | |||||||||||
| March 31, 2026 | December 31, 2025 | ||||||||||
| Lease terms | |||||||||||
| Weighted average remaining lease terms: | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
| Weighted average discount rates: | |||||||||||
| Operating leases | % | % | |||||||||
| Finance leases | % | % | |||||||||
The following table presents lease costs that Busey reported on its Consolidated Statements of Income (Unaudited):
| Three Months Ended March 31, | |||||||||||||||||
| (dollars in thousands) | Location | 2026 | 2025 | ||||||||||||||
| Lease costs | |||||||||||||||||
Operating lease costs: | |||||||||||||||||
Premises rent expense | Net occupancy expense of premises | $ | $ | ||||||||||||||
Equipment rent expense | Furniture and equipment expenses | ||||||||||||||||
Finance lease costs: | |||||||||||||||||
Amortization expense | Net occupancy expense of premises | ||||||||||||||||
Interest expense | Long-term borrowings | ||||||||||||||||
Variable lease costs | Net occupancy expense of premises | ||||||||||||||||
Short-term lease costs | Net occupancy expense of premises | ||||||||||||||||
Total lease cost | $ | $ | |||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities is presented in the following table:
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
| Cash flows related to leases | |||||||||||
Operating cash flows from operating leases | $ | $ | |||||||||
Operating cash flows from finance leases | |||||||||||
Financing cash flows from finance leases | |||||||||||
Right of use assets obtained in exchange for operating lease liabilities1 | |||||||||||
1.The three months ended March 31, 2025, included $30.7 million right of use assets recognized in connection with the acquisition of CrossFirst.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Future undiscounted payments for leases with initial terms of one year or more are presented in the table below:
| As of March 31, 2026 | |||||||||||
| (dollars in thousands) | Operating Leases | Finance Leases | |||||||||
| Rent commitments | |||||||||||
| Remainder of 2026 | $ | $ | |||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| 2029 | |||||||||||
| 2030 | |||||||||||
| 2031 | |||||||||||
| Thereafter | |||||||||||
| Total undiscounted cash flows | |||||||||||
| Less: Amounts representing interest | |||||||||||
| Present value of net future minimum lease payments | $ | $ | |||||||||
As of March 31, 2026, Busey had commitments totaling $1.7 million for one lease contract with a future accounting commencement date.
Busey as the Lessor
Busey leases space to outside parties, consisting of operating leases primarily for offices and parking areas. Revenues recorded in connection with these leases, reported in other income on Busey’s Consolidated Statements of Income (Unaudited), are summarized in the table below:
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
| Rental income | $ | $ | |||||||||
Noncancellable terms for these leases extend through 2030. Under the terms of these lease agreements, Busey is entitled to receive aggregate future lease payments as shown in the table below:
| (dollars in thousands) | As of March 31, 2026 | ||||
| Rents to be received | |||||
| Remainder of 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Total lease payments from operating leases | $ | ||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 6. DEPOSITS
The composition of Busey’s deposits is presented in the table below:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Deposits | |||||||||||
| Noninterest-bearing demand deposits | $ | $ | |||||||||
| Interest-bearing transaction deposits | |||||||||||
| Saving deposits and money market deposits | |||||||||||
| Time deposits | |||||||||||
| Total deposits | $ | $ | |||||||||
Additional information about Busey’s deposits is presented in the table below:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Brokered interest-bearing transaction deposits | $ | $ | |||||||||
| Brokered savings deposits and money market deposits | |||||||||||
| Brokered time deposits | |||||||||||
Aggregate amount of time deposits with a minimum denomination of $100,000 | |||||||||||
Aggregate amount of time deposits with a minimum denomination that meets or exceeds the FDIC insurance limit of $250,000 | |||||||||||
Scheduled maturities of time deposits are presented in the table below:
| (dollars in thousands) | As of March 31, 2026 | ||||
| Time deposits by schedule of maturities | |||||
| Remainder of 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| 2031 | |||||
| Thereafter | |||||
| Time deposits | $ | ||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 7. BORROWINGS
Securities Sold Under Agreements to Repurchase
Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature daily. Securities sold under agreements to repurchase are reflected at the amount of cash received in connection with the transaction. The underlying securities are held by Busey’s safekeeping agent. Busey may be required to provide additional collateral based on fluctuations in the fair value of the underlying securities. Securities sold under agreements to repurchase were as follows:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Securities sold under agreements to repurchase | $ | $ | |||||||||
| Weighted average rate for securities sold under agreements to repurchase | % | % | |||||||||
Revolving Line of Credit
Pursuant to the Second Amended and Restated Credit Agreement, on March 31, 2026, Busey had access to a $40.0 million revolving line of credit bearing an interest rate of 1.80 % plus the one-month forward-looking term rate based on SOFR. Effective April 30, 2026, Busey executed an amendment to its Second Amended and Restated Credit Agreement, pursuant to which: (1) Busey’s revolving line of credit increased to $50.0 million, (2) the interest rate on the revolving line of credit was reduced to the one-month Term SOFR rate plus 1.65 %, and (3) the termination date for the agreement was extended to April 30, 2027.
As of March 31, 2026, there was no balance outstanding on the revolving line of credit. The revolving line of credit incurs an insignificant non-usage fee based on any undrawn amounts.
Short-term Borrowings
Busey’s short-term borrowings include, as applicable, loans maturing within one year of the loan origination date, the current portion of long-term debt that is due within 12 months, and federal funds purchased. Federal funds purchased are short-term borrowings that generally mature between one day and 90 days. During the first quarter of 2026, Busey purchased federal funds to test operational availability to access funds if needed.
Short-term borrowings are presented in the table below:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Short-term borrowings | |||||||||||
| FHLB advances maturing in less than one year from date of origination, and the current portion of long-term FHLB advances due within 12 months | $ | $ | |||||||||
| Total short-term borrowings | $ | $ | |||||||||
Funds borrowed from the FHLB, listed above, consisted of two notes with a weighted average interest rate of 3.80 % and a weighted average maturity period of 1 day as of March 31, 2026.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Long-term Borrowings
Busey’s long-term borrowings consist of borrowings maturing more than one year from the loan origination date, excluding the current portion that is due within 12 months, and finance lease liabilities. Long-term borrowings are presented in the table below:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Long-term borrowings | |||||||||||
FHLB borrowings | $ | $ | |||||||||
Secured borrowings | |||||||||||
Finance lease liabilities | |||||||||||
| Total long-term borrowings | $ | $ | |||||||||
Funds borrowed from the FHLB, listed above, consisted of seventeen notes with a weighted average interest rate of 2.49 % and a weighted average maturity period of 1.70 years as of March 31, 2026. Maturity dates for the long-term FHLB borrowings range from May 2027 through December 2030. In comparison, as of December 31, 2025, funds borrowed from the FHLB, listed above, consisted of fifteen notes with a weighted average interest rate of 2.43 % and a weighted average maturity period of 1.96 years.
Acquired SBA loans that did not qualify for sale accounting treatment are presented as secured borrowings. Secured borrowings consisted of six notes with a weighted average maturity period of 15.37 years as of March 31, 2026. Maturity dates for the secured borrowings range from September 2030 through September 2045. In comparison, as of December 31, 2025, secured borrowings consisted of seven notes with a weighted average maturity period of 17.01 years.
Subordinated Notes
On June 2, 2022, Busey issued $100.0 million aggregate principal amount of 5.000 % fixed-to-floating rate subordinated notes maturing June 15, 2032, which qualify as Tier 2 capital for regulatory purposes. The price to the public for the subordinated notes was 100 % of the principal amount of the subordinated notes. Interest on the subordinated notes accrues at a rate equal to (1) 5.000 % per annum from the original issue date to, but excluding, June 15, 2027, payable semiannually in arrears, and (2) a floating rate per annum equal to a benchmark rate, which is the (as defined in the subordinated notes), plus a spread of 252 bps from and including June 15, 2027, payable quarterly in arrears. The subordinated notes have an optional redemption, in whole or in part, on any interest payment date on or after June 15, 2027.
Unamortized debt issuance costs related to Busey’s subordinated notes are presented in the following table:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Unamortized debt issuance costs | $ | $ | |||||||||
Junior Subordinated Debt Owed to Unconsolidated Trusts
In January 2026, Busey’s Board of Directors approved the redemption of the trust preferred securities issued by First Busey Statutory Trust II. Approval for the redemption has been received from the Federal Reserve Bank. Busey expects to complete the redemption in June of 2026.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 8. REGULATORY CAPITAL
First Busey and Busey Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory—and possibly additional discretionary—actions by regulators that, if undertaken, could have a direct material effect on First Busey's consolidated financial statements. Capital amounts and classification also are subject to qualitative judgments by regulators about components, risk weightings, and other factors.
Banking regulations identify five capital categories for insured depository institutions: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. As of March 31, 2026, and December 31, 2025, all capital ratios of First Busey and Busey Bank exceeded well capitalized levels under the applicable regulatory capital adequacy guidelines. Management believes that no events or changes have occurred subsequent to March 31, 2026, that would change this designation.
Capital Amounts and Ratios
The following tables summarize regulatory capital requirements applicable to First Busey and Busey Bank:
| As of March 31, 2026 | |||||||||||||||||||||||||||||||||||
| Actual | Minimum Capital Requirement | Minimum To Be Well Capitalized | |||||||||||||||||||||||||||||||||
| (dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||||||
| Common equity Tier 1 capital to risk weighted assets | |||||||||||||||||||||||||||||||||||
| First Busey | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
| Busey Bank | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
| Tier 1 capital to risk weighted assets | |||||||||||||||||||||||||||||||||||
| First Busey | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
| Busey Bank | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
| Total capital to risk weighted assets | |||||||||||||||||||||||||||||||||||
| First Busey | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
| Busey Bank | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
| Leverage ratio of Tier 1 capital to average assets | |||||||||||||||||||||||||||||||||||
| First Busey | $ | % | $ | % | N/A | N/A | |||||||||||||||||||||||||||||
| Busey Bank | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
| As of December 31, 2025 | |||||||||||||||||||||||||||||||||||
| Actual | Minimum Capital Requirement | Minimum To Be Well Capitalized | |||||||||||||||||||||||||||||||||
| (dollars in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||||||||||||
| Common equity Tier 1 capital to risk weighted assets | |||||||||||||||||||||||||||||||||||
| First Busey | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
| Busey Bank | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
| Tier 1 capital to risk weighted assets | |||||||||||||||||||||||||||||||||||
| First Busey | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
| Busey Bank | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
| Total capital to risk weighted assets | |||||||||||||||||||||||||||||||||||
| First Busey | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
| Busey Bank | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
| Leverage ratio of Tier 1 capital to average assets | |||||||||||||||||||||||||||||||||||
| First Busey | $ | % | $ | % | N/A | N/A | |||||||||||||||||||||||||||||
| Busey Bank | $ | % | $ | % | $ | % | |||||||||||||||||||||||||||||
Capital Conservation Buffer
In July 2013, U.S. federal banking authorities approved the Basel III Rule for strengthening international capital standards. The Basel III Rule introduced a capital conservation buffer, composed entirely of common equity Tier 1 capital, which is added to the minimum risk-weighted asset ratios. The capital conservation buffer is not a minimum capital requirement; however, banking institutions with a ratio of common equity Tier 1 capital to risk-weighted assets below the capital conservation buffer will face constraints on dividends, equity repurchases, and discretionary bonus payments based on the amount of the shortfall. In order to refrain from restrictions on dividends, equity repurchases, and discretionary bonus payments, banking institutions must maintain minimum ratios of (1) common equity Tier 1 capital to risk-weighted assets of at least 7.0%, (2) Tier 1 capital to risk-weighted assets of at least 8.5%, and (3) total capital to risk-weighted assets of at least 10.5%.
NOTE 9. TAX CREDIT INVESTMENTS AND OTHER INVESTMENTS IN UNCONSOLIDATED ENTITIES
Busey’s investments in unconsolidated entities and related unfunded investment obligations are reflected in other assets and other liabilities on the Consolidated Balance Sheets (Unaudited), and are summarized in the table below for the periods indicated:
| As of | |||||||||||||||||
| (dollars in thousands) | Location | March 31, 2026 | December 31, 2025 | ||||||||||||||
| Investments in unconsolidated entities | |||||||||||||||||
| Tax credit investments | Other assets | $ | $ | ||||||||||||||
| Other investments in unconsolidated entities | Other assets | ||||||||||||||||
| Investments in unconsolidated entities | $ | $ | |||||||||||||||
| Unfunded investment obligations | Other liabilities | $ | $ | ||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Busey applies the proportional amortization method in accounting for investments in tax-advantaged projects. Income tax credits and other benefits related to these investments, along with investment amortization, are included as a component of Busey’s estimated annual effective tax rate used for the calculation of income taxes presented on the Consolidated Statements of Income (Unaudited). Actual amounts of income tax credits and other benefits, along with the investment amortization, are presented in the table below:
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
| Income tax credits and other tax benefits | $ | $ | |||||||||
| Amortization of investments in tax-advantaged projects | |||||||||||
NOTE 10. STOCK-BASED COMPENSATION
Changes in Busey’s outstanding equity awards are presented in the tables below:
RSU Awards | PSU Awards1 | DSU Awards | |||||||||||||||
Nonvested at December 31, 2025 | |||||||||||||||||
Granted | |||||||||||||||||
Dividend equivalents earned | |||||||||||||||||
Vested | ( | ( | ( | ||||||||||||||
Forfeited | ( | ( | |||||||||||||||
Nonvested at March 31, 2026 | |||||||||||||||||
Vested and outstanding at March 31, 2026 | |||||||||||||||||
___________________________________________
1.Represents target shares at the grant date.
Options | SSARs | ||||||||||
Outstanding at December 31, 2025 | |||||||||||
Exercised | ( | ( | |||||||||
Forfeited | |||||||||||
Expired | |||||||||||
Outstanding at March 31, 2026 | |||||||||||
Exercisable at March 31, 2026 | |||||||||||
Shares remaining available for issuance under Busey’s equity compensation plans as of March 31, 2026, are set forth in the table below:
| Plan | Shares Remaining Available for Issuance Pursuant to the Plan | |||||||
| 2020 Equity Plan | ||||||||
| ESPP | ||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Stock-based Compensation Expense
Busey recognized compensation expense related to non-vested equity awards as summarized in the table below:
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
Stock-based compensation expense | |||||||||||
Salaries, wages, and employee benefits1 | $ | $ | |||||||||
Other expense2 | |||||||||||
Total stock-based compensation expense | $ | $ | |||||||||
___________________________________________
1.Includes expenses for RSUs, PSUs, SSARs, and the ESPP.
2.Represents expenses for DSU awards.
Unamortized compensation expense related to non-vested equity awards is summarized in the table below:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
Unamortized stock-based compensation | $ | $ | |||||||||
Weighted average period over which expense is to be recognized on awards issued under Busey's 2020 Equity Plan | |||||||||||
Weighted average period over which expense is to be recognized on CrossFirst replacement awards | |||||||||||
NOTE 11. OUTSTANDING COMMITMENTS AND CONTINGENT LIABILITIES
Commitments and Credit Risk
A summary of the contractual amount of Busey’s exposure to off-balance sheet risk relating to the Company’s commitments follows:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Off-Balance Sheet Commitments | |||||||||||
| Commitments to extend credit | $ | $ | |||||||||
| Standby letters of credit | |||||||||||
| Total commitments | $ | $ | |||||||||
Legal Matters
Busey is a party to legal actions which arise in the normal course of its business activities. Additionally, on November 25, 2025, First Busey Corporation filed two lawsuits against the Illinois Secretary of State in connection with an ongoing dispute regarding the amount of franchise taxes, penalties, interest, fees, and charges purportedly due from First Busey Corporation to the Illinois Secretary of State, as described in more detail under the heading “Franchise Tax Matter” below. Legal and administrative proceedings are subject to inherent uncertainties. While unfavorable outcomes could occur, Busey does not believe at this time that any potential liabilities relating to pending or potential legal matters are likely to have a material impact on Busey's results of operations or financial position.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Franchise Tax Matter
In 2021, First Busey Corporation received an inquiry from the Illinois Secretary of State, pursuant to which the Illinois Secretary of State asked for additional information regarding certain of First Busey Corporation’s franchise tax filings and the calculation of amounts due thereunder. The franchise tax is established by the Illinois Business Corporation Act (“BCA”) 805 ILCS 5/1 et seq., and is a tax imposed on foreign and domestic corporations for the privilege of conducting business in Illinois. First Busey Corporation has been cooperating with the inquiry since the initial outreach from the Illinois Secretary of State in 2021 and in October 2024 delivered additional BCA forms requested by the Illinois Secretary of State, with a full reservation of rights by First Busey Corporation.
On March 20, 2025, the Illinois Secretary of State requested that First Busey Corporation resubmit the requested forms using a proposed methodology for paid-in capital that First Busey Corporation views as inconsistent with the Illinois Secretary of State’s past practice, and existing statutory and case law. Accordingly, on May 14, 2025, within the Illinois Secretary of State’s requested timeframe, First Busey Corporation informed the Illinois Secretary of State that it would not resubmit the requested forms with the methodology that First Busey Corporation disputes and requested that the parties instead continue good faith discussions. On July 2, 2025, First Busey Corporation received a notice of hearing from the Illinois Secretary of State indicating that an administrative hearing has been scheduled to “ascertain” the required amount of franchise taxes, penalties, interest, fees, and charges purportedly due from First Busey Corporation to the Illinois Secretary of State. In the notice, the Illinois Secretary of State requested a determination of an amount due that the Illinois Secretary of State preliminarily estimated in excess of $28.0 million, including in excess of $17.4 million in interest and approximately $0.3 million in penalties. First Busey Corporation disagrees with the Illinois Secretary of State’s preliminary estimate and believes that the Illinois Secretary of State’s request is contrary not only to the Illinois Secretary of State’s past practice, but also existing statutory and case law. First Busey Corporation intends to vigorously defend itself against the Illinois Secretary of State’s notice, including through appropriate judicial relief. To that end, on July 31, 2025, First Busey Corporation filed a special appearance with the Illinois Secretary of State’s Department of Administrative Hearings solely for the limited purpose of contesting the jurisdiction of the Illinois Secretary of State to initiate and conduct the administrative hearing, and on November 25, 2025, First Busey Corporation filed two lawsuits against the Illinois Secretary of State in connection with this matter: one in federal court, First Busey Corporation v. Alexi Giannoulias, No. 3:25-cv-50488 (N.D. Ill.); and one in Illinois state court, First Busey Corporation v. Alexi Giannoulias, No. 25-MR-283 (Sixth Judicial Circuit of Illinois, Champaign County). Both lawsuits and the administrative hearing remain pending.
Where a loss is believed to be reasonably possible, but not probable, or the loss cannot be reasonably estimated, no accrual is required. Given the underlying disagreement between First Busey Corporation and the Illinois Secretary of State on the proper methodology for calculating any franchise tax owed, the loss cannot be reasonably estimated. It is reasonably possible that this matter could require First Busey Corporation to pay additional taxes, including potential penalties and interest, or make other expenditures or accrue liabilities in amounts that could not be reasonably estimated as of March 31, 2026. If the likelihood of potential liabilities elevates and First Busey Corporation becomes able to reasonably estimate the loss, requiring an accrual, the potential future liabilities could be material in the period(s) in which they are recorded.
NOTE 12. DERIVATIVE FINANCIAL INSTRUMENTS
Busey utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. Additionally, Busey enters into derivative financial instruments, including interest rate lock commitments issued to residential loan customers for loans that will be held for sale; forward sales commitments to sell residential mortgage loans to investors; and interest rate swaps and risk participation agreements with customers and other third parties. See “Note 13: Fair Value Measurements” for further discussion of the fair value measurement of such derivatives.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
To secure its obligations under derivative contracts, Busey pledged cash and held collateral as follows:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Cash pledged to secure obligations under derivative contracts | $ | $ | |||||||||
| Collateral held to secure obligations under derivative contracts | |||||||||||
Derivative Instruments Designated as Hedges
Busey entered into derivative instruments designated as cash flow hedges. For a derivative instrument that is designated and qualifies as a cash flow hedge, the change in fair value of the derivative instrument is reported as a component of OCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Changes in fair value of components excluded from the assessment of effectiveness are recognized in current earnings.
Interest Rate Swaps Designated as Cash Flow Hedges
Interest rate swaps with notional amounts totaling $700.0 million as of March 31, 2026, and $500.0 million as of December 31, 2025, were designated as cash flow hedges. Busey entered into a $300.0 million receive-fixed, pay-floating interest rate swap to reduce Busey’s asset sensitivity (“Prime Loan Swap”). Duration was added to Busey’s loan portfolio by fixing a portion of floating prime-based loans. Interest rates had risen above their historical lows allowing Busey to lock in a portion of its loan portfolio to reduce asset sensitivity while creating a more stable margin in a volatile rate market. These hedges were determined to be highly effective during the period, and Busey expects its hedges to remain highly effective during the remaining terms of the swaps. Further, Busey entered into forward-starting SOFR-based receive-fixed pay-floating interest rate swaps totaling $400.0 million to reduce Busey’s asset sensitivity (“SOFR Loan Swaps”). These hedges were determined to be highly effective during the period, and Busey expects its hedges to remain highly effective during the remaining terms of the swaps. Changes in fair value were recorded net of tax in OCI.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
A summary of the interest-rate swaps designated as cash flow hedges is presented below:
| As of | |||||||||||||||||
| (dollars in thousands) | Location | March 31, 2026 | December 31, 2025 | ||||||||||||||
| Prime Loan Swap | |||||||||||||||||
| Notional amount | $ | $ | |||||||||||||||
| Weighted average rate: receive-fixed | % | % | |||||||||||||||
| Weighted average variable Prime pay rates | % | % | |||||||||||||||
| Weighted average maturity | |||||||||||||||||
| SOFR Loan Swaps | |||||||||||||||||
| Notional amount | $ | $ | |||||||||||||||
| Weighted average rate: receive-fixed | % | % | |||||||||||||||
Weighted average variable 1-month CME Term SOFR pay rates1 | % | % | |||||||||||||||
| Weighted average maturity | |||||||||||||||||
| Gross aggregate fair value of the swaps | |||||||||||||||||
| Gross aggregate fair value of swap assets | Other assets | $ | $ | ||||||||||||||
| Gross aggregate fair value of swap liabilities | Other liabilities | ||||||||||||||||
| Balances carried in AOCI | |||||||||||||||||
| Unrealized gains (losses) on cash flow hedges, net of tax | AOCI | $ | ( | $ | ( | ||||||||||||
___________________________________________
1.A pay rate is not yet applicable for a 6-month forward-starting SOFR loan swap with a notional amount of $200 million, which was entered into during the first quarter of 2026, so this SOFR loan swap was excluded from the calculation of the weighted average pay rate.
During the next 12 months, Busey expects to reclassify unrealized gains and losses from OCI to interest income as shown in the following table. Amounts actually recognized could differ from these expectations due to changes in interest rates, hedge de-designations, and the addition of other hedges subsequent to March 31, 2026.
| (dollars in thousands) | As of March 31, 2026 | ||||
| Unrealized gains expected to be reclassified from OCI to interest income | $ | ||||
Changes in interest income recorded on these swap transactions is presented in the following table:
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
| Decrease in interest income on swap transactions | $ | ( | $ | ( | |||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Net gains and losses relating to cash flow derivative instruments that were recorded in OCI on the Consolidated Statements of Income (Unaudited) are presented in the table below:
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
| Unrealized gains (losses) on cash flow hedges | |||||||||||
| Net gains (losses) recognized in OCI, net of tax | $ | ( | $ | ||||||||
| Losses reclassified from OCI to interest income, net of tax | |||||||||||
| Net change in unrealized gains (losses) on cash flow hedges, net of tax | $ | ( | $ | ||||||||
Derivative Instruments Not Designated as Hedges
Interest Rate Swaps Not Designated as Hedges
Busey may offer derivative contracts to its customers in connection with their risk management needs. Busey manages the risk associated with these contracts by entering into equal and offsetting derivative agreements with third-party dealers. These contracts supported variable rate, commercial loan relationships totaling $1.27 billion as of March 31, 2026, and $1.16 billion as of December 31, 2025. These derivatives generally worked together as an economic interest rate hedge, but Busey did not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred.
Amounts and fair values of derivative assets and derivative liabilities related to customer interest rate swaps recorded on the Consolidated Balance Sheets (Unaudited) are summarized as follows:
| As of March 31, 2026 | As of December 31, 2025 | ||||||||||||||||||||||||||||
| (dollars in thousands) | Location | Notional Amount | Fair Value | Notional Amount | Fair Value | ||||||||||||||||||||||||
| Derivative assets not designated as hedging instruments | |||||||||||||||||||||||||||||
| Interest rate swaps: receive-fixed, pay-floating | Other assets | $ | $ | $ | $ | ||||||||||||||||||||||||
| Interest rate swaps: receive-floating, pay-fixed | Other assets | ||||||||||||||||||||||||||||
| Derivative assets not designated as hedging instruments | $ | $ | $ | $ | |||||||||||||||||||||||||
| Derivative liabilities not designated as hedging instruments | |||||||||||||||||||||||||||||
| Interest rate swaps: receive-fixed, pay-floating | Other liabilities | $ | $ | $ | $ | ||||||||||||||||||||||||
| Interest rate swaps: receive-floating, pay-fixed | Other liabilities | ||||||||||||||||||||||||||||
| Derivative liabilities not designated as hedging instruments | $ | $ | $ | $ | |||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Changes in fair value of these derivative assets and derivative liabilities were recorded in noninterest expense on the Consolidated Statements of Income (Unaudited) and are summarized as follows:
| Three Months Ended March 31, | |||||||||||||||||
| (dollars in thousands) | Location | 2026 | 2025 | ||||||||||||||
| Interest rate swaps | |||||||||||||||||
| Receive-fixed, pay-floating | Noninterest expense | $ | ( | $ | |||||||||||||
| Receive-floating, pay-fixed | Noninterest expense | ( | |||||||||||||||
| Net change in fair value of interest rate swaps | $ | $ | |||||||||||||||
Risk Participation Agreements
To manage the credit risk exposure related to customer-facing swaps, Busey entered into risk participation agreements in conjunction with loan participation arrangements with other financial institutions. Under these risk participation agreements, Busey purchased credit risk participation, paying an up-front fee to a counterparty to accept a portion of its credit exposure, and will receive a payment from the counterparty if the swap customer defaults on its obligations. Busey also assumed additional risk participation agreements entered into by CrossFirst, in which CrossFirst purchased credit risk participation, and Busey will receive a payment from the counterparty if the swap customer defaults on its obligations.
In connection with the CrossFirst acquisition, Busey assumed risk participation agreements entered into by CrossFirst, under which CrossFirst sold credit risk participation, receiving an up-front fee from a counterparty in exchange for accepting a portion of the counterparty’s credit exposure. Under these agreements, Busey will be required to make a payment to the counterparty if the swap customer defaults on its obligations.
Notional amounts of the risk participation agreements reflect the participating banks’ pro-rata shares of the derivative instruments, consistent with their shares of the related participated loans. The risk participation agreements mature between May 2026 and October 2033, and are summarized as follows:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Risk participation agreements purchased | |||||||||||
| Number of risk participation agreements | |||||||||||
| Notional amount | $ | $ | |||||||||
| Fair value | |||||||||||
| Risk participation agreements sold | |||||||||||
| Number of risk participation agreements | |||||||||||
| Notional amount | $ | $ | |||||||||
| Fair value | |||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Foreign Currency Exchange Contracts
Busey entered into foreign currency exchange contracts to support the business requirements of its customers. Foreign currency contracts involve the exchange of one currency for another on a specified date and at a specified rate. These contracts are executed on behalf of Busey's customers and are used by customers to manage fluctuations in foreign exchange rates. Busey generally minimizes its exposure by entering into similar offsetting positions with other financial institutions. Busey is subject to the credit risk that another party will fail to perform. Amounts and fair values of derivative assets and derivative liabilities related to foreign currency contracts recorded on the Consolidated Balance Sheets (Unaudited) are summarized as follows:
| As of March 31, 2026 | As of December 31, 2025 | ||||||||||||||||||||||||||||
| (dollars in thousands) | Location | Notional Amount | Fair Value | Notional Amount | Fair Value | ||||||||||||||||||||||||
| Foreign currency exchange forward contracts | |||||||||||||||||||||||||||||
| Customer contracts | Other assets | $ | $ | $ | $ | ||||||||||||||||||||||||
| Third-party dealer contracts | Other liabilities | ||||||||||||||||||||||||||||
Mortgage Banking Derivatives
Interest Rate Lock Commitments
Interest rate lock commitments that meet the definition of derivative financial instruments under ASC Topic 815 “Derivatives and Hedging” are carried at their fair values in other assets or other liabilities on the Consolidated Balance Sheets (Unaudited), with changes in the fair values of the corresponding derivative financial assets or liabilities recorded as either a charge or credit to current earnings during the period in which the changes occurred.
Forward Sales Commitments
Busey economically hedges mortgage loans held for sale and interest rate lock commitments issued to its residential loan customers related to loans that will be held for sale by obtaining corresponding forward sales commitments with an investor to sell the loans at an agreed-upon price at the time the interest rate locks are issued to the customers. Forward sales commitments that meet the definition of derivative financial instruments under ASC Topic 815 “Derivatives and Hedging” are carried at their fair values in other assets or other liabilities on the Consolidated Balance Sheets (Unaudited). While such forward sales commitments generally served as an economic hedge to mortgage loans held for sale and interest rate lock commitments, Busey did not designate them for hedge accounting treatment. Changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Amounts and fair values of mortgage banking derivatives included on the Consolidated Balance Sheets (Unaudited) are summarized as follows:
| As of March 31, 2026 | As of December 31, 2025 | ||||||||||||||||||||||||||||
| (dollars in thousands) | Location | Notional Amount | Fair Value | Notional Amount | Fair Value | ||||||||||||||||||||||||
| Mortgage banking derivative assets | |||||||||||||||||||||||||||||
| Interest rate lock commitments | $ | $ | $ | $ | |||||||||||||||||||||||||
| Forward sales commitments | |||||||||||||||||||||||||||||
| Mortgage banking derivative assets | $ | $ | $ | $ | |||||||||||||||||||||||||
| Mortgage banking derivative liabilities | |||||||||||||||||||||||||||||
Forward sales commitments1 | $ | $ | $ | $ | |||||||||||||||||||||||||
| Mortgage banking derivative liabilities | $ | $ | $ | $ | |||||||||||||||||||||||||
___________________________________________
1.The fair value of forward sales commitments in a liability position was immaterial, rounding to zero thousand.
Gains and losses relating to these derivative instruments are reported in noninterest income, and are summarized as follows:
| Three Months Ended March 31, | |||||||||||||||||
| (dollars in thousands) | Location | 2026 | 2025 | ||||||||||||||
| Net gains (losses) on mortgage banking derivatives | |||||||||||||||||
| Gains (losses) on interest rate lock commitments | Mortgage revenue | $ | $ | ||||||||||||||
| Gains (losses) on forward sales commitments | Mortgage revenue | ( | |||||||||||||||
| Net gains (losses) on mortgage banking derivatives | $ | $ | |||||||||||||||
NOTE 13. FAIR VALUE MEASUREMENTS
The fair value of an asset or liability is the price that would be received by selling that asset or paid in transferring that liability (exit price) in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. ASC Topic 820 “Fair Value Measurement” establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:
•Level 1 Inputs—Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
•Level 2 Inputs—Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatility, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.
•Level 3 Inputs—Unobservable inputs for estimating the fair values of assets or liabilities that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to Busey’s assets and liabilities that are carried at fair value.
In general, fair value estimates are based upon quoted market prices, when available. If such quoted market prices are not available, fair values are estimated utilizing independent valuation techniques that consider identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable data. Valuation adjustments may be made to ensure that financial instruments are recorded at their estimated fair values. These adjustments may include amounts to reflect, among other things, counterparty credit quality and the company's creditworthiness as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. While management believes Busey's valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to estimate the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.
Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis
Debt Securities Available for Sale
Debt securities classified as available for sale are reported at fair value, which is estimated using Level 2 inputs. Busey obtains fair value measurements from an independent pricing service. The independent pricing service utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid, and other market information. Because many fixed income securities do not trade on a daily basis, the independent pricing service applies available information to prepare evaluations, with a focus on observable market data such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing.
The independent pricing service uses model processes, such as the Option Adjusted Spread model, to assess interest rate impact and develop prepayment scenarios. Models and processes take into account market conventions. For each asset class, a team of evaluators gathers information from market sources and integrates relevant credit information, perceived market movements, and sector news into the evaluated pricing applications and models.
Market inputs that the independent pricing service normally seeks for evaluations of securities, listed in approximate order of priority, include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. The independent pricing service also monitors market indicators, industry, and economic events. For certain security types, additional inputs may be used or some of the market inputs may not be applicable. Evaluators may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs listed are available for use in the evaluation process for each security evaluation on a given day. Because the data utilized was observable, the securities have been classified as Level 2.
Equity Securities
Equity securities are reported at fair value, which is estimated using Level 1 or Level 2 inputs. Fair value measurements of mutual funds or stock in active markets are estimated using unadjusted quoted prices for identical assets at the measurement date and are classified as Level 1. Fair value measurements of stock that are not active use quoted prices for identical or similar assets in markets and are classified as Level 2.
Derivative Assets and Derivative Liabilities
Busey’s derivative assets and derivative liabilities are reported at fair value, which is measured using Level 2 or Level 3 inputs. Fair values of derivative assets and liabilities are estimated based on prices that are obtained from a third-party which uses observable market inputs and, with the exception of risk participation agreements, are classified as Level 2. Due to the significance of unobservable inputs, derivative assets and liabilities related to risk participation agreements are classified as Level 3.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
The following tables summarize financial assets and financial liabilities measured at estimated fair value on a recurring basis:
| As of March 31, 2026 | |||||||||||||||||||||||
| (dollars in thousands) | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | |||||||||||||||||||
| Debt securities available for sale: | |||||||||||||||||||||||
| Obligations of U.S. government corporations and agencies | $ | $ | $ | $ | |||||||||||||||||||
| Obligations of states and political subdivisions | |||||||||||||||||||||||
| Asset-backed securities | |||||||||||||||||||||||
| Commercial mortgage-backed securities | |||||||||||||||||||||||
| Residential mortgage-backed securities | |||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| Equity securities | |||||||||||||||||||||||
| Derivative assets | |||||||||||||||||||||||
| Derivative liabilities | |||||||||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||
| (dollars in thousands) | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | |||||||||||||||||||
| Debt securities available for sale: | |||||||||||||||||||||||
| Obligations of U.S. government corporations and agencies | $ | $ | $ | $ | |||||||||||||||||||
| Obligations of states and political subdivisions | |||||||||||||||||||||||
| Asset-backed securities | |||||||||||||||||||||||
| Commercial mortgage-backed securities | |||||||||||||||||||||||
| Residential mortgage-backed securities | |||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||
| Equity securities | |||||||||||||||||||||||
| Derivative assets | |||||||||||||||||||||||
| Derivative liabilities | |||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Activity for Busey's risk participation agreements, which are measured at estimated fair value on a recurring basis using Level 3 inputs, is summarized in the table below:
| Three Months Ended March 31, | |||||||||||||||||
| (dollars in thousands) | Location | 2026 | 2025 | ||||||||||||||
| Beginning Balance | $ | ( | $ | ||||||||||||||
| Gains (losses) recognized in earnings | Other noninterest expense | ||||||||||||||||
Gains (losses) recognized in earnings1 | Other noninterest income | ( | |||||||||||||||
| Sales | |||||||||||||||||
Assumed in business combinations2 | ( | ||||||||||||||||
| Ending Balance | $ | ( | $ | ( | |||||||||||||
___________________________________________
1.CrossFirst Bank, which Busey operated as a separate banking subsidiary from the time of its acquisition on March 1, 2025, until it was merged with and into Busey Bank on June 20, 2025, recorded gains and losses on its risk participation agreements as other noninterest income. Throughout 2025, Busey accounted for the CrossFirst portfolio of risk participation agreements consistent with this methodology. Beginning in 2026, gains and losses recognized on Busey’s full portfolio of risk participation agreements, is recorded as other noninterest expense.
2.Represents risk participation agreements assumed in the CrossFirst acquisition.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Certain financial assets and financial liabilities are measured at estimated fair value on a non-recurring basis; that is, the instruments are not measured at estimated fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).
Loans Evaluated Individually
Busey does not record portfolio loans at estimated fair value on a recurring basis. However, periodically, a loan is evaluated individually and is reported at the estimated fair value of the underlying collateral, less estimated costs to sell, if repayment is expected solely from the collateral. If the estimated collateral value is not sufficient, a specific reserve is recorded. Collateral values are estimated using a combination of observable inputs, including recent appraisals, and unobservable inputs based on customized discounting criteria. Due to the significance of unobservable inputs, fair values of individually evaluated collateral dependent loans have been classified as Level 3.
OREO and Other Repossessed Assets
Non-financial assets measured at fair value, upon initial recognition or subsequent impairment, include OREO and other repossessed assets. OREO properties and other repossessed assets are measured using a combination of observable inputs, including recent appraisals, and unobservable inputs. Due to the significance of unobservable inputs, the estimated fair values of all OREO and other repossessed assets have been classified as Level 3.
Bank Property Held for Sale
Bank property held for sale represents certain banking center office buildings which Busey has closed and consolidated with other existing banking centers. Bank property held for sale is measured at the lower of amortized cost or estimated fair value less estimated costs to sell. Fair value estimates were based upon discounted appraisals or real estate listing prices. Due to the significance of unobservable inputs, estimated fair values of all bank property held for sale have been classified as Level 3. Bank property held for sale is included in premises and equipment, net on Busey’s Consolidated Balance Sheets (Unaudited).
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
The following tables summarize financial assets and financial liabilities measured at estimated fair value on a non-recurring basis:
| As of March 31, 2026 | |||||||||||||||||||||||
| (dollars in thousands) | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | |||||||||||||||||||
| Loans evaluated individually, net of related allowance | $ | $ | $ | $ | |||||||||||||||||||
| OREO and other repossessed assets with subsequent impairment | |||||||||||||||||||||||
| Bank property held for sale with impairment | |||||||||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||
| (dollars in thousands) | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | |||||||||||||||||||
| Loans evaluated individually, net of related allowance | $ | $ | $ | $ | |||||||||||||||||||
| OREO and other repossessed assets with subsequent impairment | |||||||||||||||||||||||
| Bank property held for sale with impairment | |||||||||||||||||||||||
The following tables present additional quantitative information about assets measured at estimated fair value on a non-recurring basis using Level 3 inputs:
| As of March 31, 2026 | |||||||||||||||||||||||
| (dollars in thousands) | Fair Value | Valuation Techniques | Unobservable Input | Range (Weighted Average) | |||||||||||||||||||
| Loans evaluated individually, net of related allowance | $ | Appraisal of collateral | Appraisal adjustments | - (- | |||||||||||||||||||
| OREO and other repossessed assets with subsequent impairment | Appraisal of collateral | Appraisal adjustments | - (- | ||||||||||||||||||||
| Bank property held for sale with impairment | Appraisal of collateral or real estate listing price | Appraisal adjustments | - (- | ||||||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||
| (dollars in thousands) | Fair Value | Valuation Techniques | Unobservable Input | Range (Weighted Average) | |||||||||||||||||||
| Loans evaluated individually, net of related allowance | $ | Appraisal of collateral | Appraisal adjustments | - (- | |||||||||||||||||||
| OREO and other repossessed assets with subsequent impairment | Appraisal of collateral | Appraisal adjustments | - (- | ||||||||||||||||||||
| Bank property held for sale with impairment | Appraisal of collateral or real estate listing price | Appraisal adjustments | - (- | ||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Financial Assets and Financial Liabilities That Are Not Carried at Fair Value
Fair values of financial instruments that are not carried at fair value on Busey’s Consolidated Balance Sheets (Unaudited) were estimated as follows:
| As of March 31, 2026 | As of December 31, 2025 | ||||||||||||||||||||||
| (dollars in thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||||||||
| Financial assets | |||||||||||||||||||||||
| Level 1 inputs: | |||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Level 2 inputs: | |||||||||||||||||||||||
| Interest-bearing time deposits in other banks | |||||||||||||||||||||||
| Debt securities held to maturity | |||||||||||||||||||||||
| Loans held for sale | |||||||||||||||||||||||
| Restricted bank stock | |||||||||||||||||||||||
| Accrued interest receivable | |||||||||||||||||||||||
| Level 3 inputs: | |||||||||||||||||||||||
| Portfolio loans, net | |||||||||||||||||||||||
| Mortgage servicing rights | |||||||||||||||||||||||
| Other servicing rights | |||||||||||||||||||||||
| Financial liabilities | |||||||||||||||||||||||
| Level 2 inputs: | |||||||||||||||||||||||
| Time deposits | $ | $ | $ | $ | |||||||||||||||||||
| Securities sold under agreements to repurchase | |||||||||||||||||||||||
| Short-term borrowings | |||||||||||||||||||||||
| Long-term borrowings | |||||||||||||||||||||||
| Junior subordinated debt owed to unconsolidated trusts | |||||||||||||||||||||||
| Accrued interest payable | |||||||||||||||||||||||
| Level 3 inputs: | |||||||||||||||||||||||
| Subordinated notes, net of unamortized issuance costs | |||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 14. EARNINGS PER COMMON SHARE
Basic earnings per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding, which include DSUs that are vested but not delivered. Net income available to common stockholders is net income less dividends that have been declared on Busey’s preferred stock (all of which is non-cumulative). Diluted earnings per common share is computed using the treasury stock method and reflects the potential dilution that could occur if shares were issued for Busey’s outstanding equity-based awards.
Earnings per common share have been computed as follows:
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands, except per share amounts) | 2026 | 20251 | |||||||||
| Net income (loss) | $ | $ | ( | ||||||||
| Dividends on preferred stock | ( | ||||||||||
| Net income (loss) available to common stockholders | $ | $ | ( | ||||||||
| Weighted average number of common shares outstanding, basic | |||||||||||
| Dilutive effect of outstanding equity-based awards | |||||||||||
| Weighted average number of common shares outstanding, diluted | |||||||||||
| Basic earnings (loss) per common share | $ | $ | ( | ||||||||
| Diluted earnings (loss) per common share | $ | $ | ( | ||||||||
| Anti-dilutive equity-based awards | |||||||||||
___________________________________________
1.Since the Company experienced a net loss for the three months ended March 31, 2025, the inclusion of all potential common shares outstanding would have been anti-dilutive, so diluted loss per common share was the same as basic loss per common share.
NOTE 15. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following tables present changes in AOCI by component, net of tax:
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||
| (dollars in thousands) | Unrealized Gains (Losses) on Debt Securities Available For Sale | Unrecognized Gains (Losses) on Debt Securities Held to Maturity | Unrealized Gains (Losses) on Cash Flow Hedges | Total | |||||||||||||||||||
| Balance, December 31, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Unrealized holding gains (losses), net | ( | — | ( | ( | |||||||||||||||||||
| Amounts reclassified from AOCI, net | ( | — | |||||||||||||||||||||
| Amortization of unrecognized losses on securities transferred to held to maturity | — | — | |||||||||||||||||||||
| Balance, March 31, 2026 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||
| (dollars in thousands) | Unrealized Gains (Losses) on Debt Securities Available For Sale | Unrecognized Gains (Losses) on Debt Securities Held to Maturity | Unrealized Gains (Losses) on Cash Flow Hedges | Total | |||||||||||||||||||
| Balance, December 31, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Unrealized holding gains (losses), net | — | ||||||||||||||||||||||
| Amounts reclassified from AOCI, net | — | ||||||||||||||||||||||
| Amortization of unrecognized losses on securities transferred to held to maturity | — | — | |||||||||||||||||||||
| Balance, March 31, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
NOTE 16. OPERATING SEGMENTS AND RELATED INFORMATION
Busey’s reportable segments are determined by its chief executive officer, who is the designated chief operating decision maker. Busey is organized into three
Banking
The Banking operating segment provides a full range of banking services to individual and corporate customers through First Busey Corporation’s wholly-owned bank subsidiary, Busey Bank.
Busey Bank has 80 banking centers located throughout Illinois; the St. Louis, Missouri MSA; southwest Florida; Indianapolis, Indiana; the Dallas-Fort Worth MSA; the Kansas City MSA; Wichita, Kansas; Oklahoma City and Tulsa, Oklahoma; Phoenix and Tucson, Arizona; Denver and Colorado Springs, Colorado; and Clayton, New Mexico.
Banking services offered to individual customers include customary types of demand and savings deposits, money transfers, safe deposit services, individual retirement accounts and other fiduciary services, automated teller machines, and technology-based networks, as well as a variety of loan products including residential real estate, home equity lines of credit, and consumer loans. Banking services offered to corporate customers include commercial, CRE, real estate construction, and agricultural loans, as well as commercial depository services such as cash management.
Wealth Management
The Wealth Management operating segment provides a full range of asset management, investment, brokerage, fiduciary, philanthropic advisory, tax preparation, and farm management services to individuals, businesses, and foundations. Services are provided through Busey Capital Management, Inc., a wholly-owned subsidiary of Busey Bank, and Busey Wealth Management, a division of Busey Bank.
Wealth management services tailored to individuals include trust and estate advisory services and financial planning. Business services include business succession planning and employee retirement plan services. Services for foundations include investment strategy consulting and fiduciary services.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
FirsTech
The FirsTech operating segment provides comprehensive and innovative payment technology solutions through Busey Bank’s wholly-owned subsidiary, FirsTech. FirsTech's multi-channel payment platform allows businesses to collect payments from their customers in a variety of ways to enable fast, frictionless payments. Payment method vehicles include text-based mobile bill pay; interactive voice response; electronic payment concentration delivered to Automated Clearing House networks, money management, and credit card networks; walk-in payment processing for customers at retail pay agents; customer service payments made over a telephone; direct debit services; merchant services referral solutions serving partner financial institutions and their business customers; and lockbox remittance processing for customers to make payments by mail. FirsTech also provides additional tools to help clients with billing, reconciliation, bill reminders, and treasury services.
FirsTech's client base represents a diverse set of industries, with a higher concentration in highly regulated industries, such as financial institutions, utility, insurance, and telecommunications industries.
Segment Financial Information
The segment financial information provided below has been derived from information used by management to monitor and manage Busey’s financial performance. The accounting policies of Busey’s operating segments are the same as those described in the summary of significant accounting policies in “Note 1. Significant Accounting Policies” of Busey’s 2025 Annual Report. Busey accounts for intersegment revenue and transfers at current market prices.
Goodwill and total assets are summarized below by operating segment. The “other” category included in the tables below consists of the parent company and the elimination of intercompany transactions:
| As of March 31, 2026 | |||||||||||||||||||||||||||||
| (dollars in thousands) | Banking | Wealth Management | FirsTech | Other | Total | ||||||||||||||||||||||||
| Goodwill | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||||||||
| (dollars in thousands) | Banking | Wealth Management | FirsTech | Other | Total | ||||||||||||||||||||||||
| Goodwill | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Financial results by operating segment, including significant expense categories provided to the chief operating decision maker, are summarized below:
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||||||||
| (dollars in thousands) | Banking | Wealth Management | FirsTech | Other | Total | ||||||||||||||||||||||||
| Interest income | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Intersegment interest income | ( | ||||||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||
| Intersegment interest expense | ( | ||||||||||||||||||||||||||||
| Net interest income | ( | ||||||||||||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||||||||
| Net interest income after provision for credit losses | ( | ||||||||||||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||||||||
| Wealth management fees | |||||||||||||||||||||||||||||
| Payment technology solutions | |||||||||||||||||||||||||||||
| Treasury management services | |||||||||||||||||||||||||||||
| Card services and ATM fees | |||||||||||||||||||||||||||||
| Other service charges on deposit accounts | |||||||||||||||||||||||||||||
| All other noninterest income | ( | ||||||||||||||||||||||||||||
| Intersegment noninterest income | ( | ||||||||||||||||||||||||||||
| Noninterest income | ( | ||||||||||||||||||||||||||||
| Revenue | ( | ||||||||||||||||||||||||||||
| Noninterest expense | |||||||||||||||||||||||||||||
| Salaries, wages, and employee benefits | |||||||||||||||||||||||||||||
| Data processing | |||||||||||||||||||||||||||||
| Amortization of intangible assets | |||||||||||||||||||||||||||||
| Interchange expense | |||||||||||||||||||||||||||||
| All other noninterest expense | |||||||||||||||||||||||||||||
| Intersegment noninterest expense | ( | ||||||||||||||||||||||||||||
| Noninterest expense | ( | ||||||||||||||||||||||||||||
| Income (loss) before income taxes | ( | ( | |||||||||||||||||||||||||||
| Income taxes | ( | ( | |||||||||||||||||||||||||||
| Net income (loss) | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||
| (dollars in thousands) | Banking | Wealth Management | FirsTech | Other | Total | ||||||||||||||||||||||||
| Interest income | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Intersegment interest income | ( | ||||||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||
| Intersegment interest expense | ( | ||||||||||||||||||||||||||||
| Net interest income | ( | ||||||||||||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||||||||
| Net interest income after provision for credit losses | ( | ||||||||||||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||||||||
| Wealth management fees | |||||||||||||||||||||||||||||
| Payment technology solutions | |||||||||||||||||||||||||||||
| Treasury management services | |||||||||||||||||||||||||||||
| Card services and ATM fees | |||||||||||||||||||||||||||||
| Other service charges on deposit accounts | |||||||||||||||||||||||||||||
| All other noninterest income | ( | ( | ( | ( | |||||||||||||||||||||||||
| Intersegment noninterest income | ( | ||||||||||||||||||||||||||||
| Noninterest income | ( | ( | |||||||||||||||||||||||||||
| Revenue | ( | ||||||||||||||||||||||||||||
| Noninterest expense | |||||||||||||||||||||||||||||
| Salaries, wages, and employee benefits | |||||||||||||||||||||||||||||
| Data processing | |||||||||||||||||||||||||||||
| Amortization of intangible assets | |||||||||||||||||||||||||||||
| Interchange expense | |||||||||||||||||||||||||||||
| All other noninterest expense | |||||||||||||||||||||||||||||
| Intersegment noninterest expense | ( | ||||||||||||||||||||||||||||
| Noninterest expense | |||||||||||||||||||||||||||||
| Income (loss) before income taxes | ( | ( | ( | ( | |||||||||||||||||||||||||
| Income taxes | ( | ( | ( | ( | |||||||||||||||||||||||||
| Net income (loss) | $ | ( | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
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FIRST BUSEY CORPORATION
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
SCOPE OF DISCUSSION | 61 | ||||
BUSINESS | 61 | ||||
Banking Center Markets | 61 | ||||
Busey's Conservative Banking Strategy | 62 | ||||
Business Combinations | 62 | ||||
CrossFirst Bankshares, Inc. | 62 | ||||
RESULTS OF OPERATIONS — THREE MONTHS ENDED MARCH 31, 2026 | 63 | ||||
Net Income | 63 | ||||
Non-GAAP Adjusting Items and Non-GAAP Measures | 64 | ||||
Operating Performance Metrics | 65 | ||||
Net Interest Income | 65 | ||||
Consolidated Average Balance Sheets and Net Interest Margins | 66 | ||||
Noninterest Income | 69 | ||||
Noninterest Expense | 71 | ||||
Efficiency Ratio | 72 | ||||
Taxes | 72 | ||||
FINANCIAL CONDITION | 73 | ||||
Balance Sheet | 73 | ||||
Portfolio Loans | 73 | ||||
Portfolio Composition | 74 | ||||
Concentration of Credit Risk | 75 | ||||
Allowance for Credit Losses and Provision for Loan Losses | 77 | ||||
Non-Performing Loans and Non-Performing Assets | 78 | ||||
Potential Problem Loans | 80 | ||||
Deposits | 80 | ||||
Liquidity | 80 | ||||
Off-Balance-Sheet Arrangements | 82 | ||||
Capital Resources | 82 | ||||
NON-GAAP FINANCIAL INFORMATION | 83 | ||||
FORWARD-LOOKING STATEMENTS | 89 | ||||
CRITICAL ACCOUNTING ESTIMATES | 89 | ||||
Fair Value of Assets Acquired and Liabilities Assumed in Business Combinations | 90 | ||||
Goodwill | 90 | ||||
Income Taxes | 90 | ||||
Allowance for Credit Losses | 91 | ||||
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
SCOPE OF DISCUSSION
The following discussion and analysis are intended to assist readers in understanding Busey’s financial condition and results of operations during the three months ended March 31, 2026, and should be read in conjunction with Busey’s Consolidated Financial Statements (Unaudited) and the related Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report, as well as Busey’s 2025 Annual Report.
BUSINESS
First Busey Corporation is an $18.04 billion financial holding company headquartered in Leawood, Kansas. First Busey Corporation’s common stock is traded on The Nasdaq Global Select Market under the symbol “BUSE,” and its Series B preferred stock is traded on The Nasdaq Global Select Market under the symbol “BUSEP.”
Busey provides a full range of banking, wealth management, and payment technology solutions to individuals and corporate clients through its subsidiaries, Busey Bank and FirsTech.
Banking Center Markets
Busey Bank, headquartered in Champaign, Illinois, serves the banking needs of its customers through 80 banking centers located across five geographical regions and verticals spanning 10 states.
East Region – Busey Bank serves its East Region through 17 banking centers in the suburban Chicago market and three banking centers located in southwest Florida.
Midwest Region – Busey Bank serves its Midwest Region through 21 banking centers in central Illinois, including six in the Chicago MSA; 20 banking centers in the St. Louis MSA, including eight banking centers in eastern Missouri and 12 banking centers in western Illinois; and one banking center in Indianapolis, Indiana.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Central Region – Busey Bank serves its Central Region through three banking centers in the Kansas City MSA, including two locations in Leawood, Kansas and one in Kansas City, Missouri; one banking center in Wichita, Kansas; and three banking centers in Oklahoma, including two in Oklahoma City and one in Tulsa.
Texas Region – Busey Bank serves its Texas Region through four banking centers across the Dallas-Fort Worth MSA, including locations in Dallas, Frisco, and Fort Worth, Texas.
West Region – Busey Bank serves its West region through three banking centers in Arizona, located in Phoenix and Tucson; three banking centers in Colorado, located in Denver and Colorado Springs; and one banking center in Clayton, New Mexico.
Verticals – Transcending geographical boundaries, Busey operates in several industry verticals, including Life Equity Lending, Structured Finance, Energy Banking, and SBA Lending.
Busey's Conservative Banking Strategy
Busey’s financial strength is built on a long-term conservative operating approach. The quality of Busey’s core deposit1 franchise is a critical value driver of the institution. Busey remains substantially core deposit funded, with robust liquidity. As of March 31, 2026, Busey’s loan to deposit ratio was 91.3% and core deposits represented 93.7% of total deposits. Busey maintains sufficient on- and off-balance sheet liquidity to manage deposit fluctuations and the liquidity needs of its customers.
Busey’s credit performance reflects its highly diversified, conservatively underwritten loan portfolio. Busey’s approach to lending and its underwriting standards are designed to emphasize relationship banking rather than transactional banking. In addition, as a matter of both policy and practice, Busey limits concentration exposures in any particular loan segment.
Busey’s conservative banking strategy is reflected in the strength of its capital base. Busey strives to consistently maintain capital ratios well in excess of thresholds required to be designated as well capitalized by applicable regulatory guidelines, thereby ensuring financial strength and flexibility across economic and operating cycles. As of March 31, 2026, Busey’s leverage ratio of Tier 1 capital to average assets was 11.9%, its common equity Tier 1 capital to risk weighted assets ratio was 12.3%, and its total capital to risk weighted assets ratio was 15.9%.
Business Combinations
CrossFirst Bankshares, Inc.
On March 1, 2025, Busey completed its acquisition of CrossFirst and its wholly-owned subsidiary, CrossFirst Bank. This transformative partnership helped create a premier commercial bank spanning 10 states.
CrossFirst Bank’s results of operations were included in Busey’s results of operations beginning March 1, 2025. Busey operated CrossFirst Bank as a separate banking subsidiary until it was merged with and into Busey Bank on June 20, 2025. At the time of the bank merger, CrossFirst Bank’s banking centers became banking centers of Busey Bank.
Further information regarding Busey’s acquisitions is provided in Note 2. Business Combinations in the Notes to the Consolidated Financial Statements (Unaudited).
1 Core deposits is a non-GAAP financial measure. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “Non-GAAP Financial Information” included in this MD&A.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
RESULTS OF OPERATIONS — THREE MONTHS ENDED MARCH 31, 2026
Net Income
Results of Busey’s operations, by operating segment, are presented below:
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
Net income (loss) | |||||||||||
Banking | $ | 50,240 | $ | (19,693) | |||||||
Wealth Management | 6,167 | 6,219 | |||||||||
FirsTech | (1,680) | (239) | |||||||||
Other | (4,746) | (16,277) | |||||||||
Net income (loss) | $ | 49,981 | $ | (29,990) | |||||||
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Non-GAAP Adjusting Items and Non-GAAP Measures
Busey views certain non-operating items, including acquisition-related expenses, restructuring charges, and nonrecurring strategic events, as adjustments to net income reported under GAAP. Busey also adjusts for net securities gains and losses to align with industry and research analyst reporting. The objective of Busey’s presentation of adjusted earnings and adjusted earnings metrics is to allow investors and analysts to more clearly identify quarterly trends in core earnings performance. Pre-tax non-GAAP adjustments were as follows:
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
Pre-tax non-GAAP adjustments to net income by income/expense category | |||||||||||
Net securities (gains) losses | $ | 940 | $ | 15,768 | |||||||
Provision for credit losses1 | — | 45,572 | |||||||||
Salaries, wages, and employee benefits | 16,124 | 15,878 | |||||||||
Data processing | 80 | 2,302 | |||||||||
Professional fees | 119 | 7,294 | |||||||||
Other noninterest expense1 | 377 | 552 | |||||||||
Total pre-tax non-GAAP adjustments to net income | $ | 17,640 | $ | 87,366 | |||||||
Pre-tax non-GAAP adjustments to net income by business objective | |||||||||||
Net securities (gains) losses2 | $ | 940 | $ | 15,768 | |||||||
Initial provision for credit losses3 | — | 45,572 | |||||||||
Other acquisition (income) expenses4 | 5,244 | 26,026 | |||||||||
Restructuring expenses5 | 11,456 | — | |||||||||
Total pre-tax non-GAAP adjustments to net income | $ | 17,640 | $ | 87,366 | |||||||
1.Beginning in the second quarter of 2025, Busey revised its presentation, for all periods presented, to reclassify the provision for unfunded commitments from other noninterest expense to the provision for credit losses.
2.During the three months ended March 31, 2025, Busey sold available for sale debt securities with a book value of approximately $205.6 million for a pre-tax loss of $15.5 million and related estimated tax benefit of $4.3 million, as part of a balance sheet repositioning strategy.
3.During the three months ended March 31, 2025, in connection with the CrossFirst acquisition, Busey’s recorded expense for the initial provision for credit losses consisting of a Day 2 provision for loan losses of $42.4 million, and a Day 2 provision for unfunded commitments of $3.1 million.
4.Other acquisition expenses related to the acquisition of CrossFirst, which was completed on March 1, 2025. Final expenses for the acquisition of M&M were also included for 2025.
5.Restructuring expenses were incurred in connection with the execution on additional synergies identified in the first quarter of 2026 related to the CrossFirst acquisition and also in connection with the previously announced departure of Michael J. Maddox.
A reconciliation of non-GAAP measures, which Busey believes facilitates the assessment of its financial results and peer comparability, is included in tabular form in this MD&A. See “Non-GAAP Financial Information.”
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Operating Performance Metrics
Operating performance metrics presented in the table below have been derived from information used by management to monitor and manage Busey’s financial performance:
| Three Months Ended March 31, | |||||||||||
(dollars in thousands, except per share amounts) | 2026 | 2025 | |||||||||
Net income (loss) (GAAP) | $ | 49,981 | $ | (29,990) | |||||||
Adjusted net income (Non-GAAP)1 | $ | 63,211 | $ | 39,898 | |||||||
Net income (loss) available to common stockholders (GAAP) | $ | 45,392 | $ | (29,990) | |||||||
Adjusted net income available to common stockholders (Non-GAAP)1 | $ | 58,622 | $ | 39,898 | |||||||
Diluted earnings (loss) per common share (GAAP) | $ | 0.52 | $ | (0.44) | |||||||
Adjusted diluted earnings per common share (Non-GAAP)1 | $ | 0.67 | $ | 0.57 | |||||||
Return on average assets (Non-GAAP)1, 2 | 1.12 | % | (0.82) | % | |||||||
Adjusted return on average assets (Non-GAAP)1, 2 | 1.42 | % | 1.09 | % | |||||||
Return on average tangible common equity (Non-GAAP)1, 2 | 11.10 | % | (7.38) | % | |||||||
Adjusted return on average tangible common equity (Non-GAAP)1, 2 | 14.12 | % | 11.25 | % | |||||||
Pre-provision net revenue (Non-GAAP)1, 3 | $ | 67,655 | $ | 28,692 | |||||||
Adjusted pre-provision net revenue (Non-GAAP)1, 3 | $ | 84,355 | $ | 54,718 | |||||||
Pre-provision net revenue to average total assets (Non-GAAP)1, 2, 3 | 1.52 | % | 0.78 | % | |||||||
Adjusted pre-provision net revenue to average total assets (Non-GAAP)1, 2, 3 | 1.89 | % | 1.50 | % | |||||||
___________________________________________
1.For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “Non-GAAP Financial Information,” included in this MD&A.
2.Annualized measure.
3.Beginning in the second quarter of 2025, Busey revised its presentation, for all periods presented, to reclassify the provision for unfunded commitments so that it is now included within the provision for credit losses, affecting the calculation of pre-provision net revenue and related measures and ratios.
Net Interest Income
Net interest income is the difference between interest income and fees earned on loans and investments (“interest-earning assets”) and interest expense incurred on deposits and borrowings (“interest-bearing liabilities”). Interest rate levels and volume fluctuations within interest-earning assets and interest-bearing liabilities impact net interest income. Net interest margin is tax-equivalent net interest income as a percent of average interest-earning assets.
Certain assets with tax favorable treatment are evaluated on a tax-equivalent basis, assuming a federal income tax rate of 21.0%. Tax favorable assets generally have lower contractual pre-tax yields than fully taxable assets. A tax-equivalent analysis is performed by adding the tax savings to the earnings on tax favorable assets. After factoring in the tax favorable effects of these assets, the yields may be more appropriately evaluated against alternative earning assets. In addition to yield, various other risks are factored into the evaluation process.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Consolidated Average Balance Sheets and Net Interest Margins
The table below presents Busey’s Consolidated Average Balance Sheets, summarizing average balances for each major category of assets and liabilities, the interest income earned on interest-earning assets, the interest expense paid for interest-bearing liabilities, and the related interest yields for the periods indicated. Average information is provided on a daily average basis:
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| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Average Balance | Income/ Expense | Yield/ Rate5 | Average Balance | Income/ Expense | Yield/ Rate5 | |||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||
Interest-bearing bank deposits and federal funds sold | $ | 139,204 | $ | 1,222 | 3.56 | % | $ | 688,233 | $ | 7,584 | 4.47 | % | |||||||||||||||||||||||
Investment securities: | |||||||||||||||||||||||||||||||||||
U.S. Government obligations | 110,353 | 1,387 | 5.10 | % | 41,729 | 503 | 4.89 | % | |||||||||||||||||||||||||||
Obligations of states and political subdivisions | 265,436 | 2,820 | 4.31 | % | 192,984 | 1,531 | 3.22 | % | |||||||||||||||||||||||||||
Other securities | 2,542,451 | 19,082 | 3.04 | % | 2,547,722 | 17,076 | 2.72 | % | |||||||||||||||||||||||||||
Restricted bank stock | 81,619 | 880 | 4.37 | % | 51,146 | 759 | 6.02 | % | |||||||||||||||||||||||||||
Loans held for sale | 5,072 | 73 | 5.84 | % | 3,443 | 55 | 6.48 | % | |||||||||||||||||||||||||||
Portfolio loans1, 2 | 13,521,631 | 200,898 | 6.03 | % | 9,838,337 | 139,844 | 5.76 | % | |||||||||||||||||||||||||||
Total interest-earning assets1, 3 | 16,665,766 | $ | 226,362 | 5.51 | % | 13,363,594 | $ | 167,352 | 5.08 | % | |||||||||||||||||||||||||
Cash and due from banks | 163,897 | 172,788 | |||||||||||||||||||||||||||||||||
Premises and equipment | 193,830 | 140,490 | |||||||||||||||||||||||||||||||||
ACL | (175,402) | (131,800) | |||||||||||||||||||||||||||||||||
Other assets | 1,212,129 | 1,286,226 | |||||||||||||||||||||||||||||||||
Total assets | $ | 18,060,220 | $ | 14,831,298 | |||||||||||||||||||||||||||||||
Liabilities and stockholders’ equity | |||||||||||||||||||||||||||||||||||
Interest-bearing transaction deposits | $ | 3,124,068 | $ | 12,505 | 1.62 | % | $ | 2,646,916 | $ | 10,928 | 1.67 | % | |||||||||||||||||||||||
Savings and money market deposits | 5,687,520 | 31,964 | 2.28 | % | 4,443,528 | 27,592 | 2.52 | % | |||||||||||||||||||||||||||
Time deposits | 2,409,136 | 21,557 | 3.63 | % | 2,052,337 | 18,792 | 3.71 | % | |||||||||||||||||||||||||||
Federal funds purchased and repurchase agreements | 160,822 | 896 | 2.26 | % | 144,838 | 876 | 2.45 | % | |||||||||||||||||||||||||||
Borrowings4 | 314,611 | 3,332 | 4.30 | % | 264,615 | 3,541 | 5.43 | % | |||||||||||||||||||||||||||
Junior subordinated debt issued to unconsolidated trusts | 77,354 | 1,262 | 6.62 | % | 75,607 | 1,355 | 7.27 | % | |||||||||||||||||||||||||||
Total interest-bearing liabilities | 11,773,511 | $ | 71,516 | 2.46 | % | 9,627,841 | $ | 63,084 | 2.66 | % | |||||||||||||||||||||||||
Net interest spread1 | 3.05 | % | 2.42 | % | |||||||||||||||||||||||||||||||
Noninterest-bearing deposits | 3,536,830 | 3,036,127 | |||||||||||||||||||||||||||||||||
Other liabilities | 279,607 | 232,254 | |||||||||||||||||||||||||||||||||
Stockholders’ equity | 2,470,272 | 1,935,076 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 18,060,220 | $ | 14,831,298 | |||||||||||||||||||||||||||||||
Interest income / earning assets1, 3 | $ | 16,665,766 | $ | 226,362 | 5.51 | % | $ | 13,363,594 | $ | 167,352 | 5.08 | % | |||||||||||||||||||||||
Interest expense / earning assets | 16,665,766 | 71,516 | 1.74 | % | 13,363,594 | 63,084 | 1.92 | % | |||||||||||||||||||||||||||
Net interest margin1 | $ | 154,846 | 3.77 | % | $ | 104,268 | 3.16 | % | |||||||||||||||||||||||||||
___________________________________________
1.On a tax-equivalent basis and assuming a federal income tax rate of 21.0%. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “Non-GAAP Financial Information,” included in this MD&A.
2.Non-accrual loans are included in average portfolio loans.
3.Interest income includes tax-equivalent adjustments of $0.9 million and $0.5 million for the three months ended March 31, 2026 and 2025, respectively.
4.Includes short-term and long-term borrowings. Interest expense includes non-usage fees on a revolving loan.
5.Annualized.
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Notable changes in average assets and average liabilities are summarized as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | Change | % Change | |||||||||||||||||||
| Average interest-earning assets | $ | 16,665,766 | $ | 13,363,594 | $ | 3,302,172 | 24.7 | % | |||||||||||||||
| Average interest-bearing liabilities | 11,773,511 | 9,627,841 | 2,145,670 | 22.3 | % | ||||||||||||||||||
| Average noninterest-bearing deposits | 3,536,830 | 3,036,127 | 500,703 | 16.5 | % | ||||||||||||||||||
| Total average deposits | 14,757,554 | 12,178,908 | 2,578,646 | 21.2 | % | ||||||||||||||||||
| Total average liabilities | 15,589,948 | 12,896,222 | 2,693,726 | 20.9 | % | ||||||||||||||||||
| Average noninterest-bearing deposits as a percent of total average deposits | 24.0 | % | 24.9 | % | (90) bps | ||||||||||||||||||
| Total average deposits as a percent of total average liabilities | 94.7 | % | 94.4 | % | 30 bps | ||||||||||||||||||
Changes in net interest income and net interest margin are summarized as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | Change | % Change | |||||||||||||||||||
| Net interest income | |||||||||||||||||||||||
Interest income, on a tax-equivalent basis1 | $ | 226,362 | $ | 167,352 | $ | 59,010 | 35.3 | % | |||||||||||||||
| Interest expense | (71,516) | (63,084) | (8,432) | (13.4) | % | ||||||||||||||||||
Net interest income, on a tax-equivalent basis1 | $ | 154,846 | $ | 104,268 | $ | 50,578 | 48.5 | % | |||||||||||||||
Net interest margin1, 2 | 3.77 | % | 3.16 | % | 61 bps | ||||||||||||||||||
___________________________________________
1.Assuming a federal income tax rate of 21.0%. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “Non-GAAP Financial Information,” included in this MD&A.
2.Net interest income expressed as a percentage of average earning assets, stated on a tax-equivalent basis.
Busey continues to evaluate and execute off-balance sheet hedging and balance sheet strategies as well as embedding rate protection in our asset originations to provide consistent and predictable net interest income performance across different interest rate environments. Busey continues to execute various deposit campaigns to attract term funding and savings accounts at a lower rate than our marginal cost of funds.
Net interest spread represents the difference between the average rate earned on earning assets and the average rate paid on interest-bearing liabilities, and is presented in the table below:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
Net interest spread1 | 3.05 | % | 2.42 | % | |||||||
___________________________________________
1.Net interest spread is calculated on a tax-equivalent basis.
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Annualized net interest margins for the quarterly periods indicated were as follows:
| 2026 | 2025 | ||||||||||
| First Quarter | 3.77 | % | 3.16 | % | |||||||
| Second Quarter | 3.49 | % | |||||||||
| Third Quarter | 3.58 | % | |||||||||
| Fourth Quarter | 3.71 | % | |||||||||
Management attempts to mitigate the effects of an unpredictable interest-rate environment through effective portfolio management, prudent loan underwriting and pricing discipline, and operational efficiencies. For a description of accounting policies underlying the recognition of interest income and expense, refer to the Notes to Consolidated Financial Statements in Busey’s 2025 Annual Report.
Noninterest Income
Changes in noninterest income are summarized in the table below:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | Change | % Change | |||||||||||||||||||
| Noninterest income | |||||||||||||||||||||||
| Wealth management fees | $ | 19,370 | $ | 17,364 | $ | 2,006 | 11.6 | % | |||||||||||||||
| Payment technology solutions | 5,077 | 5,073 | 4 | 0.1 | % | ||||||||||||||||||
| Treasury management services | 4,826 | 3,017 | 1,809 | 60.0 | % | ||||||||||||||||||
| Card services and ATM fees | 4,646 | 3,709 | 937 | 25.3 | % | ||||||||||||||||||
| Other service charges on deposit accounts | 1,506 | 1,533 | (27) | (1.8) | % | ||||||||||||||||||
| Mortgage revenue | 438 | 329 | 109 | 33.1 | % | ||||||||||||||||||
| Income on bank owned life insurance | 1,616 | 1,446 | 170 | 11.8 | % | ||||||||||||||||||
| Securities income: | |||||||||||||||||||||||
| Realized net gains (losses) on securities | 23 | (15,537) | 15,560 | 100.1 | % | ||||||||||||||||||
| Unrealized net gains (losses) recognized on equity securities | (963) | (231) | (732) | (316.9) | % | ||||||||||||||||||
| Net securities gains (losses) | (940) | (15,768) | 14,828 | 94.0 | % | ||||||||||||||||||
| Other noninterest income | 5,726 | 4,520 | 1,206 | 26.7 | % | ||||||||||||||||||
| Total noninterest income | $ | 42,265 | $ | 21,223 | $ | 21,042 | 99.1 | % | |||||||||||||||
| Assets under care as of period end | $ | 15,647,250 | $ | 13,677,866 | $ | 1,969,384 | 14.4 | % | |||||||||||||||
Total noninterest income provided $42.3 million for the three months ended March 31, 2026, an increase of 99.1% from the comparable period in 2025. During the first quarter of 2025, Busey executed a strategic balance sheet repositioning resulting in a securities loss of $15.5 million. Whereas the first quarter of 2026 included a full quarter of income as a larger organization after the acquisition of CrossFirst, the first quarter of 2025 included only one month of income from CrossFirst following the acquisition, which was completed on March 1, 2025. Busey continues to benefit from its diverse set of product offerings.
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Wealth management fees provided income of $19.4 million for the three months ended March 31, 2026, an increase of 11.6% from the comparable period for 2025, primarily due to increases in trust fee income. Busey’s Wealth Management division ended the first quarter of 2026 with $15.65 billion in assets under care, an increase of 14.4% compared to the balance on March 31, 2025. Busey’s portfolio management team continues to focus on long-term returns and managing risk in the face of volatile markets.
Income from payment technology solutions derives from Busey’s payment processing company, FirsTech. Payment technology solutions provided income of $5.1 million for the three months ended March 31, 2026, an increase of 0.1% from the comparable period in 2025.
Treasury management services, which consist primarily of business analysis charges and wire transfer fees on commercial accounts, provided income of $4.8 million for the three months ended March 31, 2026, representing an increase of 60.0% from the comparable period in 2025, primarily due to the addition of CrossFirst commercial services.
Card services and ATM fees, which include both commercial and consumer accounts, provided income of $4.6 million for the three months ended March 31, 2026, representing an increase of 25.3% from the comparable period in 2025, primarily due to the addition of CrossFirst corporate card services.
Other service charges on deposit accounts provided income of $1.5 million for the three months ended March 31, 2026, representing a decrease of 1.8% from the comparable period in 2025, primarily as a result of lower non-sufficient fund charges.
Mortgage revenue provided $0.4 million for the three months ended March 31, 2026, representing an increase of 33.1% from the comparable period in 2025. General economic conditions and interest rate volatility may impact future mortgage revenue.
Income on bank owned life insurance provided $1.6 million for the three months ended March 31, 2026, representing an increase of 11.8% from the comparable period in 2025, which included an increase of $0.4 million on the cash surrender value of the policies and a decrease of $0.2 million in earnings on death proceeds.
Net securities losses of $0.9 million were realized during the three months ended March 31, 2026, representing a decrease of 94.0% from the net securities losses realized during the comparable period in 2025. Losses in 2025 were elevated due to the aforementioned strategic balance sheet repositioning.
Other noninterest income provided $5.7 million for the three months ended March 31, 2026, representing an increase of 26.7% from the comparable period in 2025. Increases were primarily attributable to swap origination, syndication, and other loan fees, offset by declines in OREO and private equity income.
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Noninterest Expense
Changes in noninterest expense are summarized in the table below:
| Three Months Ended March 31, | |||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | Change | % Change | |||||||||||||||||||
| Noninterest expense | |||||||||||||||||||||||
| Salaries, wages, and employee benefits | $ | 85,230 | $ | 67,563 | $ | 17,667 | 26.1 | % | |||||||||||||||
| Data processing | 9,864 | 9,575 | 289 | 3.0 | % | ||||||||||||||||||
| Premises expenses: | |||||||||||||||||||||||
| Net occupancy expense of premises | 7,652 | 5,799 | 1,853 | 32.0 | % | ||||||||||||||||||
| Furniture and equipment expenses | 2,177 | 1,744 | 433 | 24.8 | % | ||||||||||||||||||
| Combined, net occupancy expense of premises and furniture and equipment expenses | 9,829 | 7,543 | 2,286 | 30.3 | % | ||||||||||||||||||
| Professional fees | 3,239 | 9,511 | (6,272) | (65.9) | % | ||||||||||||||||||
| Amortization of intangible assets | 4,291 | 3,083 | 1,208 | 39.2 | % | ||||||||||||||||||
| Interchange expense | 1,116 | 1,343 | (227) | (16.9) | % | ||||||||||||||||||
| FDIC insurance | 2,451 | 2,167 | 284 | 13.1 | % | ||||||||||||||||||
Other noninterest expense1 | 13,499 | 11,245 | 2,254 | 20.0 | % | ||||||||||||||||||
Total noninterest expense1 | $ | 129,519 | $ | 112,030 | $ | 17,489 | 15.6 | % | |||||||||||||||
| Income taxes | $ | 13,676 | $ | (2,679) | $ | 16,355 | 610.5 | % | |||||||||||||||
| Effective income tax rate | 21.5 | % | 8.2 | % | 1,330 bps | ||||||||||||||||||
Efficiency ratio (Non-GAAP)2 | 54.8 | % | 58.7 | % | (390) bps | ||||||||||||||||||
| Full-time equivalent associates as of period-end | 1,832 | 1,965 | (133) | (6.8) | % | ||||||||||||||||||
___________________________________________
1.Beginning in the second quarter of 2025, Busey revised its presentation, for all periods presented, to reclassify the provision for unfunded commitments from other noninterest expense to the provision for credit losses.
2.The efficiency ratio is a non-GAAP financial measure. For a reconciliation of non-GAAP measures to the most directly comparable financial GAAP measures, see “Non-GAAP Financial Information” included in this MD&A.
Total noninterest expense amounted to $129.5 million for the three months ended March 31, 2026, representing an increase of 15.6% from the comparable period in 2025, with the increases primarily attributable to increased salaries, wages, and employee benefits and other noninterest expense, partially offset by declines in professional fees.
Salaries, wages, and employee benefits totaled $85.2 million for the three months ended March 31, 2026, representing an increase of 26.1% from the comparable period in 2025. Excluding acquisition and restructuring expenses, which include severance, retention, and stock-based compensation expenses related to the CrossFirst acquisition, salaries, wages, and employee benefits totaled $69.1 million for the three months ended March 31, 2026, representing an increase of 33.7% from the comparable period in 2025. Busey’s associate base and footprint broadened in connection with the CrossFirst acquisition, which was completed on March 1, 2025, affecting one month of the first quarter of 2025 and all three months of the first quarter of 2026.
Data processing expense totaled $9.9 million for the three months ended March 31, 2026, representing an increase of 3.0% from the comparable period in 2025. Increases were primarily attributable to Company-wide investments in technology enhancements, as well as inflation-driven price increases.
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Combined, net occupancy expense of premises and furniture and equipment expense totaled $9.8 million for the three months ended March 31, 2026, representing an increase of 30.3% from the comparable period in 2025. Primary cost drivers in these expense categories include lease costs, repairs and maintenance, depreciation expense, real estate taxes, and utilities. Expense growth resulted primarily from the addition of banking centers assumed in the CrossFirst acquisition, as well as new banking centers opened in 2025 and the first quarter of 2026.
Professional fees totaled $3.2 million for the three months ended March 31, 2026, representing a decrease of 65.9% from the comparable period in 2025, primarily as a result of increases in professional fees to execute the CrossFirst acquisition. Excluding acquisition and restructuring expenses, professional fees totaled $3.1 million for the three months ended March 31, 2026, representing an increase of 40.7% from the comparable period in 2025, due to increases in consulting costs and audit and accounting costs, partially offset by declines in legal costs.
Amortization of intangible assets totaled $4.3 million for the three months ended March 31, 2026, representing an increase of 39.2% from the comparable period for 2025. The CrossFirst acquisition added $81.8 million of finite-lived intangible assets. Busey uses an accelerated amortization methodology.
Interchange expense totaled $1.1 million for the three months ended March 31, 2026, representing a decrease of 16.9% from the comparable period in 2025. Fluctuations in interchange expense relate to payment and volume activity at FirsTech.
FDIC insurance expense totaled $2.5 million for the three months ended March 31, 2026, representing an increase of 13.1% from the comparable period in 2025. Additional FDIC insurance assessments were the result of Busey’s growth in average assets in connection with the CrossFirst acquisition.
Other noninterest expense totaled $13.5 million for the three months ended March 31, 2026, representing an increase of 20.0% from the comparable period in 2025. Significant drivers of the increase included business development costs, software amortization, and loan expenses, impacted by the timing of the CrossFirst acquisition.
Efficiency Ratio
The efficiency ratio2, which is a measure commonly used by management and the banking industry, measures the amount of expense incurred to generate a dollar of revenue. Busey’s efficiency ratio was 54.8% for the three months ended March 31, 2026, compared to 58.7% for the same period in 2025.
Taxes
Busey’s effective income tax rate was 21.5% for the three months ended March 31, 2026, which is lower than the combined federal and state statutory rate of approximately 26%, primarily due to tax exempt interest income, apportionment changes, and investments in various income tax credits. Busey continues to monitor evolving federal and state tax legislation and its potential impact on operations on an ongoing basis. As of March 31, 2026, Busey was under examination by the Illinois Department of Revenue for M&M’s tax filings for the tax years 2022 and 2023.
2 The efficiency ratio is a non-GAAP financial measure. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “Non-GAAP Financial Information” included in this MD&A.
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FINANCIAL CONDITION
Balance Sheet
Changes in significant items on Busey’s Consolidated Balance Sheets (Unaudited) are summarized in the table below:
| As of | |||||||||||||||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | Change | % Change | |||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Debt securities available for sale | $ | 2,215,267 | $ | 2,162,548 | $ | 52,719 | 2.4 | % | |||||||||||||||
| Debt securities held to maturity | 725,540 | 746,385 | (20,845) | (2.8) | % | ||||||||||||||||||
| Portfolio loans, net of ACL | 13,290,836 | 13,393,776 | (102,940) | (0.8) | % | ||||||||||||||||||
| Total assets | 18,036,622 | 18,104,736 | (68,114) | (0.4) | % | ||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||
| Noninterest-bearing | 3,526,036 | 3,659,421 | (133,385) | (3.6) | % | ||||||||||||||||||
| Interest-bearing | 11,210,024 | 11,246,537 | (36,513) | (0.3) | % | ||||||||||||||||||
| Total deposits | 14,736,060 | 14,905,958 | (169,898) | (1.1) | % | ||||||||||||||||||
| Securities sold under agreements to repurchase | 156,364 | 166,929 | (10,565) | (6.3) | % | ||||||||||||||||||
| Short-term borrowings | 170,000 | — | 170,000 | N/A | |||||||||||||||||||
| Long-term borrowings | 123,466 | 113,806 | 9,660 | 8.5 | % | ||||||||||||||||||
| Subordinated notes, net of unamortized issuance costs | 99,499 | 99,395 | 104 | 0.1 | % | ||||||||||||||||||
| Junior subordinated debt owed to unconsolidated trusts | 77,400 | 77,328 | 72 | 0.1 | % | ||||||||||||||||||
| Total liabilities | 15,623,600 | 15,635,754 | (12,154) | (0.1) | % | ||||||||||||||||||
| Stockholders’ equity | 2,413,022 | 2,468,982 | (55,960) | (2.3) | % | ||||||||||||||||||
Portfolio Loans
Busey believes that making sound and profitable loans is a necessary and desirable means of employing funds available for investment. Busey maintains lending policies and procedures designed to focus lending efforts on the types, locations, and duration of loans most appropriate for its business model and markets. While not specifically limited, Busey attempts to focus its lending on short to intermediate-term loans (0-10 years) in states where Busey maintains lending offices. Busey attempts to utilize government-assisted lending programs, such as the SBA and U.S. Department of Agriculture lending programs, when prudent. Generally, loans are collateralized by assets, primarily real estate, and guaranteed by individuals. Loans are expected to be repaid primarily from cash flows of the borrowers or from proceeds from the sale of selected assets of the borrowers.
Management reviews and approves Busey Bank’s lending policies and procedures on a regular basis. Management routinely—at least quarterly—reviews the ACL in conjunction with reports related to loan production, loan quality, concentrations of credit, loan delinquencies, non-performing loans, and potential problem loans. Busey’s underwriting standards are designed to encourage relationship banking rather than transactional banking. Relationship banking implies a primary banking relationship with the borrower that includes, at a minimum, an active deposit banking relationship in addition to the lending relationship. Significant underwriting factors in addition to location, duration, a sound and profitable cash flow basis, and the borrower’s character, include the quality of the borrower’s financial history, the liquidity of the underlying collateral, and the reliability of the valuation of the underlying collateral.
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At no time is a borrower’s total borrowing relationship permitted to exceed Busey Bank’s regulatory lending limit. Busey generally limits such relationships to amounts substantially less than the regulatory limit. Loans to related parties, including executive officers and directors of First Busey Corporation and its subsidiaries, are reviewed for compliance with regulatory guidelines.
Busey maintains an independent loan review department that reviews loans for compliance with Busey’s loan policy on a periodic basis. In addition, the loan review department reviews risk assessments made by Busey’s credit department, lenders, and loan committees. Results of these reviews are presented to management and the audit committee at least quarterly.
Busey Bank’s lending can be summarized into five primary lending activities, which can be further categorized as either commercial or retail lending. Commercial lending activities consist of C&I and other commercial loans, CRE loans, and real estate construction loans while retail lending activities consist of retail real estate loans and retail other loans. A description of each of the five primary lending activities can be found in “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Portfolio Loans” of Busey’s 2025 Annual Report.
Portfolio Composition
The composition of Busey’s loan portfolio as of the dates indicated, as well as changes in portfolio loan balances, were as follows:
| As of | |||||||||||||||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | Change | % Change | |||||||||||||||||||
| Commercial loans | |||||||||||||||||||||||
| C&I and other commercial | $ | 4,124,737 | $ | 4,229,208 | $ | (104,471) | (2.5) | % | |||||||||||||||
| CRE | 5,566,044 | 5,550,018 | 16,026 | 0.3 | % | ||||||||||||||||||
| Real estate construction | 1,052,505 | 1,039,289 | 13,216 | 1.3 | % | ||||||||||||||||||
| Total commercial loans | 10,743,286 | 10,818,515 | (75,229) | (0.7) | % | ||||||||||||||||||
| Retail loans | |||||||||||||||||||||||
| Retail real estate | 2,119,621 | 2,154,616 | (34,995) | (1.6) | % | ||||||||||||||||||
| Retail other | 596,983 | 594,668 | 2,315 | 0.4 | % | ||||||||||||||||||
| Total retail loans | 2,716,604 | 2,749,284 | (32,680) | (1.2) | % | ||||||||||||||||||
| Total portfolio loans | 13,459,890 | 13,567,799 | (107,909) | (0.8) | % | ||||||||||||||||||
| ACL | (169,054) | (174,023) | 4,969 | (2.9) | % | ||||||||||||||||||
| Portfolio loans, net | $ | 13,290,836 | $ | 13,393,776 | $ | (102,940) | (0.8) | % | |||||||||||||||
Seasonally slow new production and payoff headwinds contributed to anticipated declines in portfolio loan balances during the three months ended March 31, 2026.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Concentration of Credit Risk
As a matter of policy and practice, Busey limits the level of concentration exposure in any particular loan segment with the goal of maintaining a well-diversified loan portfolio. The following table presents the percentage of total portfolio loans for each lending activity:
| As of | |||||||||||
| March 31, 2026 | December 31, 2025 | ||||||||||
| Commercial loans | |||||||||||
| C&I and other commercial | 30.7 | % | 31.2 | % | |||||||
| CRE | 41.4 | % | 40.9 | % | |||||||
| Real estate construction | 7.8 | % | 7.6 | % | |||||||
| Total commercial loans | 79.9 | % | 79.7 | % | |||||||
| Retail loans | |||||||||||
| Retail real estate | 15.7 | % | 15.9 | % | |||||||
| Retail other | 4.4 | % | 4.4 | % | |||||||
| Total retail loans | 20.1 | % | 20.3 | % | |||||||
| Total portfolio loans | 100.0 | % | 100.0 | % | |||||||
Busey Bank originates loans across its regional operating model and through its specialty product lines, as described below:
•East – Suburban Chicago markets and southwest Florida
•Midwest – Central Illinois, the St. Louis MSA, and Indianapolis, Indiana
•Central – The Kansas City MSA, central Kansas, and Oklahoma
•Texas – The Dallas-Fort Worth MSA
•West – Colorado, New Mexico, and Arizona
•Verticals – Busey’s Life Equity Lending, Structured Finance, Energy Banking, and SBA Lending products
The distribution of Busey Bank loans outstanding that were originated in each of these markets is presented in the tables below:
| As of March 31, 2026 | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | C&I and other commercial | CRE | Real estate construction | Retail real estate | Retail other | Total | |||||||||||||||||||||||||||||
Loans by region of origination | |||||||||||||||||||||||||||||||||||
East | $ | 684,137 | $ | 1,192,985 | $ | 87,345 | $ | 521,508 | $ | 66,993 | $ | 2,552,968 | |||||||||||||||||||||||
Midwest | 1,199,443 | 2,103,352 | 270,008 | 1,033,902 | 11,133 | 4,617,838 | |||||||||||||||||||||||||||||
Central | 587,666 | 786,158 | 220,228 | 358,188 | 13,105 | 1,965,345 | |||||||||||||||||||||||||||||
Texas | 573,603 | 780,103 | 286,489 | 110,241 | 144 | 1,750,580 | |||||||||||||||||||||||||||||
West | 245,709 | 550,422 | 172,890 | 83,341 | 316 | 1,052,678 | |||||||||||||||||||||||||||||
Verticals | 834,179 | 153,024 | 15,545 | 12,441 | 505,292 | 1,520,481 | |||||||||||||||||||||||||||||
Total portfolio loans | $ | 4,124,737 | $ | 5,566,044 | $ | 1,052,505 | $ | 2,119,621 | $ | 596,983 | 13,459,890 | ||||||||||||||||||||||||
ACL | (169,054) | ||||||||||||||||||||||||||||||||||
Portfolio loans, net of ACL | $ | 13,290,836 | |||||||||||||||||||||||||||||||||
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| As of December 31, 2025 | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | C&I and other commercial | CRE | Real estate construction | Retail real estate | Retail other | Total | |||||||||||||||||||||||||||||
Loans by region of origination1 | |||||||||||||||||||||||||||||||||||
East | $ | 658,068 | $ | 1,173,323 | $ | 86,972 | $ | 521,515 | $ | 79,430 | $ | 2,519,308 | |||||||||||||||||||||||
Midwest | 1,281,283 | 2,078,637 | 294,267 | 1,070,395 | 7,654 | 4,732,236 | |||||||||||||||||||||||||||||
Central | 621,370 | 828,888 | 206,332 | 359,062 | 13,220 | 2,028,872 | |||||||||||||||||||||||||||||
Texas | 592,692 | 786,899 | 276,881 | 110,746 | 3,215 | 1,770,433 | |||||||||||||||||||||||||||||
West | 244,347 | 525,820 | 155,017 | 80,558 | 483 | 1,006,225 | |||||||||||||||||||||||||||||
Verticals | 831,448 | 156,451 | 19,820 | 12,340 | 490,666 | 1,510,725 | |||||||||||||||||||||||||||||
Total portfolio loans | $ | 4,229,208 | $ | 5,550,018 | $ | 1,039,289 | $ | 2,154,616 | $ | 594,668 | 13,567,799 | ||||||||||||||||||||||||
ACL | (174,023) | ||||||||||||||||||||||||||||||||||
Portfolio loans, net of ACL | $ | 13,393,776 | |||||||||||||||||||||||||||||||||
___________________________________________
1.In 2026, Busey moved all of its banking centers in the St. Louis MSA from its East region to its Midwest region. In addition, Busey adjusted its methodology for allocation of purchase accounting, loan fees, and clearings.
Commercial Real Estate Loans
CRE loans comprised 41.4% of Busey’s total loan portfolio as of March 31, 2026, and CRE properties were 25.9% owner occupied. Owner occupied commercial real estate is generally dependent on the performance of the borrowers’ businesses, whereas non-owner occupied commercial real estate is generally reliant on property cash flows generated by third-party tenants.
| As of | |||||||||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||||||||
| CRE by Occupancy | |||||||||||||||||
| Non-owner occupied CRE | $ | 4,125,785 | 74.1 | % | $ | 4,118,361 | 74.2 | % | |||||||||
| Owner occupied CRE | 1,440,259 | 25.9 | % | 1,431,657 | 25.8 | % | |||||||||||
| CRE | $ | 5,566,044 | 100.0 | % | $ | 5,550,018 | 100.0 | % | |||||||||
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
CRE loans are made across a variety of industries, as depicted in the table below. Balances reflected in the table below do not include loan origination fees or costs, purchase accounting adjustments, SBA discounts, or negative escrow amounts.
| As of March 31, 2026 | |||||||||||||||||||||||
| CRE Loans | Occupied By | % of CRE Loans That Are Owner Occupied | |||||||||||||||||||||
| (dollars in thousands) | Non-Owner | Owner | |||||||||||||||||||||
| Industrial and warehousing | $ | 1,237,363 | $ | 745,152 | $ | 492,211 | 39.8 | % | |||||||||||||||
| Apartments | 864,840 | 864,653 | 187 | — | % | ||||||||||||||||||
| Retail | 860,313 | 749,893 | 110,420 | 12.8 | % | ||||||||||||||||||
| Traditional office | 676,774 | 466,720 | 210,054 | 31.0 | % | ||||||||||||||||||
| Specialty | 538,308 | 211,185 | 327,123 | 60.8 | % | ||||||||||||||||||
| Hotel | 331,816 | 327,145 | 4,671 | 1.4 | % | ||||||||||||||||||
| Medical office | 284,498 | 134,362 | 150,136 | 52.8 | % | ||||||||||||||||||
| Student housing | 274,269 | 274,154 | 115 | — | % | ||||||||||||||||||
| Restaurant | 154,305 | 37,615 | 116,690 | 75.6 | % | ||||||||||||||||||
| Self-Storage | 150,964 | 146,589 | 4,375 | 2.9 | % | ||||||||||||||||||
| Senior housing | 148,640 | 144,615 | 4,025 | 2.7 | % | ||||||||||||||||||
| Nursing homes | 46,999 | 45,627 | 1,372 | 2.9 | % | ||||||||||||||||||
| Healthcare | 20,174 | 20,000 | 174 | 0.9 | % | ||||||||||||||||||
| Group homes | 4,947 | 3,544 | 1,403 | 28.4 | % | ||||||||||||||||||
| Continuing Care Facilities | 2,952 | 2,952 | — | — | % | ||||||||||||||||||
| Land acquisition and development | 91 | — | 91 | 100.0 | % | ||||||||||||||||||
| Other | 833 | 378 | 455 | 54.6 | % | ||||||||||||||||||
| Total | $ | 5,598,086 | $ | 4,174,584 | $ | 1,423,502 | 25.4 | % | |||||||||||||||
Allowance for Credit Losses and Provision for Loan Losses
The ACL is a significant estimate on Busey’s unaudited consolidated financial statements, affecting both earnings and capital. The ACL is recorded in accordance with GAAP to provide an adequate reserve for expected credit losses that is reflective of management’s best estimate of what is expected to be collected. Estimates of credit losses are based on a careful consideration of all significant factors affecting the collectability as of the evaluation date. The ACL is established through the provision for loan losses, charged to income. Provision expenses for loan losses were recorded as follows:
Three Months Ended March 31, | |||||||||||||||||
| (dollars in thousands) | Location | 2026 | 20251 | ||||||||||||||
Provision for loan losses | Provision for credit losses | $ | 2,393 | $ | 42,452 | ||||||||||||
___________________________________________
1.The three months ended March 31, 2025, included $42.4 million of provision for loan losses expense recorded to establish an initial allowance for non-PCD loans immediately following the close of the CrossFirst acquisition in accordance with ASC 326-20-30-15.
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The ACL and the ratio of ACL to portfolio loan balances is presented below by lending activity:
| As of March 31, 2026 | As of December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Portfolio Loans | ACL | Ratio of ACL to Portfolio Loans | Portfolio Loans | ACL | Ratio of ACL to Portfolio Loans | |||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||||||||
| C&I and other commercial | $ | 4,124,737 | $ | 57,804 | 1.40 | % | $ | 4,229,208 | $ | 61,370 | 1.45 | % | |||||||||||||||||||||||
| CRE | 5,566,044 | 70,100 | 1.26 | % | 5,550,018 | 70,328 | 1.27 | % | |||||||||||||||||||||||||||
| Real estate construction | 1,052,505 | 12,588 | 1.20 | % | 1,039,289 | 11,568 | 1.11 | % | |||||||||||||||||||||||||||
| Total commercial | 10,743,286 | 140,492 | 1.31 | % | 10,818,515 | 143,266 | 1.32 | % | |||||||||||||||||||||||||||
| Retail | |||||||||||||||||||||||||||||||||||
| Retail real estate | 2,119,621 | 27,140 | 1.28 | % | 2,154,616 | 29,178 | 1.35 | % | |||||||||||||||||||||||||||
| Retail other | 596,983 | 1,422 | 0.24 | % | 594,668 | 1,579 | 0.27 | % | |||||||||||||||||||||||||||
| Total retail | 2,716,604 | 28,562 | 1.05 | % | 2,749,284 | 30,757 | 1.12 | % | |||||||||||||||||||||||||||
| Total | $ | 13,459,890 | $ | 169,054 | 1.26 | % | $ | 13,567,799 | $ | 174,023 | 1.28 | % | |||||||||||||||||||||||
As of March 31, 2026, Busey management believed the level of the allowance to be appropriate based upon the information available. However, additional losses may be identified in the loan portfolio as new information is obtained. Factors that influence Busey’s calculation of its ACL include changes in economic conditions and forecasts, originated and acquired loan portfolio composition, credit performance trends, portfolio duration, and other factors.
Non-Performing Loans and Non-Performing Assets
Loans are considered past due if the required principal or interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory guidelines. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured.
Typically, loans are secured by collateral. When a loan is classified as non-accrual and determined to be collateral dependent, it is appropriately reserved or charged down through the ACL to the fair value of Busey’s interest in the underlying collateral less estimated costs to sell. Busey’s loan portfolio is collateralized primarily by real estate.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
The following table sets forth information concerning non-performing assets and asset quality ratios:
| As of | |||||||||||||||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | Change | % Change | |||||||||||||||||||
| Total assets | $ | 18,036,622 | $ | 18,104,736 | $ | (68,114) | (0.4) | % | |||||||||||||||
| Portfolio loans | 13,459,890 | 13,567,799 | (107,909) | (0.8) | % | ||||||||||||||||||
| Loans 30 – 89 days past due | 17,465 | 16,475 | 990 | 6.0 | % | ||||||||||||||||||
| Non-performing assets | |||||||||||||||||||||||
| Non-performing loans: | |||||||||||||||||||||||
| Non-accrual loans | $ | 45,799 | $ | 51,198 | $ | (5,399) | (10.5) | % | |||||||||||||||
| Loans 90+ days past due and still accruing | 812 | 2,288 | (1,476) | (64.5) | % | ||||||||||||||||||
| Total non-performing loans | 46,611 | 53,486 | (6,875) | (12.9) | % | ||||||||||||||||||
| OREO and other repossessed assets | 3,337 | 4,626 | (1,289) | NM | |||||||||||||||||||
| Total non-performing assets | 49,948 | 58,112 | (8,164) | (14.0) | % | ||||||||||||||||||
| Substandard (excludes 90+ days past due) | 166,467 | 116,402 | 50,065 | 43.0 | % | ||||||||||||||||||
| Classified assets | $ | 216,415 | $ | 174,514 | $ | 41,901 | 24.0 | % | |||||||||||||||
| ACL | $ | 169,054 | $ | 174,023 | $ | (4,969) | (2.9) | % | |||||||||||||||
| Bank Tier 1 Capital | 2,144,335 | 2,150,048 | (5,713) | (0.3) | % | ||||||||||||||||||
| Ratios | |||||||||||||||||||||||
| ACL to portfolio loans | 1.26 | % | 1.28 | % | (2) bps | ||||||||||||||||||
| ACL to non-accrual loans | 3.69 x | 3.40 x | 2,922 bps | ||||||||||||||||||||
| ACL to non-performing loans | 3.63 x | 3.25 x | 3,733 bps | ||||||||||||||||||||
| ACL to non-performing assets | 3.38 x | 2.99 x | 3,900 bps | ||||||||||||||||||||
| Non-accrual loans to portfolio loans | 0.34 | % | 0.38 | % | (4) bps | ||||||||||||||||||
| Non-performing loans to portfolio loans | 0.35 | % | 0.39 | % | (4) bps | ||||||||||||||||||
| Non-performing assets to total assets | 0.28 | % | 0.32 | % | (4) bps | ||||||||||||||||||
| Non-performing assets to portfolio loans and OREO and other repossessed assets | 0.37 | % | 0.43 | % | (6) bps | ||||||||||||||||||
| Classified assets to Bank Tier 1 Capital and ACL | 9.35 | % | 7.51 | % | 184 bps | ||||||||||||||||||
Asset quality continues to be strong. Busey Bank maintains a well-diversified loan portfolio and, as a matter of policy and practice, limits concentration exposure in any particular loan segment. Busey’s operating mandate and focus remain on emphasizing credit quality over asset growth.
Non-performing assets, which include non-performing loans, OREO, and other repossessed assets, declined to $49.9 million as of March 31, 2026, compared to $58.1 million as of December 31, 2025. Non-performing assets represented 0.28% of total assets as of March 31, 2026, compared to 0.32% as of December 31, 2025. Busey’s ACL was 3.38 times its non-performing assets as of March 31, 2026, compared to 2.99 times its non-performing assets as of December 31, 2025.
Classified assets, which include non-performing assets and substandard loans, increased to $216.4 million as of March 31, 2026, compared to $174.5 million as of December 31, 2025, as a few larger commercial credits that Busey has been monitoring shifted to substandard still accruing. Classified assets represented 9.35% of the Bank’s Tier 1 capital and ACL at March 31, 2026, compared to 7.51% at December 31, 2025.
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Asset quality metrics remain dependent upon market-specific economic conditions, and specific measures may fluctuate from period to period. If economic conditions were to deteriorate, Busey would expect the credit quality of its loan portfolio to decline and loan defaults to increase.
Potential Problem Loans
Potential problem loans are loans classified as substandard that are not individually evaluated, non-accrual, or 90+ days past due, but where current information indicates that the borrower may not be able to comply with loan repayment terms. Management assesses the potential for loss on such loans and considers the effect of any potential loss in determining its provision for expected credit losses. Potential problem loans increased to $166.5 million, or 1.2% of portfolio loans, as of March 31, 2026, compared to $116.4 million, or 0.9% of portfolio loans, as of December 31, 2025. Management continues to monitor these loans and work with the borrowers on restructurings, guarantees, additional collateral, or other planned actions. As of March 31, 2026, management identified no other loans that represent or result from trends or uncertainties that would be expected to materially impact future operating results, liquidity, or capital resources.
Deposits
Total deposits decreased by 1.1% to $14.74 billion as of March 31, 2026, compared to $14.91 billion as of December 31, 2025. Busey focuses on deepening its customer relationships to maintain and protect its strong core deposit3 franchise. Core deposits include non-brokered transaction accounts, money market and savings deposit accounts, and time deposits of $250,000 or less. Core deposits represented 93.7% of total deposits as of March 31, 2026.
Deposits are federally insured up to the FDIC insurance limit of $250,000. When a portion of a deposit account exceeds the FDIC insurance limit, that portion is uninsured. Estimated uninsured deposits were $6.31 billion, or 43% of total deposits, as of March 31, 2026, compared to $6.46 billion, or 43% of total deposits, as of December 31, 2025. Excluding intercompany accounts, fully collateralized accounts (including preferred deposits), and pass-through accounts where clients have deposit insurance at the correspondent financial institution, the portion of Busey’s deposit base that was uninsured and not otherwise collateralized was estimated to be $5.45 billion, or 37% of total deposits, as of March 31, 2026, compared to $5.58 billion, or 37% of total deposits, as of December 31, 2025.
For additional information about Busey’s deposits, see “Note 6. Deposits.”
Liquidity
Liquidity management is the process by which Busey ensures that adequate liquid funds are available to meet the present and future cash flow obligations arising in the daily operations of its business. These financial obligations consist of needs for funds to meet commitments to borrowers for extensions of credit, fund capital expenditures, honor withdrawals by customers, pay dividends to stockholders, and pay operating expenses. Busey’s most liquid assets are cash and due from banks, interest-bearing bank deposits, and federal funds sold. Balances of these assets are dependent on Busey’s operating, investing, lending, and financing activities during any given period.
3 Core deposits is a non-GAAP financial measure. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “Item 2. Management’s Discussion and Analysis—Non-GAAP Financial Information” included in this Quarterly Report.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Average liquid assets are summarized in the table below:
| Three Months Ended March 31, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
| Average liquid assets | |||||||||||
| Cash and due from banks | $ | 163,897 | $ | 172,788 | |||||||
| Interest-bearing bank deposits | 139,204 | 688,233 | |||||||||
| Less: Restricted and pledged cash and bank deposits | (96,102) | (70,777) | |||||||||
| Total average liquid assets | $ | 206,999 | $ | 790,244 | |||||||
| Average liquid assets as a percent of average total assets | 1.1 | % | 5.3 | % | |||||||
Unencumbered cash and securities on Busey’s Consolidated Balance Sheets (Unaudited) are summarized as follows:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Unencumbered cash and securities | |||||||||||
| Total cash and cash equivalents | $ | 288,462 | $ | 280,227 | |||||||
| Interest-bearing time deposits in other banks | 13,725 | 13,825 | |||||||||
| Restricted and pledged cash and bank deposits | (96,102) | (96,102) | |||||||||
| Debt securities available for sale | 2,215,267 | 2,162,548 | |||||||||
| Debt securities available for sale pledged as collateral | (553,790) | (562,566) | |||||||||
| Cash and unencumbered securities | $ | 1,867,562 | $ | 1,797,932 | |||||||
Busey’s primary sources of funds consist of deposits, investment maturities and sales, loan principal repayments, and capital funds. Additional liquidity is provided by the ability to borrow from the FHLB, the Federal Reserve Bank, and Busey’s revolving credit facility, as summarized in the table below:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Additional available borrowing capacity | |||||||||||
| FHLB | $ | 2,631,617 | $ | 1,775,157 | |||||||
| Federal Reserve Bank | 1,646,599 | 1,585,816 | |||||||||
| Federal funds purchased | 485,000 | 485,000 | |||||||||
| Revolving credit facility | 40,000 | 40,000 | |||||||||
| Additional borrowing capacity | $ | 4,803,216 | $ | 3,885,973 | |||||||
Further, Busey could utilize brokered deposits as additional sources of liquidity, as needed.
As of March 31, 2026, management believed that adequate liquidity existed to meet all projected cash flow obligations. Busey seeks to achieve a satisfactory degree of liquidity by actively managing both assets and liabilities. Asset management guides the proportion of liquid assets to total assets, while liability management monitors future funding requirements and prices liabilities accordingly.
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Off-Balance-Sheet Arrangements
Busey Bank routinely enters into commitments to extend credit and standby letters of credit in the normal course of business to meet the financing needs of its customers. The balance of commitments to extend credit represents future cash requirements and some of these commitments may expire without being drawn upon.
The following table summarizes Busey’s outstanding commitments and reserves for unfunded commitments:
| As of | |||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Outstanding loan commitments and standby letters of credit | $ | 4,709,603 | $ | 4,820,613 | |||||||
| Reserve for unfunded commitments | 13,629 | 12,964 | |||||||||
The following table summarizes Busey’s provision for unfunded commitments expenses (releases):
| Three Months Ended March 31, | |||||||||||||||||
| (dollars in thousands) | Location | 2026 | 20251 | ||||||||||||||
Provision for unfunded commitments | Provision for credit losses | $ | 665 | $ | 3,141 | ||||||||||||
___________________________________________
1.The three months ended March 31, 2025, included $3.1 million to establish an initial allowance for unfunded commitments in connection with the CrossFirst acquisition.
Busey anticipates that it will have sufficient funds available to meet current loan commitments, including loan applications received and in process prior to the issuance of firm commitments.
Capital Resources
Busey’s capital ratios are in excess of those required to be considered “well-capitalized” pursuant to applicable regulatory guidelines. The Federal Reserve uses capital adequacy guidelines in its examination and regulation of bank holding companies and their subsidiary banks. Risk-based capital ratios are established by allocating assets and certain off-balance-sheet commitments into risk-weighted categories. These balances are then multiplied by the factor appropriate for that risk-weighted category. In order to refrain from restrictions on dividends, equity repurchases, and discretionary bonus payments, banking institutions must maintain capital in excess of regulatory minimum capital requirements. The table below presents minimum capital ratios that include the capital conservation buffer in comparison to the capital ratios for First Busey and its subsidiary bank as of March 31, 2026:
| Minimum Capital Requirements with Capital Buffer | As of March 31, 2026 | ||||||||||||||||
| First Busey | Busey Bank | ||||||||||||||||
| Common equity Tier 1 capital to risk weighted assets | 7.00 | % | 12.31 | % | 14.06 | % | |||||||||||
| Tier 1 capital to risk weighted assets | 8.50 | % | 13.77 | % | 14.06 | % | |||||||||||
| Total capital to risk weighted assets | 10.50 | % | 15.87 | % | 14.99 | % | |||||||||||
| Leverage ratio of Tier 1 capital to average assets | 4.00 | % | 11.88 | % | 12.14 | % | |||||||||||
For further discussion of capital resources and requirements, see “Note 8. Regulatory Capital.”
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
NON-GAAP FINANCIAL INFORMATION
This Quarterly Report contains certain financial information determined by methods other than in accordance with GAAP. Management uses these non-GAAP financial measures and non-GAAP ratios, together with the related GAAP financial measures, in analysis of Busey’s performance and in making business decisions, as well as for comparison to Busey’s peers. Busey believes the adjusted measures are useful for investors and management to understand the effects of certain non-core and non-recurring noninterest items and provide additional perspective on Busey’s performance over time.
Non-GAAP disclosures have inherent limitations and are not audited. They should not be considered in isolation or as a substitute for the results reported in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Tax effected numbers included in these non-GAAP disclosures are based on estimated federal income tax rates or effective tax rates as noted in the tables below.
The following tables present reconciliations between these non-GAAP measures and what management believes to be the most directly comparable GAAP financial measures.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)
| Calculation of Adjusted Net Income and Adjusted Diluted Earnings Per Common Share | ||||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| (dollars in thousands, except per share amounts) | 2026 | 2025 | ||||||||||||
Net income (loss) (GAAP) | [a] | $ | 49,981 | $ | (29,990) | |||||||||
Day 2 provision for credit losses1 | — | 45,572 | ||||||||||||
Other acquisition (income) expenses | 5,244 | 26,026 | ||||||||||||
Restructuring expenses | 11,456 | — | ||||||||||||
Net securities (gains) losses | 940 | 15,768 | ||||||||||||
Related tax benefit2 | (4,410) | (22,069) | ||||||||||||
Non-recurring deferred tax adjustment3 | — | 4,591 | ||||||||||||
Adjusted net income (Non-GAAP) | [b] | 63,211 | 39,898 | |||||||||||
Preferred dividends | [c] | 4,589 | — | |||||||||||
Adjusted net income available to common stockholders (Non-GAAP) | [d] | $ | 58,622 | $ | 39,898 | |||||||||
Weighted average number of common shares outstanding, diluted (GAAP) | [e] | 87,831,295 | 68,517,647 | |||||||||||
Diluted earnings (loss) per common share (GAAP) | [(a-c)÷e] | $ | 0.52 | $ | (0.44) | |||||||||
Weighted average number of common shares outstanding, diluted (Non-GAAP)4 | [f] | 87,831,295 | 69,502,717 | |||||||||||
Adjusted diluted earnings per common share (Non-GAAP)4 | [d÷f] | $ | 0.67 | $ | 0.57 | |||||||||
___________________________________________
1.The Day 2 provision represents the initial provision for credit losses recorded in connection with the CrossFirst acquisition to establish an allowance on non-PCD loans and unfunded commitments and is reflected within the provision for credit losses line on the Statements of Income (Unaudited).
2.Tax benefits were calculated using tax rates of 25.0% and 25.3% for the three months ended March 31, 2026 and 2025, respectively.
3.A deferred valuation tax adjustment was recorded in the first quarter of 2025 in connection with the CrossFirst acquisition and the expansion of Busey’s footprint into new states. Deferred tax adjustments are reflected within the income taxes line on the Statements of Income (Unaudited).
4.Dilution includes shares that would have been dilutive if there had been net income during the period.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)
| Calculation of Return On Average Assets, Return On Average Tangible Common Equity, and Related Adjusted Return Measures | ||||||||||||||
| Three Months Ended | ||||||||||||||
| (dollars in thousands) | March 31, 2026 | March 31, 2025 | ||||||||||||
Net income (loss) (GAAP) | [a] | $ | 49,981 | $ | (29,990) | |||||||||
Amortization of intangible assets | 4,291 | 3,083 | ||||||||||||
Tax effect of amortization of intangible assets1 | (1,073) | (779) | ||||||||||||
Preferred dividends | (4,589) | — | ||||||||||||
Tangible net income available to common stockholders (Non-GAAP) | [b] | $ | 48,610 | $ | (27,686) | |||||||||
Adjusted net income (Non-GAAP)2 | [c] | $ | 63,211 | $ | 39,898 | |||||||||
Amortization of intangible assets | 4,291 | 3,083 | ||||||||||||
Tax effect of amortization of intangible assets1 | (1,073) | (779) | ||||||||||||
Preferred dividends | (4,589) | — | ||||||||||||
Adjusted tangible net income available to common stockholders (Non-GAAP) | [d] | $ | 61,840 | $ | 42,202 | |||||||||
Average total assets | [e] | $ | 18,060,220 | $ | 14,831,298 | |||||||||
Return on average assets (Non-GAAP)3 | [a÷e] | 1.12 | % | (0.82) | % | |||||||||
Adjusted return on average assets (Non-GAAP)3 | [c÷e] | 1.42 | % | 1.09 | % | |||||||||
Average common equity | $ | 2,255,075 | $ | 1,932,407 | ||||||||||
Average goodwill and other intangible assets, net | (478,885) | (411,020) | ||||||||||||
Average tangible common equity (Non-GAAP) | [f] | $ | 1,776,190 | $ | 1,521,387 | |||||||||
Return on average tangible common equity (Non-GAAP)3, 4 | [b÷f] | 11.10 | % | (7.38) | % | |||||||||
Adjusted return on average tangible common equity (Non-GAAP)3, 4 | [d÷f] | 14.12 | % | 11.25 | % | |||||||||
___________________________________________
1.Tax effects were calculated using income tax rates of 25.0% and 25.3% for the three months ended March 31, 2026, and March 31, 2025, respectively.
2.A reconciliation is provided in the previous table.
3.Annualized measure.
4.Beginning in 2026, Busey revised, for all periods presented, its calculation of return on average tangible common equity and adjusted return on average tangible common equity to eliminate the effects of intangible asset amortization from the numerator of both calculations.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)
| Calculation of Net Interest Margin and Adjusted Net Interest Margin | ||||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| (dollars in thousands) | 2026 | 2025 | ||||||||||||
Net interest income (GAAP) | $ | 153,969 | $ | 103,731 | ||||||||||
Tax-equivalent adjustment1 | 877 | 537 | ||||||||||||
Tax-equivalent net interest income (Non-GAAP) | [a] | 154,846 | 104,268 | |||||||||||
Purchase accounting accretion related to business combinations | (5,394) | (2,728) | ||||||||||||
Adjusted net interest income (Non-GAAP) | [b] | $ | 149,452 | $ | 101,540 | |||||||||
Average interest-earning assets (Non-GAAP) | [c] | $ | 16,665,766 | $ | 13,363,594 | |||||||||
Net interest margin (Non-GAAP)2 | [a÷c] | 3.77 | % | 3.16 | % | |||||||||
Adjusted net interest margin (Non-GAAP)2 | [b÷c] | 3.64 | % | 3.08 | % | |||||||||
___________________________________________
1.Tax-equivalent adjustments were calculated using an estimated federal income tax rate of 21.0%, applied to non-taxable interest income on investments and loans.
2.Annualized measure.
| Calculation of Pre-Provision Net Revenue and Related Measures | ||||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| (dollars in thousands) | 2026 | 2025 | ||||||||||||
Net interest income (GAAP) | $ | 153,969 | $ | 103,731 | ||||||||||
Total noninterest income (GAAP) | 42,265 | 21,223 | ||||||||||||
Net security (gains) losses (GAAP) | 940 | 15,768 | ||||||||||||
Total noninterest expense (GAAP)1 | (129,519) | (112,030) | ||||||||||||
Pre-provision net revenue (Non-GAAP) | [a] | 67,655 | 28,692 | |||||||||||
Acquisition and restructuring (income) expenses, excluding initial provision expenses | 16,700 | 26,026 | ||||||||||||
Adjusted pre-provision net revenue (Non-GAAP) | [b] | $ | 84,355 | $ | 54,718 | |||||||||
Average total assets | [c] | $ | 18,060,220 | $ | 14,831,298 | |||||||||
Pre-provision net revenue to average total assets (Non-GAAP)2 | [a÷c] | 1.52 | % | 0.78 | % | |||||||||
Adjusted pre-provision net revenue to average total assets (Non-GAAP)2 | [b÷c] | 1.89 | % | 1.50 | % | |||||||||
___________________________________________
1.Beginning in the second quarter of 2025, Busey revised its presentation, for all periods presented, to reclassify the provision for unfunded commitments out of total noninterest expense and into the provision for credit losses. This change affects all measures and ratios derived from total noninterest expense.
2.Annualized measure.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)
| Calculation of Efficiency Ratio | ||||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| (dollars in thousands) | 2026 | 2025 | ||||||||||||
Net interest income (GAAP) | [a] | $ | 153,969 | $ | 103,731 | |||||||||
Tax-equivalent adjustment1 | 877 | 537 | ||||||||||||
Tax-equivalent net interest income (Non-GAAP) | [b] | 154,846 | 104,268 | |||||||||||
Total noninterest income (GAAP) | 42,265 | 21,223 | ||||||||||||
Net security (gains) losses | 940 | 15,768 | ||||||||||||
Adjusted noninterest income (Non-GAAP) | [c] | $ | 43,205 | $ | 36,991 | |||||||||
Operating revenue (Non-GAAP) | [d = a+c] | $ | 197,174 | $ | 140,722 | |||||||||
Tax-equivalent operating revenue (Non-GAAP)2 | [e = b+c] | 198,051 | 141,259 | |||||||||||
Adjusted noninterest income to operating revenue (Non-GAAP) | [c÷d] | 21.91 | % | 26.29 | % | |||||||||
Total noninterest expense (GAAP)3 | $ | 129,519 | $ | 112,030 | ||||||||||
Acquisition and restructuring expenses, excluding initial provision expenses | (16,700) | (26,026) | ||||||||||||
Adjusted noninterest expense (Non-GAAP)3, 4 | 112,819 | 86,004 | ||||||||||||
Amortization of intangible assets | (4,291) | (3,083) | ||||||||||||
Adjusted noninterest expense excluding amortization of intangible assets (Non-GAAP)3, 5 | [f] | $ | 108,528 | $ | 82,921 | |||||||||
Efficiency ratio (Non-GAAP)3, 6 | [f÷e] | 54.80 | % | 58.70 | % | |||||||||
___________________________________________
1.Tax-equivalent adjustments were calculated using an estimated federal income tax rate of 21.0%, applied to non-taxable interest income on investments and loans.
2.Beginning in 2026, Busey changed the caption for this revenue measure, which was previously called “adjusted tax-equivalent revenue.” The calculation itself has not changed.
3.Beginning in the second quarter of 2025, Busey revised its presentation, for all periods presented, to reclassify the provision for unfunded commitments out of total noninterest expense and into the provision for credit losses. This change affects all measures and ratios derived from total noninterest expense.
4.Beginning in 2026, to better align with industry standards, Busey revised its calculation of adjusted noninterest expense, for all periods presented, to exclude any adjustment for amortization of intangible assets.
5.Beginning in 2026, Busey changed the caption for the efficiency ratio numerator from “adjusted noninterest expense” to “adjusted noninterest expense excluding amortization of intangible assets.” The calculation itself has not changed.
6.Beginning in 2026, Busey now reports a single efficiency ratio, which was previously reported as the “Adjusted efficiency ratio.”
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)
| Calculation of Tangible Common Equity, and Related Measures and Ratio | ||||||||||||||
| As of | ||||||||||||||
| (dollars in thousands, except per share amounts) | March 31, 2026 | December 31, 2025 | ||||||||||||
Total assets (GAAP) | $ | 18,036,622 | $ | 18,104,736 | ||||||||||
Goodwill and other intangible assets, net | (475,520) | (480,729) | ||||||||||||
Tangible assets (Non-GAAP)1 | [a] | $ | 17,561,102 | $ | 17,624,007 | |||||||||
Total stockholders’ equity (GAAP) | $ | 2,413,022 | $ | 2,468,982 | ||||||||||
Preferred stock and additional paid in capital on preferred stock | (215,197) | (215,197) | ||||||||||||
Common equity | [b] | 2,197,825 | 2,253,785 | |||||||||||
Goodwill and other intangible assets, net | (475,520) | (480,729) | ||||||||||||
Tangible common equity (Non-GAAP)1 | [c] | $ | 1,722,305 | $ | 1,773,056 | |||||||||
Tangible common equity to tangible assets (Non-GAAP)1 | [c÷a] | 9.81 | % | 10.06 | % | |||||||||
Ending number of common shares outstanding (GAAP) | [d] | 85,507,160 | 87,624,430 | |||||||||||
Book value per common share (Non-GAAP) | [b÷d] | $ | 25.70 | $ | 25.72 | |||||||||
Tangible book value per common share (Non-GAAP) | [c÷d] | $ | 20.14 | $ | 20.23 | |||||||||
___________________________________________
1.Beginning in 2025, Busey revised its calculation of tangible assets and tangible common equity, for all periods presented, to exclude any tax adjustment.
| Calculation of Core Deposits and Related Ratio | ||||||||||||||
| As of | ||||||||||||||
| (dollars in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
Total deposits (GAAP) | [a] | $ | 14,736,060 | $ | 14,905,958 | |||||||||
Brokered deposits, excluding brokered time deposits of $250,000 or more | (60,123) | (70,140) | ||||||||||||
Time deposits of $250,000 or more | (865,493) | (876,207) | ||||||||||||
Core deposits (Non-GAAP) | [b] | $ | 13,810,444 | $ | 13,959,611 | |||||||||
Core deposits to total deposits (Non-GAAP) | [b÷a] | 93.72 | % | 93.65 | % | |||||||||
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
FORWARD-LOOKING STATEMENTS
This Quarterly Report may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to Busey’s financial condition, results of operations, plans, objectives, future performance, and business. Forward-looking statements, which may be based upon beliefs, expectations, and assumptions of Busey’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should,” “position,” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and Busey undertakes no obligation to update any statement in light of new information or future events.
A number of factors, many of which are beyond Busey’s ability to control or predict, could cause actual results to differ materially from those in any forward-looking statements. These factors include, among others, the following: (1) the strength of the local, state, national, and international economies and financial markets (including effects of inflationary pressures, the threat or implementation of tariffs, trade wars, and changes to immigration policy); (2) changes in, and the interpretation and prioritization of, local, state, and federal laws, regulations, and governmental policies (including those concerning Busey's general business); (3) the economic impact of any future terrorist threats or attacks, widespread disease or pandemics, military conflicts, acts of war or threats thereof, or other adverse external events that could cause economic deterioration or instability in credit markets (including the conflicts in the Middle East and Russia’s invasion of Ukraine); (4) unexpected results of acquisitions, including the acquisition of CrossFirst, which may include the failure to realize the anticipated benefits of the acquisitions and the possibility that the transaction and integration costs may be greater than anticipated; (5) the imposition of tariffs or other governmental policies impacting the value of products produced by Busey's commercial borrowers; (6) the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry, including investor and depositor sentiment regarding bank stability and liquidity; (7) new or revised accounting policies and practices as may be adopted by state and federal regulatory banking agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission, or the Public Company Accounting Oversight Board; (8) changes in interest rates and prepayment rates of Busey’s assets (including the impact of sustained elevated interest rates); (9) increased competition in the financial services sector (including from non-bank competitors such as credit unions, digital asset service providers, private credit, and fintech companies) and the inability to attract new customers; (10) technological changes implemented by us and other parties, including our third-party vendors, which may have unforeseen consequences to us and our customers, including the development and implementation of tools incorporating artificial intelligence; (11) the loss of key executives or associates, talent shortages, and employee turnover; (12) unexpected outcomes and costs of existing or new litigation, investigations, or other legal proceedings, inquiries, and regulatory actions involving Busey (including with respect to Busey’s Illinois franchise taxes); (13) fluctuations in the value of securities held in Busey’s securities portfolio, including as a result of changes in interest rates; (14) credit risk and risk from concentrations (by type of borrower, geographic area, collateral, and industry), within Busey's loan portfolio and large loans to certain borrowers (including commercial real estate loans); (15) the concentration of large deposits from certain clients who have balances above current Federal Deposit Insurance Corporation insurance limits and may withdraw deposits to diversify their exposure; (16) the level of non-performing assets on Busey’s balance sheets; (17) interruptions involving information technology and communications systems or third-party servicers; (18) breaches or failures of information security controls or cybersecurity-related incidents; (19) the economic impact on Busey and its customers of climate change, natural disasters, and exceptional weather occurrences such as tornadoes, hurricanes, floods, blizzards, and droughts; (20) the ability to successfully manage liquidity risk, which may increase dependence on non-core funding sources such as brokered deposits, and may negatively impact Busey's cost of funds; (21) the ability to maintain an adequate level of allowance for credit losses on loans; (22) the effectiveness of Busey’s risk management framework; and (23) the ability of Busey to manage the risks associated with the foregoing. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.
Additional information concerning Busey and its business, including additional factors that could materially affect Busey’s financial results, is included in Busey’s 2025 Annual Report.
CRITICAL ACCOUNTING ESTIMATES
Busey has established various accounting policies that govern the application of GAAP in the preparation of its unaudited consolidated financial statements. Significant accounting policies are described in “Note 1. Significant Accounting Policies” of Busey’s 2025 Annual Report.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Critical accounting estimates are those that are critical to the portrayal and understanding of Busey’s financial condition and results of operations and require management to make assumptions that are subjective or complex. These estimates involve judgments, assumptions, and uncertainties that are susceptible to change. In the event that different assumptions or conditions were to prevail, and depending on the severity of such changes, the possibility of a materially different financial condition or materially different results of operations is a reasonable likelihood. Further, changes in accounting standards could impact Busey’s critical accounting estimates. Management has reviewed these critical accounting estimates and related disclosures with Busey’s Audit Committee. The following estimates could be deemed critical:
Fair Value of Assets Acquired and Liabilities Assumed in Business Combinations
Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method of accounting, assets acquired and liabilities assumed are recorded at their estimated fair value on the date of acquisition. Fair values are determined based on the definition of “fair value” defined in ASC Topic 820 “Fair Value Measurement” as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The determination of fair values is based on valuations using management’s assumptions of future growth rates, future attrition, discount rates, multiples of earnings, or other relevant factors. In addition, Busey engages third party specialists to assist in the development of fair values.
The fair value of a loan portfolio acquired in a business combination generally requires greater levels of management estimates and judgment than other assets acquired or liabilities assumed. Acquired loans are within the scope of ASC Topic 326 “Financial Instruments-Credit Losses.” However, the offset to record the allowance on acquired loans at the date of acquisition depends on whether or not the loan is classified as PCD. The allowance for PCD loans is recorded through a gross-up effect, while the allowance for acquired non-PCD loans is recorded through provision expense, consistent with originated loans. Thus, the determination of which loans are PCD and non-PCD can have a significant effect on the accounting for these loans.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of net assets acquired using the acquisition method of accounting. Goodwill is not amortized; instead, Busey assesses the potential for impairment on an annual basis or more frequently if events and circumstances indicate that goodwill might be impaired. Management applies significant judgment when testing goodwill for impairment, such as the valuation approach chosen, market multiples for competitors used in the calculation, and forecasts of business outlook.
Income Taxes
Busey is subject to the income tax laws of the U.S., as well as the tax laws of the individual states and municipalities in which the Company conducts its operations. These laws are often complex and subject to nuanced interpretations.
Income taxes are estimated for the tax effects of the transactions reported on Busey’s unaudited consolidated financial statements and consist of an expense for taxes currently due plus assets and/or liabilities for deferred taxes. Deferred taxes represent the future tax consequences of differences between the tax basis and accounting basis of certain assets and liabilities, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred tax assets and liabilities are estimates that are reflected at income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. Deferred taxes are reported in other assets or other liabilities on the Consolidated Balance Sheets (Unaudited). Estimated income tax expense is reported on the Consolidated Statements of Income (Unaudited).
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
In establishing its provision for income taxes and its estimates of deferred tax assets and liabilities, Busey must make judgments and interpretations about the application of inherently complex tax laws. Busey must also make estimates about when in the future certain items will affect taxable income. Disputes over interpretations of the tax laws may be subject to review and adjudication by the court systems of the various tax jurisdictions or may be settled with the taxing authority upon examination or audit. Although Busey’s management believes that its judgments are sound and its tax estimates are reasonable, interpretations of tax law applied by the taxing jurisdictions could differ. As such, Busey may be exposed to losses or gains, which could be material. An unfavorable tax settlement would result in an increase in Busey’s effective income tax rate in the period of resolution. A favorable tax settlement would result in a reduction in Busey’s effective income tax rate in the period of resolution.
Allowance for Credit Losses
Busey calculates the ACL at each reporting date. Busey recognizes an allowance for the lifetime expected credit losses for the amount it does not expect to collect. Measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported book value. The calculation also contemplates that Busey may not be able to make or obtain such forecasts for the entire life of the financial assets and requires a reversion to historical credit loss information.
In determining the ACL, management relies predominantly on a disciplined credit review and approval process that extends to the full range of Busey’s credit exposure. The ACL must be determined on a collective (pool) basis when similar risk characteristics exist. On a case-by-case basis, Busey may conclude that a loan should be evaluated on an individual basis based on disparate risk characteristics.
Loans deemed uncollectible are charged against and reduce the ACL. A provision for credit losses is charged to current expense and acts to replenish the ACL in order to maintain the ACL at a level that management deems adequate.
Determining the ACL involves significant judgments and assumptions. Macroeconomic forecasts provided by a third party and the economic indices sourced are significant judgments used in determining the allowance. Changes in these economic forecasts could significantly affect the ACL and lead to materially different amounts from one period to the next. Additionally, prepayment assumptions impact model output. Further, Busey completes a quarterly evaluation of several qualitative factors to determine if there should be adjustments made to the ACL. These factors include economic conditions, collateral, concentrations, delinquency trends, portfolio composition, underwriting, and certain other risks. Significant downturns relating to loan quality and economic conditions could result in a requirement for an additional allowance. Likewise, an upturn in loan quality and improved economic conditions may allow for a reduction in the required allowance. Because of the nature of the judgments and assumptions made by management, actual results may differ from these judgments and assumptions.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk of changes in asset values due to movements in underlying market rates and prices. Interest rate risk is a type of market risk to earnings and capital arising from movements in interest rates. Interest rate risk is the most significant market risk affecting Busey as other types of market risk, such as foreign currency exchange rate risk and commodity price risk, have a minimal impact or do not arise in the normal course of Busey’s business activities.
Busey has an asset-liability committee, whose policy is to meet at least quarterly, to review current market conditions and to structure the Consolidated Balance Sheets (Unaudited) to optimize stability in net interest income in consideration of projected future changes in interest rates.
As interest rate changes do not impact all categories of assets and liabilities equally or simultaneously, the asset-liability committee primarily relies on balance sheet and income simulation analysis to determine the potential impact of changes in market interest rates on net interest income. In these standard simulation models, the balance sheet is projected over a one-year and a two-year time horizon and net interest income is calculated under current market rates and assuming permanent instantaneous shifts of +/-100 and +/-200 bps. The model assumes immediate and sustained shifts in the federal funds rate and other market rate indices and corresponding shifts in other non-market rate indices based on their historical changes relative to changes in the federal funds rate and other market indices. Assets and liabilities are assumed to remain constant as of the measurement date; variable-rate assets and liabilities are repriced based on repricing frequency; and prepayment speeds on loans are projected for both declining and rising rate environments.
Busey’s interest rate risk resulting from immediate and sustained changes in interest rates, expressed as a change in net interest income as a percentage of the net interest income calculated in the constant base model, was as follows:
| Year-One: Basis Point Changes | Year-Two: Basis Point Changes | ||||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2026 | December 31, 2025 | ||||||||||||||||||||
| +200 | 4.29 | % | 4.14 | % | 5.00 | % | 5.65 | % | |||||||||||||||
| +100 | 2.33 | % | 2.31 | % | 2.75 | % | 3.13 | % | |||||||||||||||
| -100 | (1.30) | % | (1.76) | % | (2.55) | % | (3.27) | % | |||||||||||||||
| -200 | (1.32) | % | (2.18) | % | (4.17) | % | (5.59) | % | |||||||||||||||
Interest rate risk is monitored and managed within approved policy limits and any temporary exceptions to policy in periods of rapid rate movement are approved and documented. The calculation of potential effects of hypothetical interest rate changes is based on numerous assumptions and should not be relied upon as indicative of actual results. Actual results would likely differ from simulated results due to the timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies.
ITEM 4. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
An evaluation of Busey’s disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act, was carried out as of March 31, 2026, under the supervision and with the participation of its Chief Executive Officer, Chief Financial Officer, and several other members of senior management. Based on this evaluation, Busey’s Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2026, Busey’s disclosure controls and procedures were effective in ensuring that the information Busey is required to disclose in the reports Busey files or submits under the Exchange Act was (1) accumulated and communicated to Busey’s management (including the Chief Executive Officer and Chief Financial Officer) to allow timely decisions regarding required disclosure, and (2) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.
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CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
During the three months ended March 31, 2026, no change occurred in Busey’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, Busey’s internal control over financial reporting.
PART II—OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As part of the ordinary course of business, First Busey Corporation and its subsidiaries are parties to litigation that is incidental to their regular business activities.
On November 25, 2025, First Busey Corporation filed two lawsuits against the Illinois Secretary of State in connection with an ongoing dispute regarding the amount of franchise taxes, penalties, interest, fees, and charges purportedly due from First Busey Corporation to the Illinois Secretary of State. See “Note 11. Outstanding Commitments and Contingent Liabilities” for further information.
Other than the foregoing lawsuits, there is no material pending litigation, other than ordinary routine litigation incidental to its business, in which First Busey Corporation or any of its subsidiaries is involved or of which any of their property is the subject. Furthermore, there is no pending legal proceeding that is adverse to Busey in which any director, officer, or affiliate of Busey, or any associate of any such director or officer, is a party, or has a material interest.
ITEM 1A. RISK FACTORS
There have been no material changes to the factors discussed in Part II—Item 1A of Busey’s 2025 Annual Report.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES
UNREGISTERED SALES OF EQUITY SECURITIES
None.
ISSUER PURCHASES OF EQUITY SECURITIES
On February 3, 2015, Busey's board of directors approved the Stock Repurchase Plan authorizing, but not obligating, Busey to repurchase shares of its common stock. The Stock Repurchase Plan may be terminated, or the number of shares authorized for repurchase may be increased or decreased by Busey's board of directors at its discretion at any time.
The following table summarizes share repurchase activity, excluding excise taxes, during the first quarter of 2026.
| Period | Total Number of Common Shares Purchased | Weighted Average Price Paid per Common Share | Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Common Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
| January 1-31, 2026 | 882,400 | $ | 24.42 | 882,400 | 3,973,775 | |||||||||||||||||||||
| February 1-28, 2026 | 675,000 | 26.11 | 675,000 | 3,298,775 | ||||||||||||||||||||||
| March 1-31, 2026 | 1,060,000 | 24.95 | 1,060,000 | 2,238,775 | ||||||||||||||||||||||
| Three months ended March 31, 2026 | 2,617,400 | $ | 25.07 | 2,617,400 | ||||||||||||||||||||||
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
During the fiscal quarter ended March 31, 2026, none of Busey’s directors or executive officers adopted terminated
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ITEM 6. EXHIBITS
| | ||||||||||||||
| Exhibit Number | Description of Exhibit | Filed Herewith | ||||||||||||
| 31.1 | Certification of Principal Executive Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) | X | ||||||||||||
| 31.2 | Certification of Principal Financial Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) | X | ||||||||||||
| 32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, from First Busey’s Chief Executive Officer | X | ||||||||||||
| 32.2 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, from First Busey’s Chief Financial Officer | X | ||||||||||||
| 101.INS | iXBRL Instance Document | |||||||||||||
| 101.SCH | iXBRL Taxonomy Extension Schema | |||||||||||||
| 101.CAL | iXBRL Taxonomy Extension Calculation Linkbase | |||||||||||||
| 101.LAB | iXBRL Taxonomy Extension Label Linkbase | |||||||||||||
| 101.PRE | iXBRL Taxonomy Extension Presentation Linkbase | |||||||||||||
| 101.DEF | iXBRL Taxonomy Extension Definition Linkbase | |||||||||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101) | |||||||||||||
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, as of May 7, 2026.
FIRST BUSEY CORPORATION (Registrant) | ||||||||
| By: | /s/ VAN A. DUKEMAN | |||||||
| Van A. Dukeman | ||||||||
| Chairman, President, and Chief Executive Officer (Principal Executive Officer) | ||||||||
| By: | /s/ CHRISTOPHER H.M. CHAN | |||||||
| Christopher H.M. Chan | ||||||||
| Chief Financial Officer (Principal Financial Officer) | ||||||||
| By: | /s/ SCOTT A. PHILLIPS | |||||||
Scott A. Phillips | ||||||||
| Chief Accounting Officer (Principal Accounting Officer) | ||||||||
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FAQ
How did First Busey (BUSE) perform financially in Q1 2026?
First Busey generated net income of $49.98 million in Q1 2026, versus a net loss of $29.99 million a year earlier. Diluted earnings per common share improved to $0.52 from a loss of $0.44, reflecting higher net interest income and lower credit costs.
What were First Busey’s key revenue and expense drivers in Q1 2026?
Net interest income rose to $153.97 million, helped by higher interest and fees on loans of $200.56 million. The provision for credit losses fell to $3.06 million from $45.59 million, while noninterest income increased to $42.27 million and noninterest expense reached $129.52 million.
How strong are First Busey’s capital ratios as of March 31, 2026?
First Busey reported a common equity Tier 1 capital ratio of 12.31%, Tier 1 capital ratio of 13.77%, and total capital ratio of 15.87%. Its leverage ratio was 11.88%, comfortably above regulatory minimum and “well capitalized” thresholds for bank holding companies.
What are First Busey’s loan and deposit balances in Q1 2026?
Total portfolio loans were $13.46 billion at March 31, 2026, with commercial and retail portfolios across multiple categories. Total deposits stood at $14.74 billion, including $3.53 billion of noninterest-bearing deposits and $11.21 billion of interest-bearing balances.
How did securities impact First Busey’s Q1 2026 results?
Realized net gains on debt securities were modest at $23,000, but changes in market values produced $9.35 million of negative unrealized movements on debt securities and $1.73 million on cash flow hedges, contributing to total other comprehensive income of −$11.08 million.
What is the status of First Busey’s CrossFirst acquisition accounting?
Acquisition accounting for CrossFirst is now final. Net assets acquired were valued at $760.39 million, total consideration was $808.98 million, and resulting goodwill was $48.59 million. A final deferred tax fair value adjustment of $0.9 million was recorded in Q1 2026.