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Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.31pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.45pp
Lean -
Net-tone change vs last year's 10-K.
MD&A
-0.16pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
adversely+23
volatility+7
stress+7
impair+6
adverse+5
Positive rising
opportunities+2
successful+2
greater+2
satisfy+2
enabled+2
Risk Factors (Item 1A)
7,152 words
ITEM 1A. RISK FACTORS
This section highlights the risks management believes could adversely affect Busey’s financial performance. Additional risks that could affect Busey adversely and cannot be predicted may arise at any time. Further, risks that are immaterial at this time may have an adverse impact on Busey’s future financial condition.
Contents of Item 1A. Risk Factors
ECONOMIC AND MARKET RISKS
REGULATORY AND LEGAL RISKS
CREDIT AND LENDING RISKS
CAPITAL AND LIQUIDITY RISKS
COMPETITIVE AND STRATEGIC RISKS
ACCOUNTING AND TAX RISKS
OPERATIONAL RISKS
ECONOMIC AND MARKET RISKS
Economic and financial market conditions, including conditions in the states in which it operates, may adversely affect Busey’s business.
Busey’s general financial performance is highly dependent upon the business environment in the markets where it operates and, in particular, the ability of borrowers to pay interest on, and repay principal of, outstanding loans, and the value of collateral securing those loans, as well as demand for loans and other products and services it offers. A favorable business environment is characterized by, among other factors, economic growth, capital markets, low and inflation, full employment, high business and investor confidence, and business earnings. or uncertain economic and market conditions can be caused by in economic growth, business activity, or investor or business confidence; on the availability, or increases in the cost, of credit and capital; increases in inflation or interest rates; high ; natural ; or a combination of these or other factors. Current conditions reflect elevated interest rates and inflation above the Federal Reserve’s 2% target, which continue to pressure borrowing costs and consumer confidence. Fiscal , including a large federal and rising debt-service obligations, add longer-term uncertainty. Geopolitical across the globe, including in the Middle East, the Russian invasion of Ukraine, and the recent military activity in Venezuela, sustain in energy and trade markets, while domestic labor markets remain tight in key sectors job growth. Supply chain , though , due to structural and geopolitical factors. Policy uncertainty—including tariffs, immigration enforcement, and regulatory changes—further planning. These factors may affect Busey’s business, financial condition, results of operations, and growth prospects.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
losses+23
restructuring+3
unfunded+3
against+1
decline+1
Positive rising
gains+7
greater+1
stabilization+1
stability+1
MD&A (Item 7)
13,953 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Contents of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Unaudited) (“MD&A”)
SCOPE OF DISCUSSION
BUSEY’S CONSERVATIVE BANKING STRATEGY
CRITICAL ACCOUNTING ESTIMATES
Fair Value of Assets Acquired and Liabilities Assumed in Business Combinations
Goodwill
Income Taxes
Allowance for Credit Losses
RESULTS OF OPERATIONS — THREE YEARS ENDED DECEMBER 31, 2025
Shifts in consumer and business behavior during economic uncertainty may impact Busey’s business.
Uncertainty regarding economic conditions may result in changes in consumer and business spending, borrowing, and savings habits. Downturns in the markets where Busey’s banking operations occur could result in a decrease in demand for Busey’s products and services, an increase in loan delinquencies and defaults, high or increased levels of problem assets and foreclosures, and reduced wealth management fees resulting from lower asset values. Such conditions could adversely affect Busey’s asset quality, financial condition, and results of operations.
Regional economic vulnerabilities may heighten risks.
Busey conducts banking operations across ten states, including Illinois, Missouri, Texas, Colorado, Florida, Kansas, Oklahoma, Arizona, Indiana, and New Mexico, with a focus in the major metropolitan areas in these states, which can be more susceptible to economic cycles, real estate market volatility, and localized downturns. Urban markets often experience sharper volatility in employment, housing demand, and commercial development, which can affect credit quality and loan demand. These regional and metropolitan exposures could adversely impact Busey’s financial condition and results of operations.
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Contents of Item 1A. Risk Factors
Changes in interest rates and yield‑curve dynamics may compress net interest margin, affect asset valuations, and create liquidity pressures.
Busey’s financial performance depends heavily on the level, direction, and volatility of interest rates. Movements in short‑term or long‑term rates—and changes in the shape of the yield curve—may materially affect net interest income and the value of interest‑earning assets and funding sources. Rising rates can increase funding costs faster than earning‑asset yields reprice, compressing net interest margin, reducing fair values of fixed‑rate assets, and slowing loan demand. Conversely, declining rates may reduce yields on loans and securities more quickly than deposit costs decline, accelerate prepayments on fixed‑rate loans and securities, and require reinvestment at lower rates. In addition, inverted or flattened yield curves may limit opportunities to profitably deploy funds and can discourage borrowers from seeking longer‑term credit. Busey’s interest‑rate risk management strategies may not fully mitigate these impacts. Sustained interest‑rate volatility, rapid shifts in the yield curve, or an inability to effectively manage interest‑rate sensitivity could materially and adversely affect Busey’s net interest income, liquidity position, financial condition, and results of operations.
REGULATORY AND LEGAL RISKS
Changes in government policies and regulatory frameworks could adversely affect operations and profitability.
The banking regulatory environment is a complex mix of increased deferment to local regulatory authorities relative to international rulemaking, adapting to digital innovation (e.g., AI, digital assets, etc.), and potential easing of federal regulatory oversight. Key risks in 2026 include implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, managing fintech/crypto risks, and evolving technological, geopolitical, and economic pressures, all requiring an agile regulatory management system.
More specifically, Busey Bank's focus on commercial banking and wealth management increases risk for customers to seek out opportunities in digital assets and real time payments, requiring enhanced risk oversight and compliance practices to ensure rapid adoption when appropriate.
In addition, the geopolitical risk from global conflicts increases the operational burden of complying with dynamic sanctions placed and eased on various foreign countries, foreign nationals, and foreign companies despite limited exposure to foreign customers and transactions. These evolving regulatory, technological, and geopolitical dynamics could increase compliance costs, operational complexity, and strategic risk for the Company, which in turn could adversely affect Busey’s financial condition and results of operations.
Evolving privacy, data protection, and information security laws and regulations present operational and legal challenges.
In the normal course of business, Busey collects, processes, and retains sensitive and confidential information regarding its customers, and Busey’s collection and handling of such information is subject to regulatory scrutiny. There has been a heightened legislative and regulatory focus on privacy, data protection, and information security. New or revised laws and regulations, including with respect to the use of artificial intelligence by financial institutions and service providers, may significantly impact Busey’s current and planned privacy, data protection, and information security-related practices; the collection, use, retention, and safeguarding of customer and employee information; and current or planned business activities. Compliance with current or future privacy, data protection, and information security laws could result in higher compliance and technology costs and could restrict Busey’s ability to provide certain products and services, which could materially and adversely affect Busey’s business, financial condition, and results of operations.
Laws impacting cannabis-related businesses may have an impact on Busey’s operations and risk profile.
Executive Order 14370, "Increasing Medical Marijuana and Cannabidiol Research," directs federal agencies to work towards rescheduling marijuana from Schedule I to Schedule III under the Controlled Substances Act. This includes instructing the Attorney General to expedite the rulemaking process, following a Department of Justice proposed rule based on a Health and Human Services recommendation that marijuana has an accepted medical use. The executive order itself does not change cannabis's legal status under the Controlled Substances Act; it only directs the Attorney General to expedite the formal rulemaking process. The outlook is encouraging more commercial investment into cannabis related businesses with anticipation of rescheduling of cannabis.
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Contents of Item 1A. Risk Factors
It is Busey Bank’s current practice to avoid knowingly providing banking products or services to entities or individuals that: (1) directly or indirectly manufacture, distribute, or dispense marijuana or hemp products, or those with a significant financial interest in such entities; or (2) derive a material amount of revenue from providing products or services to, or other involvement with, such entities. Busey Bank uses reasonable measures, including appropriate new account screening and customer due diligence measures, to ensure that existing and potential customers that operate in the states in which the Bank operates do not engage in any such activities. Nonetheless, shifts in state laws legalizing cannabis use and decriminalizing possession have increased the number of direct and indirect cannabis-related businesses in the states in which Busey operates, and therefore increases the likelihood that Busey Bank could interact with such businesses, as well as their owners and employees. Such interactions could create additional legal, regulatory, strategic, and reputational risk to Busey Bank and First Busey Corporation. Any such legal, regulatory, or reputational exposure could adversely affect Busey’s financial condition and results of operations.
Busey is or may become involved from time to time in suits, legal proceedings, information-gathering requests, investigations, and proceedings by governmental and self-regulatory agencies that may lead to adverse consequences.
Busey may be subject to lawsuits, governmental inquiries, or self-regulatory reviews. These proceedings could result in penalties, adverse judgments, or operational restrictions. While accruals are established for legal contingencies when losses are probable and estimable, outcomes may exceed these amounts, and accordingly, Busey’s ultimate losses may be higher, possibly significantly so, than the amounts accrued for legal loss contingencies, which may materially and adversely affect Busey’s financial condition and results of operations.
See “ Note 18. Outstanding Commitments and Contingent Liabilities ” in the Notes to the Consolidated Financial Statements for information regarding 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.
CREDIT AND LENDING RISKS
Heightened credit risk associated with lending activities may result in insufficient credit loss provisions, which could have material adverse effects on Busey’s results of operations and financial condition.
Busey’s lending activities involve inherent risks, including borrower nonpayment, fluctuations in collateral value, and the effects of economic and market conditions. These risks have been amplified by certain economic factors, such as elevated interest rates above the Federal Reserve’s 2% target, inflationary pressures, tariffs, geopolitics, and increased economic uncertainty. Busey employs rigorous underwriting standards, monitors portfolio performance, including industry and geographic loan concentrations, and conducts both internal and external independent loan reviews to mitigate these risks. Additionally, Busey leverages stress testing at both the borrower and portfolio levels to proactively identify potential vulnerabilities. Despite these efforts, credit risks cannot be eliminated, and increased borrower stress could lead to increased delinquencies, non-performing loans, higher ACL provisions, and charge-offs.
Busey establishes the ACL based on detailed analyses of the loan portfolio and broader market conditions, incorporating forward-looking forecasts and management judgments. While management considers the ACL adequate to absorb probable losses, unforeseen economic disruptions or borrower-specific events could necessitate additional provisions and adversely affect Busey’s financial condition and results of operations.
Elevated levels of non-performing assets could reduce Busey’s profitability and strain operational resources.
Non-performing assets negatively impact Busey’s financial condition through lost interest income, increased loan administration costs, and adverse effects on efficiency ratios. The resolution of these assets demands significant management attention and regulatory compliance, which can divert resources from other priorities. Non-performing loans and OREO properties elevate Busey’s risk profile and require ongoing vigilance to minimize financial and operational disruptions, which may adversely affect Busey’s financial condition and results of operations.
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Contents of Item 1A. Risk Factors
Loan concentrations in volatile markets could increase Busey’s exposure to adverse economic conditions and heighten credit risk.
Busey may face elevated credit risks, or experience increased credit losses, when its loan portfolio is concentrated by loan type, industry segment, borrower characteristics, or the geographic location of borrowers or collateral. CRE is a significant component of Busey’s loan portfolio and is inherently sensitive to broader economic and market fluctuations. Busey’s CRE portfolio primarily consists of (1) owner occupied CRE and (2) non-owner occupied CRE, each with distinct risk profiles:
• Owner occupied CRE: Repayment of owner occupied CRE loans depends on the financial performance and operational stability of the business occupying the property. Financial stress, cash flow constraints, or operational disruptions at the borrower level may impair repayment capacity. However, these loans may benefit from the borrower’s incentive to maintain the property to support its ongoing business operations.
• Non-owner occupied CRE: Non-owner occupied CRE loans rely on rental income generated by third party tenants. These loans are more vulnerable to changes in market demand, tenant turnover, rising vacancy rates, reduced rental income, and potential regulatory shifts affecting commercial leasing or property use. Economic downturns or weakened tenant performance can materially impact the borrower’s ability to meet repayment obligations.
If concentrations within the loan portfolio are not effectively monitored and managed, Busey could face heightened credit losses, increased earnings volatility, and reduced capital flexibility, which could materially and adversely affect its financial condition and results of operations.
Busey’s commercial lending activities expose it to repayment risks that may increase during periods of economic stress.
Busey primarily underwrites commercial loans based on the borrower’s projected cash flows, with collateral serving as secondary support. Credit enhancements—such as pledged collateral and personal guarantees—are often used to improve the likelihood of repayment. However, repayment capacity, particularly for loans secured by accounts receivable, may depend heavily on the borrower’s ability to collect payments from its own customers. During periods of economic stress or industry‑specific downturns, borrowers may experience weakened collections, which can elevate repayment risk.
Collateral securing commercial loans may depreciate over time, be difficult to accurately value, or fluctuate in response to changes in the borrower’s financial condition or business performance. Given the size of certain commercial loan exposures and the often less‑marketable nature of related collateral, even a limited number of credit losses within this portfolio could result in a disproportionatelynegative impact on the Company.
Failure to effectively manage these risks could lead to higher credit losses, reduced asset quality, and increased operational costs, any of which could materially and adversely affect Busey’s financial condition and results of operations.
Construction, land acquisition, and development loans involve heightened risks that could adversely affect Busey’s credit performance.
Construction, land acquisition, and development lending carries additional risk because loan proceeds are advanced based on the projected value of a property that will not be realized until the project is completed. In periods of declining real estate markets conditions, construction costs may exceed expected values, resulting in diminished collateral coverage. Due to uncertainties in estimating total construction costs, timelines, and the ultimate market value of the completed property—and given the potential impact of zoning, permitting, environmental requirements, and other governmental regulations—accurately assessing required funding levels and the resulting loan‑to‑value ratio can be difficult.
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Contents of Item 1A. Risk Factors
Repayment of these loans is often dependent on the successful completion and stabilization of the project, including the borrower’s ability to sell or lease the property, rather than solely on the borrower’s or guarantor’s financial capacity. If Busey’s appraisal of the completed project proves overstated, or if market values or rental rates decline, the collateral securing the loan may be insufficient at completion. In the event of default, foreclosure prior to or at completion may not result in full recovery of principal, interest, or associated foreclosure and holding costs, and Busey may be required to advance additional funds to complete the project or retain the property for an extended period.
Failure to effectively manage these risks could result in increased nonperforming assets, elevated expenses, and higher credit losses, which could materially and adversely affect Busey’s financial condition and results of operations.
Credit exposure to the energy industry may increase Busey’s vulnerability to sector-specific volatility.
Busey has limited credit exposure to energy-related loans across its western markets and throughout the United States. A downturn or prolongedstagnation in the energy sector could adversely affect borrowers engaged in energy production, services, and related activities, potentially resulting in higher delinquencies and increased charge‑offs. Pricing pressures on oil and natural gas may also contribute to elevated credit stress within the energy portfolio, higher loss expectations, greater utilization of unfunded commitments, and reduced demand for new energy-related credit.
Sustained uncertainty and price volatility in the energy sector may produce additional adverse effects that are difficult to quantify, and responses to climate change—whether through regulation, market shifts, or technological transition—may further weaken the financial condition of Busey’s energy‑sector clients, thereby increasing associated credit risk.
Failure to effectively manage these exposures could lead to increased nonperforming assets, greater operational costs, and higher credit losses, any of which could materially and adversely impact Busey’s financial condition and results of operations.
Credit quality deterioration in investment securities may result in significant realized losses, impacting Busey’s financial performance.
Busey’s investment portfolio includes securities issued by government-sponsored agencies and non-government entities. While these securities offer portfolio diversification, they are subject to risks such as credit downgrades, collateral underperformance, and issuer defaults. These factors could result in realized losses, negatively impacting Busey’s financial condition and results of operations.
CAPITAL AND LIQUIDITY RISKS
Failure to maintain sufficient capital to meet regulatory requirements could have material adverse effects on financial condition, liquidity, results of operations, and regulatory compliance.
Busey is required to satisfy regulatory capital standards and to maintain sufficient liquidity to support ongoing operations and strategic objectives. Its ability to raise additional capital when needed depends on conditions in the capital markets, broader economic trends, investor sentiment toward the banking industry, governmental actions, and other factors outside Busey’s control, as well as Busey’s own financial performance and condition. As a result, Busey cannot guarantee that it will be able to obtain additional capital on favorable terms, or at all, if circumstances require it.
Failure to maintain capital ratios at levels sufficient to be considered “well‑capitalized” for regulatory purposes could negatively affect customer confidence, constrain growth opportunities, increase funding costs, raise FDIC insurance premiums, restrict the ability to pay dividends, limit acquisition capacity, and otherwise adversely affect business operations. In addition, under FDIC regulations, if Busey no longer meets the standards to be deemed “well‑capitalized,” it may face restrictions on the interest rates it may pay on deposits and on its ability to accept, renew, or roll over deposits, particularly brokered deposits.
Failure to effectively manage capital and liquidity levels could result in higher funding costs, reduced operational flexibility, and diminished competitive positioning, any of which could materially and adversely affect Busey’s financial condition and results of operations.
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Contents of Item 1A. Risk Factors
Liquidity risks could affect operations and jeopardize Busey’s business, financial condition, and results of operations.
Maintaining sufficient liquidity is essential to Busey’s business model and ongoing operations. Busey relies on a variety of funding sources—including deposits, borrowings, sales or maturities of securities, loan sales, and operating cash flows—to support lending activity, meet obligations, and manage daily liquidity needs. Additional liquidity is available through repurchase agreements, brokered deposits, and borrowing capacity with the FHLB and the Federal Reserve Bank. An inability to access these funding sources in adequate amounts or on acceptable terms could materially impair liquidity.
Access to funding may be negatively affected by factors specific to Busey, as well as broader conditions in the banking industry or the economy, many of which are beyond Busey’s control. Increasing competition from large banks and fintech firms for retail deposits may further pressure Busey’s ability to attract and retain deposits, which could adversely affect liquidity.
A reduction in available funding or capital could constrain Busey’s ability to originate new loans, purchase investment securities, meet operating expenses, satisfy deposit withdrawal demands, or pay dividends to stockholders. Failure to effectively manage liquidity needs could materially and adversely affect Busey’s liquidity position, overall financial condition, and results of operations.
Busey may face challenges accessing contingent liquidity during times of market stress.
Busey’s ability to access contingent liquidity during periods of market stress depends on its operational readiness to utilize central‑bank and other secured funding facilities. Operational readiness includes maintaining current and complete legal documentation, ensuring proper internal controls and procedures, and pre-positioning eligible collateral with the Federal Reserve Banks or other liquidity providers. The Federal Reserve periodically updates collateral requirements, valuation methodologies, and margin schedules, which can affect the type and value of assets considered eligible for borrowing. Institutions that regularly pre‑pledge collateral and test operational access have been observed to access the Federal Reserve’s discount window more promptly during periods of financial stress, thereby reducing liquidity pressures and stabilizing funding profiles. Failure to maintain adequate preparedness—including insufficient collateral, incomplete documentation, or inadequate operational testing—could limit Busey’s ability to access these facilities when needed, increase the cost of contingent funding, and heighten the risk of liquidity shortfalls. Any such limitations could materially and adversely affect Busey’s liquidity position, financial condition, results of operations, and ability to meet its obligations as they come due.
COMPETITIVE AND STRATEGIC RISKS
If securities or industry analysts do not publish or cease publishing research reports about Busey, if they adversely change their recommendations regarding Busey’s stock, or if Busey’s operating results do not meet their expectations, the price of Busey’s stock could decline.
The trading market for Busey’s common stock is significantly influenced by research and reports from industry analysts. Limited or negative analyst coverage could reduce the stock’s demand, market price, and trading volume. Downgrades, unfavorable comparisons with competitors, or operating results that fall short of analyst’s expectations may further negatively affect stock performance. The cessation of analyst coverage could exacerbate these challenges, diminishing interest in Busey’s stock and affecting stock performance.
Busey faces significant competition from traditional financial institutions and emerging non‑bank competitors threatening market share.
Busey operates in highly competitive markets across its geographic footprint, competing with national and regional banks, community banks, credit unions, and a range of non‑bank financial services providers, including fintech companies offering digital‑first products and platforms. Advances in financial technology have enabled non‑banks and large technology firms to provide services historically offered by regulated financial institutions, such as payment processing, credit products, and deposit‑like alternatives.
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Contents of Item 1A. Risk Factors
Innovations including digital wallets, peer‑to‑peer lending platforms, and blockchain‑enabled financial services continue to reshape customer expectations and may increase the risk of disintermediation. To remain competitive, Busey must continue to invest in technology, enhance digital capabilities, and respond to evolving customer preferences.
Failure to effectively manage competitive pressures could result in reduced loan and deposit balances, lower fee income, and diminishedprofitability, any of which could materially and adversely affect Busey’s financial condition and results of operations.
Rapid technological change, digital innovation, and emerging artificial intelligence capabilities present competitive, operational, and compliance risks.
The financial services industry is undergoing significant digital transformation, requiring continual investment to meet evolving customer expectations for convenience, personalization, security, and speed. Failure to effectively adopt, integrate, or govern new technologies—including generative AI—may impair Busey’s ability to attract and retain customers, compete with technologically advanced financial firms, or achieve anticipated efficiencies. The increasing use of artificial intelligence across the industry also introduces risks related to cybersecurity, data privacy, intellectual property, fraudprevention, model governance, and evolving regulatory requirements. Generative AI, in particular, enables more sophisticated impersonation, social‑engineering, and fraud schemes, increasing the need for robust controls, monitoring, and oversight.
Busey relies on third‑party technology providers for critical functions, and deficiencies in their performance, security practices, or Busey’s oversight could result in operational disruptions, service interruptions, or compliance failures. Inadequate management of these technology‑related risks—including risks arising from rapid adoption of artificial intelligence—could lead to operational inefficiencies, elevated costs, regulatory exposure, diminished competitiveness, or cybersecurity incidents, and could materially and adversely affect Busey’s financial condition and results of operations.
Acquisitions and strategic combinations are important to Busey’s growth strategy, but they involve significant regulatory, operational, financial, and strategic risks.
Acquisitions and strategic combinations offer opportunities to expand market presence, diversify revenue streams, and enhance operational scale. However, acquisitions inherently involve significant uncertainties and risks. Each transaction requires extensive evaluation of financial, operational, cultural, and regulatory factors, and Busey must successfully integrate acquired operations while maintaining service quality, customer relationships, and internal controls. The execution and integration challenges associated with acquisitions can affect multiple areas of the business. These risks may be heightened by differences in business models, product offerings, compliance programs, or organizational cultures between Busey and the acquired institution.
Regulatory Approvals and Conditions:
• Bank mergers and acquisitions require approvals from multiple regulators and may be delayed, conditioned, or denied.
• Approvals may impose restrictions on operations, capital, or business practices that reduce expected benefits.
• Timing uncertainty around regulatory processes can increase integration costs and execution risk.
Due Diligence Limitations and Legacy Liabilities:
• Pre‑closing diligence has inherent limits and may not identify all credit, operational, legal, tax, compliance, Bank Secrecy Act and Anti-Money Laundering regulations, fair lending, environmental, or cybersecurity issues.
• Post‑closing discovery of legacy risks, including litigation, contractual obligations, off‑balance‑sheet exposures, or regulatory remediation, can increase costs and reduce anticipated returns.
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Contents of Item 1A. Risk Factors
Integration, Technology, Data, and Cybersecurity:
• Integrating systems, data, processes, models, and vendors is complex and may create operational disruptions or control gaps.
• Data conversions and core or digital platform migrations present risks related to data integrity, customer experience, and business continuity.
• Integration periods can heighten vulnerability to cyber incidents, fraud, and third‑party risk, including from new or inherited vendors.
Customer, Cultural, and Talent Retention:
• Harmonizing organizational cultures and compensation structures is challenging and may affect morale and productivity.
• Loss of key personnel or relationship managers, or deterioration in customer experience, can lead to client attrition and reduced business volumes.
• Retention and severance arrangements may increase expenses and dilute near‑term results.
Credit Quality, Valuation, and Purchase Accounting:
• Acquired portfolios may perform below expectations due to borrower‑specific, collateral, or concentration risks, among others.
• Fair value marks, credit loss allowances, and other purchase accounting adjustments may be larger than expected and affect earnings.
• Subsequent adverse performance could require additional provisions, write‑downs, or other valuation adjustments.
Financing, Capital, and Dilution:
• Transactions may require new debt or equity financing, increasing leverage, reducing liquidity, or diluting existing stockholder positions.
• Use of capital for acquisitions may reduce flexibility for other strategic investments or stockholder returns.
• Financing terms, covenants, or market conditions may limit post‑closing operating discretion.
Contractual, Legal, and Reputational Risk:
• Change‑of‑control provisions in customer, vendor, or employment contracts may trigger renegotiations, terminations, or penalties.
• Disputes, litigation, or claims related to the transaction or legacy activities may arise.
• Missteps in execution can damage brand and stakeholder trust, affecting customer acquisition and retention.
Internal Controls, Compliance, and Governance:
• Integrating control environments, policies, and risk management frameworks—including compliance with the Sarbanes-Oxley Act of 2002 and model risk management—may expose gaps or require material remediation efforts.
• Misalignment in risk appetite or governance practices can impair decision‑making and oversight.
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Contents of Item 1A. Risk Factors
Synergies, Timing, and Strategic Fit:
• Cost savings, revenue synergies, and strategic benefits may be smaller than projected, take longer to realize, or not materialize.
• Management distraction during the transaction and integration phases can adversely affect ongoing operations and strategic execution.
• Market availability and pricing of targets may limit opportunities or require terms that reduce expected returns.
Goodwill and Intangible Assets:
• Acquisitions typically result in goodwill and other intangibles, which are subject to periodic assessments and potential impairment.
• Any impairment charges could negatively affect reported earnings.
The risks above can lead to higher operating and integration costs, reduced revenue, credit losses, increased provisions, system and control remediation expenses, customer attrition, litigation, regulatory burdens, capital strain, and dilution. Individually or in the aggregate, these factors could disrupt operations, reduce profitability, and impair capital and liquidity, any of which could materially and adversely affect Busey’s financial condition and results of operations.
Introduction of new products and services carries financial and strategic risks.
Busey strives to serve customers with a competitive product set and relevant services. While introducing new lines of business or innovative products and services supports this goal, these efforts carry inherent risks. Competitive pressures, underdeveloped markets, or unforeseenchallenges can lead to delayed timelines and missedprofitability targets. Significant investments in technology and marketing may not yield the desired outcomes. These risks may materially adversely affect Busey’s financial condition and results of operations.
The rapid evolution of digital assets and emerging regulatory frameworks introduces new competitive, compliance, and operational risks for Busey.
The rapid evolution of digital assets and emerging regulatory frameworks introduces new competitive, compliance, and operational risks for Busey. While Busey does not currently offer digital asset products such as cryptocurrencies or stablecoins, increasing global adoption of digital assets and distributed‑ledger technologies continues to influence customer expectations and competitive dynamics. Recent U.S. legislative and regulatory initiatives—including the enactment of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act in 2025, which establishes federal standards for payment stablecoin issuers, and ongoing Congressional efforts to finalize broader crypto‑market structure legislation such as the Digital Asset Market Clarity Act—signal a shift toward more comprehensive oversight of digital‑asset activities.
These regulatory developments may affect Busey even without offering digital‑asset products, including through increased expectations related to cybersecurity, anti‑money‑laundering controls, sanctions compliance, custody arrangements, data governance, and vendor‑risk management.
The competitive landscape is also evolving as traditional financial institutions, fintech companies, and technology firms leverage innovations such as stablecoin‑based payments, blockchain settlements, and digital‑wallet ecosystems. These developments may accelerate disintermediation risks or shift customer behavior toward alternative financial platforms that offer new capabilities, higher transaction speeds, or programmable payment features. To remain competitive, Busey must assess emerging technologies, invest in modern infrastructure, and maintain the flexibility to scale operational capabilities in response to changing market demand. Failure to do so could impede Busey’s ability to offer competitive products, attract and retain customers, or respond to strategic opportunities.
Inadequate oversight or adaptation to these developments could lead to increased operational complexity, reduced competitiveness, and financial impacts that materially and adversely affect Busey’s financial condition and results of operations.
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Contents of Item 1A. Risk Factors
ACCOUNTING AND TAX RISKS
Financial statements are created, in part, using estimates, assumptions, and management judgments, which, if incorrect, could result in material misstatement and adverse effect on Busey’s financial position.
Busey’s financial performance is impacted by accounting principles, policies, and guidelines. Some of these policies require the use of estimates and assumptions that may affect the value of assets or liabilities and financial results. Certain accounting policies are critical and require management to make subjective and complex judgments about matters that are inherently uncertain, and materially different amounts could be reported under different conditions or using different assumptions. If such estimates or assumptions underlying Busey’s Consolidated Financial Statements are incorrect, Busey may experience material losses.
One such assumption and estimate is the valuation analysis of Busey’s goodwill and other intangible assets. Although Busey’s analysis does not indicate impairments exist, Busey is required to perform additional impairment assessments on at least an annual basis, which could result in future impairment charges. Any future impairment of goodwill or other intangible assets, whether based on the current balances or future balances arising out of acquisitions, could have a material adverse effect on Busey’s financial condition or results of operations.
Changes in accounting principles or guidelines could adversely affect financial reporting.
Periodically, agencies such as the FASB or the SEC change the financial accounting and reporting standards or the interpretation of those standards that govern the preparation of Busey’s Financial Statements. These changes are beyond Busey’s control, can be difficult to predict, and could materially impact how Busey reports its financial condition and results of operations. Changes in these standards are continuously occurring, and the implementation of such changes could have a material adverse effect on Busey’s financial condition and results of operations.
Busey is subject to changes in tax law and may not realize tax benefits which could adversely affect its results of operations.
Changes in tax laws at federal or state levels could influence Busey’s short-term and long-term earnings. Tax law changes are both difficult to predict and beyond Busey’s control. These laws are complex and subject to different interpretations by the taxpayer and the various taxing authorities. In determining the provision for income taxes and filing tax returns, management makes judgments and estimates about the application of these inherently complex laws, related regulations, and case law. These interpretations are subject to challenge by taxing authorities upon audit and may result in adjustments to our tax return filings, resulting in similar adverse impacts to our financial position. Changes in tax laws could affect Busey’s earnings, its customers’ financial positions, or both.
Deferred tax assets are future tax benefits carried on the balance sheet that allow for tax savings by reducing taxable income in subsequent periods. They arise, in part, as a result of net loss carry-overs, and other book accounting to tax accounting timing differences, for items such as expected credit losses, stock-based compensation, and deferred compensation. Deferred tax assets are recorded for such items when it is anticipated that the tax benefits will be recognized in earnings in future periods. A valuation allowance is established against a deferred tax asset when it is more-likely-than-not that some or all of the future tax benefit will not be realized.
In evaluating the need for a valuation allowance, Busey estimates future taxable income based on management forecasts and tax planning strategies that may be available to the Company.
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods prior to the expiration of the related net operating losses and may be limited by ownership change rules under Section 382 of the Internal Revenue Code.
If future events differ significantly from current forecasts, Busey may need to establish an additional valuation allowance against its deferred tax assets, which could have a material adverse effect on its financial condition and results of operations.
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Contents of Item 1A. Risk Factors
Investments in tax-advantaged projects may not generate returns as anticipated and may have an adverse impact on Busey’s financial results.
Busey invests in certain tax-advantaged projects promoting renewable energy, affordable housing, community development, and other community revitalization projects. These investments are designed to generate a return primarily through the realization of federal and state income tax credits and other tax benefits over specified periods. Busey is subject to the risk that previously recorded tax credits, which remain subject to recapture by taxing authorities based on compliance features required at the project level, may fail to meet certain government compliance requirements and may not be realized.
The ultimate realization of these benefits depends upon having sufficient taxable income and on many other factors outside of Busey’s control, including changes in the applicable tax code and the ability of the projects to be completed. Busey continues to monitor tax law developments and compliance with applicable regulations to mitigate these risks. The potential inability to realize these tax credits and other tax benefits could negatively impact Busey’s earnings and financial condition.
OPERATIONAL RISKS
Busey’s framework for managing risks may not be fully effective in mitigating risk and loss.
Busey’s risk management framework is designed to identify, measure, monitor, and analyze a broad spectrum of risks, including compliance, operational, and reputational risks. However, as with any framework, inherent limitations exist, particularly as new risks emerge or previously unidentified vulnerabilities become apparent.
The effectiveness of this framework depends on its alignment with Busey’s evolving risk profile, especially following the completion of the CrossFirst merger. As the organization grows in complexity, risks related to system integration, process harmonization, and operational oversight may challenge the framework's capacity to adapt in a timely and effective manner. Failures to identify and manage these risks could adversely affect Busey’s financial condition, regulatory standing, and overall operational stability.
To address these challenges, Busey continuously refines its risk management processes, leveraging enhanced risk assessment tools, investing in automation and analytics, and aligning with industry best practices. Despite these efforts, no risk management framework is foolproof, and unforeseenlosses or disruptions remain a possibility, which may materially and adversely affect Busey’s financial condition and results of operations.
Technological investments drive efficiency but introduce cybersecurity risks.
Busey’s ongoing investments in technology infrastructure have strengthened operational efficiency, enhanced client service delivery, and supported the scaling of key business functions. Initiatives such as enterprise-wide automation, cloud integration, and enhanced data analytics capabilities have positioned Busey as a forward-thinking financial institution. However, these advancements introduce vulnerabilities, including the risk of cyber-attacks and operational disruptions.
The Federal Reserve’s November 2025 Financial Stability Report has emphasized growing threats posed by sophisticated cyber-attacks. These threats not only compromise data integrity but also pose significant reputational and financial risks. The outcomes of such risks include:
• Amplification of Vendor Risk: Third-party vendors and their subcontractors introduce multi-layered risks, complicating oversight and heightening the likelihood of service interruptions or compliance breaches.
• Need for Advanced Cyber Protections: As bad actors deploy increasingly sophisticated tactics, including artificial intelligence-driven impersonation and malware, the effectiveness of traditional cybersecurity defenses is diminished.
To mitigate these risks, Busey has implemented robust cybersecurity protocols, regular system audits, and incident response plans. The use of artificial intelligence-powered tools provide additional layers of fraud and threat detection, enablingproactive management. However, as cybersecurity threats evolve, the possibility of system penetration persists even with robust security protocols in place. As a result, successful or attempted cyber intrusions, vendor failures, or operational disruptions stemming from these evolving threats could materially and adversely impact Busey’s financial condition and results of operations.
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Contents of Item 1A. Risk Factors
Outsourcing dependencies could disrupt operations and increase compliance risks.
Busey’s reliance on secure and resilient systems to manage customer relationships, transactions, and data underscores the critical importance of operational stability. Outsourcing arrangements introduce risks tied to service disruptions, compliance violations, and vulnerabilities stemming from subcontractors in downstream supply chains.
This cascading outsourcing structure adds complexity to communication and coordination, particularly when vendors operate in regions with varying regulatory standards. Risks are further amplified by geopolitical tensions, trade restrictions, or cyberattacks targeting these external partners.
While Busey conducts rigorous due diligence when selecting third-party providers, residual risks, especially from indirect outsourcing (fourth parties), remain challenging to eliminate entirely. Failures or breaches in these systems could disrupt Busey’s operations, damage its reputation, and materially and adversely affect its financial conditions and results of operations.
Fraudulent activities could erode financial stability and customer trust.
The rising sophistication of fraudulent schemes poses a persistentchallenge for financial institutions, with Busey being no exception. Fraudulent activities, such as identity theft, phishing, and unauthorized transactions, could result in financial losses, regulatory penalties, and erosion of customer trust.
Busey employs a multi-layered approach to fraudprevention, including internal controls, advanced fraud detection tools, and insurance coverage. However, even robust frameworks may not fully eliminate risks, particularly as threat actors adapt their tactics to exploit emerging industry vulnerabilities and customer vulnerabilities. Accordingly, successfulfraud attempts or failures in our fraud‑prevention controls could result in financial losses, increased operational costs, regulatory consequences, and reputational harm that could adversely affect Busey’s financial condition and results of operations.
Busey’s ability to attract and retain key personnel may affect future growth and earnings.
Busey’s ability to attract and retain experienced management and qualified personnel remains critical to sustaining growth and executing its strategic objectives. Despite continued investment in leadership development, succession planning, and employee engagement, competitive labor markets and evolving employee expectations pose ongoing challenges.
Beyond executive leadership, Busey's ability to build and maintain a diverse and skilled workforce is essential to implementing its community-based strategy and serving an expanded geographic footprint. The unexpected departure of high-performing employees or difficulty in recruiting specialized talent could disrupt operations, delay strategic initiatives, or increase costs associated with workforce realignment, all of which may materially and adversely affect Busey’s financial condition and results of operations.
Damage resulting from negative publicity could harm Busey’s reputation and adversely impact its business and financial condition.
Busey’s ability to attract and retain customers, investors, employees, and business partners depends significantly on the trust placed in its brand, business practices, and commitment to responsible conduct. Negative public opinion may arise from actual or alleged issues across a wide range of activities, including employee misconduct, customer service failures, loan origination or servicing practices, compliance or regulatory violations, cybersecurity incidents, data‑protection lapses, corporate governance concerns, product suitability issues, or perceived shortfalls in Busey’s community and stakeholder engagement. Even isolated incidents—whether substantiated or not—can be rapidly amplified through social media, news outlets, or regulatory commentary, increasing the speed and scale at which reputational harm may occur.
Reputation risk is heightened by Busey’s relationship‑based operating model, in which customer loyalty and business development rely heavily on personal trust and perceived service quality. Busey is also exposed to reputational impacts arising from its third‑party relationships, including vendors, fintech partners, and other service providers, whose failures or misconduct may be attributed to Busey.
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Reputational harm can lead to customer attrition, reduced deposit and loan growth, lower fee income, diminished employee morale or retention challenges, increased regulatory scrutiny, delays in obtaining regulatory approvals, reduced investor confidence, and exposure to litigation or enforcement actions. These effects may also limit Busey’s ability to pursue strategic initiatives or partnerships. Any failure to effectively identify, monitor, and manage reputational risks could result in lost business opportunities, elevated costs, and operational disruptions, and could materially and adversely affect Busey’s financial condition and results of operations.
Severe weather, natural disasters, pandemics or other health crises, acts of war or terrorism and other external events could significantly impact Busey’s business.
Adverse external events—including severe weather, natural disasters, wildfires, pandemics or other public‑health crises, acts of war or terrorism, and other large‑scale disruptions—could significantly affect Busey’s operations and the ability of customers, counterparties, and third‑party providers to conduct business. Such events may interrupt business activity, damage physical assets, disrupt supply chains, reduce demand for financial services, impair borrowers’ repayment capacity, increase vacancy rates in commercial properties, and reduce the value of collateral supporting Busey’s loan portfolio. They may also lead to financial‑market volatility, elevated credit losses, and operational challenges stemming from facility closures, evacuations, or interruptions in access to banking channels. Geopolitical conflicts can further influence energy prices, commodity markets, and financial‑market stability, while regulatory responses to these events may impose additional compliance or operational requirements.
Although Busey maintains business‑continuity plans and risk‑management processes, the occurrence of one or more such adverse events could disrupt operations, increase costs, reduce revenue, and materially and adversely affect Busey’s financial condition and results of operations.
Off-Balance-Sheet Arrangements
Contractual Obligations
Cash Flows
Capital Resources
NEW ACCOUNTING PRONOUNCEMENTS
EFFECTS OF INFLATION
SCOPE OF DISCUSSION
The following is management’s discussion and analysis of the financial condition as of December 31, 2025, and 2024, and the results of operations for the years ended December 31, 2025, 2024, and 2023, of First Busey Corporation and its subsidiaries. It should be read in conjunction with “ Item 1. Business ,” the Consolidated Financial Statements , and the related Notes to the Consolidated Financial Statements included in this Annual Report.
Detailed discussion and analysis of Busey’s financial condition and results of operation for 2025 as compared to 2024 can be found below. Comparison of 2024 to 2023 can be found in “ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ” of Busey's 2024 Annual Report .
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BUSEY’S CONSERVATIVE BANKING STRATEGY
Busey’s financial strength is built on a long-term conservative operating approach. The quality of Busey’s core deposit 1 franchise is a critical value driver of the institution. Busey remains substantially core deposit funded, with robust liquidity. As of December 31, 2025, Busey’s loan to deposit ratio was 91.0% and core deposits 1 represented 93.7% of total deposits. Furthermore, Busey has 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. While impacted by loans acquired as a result of the CrossFirst acquisition, asset quality remains strong by both Busey’s historical and current industry trends.
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. At December 31, 2025, 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 12.4%, and its total capital to risk weighted assets ratio was 15.9%.
CRITICAL ACCOUNTING ESTIMATES
Busey has established various accounting policies that govern the application of GAAP in the preparation of its Consolidated Financial Statements . Significant accounting policies are described in “ Note 1. Significant Accounting Policies ” in the Notes to the Consolidated Financial Statements .
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.
1 Core deposits is a non-GAAP financial measure. For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, see “ Item 1. Business—Non-GAAP Financial Information. ”
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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 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 . Estimated income tax expense is reported on the Consolidated Statements of Income .
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-off 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.
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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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Contents of Item 7. MD&A
RESULTS OF OPERATIONS — THREE YEARS ENDED DECEMBER 31, 2025
Net Income
Results of Busey’s operations are presented below, segregated by operating segment:
Years Ended December 31,
(dollars in thousands)
Net income
Banking
Wealth Management
FirsTech
Other
Net income
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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:
Years Ended December 31,
(dollars in thousands)
Pre-tax non-GAAP adjusting items by income/expense category
Realized net (gains) losses on the sale of mortgage servicing rights
Net securities (gains) losses
Other noninterest income
Provision for credit losses
Salaries, wages, and employee benefits
Data processing
Net occupancy expense of premises
Furniture and equipment expenses
Professional fees
Other noninterest expense
Total pre-tax non-GAAP adjustments
Non-GAAP adjusting items by business objective
Balance sheet repositioning 1
Net securities (gains) losses 1
Initial provision for credit losses 2
Other acquisition (income) expenses 3
Restructuring expenses 4
Total pre-tax non-GAAP adjustments
1. During the year ended December 31, 2024, Busey executed a two-part balance sheet repositioning strategy in which it sold mortgage servicing rights on approximately $923.5 million of one-to-four family mortgage loans for a pre-tax gain of $7.7 million and sold available-for-sale debt securities with a book value of approximately $108.2 million for a pre-tax loss of $6.8 million.
2. During the year ended December 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, a Day 2 provision for unfunded commitments of $3.1 million, and an adjustment to the initial provision for unfunded commitments of $4.0 million that was recorded based on revised estimates resulting from implementation of a new CECL model.
3. Other acquisition expenses related to the acquisition of CrossFirst, which was completed on March 1, 2025, and the acquisition of M&M, which was completed on April 1, 2024.
4. Restructuring expenses were related to previously disclosedrestructuring and efficiency plans and to corporate strategy advisement.
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 Annual Report. See “ Item 1. Business—Non-GAAP Financial Information . ”
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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:
Years Ended December 31,
(dollars in thousands, except per share amounts)
Net income (GAAP)
Adjusted net income (Non-GAAP) 1, 2
Net income available to common stockholders (GAAP)
Adjusted net income available to common stockholders (Non-GAAP) 1
Diluted earnings per common share
Adjusted diluted earnings per common share (Non-GAAP) 1, 2
Return on average assets
Adjusted return on average assets (Non-GAAP) 1, 2
Return on average tangible common equity (Non-GAAP) 1
Adjusted return on average tangible common equity (Non-GAAP) 1, 2
Pre-provision net revenue (Non-GAAP) 1, 3
Adjusted pre-provision net revenue (Non-GAAP) 1, 3
Pre-provision net revenue to average total assets (Non-GAAP) 1, 3
Adjusted pre-provision net revenue to average total assets (Non-GAAP) 1, 3
1. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “ Item 1. Business—Non-GAAP Financial Information ” included in this Annual Report.
2. Beginning in 2025, Busey revised its calculation of adjusted net income for all periods presented to include, as applicable, adjustments for net securities gains and losses, realized net gains and losses on the sale of mortgage servicing rights, and non-recurring deferred tax adjustments.
3. Beginning in 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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The tables below present 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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Year Ended December 31, 2025
(dollars in thousands)
Average
Balance
Income/
Expense
Yield/
Rate
Assets
Interest-bearing bank deposits and federal funds sold
Investment securities:
U.S. Government obligations
Obligations of states and political subdivisions
Other securities
Restricted bank stock
Loans held for sale
Portfolio loans 1, 2
Total interest-earning assets 1, 3
Cash and due from banks
Premises and equipment
ACL
Other assets
Total assets
Liabilities and stockholders’ equity
Interest-bearing transaction deposits
Savings and money market deposits
Time deposits
Federal funds purchased and repurchase agreements
Borrowings 4
Junior subordinated debt issued to unconsolidated trusts
Total interest-bearing liabilities
Net interest spread 1
Noninterest-bearing deposits
Other liabilities
Stockholders’ equity
Total liabilities and stockholders’ equity
Interest income / earning assets 1, 3
Interest expense / earning assets
Net interest margin 1
1. On a tax-equivalent basis, assuming a federal income tax rate of 21.0%.
2. Non-accrual loans have been included in average portfolio loans.
3. Interest income includes tax-equivalent adjustments of $3.0 million.
4. Borrowings include, as applicable, short-term borrowings, long-term borrowings, senior notes, and subordinated notes. Interest expense includes a non-usage fee on the revolving credit facility.
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Year Ended December 31, 2024
(dollars in thousands)
Average
Balance
Income/
Expense
Yield/
Rate
Assets
Interest-bearing bank deposits and federal funds sold
Investment securities:
U.S. Government obligations
Obligations of states and political subdivisions
Other securities
Restricted bank stock
Loans held for sale
Portfolio loans 1, 2
Total interest-earning assets 1, 3
Cash and due from banks
Premises and equipment
ACL
Other assets
Total assets
Liabilities and stockholders’ equity
Interest-bearing transaction deposits
Savings and money market deposits
Time deposits
Federal funds purchased and repurchase agreements
Borrowings 4
Junior subordinated debt issued to unconsolidated trusts
Total interest-bearing liabilities
Net interest spread 1
Noninterest-bearing deposits
Other liabilities
Stockholders’ equity
Total liabilities and stockholders’ equity
Interest income / earning assets 1, 3
Interest expense / earning assets
Net interest margin 1
1. On a tax-equivalent basis, assuming a federal income tax rate of 21.0%.
2. Non-accrual loans have been included in average portfolio loans.
3. Interest income includes tax-equivalent adjustments of $1.7 million.
4. Borrowings include, as applicable, short-term borrowings, long-term borrowings, senior notes, and subordinated notes. Interest expense includes a non-usage fee on the revolving credit facility.
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Year Ended December 31, 2023
(dollars in thousands)
Average
Balance
Income/
Expense
Yield/
Rate
Assets
Interest-bearing bank deposits and federal funds sold
Investment securities:
U.S. Government obligations
Obligations of states and political subdivisions
Other securities
Restricted bank stock
Loans held for sale
Portfolio loans 1, 2
Total interest-earning assets 1, 3
Cash and due from banks
Premises and equipment
ACL
Other assets
Total assets
Liabilities and stockholders’ equity
Interest-bearing transaction deposits
Savings and money market deposits
Time deposits
Federal funds purchased and repurchase agreements
Borrowings 4
Junior subordinated debt issued to unconsolidated trusts
Total interest-bearing liabilities
Net interest spread 1
Noninterest-bearing deposits
Other liabilities
Stockholders’ equity
Total liabilities and stockholders’ equity
Interest income / earning assets 1, 3
Interest expense / earning assets
Net interest margin 1
1. On a tax-equivalent basis, assuming a federal income tax rate of 21.0%.
2. Non-accrual loans have been included in average portfolio loans.
3. Interest income includes tax-equivalent adjustments of $2.2 million.
4. Borrowings include short-term borrowings, long-term debt, senior notes, and subordinated notes. Interest expense includes a non-usage fee on the revolving credit facility.
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The following tables present, for the major components of interest-earning assets and interest-bearing liabilities, a breakout of changes in interest income and interest expense attributable to (1) changes in average volume and (2) changes in average yield. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately, based on changes due to rate and changes due to volume:
Years Ended December 31,
2025 vs. 2024 Change Due To
(dollars in thousands)
Average
Volume
Average
Yield/Rate
Total
Change
Increase (decrease) in interest income
Interest-bearing bank deposits and federal funds sold
Investment securities:
U.S. Government obligations
Obligations of state and political subdivisions
Other securities
Restricted bank stock
Loans held for sale
Portfolio loans
Change in interest income
Increase (decrease) in interest expense
Interest-bearing transaction deposits
Savings and money market deposits
Time deposits
Federal funds purchased and repurchase agreements
Borrowings
Junior subordinated debt owed to unconsolidated trusts
Change in interest expense
Increase (decrease) in net interest income
Percentage increase (decrease) in net interest income over prior period
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Years Ended December 31,
2024 vs. 2023 Change Due To
(dollars in thousands)
Average
Volume
Average
Yield/Rate
Total
Change
Increase (decrease) in interest income
Interest-bearing bank deposits and federal funds sold
Investment securities:
U.S. Government obligations
Obligations of state and political subdivisions
Other securities
Restricted bank stock
Loans held for sale
Portfolio loans
Change in interest income
Increase (decrease) in interest expense
Interest-bearing transaction deposits
Savings and money market deposits
Time deposits
Federal funds purchased and repurchase agreements
Borrowings
Junior subordinated debt owed to unconsolidated trusts
Change in interest expense
Increase (decrease) in net interest income
Percentage increase (decrease) in net interest income over prior period
Notable changes in average assets and average liabilities are summarized as follows for the periods presented:
Years Ended December 31,
(dollars in thousands)
Change
% Change
Average interest-earning assets
Average interest-bearing liabilities
Average noninterest-bearing deposits
Total average deposits
Total average liabilities
Average noninterest-bearing deposits as a percent of total average deposits
(390) bps
Total average deposits as a percent of total average liabilities
170 bps
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Changes in net interest income and net interest margin are summarized as follows for the periods presented:
Years Ended December 31,
(dollars in thousands)
Change
% Change
Net interest income
Interest income, on a tax-equivalent basis 1
Interest expense
Net interest income, on a tax-equivalent basis 1
Net interest margin 1, 2
56 bps
1. Assuming a federal income tax rate of 21.0%.
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 stabilization to net interest income in lower rate environments. Stability in core deposit balances, as well as retail time deposit and savings specials, have continued to provide sufficient funding flows to allow intentional runoff of brokered and high-cost, non-relationship funding.
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 for the periods indicated:
Years Ended December 31,
Net interest spread 1
1. Calculated on a tax-equivalent basis.
Annualized net interest margins for the quarterly periods indicated were as follows:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
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.
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Noninterest Income
Changes in noninterest income are summarized in the tables below for the periods presented:
Years Ended December 31,
(dollars in thousands)
Change
% Change
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 the sale of mortgage servicing rights
Securities income:
Realized net gains (losses) on securities
Unrealized net gains (losses) recognized on equity securities
Net securities gains (losses)
Other noninterest income
Total noninterest income
Assets under care as of period end
Total noninterest income was $150.0 million for the year ended December 31, 2025, an increase of 7.4% when compared with $139.7 million for the year ended December 31, 2024. Total noninterest income represented 20.8% of total revenue 2 in 2025, compared to 30.2% in 2024. The year ended December 31, 2025, includes ten months of income from the CrossFirst acquisition.
Revenues from wealth management fees and payment technology solutions provide a complement to spread-based revenue from traditional banking activities.
Wealth management fees increased by 9.1% to $69.4 million for 2025, compared to $63.6 million for 2024. Busey’s Wealth Management division had $15.66 billion in assets under care as of December 31, 2025, compared to $13.83 billion as of December 31, 2024. 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. This income decreased by 9.0% to $20.0 million for 2025, compared to $22.0 million for 2024, primarily due to decreases in income from online bill payments.
Treasury management services consist primarily of business analysis charges and wire transfer fees on commercial accounts. Income from treasury management services increased by 106.8% compared to 2024 due to the addition of CrossFirst commercial services.
Card services and ATM fees, which include both commercial and consumer accounts, increased by 34.4% compared to 2024 primarily due to the addition of CrossFirst corporate card services.
2 Total revenue consists of net interest income plus noninterest income.
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Other service charges on deposit accounts were $6.3 million for the year ended December 31, 2025, a decline of 33.5% from the comparable period in 2024. Declines were largely related to lower non-sufficient fund charges, reflecting changes Busey made to its fee structure in 2025.
Mortgage revenue was $2.6 million for 2025, compared to $2.1 million for 2024. General economic conditions and interest rate volatility may impact future mortgage revenue.
Income on bank owned life insurance increased by 28.6% to $6.6 million for 2025, compared to $5.1 million for 2024, resulting from a $1.9 million increase in the cash surrender value of the insurance policies partially offset by a $0.4 million decrease in earnings on death proceeds.
During the year ended December 31, 2025, Busey did not record any realized gains on the sale of mortgage servicing rights. In comparison, during the year ended December 31, 2024, Busey recognized a $7.7 million gain on the sale of mortgage servicing rights in connection with a strategic two-part balance sheet repositioning. For more information, see “ Busey executed a two-part balance sheet repositioning strategy ” in the Management Discussion and Analysis included in Busey’s Quarterly Report for the first quarter of 2024, filed with the SEC on May 7, 2024.
Net securities losses of $10.7 million during the year ended December 31, 2025, were greater than the net securities losses realized during the comparable period in 2024. Losses for the year ended December 31, 2025, were comprised of $15.2 million of realized net losses on securities resulting from a strategic balance sheet repositioning completed in the first quarter of 2025, partially offset by unrealized net gains on Busey’s approximately 3% equity ownership of a financial institution that was the target of an acquisition at a significant market premium.
Other income increased by 46.1% to $20.5 million for 2025, compared to $14.0 million for 2024. Increases in other income were primarily attributable to increases in commercial loan servicing income and swap origination fees.
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Noninterest Expense
Changes in noninterest expense are summarized in the tables below for the periods presented:
Years Ended December 31,
(dollars in thousands)
Change
% Change
Noninterest expense
Salaries, wages, and employee benefits
Data processing
Premises expenses:
Net occupancy expense of premises
Furniture and equipment expenses
Combined, net occupancy expense of premises and furniture and equipment expenses
Professional fees
Amortization of intangible assets
Interchange expense
FDIC insurance
Other noninterest expense
Total noninterest expense
Income taxes
Effective income tax rate
170 bps
Efficiency ratio (Non-GAAP) 1
120 bps
Adjusted efficiency ratio (Non-GAAP) 1
(550) bps
Full-time equivalent associates as of period-end
1. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “ Item 1. Business—Non-GAAP Financial Information ” included in the Annual Report.
Total noninterest expense increased to $480.2 million for the year ended December 31, 2025, compared to $301.5 million for the year ended December 31, 2024, representing a year-over-year increase of 59.3%. Growth in noninterest expense was primarily attributable to acquisition expenses related to the CrossFirst acquisition, added costs for operating expenses for two banks from March 1, 2025, until the banks were merged on June 20, 2025, and increased expenses associated with Busey’s larger organization and expanded branch network. Acquisition and restructuring expenses contributed $54.6 million to total noninterest expense for the year ended December 31, 2025, compared to $8.1 million for the comparable period in 2024. Annual pre-tax expense synergy estimates resulting from the CrossFirst acquisition remain on track at $25.0 million with 100% realization of identified synergies in 2026.
Salaries, wages, and employee benefits increased to $289.1 million for 2025, compared to $175.6 million for 2024. Excluding acquisition and restructuring expenses, which include severance, retention, and stock-based compensation expenses related to the CrossFirst acquisition, salaries, wages, and employee benefits were $252.0 million for 2025, compared to $174.0 million for 2024, representing an increase of 44.8%. During 2025, Busey added 17 banking centers, largely in connection with the CrossFirst acquisition, resulting in the expansion of Busey’s workforce, including the addition of 405 full-time equivalent associates.
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Data processing expense increased to $43.2 million for 2025, compared to $27.1 million for 2024. Excluding acquisition and restructuring expenses, data processing expense was $36.2 million for 2025, compared to $26.6 million for 2024, representing an increase of 36.2%. Increases were primarily attributable to Company-wide investments in technology enhancements, as well as inflation-driven price increases.
Combined, net occupancy expense of premises and furniture and equipment expenses increased to $38.0 million for 2025, compared to $25.5 million for 2024. The CrossFirst acquisition added 16 banking centers. Further, on August 18, 2025, Busey opened its second Denver service center, located in the Cherry Creek North neighborhood. Primary cost drivers in these expense categories include lease costs, repairs and maintenance, depreciation expense, real estate taxes, and utilities.
Professional fees increased to $18.8 million for 2025, compared to $12.8 million for 2024. Excluding acquisition and restructuring expenses, professional fees were $10.7 million for 2025, compared to $7.9 million for 2024, representing an increase of 35.3%. Primary cost drivers in this expense category include legal, audit and accounting, and consulting expenses.
Amortization of intangible assets increased to $16.6 million for 2025, compared to $10.1 million for 2024. The CrossFirst acquisition added an estimated $81.8 million of finite-lived intangible assets with amortization of $7.8 million during the year ended December 31, 2025. Busey uses an accelerated amortization methodology.
Interchange expense decreased to $5.2 million for 2025, compared to $6.0 million for 2024. Fluctuations in interchange expense relate to payment and volume activity at FirsTech.
FDIC insurance expense increased to $10.4 million for 2025, compared to $5.6 million for 2024. Additional FDIC insurance assessments were the result of Busey’s growth in average assets in connection with the CrossFirst acquisition.
Other noninterest expense increased to $59.0 million for 2025, compared to $38.7 million for 2024. Excluding acquisition and restructuring expenses, other noninterest expense was $56.5 million for 2025, compared to $37.8 million for 2024, representing an increase of 49.8%. Increases in other noninterest expense were attributable to multiple items, including increased costs on loans, marketing, business development, and office supplies.
Efficiency Ratio
The efficiency ratio 3 is calculated as total noninterest expense, less amortization charges, as a percentage of tax-equivalent net interest income plus noninterest income, less security gains and losses. The efficiency ratio, 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 63.2% for the year ended December 31, 2025, compared to 62.0% for the year ended December 31, 2024.
Operating costs have been influenced by acquisition expenses and other restructuring costs, and the adjusted efficiency ratio 3 was 55.8% for the year ended December 31, 2025, compared to 61.3% for the year ended December 31, 2024.
Income Taxes
Effective income tax rates, calculated by dividing income taxes by income before taxes, were 27.5%, 25.8%, and 20.4% for the years ended December 31, 2025, 2024, and 2023, respectively. Busey's effective tax rate increased in 2025 primarily due to the deferred tax impact of the lower blended state tax rates resulting in (1) a one-time revaluation of deferred tax assets; and (2) a higher disallowance related to Internal Revenue Code Section 162(m) limited compensation. These results were partially offset by increased tax credit investments and tax-exempt interest. Following the acquisition of CrossFirst Bank, and the inclusion of the CrossFirst entities within the Busey consolidated group, the deferred tax attributes were revalued to reflect the new consolidated group's state tax rates. As such, there was a significant rate change adjustment recognized against deferred tax assets in 2025, which increased Busey's effective tax rate for the year ended December 31, 2025.
3 The efficiency ratio and adjusted efficiency ratio are both non-GAAP financial measures. For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, see “ Item 1. Business—Non-GAAP Financial Information. ”
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Busey continues to monitor evolving federal and state tax legislation and its potential impact on operations on an ongoing basis. As of December 31, 2025, Busey remains under examination by the Illinois Department of Revenue for Merchant & Manufacturers Bank's tax filings for the tax years ended December 31, 2022 and 2023. The Florida Department of Revenue examination of Busey Bank's tax years 2020 to 2022 corporate income tax filings was completed with no additional income tax assessments.
FINANCIAL CONDITION
Balance Sheet
Changes in significant items included on Busey’s Consolidated Balance Sheets are summarized in the table below:
As of December 31,
(dollars in thousands)
Change
% Change
Assets
Debt securities available for sale
Debt securities held to maturity
Portfolio loans, net of ACL
Total assets
Liabilities
Deposits:
Noninterest-bearing
Interest-bearing
Total deposits
Securities sold under agreements to repurchase
Long-term borrowings
Subordinated notes, net of unamortized issuance costs
Total liabilities
Stockholders’ equity
Investment Securities
The primary purposes of Busey’s investment securities portfolio are to provide a source of earnings by deploying funds that are not needed to fulfill loan demand, deposit redemptions, or other liquidity purposes; to serve as a tool for interest rate risk positioning; and to provide collateral for pledging purposes against public deposits and repurchase agreements, all while providing a source of liquidity.
Busey considers many factors in determining the composition of its investment portfolio including, but not limited to, credit quality, duration, interest rate risk, liquidity, tax-equivalent yield, regulatory considerations, and overall portfolio allocation. As of December 31, 2025, Busey did not hold general obligation bonds of any single issuer, the aggregate of which exceeded 10% of Busey’s stockholders’ equity.
Pledged securities totaled $744.2 million, or 25.6% of total debt securities, as of December 31, 2025, and $871.4 million, or 33.0% of total debt securities, as of December 31, 2024.
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Debt Securities Available for Sale
Debt securities available for sale are carried at fair value. Net unrealized gains or losses, net of tax, are recorded in stockholders’ equity, through AOCI. As of December 31, 2025, the fair value of debt securities available for sale was $2.16 billion, and the amortized cost was $2.30 billion. There were $13.9 million of gross unrealized gains and $152.2 million of gross unrealized losses, resulting in a net unrealized loss of $138.3 million.
The composition of debt securities available for sale was as follows:
As of December 31,
(dollars in thousands)
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, fair value
Debt securities available for sale, amortized cost
Fair value as a percentage of amortized cost
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By maturity date, fair values and weighted average yields of debt securities available for sale as of December 31, 2025, are presented in the following table:
Due in 1 year or less
Due after 1 year
through 5 years
Due after 5 years
through 10 years
Due after
10 years
(dollars in thousands)
Fair
Value
Weighted
Average
Yield
Fair
Value
Weighted
Average
Yield
Fair
Value
Weighted
Average
Yield
Fair
Value
Weighted
Average
Yield
Debt securities available for sale 1
Obligations of U.S. government corporations and agencies
Obligations of states and political subdivisions 2
Asset-backed securities
Commercial mortgage-backed securities
Residential mortgage-backed securities
Corporate debt securities
Debt securities available for sale
1. Securities are presented based upon final contractual maturity or pre-refunded date.
2. Weighted average yield calculated on a tax-equivalent basis, assuming a federal income tax rate of 21.0%.
Debt Securities Held to Maturity
Debt securities held to maturity are carried at amortized cost. Unrecognized losses related to securities that were transferred in 2022 are included in OCI, net of taxes, and amortized into income over the contractual lives of the securities. An ACL balance will be established for debt securities held to maturity when applicable. No ACL was recorded for Busey’s portfolio of debt securities held to maturity as of December 31, 2025 or 2024.
As of December 31, 2025, the amortized cost of debt securities held to maturity was $746.4 million, and the fair value was $626.0 million. There were no gross unrecognized gains and $120.4 million of gross unrecognized losses.
The composition of debt securities held to maturity was as follows:
As of December 31,
(dollars in thousands)
Debt securities held to maturity
Commercial mortgage-backed securities
Residential mortgage-backed securities
Debt securities held to maturity, amortized cost
Debt securities held to maturity, fair value
Fair value as a percentage of amortized cost
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By maturity date, fair values and weighted average yields of debt securities held to maturity as of December 31, 2025, are presented in the following table:
Due in 1 year or less
Due after 1 year
through 5 years
Due after 5 years
through 10 years
Due after
10 years
(dollars in thousands)
Fair
Value
Weighted
Average
Yield
Fair
Value
Weighted
Average
Yield
Fair
Value
Weighted
Average
Yield
Fair
Value
Weighted
Average
Yield
Debt securities held to maturity 1
Commercial mortgage-backed securities
Residential mortgage-backed securities
Debt securities held to maturity
1. Securities are presented based upon final contractual maturity or pre-refunded date.
Equity Securities
Equity securities are carried at fair value. The fair value of equity securities was $14.9 million as of December 31, 2025, compared to $15.9 million as of December 31, 2024.
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.
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.
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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.
C&I and Other Commercial Loans
C&I and other commercial loans typically comprise working capital loans or business expansion loans, including loans for asset purchases and other business loans. C&I and other commercial loans will generally be guaranteed, in full or a material percentage, by the primary owners of the business. C&I and other commercial loans are made based primarily on the borrower’s historical and projected cash flows and secondarily on the underlying assets pledged as collateral by the borrower. Cash flows of the borrower, however, may not perform consistently with historical or projected information. Further, collateral securing loans may fluctuate in value due to individual economic or other factors. Busey Bank has established minimum standards and underwriting guidelines for all C&I and other commercial loan types.
Commercial Real Estate Loans
The commercial environment, along with the academic presence in some of the markets in which Busey operates, provides for the majority of Busey’s commercial lending opportunities to be CRE related, including multi-unit housing. As the majority of Busey’s loan portfolio is within the CRE class, Busey’s goal is to maintain a high quality, geographically diverse portfolio of CRE loans. CRE loans are subject to underwriting standards and guidelines similar to commercial loans. CRE loans are generally guaranteed, in full or a material percentage, by the primary owners of the business. Repayment of these loans is primarily dependent on the cash flows of the underlying property. Nevertheless, CRE loans generally must be supported by an adequate underlying collateral value. The performance and the value of the underlying property may be adversely affected by economic factors or geographical and/or industry specific factors. These loans are subject to other industry guidelines which Busey closely monitors.
Real Estate Construction Loans
Real estate construction loans are primarily commercial in nature. Loan proceeds are monitored by Busey and advanced for the improvement of real estate in which Busey holds a mortgage. Real estate construction loans will generally be guaranteed, in full or a material percentage, by the developer or primary owners of the business. These loans are subject to underwriting standards and guidelines similar to commercial loans and generally must be supported by an adequate “as completed” value of the underlying project. In addition to the underlying project, the financial history of the developer and business owners weighs significantly in determining approval. Repayment of these loans is typically through permanent financing following completion of the construction. Real estate construction loans are inherently more risky than loans on completed properties as the unimproved nature and the financial risks of construction significantly enhance the risks of commercial real estate loans. These loans are closely monitored and subject to other industry guidelines.
Retail Real Estate Loans
Retail real estate loans are comprised of direct consumer loans that include residential real estate, home equity lines of credit, and home equity loans. In 2025, Busey retained a smaller percentage of originated retail real estate loans in its portfolio, electing to sell a larger percentage to secondary market purchasers. As retail real estate loan underwriting is subject to specific regulations, Busey typically underwrites retail real estate loans to conform to widely accepted standards. Several factors are considered in underwriting including the debt-to-income ratio and credit history of the borrower, as well as the value of the underlying real estate.
Retail Other Loans
Retail other loans consist of installment loans to individuals, including automotive loans and indirect lending. These loans are centrally underwritten utilizing the borrower’s financial history, including credit scores, as well as information about the underlying collateral. Retail other loans also include whole-life loans which are secured by the cash value of underlying life insurance policies. Repayment of retail other loans is expected from the borrower’s cash flows.
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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 December 31,
(dollars in thousands)
Change
% Change
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
Portfolio loan growth in 2025 was primarily attributable to the CrossFirst acquisition. Busey remains steadfast in its conservative approach to underwriting and disciplined approach to pricing. During 2025, Busey experienced elevated payoffs that outpaced new production momentums.
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 December 31,
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
Busey Bank originates loans across its regional operating model and through its specialty product lines, as described below:
• East – Suburban Chicago markets, the St. Louis MSA, and southwest Florida
• Midwest – Central Illinois and Indianapolis, Indiana
• Central – The Kansas City MSA, Central Kansas, and Oklahoma
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• Texas – The Dallas-Fort Worth MSA
• West – Colorado, New Mexico, and Arizona
• Verticals – Busey’s Life Equity Lending, Sponsor Finance, Energy Lending, and SBA Lending products
The distribution of Busey Bank loans outstanding as of December 31, 2025, that were originated in each of these markets is presented in the table below:
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 origination
East
Midwest
Central
Texas
West
Verticals
Total portfolio loans
ACL
Portfolio loans, net of ACL
Prior to the CrossFirst acquisition on March 1, 2025, Busey Bank’s loan origination occurred in the Illinois, Missouri, Florida, and Indiana markets. The geographic distribution of Busey Bank loans outstanding as of December 31, 2024, that were originated in each of these markets is presented in the table below:
As of December 31, 2024
(dollars in thousands)
C&I and other commercial
CRE
Real estate construction
Retail real estate
Retail other
Total
Loans by state of origination
Illinois
Missouri
Florida
Indiana
Total portfolio loans
ACL
Portfolio loans, net of ACL
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Commercial Real Estate Loans
CRE loans made up 40.9% of Busey’s total loan portfolio as of December 31, 2025, and CRE properties were approximately 25.8% 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 December 31,
(dollars in thousands)
COMMERCIAL REAL ESTATE LOANS
Non-owner occupied commercial real estate
Owner-occupied commercial real estate
Total commercial real estate loans
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 December 31, 2025
CRE Loans
Occupied By
% of CRE Loans That Are Owner Occupied
(dollars in thousands)
Non-Owner
Owner
Industry
Industrial and warehousing
Apartments
Retail
Traditional office
Specialty
Hotel
Medical office
Student housing
Restaurant
Self-Storage
Senior housing
Nursing homes
Healthcare
Group homes
Continuing Care Facilities
1-4 Family
Land acquisition and development
Other
Total
Loan Commitments
Commitments to extend credit and standby letters of credit increased by $2.27 billion, or 89.2%, to a total of $4.82 billion as of December 31, 2025, compared to $2.55 billion as of December 31, 2024.
Loan Maturities
The determination of loan maturities is based on contractual loan terms. Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts are considered to mature within one year.
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The following table sets forth the remaining maturities of portfolio loans at December 31, 2025:
(dollars in thousands)
Within 1 Year
After 1 Year
Through 5 Years
After 5 Years
Through 15 Years
After 15 Years
Total
Portfolio loans
C&I and other commercial
CRE
Real estate construction
Retail real estate
Retail other
Total portfolio loans
Interest Rate Structure
Portfolio loans maturing after one year are summarized below by interest rate structure and lending activity, as of December 31, 2025:
(dollars in thousands)
Fixed
Rate
Adjustable
Rate
Total
Portfolio loans maturing after 1 year
C&I and other commercial
CRE
Real estate construction
Retail real estate
Retail other
Total portfolio loans maturing after 1 year
Allowance for Credit Losses and Provision for Credit Losses
The ACL is a significant estimate on Busey’s Consolidated Financial Statements , affecting both earnings and capital. The methodology adopted influences, and is influenced by, Busey’s overall credit risk management processes. 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 credit loss charged to income. Provision expenses for loan losses were recorded as follows for each of the years indicated:
Years Ended December 31,
(dollars in thousands)
Location
Provision for loan losses 1
Provision for credit losses
1. The year ended December 31, 2025, included $42.4 million provision expense that was recorded to establish an initial allowance for loan losses on non-PCD loans immediately following the close of the CrossFirst acquisition in accordance with ASC 326‑20‑30‑15.
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The following table summarizes, by lending activity, net charge-off and recovery activity affecting the ACL balance, together with average portfolio loans outstanding and the related ratios of net charge-offs (recoveries) to average portfolio loans:
(dollars in thousands)
ACL
Average
Portfolio Loans
Outstanding
Ratio of
Net Charge-offs
(Recoveries)
To Average
Portfolio Loans
ACL balance, December 31, 2022
Net (charge-offs) recoveries and average portfolio loans by lending activity:
C&I and other commercial
CRE
Real estate construction
Retail real estate
Retail other
Net (charge-offs) recoveries and average portfolio loans
Provision for loan losses
ACL balance, December 31, 2023
Day 1 PCD 1
Net (charge-offs) recoveries and average portfolio loans by lending activity:
C&I and other commercial
CRE
Real estate construction
Retail real estate
Retail other
Net (charge-offs) recoveries and average portfolio loans
Provision for loan losses
ACL balance, December 31, 2024
Day 1 PCD 1
Day 2 Provision for loan losses 2
Net (charge-offs) recoveries and average portfolio loans by lending activity:
C&I and other commercial
CRE
Real estate construction
Retail real estate
Retail other
Net (charge-offs) recoveries and average portfolio loans
Provision for loan losses
ACL balance, December 31, 2025
1. The Day 1 PCD was attributable to the M&M acquisition in 2024 and the CrossFirst acquisition in 2025.
2. The Day 2 Provision for loan losses was attributable to the CrossFirst acquisition.
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The following table sets forth the ACL by loan categories and percentage of loans to total loans as of December 31 for each of the years indicated:
As of December 31,
(dollars in thousands)
ACL
% of Loans to Total Loans
ACL
% of Loans to Total Loans
Loan Category
C&I and other commercial
CRE
Real estate construction
Retail real estate
Retail other
Total
Busey did not record an allowance for loan losses for its Life Equity Loan ® portfolio, a component of its retail other lending activity, due to no expected credit loss at default, as permitted under the practical expedient provided within ASC 326-20-35-6. The Life Equity Loan ® portfolio balance was $445.4 million as of December 31, 2025, and $264.2 million as of December 31, 2024.
As of December 31, 2025, 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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The following table sets forth information concerning non-performing assets and asset quality ratios:
As of December 31,
(dollars in thousands)
Change
% Change
Total assets
Portfolio loans
Loans 30 – 89 days past due
Non-performing assets
Non-performing loans:
Non-accrual loans
Loans 90+ days past due and still accruing
Total non-performing loans
OREO and other repossessed assets
Total non-performing assets
Substandard (excludes 90+ days past due)
Classified assets
ACL
Bank Tier 1 Capital
Ratios
ACL to portfolio loans
20 bps
ACL to non-accrual loans
ACL to non-performing loans
ACL to non-performing assets
Non-accrual loans to portfolio loans
9 bps
Non-performing loans to portfolio loans
9 bps
Non-performing assets to total assets
13 bps
Non-performing assets to portfolio loans and OREO and other repossessed assets
13 bps
Classified assets to Bank Tier 1 Capital and ACL
190 bps
Busey’s total assets grew by 50.3% to $18.10 billion as of December 31, 2025, compared to $12.05 billion as of December 31, 2024, largely in connection with the CrossFirst acquisition. Further, Busey’s loan portfolio grew by 76.3% to $13.57 billion as of December 31, 2025, compared to $7.70 billion as of December 31, 2024.
Asset quality continues to be strong. Following the merger of CrossFirst Bank into Busey Bank in June, Busey is operating as one bank, with a singular credit policy, concentration limits, and monitoring that will continue to align with Busey’s pillars of credit quality. Busey’s operating mandate and focus remain on emphasizing credit quality over asset growth.
Non-performing loan balances increased to $53.5 million as of December 31, 2025, compared to $23.2 million as of December 31, 2024, primarily due to PCD loans assumed in the CrossFirst acquisition. Non-performing loans represented 0.39% of portfolio loans as of December 31, 2025, compared to 0.30% as of December 31, 2024. Busey’s ACL was 3.25 times its non-performing loan balance at December 31, 2025, compared to 3.59 times its non-performing loan balance at December 31, 2024.
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Non-performing assets, which include non-performing loans, OREO, and other repossessed assets, increased to $58.1 million as of December 31, 2025, compared to $23.3 million as of December 31, 2024. Non-performing assets represented 0.32% of total assets as of December 31, 2025, compared to 0.19% as of December 31, 2024. Busey’s ACL was 2.99 times its non-performing assets as of December 31, 2025, compared to 3.58 times its non-performing assets as of December 31, 2024.
Classified assets, which include non-performing assets and substandard loans, increased to $174.5 million as of December 31, 2025, compared to $85.3 million as of December 31, 2024. Classified assets represented 7.51% of Busey Bank’s Tier 1 capital and ACL at December 31, 2025, up from 5.61% at December 31, 2024.
Net charge-offs totaled $55.9 million in 2025, representing 0.44% of average loans, compared with net charge-offs of $18.2 million in 2024, representing 0.23% of average loans. Net charge-offs for the year ended December 31, 2025, included $36.2 million related to PCD loans.
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 $116.4 million, or 0.9% of portfolio loans, as of December 31, 2025, compared to $62.0 million, or 0.8% of portfolio loans, as of December 31, 2024. Management continues to monitor these loans and work with the borrowers on restructurings, guarantees, additional collateral, or other planned actions. As of December 31, 2025, 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
The following table presents the composition of, and changes in, Busey’s deposits:
As of December 31,
(dollars in thousands)
Balance
% Total
Balance
% Total
Change
% Change
Deposits
Non-maturity deposits:
Noninterest-bearing demand deposits
Interest-bearing transaction deposits
Saving deposits and money market deposits
Total non-maturity deposits
Time deposits
Total deposits
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Total deposits increased by 49.3% to $14.91 billion as of December 31, 2025, compared to $9.98 billion as of December 31, 2024, in connection with the CrossFirst acquisition. Busey focuses on deepening its customer relationships to maintain and protect its strong core deposit 4 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 December 31, 2025.
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 $6.46 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 $5.58 billion, or 37% of total deposits, at December 31, 2025. Of that amount, $759.4 million represented time deposits. The following table presents estimates of the uninsured portion of time deposits by maturity date:
(dollars in thousands)
December 31,
Estimated uninsured time deposits by schedule of maturities
3 months or less
Over 3 months through 6 months
Over 6 months through 12 months
Thereafter
Uninsured time deposits
Additional information about Busey’s deposits is located in “ Note 9. Deposits .”
Borrowings
Busey’s borrowings include, as applicable, securities sold under agreements to repurchase, a revolving line of credit, short-term borrowings, long-term borrowings, subordinated notes, and junior subordinated debt owed to unconsolidated trusts.
4 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 1. Business—Non-GAAP Financial Information ” included in this Annual Report.
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The following table sets forth the distribution of securities sold under agreements to repurchase and short-term borrowings, as well as the weighted average interest rates thereon:
Years Ended December 31,
(dollars in thousands)
Securities sold under agreements to repurchase
Balance at end of period
Weighted average interest rate at end of period
Maximum outstanding at any month end in year-to-date period
Average daily balance for the year-to-date period
Weighted average interest rate during period 1
FHLB advances, current portion due within 12 months
Balance at end of period
Weighted average interest rate at end of period
Maximum outstanding at any month end in year-to-date period
Average daily balance for the year-to-date period
Weighted average interest rate during period 1
Term Loan, current portion due within 12 months
Balance at end of period
Weighted average interest rate at end of period
Maximum outstanding at any month end in year-to-date period
Average daily balance for the year-to-date period
Weighted average interest rate during period 1
1. The weighted average interest rate is computed by dividing total interest for the period by the average daily balance outstanding.
Additional information about Busey’s borrowing activities is located in “ Note 10. Borrowings .” Additional information about Busey’s contractual obligations related to its borrowing activities is located under the heading “ Contractual Obligations ” within this MD&A .
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.
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Average liquid assets are summarized in the table below:
Years Ended December 31,
(dollars in thousands)
Average liquid assets
Cash and due from banks
Interest-bearing bank deposits
Less: Restricted and pledged cash and bank deposits
Total average liquid assets
Average liquid assets as a percent of average total assets
Cash and unencumbered securities on Busey’s Consolidated Balance Sheets are summarized as follows:
As of December 31,
(dollars in thousands)
Unencumbered cash and securities
Total cash and cash equivalents
Restricted and pledged cash and bank deposits
Debt securities available for sale
Debt securities available for sale pledged as collateral
Cash and unencumbered securities
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 December 31,
(dollars in thousands)
Additional available borrowing capacity
FHLB
Federal Reserve Bank
Federal funds purchased
Revolving credit facility
Additional borrowing capacity
Further, Busey could utilize brokered deposits as additional sources of liquidity, as needed.
As of December 31, 2025, 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.
Busey’s ability to pay cash dividends to its stockholders and to service its debt is dependent on the receipt of cash dividends from its subsidiaries. Busey Bank paid dividends to First Busey Corporation totaling $160.0 million and $100.0 million for the years ended December 31, 2025, and 2024, respectively.
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.
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The following table summarizes Busey’s outstanding commitments and reserves for unfunded commitments :
As of December 31,
(dollars in thousands)
Outstanding loan commitments and standby letters of credit
Reserve for unfunded commitments
The following table summarizes Busey’s provision for unfunded commitments for the periods presented:
Years Ended December 31,
(dollars in thousands)
Location
Provision for unfunded commitments 1
Provision for credit losses
1. The year ended December 31, 2025, included $7.2 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.
Contractual Obligations
Busey has entered into certain contractual obligations and other commitments that generally relate to funding of operations through deposits, debt issuance, and property and equipment leases.
The following table summarizes significant contractual obligations and other commitments, excluding, when applicable, short-term borrowings and the current portion of long-term borrowings, as of December 31, 2025:
(dollars in thousands)
Time deposits
Long-term
Borrowings
Subordinated Notes,
Net of Unamortized
Issuance Costs
Junior
Subordinated
Debt Owed to Unconsolidated
Trusts
Operating
Leases in Other Liabilities
Total
Contractual obligations 1
Thereafter
Contractual obligations
Commitments to extend credit and standby letters of credit
1. The contractual obligations in this table include principal and estimated interest without any purchase accounting or debt issuance cost adjustments.
Cash Flows
Busey’s cash flows consist of operating activities, investing activities, and financing activities.
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Net cash flows provided by operating activities totaled $192.6 million in 2025, compared to $178.3 million provided by operating activities in 2024. Significant operating activities affecting cash flows include net income, depreciation and amortization, the provision for credit losses, stock-based compensation, and mortgage loan sale activity. Fluctuations in sales of loans held for sale are a function of changes in market rates for mortgage loans, which influence refinance activity.
Net cash provided by investing activities totaled $1.10 billion in 2025, compared to $657.9 million provided by investing activities in 2024. Significant investing activities are those associated with managing Busey’s investment and loan portfolios.
Net cash used in financing activities totaled $1.69 billion in 2025, compared to $858.1 million used in financing activities in 2024. Significant financing activities affecting cash flows include deposit and other borrowings, issuance of preferred stock, and cash dividends paid.
For additional detail, see the Consolidated Statements of Cash Flows .
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 Busey Bank as of December 31, 2025.
Minimum Capital Requirements with
Capital Buffer
As of December 31, 2025
First
Busey
Busey
Bank
Common equity Tier 1 capital to risk weighted assets
Tier 1 capital to risk weighted assets
Total capital to risk weighted assets
Leverage ratio of Tier 1 capital to average assets
Management believes that no conditions or events have occurred since December 31, 2025, that would materially adversely change First Busey’s or Busey Bank’s capital classifications. For further discussion of capital resources and requirements, see “ Note 12. Regulatory Capital .”
NEW ACCOUNTING PRONOUNCEMENTS
Busey reviews new accounting standards as issued. Information relating to accounting pronouncements applicable to Busey appears in “ Note 1. Significant Accounting Policies ” in the Notes to Consolidated Financial Statements .
EFFECTS OF INFLATION
The effect of inflation on a financial institution differs significantly from the effect on an industrial company. While a financial institution’s operating expenses, particularly salaries, wages, and employee benefits, are affected by general inflation, the asset and liability structure of a financial institution consists largely of monetary items. Monetary items, such as cash, loans, and deposits, are those assets and liabilities which are or will be converted into a fixed number of dollars regardless of changes in prices. As a result, changes in interest rates have a more significant impact on a financial institution’s performance than does general inflation. For additional information regarding interest rates and changes in net interest income see “ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operation — Three Years Ended December 31, 2025—Net Interest Income ” and “ Item 7A. Quantitative and Qualitative Disclosures About Market Risk .”
