XML 35 R13.htm IDEA: XBRL DOCUMENT v3.25.0.1
PORTFOLIO LOANS
 12 Months Ended
Dec. 31, 2024
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
PORTFOLIO LOANS
NOTE 4. PORTFOLIO LOANS
Loan Categories
Busey’s lending can be summarized into two primary categories: commercial and retail. Loans within these categories are further classified by lending activity: C&I and other commercial, CRE, real estate construction, retail real estate, and retail other. Distributions of the loan portfolio by loan category and lending activity is presented in the following table (dollars in thousands):
As of December 31,
20242023
Commercial loans
C&I and other commercial$1,904,515 $1,835,994 
CRE3,269,564 3,337,337 
Real estate construction378,209 461,717 
Total commercial loans5,552,288 5,635,048 
Retail loans
Retail real estate1,696,457 1,720,455 
Retail other448,342 295,531 
Total retail loans2,144,799 2,015,986 
 
Total portfolio loans7,697,087 7,651,034 
ACL(83,404)(91,740)
Portfolio loans, net$7,613,683 $7,559,294 
Net deferred loan origination costs included in the balances above were $12.5 million as of December 31, 2024, compared to $13.5 million as of December 31, 2023. Net accretable purchase accounting adjustments included in the balances above reduced loans by $8.8 million as of December 31, 2024, and by $4.5 million as of December 31, 2023.
Busey elected to purchase $6.9 million of retail real estate loans during the year ended December 31, 2024, and did not purchase any retail real estate loans during the years ended December 31, 2023 or 2022.
Pledged Loans
The principal balance of loans Busey has pledged as collateral to the FHLB and Federal Reserve Bank for liquidity as set forth in the table below (dollars in thousands):
As of December 31,
20242023
Pledged loans
FHLB$4,813,600 $4,865,481 
Federal Reserve Bank765,824 722,914 
Total pledged loans$5,579,424 $5,588,395 
Risk Grading
Busey utilizes a loan grading scale to assign a risk grade to all of its loans. A description of the general characteristics of each grade is as follows:
•Pass – This category includes loans that are all considered acceptable credits, ranging from investment or near investment grade, to loans made to borrowers who exhibit credit fundamentals that meet or exceed industry standards.
•Watch – This category includes loans that warrant a higher-than-average level of monitoring to ensure that weaknesses do not cause the inability of the credit to perform as expected. These loans are not necessarily a problem due to other inherent strengths of the credit, such as guarantor strength, but have above average concern and monitoring.
•Special mention – This category is for “Other Assets Specially Mentioned” loans that have potential weaknesses, which may, if not checked or corrected, weaken the asset, or inadequately protect Busey’s credit position at some future date.
•Substandard – This category includes “Substandard” loans, determined in accordance with regulatory guidelines, for which the accrual of interest has not been stopped. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that Busey will sustain some loss if the deficiencies are not corrected.
•Substandard non-accrual – This category includes loans that have all the characteristics of a “Substandard” loan with additional factors that make collection in full highly questionable and improbable. Such loans are placed on non-accrual status and may be dependent on collateral with a value that is difficult to determine.
All loans are graded at their inception. Commercial lending relationships that are $1.0 million or less are usually processed through an expedited underwriting process. Most commercial loans greater than $1.0 million are included in a portfolio review at least annually. Commercial loans greater than $0.35 million that have a grading of special mention or worse are typically reviewed on a quarterly basis. Interim reviews may take place if circumstances of the borrower warrant a more frequent review.
The following table is a summary of risk grades segregated by category of portfolio loans (dollars in thousands):
As of December 31, 2024
PassWatchSpecial
Mention		SubstandardSubstandard
Non-accrual		Total
Commercial loans
C&I and other commercial$1,545,338 $281,424 $36,152 $37,749 $3,852 $1,904,515 
CRE2,744,018 438,945 55,041 16,507 15,053 3,269,564 
Real estate construction345,908 26,833 221 5,224 23 378,209 
Total commercial loans4,635,264 747,202 91,414 59,480 18,928 5,552,288 
Retail loans
Retail real estate1,680,640 9,408 882 2,543 2,984 1,696,457 
Retail other448,166 — — — 176 448,342 
Total retail loans2,128,806 9,408 882 2,543 3,160 2,144,799 
Total portfolio loans$6,764,070 $756,610 $92,296 $62,023 $22,088 $7,697,087 
As of December 31, 2023
PassWatchSpecial
Mention		SubstandardSubstandard
Non-accrual		Total
Commercial loans
C&I and other commercial$1,462,755 $296,416 $46,488 $27,733 $2,602 $1,835,994 
CRE2,827,030 431,427 48,545 29,492 843 3,337,337 
Real estate construction448,011 8,135 — 5,327 244 461,717 
Total commercial loans4,737,796 735,978 95,033 62,552 3,689 5,635,048 
Retail loans
Retail real estate1,702,897 11,144 1,024 1,795 3,595 1,720,455 
Retail other295,374 — — — 157 295,531 
Total retail loans1,998,271 11,144 1,024 1,795 3,752 2,015,986 
Total portfolio loans$6,736,067 $747,122 $96,057 $64,347 $7,441 $7,651,034 
Risk grades of portfolio loans and net charge-offs are presented in the tables below by loan class, further sorted by origination year (dollars in thousands):
As of and For The Year Ended December 31, 2024
Term Loans Amortized Cost Basis by Origination YearRevolving
Loans		Total
Risk Grade Ratings20242023202220212020Prior
C&I and other commercial
Pass$320,831 $147,909 $163,870 $125,053 $74,146 $117,234 $596,295 $1,545,338 
Watch38,734 49,394 44,709 16,393 2,175 20,964 109,055 281,424 
Special Mention1,718 2,293 5,658 2,634 106 2,540 21,203 36,152 
Substandard15,186 6,545 788 591 320 2,424 11,895 37,749 
Substandard non-accrual65 141 464 — 42 852 2,288 3,852 
Total C&I and other commercial376,534 206,282 215,489 144,671 76,789 144,014 740,736 1,904,515 
Gross charge-offs$— $14,980 $148 $22 $— $303 $— $15,453 
 
CRE
Pass291,503 354,591 755,266 645,994 356,867 314,340 25,457 2,744,018 
Watch115,078 132,900 60,611 62,408 28,320 38,733 895 438,945 
Special Mention39,252 643 8,020 1,395 4,165 1,517 49 55,041 
Substandard6,983 355 4,628 50 95 4,346 50 16,507 
Substandard non-accrual15,000 39 — — 14 — — 15,053 
Total CRE467,816 488,528 828,525 709,847 389,461 358,936 26,451 3,269,564 
Gross charge-offs— — — 2,999 — 315 — 3,314 
 
Real estate construction
Pass159,825 134,450 12,205 24,781 2,213 1,124 11,310 345,908 
Watch20,170 6,455 — 208 — — — 26,833 
Special Mention— — — 221 — — — 221 
Substandard5,224 — — — — — — 5,224 
Substandard non-accrual— — — 23 — — — 23 
Total real estate construction185,219 140,905 12,205 25,233 2,213 1,124 11,310 378,209 
 
Retail real estate
Pass101,582 237,306 366,820 354,380 147,236 267,431 205,885 1,680,640 
Watch1,255 550 2,733 3,377 872 124 497 9,408 
Special Mention151 — 344 — — 372 15 882 
Substandard— 243 1,018 503 — 776 3 2,543 
Substandard non-accrual— — 344 91 152 1,526 871 2,984 
Total retail real estate102,988 238,099 371,259 358,351 148,260 270,229 207,271 1,696,457 
Gross charge-offs— — — — — 168 — 168 
 
Retail other
Pass4,996 55,665 57,944 12,207 2,304 589 314,461 448,166 
Substandard non-accrual— 94 67 4 — 11 — 176 
Total retail other4,996 55,759 58,011 12,211 2,304 600 314,461 448,342 
Gross charge-offs9 31 106 78 4 403 — 631 
 
Total portfolio loans$1,137,553 $1,129,573 $1,485,489 $1,250,313 $619,027 $774,903 $1,300,229 $7,697,087 
Total gross charge-offs$9 $15,011 $254 $3,099 $4 $1,189 $— $19,566 
As of and For The Year Ended December 31, 2023
Term Loans Amortized Cost Basis by Origination YearRevolving
Loans		Total
Risk Grade Ratings20232022202120202019Prior
C&I and other commercial
Pass$306,578 $220,847 $159,130 $71,025 $35,927 $143,078 $526,170 $1,462,755 
Watch78,603 65,703 21,421 23,919 7,035 21,293 78,442 296,416 
Special Mention792 8,224 2,917 1,076 686 3,274 29,519 46,488 
Substandard8,715 765 942 426 3,734 1,859 11,292 27,733 
Substandard non-accrual166 — 117 84 128 407 1,700 2,602 
Total C&I and other commercial394,854 295,539 184,527 96,530 47,510 169,911 647,123 1,835,994 
Gross charge-offs$284 $— $420 $— $316 $1,409 $— $2,429 
CRE
Pass395,644 824,506 720,052 399,195 271,078 199,662 16,893 2,827,030 
Watch166,795 47,070 92,848 34,010 68,196 19,396 3,112 431,427 
Special Mention14,313 10,507 12,446 4,968 3,297 3,014 — 48,545 
Substandard1,796 188 18,862 2,938 1,802 3,856 50 29,492 
Substandard non-accrual47 79 85 23 — 609 — 843 
Total CRE578,595 882,350 844,293 441,134 344,373 226,537 20,055 3,337,337 
Gross charge-offs— — — — — 953 — 953 
Real estate construction
Pass204,952 128,462 85,086 2,616 1,323 2,934 22,638 448,011 
Watch2,859 4,406 507 322 41 — — 8,135 
Substandard5,327 — — — — — — 5,327 
Substandard non-accrual— — — — — 244 — 244 
Total real estate construction213,138 132,868 85,593 2,938 1,364 3,178 22,638 461,717 
Retail real estate
Pass243,400 376,922 411,723 156,762 70,099 256,571 187,420 1,702,897 
Watch1,096 4,137 2,442 954 536 234 1,745 11,144 
Special Mention286 358 — — — 380 — 1,024 
Substandard69 72 292 49 80 997 236 1,795 
Substandard non-accrual— 528 121 267 100 1,960 619 3,595 
Total retail real estate244,851 382,017 414,578 158,032 70,815 260,142 190,020 1,720,455 
Gross charge-offs— 5 — 29 72 301 — 407 
Retail other
Pass88,885 92,931 23,019 6,701 4,597 854 78,387 295,374 
Substandard non-accrual— 93 62 — — 2 — 157 
Total retail other88,885 93,024 23,081 6,701 4,597 856 78,387 295,531 
Gross charge-offs5 71 172 5 3 373 — 629 
Total portfolio loans$1,520,323 $1,785,798 $1,552,072 $705,335 $468,659 $660,624 $958,223 $7,651,034 
Total gross charge-offs$289 $76 $592 $34 $391 $3,036 $— $4,418 
Past Due and Non-Accrual Loans
An analysis of the amortized cost basis of portfolio loans that are past due and still accruing, or on non-accrual status, is as follows (dollars in thousands):
As of December 31, 2024
Loans past due, still accruingNon-accrual
Loans
30-59 Days60-89 Days90+Days
Commercial loans
C&I and other commercial$95 $— $— $3,852 
CRE42 2,759 — 15,053 
Real estate construction41 — — 23 
Past due and non-accrual commercial loans178 2,759 — 18,928 
Retail loans
Retail real estate3,280 683 1,115 2,984 
Retail other1,094 130 34 176 
Past due and non-accrual retail loans4,374 813 1,149 3,160 
Total past due and non-accrual loans$4,552 $3,572 $1,149 $22,088 
As of December 31, 2023
Loans past due, still accruingNon-accrual
Loans
30-59 Days60-89 Days90+Days
Commercial loans
C&I and other commercial$— $214 $— $2,602 
CRE752 — — 843 
Real estate construction24 — — 244 
Past due and non-accrual commercial loans776 214 — 3,689 
Retail loans
Retail real estate2,781 927 366 3,595 
Retail other886 195 9 157 
Past due and non-accrual retail loans3,667 1,122 375 3,752 
Total past due and non-accrual loans$4,443 $1,336 $375 $7,441 
Gross interest income recorded on 90+ days past due loans, and that would have been recorded on non-accrual loans if they had been accruing interest in accordance with their original terms, was $0.9 million, $1.1 million, and $1.2 million for the years ended December 31, 2024, 2023, and 2022, respectively. Interest collected on those loans and recognized on a cash basis that was included in interest income was immaterial for the year ended December 31, 2024, and totaled $0.4 million for each of the years ended December 31, 2023, and 2022.
Loan Modifications for Borrowers Experiencing Financial Difficulty
The following tables present the amortized cost basis of loans that were modified—specifically in the form of (1) principal forgiveness, (2) an interest rate reduction, (3) an other-than-insignificant payment deferral, and/or (4) a term extension—for borrowers experiencing financial difficulty during the periods indicated, disaggregated by lending activity and the type of modification (dollars in thousands):
Year Ended December 31, 2024
Payment Deferral
% of Total Class of Financing Receivable1
Term Extension
% of Total Class of Financing Receivable
Modified Loans
C&I and other commercial
$325 — %$26,175 1.4 %
CRE
— — %18,147 0.6 %
Real estate construction
— — %5,224 1.4 %
Total of loans modified during the period2
$325 — %$49,546 0.6 %
___________________________________________
1.Modified loans represent an insignificant portion of C&I and other commercial loans, rounding to zero percent.
2.Modifications include one loan on non-accrual status, and the remaining loans were classified as substandard.
Year Ended December 31, 2023
Interest Rate Reduction1
% of Total Class of Financing Receivable2
Term Extension3
% of Total Class of Financing Receivable2
Modified Loans
C&I and other commercial
$— — %$16,586 0.9 %
CRE
872 — %923 — %
Real estate construction
— — %5,327 1.2 %
Total of loans modified during the period4
$872 — %$22,836 0.3 %
___________________________________________
1.For one loan, the default rate was removed once forbearance was entered.
2.Modified loans represent an insignificant portion of CRE loans, rounding to zero percent.
3.Modifications to extend loan terms also included, in some cases, interest rate increases during the extension period.
4.Modifications include one loan on non-accrual status, and the remaining loans were classified as substandard.
The following table summarizes the effects of loan modifications made during the periods indicated for borrowers experiencing financial difficulty:
Years Ended December 31,
20242023
Weighted Average Term Extension
Weighted Average Interest Rate Reduction
Weighted Average Term Extension
Loan Modifications
C&I and other commercial
15.6 months
— %
18.1 months
CRE
3.8 months
2.50 %
21.0 months
Real estate construction
6.0 months
— %
12.0 months
Weighted average modifications
10.3 months
2.50 %
16.8 months
Performance of Modified Loans
Busey closely monitors the performance of the loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the payment performance of loans modified during the last twelve months (dollars in thousands):
As of December 31, 2024
Current30-89 Days90+ DaysNon-accrual
Modified Loans
C&I and other commercial$26,500 $— $— $— 
CRE3,147 — — 15,000 
Real estate construction5,224 — — — 
Amortized cost of modified loans$34,871 $— $— $15,000 
The following table provides the amortized cost basis of loans that had a payment default during the periods indicated, after having been modified during the 12 months before default for borrowers experiencing financial difficulty (dollars in thousands). A default occurs when a loan is 90 days or more past due or transferred to non-accrual status.
Years Ended December 31,
20242023
Term Extension
Term Extension
Loans with Subsequent Defaults
C&I and other commercial
$— $88 
CRE
15,000 — 
Amortized cost of modified loans with subsequent defaults
$15,000 $88 
Collateral Dependent Loans
Management's evaluation as to the ultimate collectability of loans includes estimates regarding future cash flows from operations and the value of property, real and personal, pledged as collateral. These estimates are affected by changing economic conditions and the economic prospects of borrowers. Collateral dependent loans are loans in which repayment is expected to be provided solely by the underlying collateral and there are no other available and reliable sources of repayment. Loans are written down to the lower of cost or fair value of underlying collateral, less estimated costs to sell. Busey had $19.3 million and $6.1 million of collateral dependent loans secured by real estate or business assets as of December 31, 2024, and December 31, 2023, respectively.
Loans Evaluated Individually
Busey evaluates loans with disparate risk characteristics on an individual basis. The following tables provide details of loans evaluated individually, segregated by category and lending activity. The unpaid principal balance represents customer outstanding contractual principal balances excluding any partial charge-offs. Recorded investment represents the amortized cost of customer balances net of any partial charge-offs recognized on the loans. Average recorded investment is calculated using the most recent four quarters (dollars in thousands):
As of December 31, 2024
Unpaid
Principal
Balance		Recorded InvestmentAverage
Recorded
Investment
With No
Allowance		With
Allowance		TotalRelated
Allowance
Loans evaluated individually
Commercial loans:
C&I and other commercial$7,127 $1,224 $2,456 $3,680 $1,840 $5,014 
CRE17,999 15,000 — 15,000 — 3,882 
Commercial loans evaluated individually25,126 16,224 2,456 18,680 1,840 8,896 
Retail loans:
Retail real estate1,152 1,128 — 1,128 — 276 
Retail loans evaluated individually1,152 1,128 — 1,128 — 276 
Total loans evaluated individually$26,278 $17,352 $2,456 $19,808 $1,840 $9,172 
As of December 31, 2023
Unpaid
Principal
Balance		Recorded InvestmentAverage
Recorded
Investment
With No
Allowance		With
Allowance		TotalRelated
Allowance
Loans evaluated individually
Commercial loans:
C&I and other commercial$7,283 $585 $1,785 $2,370 $785 $5,244 
CRE2,600 610 85 695 85 3,865 
Real estate construction— — — — — 49 
Commercial loans evaluated individually9,883 1,195 1,870 3,065 870 9,158 
Retail loans:
Retail real estate213 61 25 86 25 790 
Retail loans evaluated individually213 61 25 86 25 790 
Total loans evaluated individually$10,096 $1,256 $1,895 $3,151 $895 $9,948 
Allowance for Credit Losses
Management estimates the ACL balance using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The cumulative loss rate used as the basis for the estimate of credit losses is comprised of Busey’s historical loss experience beginning in 2010. Due to the continued economic uncertainty in the markets in which the Company operates, Busey will continue to utilize a forecast period of 12 months with an immediate reversion to historical loss rates beyond this forecast period in its ACL estimate.
The following table summarizes activity in the ACL attributable to each lending activity. Allocation of a portion of the ACL to one lending activity does not preclude its availability to absorb losses in other lending activities (dollars in thousands):
C&I and Other CommercialCREReal Estate
Construction		Retail
Real Estate		Retail OtherTotal
ACL Balance, December 31, 2021$23,855 $38,249 $5,102 $17,589 $3,092 $87,887 
Provision for credit losses497 892 1,142 219 1,873 4,623 
Charged-off(1,069)(1,375)(23)(251)(461)(3,179)
Recoveries577 533 236 636 295 2,277 
ACL balance, December 31, 202223,860 38,299 6,457 18,193 4,799 91,608 
Provision for credit losses(727)(2,455)(1,465)7,922 (876)2,399 
Charged-off(2,429)(953)— (407)(629)(4,418)
Recoveries552 574 171 590 264 2,151 
ACL balance, December 31, 202321,256 35,465 5,163 26,298 3,558 91,740 
Day 1 PCD1
824 322 — 96 1 1,243 
Provision for credit losses14,455 (318)(1,885)(3,031)(631)8,590 
Charged-off(15,453)(3,314)— (168)(631)(19,566)
Recoveries507 146 67 516 161 1,397 
ACL balance, December 31, 2024$21,589 $32,301 $3,345 $23,711 $2,458 $83,404 
__________________________________________
1.The Day 1 PCD is attributable to the M&M acquisition, finalized April 1, 2024.
The following tables present the ACL and amortized cost of portfolio loans by loan category and lending activity (dollars in thousands):
As of December 31, 2024
Portfolio LoansACL Attributed to Portfolio Loans
Collectively
Evaluated for
Impairment		Individually
Evaluated for
Impairment		TotalCollectively
Evaluated for
Impairment		Individually
Evaluated for
Impairment		Total
Portfolio loans and related ACL
Commercial loans:
C&I and other commercial$1,900,835 $3,680 $1,904,515 $19,749 $1,840 $21,589 
CRE3,254,564 15,000 3,269,564 32,301 — 32,301 
Real estate construction378,209 — 378,209 3,345 — 3,345 
Commercial loans and related ACL5,533,608 18,680 5,552,288 55,395 1,840 57,235 
Retail loans:
Retail real estate1,695,329 1,128 1,696,457 23,711 — 23,711 
Retail other448,342 — 448,342 2,458 — 2,458 
Retail loans and related ACL2,143,671 1,128 2,144,799 26,169 — 26,169 
Portfolio loans and related ACL$7,677,279 $19,808 $7,697,087 $81,564 $1,840 $83,404 
As of December 31, 2023
Portfolio LoansACL Attributed to Portfolio Loans
Collectively
Evaluated for
Impairment		Individually
Evaluated for
Impairment		TotalCollectively
Evaluated for
Impairment		Individually
Evaluated for
Impairment		Total
Portfolio loans and related ACL
Commercial loans:
C&I and other commercial$1,833,624 $2,370 $1,835,994 $20,471 $785 $21,256 
CRE3,336,642 695 3,337,337 35,380 85 35,465 
Real estate construction461,717 — 461,717 5,163 — 5,163 
Commercial loans and related ACL5,631,983 3,065 5,635,048 61,014 870 61,884 
Retail loans:
Retail real estate1,720,369 86 1,720,455 26,273 25 26,298 
Retail other295,531 — 295,531 3,558 — 3,558 
Retail loans and related ACL2,015,900 86 2,015,986 29,831 25 29,856 
Portfolio loans and related ACL$7,647,883 $3,151 $7,651,034 $90,845 $895 $91,740