INCOME TAXES

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 13. INCOME TAXES

Components of Busey’s income tax expense consist of the following (dollars in thousands):

	Years Ended December 31,
	2024		2023		2022
Income tax expense
Current expense:
Federal	$	26,696	$	20,139	$	20,815
State	11,533		14,120		13,883
Deferred expense:
Federal	1,561		(1,557)		(700)
State	(177)		(1,363)		(572)
Total income tax expense	$	39,613	$	31,339	$	33,426

A reconciliation of federal and state income taxes at statutory rates to Busey’s income taxes included in the accompanying Consolidated Statements of Income is as follows:

	Years Ended December 31,
	2024		2023		2022
Percent of pretax income
Income tax at federal statutory rate	21.0	%	21.0	%	21.0	%
Effect of:
Tax-exempt interest, net	(0.7)	%	(1.0)	%	(1.1)	%
Stock incentive	—	%	0.2	%	0.1	%
State income taxes, net	5.8	%	6.5	%	6.5	%
Income on bank owned life insurance	(0.7)	%	(0.6)	%	(0.5)	%
Tax credit investments	(3.1)	%	(6.0)	%	(5.6)	%
Other, net	3.5	%	0.3	%	0.3	%
Effective income tax rate	25.8	%	20.4	%	20.7	%

Net deferred taxes, reported in other assets or other liabilities on Busey’s Consolidated Balance Sheets, include the following amounts of deferred tax assets and liabilities (dollars in thousands):

	As of December 31,
	2024		2023
Deferred taxes
Deferred tax assets:
ACL	$	23,685	$	27,068
Unrealized loss on cash flow hedge	7,256		6,654
Unrealized losses on securities available for sale, net	61,479		70,423
Unrealized losses on securities held to maturity	8,068		10,156
Stock-based compensation	6,431		5,767
Purchase accounting adjustments	2,076		764
Accrued vacation	493		456
Lease liabilities	2,951		3,092
Employee costs	5,725		4,789
Unrealized loss on equity securities	—		75
Other	—		67
Total deferred tax assets	118,164		129,311
Deferred tax liabilities:
Basis in premises and equipment	(2,419)		(2,830)
Affordable housing partnerships and other investments	(8,011)		(8,341)
Purchase accounting adjustments	(1,022)		(1,133)
Mortgage servicing assets	(745)		(1,336)
Basis in core deposit, customer intangible assets, and asset purchase goodwill	(3,325)		(4,709)
Deferred loan origination costs	(3,317)		(3,691)
Right of use assets	(2,835)		(3,015)
Unrealized gain on equity securities	(172)		—
Other	(856)		(251)
Total deferred tax liabilities	(22,702)		(25,306)
Net deferred tax asset	$	95,462	$	104,005

Management believes that it is more likely than not that the net deferred tax asset included in the accompanying Consolidated Balance Sheets will be fully realized. Busey has determined that no valuation allowance is required for any deferred tax assets as of December 31, 2024, or 2023.