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PORTFOLIO LOANS
 3 Months Ended
Mar. 31, 2025
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 in two primary categories: commercial and retail. Loans within these categories are further classified by lending activity: C&I and other commercial, commercial real estate, real estate construction, retail real estate, and retail other. Distributions of the loan portfolio by loan category and activity is presented in the following table:
As of
(dollars in thousands)March 31,
2025		December 31,
2024
Commercial loans
C&I and other commercial$4,513,543 $1,904,515 
CRE5,573,766 3,269,564 
Real estate construction1,051,179 378,209 
Total commercial loans11,138,488 5,552,288 
Retail loans
Retail real estate2,245,705 1,696,457 
Retail other484,164 448,342 
Total retail loans2,729,869 2,144,799 
Total portfolio loans13,868,357 7,697,087 
ACL(195,210)(83,404)
Portfolio loans, net$13,673,147 $7,613,683 
Net deferred loan origination costs included in the balances above were $12.3 million as of March 31, 2025, compared to $12.5 million as of December 31, 2024. Net accretable purchase accounting adjustments included in the balances above reduced loans by $105.3 million as of March 31, 2025, and $8.8 million as of December 31, 2024.
Busey did not purchase any retail real estate loans during the three months ended March 31, 2025 or 2024.
Pledged Loans
Busey has an executed blanket lien with the FHLB. The principal balance of loans Busey has pledged as collateral that the banks are able to borrow against with the FHLB and Federal Reserve Bank for liquidity is set forth in the table below:
As of
(dollars in thousands)March 31,
2025		December 31,
2024
Pledged loans
FHLB$5,454,647 $4,813,600 
Federal Reserve Bank1,764,406 765,824 
Total pledged loans$7,219,053 $5,579,424 
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 Busey’s portfolio loans by risk grade, segregated by loan category:
As of March 31, 2025
(dollars in thousands)PassWatchSpecial
Mention		SubstandardSubstandard
Non-accrual		Total
Commercial loans
C&I and other commercial$3,765,745 $500,705 $121,321 $87,567 $38,205 $4,513,543 
CRE4,571,478 822,841 137,373 34,375 7,699 5,573,766 
Real estate construction951,758 68,016 26,116 5,270 19 1,051,179 
Total commercial loans9,288,981 1,391,562 284,810 127,212 45,923 11,138,488 
Retail loans
Retail real estate2,220,625 7,344 6,696 8,410 2,630 2,245,705 
Retail other483,739 150 — 181 94 484,164 
Total retail loans2,704,364 7,494 6,696 8,591 2,724 2,729,869 
Total portfolio loans$11,993,345 $1,399,056 $291,506 $135,803 $48,647 $13,868,357 
As of December 31, 2024
(dollars in thousands)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 
Risk grades of portfolio loans and gross charge-offs are presented in the tables below by lending activity, further sorted by origination year:
As of and For The Three Months Ended March 31, 2025
Risk Grade RatingsTerm Loans Amortized Cost Basis by Origination YearRevolving
Loans		Total
(dollars in thousands)20252024202320222021Prior
C&I and other commercial
Pass$220,082 $592,425 $327,725 $295,521 $203,737 $204,373 $1,921,882 $3,765,745 
Watch44,966 64,433 61,625 60,613 37,935 23,765 207,368 500,705 
Special Mention1,341 13,555 14,331 30,667 3,836 2,628 54,963 121,321 
Substandard5,248 17,351 21,219 963 5,349 4,047 33,390 87,567 
Substandard non-accrual97 2,939 804 1,218 196 4,778 28,173 38,205 
Total C&I and other commercial271,734 690,703 425,704 388,982 251,053 239,591 2,245,776 4,513,543 
Gross charge-offs$— $— $2,221 $114 $13,591 $11,174 $4,121 $31,221 
CRE
Pass186,098 448,045 590,920 1,078,055 807,404 792,088 668,868 4,571,478 
Watch25,271 157,620 118,044 112,461 146,922 116,367 146,156 822,841 
Special Mention19,377 28,666 1,189 21,721 24,376 14,699 27,345 137,373 
Substandard2,760 17,106 1,609 4,498 — 8,402 — 34,375 
Substandard non-accrual— — 4,545 — 3 3,151 — 7,699 
Total CRE233,506 651,437 716,307 1,216,735 978,705 934,707 842,369 5,573,766 
Gross charge-offs— — — — 253 — — 253 
Real estate construction
Pass103,765 373,395 194,079 210,403 21,948 4,649 43,519 951,758 
Watch938 29,257 2,356 13,368 20,095 — 2,002 68,016 
Special Mention18,402 — — 617 7,097 — — 26,116 
Substandard5,208 — — — 62 — — 5,270 
Substandard non-accrual— — — — 19 — — 19 
Total real estate construction128,313 402,652 196,435 224,388 49,221 4,649 45,521 1,051,179 
Gross charge-offs— — — — — — — — 
Retail real estate
Pass36,881 139,739 326,479 474,276 411,108 572,418 259,724 2,220,625 
Watch48 2,051 530 2,179 578 1,290 668 7,344 
Special Mention— 144 3,883 950 1,669 — 50 6,696 
Substandard— — 234 1,311 1,581 2,095 3,189 8,410 
Substandard non-accrual— — — 497 91 1,280 762 2,630 
Total retail real estate36,929 141,934 331,126 479,213 415,027 577,083 264,393 2,245,705 
Gross charge-offs— — — — — — — — 
Retail other
Pass1,555 10,814 52,162 51,269 10,288 1,978 355,673 483,739 
Watch— — — — — — 150 150 
Special Mention— — — — — — — — 
Substandard— — — — 20 11 150 181 
Substandard non-accrual— — — 83 — 11 — 94 
Total retail other1,555 10,814 52,162 51,352 10,308 2,000 355,973 484,164 
Gross charge-offs— 147 105 35 — 74 — 361 
Total portfolio loans$672,037 $1,897,540 $1,721,734 $2,360,670 $1,704,314 $1,758,030 $3,754,032 $13,868,357 
Total gross charge-offs$— $147 $2,326 $149 $13,844 $11,248 $4,121 $31,835 
As of and For The Year Ended December 31, 2024
Risk Grade RatingsTerm Loans Amortized Cost Basis by Origination YearRevolving
Loans		Total
(dollars in thousands)20242023202220212020Prior
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 
Gross charge-offs— — — — — — — — 
 
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 
Past Due and Non-accrual Loans
An analysis of portfolio loans that were past due and still accruing, or on a non-accrual status, is presented in the table below:
As of March 31, 2025
Loans past due, still accruingNon-accrual
Loans		Non-accrual Loans with No Allowance for Credit Losses
(dollars in thousands)30-59 Days60-89 Days90+Days
Commercial loans
C&I and other commercial$1,778 $5,110 $794 $38,205 $1,224 
CRE1,887 2,399 73 7,699 1,514 
Real estate construction— — — 19 — 
Past due and non-accrual commercial loans3,665 7,509 867 45,923 2,738 
Retail loans
Retail real estate3,778 638 5,190 2,630 194 
Retail other1,458 1,506 20 94 — 
Past due and non-accrual retail loans5,236 2,144 5,210 2,724 194 
Total past due and non-accrual loans$8,901 $9,653 $6,077 $48,647 $2,932 
As of December 31, 2024
Loans past due, still accruingNon-accrual
Loans		Non-accrual Loans with No Allowance for Credit Losses
(dollars in thousands)30-59 Days60-89 Days90+Days
Commercial loans
C&I and other commercial$95 $— $— $3,852 $1,224 
CRE42 2,759 — 15,053 15,000 
Real estate construction41 — — 23 — 
Past due and non-accrual commercial loans178 2,759 — 18,928 16,224 
Retail loans
Retail real estate3,280 683 1,115 2,984 194 
Retail other1,094 130 34 176 — 
Past due and non-accrual retail loans4,374 813 1,149 3,160 194 
Total past due and non-accrual loans$4,552 $3,572 $1,149 $22,088 $16,418 
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 $0.2 million for the three months ended March 31, 2025, and was $0.3 million for the three months ended March 31, 2024. The amount of interest collected on those loans and recognized on a cash basis that was included in interest income was immaterial for the three months ended March 31, 2025 and 2024.
Loan Modifications for Borrowers Experiencing Financial Difficulty
The following tables present the amortized cost basis of loans that were modified—specifically in the form of (1) principal forgiveness, (2) an interest rate reduction, (3) an other-than-insignificant payment deferral, and/or (4) a term extension—for borrowers experiencing financial difficulty during the periods indicated, disaggregated by lending activity and the type of modification:
Three Months Ended March 31, 2025
(dollars in thousands)
Payment Deferral
% of Total Class of Financing Receivable
Term Extension
% of Total Class of Financing Receivable
Modified Loans
C&I and other commercial
$10,832 0.2 %$21,923 0.5 %
CRE
— — %4,719 0.1 %
Real estate construction
— — %5,208 0.5 %
Total of loans modified during the period1
$10,832 0.1 %$31,850 0.2 %
___________________________________________
1.All modifications were for loans classified as substandard.
Three Months Ended March 31, 2024
(dollars in thousands)
Payment Deferral1
% of Total Class of Financing Receivable
Term Extension2
% of Total Class of Financing Receivable
Modified Loans
C&I and other commercial
$10,000 0.5 %$17,155 0.9 %
CRE
— — %1,705 0.1 %
Total of loans modified during the period
$10,000 0.1 %$18,860 0.2 %
___________________________________________
1.One loan was modified and classified as non-accrual during the three months ended March 31, 2024.
2.Modifications to extend loan terms also included, in some cases, interest rate increases during the extension period. All modifications were for loans classified as substandard.
The following table summarizes the effects of loan modifications made during the periods indicated for borrowers experiencing financial difficulty:
Three Months Ended March 31,
20252024
Weighted Average Term ExtensionWeighted Average Term Extension
Loan Modifications
C&I and other commercial
23.1 months
19.1 months
CRE
6.1 months
2.0 months
Real estate construction
15.0 months
—
Weighted average modifications
19.3 months
17.6 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:
As of March 31, 2025
(dollars in thousands)Current30-89 Days90+ DaysNon-accrual
Modified Loans
C&I and other commercial$33,620 $— $— $— 
CRE6,115 — — — 
Real estate construction5,208 — — — 
Amortized cost of modified loans$44,943 $— $— $— 
No loans had a payment default during the three months ended March 31, 2024 or 2025, after having been modified during the 12 months before that default for borrowers experiencing financial difficulty. A default occurs when a loan is 90 days or more past due or transferred to non-accrual status.
Collateral Dependent Loans
Management's evaluation as to the ultimate collectability of loans includes estimates regarding future cash flows from operations and the value of property, real and personal, pledged as collateral. These estimates are affected by changing economic conditions and the economic prospects of borrowers. Collateral dependent loans are loans in which repayment is expected to be provided solely by the operation or sale of the underlying collateral and there are no other available and reliable sources of repayment. Loans are written down to the lower of cost or fair value of the underlying collateral, less estimated costs to sell. Busey had $45.1 million and $19.3 million of collateral dependent loans secured by real estate or business assets as of March 31, 2025, and December 31, 2024, respectively.
Foreclosures
Busey’s recorded investment in residential real estate loans that were in the process of foreclosure was $5.7 million as of March 31, 2025. Busey follows Federal Housing Finance Agency guidelines on single-family foreclosures and real estate owned evictions on portfolio loans.
Allowance for Credit Losses
The ACL is a valuation account that is deducted from the portfolio loans’ amortized cost bases to present the net amount expected to be collected on the portfolio loans. The ACL is established through the provision for credit losses charged to income. Portfolio loans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed. Recoveries are recognized up to the aggregate amount of previously charged-off balances.
Management estimates the ACL balance using relevant available information from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The ACL consists of three components: (i) specific allocations/individual reserves; (ii) quantitative reserves; and (iii) qualitative reserves. For Busey Bank, a non-discounted cash flow model is used for the quantitative reserves. 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. For CrossFirst Bank, a cohort method is used for the quantitative reserves, with a look-back period of approximately six years to establish the cohort population. Busey is working to develop a new model with combined bank data for use once Busey Bank and CrossFirst Bank merge.
The following tables summarize activity in the ACL attributable to each lending activity. Allocation of a portion of the ACL to one lending activity does not preclude its availability to absorb losses from other lending activities:
Three Months Ended March 31, 2025
(dollars in thousands)C&I and Other CommercialCREReal Estate
Construction		Retail
Real Estate		Retail OtherTotal
ACL balance, December 31, 2024$21,589 $32,301 $3,345 $23,711 $2,458 $83,404 
Day 1 PCD1
75,569 21,588 2,112 1,430 84 100,783 
Day 2 Provision for credit losses2
22,648 15,104 2,911 1,628 142 42,433 
Provision for credit losses623 (393)311 (503)(19)19 
Charged-off(31,221)(253)— — (361)(31,835)
Recoveries96 131 10 133 36 406 
ACL balance, March 31, 2025$89,304 $68,478 $8,689 $26,399 $2,340 $195,210 
___________________________________________
1.The Day 1 PCD is attributable to the CrossFirst acquisition (see “Note 2. Mergers and Acquisitions”), and represents the initial adjustment to the fair value of the PCD loans.
2.The Day 2 provision for credit losses is attributable to the CrossFirst acquisition (see “Note 2. Mergers and Acquisitions”), and represents the initial provision for non-PCD loans.
Three Months Ended March 31, 2024
(dollars in thousands)C&I and Other CommercialCREReal Estate
Construction		Retail
Real Estate		Retail OtherTotal
ACL balance, December 31, 2023$21,256 $35,465 $5,163 $26,298 $3,558 $91,740 
Provision for credit losses10,125 (1,864)(491)(2,093)(639)5,038 
Charged-off(5,218)(96)— (52)(94)(5,460)
Recoveries44 — 41 128 31 244 
ACL balance, March 31, 2024$26,207 $33,505 $4,713 $24,281 $2,856 $91,562 
Net charge-offs during the three months ended March 31, 2025, included $29.6 million related to PCD loans acquired from CrossFirst Bank, which were fully reserved at acquisition and did not require recording additional provision expense.