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Portfolio Loans (Tables)

12 Months Ended

Dec. 31, 2021

Distributions of portfolio loans were as follows (dollars in thousands):


	As of December 31,
	2021		2020
Portfolio loans
Commercial	$	1,943,886	$	2,014,576
Commercial real estate		3,119,807		2,892,535
Real estate construction		385,996		461,786
Retail real estate		1,512,976		1,407,852
Retail other		226,333		37,428
Total portfolio loans	$	7,188,998	$	6,814,177

ACL		(87,887)		(101,048)
Portfolio loans, net	$	7,101,111	$	6,713,129

Summary of risk grades segregated by category of portfolio loans (excluding accretable purchase accounting adjustments and clearings)

The following table is a summary of risk grades segregated by category of portfolio loans (dollars in thousands):


	As of December 31, 2021
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual		Total
Portfolio loans
Commercial	$	1,747,756	$	93,582	$	69,427	$	26,117	$	7,004	$	1,943,886
Commercial real estate		2,682,441		343,304		49,695		38,394		5,973		3,119,807
Real estate construction		369,797		13,793		6		2,400		—		385,996
Retail real estate		1,491,845		12,374		1,992		3,867		2,898		1,512,976
Retail other		226,262		—		—		—		71		226,333
Total portfolio loans	$	6,518,101	$	463,053	$	121,120	$	70,778	$	15,946	$	7,188,998


	As of December 31, 2020
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual		Total
Portfolio loans
Commercial	$	1,768,755	$	136,948	$	72,447	$	27,903	$	8,523	$	2,014,576
Commercial real estate		2,393,372		383,277		75,486		34,897		5,503		2,892,535
Real estate construction		434,681		24,481		77		2,546		1		461,786
Retail real estate		1,382,616		10,264		2,471		3,702		8,799		1,407,852
Retail other		37,324		—		—		—		104		37,428
Total portfolio loans	$	6,016,748	$	554,970	$	150,481	$	69,048	$	22,930	$	6,814,177

Risk grades of portfolio loans, further sorted by origination

Risk grades of portfolio loans, further sorted by origination year, are as follows (dollars in thousands):


	As of December 31, 2021
	Term Loans Amortized Cost Basis by Origination Year													Revolving
Risk Grade Ratings	2021		2020		2019		2018		2017			Prior		loans		Total
Commercial
Pass	$	512,729	$	228,811	$	107,877	$	84,873	$	74,351	$	122,418	$	616,697	$	1,747,756
Watch		13,847		5,913		14,274		5,060		1,361		2,866		50,261		93,582
Special Mention		7,062		898		5,961		4,025		6,790		11,845		32,846		69,427
Substandard		3,595		3,362		3,136		1,855		1,125		5,459		7,585		26,117
Substandard non-accrual		4,126		364		142		—		320		52		2,000		7,004
Total commercial		541,359		239,348		131,390		95,813		83,947		142,640		709,389		1,943,886

Commercial real estate
Pass		969,548		637,550		425,850		235,928		200,373		198,002		15,190		2,682,441
Watch		51,560		38,820		123,324		48,088		46,761		32,608		2,143		343,304
Special Mention		9,542		7,060		6,585		10,098		6,357		9,870		183		49,695
Substandard		21,002		3,781		1,218		11,451		521		421		—		38,394
Substandard non-accrual		112		181		359		1,893		3,407		21		—		5,973
Total commercial real estate		1,051,764		687,392		557,336		307,458		257,419		240,922		17,516		3,119,807

Real estate construction
Pass		202,082		123,491		31,927		3,155		738		1,223		7,181		369,797
Watch		7,886		4,159		54		—		1,574		120		—		13,793
Special Mention		—		—		6		—		—		—		—		6
Substandard		—		2,400		—		—		—		—		—		2,400
Substandard non-accrual		—		—		—		—		—		—		—		—
Total real estate construction		209,968		130,050		31,987		3,155		2,312		1,343		7,181		385,996

Retail real estate
Pass		523,541		215,068		96,617		79,158		82,478		281,737		213,246		1,491,845
Watch		4,100		2,460		1,780		1,312		343		150		2,229		12,374
Special Mention		1,965		27		—		—		—		—		—		1,992
Substandard		1,369		232		12		71		165		1,687		331		3,867
Substandard non-accrual		235		63		—		16		227		1,705		652		2,898
Total retail real estate		531,210		217,850		98,409		80,557		83,213		285,279		216,458		1,512,976

Retail other
Pass		59,366		22,305		26,126		16,189		7,180		1,326		93,770		226,262
Watch		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Substandard non-accrual		34		10		—		14		13		—		—		71
Total retail other		59,400		22,315		26,126		16,203		7,193		1,326		93,770		226,333

Total portfolio loans	$	2,393,701	$	1,296,955	$	845,248	$	503,186	$	434,084	$	671,510	$	1,044,314	$	7,188,998


	As of December 31, 2020
	Term Loans Amortized Cost Basis by Origination Year													Revolving
Risk Grade Ratings	2020		2019		2018		2017		2016			Prior		loans		Total
Commercial
Pass	$	812,536	$	158,307	$	107,565	$	93,190	$	61,847	$	79,970	$	455,340	$	1,768,755
Watch		16,544		22,247		14,954		13,724		2,577		10,943		55,959		136,948
Special Mention		6,402		2,671		2,069		7,164		6,763		13,733		33,645		72,447
Substandard		7,772		3,791		2,371		1,939		819		1,233		9,978		27,903
Substandard non-accrual		150		3,045		451		2,168		641		68		2,000		8,523
Total commercial		843,404		190,061		127,410		118,185		72,647		105,947		556,922		2,014,576

Commercial real estate
Pass		717,559		503,977		360,573		384,843		180,555		227,068		18,797		2,393,372
Watch		88,297		110,526		90,412		33,734		32,887		27,023		398		383,277
Special Mention		16,490		8,858		10,490		10,505		7,102		21,808		233		75,486
Substandard		17,445		4,166		1,491		7,812		2,111		1,377		495		34,897
Substandard non-accrual		1,091		776		821		882		286		1,647		—		5,503
Total commercial real estate		840,882		628,303		463,787		437,776		222,941		278,923		19,923		2,892,535

Real estate construction
Pass		179,232		171,663		64,025		1,468		761		1,444		16,088		434,681
Watch		18,485		3,657		337		1,838		164						24,481
Special Mention		67		10		—		—		—		—		—		77
Substandard		2,400		—		—		—		146		—		—		2,546
Substandard non-accrual		—		—		—		—		—		1		—		1
Total real estate construction		200,184		175,330		64,362		3,306		1,071		1,445		16,088		461,786

Retail real estate
Pass		319,302		162,711		135,065		136,427		140,600		257,147		231,364		1,382,616
Watch		2,715		2,053		1,396		349		579		233		2,939		10,264
Special Mention		509		—		—		—		1,962		—		—		2,471
Substandard		899		96		56		26		727		1,631		267		3,702
Substandard non-accrual		687		78		646		1,147		233		4,815		1,193		8,799
Total retail real estate		324,112		164,938		137,163		137,949		144,101		263,826		235,763		1,407,852

Retail other
Pass		8,357		9,430		5,600		2,516		691		440		10,290		37,324
Watch		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Substandard non-accrual		14		7		5		15		5		57		1		104
Total retail other		8,371		9,437		5,605		2,531		696		497		10,291		37,428

Total portfolio loans	$	2,216,953	$	1,168,069	$	798,327	$	699,747	$	441,456	$	650,638	$	838,987	$	6,814,177

Summary of portfolio loans that are past due and still accruing or on a non-accrual status

An analysis of the amortized cost basis of portfolio loans that are past due and still accruing, or on a non-accrual status, is as follows (dollars in thousands):


	As of December 31, 2021
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Past due and non-accrual loans
Commercial	$	363	$	10	$	213	$	7,004
Commercial real estate		151		441		—		5,973
Real estate construction		56		—		—		—
Retail real estate		3,312		1,830		693		2,898
Retail other		82		16		—		71
Total past due and non-accrual loans	$	3,964	$	2,297	$	906	$	15,946


	As of December 31, 2020
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Past due and non-accrual loans
Commercial	$	243	$	—	$	—	$	8,523
Commercial real estate		—		—		—		5,503
Real estate construction		237		235		—		1
Retail real estate		6,248		400		1,305		8,799
Retail other		66		149		66		104
Total past due and non-accrual loans	$	6,794	$	784	$	1,371	$	22,930

Summary of TDR loans

TDR loan balances are summarized as follows (dollars in thousands):


	As of December 31,
	2021		2020
TDRs
In compliance with modified terms	$	1,801	$	3,814
30 – 89 days past due		—		15
Non-performing TDRs		551		1,249
Total TDRs	$	2,352	$	5,078

Loans that were designated as TDRs during the periods presented are summarized as follows (dollars in thousands):


	Newly Designated TDRs
			Recorded Investment ⁽²⁾
	Number of		Rate		Payment
	Contracts ⁽¹⁾		Modification ⁽³⁾		Modification ⁽³⁾
December 31, 2021
Commercial		1	$	364	$	—

December 31, 2020
Commercial		3	$	130	$	—
Commercial real estate		1		651		—
Retail real estate		4		—		986
Total		8	$	781	$	986

December 31, 2019
Commercial		2	$	342	$	—
Commercial real estate ⁽⁴⁾		1		—		—
Real estate construction		1		185		—
Total		4	$	527	$	—

(1)

Total number of contracts that were newly designated as TDRs during years ended on the dates indicated.

(2)

Recorded investment for newly designated TDR’s that were still outstanding as of the dates indicated.

(3)

TDRs may include multiple concessions; those that include an interest rate concession and payment concession are shown in the rate modification columns.

(4)

One commercial real estate TDR that was entered into during the year ended December 31, 2019, subsequently had payment defaults; it was then transferred to OREO by December 31, 2019.

Schedule of defaults occurring during the period designated as TDRs

Loans that were designated as TDRs and had subsequent defaults within 12 months are summarized in the table below (dollars in thousands). A default occurs when a loan is 90 days or more past due or transferred to non-accrual.


	Year Ended December 31,
	2021		2020		2019
Defaults on loans designated as TDRs within the last 12 months
Commercial	$	—	$	—	$	—
Commercial real estate		—		—		3,277

Schedule of suspended requirements under GAAP related to TDR classification

The Company’s TDR loan totals do not include the following modified loans with payment deferrals that fall under the CARES Act or Interagency Statement that suspended requirements under GAAP related to TDR classification (dollars in thousands):


	As of December 31, 2021				As of December 31, 2020
	Number of		Recorded		Number of		Recorded
	Contracts		Investment		Contracts		Investment
COVID-19 loan modifications
Commercial loans:
Full payment deferral ⁽¹⁾		—	$	—		46	$	37,150
Interest-only deferrals		32		128,730		23		85,270
Blended principal and interest and interest-only deferrals		—		—		29		86,204
Total commercial loans		32		128,730		98		208,624

Retail loans:
Mortgage and personal loan deferrals		2		137		351		47,671
Purchased home equity line of credit pool deferrals		—		—		1		119
Total retail loans		2		137		352		47,790

Total COVID-19 loans modifications		34	$	128,867		450	$	256,414

(1)

Includes SBA loans with additional 90-day full payment deferrals granted by Busey.

Schedule of details of impaired loans, segregated by category


	As of and for the Year Ended December 31, 2021
	Unpaid		Recorded Investment								Average
	Principal		With No		With				Related		Recorded
	Balance		Allowance		Allowance		Total		Allowance		Investment
Loans evaluated individually
Commercial	$	10,247	$	498	$	6,490	$	6,988	$	3,564	$	8,791
Commercial real estate		6,456		5,750		—		5,750		—		6,390
Real estate construction		272		272		—		272		—		282
Retail real estate		2,514		2,345		25		2,370		25		4,093
Retail other		—		—		—		—		—		—
Total loans evaluated individually	$	19,489	$	8,865	$	6,515	$	15,380	$	3,589	$	19,556


	As of and for the Year Ended December 31, 2020
	Unpaid		Recorded Investment								Average
	Principal		With No		With				Related		Recorded
	Balance		Allowance		Allowance		Total		Allowance		Investment
Loans evaluated individually
Commercial	$	16,771	$	4,001	$	4,371	$	8,372	$	1,600	$	7,920
Commercial real estate		7,406		6,067		—		6,067		—		9,349
Real estate construction		292		292		—		292		—		581
Retail real estate		5,873		5,490		25		5,515		25		7,439
Retail other		—		—		—		—		—		10
Total loans evaluated individually	$	30,342	$	15,850	$	4,396	$	20,246	$	1,625	$	25,299

Schedule of activity on the allowance for loan losses

The following tables summarize activity in the ACL. Allocation of a portion of the ACL to one category does not preclude its availability to absorb losses in other categories (dollars in thousands):


	As of and for the Year Ended December 31, 2021
			Commercial		Real Estate		Retail
	Commercial		Real Estate		Construction		Real Estate		Retail Other		Total
ACL beginning balance	$	23,866	$	46,230	$	8,193	$	21,992	$	767	$	101,048
Day 1 PCD ⁽¹⁾		3,546		336		—		129		167		4,178
Provision for credit losses		(2,160)		(7,651)		(3,180)		(4,456)		2,346		(15,101)
Charged-off		(2,026)		(925)		(209)		(1,145)		(478)		(4,783)
Recoveries		629		259		298		1,069		290		2,545
ACL ending balance	$	23,855	$	38,249	$	5,102	$	17,589	$	3,092	$	87,887

(1)

The Day 1 PCD is attributable to the CAC acquisition.


	As of and for the Year Ended December 31, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance, prior to adoption of ASC 326-30	$	18,291	$	21,190	$	3,204	$	10,495	$	568	$	53,748
Adoption of ASC 326-30		715		9,306		2,954		3,292		566		16,833
Provision for credit losses		10,832		17,511		1,452		9,050		(48)		38,797
Charged-off		(6,376)		(1,972)		(18)		(2,057)		(665)		(11,088)
Recoveries		404		195		601		1,212		346		2,758
ACL ending balance	$	23,866	$	46,230	$	8,193	$	21,992	$	767	$	101,048


	As of and for the Year Ended December 31, 2019
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	17,829	$	21,137	$	2,723	$	8,471	$	488	$	50,648
Provision for credit losses		4,893		3,002		(70)		2,102		479		10,406
Charged-off		(6,478)		(3,257)		—		(1,162)		(863)		(11,760)
Recoveries		2,047		308		551		1,084		464		4,454
Ending balance	$	18,291	$	21,190	$	3,204	$	10,495	$	568	$	53,748

Schedule of allowance for loan losses and recorded investments in portfolio loans, by category

The following tables present the ACL and amortized cost of portfolio loans by category (dollars in thousands):


	As of December 31, 2021
	Portfolio Loans						ACL Attributed to Portfolio Loans
	Collectively		Individually				Collectively		Individually
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Impairment		Impairment		Total		Impairment		Impairment		Total
Portfolio loan category
Commercial	$	1,936,898	$	6,988	$	1,943,886	$	20,291	$	3,564	$	23,855
Commercial real estate		3,114,057		5,750		3,119,807		38,249		—		38,249
Real estate construction		385,724		272		385,996		5,102		—		5,102
Retail real estate		1,510,606		2,370		1,512,976		17,564		25		17,589
Retail other		226,333		—		226,333		3,092		—		3,092
Total portfolio loans and related ACL	$	7,173,618	$	15,380	$	7,188,998	$	84,298	$	3,589	$	87,887


	As of December 31, 2020
	Portfolio Loans						ACL Attributed to Portfolio Loans
	Collectively		Individually				Collectively		Individually
	Evaluated for		Evaluated for				Evaluated for		Evaluated for
	Impairment		Impairment		Total		Impairment		Impairment		Total
Portfolio loan category
Commercial	$	2,006,204	$	8,372	$	2,014,576	$	22,266	$	1,600	$	23,866
Commercial real estate		2,886,468		6,067		2,892,535		46,230		—		46,230
Real estate construction		461,494		292		461,786		8,193		—		8,193
Retail real estate		1,402,337		5,515		1,407,852		21,967		25		21,992
Retail other		37,428		—		37,428		767		—		767
Total portfolio loans and related ACL	$	6,793,931	$	20,246	$	6,814,177	$	99,423	$	1,625	$	101,048