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Borrowings

3 Months Ended

Mar. 31, 2022

Borrowings

Borrowings

Note 6:  Borrowings

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Securities Sold Under Agreements to Repurchase

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Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature daily.  Securities sold under agreements to repurchase are reflected at the amount of cash received in connection with the transaction.  The underlying securities are held by the Company’s safekeeping agent.  The Company may be required to provide additional collateral based on fluctuations in the fair value of the underlying securities.  Securities sold under agreements to repurchase were as follows (dollars in thousands):

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​	​	​	​	​	​	​	​
​		As of					​
​	​	March 31,		​	December 31,		​
​		2022			2021
Securities sold under agreements to repurchase	​	$	255,668	​	$	270,139	​
Weighted average rate for securities sold under agreements to repurchase	​	​	0.15	%	​	0.08	%

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Term Loan

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On May 28, 2021, the Company entered into a Second Amended and Restated Credit Agreement, pursuant to which the Company has access to (i) a $40.0 million revolving line of credit with a termination date of April 30, 2022, and (ii) a $60.0 million term loan with a maturity date of May 31, 2026.  The loans had an annual interest rate of 1.75% plus the one-month LIBOR rate.  On April 30, 2022, the agreement was amended, effecting an extension of the termination date for the revolving line of credit to April 30, 2023, and providing for the transition from a LIBOR-indexed interest rate to a SOFR-indexed interest rate.  Under the terms of the amendment, the loans now have an annual interest rate of 1.80% plus the one-month forward-looking term rate based on SOFR.

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Proceeds of the term loan were used to fund a part of the cash portion of the merger consideration related to the acquisition of CAC in the second quarter of 2021, and for general corporate purposes.  As of March 31, 2022, there was no balance outstanding on the revolving credit facility and a total of $51.0 million outstanding on the term loan, of which $12.0 million was short-term and $39.0 million was long-term.    The revolving credit facility incurs a non-usage fee based on any undrawn amounts.  Quarterly payments on the term loan reduce the outstanding principal balance by $3.0 million each quarter.

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Short-term Borrowings

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First Busey’s short-term borrowings include loans maturing within one year of the loan origination date, as well as the current portion of long-term debt that is due within 12 months.  Short-term borrowings are summarized as follows (dollars in thousands):

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​	​	​	​	​	​	​
​		As of
​	​	March 31,		​	December 31,
​		2022			2021
Short-term borrowings	​	​	​	​	​	​
FHLB advances maturing in less than one year from date of origination, and the current portion of long-term FHLB advances due within 12 months	​	$	5,683	​	$	5,678
Term Loan, current portion due within 12 months	​	​	12,000	​	​	12,000
Total short-term debt	​	$	17,683	​	$	17,678

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Federal funds purchased are short-term borrowings that generally mature between one and 90 days.  The Company had no federal funds purchased as of March 31, 2022 or December 31, 2021.

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Long-term Debt

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First Busey’s long-term debt consists of loans maturing more than one year from the loan origination date, excluding the current portion that is due within 12 months.  Long-term debt is summarized as follows (dollars in thousands):

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​	​	​	​	​	​	​
​		As of
​	​	March 31,		​	December 31,
​		2022			2021
Long-term debt	​	​	​	​	​	​
Notes payable, FHLB, original maturity of 5 years, collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock	​	$	3,881	​	$	4,056
Term Loan	​	​	39,000	​	​	42,000
Total long-term debt	​	$	42,881	​	$	46,056

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As of March 31, 2022, and December 31, 2021, funds borrowed from the FHLB, listed above, consisted of one variable-rate note maturing May 2023, with an interest rate of 3.04%.

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Senior and Subordinated Notes

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On May 25, 2017, the Company issued $40.0 million of 3.75% senior notes that mature on May 25, 2022.  The senior notes are payable semi-annually on each May 25 and November 25, commencing on November 25, 2017.  The senior notes are not subject to optional redemption by the Company.  Additionally, on May 25, 2017, the Company issued $60.0 million of fixed-to-floating rate subordinated notes that mature on May 25, 2027.  The subordinated notes, which qualify as Tier 2 capital for First Busey, bear interest at an annual rate of 4.75% for the first five years after issuance and thereafter bear interest at a floating rate equal to three-month LIBOR plus a spread of 2.919%, as calculated on each applicable determination date.  The subordinated notes are payable semi-annually on each May 25 and November 25, commencing on November 25, 2017, during the five-year fixed-term, and thereafter on February 25, May 25, August 25, and November 25 of each year, commencing on August 25, 2022.  The subordinated notes have an optional redemption in whole or in part on any interest payment date on or after May 25, 2022.  The senior notes and subordinated notes are unsecured obligations of the Company.

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On June 1, 2020, the Company issued $125.0 million of fixed-to-floating rate subordinated notes that mature on June 1, 2030.  The subordinated notes, which qualify as Tier 2 capital for First Busey, bear interest at an annual rate of 5.25% for the first five years after issuance and thereafter bear interest at a floating rate equal to a three-month benchmark rate plus a spread of 5.11%, as calculated on each applicable determination date.  The subordinated notes are payable semi-annually on each June 1 and December 1 during the five-year fixed-term, and thereafter on March 1, June 1, September 1, and December 1 of each year, commencing on September 1, 2025.  The subordinated notes have an optional redemption in whole or in part on any interest payment date on or after June 1, 2025.  The subordinated notes are unsecured obligations of the Company.

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Unamortized debt issuance costs related to senior notes and subordinated notes are presented in the following table (dollars in thousands):

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​	​	​	​	​	​	​
​		As of
​	​	March 31,		​	December 31,
​		2022			2021
Unamortized debt issuance costs	​	​	​	​	​	​
Senior notes issued in 2017	​	$	22	​	$	56
Subordinated notes issued in 2017	​	​	254	​	​	549
Subordinated notes issued in 2020	​	​	1,566	​	​	1,678
Total unamortized debt issuance costs	​	$	1,842	​	$	2,283

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The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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