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Debt Securities

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Debt Securities

Debt Securities

Busey's portfolio of debt securities includes both available for sale and held to maturity securities. The tables below provide the amortized cost, unrealized gains and losses, and fair values of debt securities summarized by major category (dollars in thousands):

			As of September 30, 2023
			Amortized Cost						Unrealized												Fair Value
									Gross Gains						Gross Losses
Debt securities available for sale
U.S. Treasury securities			$	51,522					$	—					$	(1,392)					$	50,130
Obligations of U.S. government corporations and agencies			10,071						2						(254)						9,819
Obligations of states and political subdivisions1			254,549						6						(27,758)						226,797
Asset-backed securities			486,517						—						(7,069)						479,448
Commercial mortgage-backed securities			120,117						—						(19,817)						100,300
Residential mortgage-backed securities2			1,343,324						—						(254,528)						1,088,796
Corporate debt securities			251,194						91						(23,734)						227,551
Total debt securities available for sale			$	2,517,294					$	99					$	(334,552)					$	2,182,841

___________________________________________

1.Includes securities marked at par, with no gain or loss to report.

2.Gross gains on Residential mortgage-backed securities were insignificant, rounding to zero thousand.

			Amortized Cost						Unrecognized												Fair Value
									Gross Gains						Gross Losses
Debt securities held to maturity
Commercial mortgage-backed securities			$	459,866					$	—					$	(93,401)					$	366,465
Residential mortgage-backed securities			422,748						—						(87,537)						335,211
Total debt securities held to maturity			$	882,614					$	—					$	(180,938)					$	701,676

			As of December 31, 2022
			Amortized Cost						Unrealized												Fair Value
									Gross Gains						Gross Losses
Debt securities available for sale
U.S. Treasury securities			$	117,805					$	—					$	(3,744)					$	114,061
Obligations of U.S. government corporations and agencies			20,097						3						(321)						19,779
Obligations of states and political subdivisions			283,481						106						(26,075)						257,512
Asset-backed securities			489,558						—						(19,683)						469,875
Commercial mortgage-backed securities			124,423						—						(16,029)						108,394
Residential mortgage-backed securities			1,463,971						2						(220,717)						1,243,256
Corporate debt securities			273,118						33						(24,635)						248,516
Total debt securities available for sale			$	2,772,453					$	144					$	(311,204)					$	2,461,393

			Amortized Cost						Unrecognized												Fair Value
									Gross Gains						Gross Losses
Debt securities held to maturity
Commercial mortgage-backed securities			$	474,820					$	—					$	(63,738)					$	411,082
Residential mortgage-backed securities			443,492						—						(69,279)						374,213
Total debt securities held to maturity			$	918,312					$	—					$	(133,017)					$	785,295

Maturities of Debt Securities

Amortized cost and fair value of debt securities, by contractual maturity or pre-refunded date, are shown below. Mortgages underlying mortgage-backed securities and asset-backed securities may be called or prepaid; therefore, actual maturities could differ from the contractual maturities. All mortgage-backed securities were issued by U.S. government corporations and agencies (dollars in thousands):

			As of September 30, 2023
			Amortized Cost						Fair Value
Debt securities available for sale
Due in one year or less			$	109,189					$	106,940
Due after one year through five years			312,419						289,027
Due after five years through ten years			431,297						389,702
Due after ten years			1,664,389						1,397,172
Debt securities available for sale			$	2,517,294					$	2,182,841

Debt securities held to maturity
Due after one year through five years			$	63,474					$	58,144
Due after five years through ten years			40,076						34,985
Due after ten years			779,064						608,547
Debt securities held to maturity			$	882,614					$	701,676

Gains and Losses on Debt Securities Available for Sale

Realized gains and losses related to sales and calls of debt securities available for sale are summarized as follows (dollars in thousands):

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
Realized gains and losses on debt securities
Gross gains on debt securities			$	10					$	—					$	20					$	114
Gross (losses) on debt securities			(43)						(74)						(227)						(86)
Realized net gains (losses) on debt securities1			$	(33)					$	(74)					$	(207)					$	28

___________________________________________

1.Net gains (losses) on sales of securities reported in the Consolidated Statements of Income (Unaudited) include sales of equity securities, excluded in this table.

Debt securities with carrying amounts of $819.8 million on September 30, 2023, and $746.7 million on December 31, 2022, were pledged as collateral for public deposits, securities sold under agreements to repurchase, and for other purposes as required.

Debt Securities in an Unrealized or Unrecognized Loss Position

The following information pertains to debt securities with gross unrealized or unrecognized losses, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (dollars in thousands):

			As of September 30, 2023
			Less than 12 months												12 months or more												Total
			Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
Debt securities available for sale
U.S. Treasury securities			$	—					$	—					$	50,130					$	(1,392)					$	50,130					$	(1,392)
Obligations of U.S. government corporations and agencies			1,983						(6)						7,699						(248)						9,682						(254)
Obligations of states and political subdivisions			45,778						(1,219)						177,195						(26,539)						222,973						(27,758)
Asset-backed securities			—						—						479,448						(7,069)						479,448						(7,069)
Commercial mortgage-backed securities			—						—						100,300						(19,817)						100,300						(19,817)
Residential mortgage-backed securities			431						(10)						1,088,344						(254,518)						1,088,775						(254,528)
Corporate debt securities			1,457						(2)						219,074						(23,732)						220,531						(23,734)
Debt securities available for sale with gross unrealized losses			$	49,649					$	(1,237)					$	2,122,190					$	(333,315)					$	2,171,839					$	(334,552)

									12 months or more												Total
															Fair Value						Unrecognized Losses						Fair Value						Unrecognized Losses
Debt securities held to maturity
Commercial mortgage-backed securities															$	366,465					$	(93,401)					$	366,465					$	(93,401)
Residential mortgage-backed securities															335,211						(87,537)						335,211						(87,537)
Debt securities held to maturity with gross unrecognized losses															$	701,676					$	(180,938)					$	701,676					$	(180,938)

			As of December 31, 2022
			Less than 12 months												12 months or more												Total
			Fair Value						Unrealized Losses						Fair Value						Unrealized Losses						Fair Value						Unrealized Losses
Debt securities available for sale
U.S. Treasury securities1			$	74					$	—					$	113,987					$	(3,744)					$	114,061					$	(3,744)
Obligations of U.S. government corporations and agencies			19,603						(321)						—						—						19,603						(321)
Obligations of states and political subdivisions			166,147						(10,059)						75,217						(16,016)						241,364						(26,075)
Asset-backed securities			390,164						(15,648)						79,711						(4,035)						469,875						(19,683)
Commercial mortgage-backed securities			89,428						(12,623)						18,966						(3,406)						108,394						(16,029)
Residential mortgage-backed securities			366,221						(38,111)						876,668						(182,606)						1,242,889						(220,717)
Corporate debt securities			39,037						(5,079)						204,310						(19,556)						243,347						(24,635)
Debt securities available for sale with gross unrealized losses			$	1,070,674					$	(81,841)					$	1,368,859					$	(229,363)					$	2,439,533					$	(311,204)

			Less than 12 months												12 months or more												Total
			Fair Value						Unrecognized Losses						Fair Value						Unrecognized Losses						Fair Value						Unrecognized Losses
Debt securities held to maturity
Commercial mortgage-backed securities			$	58,065					$	(8,009)					$	353,017					$	(55,729)					$	411,082					$	(63,738)
Residential mortgage-backed securities			—						—						374,213						(69,279)						374,213						(69,279)
Debt securities held to maturity with gross unrecognized losses			$	58,065					$	(8,009)					$	727,230					$	(125,008)					$	785,295					$	(133,017)

___________________________________________

1.Unrealized losses for U.S. Treasury securities that had been in a continuous unrealized loss position for less than 12 months were insignificant, rounding to zero thousand.

Additional information about debt securities in an unrealized or unrecognized loss position is presented in the tables below (dollars in thousands):

			As of September 30, 2023
			Available for Sale						Held to Maturity						Total
Debt securities with gross unrealized or unrecognized losses, fair value			$	2,171,839					$	701,676					$	2,873,515
Gross unrealized or unrecognized losses on debt securities			334,552						180,938						515,490
Ratio of gross unrealized or unrecognized losses to debt securities with gross unrealized or unrecognized losses			15.4		%				25.8		%				17.9		%
Count of debt securities			1,001						55						1,056
Count of debt securities in an unrealized or unrecognized loss position			982						55						1,037

			As of December 31, 2022
			Available for Sale						Held to Maturity						Total
Debt securities with gross unrealized or unrecognized losses, fair value			$	2,439,533					$	785,295					$	3,224,828
Gross unrealized or unrecognized losses on debt securities			311,204						133,017						444,221
Ratio of gross unrealized or unrecognized losses to debt securities with gross unrealized or unrecognized losses			12.8		%				16.9		%				13.8		%
Count of debt securities			1,091						55						1,146
Count of debt securities in an unrealized or unrecognized loss position			1,032						55						1,087

Unrealized and unrecognized losses were related to changes in market interest rates and market conditions that do not represent credit-related impairments. Busey does not intend to sell securities that are in an unrealized or unrecognized loss position, and it is more likely than not that the Company will recover the amortized cost prior to being required to sell the debt securities. Full collection of the amounts due according to the contractual terms of the debt securities is expected; therefore, no ACL was recorded in relation to debt securities, and the impairment related to noncredit factors on debt securities available for sale is recognized in AOCI, net of applicable taxes. As of September 30, 2023, Busey did not hold general obligation bonds of any single issuer, the aggregate of which exceeded 10% of the Company’s stockholders’ equity.

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- Definition

The entire disclosure for investments in certain debt and equity securities.

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