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DEBT SECURITIES

3 Months Ended

Mar. 31, 2024

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 March 31, 2024
			Amortized Cost						Unrealized												Fair Value
									Gross Gains						Gross Losses
Debt securities available for sale
U.S. Treasury securities			$	749					$	—					$	(7)					$	742
Obligations of U.S. government corporations and agencies			5,777						1						(35)						5,743
Obligations of states and political subdivisions1			168,997						20						(18,091)						150,926
Asset-backed securities1,2			462,082						—						(384)						461,698
Commercial mortgage-backed securities			108,006						—						(15,443)						92,563
Residential mortgage-backed securities			1,223,453						2						(201,722)						1,021,733
Corporate debt securities			177,212						85						(12,630)						164,667
Total debt securities available for sale			$	2,146,276					$	108					$	(248,312)					$	1,898,072

			Amortized Cost						Unrecognized												Fair Value
									Gross Gains						Gross Losses
Debt securities held to maturity
Commercial mortgage-backed securities			$	424,946					$	—					$	(74,590)					$	350,356
Residential mortgage-backed securities			437,272						—						(74,597)						362,675
Total debt securities held to maturity			$	862,218					$	—					$	(149,187)					$	713,031

___________________________________________

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

2.Gross gains were insignificant, rounding to zero thousand.

			As of December 31, 2023
			Amortized Cost						Unrealized												Fair Value
									Gross Gains						Gross Losses
Debt securities available for sale
U.S. Treasury securities			$	16,031					$	—					$	(85)					$	15,946
Obligations of U.S. government corporations and agencies			5,889						1						(58)						5,832
Obligations of states and political subdivisions1			190,819						52						(18,026)						172,845
Asset-backed securities			470,046						—						(1,823)						468,223
Commercial mortgage-backed securities			119,044						—						(15,535)						103,509
Residential mortgage-backed securities1			1,306,854						5						(195,547)						1,111,312
Corporate debt securities			225,947						128						(16,171)						209,904
Total debt securities available for sale			$	2,334,630					$	186					$	(247,245)					$	2,087,571

			Amortized Cost						Unrecognized												Fair Value
									Gross Gains						Gross Losses
Debt securities held to maturity
Commercial mortgage-backed securities			$	428,526					$	—					$	(71,000)					$	357,526
Residential mortgage-backed securities			444,102						—						(71,231)						372,871
Total debt securities held to maturity			$	872,628					$	—					$	(142,231)					$	730,397

___________________________________________

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

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 March 31, 2024
			Amortized Cost						Fair Value
Debt securities available for sale
Due in one year or less			$	262,012					$	222,566
Due after one year through five years			752,610						666,718
Due after five years through ten years			529,926						469,029
Due after ten years			601,728						539,759
Debt securities available for sale			$	2,146,276					$	1,898,072

Debt securities held to maturity
Due in one year or less			$	104,797					$	88,589
Due after one year through five years			263,376						216,744
Due after five years through ten years			241,243						198,562
Due after ten years			252,802						209,136
Debt securities held to maturity			$	862,218					$	713,031

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 March 31,
															2024						2023
Realized gains and losses on debt securities
Gross gains on debt securities															$	1					$	10
Gross (losses) on debt securities1															(6,803)						(6)
Realized net gains (losses) on debt securities															$	(6,802)					$	4

___________________________________________

1.During the first quarter of 2024, Busey sold available-for-sale debt securities with a book value of approximately $108.2 million for a pre-tax loss of $6.8 million, as part of a balance sheet repositioning strategy. The loss on the sale of securities was offset by a pre-tax gain of $7.5 million realized on the sale of mortgage servicing rights on approximately $923.5 million of one- to four-family mortgage loans.

Debt securities with carrying amounts of $787.5 million on March 31, 2024, and $837.4 million on December 31, 2023, 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 March 31, 2024
			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			$	—					$	—					$	742					$	(7)					$	742					$	(7)
Obligations of U.S. government corporations and agencies			—						—						5,629						(35)						5,629						(35)
Obligations of states and political subdivisions			8,524						(68)						134,945						(18,023)						143,469						(18,091)
Asset-backed securities			—						—						253,231						(384)						253,231						(384)
Commercial mortgage-backed securities			—						—						92,563						(15,443)						92,563						(15,443)
Residential mortgage-backed securities			165						(1)						1,021,383						(201,721)						1,021,548						(201,722)
Corporate debt securities			4,313						(102)						152,739						(12,528)						157,052						(12,630)
Debt securities available for sale with gross unrealized losses			$	13,002					$	(171)					$	1,661,232					$	(248,141)					$	1,674,234					$	(248,312)

									12 months or more												Total
															Fair Value						Unrecognized Losses						Fair Value						Unrecognized Losses
Debt securities held to maturity
Commercial mortgage-backed securities															$	350,356					$	(74,590)					$	350,356					$	(74,590)
Residential mortgage-backed securities															362,675						(74,597)						362,675						(74,597)
Debt securities held to maturity with gross unrecognized losses															$	713,031					$	(149,187)					$	713,031					$	(149,187)

			As of December 31, 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			$	—					$	—					$	15,946					$	(85)					$	15,946					$	(85)
Obligations of U.S. government corporations and agencies			—						—						5,709						(58)						5,709						(58)
Obligations of states and political subdivisions			11,442						(54)						146,797						(17,972)						158,239						(18,026)
Asset-backed securities			—						—						468,223						(1,823)						468,223						(1,823)
Commercial mortgage-backed securities			—						—						103,509						(15,535)						103,509						(15,535)
Residential mortgage-backed securities			141						(1)						1,110,906						(195,546)						1,111,047						(195,547)
Corporate debt securities			1,450						(10)						198,694						(16,161)						200,144						(16,171)
Debt securities available for sale with gross unrealized losses			$	13,033					$	(65)					$	2,049,784					$	(247,180)					$	2,062,817					$	(247,245)

									12 months or more												Total
															Fair Value						Unrecognized Losses						Fair Value						Unrecognized Losses
Debt securities held to maturity
Commercial mortgage-backed securities															$	357,526					$	(71,000)					$	357,526					$	(71,000)
Residential mortgage-backed securities															372,871						(71,231)						372,871						(71,231)
Debt securities held to maturity with gross unrecognized losses															$	730,397					$	(142,231)					$	730,397					$	(142,231)

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

			As of March 31, 2024
			Available for Sale						Held to Maturity						Total
Debt securities with gross unrealized or unrecognized losses, fair value			$	1,674,234					$	713,031					$	2,387,265
Gross unrealized or unrecognized losses on debt securities			248,312						149,187						397,499
Ratio of gross unrealized or unrecognized losses to debt securities with gross unrealized or unrecognized losses			14.8		%				20.9		%				16.7		%
Count of debt securities			708						55						763
Count of debt securities in an unrealized or unrecognized loss position			654						55						709

			As of December 31, 2023
			Available for Sale						Held to Maturity						Total
Debt securities with gross unrealized or unrecognized losses, fair value			$	2,062,817					$	730,397					$	2,793,214
Gross unrealized or unrecognized losses on debt securities			247,245						142,231						389,476
Ratio of gross unrealized or unrecognized losses to debt securities with gross unrealized or unrecognized losses			12.0		%				19.5		%				13.9		%
Count of debt securities			835						55						890
Count of debt securities in an unrealized or unrecognized loss position			779						55						834

Unrealized and unrecognized losses were related to changes in market interest rates and market conditions that do not represent credit-related impairments. Unless part of a corporate strategy or restructuring plan, 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 March 31, 2024, Busey did not hold general obligation bonds of any single issuer, the aggregate of which exceeded 10% of Busey’s stockholders’ equity.

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- Definition

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

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