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FAIR VALUE MEASUREMENTS
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
NOTE 13. FAIR VALUE MEASUREMENTS
The fair value of an asset or liability is the price that would be received by selling that asset or paid in transferring that liability (exit price) in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. ASC Topic 820 “Fair Value Measurement” establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:
•Level 1 Inputs—Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
•Level 2 Inputs—Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatility, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.
•Level 3 Inputs—Unobservable inputs for estimating the fair values of assets or liabilities that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.
A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to Busey’s assets and liabilities that are carried at fair value.
In general, fair value estimates are based upon quoted market prices, when available. If such quoted market prices are not available, fair values are estimated utilizing independent valuation techniques that consider identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable data. Valuation adjustments may be made to ensure that financial instruments are recorded at their estimated fair values. These adjustments may include amounts to reflect, among other things, counterparty credit quality and the company's creditworthiness as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. While management believes Busey's valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to estimate the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.
Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis
Debt Securities Available for Sale
Debt securities classified as available for sale are reported at fair value, which is estimated using Level 2 inputs. Busey obtains fair value measurements from an independent pricing service. The independent pricing service utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid, and other market information. Because many fixed income securities do not trade on a daily basis, the independent pricing service applies available information to prepare evaluations, with a focus on observable market data such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing.
The independent pricing service uses model processes, such as the Option Adjusted Spread model, to assess interest rate impact and develop prepayment scenarios. Models and processes take into account market conventions. For each asset class, a team of evaluators gathers information from market sources and integrates relevant credit information, perceived market movements, and sector news into the evaluated pricing applications and models.
Market inputs that the independent pricing service normally seeks for evaluations of securities, listed in approximate order of priority, include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. The independent pricing service also monitors market indicators, industry, and economic events. For certain security types, additional inputs may be used or some of the market inputs may not be applicable. Evaluators may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs listed are available for use in the evaluation process for each security evaluation on a given day. Because the data utilized was observable, the securities have been classified as Level 2.
Equity Securities
Equity securities are reported at fair value, which is estimated using Level 1 or Level 2 inputs. Fair value measurements of mutual funds or stock in active markets are estimated using unadjusted quoted prices for identical assets at the measurement date and are classified as Level 1. Fair value measurements of stock that are not active use quoted prices for identical or similar assets in markets and are classified as Level 2.
Derivative Assets and Derivative Liabilities
Busey’s derivative assets and derivative liabilities are reported at fair value, which is measured using Level 2 or Level 3 inputs. Fair values of derivative assets and liabilities are estimated based on prices that are obtained from a third-party which uses observable market inputs and, with the exception of risk participation agreements, are classified as Level 2. Due to the significance of unobservable inputs, derivative assets and liabilities related to risk participation agreements are classified as Level 3.
The following tables summarize financial assets and financial liabilities measured at estimated fair value on a recurring basis:
As of March 31, 2025
(dollars in thousands)Level 1
Inputs		Level 2
Inputs		Level 3
Inputs		Total
Fair Value
Debt securities available for sale:
Obligations of U.S. government corporations and agencies$— $217 $— $217 
Obligations of states and political subdivisions— 243,864 — 243,864 
Asset-backed securities— 342,676 — 342,676 
Commercial mortgage-backed securities— 80,824 — 80,824 
Residential mortgage-backed securities— 1,495,516 — 1,495,516 
Corporate debt securities— 110,777 — 110,777 
Equity securities824 10,004 — 10,828 
Derivative assets— 35,034 28 35,062 
Derivative liabilities— 54,567 67 54,634 
As of December 31, 2024
(dollars in thousands)Level 1
Inputs		Level 2
Inputs		Level 3
Inputs		Total
Fair Value
Debt securities available for sale:
Obligations of U.S. government corporations and agencies$— $1,400 $— $1,400 
Obligations of states and political subdivisions— 139,829 — 139,829 
Asset-backed securities— 336,557 — 336,557 
Commercial mortgage-backed securities— 92,174 — 92,174 
Residential mortgage-backed securities— 1,087,210 — 1,087,210 
Corporate debt securities— 153,051 — 153,051 
Equity securities5,567 10,295 — 15,862 
Derivative assets— 30,368 5 30,373 
Derivative liabilities— 58,099 — 58,099 
Activity for risk participation agreements, which are financial assets measured at estimated fair value on a recurring basis using Level 3, is summarized in the tables below:
Three Months Ended March 31,
(dollars in thousands)Location20252024
Beginning Balance$5 $15 
Gains (losses) recognized in earningsOther expense(3)(9)
Purchases— 3 
Assumed in acquisition(41)— 
Ending Balance$(39)$9 
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Certain financial assets and financial liabilities are measured at estimated fair value on a non-recurring basis; that is, the instruments are not measured at estimated fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).
Loans Evaluated Individually
Busey does not record portfolio loans at estimated fair value on a recurring basis. However, periodically, a loan is evaluated individually and is reported at the estimated fair value of the underlying collateral, less estimated costs to sell, if repayment is expected solely from the collateral. If the estimated collateral value is not sufficient, a specific reserve is recorded. Collateral values are estimated using a combination of observable inputs, including recent appraisals, and unobservable inputs based on customized discounting criteria. Due to the significance of unobservable inputs, fair values of individually evaluated collateral dependent loans have been classified as Level 3.
Bank Property Held for Sale
Bank property held for sale represents certain banking center office buildings which Busey has closed and consolidated with other existing banking centers. Bank property held for sale is measured at the lower of amortized cost or estimated fair value less estimated costs to sell. Fair value estimates were based upon discounted appraisals or real estate listing prices. Due to the significance of unobservable inputs, estimated fair values of all bank property held for sale have been classified as Level 3. Bank property held for sale is included in premises and equipment, net on Busey’s Consolidated Balance Sheets (Unaudited).
The following tables summarize financial assets and financial liabilities measured at estimated fair value on a non-recurring basis:
As of March 31, 2025
(dollars in thousands)Level 1
Inputs		Level 2
Inputs		Level 3
Inputs		Total
Fair Value
Loans evaluated individually, net of related allowance$— $— $21,440 $21,440 
Bank property held for sale with impairment— — 2,653 2,653 
As of December 31, 2024
(dollars in thousands)Level 1
Inputs		Level 2
Inputs		Level 3
Inputs		Total
Fair Value
Loans evaluated individually, net of related allowance$— $— $616 $616 
Bank property held for sale with impairment— — 2,841 2,841 
The following table presents additional quantitative information about assets measured at estimated fair value on a non-recurring basis using Level 3 inputs:
As of March 31, 2025
(dollars in thousands)Fair ValueValuation
Techniques		Unobservable
Input		Range
(Weighted Average)
Loans evaluated individually, net of related allowance$21,440 Appraisal of collateralAppraisal adjustments
-1.6% to -100.0%
(-47.9)%
Bank property held for sale with impairment2,653 Appraisal of collateral or real estate listing priceAppraisal adjustments
-9.0% to -86.8%
(-55.0)%
As of December 31, 2024
(dollars in thousands)Fair ValueValuation
Techniques		Unobservable
Input		Range
(Weighted Average)
Loans evaluated individually, net of related allowance$616 Appraisal of collateralAppraisal adjustments
-25.0% to -100.0%
(-74.9)%
Bank property held for sale with impairment2,841 Appraisal of collateral or real estate listing priceAppraisal adjustments
-9.0% to -76.7%
(-51.8)%
Financial Assets and Financial Liabilities That Are Not Carried at Fair Value
Fair values of financial instruments that are not carried at fair value on Busey’s Consolidated Balance Sheets (Unaudited) were estimated as follows:
As of March 31, 2025As of December 31, 2024
(dollars in thousands)Carrying
Amount		Fair
Value		Carrying
Amount		Fair
Value
Financial assets
Level 1 inputs:
Cash and cash equivalents$1,200,292 $1,200,292 $697,659 $697,659 
Level 2 inputs:
Debt securities held to maturity815,402 678,470 826,630 675,053 
Loans held for sale7,270 7,305 3,657 3,726 
Restricted bank stock53,518 53,518 49,930 49,930 
Accrued interest receivable79,673 79,673 45,141 45,141 
Level 3 inputs:
Portfolio loans, net13,673,147 13,610,565 7,613,683 7,426,158 
Mortgage servicing rights1,203 5,311 1,304 5,627 
Other servicing rights2,733 2,883 1,482 1,591 
 
Financial liabilities
Level 2 inputs:
Time deposits$3,091,076 $3,083,309 $1,490,635 $1,481,591 
Securities sold under agreements to repurchase137,340 137,340 155,610 155,610 
Short-term borrowings11,209 11,130 — — 
Long-term debt78,542 75,092 — — 
Junior subordinated debt owed to unconsolidated trusts 77,117 70,492 74,815 67,314 
Accrued interest payable41,699 41,699 21,129 21,129 
Level 3 inputs:
Subordinated notes, net of unamortized issuance costs227,967 220,355 227,723 219,043