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PORTFOLIO LOANS | 6 Months Ended
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Jun. 30, 2025
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] |
PORTFOLIO LOANS | NOTE 4. PORTFOLIO LOANS Loan Categories Busey’s lending can be summarized in two primary categories: commercial and retail. Loans within these categories are further classified by lending activity: C&I and other commercial, commercial real estate, real estate construction, retail real estate, and retail other. Distributions of the loan portfolio by loan category and lending activity is presented in the following table:
|  | As of
(dollars in thousands) |  | June 30, 2025 |  | December 31, 2024
Commercial loans |  |  |  |
C&I and other commercial |  | $ | 4,476,869 |  |  | $ | 1,904,515 |
CRE |  | 5,569,759 |  |  | 3,269,564 |
Real estate construction |  | 1,041,803 |  |  | 378,209 |
Total commercial loans |  | 11,088,431 |  |  | 5,552,288 |
Retail loans |  |  |  |
Retail real estate |  | 2,228,959 |  |  | 1,696,457 |
Retail other |  | 491,229 |  |  | 448,342 |
Total retail loans |  | 2,720,188 |  |  | 2,144,799 |
Total portfolio loans |  | 13,808,619 |  |  | 7,697,087 |
ACL |  | (183,334) |  |  | (83,404) |
Portfolio loans, net |  | $ | 13,625,285 |  |  | $ | 7,613,683 |
Net deferred loan origination costs included in the balances above were $10.8 million as of June 30, 2025, compared to $12.5 million as of December 31, 2024. Net accretable purchase accounting adjustments included in the balances above reduced loans by $98.1 million as of June 30, 2025, and $8.8 million as of December 31, 2024. Busey did not purchase any retail real estate loans during the three and six months ended June 30, 2025. Busey elected to purchase $6.9 million of retail real estate loans during the three and six months ended June 30, 2024. Pledged Loans Busey has executed a blanket lien with the FHLB. The principal balance of loans Busey has pledged as collateral with the FHLB and Federal Reserve Bank for liquidity, which Busey is able to borrow against, is set forth in the table below:
|  | As of
(dollars in thousands) |  | June 30, 2025 |  | December 31, 2024
Pledged loans |  |  |  |
FHLB |  | $ | 5,010,792 |  |  | $ | 4,813,600 |
Federal Reserve Bank |  | 1,580,491 |  |  | 765,824 |
Total pledged loans |  | $ | 6,591,283 |  |  | $ | 5,579,424 |
Risk Grading Busey utilizes a loan grading scale to assign a risk grade to all of its loans. A description of the general characteristics of each grade is as follows: •Pass – This category includes loans that are all considered acceptable credits, ranging from investment or near investment grade, to loans made to borrowers who exhibit credit fundamentals that meet or exceed industry standards. •Watch – This category includes loans that warrant a higher-than-average level of monitoring to ensure that weaknesses do not cause the inability of the credit to perform as expected. These loans are not necessarily a problem due to other inherent strengths of the credit, such as guarantor strength, but have above average concern and monitoring. •Special mention – This category is for “Other Assets Specially Mentioned” loans that have potential weaknesses, which may, if not checked or corrected, weaken the asset or inadequately protect Busey’s credit position at some future date. •Substandard – This category includes “Substandard” loans, determined in accordance with regulatory guidelines, for which the accrual of interest has not been stopped. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that Busey will sustain some loss if the deficiencies are not corrected. •Substandard non-accrual – This category includes loans that have all the characteristics of a “Substandard” loan with additional factors that make collection in full highly questionable and improbable. Such loans are placed on non-accrual status and may be dependent on collateral with a value that is difficult to determine. All loans are graded at their inception. Commercial lending relationships that are $2.0 million or less are usually processed through an expedited underwriting process. Most commercial loans greater than $2.0 million are included in a portfolio review at least annually. Commercial loans greater than $0.35 million that have a grading of special mention or worse are typically reviewed on a quarterly basis. Interim reviews may take place if circumstances of the borrower warrant a more frequent review. The following table is a summary of Busey’s portfolio loans by risk grade, segregated by loan category:
|  | As of June 30, 2025
(dollars in thousands) |  | Pass |  | Watch |  | Special Mention |  | Substandard |  | Substandard Non-accrual |  | Total
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |
C&I and other commercial |  | $ | 3,790,854 |  |  | $ | 436,157 |  |  | $ | 127,315 |  |  | $ | 87,603 |  |  | $ | 34,940 |  |  | $ | 4,476,869 |
CRE |  | 4,571,016 |  |  | 813,941 |  |  | 152,544 |  |  | 21,695 |  |  | 10,563 |  |  | 5,569,759 |
Real estate construction |  | 964,183 |  |  | 45,940 |  |  | 25,981 |  |  | 5,677 |  |  | 22 |  |  | 1,041,803 |
Total commercial loans |  | 9,326,053 |  |  | 1,296,038 |  |  | 305,840 |  |  | 114,975 |  |  | 45,525 |  |  | 11,088,431 |
Retail loans |  |  |  |  |  |  |  |  |  |  |  |
Retail real estate |  | 2,205,127 |  |  | 6,331 |  |  | 6,848 |  |  | 2,806 |  |  | 7,847 |  |  | 2,228,959 |
Retail other |  | 490,979 |  |  | — |  |  | — |  |  | 8 |  |  | 242 |  |  | 491,229 |
Total retail loans |  | 2,696,106 |  |  | 6,331 |  |  | 6,848 |  |  | 2,814 |  |  | 8,089 |  |  | 2,720,188 |
Total portfolio loans |  | $ | 12,022,159 |  |  | $ | 1,302,369 |  |  | $ | 312,688 |  |  | $ | 117,789 |  |  | $ | 53,614 |  |  | $ | 13,808,619 |
|  | As of December 31, 2024
(dollars in thousands) |  | Pass |  | Watch |  | Special Mention |  | Substandard |  | Substandard Non-accrual |  | Total
Commercial loans |  |  |  |  |  |  |  |  |  |  |  |
C&I and other commercial |  | $ | 1,545,338 |  |  | $ | 281,424 |  |  | $ | 36,152 |  |  | $ | 37,749 |  |  | $ | 3,852 |  |  | $ | 1,904,515 |
CRE |  | 2,744,018 |  |  | 438,945 |  |  | 55,041 |  |  | 16,507 |  |  | 15,053 |  |  | 3,269,564 |
Real estate construction |  | 345,908 |  |  | 26,833 |  |  | 221 |  |  | 5,224 |  |  | 23 |  |  | 378,209 |
Total commercial loans |  | 4,635,264 |  |  | 747,202 |  |  | 91,414 |  |  | 59,480 |  |  | 18,928 |  |  | 5,552,288 |
Retail loans |  |  |  |  |  |  |  |  |  |  |  |
Retail real estate |  | 1,680,640 |  |  | 9,408 |  |  | 882 |  |  | 2,543 |  |  | 2,984 |  |  | 1,696,457 |
Retail other |  | 448,166 |  |  | — |  |  | — |  |  | — |  |  | 176 |  |  | 448,342 |
Total retail loans |  | 2,128,806 |  |  | 9,408 |  |  | 882 |  |  | 2,543 |  |  | 3,160 |  |  | 2,144,799 |
Total portfolio loans |  | $ | 6,764,070 |  |  | $ | 756,610 |  |  | $ | 92,296 |  |  | $ | 62,023 |  |  | $ | 22,088 |  |  | $ | 7,697,087 |
Risk grades of portfolio loans and gross charge-offs are presented in the tables below by lending activity, further sorted by origination year:
|  | As of and For The Six Months Ended June 30, 2025
Risk Grade Ratings |  | Term Loans Amortized Cost Basis by Origination Year |  | Revolving Loans |  | Total
(dollars in thousands) |  | 2025 |  | 2024 |  | 2023 |  | 2022 |  | 2021 |  | Prior |  |
C&I and other commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 515,264 |  |  | $ | 829,795 |  |  | $ | 517,205 |  |  | $ | 279,602 |  |  | $ | 192,483 |  |  | $ | 166,112 |  |  | $ | 1,290,393 |  |  | $ | 3,790,854 |
Watch |  | 40,197 |  |  | 60,053 |  |  | 70,716 |  |  | 51,774 |  |  | 74,582 |  |  | 19,821 |  |  | 119,014 |  |  | 436,157 |
Special Mention |  | 2,579 |  |  | 22,737 |  |  | 18,440 |  |  | 42,789 |  |  | 3,376 |  |  | 2,784 |  |  | 34,610 |  |  | 127,315 |
Substandard |  | 16,642 |  |  | 4,314 |  |  | 17,675 |  |  | 4,587 |  |  | 10,163 |  |  | 3,907 |  |  | 30,315 |  |  | 87,603 |
Substandard non-accrual |  | 86 |  |  | 3,774 |  |  | 3,159 |  |  | 7,309 |  |  | 1,046 |  |  | 5,051 |  |  | 14,515 |  |  | 34,940 |
Total C&I and other commercial |  | 574,768 |  |  | 920,673 |  |  | 627,195 |  |  | 386,061 |  |  | 281,650 |  |  | 197,675 |  |  | 1,488,847 |  |  | 4,476,869 |
Gross charge-offs |  | $ | — |  |  | $ | 908 |  |  | $ | 3,222 |  |  | $ | 285 |  |  | $ | 13,591 |  |  | $ | 11,174 |  |  | $ | 4,121 |  |  | $ | 33,301 |
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 389,049 |  |  | 509,376 |  |  | 726,226 |  |  | 1,336,389 |  |  | 832,204 |  |  | 735,227 |  |  | 42,545 |  |  | 4,571,016 |
Watch |  | 91,566 |  |  | 111,220 |  |  | 141,107 |  |  | 162,659 |  |  | 208,775 |  |  | 95,704 |  |  | 2,910 |  |  | 813,941 |
Special Mention |  | 54,783 |  |  | 24,440 |  |  | 4,161 |  |  | 26,254 |  |  | 24,902 |  |  | 16,357 |  |  | 1,647 |  |  | 152,544 |
Substandard |  | 1,447 |  |  | 1,959 |  |  | 916 |  |  | 8,611 |  |  | — |  |  | 8,717 |  |  | 45 |  |  | 21,695 |
Substandard non-accrual |  | 10 |  |  | 2,769 |  |  | 4,551 |  |  | 73 |  |  | 2 |  |  | 3,158 |  |  | — |  |  | 10,563 |
Total CRE |  | 536,855 |  |  | 649,764 |  |  | 876,961 |  |  | 1,533,986 |  |  | 1,065,883 |  |  | 859,163 |  |  | 47,147 |  |  | 5,569,759 |
Gross charge-offs |  | — |  |  | 10,916 |  |  | — |  |  | — |  |  | 253 |  |  | — |  |  | — |  |  | 11,169 |
Real estate construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 174,939 |  |  | 324,172 |  |  | 153,653 |  |  | 211,480 |  |  | 24,401 |  |  | 2,625 |  |  | 72,913 |  |  | 964,183 |
Watch |  | 14,429 |  |  | 28,866 |  |  | 2,458 |  |  | — |  |  | 187 |  |  | — |  |  | — |  |  | 45,940 |
Special Mention |  | 18,334 |  |  | — |  |  | — |  |  | 610 |  |  | 7,037 |  |  | — |  |  | — |  |  | 25,981 |
Substandard |  | 5,187 |  |  | 428 |  |  | — |  |  | — |  |  | 62 |  |  | — |  |  | — |  |  | 5,677 |
Substandard non-accrual |  | — |  |  | — |  |  | — |  |  | — |  |  | 22 |  |  | — |  |  | — |  |  | 22 |
Total real estate construction |  | 212,889 |  |  | 353,466 |  |  | 156,111 |  |  | 212,090 |  |  | 31,709 |  |  | 2,625 |  |  | 72,913 |  |  | 1,041,803 |
Gross charge-offs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Retail real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 75,389 |  |  | 138,161 |  |  | 323,645 |  |  | 459,652 |  |  | 423,095 |  |  | 546,277 |  |  | 238,908 |  |  | 2,205,127 |
Watch |  | 132 |  |  | 1,957 |  |  | 509 |  |  | 1,685 |  |  | 290 |  |  | 1,185 |  |  | 573 |  |  | 6,331 |
Special Mention |  | 92 |  |  | 89 |  |  | 3,865 |  |  | 840 |  |  | 1,748 |  |  | — |  |  | 214 |  |  | 6,848 |
Substandard |  | — |  |  | — |  |  | 114 |  |  | 1,460 |  |  | 494 |  |  | 735 |  |  | 3 |  |  | 2,806 |
Substandard non-accrual |  | 160 |  |  | 153 |  |  | 39 |  |  | 322 |  |  | 317 |  |  | 2,944 |  |  | 3,912 |  |  | 7,847 |
Total retail real estate |  | 75,773 |  |  | 140,360 |  |  | 328,172 |  |  | 463,959 |  |  | 425,944 |  |  | 551,141 |  |  | 243,610 |  |  | 2,228,959 |
Gross charge-offs |  | 35 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 48 |  |  | 36 |  |  | 119 |
Retail other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 6,059 |  |  | 7,347 |  |  | 43,453 |  |  | 43,952 |  |  | 8,071 |  |  | 1,173 |  |  | 380,924 |  |  | 490,979 |
Watch |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8 |  |  | — |  |  | 8 |
Substandard non-accrual |  | — |  |  | — |  |  | 93 |  |  | 138 |  |  | — |  |  | 11 |  |  | — |  |  | 242 |
Total retail other |  | 6,059 |  |  | 7,347 |  |  | 43,546 |  |  | 44,090 |  |  | 8,071 |  |  | 1,192 |  |  | 380,924 |  |  | 491,229 |
Gross charge-offs |  | 120 |  |  | 147 |  |  | 253 |  |  | 35 |  |  | — |  |  | 74 |  |  | — |  |  | 629 |
Total portfolio loans |  | $ | 1,406,344 |  |  | $ | 2,071,610 |  |  | $ | 2,031,985 |  |  | $ | 2,640,186 |  |  | $ | 1,813,257 |  |  | $ | 1,611,796 |  |  | $ | 2,233,441 |  |  | $ | 13,808,619 |
Total gross charge-offs |  | $ | 155 |  |  | $ | 11,971 |  |  | $ | 3,475 |  |  | $ | 320 |  |  | $ | 13,844 |  |  | $ | 11,296 |  |  | $ | 4,157 |  |  | $ | 45,218 |
|  | As of and For The Year Ended December 31, 2024
Risk Grade Ratings |  | Term Loans Amortized Cost Basis by Origination Year |  | Revolving Loans |  | Total
(dollars in thousands) |  | 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | Prior |  |
C&I and other commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 320,831 |  |  | $ | 147,909 |  |  | $ | 163,870 |  |  | $ | 125,053 |  |  | $ | 74,146 |  |  | $ | 117,234 |  |  | $ | 596,295 |  |  | $ | 1,545,338 |
Watch |  | 38,734 |  |  | 49,394 |  |  | 44,709 |  |  | 16,393 |  |  | 2,175 |  |  | 20,964 |  |  | 109,055 |  |  | 281,424 |
Special Mention |  | 1,718 |  |  | 2,293 |  |  | 5,658 |  |  | 2,634 |  |  | 106 |  |  | 2,540 |  |  | 21,203 |  |  | 36,152 |
Substandard |  | 15,186 |  |  | 6,545 |  |  | 788 |  |  | 591 |  |  | 320 |  |  | 2,424 |  |  | 11,895 |  |  | 37,749 |
Substandard non-accrual |  | 65 |  |  | 141 |  |  | 464 |  |  | — |  |  | 42 |  |  | 852 |  |  | 2,288 |  |  | 3,852 |
Total C&I and other commercial |  | 376,534 |  |  | 206,282 |  |  | 215,489 |  |  | 144,671 |  |  | 76,789 |  |  | 144,014 |  |  | 740,736 |  |  | 1,904,515 |
Gross charge-offs |  | $ | — |  |  | $ | 14,980 |  |  | $ | 148 |  |  | $ | 22 |  |  | $ | — |  |  | $ | 303 |  |  | $ | — |  |  | $ | 15,453 |
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 291,503 |  |  | 354,591 |  |  | 755,266 |  |  | 645,994 |  |  | 356,867 |  |  | 314,340 |  |  | 25,457 |  |  | 2,744,018 |
Watch |  | 115,078 |  |  | 132,900 |  |  | 60,611 |  |  | 62,408 |  |  | 28,320 |  |  | 38,733 |  |  | 895 |  |  | 438,945 |
Special Mention |  | 39,252 |  |  | 643 |  |  | 8,020 |  |  | 1,395 |  |  | 4,165 |  |  | 1,517 |  |  | 49 |  |  | 55,041 |
Substandard |  | 6,983 |  |  | 355 |  |  | 4,628 |  |  | 50 |  |  | 95 |  |  | 4,346 |  |  | 50 |  |  | 16,507 |
Substandard non-accrual |  | 15,000 |  |  | 39 |  |  | — |  |  | — |  |  | 14 |  |  | — |  |  | — |  |  | 15,053 |
Total CRE |  | 467,816 |  |  | 488,528 |  |  | 828,525 |  |  | 709,847 |  |  | 389,461 |  |  | 358,936 |  |  | 26,451 |  |  | 3,269,564 |
Gross charge-offs |  | — |  |  | — |  |  | — |  |  | 2,999 |  |  | — |  |  | 315 |  |  | — |  |  | 3,314 |
Real estate construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 159,825 |  |  | 134,450 |  |  | 12,205 |  |  | 24,781 |  |  | 2,213 |  |  | 1,124 |  |  | 11,310 |  |  | 345,908 |
Watch |  | 20,170 |  |  | 6,455 |  |  | — |  |  | 208 |  |  | — |  |  | — |  |  | — |  |  | 26,833 |
Special Mention |  | — |  |  | — |  |  | — |  |  | 221 |  |  | — |  |  | — |  |  | — |  |  | 221 |
Substandard |  | 5,224 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,224 |
Substandard non-accrual |  | — |  |  | — |  |  | — |  |  | 23 |  |  | — |  |  | — |  |  | — |  |  | 23 |
Total real estate construction |  | 185,219 |  |  | 140,905 |  |  | 12,205 |  |  | 25,233 |  |  | 2,213 |  |  | 1,124 |  |  | 11,310 |  |  | 378,209 |
Gross charge-offs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Retail real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 101,582 |  |  | 237,306 |  |  | 366,820 |  |  | 354,380 |  |  | 147,236 |  |  | 267,431 |  |  | 205,885 |  |  | 1,680,640 |
Watch |  | 1,255 |  |  | 550 |  |  | 2,733 |  |  | 3,377 |  |  | 872 |  |  | 124 |  |  | 497 |  |  | 9,408 |
Special Mention |  | 151 |  |  | — |  |  | 344 |  |  | — |  |  | — |  |  | 372 |  |  | 15 |  |  | 882 |
Substandard |  | — |  |  | 243 |  |  | 1,018 |  |  | 503 |  |  | — |  |  | 776 |  |  | 3 |  |  | 2,543 |
Substandard non-accrual |  | — |  |  | — |  |  | 344 |  |  | 91 |  |  | 152 |  |  | 1,526 |  |  | 871 |  |  | 2,984 |
Total retail real estate |  | 102,988 |  |  | 238,099 |  |  | 371,259 |  |  | 358,351 |  |  | 148,260 |  |  | 270,229 |  |  | 207,271 |  |  | 1,696,457 |
Gross charge-offs |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 168 |  |  | — |  |  | 168 |
Retail other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 4,996 |  |  | 55,665 |  |  | 57,944 |  |  | 12,207 |  |  | 2,304 |  |  | 589 |  |  | 314,461 |  |  | 448,166 |
Substandard non-accrual |  | — |  |  | 94 |  |  | 67 |  |  | 4 |  |  | — |  |  | 11 |  |  | — |  |  | 176 |
Total retail other |  | 4,996 |  |  | 55,759 |  |  | 58,011 |  |  | 12,211 |  |  | 2,304 |  |  | 600 |  |  | 314,461 |  |  | 448,342 |
Gross charge-offs |  | 9 |  |  | 31 |  |  | 106 |  |  | 78 |  |  | 4 |  |  | 403 |  |  | — |  |  | 631 |
Total portfolio loans |  | $ | 1,137,553 |  |  | $ | 1,129,573 |  |  | $ | 1,485,489 |  |  | $ | 1,250,313 |  |  | $ | 619,027 |  |  | $ | 774,903 |  |  | $ | 1,300,229 |  |  | $ | 7,697,087 |
Total gross charge-offs |  | $ | 9 |  |  | $ | 15,011 |  |  | $ | 254 |  |  | $ | 3,099 |  |  | $ | 4 |  |  | $ | 1,189 |  |  | $ | — |  |  | $ | 19,566 |
Past Due and Non-accrual Loans An analysis of portfolio loans that were past due and still accruing, or on a non-accrual status, is presented in the table below:
|  | As of June 30, 2025
|  | Loans past due, still accruing |  | Non-accrual Loans |  | Non-accrual Loans with No Allowance for Credit Losses
(dollars in thousands) |  | 30-59 Days |  | 60-89 Days |  | 90+Days |  |
Commercial loans |  |  |  |  |  |  |  |  |  |
C&I and other commercial |  | $ | 4,972 |  |  | $ | 1,490 |  |  | $ | 796 |  |  | $ | 34,940 |  |  | $ | 3,311 |
CRE |  | 524 |  |  | 5,744 |  |  | — |  |  | 10,563 |  |  | 4,300 |
Real estate construction |  | 18,670 |  |  | 6,794 |  |  | — |  |  | 22 |  |  | — |
Past due and non-accrual commercial loans |  | 24,166 |  |  | 14,028 |  |  | 796 |  |  | 45,525 |  |  | 7,611 |
Retail loans |  |  |  |  |  |  |  |  |  |
Retail real estate |  | 1,894 |  |  | 331 |  |  | 145 |  |  | 7,847 |  |  | 194 |
Retail other |  | 1,378 |  |  | 391 |  |  | — |  |  | 242 |  |  | — |
Past due and non-accrual retail loans |  | 3,272 |  |  | 722 |  |  | 145 |  |  | 8,089 |  |  | 194 |
Total past due and non-accrual loans |  | $ | 27,438 |  |  | $ | 14,750 |  |  | $ | 941 |  |  | $ | 53,614 |  |  | $ | 7,805 |
|  | As of December 31, 2024
|  | Loans past due, still accruing |  | Non-accrual Loans |  | Non-accrual Loans with No Allowance for Credit Losses
(dollars in thousands) |  | 30-59 Days |  | 60-89 Days |  | 90+Days |  |
Commercial loans |  |  |  |  |  |  |  |  |  |
C&I and other commercial |  | $ | 95 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,852 |  |  | $ | 1,224 |
CRE |  | 42 |  |  | 2,759 |  |  | — |  |  | 15,053 |  |  | 15,000 |
Real estate construction |  | 41 |  |  | — |  |  | — |  |  | 23 |  |  | — |
Past due and non-accrual commercial loans |  | 178 |  |  | 2,759 |  |  | — |  |  | 18,928 |  |  | 16,224 |
Retail loans |  |  |  |  |  |  |  |  |  |
Retail real estate |  | 3,280 |  |  | 683 |  |  | 1,115 |  |  | 2,984 |  |  | 194 |
Retail other |  | 1,094 |  |  | 130 |  |  | 34 |  |  | 176 |  |  | — |
Past due and non-accrual retail loans |  | 4,374 |  |  | 813 |  |  | 1,149 |  |  | 3,160 |  |  | 194 |
Total past due and non-accrual loans |  | $ | 4,552 |  |  | $ | 3,572 |  |  | $ | 1,149 |  |  | $ | 22,088 |  |  | $ | 16,418 |
Gross interest income recorded on 90+ days past due loans, and that would have been recorded on non-accrual loans if they had been accruing interest in accordance with their original terms, was $1.0 million and $1.2 million for the three and six months ended June 30, 2025, respectively, and was $0.2 million and $0.5 million for the three and six months ended June 30, 2024, respectively. The amount of interest collected on those loans and recognized on a cash basis that was included in interest income was immaterial for the three and six months ended June 30, 2025 and 2024. Loan Modifications for Borrowers Experiencing Financial Difficulty The following tables present the amortized cost basis of loans that were modified—specifically in the form of (1) principal forgiveness, (2) an interest rate reduction, (3) an other-than-insignificant payment deferral, and/or (4) a term extension—for borrowers experiencing financial difficulty during the periods indicated, disaggregated by lending activity and the type of modification:
|  |  |  |  |  |  |  |  |  | Three Months Ended June 30, 2025
(dollars in thousands) |  |  |  |  |  |  |  |  |  | Payment Deferral |  | % of Total Class of Financing Receivable 1 |  | Term Extension |  | % of Total Class of Financing Receivable 2 |  | Combination—Term Extension and Payment Deferral |  | % of Total Class of Financing Receivable 3 |  |  |  |
Modified Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I and other commercial |  |  |  |  |  |  |  |  |  | $ | 490 |  |  | — | % |  | $ | 21,913 |  |  | 0.5 | % |  | $ | 4,412 |  |  | 0.1 | % |  |  |  |
CRE |  |  |  |  |  |  |  |  |  | — |  |  | — | % |  | 1,297 |  |  | — | % |  | — |  |  | — | % |  |  |  |
Total of loans modified during the period 4 |  |  |  |  |  |  |  |  |  | $ | 490 |  |  | — | % |  | $ | 23,210 |  |  | 0.2 | % |  | $ | 4,412 |  |  | — | % |  |  |  |
___________________________________________ 1.Modified loans represent an insignificant portion of C&I and other commercial loans, and an insignificant portion of total loans, in both cases rounding to zero percent. 2.Modified loans represent an insignificant portion of CRE loans, rounding to zero percent. 3.Modified loans represent an insignificant portion of total loans, rounding to zero percent. 4.All modifications were for loans classified as substandard.
|  |  |  |  |  |  |  |  |  |  |  |  | Three Months Ended June 30, 2024
(dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  | Term Extension 1 |  | % of Total Class of Financing Receivable 2 |  |  |  |  |  |  |  |
Modified Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I and other commercial |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 8,545 |  |  | 0.4 | % |  |  |  |  |  |  |  |
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  | 466 |  |  | — | % |  |  |  |  |  |  |  |
Total of loans modified during the period 3 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 9,011 |  |  | 0.1 | % |  |  |  |  |  |  |  |
___________________________________________ 1.Modifications to extend loan terms also included, in some cases, interest rate increases during the extension period. 2.Modified loans represent an insignificant portion of commercial real estate loans, rounding to zero percent. 3.All modifications were for loans classified as substandard.
|  |  |  |  |  | Six Months Ended June 30, 2025
(dollars in thousands) |  |  |  |  |  | Payment Deferral |  | % of Total Class of Financing Receivable |  | Term Extension |  | % of Total Class of Financing Receivable 1 |  |  |  |  |  | Combination—Term Extension and Payment Deferral |  | % of Total Class of Financing Receivable 2 |  |  |  |
Modified Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I and other commercial |  |  |  |  |  | $ | 11,639 |  |  | 0.3 | % |  | $ | 26,985 |  |  | 0.6 | % |  |  |  |  |  | $ | 4,412 |  |  | 0.1 | % |  |  |  |
CRE |  |  |  |  |  | — |  |  | — | % |  | 1,848 |  |  | — | % |  |  |  |  |  | — |  |  | — | % |  |  |  |
Real estate construction |  |  |  |  |  | — |  |  | — | % |  | 5,187 |  |  | 0.5 | % |  |  |  |  |  | — |  |  | — | % |  |  |  |
Total of loans modified during the period 3 |  |  |  |  |  | $ | 11,639 |  |  | 0.1 | % |  | $ | 34,020 |  |  | 0.2 | % |  |  |  |  |  | $ | 4,412 |  |  | — | % |  |  |  |
___________________________________________ 1.Modified loans represent an insignificant portion of CRE loans, rounding to zero percent. 2.Modified loans represent an insignificant portion of total loans, rounding to zero percent. 3.With the exception of one loan that was transferred to non-accrual status during the six months ended June 30, 2025, all modifications were for loans classified as substandard.
|  |  |  |  |  |  |  |  |  |  |  |  |  | Six Months Ended June 30, 2024
(dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  | Term Extension 1 |  | % of Total Class of Financing Receivable |  |  |  |  |  |  |  |
Modified Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I and other commercial |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 24,067 |  |  | 1.2 | % |  |  |  |  |  |  |  |
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,814 |  |  | 0.1 | % |  |  |  |  |  |  |  |
Total of loans modified during the period 2 |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 25,881 |  |  | 0.3 | % |  |  |  |  |  |  |  |
___________________________________________ 1.Modifications to extend loan terms also included, in some cases, interest rate increases during the extension period. 2.All modifications were for loans classified as substandard. The following table provides the weighted average term extension for loan modifications made during the periods indicated for borrowers experiencing financial difficulty:
|  |  |  |  |  | Three Months Ended June 30, |  |  |  |  |  | Six Months Ended June 30,
|  |  |  |  |  | 2025 |  |  |  |  |  | 2024 |  |  |  |  |  | 2025 |  |  |  |  |  | 2024
Weighted Average Loan Term Extensions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I and other commercial |  |  |  |  |  | 19.9 months |  |  |  |  |  | 4.3 months |  |  |  |  |  | 19.3 months |  |  |  |  |  | 14.7 months
CRE |  |  |  |  |  | 7.0 months |  |  |  |  |  | 4.0 months |  |  |  |  |  | 11.0 months |  |  |  |  |  | 1.8 months
Real estate construction |  |  |  |  |  | — |  |  |  |  |  | — |  |  |  |  |  | 15.0 months |  |  |  |  |  | —
Weighted average term extensions |  |  |  |  |  | 19.3 months |  |  |  |  |  | 4.3 months |  |  |  |  |  | 18.3 months |  |  |  |  |  | 13.8 months
Performance of Modified Loans Busey closely monitors the performance of the loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the payment performance of loans modified during the last twelve months:
|  | As of June 30, 2025
(dollars in thousands) |  | Current |  | 30-89 Days |  | 90+ Days |  | Non-accrual
Modified Loans |  |  |  |  |  |  |  |
C&I and other commercial |  | $ | 43,420 |  |  | $ | — |  |  | $ | — |  |  | $ | 467 |
CRE |  | 3,239 |  |  | — |  |  | — |  |  | — |
Real estate construction |  | 5,187 |  |  | — |  |  | — |  |  | — |
Amortized cost of modified loans |  | $ | 51,846 |  |  | $ | — |  |  | $ | — |  |  | $ | 467 |
A default occurs when a loan is 90 days or more past due or transferred to non-accrual status. During the three and six months ended June 30, 2025, one C&I and other commercial loan with a balance of $0.5 million experienced a default by being transferred to non-accrual status after having been modified (a payment deferral was provided to the borrower who was experiencing financial difficulty) during the 12 months before the default. No loans had a default during the three or six months ended June 30, 2024, after having been modified during the 12 months before that default for borrowers experiencing financial difficulty. Collateral Dependent Loans Management's evaluation as to the ultimate collectability of loans includes estimates regarding future cash flows from operations and the value of property, real and personal, pledged as collateral. These estimates are affected by changing economic conditions and the economic prospects of borrowers. Collateral dependent loans are loans in which repayment is expected to be provided solely by the operation or sale of the underlying collateral and there are no other available and reliable sources of repayment. Loans are written down to the lower of cost or fair value of the underlying collateral, less estimated costs to sell. Busey had $50.0 million and $19.3 million of collateral dependent loans secured by real estate or business assets as of June 30, 2025, and December 31, 2024, respectively. Foreclosures Busey’s recorded investment in residential real estate loans that were in the process of foreclosure was $5.7 million as of June 30, 2025. Busey follows Federal Housing Finance Agency guidelines on single-family foreclosures and real estate owned evictions on portfolio loans. Allowance for Credit Losses The ACL is a valuation account that is deducted from the portfolio loans’ amortized cost bases to present the net amount expected to be collected on the portfolio loans. The ACL is established through the provision for credit losses charged to income. Portfolio loans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed. Recoveries are recognized up to the aggregate amount of previously charged-off balances. Management estimates the ACL balance using relevant available information from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The ACL consists of three components: (i) specific allocations/individual reserves; (ii) quantitative reserves; and (iii) qualitative reserves. •Specific allocations/individual reserves – When a loan no longer exhibits risk characteristics that are similar to other loans, that loan is individually evaluated. Individual reserves are calculated for loans that are on a non-accrual status that are greater than a defined dollar threshold or loans that have disparate risk characteristics. Reserves may be based on collateral, for collateral-dependent loans, or on quantitative and qualitative factors, including expected cash flow, market sentiment, and guarantor support. •Quantitative reserves – Busey implemented a new non-discounted cash flow model in the second quarter of 2025 that used combined historical loan data from Busey Bank beginning in 2004 and CrossFirst Bank since its inception in 2007. The model incorporates various baseline forecast scenarios and national unemployment rates with either national gross domestic product, the national home price index, or the national commercial real estate price index. Further, prepayment and curtailment expectations are factored into the model. Due to the continued economic uncertainty in the markets in which the Company operates, Busey will continue to utilize a forecast period of 12 months with an immediate reversion to historical loss rates beyond this forecast period in its ACL estimate. •Qualitative reserves – Busey uses qualitative factors to adjust the historical loss factors for current and forecasted conditions. Busey considers the ten qualitative factors identified in the Interagency Guidance and ASC Topic 326 at each reporting date. The following tables summarize activity in the ACL attributable to each lending activity. Allocation of a portion of the ACL to one lending activity does not preclude its availability to absorb losses from other lending activities:
|  | Three Months Ended June 30, 2025
(dollars in thousands) |  | C&I and Other Commercial |  | CRE |  | Real Estate Construction |  | Retail Real Estate |  | Retail Other |  | Total
ACL balance, March 31, 2025 |  | $ | 89,304 |  |  | $ | 68,478 |  |  | $ | 8,689 |  |  | $ | 26,399 |  |  | $ | 2,340 |  |  | $ | 195,210 |
Provision for loan losses |  | (18,863) |  |  | 13,370 |  |  | 4,300 |  |  | 2,597 |  |  | (399) |  |  | 1,005 |
Charged-off |  | (2,080) |  |  | (10,916) |  |  | — |  |  | (119) |  |  | (268) |  |  | (13,383) |
Recoveries |  | 217 |  |  | 3 |  |  | 83 |  |  | 165 |  |  | 34 |  |  | 502 |
ACL balance, June 30, 2025 |  | $ | 68,578 |  |  | $ | 70,935 |  |  | $ | 13,072 |  |  | $ | 29,042 |  |  | $ | 1,707 |  |  | $ | 183,334 |
|  | Three Months Ended June 30, 2024
(dollars in thousands) |  | C&I and Other Commercial |  | CRE |  | Real Estate Construction |  | Retail Real Estate |  | Retail Other |  | Total
ACL balance, March 31, 2024 |  | $ | 26,207 |  |  | $ | 33,505 |  |  | $ | 4,713 |  |  | $ | 24,281 |  |  | $ | 2,856 |  |  | $ | 91,562 |
Day 1 PCD 1 |  | 824 |  |  | 322 |  |  | — |  |  | 96 |  |  | 1 |  |  | 1,243 |
Provision for loan losses |  | 3,118 |  |  | 1,140 |  |  | (997) |  |  | (651) |  |  | (333) |  |  | 2,277 |
Charged-off |  | (10,013) |  |  | (4) |  |  | — |  |  | (75) |  |  | (184) |  |  | (10,276) |
Recoveries |  | 150 |  |  | 141 |  |  | 6 |  |  | 78 |  |  | 45 |  |  | 420 |
ACL balance, June 30, 2024 |  | $ | 20,286 |  |  | $ | 35,104 |  |  | $ | 3,722 |  |  | $ | 23,729 |  |  | $ | 2,385 |  |  | $ | 85,226 |
|  | Six Months Ended June 30, 2025
(dollars in thousands) |  | C&I and Other Commercial |  | CRE |  | Real Estate Construction |  | Retail Real Estate |  | Retail Other |  | Total
ACL balance, December 31, 2024 |  | $ | 21,589 |  |  | $ | 32,301 |  |  | $ | 3,345 |  |  | $ | 23,711 |  |  | $ | 2,458 |  |  | $ | 83,404 |
Day 1 PCD 1 |  | 75,569 |  |  | 21,588 |  |  | 2,112 |  |  | 1,430 |  |  | 84 |  |  | 100,783 |
Day 2 Provision for loan losses 2 |  | 22,648 |  |  | 15,104 |  |  | 2,911 |  |  | 1,628 |  |  | 142 |  |  | 42,433 |
Provision for loan losses |  | (18,240) |  |  | 12,977 |  |  | 4,611 |  |  | 2,094 |  |  | (418) |  |  | 1,024 |
Charged-off |  | (33,301) |  |  | (11,169) |  |  | — |  |  | (119) |  |  | (629) |  |  | (45,218) |
Recoveries |  | 313 |  |  | 134 |  |  | 93 |  |  | 298 |  |  | 70 |  |  | 908 |
ACL balance, June 30, 2025 |  | $ | 68,578 |  |  | $ | 70,935 |  |  | $ | 13,072 |  |  | $ | 29,042 |  |  | $ | 1,707 |  |  | $ | 183,334 |
___________________________________________ 1.The Day 1 PCD is attributable to the CrossFirst acquisition (see “Note 2. Mergers and Acquisitions”), and represents the initial adjustment to the fair value of the PCD loans. 2.The Day 2 provision for loan losses is attributable to the CrossFirst acquisition (see “Note 2. Mergers and Acquisitions”), and represents the initial provision for non-PCD loans.
|  | Six Months Ended June 30, 2024
(dollars in thousands) |  | C&I and Other Commercial |  | CRE |  | Real Estate Construction |  | Retail Real Estate |  | Retail Other |  | Total
ACL balance, December 31, 2023 |  | $ | 21,256 |  |  | $ | 35,465 |  |  | $ | 5,163 |  |  | $ | 26,298 |  |  | $ | 3,558 |  |  | $ | 91,740 |
Day 1 PCD 1 |  | 824 |  |  | 322 |  |  | — |  |  | 96 |  |  | 1 |  |  | 1,243 |
Provision for loan losses |  | 13,243 |  |  | (724) |  |  | (1,488) |  |  | (2,744) |  |  | (972) |  |  | 7,315 |
Charged-off |  | (15,231) |  |  | (100) |  |  | — |  |  | (127) |  |  | (278) |  |  | (15,736) |
Recoveries |  | 194 |  |  | 141 |  |  | 47 |  |  | 206 |  |  | 76 |  |  | 664 |
ACL balance, June 30, 2024 |  | $ | 20,286 |  |  | $ | 35,104 |  |  | $ | 3,722 |  |  | $ | 23,729 |  |  | $ | 2,385 |  |  | $ | 85,226 |
___________________________________________ 1.The Day 1 PCD is attributable to the M&M acquisition (see “Note 2. Mergers and Acquisitions.”) Net charge-offs during the six months ended June 30, 2025, included $31.1 million related to PCD loans acquired from CrossFirst Bank, which were fully reserved at acquisition and did not require recording additional provision expense.

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