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MERGERS AND ACQUISITIONS | 9 Months Ended
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Sep. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
MERGERS AND ACQUISITIONS | NOTE 2. MERGERS AND ACQUISITIONS CrossFirst Bankshares, Inc. On March 1, 2025, Busey completed its acquisition of CrossFirst (NASDAQ: CFB), the holding company for CrossFirst Bank, pursuant to an Agreement and Plan of Merger, dated August 26, 2024, by and between Busey and CrossFirst (the “CrossFirst Merger Agreement”). This partnership creates a premier commercial bank in the Midwest, Southwest, and Florida, with 79 full-service locations across 10 states—Arizona, Colorado, Florida, Illinois, Indiana, Kansas, Missouri, New Mexico, Oklahoma, and Texas. The combined holding company continues to operate under the First Busey Corporation name. Busey’s common stock continues to trade on the Nasdaq under the “BUSE” stock ticker symbol. Merger of CrossFirst Bank into Busey Bank CrossFirst Bank’s results of operations were included in Busey’s consolidated results of operations beginning March 1, 2025. Busey operated CrossFirst Bank as a separate banking subsidiary until it was merged with and into Busey Bank on June 20, 2025. At the time of the bank merger, CrossFirst Bank’s banking centers became banking centers of Busey Bank. CrossFirst Merger Consideration Upon completion of the acquisition, each share of CrossFirst common stock converted into the right to receive 0.6675 of a share of Busey’s common stock. Cash was paid in lieu of fractional shares. The fair value of common shares issued in consideration of the CrossFirst acquisition was based on the closing price of Busey’s common stock on February 28, 2025. Further, upon completion of the acquisition, each share of CrossFirst Series A Non-Cumulative Perpetual Preferred Stock converted to the right to receive one share of Busey Series A Preferred Stock. The fair value of Busey Series A Preferred Stock was based on the redemption price of $1,000 per share. The total consideration paid also included the fair value of replacement equity awards related to past service totaling $6.0 million. Busey used a Monte Carlo simulation to estimate the fair value of SSARs and market-based awards. Other awards were valued based on Busey’s closing stock price on February 28, 2025. Acquisition Accounting The CrossFirst acquisition was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair values as of March 1, 2025, the date of acquisition. Subsequent to the acquisition, fair value adjustments of $1.8 million have been recorded, as additional information and valuations became available. Estimated fair values are considered provisional until final fair values are determined or the measurement period has passed, but no later than one year from the acquisition date. Review of all valuations and taxes are still being performed by management. Therefore, amounts are subject to change from the provisional amounts disclosed below. As the total consideration paid for CrossFirst exceeded the estimated fair value of net assets acquired, goodwill of $49.6 million was recorded as a result of the acquisition. Goodwill recorded for this transaction reflects synergies expected from the acquisition and the greater revenue opportunities from Busey’s broader service capabilities in attractive new markets. Goodwill recorded for this transaction is not tax deductible and was assigned to the Banking operating segment. Merchants and Manufacturers Bank Corporation On April 1, 2024, Busey completed its acquisition of M&M and its wholly-owned subsidiary, M&M Bank, through a merger transaction. This partnership added M&M’s Life Equity Loan® products to Busey’s existing suite of services and expanded Busey’s presence in the suburban Chicago market. Merger of M&M Bank into Busey Bank M&M Bank’s results of operations were included in Busey’s results of operation beginning April 1, 2024. Busey operated M&M Bank as a separate banking subsidiary of Busey until it was merged with Busey Bank on June 21, 2024. At the time of the bank merger, M&M Bank’s banking centers became banking centers of Busey Bank, except for M&M’s banking center located at 990 Essington Rd., Joliet, Illinois, which was closed in connection with the bank merger. M&M Merger Consideration At the effective time of the M&M acquisition, each share of M&M common stock converted to the right to receive, at the election of each stockholder and subject to proration and adjustment as provided in the M&M merger agreement, either (1) $117.74 in cash (“Cash Election”), (2) 5.7294 shares of Busey common stock (“Share Election”), or (3) mixed consideration of $34.55 in cash and 4.0481 shares of Busey common stock (“Mixed Election”). Most of the M&M common stockholders who submitted an election form by the election deadline made the Share Election to receive their merger consideration solely in the form of shares of Busey common stock. As a result of the elections of M&M common stockholders, and in accordance with the proration and adjustment provisions of the M&M merger agreement, the merger consideration paid to M&M common stockholders was comprised of an aggregate of 1,429,304 shares of Busey common stock and an aggregate of $12.2 million in cash, allocated as follows for each share of M&M stock: (1) $117.74 in cash for the Cash Election, (2) $5.3966 in cash and 5.4668 shares of Busey common stock for the Share Election, and (3) $34.55 in cash and 4.0481 shares of Busey common stock for the Mixed Election. Pursuant to the terms of the M&M merger agreement, M&M common stockholders that did not make an election or submit a properly completed election form by the election deadline of March 29, 2024, received cash consideration of $117.74 for each share of M&M common stock held. No fractional shares of Busey common stock were issued in the M&M acquisition. Fractional shares were paid in cash at the rate of $23.32 per share. Additional merger consideration of $3.0 million was paid to redeem 300 shares of M&M preferred stock. Acquisition Accounting The M&M acquisition was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at estimated fair values on April 1, 2024, the date of acquisition. A final fair value adjustment of $0.1 million for deferred taxes was recorded during the three months ended March 31, 2025, in connection with the M&M acquisition. Fair values, including initial accounting for deferred taxes, were subject to refinement for up to one year after the closing date as additional information regarding the closing date fair values became available. Fair values were final as of March 31, 2025. As the total consideration paid for M&M exceeded the estimated fair value of net assets acquired, goodwill of $15.9 million was recorded as a result of the acquisition. Goodwill recorded for this transaction reflects synergies expected from the acquisition and expansion within the Chicago metropolitan market. Goodwill recorded for this transaction is not tax deductible and was assigned to the Banking operating segment. Acquisition Date Fair Values Acquisition-date fair values of the assets acquired and liabilities assumed, as well as the fair value of consideration transferred, were estimated as follows:
|  | As of
|  | March 1, 2025 |  | April 1, 2024
(dollars in thousands) |  | CrossFirst (provisional) |  | M&M (final)
Assets acquired |  |  |  |
Cash and cash equivalents |  | $ | 385,808 |  |  | $ | 33,577 |
Securities |  | 725,622 |  |  | 8,086 |
Portfolio loans, net of ACL |  | 6,023,063 |  |  | 417,230 |
Premises and equipment |  | 69,673 |  |  | 2,045 |
Other intangible assets |  | 81,783 |  |  | 6,346 |
Other assets |  | 212,832 |  |  | 10,461 |
Total assets acquired |  | 7,498,781 |  |  | 477,745 |
Liabilities assumed |  |  |  |
Deposits |  | 6,571,699 |  |  | 392,838 |
Short-term borrowings |  | 11,148 |  |  | 35,932 |
Long-term borrowings |  | 68,922 |  |  | 1,450 |
Subordinated notes, net of unamortized issuance costs |  | — |  |  | 3,911 |
Junior subordinated debt owed to unconsolidated trusts |  | 2,238 |  |  | 2,594 |
Other liabilities |  | 85,347 |  |  | 7,342 |
Total liabilities assumed |  | 6,739,354 |  |  | 444,067 |
Net assets acquired |  | $ | 759,427 |  |  | $ | 33,678 |
Consideration paid |  |  |  |
Cash |  | $ | 4 |  |  | $ | 15,200 |
Common stock |  | 795,227 |  |  | 34,375 |
Preferred stock |  | 7,750 |  |  | — |
Replacement awards 1 |  | 5,999 |  |  | — |
Total consideration paid |  | $ | 808,980 |  |  | $ | 49,575 |
Goodwill |  | $ | 49,553 |  |  | $ | 15,897 |
___________________________________________ 1.Represents the fair value of replacement equity awards issued to CrossFirst associates attributable to pre-combination service. Valuations of Loans Estimated fair values for the loan portfolio acquired in the CrossFirst acquisition includes adjustments to certain receivables that were not considered PCD as of the acquisition date. These fair value adjustments were determined using a discounted cash flow model that applies various assumptions about coupon rates, remaining maturities, prepayment speeds, projected default probabilities, losses given defaults, and estimates of prevailing discount rates. These loans did not show signs of deterioration since origination, and therefore, at the acquisition date, were not subject to the guidance related to PCD loans. Receivables acquired in the CrossFirst acquisition that were not subject to these requirements include non-PCD loans with a fair value of $4.70 billion and gross contractual amounts receivable of $4.79 billion. A portion of acquired loans were PCD. The following table provides a reconciliation between the purchase price and the fair value of these loans:
|  | As of
|  | March 1, 2025 |  | April 1, 2024
(dollars in thousands) |  | CrossFirst |  | M&M
PCD Financial Assets |  |  |  |
Gross contractual receivable for PCD financial assets |  | $ | 1,539,718 |  |  | $ | 29,290 |
ACL recorded for estimated uncollectible contractual cash flows specific to PCD financial assets |  | (100,783) |  |  | (1,243) |
Interest premium (discount) specific to PCD financial assets |  | (3,063) |  |  | (1,773) |
Loans previously charged-off by CrossFirst |  | (110,740) |  |  | — |
Fair value of PCD financial assets |  | $ | 1,325,132 |  |  | $ | 26,274 |
Pro Forma Results The following unaudited pro forma information has been prepared as if the CrossFirst acquisition had occurred on January 1, 2024, and as if the M&M acquisition had occurred January 1, 2023. The pro forma results combine the historical results of CrossFirst and M&M into Busey’s Consolidated Statements of Income (Unaudited), including the impact of purchase accounting adjustments such as loan discount accretion, intangible assets amortization, and deposit accretion, net of taxes. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisitions actually occurred on January 1, 2024, or on January 1, 2023, as applicable. Further, pro forma information does not purport to be indicative of future financial operating results. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, expense efficiencies, or asset dispositions. Only the merger related expenses that have been recognized are included in net income in the table below:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(dollars in thousands) |  | 2025 |  | 2024 |  | 2025 |  | 2024
Revenue (net interest income plus noninterest income) |  | $ | 191,142 |  |  | $ | 186,276 |  |  | $ | 562,462 |  |  | $ | 564,177 |
Net income |  | 55,120 |  |  | 54,853 |  |  | 123,822 |  |  | 120,093 |
Other Acquisition Costs Busey incurred acquisition related expenses as follows:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(dollars in thousands) |  | 2025 |  | 2024 |  | 2025 |  | 2024
Pre-tax acquisition expenses |  |  |  |  |  |  |  |
M&M |  | $ | — |  |  | $ | 597 |  |  | $ | 108 |  |  | $ | 2,947 |
CrossFirst 1 |  | 7,251 |  |  | 1,338 |  |  | 95,341 |  |  | 1,485 |
Pre-tax acquisition expenses 1 |  | $ | 7,251 |  |  | $ | 1,935 |  |  | $ | 95,449 |  |  | $ | 4,432 |
___________________________________________ 1.In addition to the acquisition costs presented in the table above, during the nine months ended September 30, 2025, Busey recorded a $4.0 million adjustment to the initial provision for unfunded commitments for CrossFirst acquisition-date balances based on revised estimates resulting from implementation of a new CECL model. Acquisition related expenses for CrossFirst were comprised primarily of an initial provision to establish an ACL on non-PCD loans (recorded as provision expense), and multiple components of noninterest expense including an initial provision for unfunded commitments; salaries, wages and employee benefits (including equity compensation); data processing; and legal, professional, and consulting costs. Acquisition related expenses for M&M were comprised primarily of professional fees and data processing costs. Of the total acquisition related expenses, the following legal, professional, and consulting costs were incurred to consummate the mergers:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(dollars in thousands) |  | 2025 |  | 2024 |  | 2025 |  | 2024
Pre-tax costs to consummate the merger |  |  |  |  |  |  |  |
M&M |  | $ | — |  |  | $ | (3) |  |  | $ | — |  |  | $ | 147 |
CrossFirst |  | 301 |  |  | 1,180 |  |  | 7,531 |  |  | 1,316 |
Pre-tax costs to consummate the merger |  | $ | 301 |  |  | $ | 1,177 |  |  | $ | 7,531 |  |  | $ | 1,463 |

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