First Busey Corp: Form 10-Q for the period ended Sep 30, 2025

SCOPE OF DISCUSSION

The following discussion and analysis are intended to assist readers in understanding Busey’s financial condition and results of operations during the three and nine months ended September 30, 2025, and should be read in conjunction with Busey’s Consolidated Financial Statements (Unaudited) and the related Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report, as well as Busey’s 2024 Annual Report.

BUSINESS

First Busey Corporation is an $18.19 billion financial holding company headquartered in Leawood, Kansas. First Busey Corporation’s common stock is traded on The Nasdaq Global Select Market under the symbol “BUSE,” and its preferred stock is traded on The Nasdaq Global Select Market under the symbol “BUSEP.”

Busey provides a full range of banking, wealth management, and payment technology solutions to individuals and corporate clients through its subsidiaries, Busey Bank and FirsTech.

Banking Center Markets

Busey Bank, headquartered in Champaign, Illinois, serves the banking needs of its customers through 79 banking centers located across six regions spanning 10 states.

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Busey’s East Region

Busey Bank serves the suburban Chicago market with 17 banking centers, offering a full spectrum of financial services to individuals and businesses. The Chicago area is home to several Fortune 500 companies, featuring a diverse economic mix that includes manufacturing, logistics, information technology, and financial services. With a regionalized approach and a legacy of service excellence, Busey remains a trusted financial partner to the vibrant communities of northeastern Illinois.

Busey Bank operates 20 banking centers in the St. Louis MSA, including eight banking centers in eastern Missouri and 12 banking centers in western Illinois. St. Louis has a diverse economy and major employment sectors that include healthcare, financial services, professional and business services, and retail. Busey continues to build on its legacy of serving dynamic urban and suburban markets in the region.

Busey Bank serves the southwest Florida banking market with three banking centers located in and around Fort Myers, an area which has experienced strong population growth, job expansion, and a vibrant housing market, as well as the benefits of a robust tourism and winter resort economy. These factors have contributed to a thriving environment for consumer banking and small business services.

Busey’s Midwest Region

Busey Bank serves the central Illinois banking market with 21 banking centers. The economy of central Illinois is agriculture-based, with a prominent presence of manufacturing and services industries. These industries, coupled with large healthcare and higher education sectors, anchor the communities in which they are located and have provided a comparatively stable foundation for housing, employment, and small business.

Busey Bank has one banking center in the Indianapolis, Indiana, area, which is the most populous city of Indiana with a diverse economy, due in part to it serving as the headquarters of many large corporations. Its strategic location and infrastructure have fostered steady economic performance, positioning Busey to meet the financial needs of both retail and commercial clients.

Busey’s Central Region

Busey Bank serves the Kansas City MSA with three banking centers, including two locations in Leawood, Kansas and one in Kansas City, Missouri. The Kansas City MSA is a diverse and economically vibrant region, supported by industries such as healthcare, financial services, manufacturing, and transportation. Leawood is known for its desirable residential communities and concentration of corporate offices and financial institutions, while the Missouri location provides connectivity to the area’s broader commercial and industrial base. Together, these banking centers position Busey to serve a wide range of consumer and business clients across one of the Midwest’s most dynamic metropolitan regions.

Busey Bank operates one banking center in Wichita, Kansas, the state’s largest city and a key regional economic hub. Wichita’s economy is anchored by its leadership in aviation, aerospace engineering, and manufacturing, along with growing healthcare and education footprints that contribute to a stable employment base and expanding residential development. Busey’s presence in Wichita enables Busey Bank to serve a diverse mix of consumer and commercial clients in a market known for its industrial strength and community resilience.

Busey Bank serves the Oklahoma banking market with three banking centers, including two in Oklahoma City and one in Tulsa. These cities anchor the state’s economy, with leading sectors including aerospace, energy, healthcare, and higher education. Both Oklahoma City and Tulsa have benefited from economic diversification efforts and urban revitalization, fostering resilience in employment and housing markets and providing opportunities for Busey to support local business and community needs.

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Busey’s Texas Region

Busey Bank operates four banking centers across the Dallas-Fort Worth MSA, including locations in Dallas, Frisco, and Fort Worth, Texas. The Dallas-Fort Worth MSA is the most populous metropolitan area in the southern United States, and serves as a key business and financial hub with a diverse economy spanning technology, healthcare, telecommunications, and logistics. The region’s rapid population growth, entrepreneurial energy, and deep talent pool have created strong demand for housing and commercial expansion, aligning well with Busey’s financial services model.

Busey’s West Region

Busey Bank has two banking centers in Arizona, located in Phoenix and Tucson. Phoenix, a fast-growing metropolitan area, features a broad-based economy with key sectors in advanced manufacturing, fintech, and education. Tucson, supported by a strong university presence and a vibrant tourism sector, has seen steady growth in small business development and residential communities. Busey’s presence supports a range of financial needs in both urban and suburban settings.

Busey Bank has three banking centers in Colorado, located in Denver and Colorado Springs. Denver stands out as a major economic center with thriving industries in technology, energy, and financial services, while Colorado Springs offers a more suburban environment anchored by defense, aerospace, and healthcare sectors. Both cities have experienced consistent population growth and infrastructure investment, creating opportunities for Busey to serve a dynamic customer base.

Busey Bank operates one banking center in Clayton, New Mexico. Located in northeastern New Mexico, Clayton’s economy is primarily driven by agricultural, cattle ranching, and small-scale retail, with steady contributions from transportation services due to its proximity to major highways. The community also benefits from local tourism linked to nearby parks and attractions. Busey’s presence supports essential financial needs in this rural market, reinforcing its commitment to serving both metropolitan and underserved areas with tailored banking solutions.

Busey’s Verticals

Transcending geographical boundaries, Busey operates in several industry verticals, including Life Equity Lending, Sponsor Finance, Energy Lending, and SBA Lending.

Busey's Conservative Banking Strategy

Busey’s financial strength is built on a long-term conservative operating approach. The quality of Busey’s core deposit franchise is a critical value driver of the institution. Busey remains substantially core deposit1 funded, with robust liquidity and significant market share in the communities it serves. As of September 30, 2025, Busey’s loan to deposit ratio was 90.2% and core deposits represented 93.8% of total deposits. Furthermore, Busey has sufficient on- and off-balance sheet liquidity to manage deposit fluctuations and the liquidity needs of its customers.

Busey’s credit performance reflects its highly diversified, conservatively underwritten loan portfolio, which has been originated predominantly to established customers with tenured relationships with Busey. Busey’s approach to lending and its underwriting standards are designed to emphasize relationship banking rather than transactional banking. In addition, as a matter of both policy and practice, Busey limits concentration exposures in any particular loan segment.

Busey’s conservative banking strategy is reflected in the strength of its capital base. Busey strives to consistently maintain capital ratios well in excess of thresholds required to be designated as well capitalized by applicable regulatory guidelines, thereby ensuring financial strength and flexibility across economic and operating cycles. As of September 30, 2025, Busey’s leverage ratio of Tier 1 capital to average assets was 11.6%, its common equity Tier 1 capital to risk weighted assets ratio was 12.3%, and its total capital to risk weighted assets ratio was 15.9%.

1 Core deposits is a non-GAAP financial measure. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “Item 2. Management’s Discussion and Analysis—Non-GAAP Financial Information” included in this Quarterly Report.

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Mergers and Acquisitions

CrossFirst Bankshares, Inc.

On March 1, 2025, Busey completed its acquisition of CrossFirst and its wholly-owned subsidiary, CrossFirst Bank. This partnership creates a premier commercial bank with 79 full-service locations across 10 states.

CrossFirst Bank’s results of operations were included in Busey’s 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.

Further information regarding Busey’s acquisitions is provided in Note 2. Mergers and Acquisitions in the Notes to the Consolidated Financial Statements (Unaudited).

RESULTS OF OPERATIONS — THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025

Net Income

Results of Busey’s operations, by operating segment, are presented below:

(dollars in thousands)

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Non-GAAP Adjusting Items and Non-GAAP Measures

Busey views certain non-operating items, including acquisition-related expenses, restructuring charges, and nonrecurring strategic events, as adjustments to net income reported under GAAP. We also adjust for net securities gains and losses to align with industry and research analyst reporting. The objective of our presentation of adjusted earnings and adjusted earnings metrics is to allow investors and analysts to more clearly identify quarterly trends in core earnings performance. Pre-tax non-GAAP adjustments were as follows:

(dollars in thousands)

1. During the nine months ended September 30, 2024, Busey executed a two-part balance sheet repositioning strategy in which it sold mortgage servicing rights on approximately $923.5 million of one-to-four family mortgage loans for a pre-tax gain of $7.7 million and sold available-for-sale debt securities with a book value of approximately $108.2 million for a pre-tax loss of $6.8 million.

2. During the nine months ended September 30, 2025, in connection with the CrossFirst acquisition, Busey’s recorded expense for the initial provision for credit losses consisting of a Day 2 provision for loan losses of $42.4 million, a Day 2 provision for unfunded commitments of $3.1 million, and an adjustment to the initial provision for unfunded commitments of $4.0 million that was recorded based on revised estimates resulting from implementation of a new CECL model.

3. Other acquisition expenses related to the acquisition of CrossFirst, which was completed on March 1, 2025, and the acquisition of M&M, which was completed on April 1, 2024.

4. Restructuring expenses were related to previously disclosed restructuring and efficiency plans.

A reconciliation of non-GAAP measures, which Busey believes facilitates the assessment of its financial results and peer comparability, is included in tabular form in this Quarterly Report. See “Item 2. Management’s Discussion and Analysis—Non-GAAP Financial Information.”

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Operating Performance Metrics

Operating performance metrics presented in the table below have been derived from information used by management to monitor and manage Busey’s financial performance:

(dollars in thousands, except per share amounts)

1. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “Item 2. Management’s Discussion and Analysis—Non-GAAP Financial Information” included in this Quarterly Report.

2. Beginning in 2025, Busey revised its calculation of adjusted net income for all periods presented to include, as applicable, adjustments for net securities gains and losses, realized net gains and losses on the sale of mortgage servicing rights, and non-recurring deferred tax adjustments.

3. Annualized measure.

4. Beginning in the second quarter of 2025, Busey revised its presentation, for all periods presented, to reclassify the provision for unfunded commitments so that it is now included within the provision for credit losses, affecting the calculation of pre-provision net revenue and related measures and ratios.

Net Interest Income

Net interest income is the difference between interest income and fees earned on loans and investments (“interest-earning assets”) and interest expense incurred on deposits and borrowings (“interest-bearing liabilities”). Interest rate levels and volume fluctuations within interest-earning assets and interest-bearing liabilities impact net interest income. Net interest margin is tax-equivalent net interest income as a percent of average interest-earning assets.

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Certain assets with tax favorable treatment are evaluated on a tax-equivalent basis, assuming a federal income tax rate of 21.0%. Tax favorable assets generally have lower contractual pre-tax yields than fully taxable assets. A tax-equivalent analysis is performed by adding the tax savings to the earnings on tax favorable assets. After factoring in the tax favorable effects of these assets, the yields may be more appropriately evaluated against alternative earning assets. In addition to yield, various other risks are factored into the evaluation process.

Consolidated Average Balance Sheets and Interest Rates

The table below presents Busey’s Consolidated Average Balance Sheets, summarizing average balances for each major category of assets and liabilities, the interest income earned on interest-earning assets, the interest expense paid for interest-bearing liabilities, and the related interest yields for the periods indicated. Average information is provided on a daily average basis:

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited)

(dollars in thousands)

1. On a tax-equivalent basis and assuming a federal income tax rate of 21.0%. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “Item 2. Management’s Discussion and Analysis—Non-GAAP Financial Information” included in this Quarterly Report.

2. Non-accrual loans have been included in average portfolio loans.

3. Interest income includes tax-equivalent adjustments of $0.8 million and $0.4 million for the three months ended September 30, 2025 and 2024, respectively.

4. Includes short-term and long-term borrowings. Interest expense includes non-usage fees on a revolving loan.

5. Annualized.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited)

(dollars in thousands)

1. On a tax-equivalent basis and assuming a federal income tax rate of 21.0%. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “Item 2. Management’s Discussion and Analysis—Non-GAAP Financial Information” included in this Quarterly Report.

2. Non-accrual loans have been included in average portfolio loans.

3. Interest income includes tax-equivalent adjustments of $2.1 million and $1.2 million for the nine months ended September 30, 2025 and 2024, respectively.

4. Includes short-term and long-term borrowings. Interest expense includes non-usage fees on a revolving loan.

5. Annualized.

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Notable changes in average assets and average liabilities are summarized as follows:

(dollars in thousands)

(dollars in thousands)

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Changes in net interest income and net interest margin are summarized as follows:

(dollars in thousands)

(dollars in thousands)

1. Assuming a federal income tax rate of 21.0%. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “Item 2. Management’s Discussion and Analysis—Non-GAAP Financial Information” included in this Quarterly Report.

2. Net interest income expressed as a percentage of average earning assets, stated on a tax-equivalent basis.

Busey continues to evaluate and execute off-balance sheet hedging and balance sheet strategies as well as embedding rate protection in our asset originations to provide stabilization to net interest income in lower rate environments. Stability in core deposit balances, as well as retail time deposit and savings specials, have continued to provide sufficient funding flows to allow intentional runoff of brokered and high-cost, non-relationship funding. During the three months ended September 30, 2025, Busey executed a strategic targeted reduction of $794.6 million high-cost, non-relationship deposits bearing a weighted average cost of 4.45%, including $228.2 million of brokered deposits.

Net interest spread represents the difference between the average rate earned on earning assets and the average rate paid on interest-bearing liabilities, and is presented in the table below:

1. Net interest spread is calculated on a tax-equivalent basis.

Annualized net interest margins for the quarterly periods indicated were as follows:

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Management attempts to mitigate the effects of an unpredictable interest-rate environment through effective portfolio management, prudent loan underwriting and pricing discipline, and operational efficiencies. For a description of accounting policies underlying the recognition of interest income and expense, refer to the Notes to Consolidated Financial Statements in Busey’s 2024 Annual Report.

Noninterest Income

Changes in noninterest income are summarized as follows:

(dollars in thousands)

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited)

(dollars in thousands)

Total noninterest income was $41.2 million for the three months ended September 30, 2025, an increase of 14.9% from the comparable period in 2024, as we benefit from the CrossFirst acquisition and extend services into new markets. Total noninterest income was $107.3 million for the nine months ended September 30, 2025, an increase of 2.7% from the comparable period in 2024. The nine months ended September 30, 2025, includes seven months of income from the CrossFirst acquisition, offset by net securities losses that were recorded in the first quarter of 2025 in connection with a strategic balance sheet repositioning. Additionally, the prior year included $7.7 million of realized net gains on the sale of mortgage servicing rights, which was not repeated in the current year.

Wealth management fees were $17.2 million for the three months ended September 30, 2025, an 11.7% increase from the comparable period in 2024, and were $51.3 million for the nine months ended September 30, 2025, a 9.6% increase from the comparable period for 2024, primarily due to increases in trust fee income. On a segment basis, Busey’s Wealth Management division contributed $17.4 million, or 42.2%, of Busey’s noninterest income for the three months ended September 30, 2025, which included approximately $0.2 million reported as other noninterest income, and contributed $51.9 million, or 48.4%, of Busey’s noninterest income for the nine months ended September 30, 2025, which included approximately $0.6 million reported as other noninterest income. Busey’s Wealth Management division ended the third quarter of 2025 with $14.96 billion in assets under care, an increase of 9.3% compared to the balance on September 30, 2024. Busey’s portfolio management team continues to focus on long-term returns and managing risk in the face of volatile markets.

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Payment technology solutions relates to Busey’s payment processing company, FirsTech. Income from payment technology solutions was $5.1 million for the three months ended September 30, 2025, a 3.3% decrease from the comparable period in 2024, and was $15.1 million for the nine months ended September 30, 2025, a 10.5% decrease from the comparable period in 2024, primarily due to decreases in income from online bill payments. On a segment basis, FirsTech contributed $5.5 million, or 13.4%, of Busey’s noninterest income for the three months ended September 30, 2025, and $16.3 million, or 15.2%, of Busey’s noninterest income for the nine months ended September 30, 2025.

Combined, noninterest income from wealth management fees and payment technology solutions represented 54.1% and 61.9% of Busey’s noninterest income for the three and nine months ended September 30, 2025, respectively, providing a complement to spread-based revenue from traditional banking activities.

Treasury management services consist primarily of business analysis charges and wire transfer fees on commercial accounts. Income from treasury management services increased by 108.9% and 101.6% compared to the three and nine months ended September 30, 2024, respectively, due to the addition of CrossFirst commercial services.

Card services and ATM fees, which include both commercial and consumer accounts, increased by 34.9% and 34.6% compared to the three and nine months ended September 30, 2024, respectively, primarily due to addition of CrossFirst corporate card services.

Other service charges on deposit accounts were $1.6 million for the three months ended September 30, 2025, a 32.3% decline from the comparable period in 2024, and were $4.7 million for the nine months ended September 30, 2025, a decline of 33.9% from the comparable period in 2024. Declines were largely related to lower non-sufficient fund charges, reflecting changes Busey made to its fee structure in 2025.

Mortgage revenue was $0.7 million for the three months ended September 30, 2025, an 85.1% increase from the comparable period in 2024, and was $1.8 million for the nine months ended September 30, 2025, an 11.6% increase from the comparable period in 2024. General economic conditions and interest rate volatility may impact future mortgage revenue.

Income on bank owned life insurance was $1.6 million for the three months ended September 30, 2025, a 36.5% increase from the comparable period in 2024, as a result of a $0.5 million increase in the cash surrender value of the policies, partially offset by a $0.1 million decrease in earnings on death proceeds. Income on bank owned life insurance was $4.8 million for the nine months ended September 30, 2025, an 18.9% increase from the comparable period in 2024, as a result of a $1.3 million increase in the cash surrender value of the policies, partially offset by a $0.5 million decrease in earnings on death proceeds.

During the nine months ended September 30, 2025, Busey did not record any realized gains on the sale of mortgage servicing rights. In comparison, during the nine months ended September 30, 2024, Busey recognized a $7.7 million gain on the sale of mortgage servicing rights in connection with a strategic two-part balance sheet repositioning. For more information, see “Busey executed a two-part balance sheet repositioning strategy” in the Management Discussion and Analysis included in Busey’s Quarterly Report for the first quarter of 2024, filed with the SEC on May 7, 2024.

Net securities losses were $0.3 million for the three months ended September 30, 2025, a decrease from the net securities gains from the comparable period in 2024. Net securities losses of $10.1 million during the nine months ended September 30, 2025, were greater than the net securities losses realized during the comparable period in 2024. Losses for the nine months ended September 30, 2025, were comprised of $15.5 million of realized net losses on securities associated with a strategic balance sheet repositioning in the first quarter of 2025, partially offset by second quarter unrealized net gains on Busey’s approximately 3% equity ownership of a financial institution that was the target of an announced acquisition at a significant market premium.

Other noninterest income was $5.9 million for the three months ended September 30, 2025, a 25.7% increase from the comparable period in 2024, and was $13.7 million for the nine months ended September 30, 2025, a 36.4% increase from the comparable period in 2024. Increases were primarily attributable to fluctuations in income recognized on private equity investments, commercial loan servicing income, swap origination fees, and syndication fees.

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Noninterest Expense

Changes in noninterest expense are summarized as follows:

(dollars in thousands)

1. The efficiency ratio and adjusted efficiency ratio are non-GAAP financial measures. For a reconciliation of non-GAAP measures to the most directly comparable financial GAAP measures, see “Item 2. Management’s Discussion and Analysis—Non-GAAP Financial Information” included in this Quarterly Report.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited)

(dollars in thousands)

1. The efficiency ratio and adjusted efficiency ratio are non-GAAP financial measures. For a reconciliation of non-GAAP measures to the most directly comparable financial GAAP measures, see “Item 2. Management’s Discussion and Analysis—Non-GAAP Financial Information” included in this Quarterly Report.

Total noninterest expense was $120.0 million for the three months ended September 30, 2025, a 58.9% increase from the comparable period in 2024. Total noninterest expense was $359.9 million for the nine months ended September 30, 2025, a 61.5% increase from the comparable period in 2024. Growth in noninterest expense was primarily attributable to acquisition and restructuring expenses related to the CrossFirst acquisition, added costs for operating expenses for two banks from March 1, 2025, until the banks were merged on June 20, 2025, and increased expenses associated with Busey’s larger organization and expanded branch network. Acquisition and restructuring expenses contributed $7.2 million to total noninterest expense for the three months ended September 30, 2025, compared to $1.9 million for the comparable period in 2024. Acquisition and restructuring expenses contributed $49.8 million to total noninterest expense for the nine months ended September 30, 2025, compared to $4.6 million for the comparable period in 2024.

Annual pre-tax expense synergy estimates resulting from the CrossFirst acquisition remain on track at $25.0 million. Busey anticipates a 50% rate of synergy realization in 2025 and 100% in 2026.

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Salaries, wages, and employee benefits were $74.1 million for the three months ended September 30, 2025, a 66.3% increase from the comparable period in 2024 and were $220.1 million for the nine months ended September 30, 2025, a 69.1% increase from the comparable period in 2024. Acquisition and restructuring expenses were $5.6 million and $33.0 million for the three and nine months ended September 30, 2025, respectively, with additional severance, retention, and stock-based compensation expenses related to the CrossFirst acquisition. Further, in connection with the CrossFirst acquisition in March and the addition of 16 banking centers, Busey’s workforce expanded, with a net addition of 412 full-time equivalent associates over the past year.

Data processing expense was $9.7 million for the three months ended September 30, 2025, a 40.6% increase from the comparable period in 2024. Excluding acquisition and restructuring expenses, data processing expense was $9.3 million for the three months ended September 30, 2025, a 36.2% increase from the comparable period in 2024. Data processing expense was $33.3 million for the nine months ended September 30, 2025, a 62.0% increase from the comparable period in 2024. Excluding acquisition and restructuring expenses, data processing expense was $26.6 million for the nine months ended September 30, 2025, a 32.9% increase from the comparable period in 2024. Busey has continued to make investments in technology and has also experienced inflation-driven price increases.

Combined, net occupancy expense of premises and furniture and equipment expense totaled $10.1 million for the three months ended September 30, 2025, a 61.2% increase from the comparable period in 2024, and $27.9 million for the nine months ended September 30, 2025, a 46.1% increase from the comparable period in 2024. The CrossFirst acquisition added 16 banking centers. Further, on August 18, 2025, Busey opened its second Denver service center, located in the Cherry Creek North neighborhood. Primary cost drivers in these expense categories include lease costs, repairs and maintenance, depreciation expense, real estate taxes, and utilities.

Professional fees were $2.9 million for the three months ended September 30, 2025, a 6.0% decrease from the comparable period in 2024. Excluding acquisition and restructuring expenses of $0.4 million and $1.4 million for the three months ended September 30, 2025 and 2024, respectively, professional fees for the three months ended September 30, 2025, were 47.3% higher than the comparable period in 2024. Professional fees were $15.3 million for the nine months ended September 30, 2025, a 94.7% increase from the comparable period in 2024. Excluding acquisition and restructuring expenses of $8.0 million and $1.9 million for the nine months ended September 30, 2025 and 2024, respectively, professional fees for the nine months ended September 30, 2025, were 23.3%, higher than the comparable period in 2024. Changes in professional fees were primarily related to legal, audit and accounting, and consulting expenses.

Amortization of intangible assets was $4.5 million for the three months ended September 30, 2025, a 76.9% increase from the comparable period in 2024, and $12.2 million for the nine months ended September 30, 2025, a 60.6% increase from the comparable period for 2024. The CrossFirst acquisition added an estimated $81.8 million of finite-lived intangible assets with amortization of $2.3 million and $5.5 million during the three and nine months ended September 30, 2025, respectively. Busey uses an accelerated amortization methodology.

Interchange expense was $1.3 million for the three months ended September 30, 2025, a 1.2% decrease from the comparable period in 2024, and was $4.0 million for the nine months ended September 30, 2025, a 15.3% decrease from the comparable period in 2024. Fluctuations in interchange expense relate to payment and volume activity at FirsTech.

FDIC insurance expense was $3.2 million for the three months ended September 30, 2025, a 123.0% increase from the comparable period in 2024, and $7.7 million for the nine months ended September 30, 2025, an 81.2% increase from the comparable period in 2024. Additional FDIC insurance assessments were the result of Busey’s growth in average assets in connection with the CrossFirst acquisition.

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Other noninterest expense was $14.1 million for the three months ended September 30, 2025, a 51.6% increase from the comparable period in 2024, and was $39.4 million for the nine months ended September 30, 2025, a 37.5% increase from the comparable period in 2024. Increases in other noninterest expense are attributable to multiple items, including marketing, business development, and supplies, as well as increases in acquisition and restructuring expenses of $0.4 million and $1.4 million compared to the three and nine months ended September 30, 2024, respectively.

Efficiency Ratio

The efficiency ratio2, which is a measure commonly used by management and the banking industry, measures the amount of expense incurred to generate a dollar of revenue. Busey’s efficiency ratio was 58.5% for the three months ended September 30, 2025, compared to 61.8% for the same period in 2024, and was 65.4% for the nine months ended September 30, 2025, compared to 61.1% for the same period in 2024.

Busey’s adjusted efficiency ratio2 was 54.9% for the three months ended September 30, 2025, compared to 60.2% for the same period in 2024, and was 56.0% for the nine months ended September 30, 2025, compared to 61.1% for the same period in 2024.

Taxes

Busey’s effective income tax rate of 26.1% for the three months ended September 30, 2025, aligning with a combined federal and state statutory rate of approximately 26%. Busey’s effective income tax rate of 31.7% for the nine months ended September 30, 2025, was impacted by the remeasurement of deferred tax assets acquired in the CrossFirst acquisition, discrete adjustments related to equity award vestings, and other non-recurring adjustments.

Busey continues to monitor evolving federal and state tax legislation and its potential impact on operations on an ongoing basis. As of September 30, 2025, Busey Bank was under examination by the Florida Department of Revenue for its 2020 to 2022 corporate income tax filings and by the Illinois Department of Revenue for M&M’s tax filings for the tax years 2022 and 2023.

2 The efficiency ratio and adjusted efficiency ratio are non-GAAP financial measures. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “Item 2. Management’s Discussion and Analysis—Non-GAAP Financial Information” included in this Quarterly Report.

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FINANCIAL CONDITION

Balance Sheet

Changes in significant items on Busey’s Consolidated Balance Sheets (Unaudited) are summarized as follows:

(dollars in thousands)

Portfolio Loans

Busey believes that making sound and profitable loans is a necessary and desirable means of employing funds available for investment. Busey maintains lending policies and procedures designed to focus lending efforts on the types, locations, and duration of loans most appropriate for its business model and markets. While not specifically limited, Busey attempts to focus its lending on short to intermediate-term loans (0-10 years) in geographic areas within 125 miles of its lending offices. Busey seeks to utilize government-assisted lending programs, such as the SBA and U.S. Department of Agriculture lending programs, when prudent. Generally, loans are collateralized by assets, primarily real estate, and guaranteed by individuals. Loans are expected to be repaid primarily from cash flows of the borrowers or from proceeds from the sale of selected assets of the borrowers.

Management reviews and approves Busey Bank’s lending policies and procedures on a regular basis. Management routinely—at least quarterly—reviews the ACL in conjunction with reports related to loan production, loan quality, concentrations of credit, loan delinquencies, non-performing loans, and potential problem loans. Busey’s underwriting standards are designed to encourage relationship banking rather than transactional banking. Relationship banking implies a primary banking relationship with the borrower that includes, at a minimum, an active deposit banking relationship in addition to the lending relationship. Significant underwriting factors in addition to location, duration, a sound and profitable cash flow basis, and the borrower’s character, include the quality of the borrower’s financial history, the liquidity of the underlying collateral, and the reliability of the valuation of the underlying collateral.

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At no time is a borrower’s total borrowing relationship permitted to exceed Busey Bank’s regulatory lending limit. Busey generally limits such relationships to amounts substantially less than the regulatory limit. Loans to related parties, including executive officers and directors of First Busey Corporation and its subsidiaries, are reviewed for compliance with regulatory guidelines.

Busey maintains an independent loan review department that reviews loans for compliance with Busey’s loan policy on a periodic basis. In addition, the loan review department reviews risk assessments made by Busey’s credit department, lenders, and loan committees. Results of these reviews are presented to management and the audit committee at least quarterly.

Busey Bank’s lending can be summarized into five primary lending activities, which can be further categorized as either commercial or retail lending. Commercial lending activities consist of C&I and other commercial loans, CRE loans, and real estate construction loans while retail lending activities consist of retail real estate loans and retail other loans. A description of each of the five primary areas can be found in “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Portfolio Loans” of Busey’s 2024 Annual Report.

Portfolio Composition

The composition of Busey’s loan portfolio as of the dates indicated, as well as changes in portfolio loan balances, were as follows:

(dollars in thousands)

Total portfolio loans were $13.60 billion at September 30, 2025, compared to $7.70 billion at December 31, 2024. The $5.90 billion growth in the loan portfolio during the first nine months of 2025 was primarily attributable to the CrossFirst acquisition. Busey remains steadfast in its conservative approach to underwriting and disciplined approach to pricing. During the third quarter of 2025, the Company experienced elevated payoffs that outpaced new production momentum. Busey expects continued pressure, particularly from commercial real estate payoffs through the remainder of 2025.

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Concentration of Credit Risk

As a matter of policy and practice, Busey limits the level of concentration exposure in any particular loan segment with the goal of maintaining a well-diversified loan portfolio. The following table presents the percentage of total portfolio loans for each lending activity:

Busey Bank originates loans across its regional operating model. Busey’s regions are defined as follows:

• East – Suburban Chicago markets, the St. Louis MSA, and southwest Florida
• Midwest – Central Illinois and Indianapolis, Indiana
• Central – The Kansas City MSA, central Kansas, and Oklahoma
• Texas – The Dallas-Fort Worth MSA
• West – Colorado, New Mexico, and Arizona
• Verticals – Busey’s Life Equity Lending, Sponsor Finance, Energy Lending, and SBA Lending products

The geographic distribution of Busey Bank loans outstanding as of September 30, 2025, that were originated in each of these markets is presented in the table below:

(dollars in thousands)

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Prior to the CrossFirst acquisition on March 1, 2025, Busey Bank’s loan origination occurred in the Illinois, Missouri, Florida, and Indiana markets. The geographic distribution of Busey Bank loans outstanding as of December 31, 2024, that were originated in each of these markets is presented in the table below:

(dollars in thousands)

CRE loans comprised 39.9% of Busey’s total loan portfolio as of September 30, 2025, and were 25.7% owner occupied. CRE loans are made across a variety of industries, as depicted in the table below. Balances reflected in the table below do not include loan origination fees or costs, purchase accounting adjustments, SBA discounts, or negative escrow amounts.

(dollars in thousands)

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Allowance for Credit Losses and Provision for Loan Losses

The ACL is a significant estimate on Busey’s unaudited consolidated financial statements, affecting both earnings and capital. The methodology adopted influences, and is influenced by, Busey’s overall credit risk management processes. The ACL is recorded in accordance with GAAP to provide an adequate reserve for expected credit losses that is reflective of management’s best estimate of what is expected to be collected. Estimates of credit losses are based on a careful consideration of all significant factors affecting the collectability as of the evaluation date. The ACL is established through the provision for credit loss expense charged to income. Provision for loan losses expenses were recorded as follows:

(dollars in thousands)

1. The nine months ended September 30, 2025, included $42.4 million to establish an initial allowance for loan losses in connection with the CrossFirst acquisition.

The $3.3 million provision reversal for loan losses recorded during the three months ended September 30, 2025, included a provision release of $7.1 million for PCD loans due to payoffs/paydowns and provision expense of $3.8 million for non-PCD loans to support charge-offs and qualitative factor adjustments. The provision for loan losses for the nine months ended September 30, 2025, included $42.4 million of provision expense recorded to establish an initial allowance for non-PCD loans immediately following the close of the CrossFirst acquisition in accordance with ASC 326-20-30-15.

The ACL and the ratio of ACL to portfolio loan balances is presented below by lending activity:

(dollars in thousands)

As of September 30, 2025, management believed the level of the ACL to be appropriate based upon the information available. However, additional losses may be identified in the loan portfolio as new information is obtained. Factors that influence Busey’s calculation of its ACL include changes in economic conditions and forecasts, originated and acquired loan portfolio composition, credit performance trends, portfolio duration, and other factors.

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Non-Performing Loans and Non-Performing Assets

Loans are considered past due if the required principal or interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory guidelines. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Typically, loans are secured by collateral. When a loan is classified as non-accrual and determined to be collateral dependent, it is appropriately reserved or charged down through the ACL to the fair value of Busey’s interest in the underlying collateral less estimated costs to sell. Busey’s loan portfolio is collateralized primarily by real estate.

The following table sets forth information concerning non-performing assets and asset quality ratios:

(dollars in thousands)

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Busey’s total assets grew by 51.0% to $18.19 billion as of September 30, 2025, compared to $12.05 billion as of December 31, 2024, largely in connection with the CrossFirst acquisition. Further, Busey’s loan portfolio grew by 76.7% to $13.60 billion as of September 30, 2025, compared to $7.70 billion as of December 31, 2024.

Asset quality continues to be strong. Following the CrossFirst Bank Merger in June, Busey is operating as one bank, with a singular credit policy, concentration limits, and monitoring that will continue to align with Busey’s pillars of credit quality. Busey’s operating mandate and focus remain on emphasizing credit quality over asset growth.

Non-performing loan balances increased to $47.5 million as of September 30, 2025, compared to $23.2 million as of December 31, 2024, primarily due to PCD loans assumed in the CrossFirst acquisition. Non-performing loans represented 0.35% of portfolio loans as of September 30, 2025, compared to 0.30% as of December 31, 2024. Busey’s allowance for credit losses provided coverage of 3.67 times non-performing loans at September 30, 2025, compared to 3.59 times at December 31, 2024.

Non-performing assets, which include non-performing loans, OREO, and other repossessed assets, increased to $57.7 million as of September 30, 2025, compared to $23.3 million as of December 31, 2024, primarily due to PCD loans assumed in the CrossFirst acquisition. Non-performing assets represented 0.32% of total assets as of September 30, 2025, compared to 0.19% as of December 31, 2024. Busey’s allowance for credit losses provided coverage of 3.02 times non-performing assets at September 30, 2025, compared to 3.58 times at December 31, 2024.

Classified assets, which include non-performing assets and substandard loans, increased to $161.1 million as of September 30, 2025, compared to $85.3 million as of December 31, 2024, primarily due to PCD loans assumed in the CrossFirst acquisition. Classified assets represented 7.03% of the Bank’s Tier 1 capital and ACL at September 30, 2025, compared to 5.61% at December 31, 2024.

Net charge-offs totaled $5.8 million and $50.2 million for the three and nine months ended September 30, 2025, respectively, compared to $0.2 million and $15.3 million for the comparable periods in 2024. Net charge-offs for the nine months ended September 30, 2025, include $35.5 million related to PCD loans acquired from CrossFirst Bank, which were fully reserved at acquisition and did not require recording additional provision expense.

Asset quality metrics remain dependent upon market-specific economic conditions, and specific measures may fluctuate from period to period. If economic conditions were to deteriorate, Busey would expect the credit quality of its loan portfolio to decline and loan defaults to increase.

Potential Problem Loans

Potential problem loans are loans classified as substandard which are not individually evaluated, non-accrual, or 90+ days past due, but where current information indicates that the borrower may not be able to comply with loan repayment terms. Management assesses the potential for loss on such loans and considers the effect of any potential loss in determining its provision for expected credit losses. Potential problem loans increased to $103.3 million as of September 30, 2025, compared to $62.0 million as of December 31, 2024. Management continues to monitor these loans and work with the borrowers on restructurings, guarantees, additional collateral, or other planned actions. As of September 30, 2025, management identified no other loans that represent or result from trends or uncertainties that would be expected to materially impact future operating results, liquidity, or capital resources.

Deposits

Total deposits increased by 51.0% to $15.07 billion as of September 30, 2025, compared to $9.98 billion as of December 31, 2024, in connection with the CrossFirst acquisition. Busey focuses on deepening its customer relationships to maintain and protect its strong core deposit3 franchise. Core deposits include non-brokered transaction accounts, money market and savings deposit accounts, and time deposits of $250,000 or less. Core deposits represented 93.8% of total deposits as of September 30, 2025.

3 Core deposits is a non-GAAP financial measure. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see “Item 2. Management’s Discussion and Analysis—Non-GAAP Financial Information” included in this Quarterly Report.

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Deposits are federally insured up to the FDIC insurance limit of $250,000. When a portion of a deposit account exceeds the FDIC insurance limit, that portion is uninsured. Estimated uninsured deposits were $6.45 billion, or 43% of total deposits, as of September 30, 2025, compared to $3.78 billion, or 38% of total deposits, as of December 31, 2024. Excluding intercompany accounts, fully collateralized accounts (including preferred deposits), and pass-through accounts where clients have deposit insurance at the correspondent financial institution, the portion of Busey’s deposit base that was uninsured and not otherwise collateralized was $5.31 billion, or 35% of total deposits, as of September 30, 2025, compared to $2.96 billion, or 30% of total deposits, as of December 31, 2024.

Liquidity

Liquidity management is the process by which Busey ensures that adequate liquid funds are available to meet the present and future cash flow obligations arising in the daily operations of its business. These financial obligations consist of needs for funds to meet commitments to borrowers for extensions of credit, fund capital expenditures, honor withdrawals by customers, pay dividends to stockholders, and pay operating expenses. Busey’s most liquid assets are cash and due from banks, interest-bearing bank deposits, and federal funds sold. Balances of these assets are dependent on Busey’s operating, investing, lending, and financing activities during any given period.

Average liquid assets are summarized in the table below:

(dollars in thousands)

Unencumbered cash and securities on Busey’s Consolidated Balance Sheets (Unaudited) are summarized as follows:

(dollars in thousands)

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Busey’s primary sources of funds consist of deposits, investment maturities and sales, loan principal repayments, and capital funds. Additional liquidity is provided by the ability to borrow from the FHLB, the Federal Reserve Bank, and Busey’s revolving credit facility, as summarized in the table below:

(dollars in thousands)

Further, Busey could utilize brokered deposits as additional sources of liquidity, as needed.

As of September 30, 2025, management believed that adequate liquidity existed to meet all projected cash flow obligations. Busey seeks to achieve a satisfactory degree of liquidity by actively managing both assets and liabilities. Asset management guides the proportion of liquid assets to total assets, while liability management monitors future funding requirements and prices liabilities accordingly.

Off-Balance-Sheet Arrangements

Busey Bank routinely enters into commitments to extend credit and standby letters of credit in the normal course of business to meet the financing needs of its customers. The balance of commitments to extend credit represents future cash requirements and some of these commitments may expire without being drawn upon.

The following table summarizes Busey’s outstanding commitments and reserves for unfunded commitments:

(dollars in thousands)

The following table summarizes Busey’s provision for unfunded commitments expenses (releases):

(dollars in thousands)

1. The nine months ended September 30, 2025, included $7.2 million to establish an initial allowance for unfunded commitments in connection with the CrossFirst acquisition.

Busey anticipates that it will have sufficient funds available to meet current loan commitments, including loan applications received and in process prior to the issuance of firm commitments.

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Capital Resources

Busey’s capital ratios are in excess of those required to be considered “well-capitalized” pursuant to applicable regulatory guidelines. The Federal Reserve uses capital adequacy guidelines in its examination and regulation of bank holding companies and their subsidiary banks. Risk-based capital ratios are established by allocating assets and certain off-balance-sheet commitments into risk-weighted categories. These balances are then multiplied by the factor appropriate for that risk-weighted category. In order to refrain from restrictions on dividends, equity repurchases, and discretionary bonus payments, banking institutions must maintain capital in excess of regulatory minimum capital requirements. The table below presents minimum capital ratios that include the capital conservation buffer in comparison to the capital ratios for First Busey and its subsidiary bank as of September 30, 2025:

For further discussion of capital resources and requirements, see “Note 8: Regulatory Capital.”

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NON-GAAP FINANCIAL INFORMATION

This Quarterly Report contains certain financial information determined by methods other than in accordance with GAAP. Management uses these non-GAAP financial measures and non-GAAP ratios, together with the related GAAP financial measures, in analysis of Busey’s performance and in making business decisions, as well as for comparison to Busey’s peers. Busey believes the adjusted measures are useful for investors and management to understand the effects of certain non-core and non-recurring noninterest items and provide additional perspective on Busey’s performance over time.

Non-GAAP disclosures have inherent limitations and are not audited. They should not be considered in isolation or as a substitute for the results reported in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Tax effected numbers included in these non-GAAP disclosures are based on estimated federal income tax rates or effective tax rates as noted with the tables below.

The following tables present reconciliations between these non-GAAP measures and what management believes to be the most directly comparable GAAP financial measures.

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

Pre-Provision Net Revenue and Related Measures

(dollars in thousands)

1. Beginning in the second quarter of 2025, Busey revised its presentation, for all periods presented, to reclassify the provision for unfunded commitments so that it is now included within the provision for credit losses; therefore, it is no longer included within total noninterest expense.

2. Annualized measure.

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

Adjusted Net Income, Average Tangible Common Equity, and Related Ratios

(dollars in thousands, except per share amounts)

1. The Day 2 provision represents the initial provision for credit losses recorded in connection with the CrossFirst acquisition to establish an allowance on non-PCD loans and unfunded commitments and is reflected within the provision for credit losses line on the Statement of Income.

2. In the second quarter of 2025, Busey recorded an adjustment to the initial provision for unfunded commitments for CrossFirst acquisition-date balances based on revised estimates resulting from implementation of a new Current Expected Credit Losses model.

3. Tax benefits were calculated for the year-to-date periods using tax rates of 26.64% and 22.21% for the nine months ended September 30, 2025 and 2024, respectively. Tax benefits for the quarterly periods were calculated as the year-to-date tax amounts less the tax reported for previous quarters during the year.

4. A deferred valuation tax adjustment in 2025 was recorded in connection with the CrossFirst acquisition and the expansion of Busey’s footprint into new states. Additionally, 2025 includes a write-off of deferred tax assets related to non-deductible compensation and acquisition-related expenses. A deferred tax valuation adjustment in 2024 resulted from a change to Busey’s Illinois apportionment rate due to recently enacted regulations. Deferred tax adjustments are reflected within the income taxes line on the Statement of Income.

5. Beginning in 2025, Busey revised its calculation of adjusted net income for all periods presented to include, as applicable, adjustments for net securities gains and losses, realized net gains and losses on the sale of mortgage servicing rights, and one-time deferred tax valuation adjustments. In 2024, these adjusting items were presented as further adjustments to adjusted net income.

6. Annualized measure.

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

Tax-Equivalent Net Interest Income, Adjusted Net Interest Income, Net Interest Margin, and Adjusted Net Interest Margin

(dollars in thousands)

1. Tax-equivalent adjustments were calculated using an estimated federal income tax rate of 21.0%, applied to non-taxable interest income on investments and loans.

2. Annualized measure.

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

Adjusted Noninterest Income, Revenue Measures, Adjusted Noninterest Expense, and Efficiency Ratios

(dollars in thousands)

1. Tax-equivalent adjustments were calculated using an estimated federal income tax rate of 21.0%, applied to non-taxable interest income on investments and loans.

2. Beginning in the second quarter of 2025, Busey revised its presentation, for all periods presented, to reclassify the provision for unfunded commitments so that it is now included within the provision for credit losses; therefore, it is no longer included within total noninterest expense. This change affects all measures and ratios derived from total noninterest expense.

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

Tangible Assets, Tangible Common Equity, and Related Measures and Ratio

(dollars in thousands, except per share amounts)

1. Beginning in 2025, Busey revised its calculation of tangible assets and tangible common equity for all periods presented to exclude any tax adjustment.

Core Deposits and Related Ratio

(dollars in thousands)

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FORWARD-LOOKING STATEMENTS

This Quarterly Report may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to Busey’s financial condition, results of operations, plans, objectives, future performance, and business. Forward-looking statements, which may be based upon beliefs, expectations, and assumptions of Busey’s management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should,” “position,” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and Busey undertakes no obligation to update any statement in light of new information or future events.

A number of factors, many of which are beyond Busey’s ability to control or predict, could cause actual results to differ materially from those in any forward-looking statements. These factors include, among others, the following: (1) the strength of the local, state, national, and international economies and financial markets (including effects of a prolonged government shut-down, inflationary pressures, the threat or implementation of tariffs, trade wars, and changes to immigration policy); (2) changes in, and the interpretation and prioritization of, local, state, and federal laws, regulations, and governmental policies (including those concerning Busey's general business); (3) the economic impact of any future terrorist threats or attacks, widespread disease or pandemics, or other adverse external events that could cause economic deterioration or instability in credit markets (including Russia’s invasion of Ukraine and the conflict in the Middle East); (4) unexpected results of acquisitions, including the acquisition of CrossFirst, which may include the failure to realize the anticipated benefits of the acquisitions and the possibility that the transaction and integration costs may be greater than anticipated; (5) the imposition of tariffs or other governmental policies impacting the value of products produced by Busey's commercial borrowers; (6) new or revised accounting policies and practices as may be adopted by state and federal regulatory banking agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission, or the Public Company Accounting Oversight Board; (7) changes in interest rates and prepayment rates of Busey’s assets (including the impact of sustained elevated interest rates); (8) increased competition in the financial services sector (including from non-bank competitors such as credit unions, private credit, and fintech companies) and the inability to attract new customers; (9) technological changes implemented by us and other parties, including our third-party vendors, which may have unforeseen consequences to us and our customers, including the development and implementation of tools incorporating artificial intelligence; (10) the loss of key executives or associates, talent shortages, and employee turnover; (11) unexpected outcomes and costs of existing or new litigation, investigations, or other legal proceedings, inquiries, and regulatory actions involving Busey (including with respect to Busey’s Illinois franchise taxes); (12) fluctuations in the value of securities held in Busey’s securities portfolio, including as a result of changes in interest rates; (13) credit risk and risk from concentrations (by type of borrower, geographic area, collateral, and industry), within Busey's loan portfolio and large loans to certain borrowers (including commercial real estate loans); (14) the concentration of large deposits from certain clients who have balances above current Federal Deposit Insurance Corporation insurance limits and may withdraw deposits to diversify their exposure; (15) the level of non-performing assets on Busey’s balance sheets; (16) interruptions involving information technology and communications systems or third-party servicers; (17) breaches or failures of information security controls or cybersecurity-related incidents; (18) the economic impact on Busey and its customers of climate change, natural disasters, and exceptional weather occurrences such as tornadoes, hurricanes, floods, blizzards, and droughts; (19) the ability to successfully manage liquidity risk, which may increase dependence on non-core funding sources such as brokered deposits, and may negatively impact Busey's cost of funds; (20) the ability to maintain an adequate level of allowance for credit losses on loans; (21) the effectiveness of Busey’s risk management framework; and (22) the ability of Busey to manage the risks associated with the foregoing. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Additional information concerning Busey and its business, including additional factors that could materially affect Busey’s financial results, is included in Busey’s filings with the Securities and Exchange Commission including Busey’s 2024 Annual Report.

CRITICAL ACCOUNTING ESTIMATES

Busey has established various accounting policies that govern the application of GAAP in the preparation of its unaudited consolidated financial statements. Significant accounting policies are described in “Note 1. Significant Accounting Policies” of Busey’s 2024 Annual Report.

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Critical accounting estimates are those that are critical to the portrayal and understanding of Busey’s financial condition and results of operations and require management to make assumptions that are subjective or complex. These estimates involve judgments, assumptions, and uncertainties that are susceptible to change. In the event that different assumptions or conditions were to prevail, and depending on the severity of such changes, the possibility of a materially different financial condition or materially different results of operations is a reasonable likelihood. Further, changes in accounting standards could impact Busey’s critical accounting estimates. Management has reviewed these critical accounting estimates and related disclosures with Busey’s Audit Committee. The following estimates could be deemed critical:

Fair Value of Assets Acquired and Liabilities Assumed in Business Combinations

Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method of accounting, assets acquired and liabilities assumed are recorded at their estimated fair value on the date of acquisition. Fair values are determined based on the definition of “fair value” defined in ASC Topic 820 “Fair Value Measurement” as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The determination of fair values is based on valuations using management’s assumptions of future growth rates, future attrition, discount rates, multiples of earnings, or other relevant factors. In addition, Busey engages third party specialists to assist in the development of fair values.

The fair value of a loan portfolio acquired in a business combination generally requires greater levels of management estimates and judgment than other assets acquired or liabilities assumed. Acquired loans are within the scope of ASC Topic 326 “Financial Instruments-Credit Losses.” However, the offset to record the allowance on acquired loans at the date of acquisition depends on whether or not the loan is classified as PCD. The allowance for PCD loans is recorded through a gross-up effect, while the allowance for acquired non-PCD loans is recorded through provision expense, consistent with originated loans. Thus, the determination of which loans are PCD and non-PCD can have a significant effect on the accounting for these loans.

Goodwill

Goodwill represents the excess of purchase price over the fair value of net assets acquired using the acquisition method of accounting. Goodwill is not amortized; instead, Busey assesses the potential for impairment on an annual basis or more frequently if events and circumstances indicate that goodwill might be impaired. Management applies significant judgment when testing goodwill for impairment, such as the valuation approach chosen, market multiples for competitors used in the calculation, and forecasts of business outlook.

Income Taxes

Busey is subject to the income tax laws of U.S., as well as the tax laws of the individual states and municipalities in which the Company conducts its operations. These laws are often complex and subject to nuanced interpretations.

Income taxes are estimated for the tax effects of the transactions reported on Busey’s unaudited consolidated financial statements and consist of an expense for taxes currently due plus assets and/or liabilities for deferred taxes. Deferred taxes represent the future tax consequences of differences between the tax basis and accounting basis of certain assets and liabilities, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred tax assets and liabilities are estimates that are reflected at income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. Deferred taxes are reported in other assets or other liabilities on the Consolidated Balance Sheets (Unaudited). Estimated income tax expense is reported on the Consolidated Statements of Income (Unaudited).

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In establishing its provision for income taxes and its estimates of deferred tax assets and liabilities, Busey must make judgments and interpretations about the application of inherently complex tax laws. Busey must also make estimates about when in the future certain items will affect taxable income. Disputes over interpretations of the tax laws may be subject to review and adjudication by the court systems of the various tax jurisdictions or may be settled with the taxing authority upon examination or audit. Although Busey’s management believes that its judgments are sound and its tax estimates are reasonable, interpretations of tax law applied by the taxing jurisdictions could differ. As such, Busey may be exposed to losses or gains, which could be material. An unfavorable tax settlement would result in an increase in Busey’s effective income tax rate in the period of resolution. A favorable tax settlement would result in a reduction in Busey’s effective income tax rate in the period of resolution.

Allowance for Credit Losses

Busey calculates the ACL at each reporting date. Busey recognizes an allowance for the lifetime expected credit losses for the amount it does not expect to collect. Measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported book value. The calculation also contemplates that Busey may not be able to make or obtain such forecasts for the entire life of the financial assets and requires a reversion to historical credit loss information.

In determining the ACL, management relies predominantly on a disciplined credit review and approval process that extends to the full range of Busey’s credit exposure. The ACL must be determined on a collective (pool) basis when similar risk characteristics exist. On a case-by-case basis, Busey may conclude that a loan should be evaluated on an individual basis based on disparate risk characteristics.

Loans deemed uncollectible are charged against and reduce the ACL. A provision for credit losses is charged to current expense and acts to replenish the ACL in order to maintain the ACL at a level that management deems adequate.

Determining the ACL involves significant judgments and assumptions. Macroeconomic forecasts provided by a third party and the economic indices sourced are significant judgments used in determining the allowance. Changes in these economic forecasts could significantly affect the ACL and lead to materially different amounts from one period to the next. Additionally, prepayment assumptions impact model output. Further, Busey completes a quarterly evaluation of several qualitative factors to determine if there should be adjustments made to the ACL. These factors include economic conditions, collateral, concentrations, delinquency trends, portfolio composition, underwriting, and certain other risks. Significant downturns relating to loan quality and economic conditions could result in a requirement for an additional allowance. Likewise, an upturn in loan quality and improved economic conditions may allow for a reduction in the required allowance. Because of the nature of the judgments and assumptions made by management, actual results may differ from these judgments and assumptions.

Market risk is the risk of changes in asset values due to movements in underlying market rates and prices. Interest rate risk is a type of market risk to earnings and capital arising from movements in interest rates. Interest rate risk is the most significant market risk affecting Busey as other types of market risk, such as foreign currency exchange rate risk and commodity price risk, have a minimal impact or do not arise in the normal course of Busey’s business activities.

Busey has an asset-liability committee, whose policy is to meet at least quarterly, to review current market conditions and to structure the Consolidated Balance Sheets (Unaudited) to optimize stability in net interest income in consideration of projected future changes in interest rates.

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As interest rate changes do not impact all categories of assets and liabilities equally or simultaneously, the asset-liability committee primarily relies on balance sheet and income simulation analysis to determine the potential impact of changes in market interest rates on net interest income. In these standard simulation models, the balance sheet is projected over a one-year and a two-year time horizon and net interest income is calculated under current market rates and assuming permanent instantaneous shifts of +/-100 and +/-200 bps. The model assumes immediate and sustained shifts in the federal funds rate and other market rate indices and corresponding shifts in other non-market rate indices based on their historical changes relative to changes in the federal funds rate and other market indices. Assets and liabilities are assumed to remain constant as of the measurement date; variable-rate assets and liabilities are repriced based on repricing frequency; and prepayment speeds on loans are projected for both declining and rising rate environments.

Busey’s interest rate risk resulting from immediate and sustained changes in interest rates, expressed as a change in net interest income as a percentage of the net interest income calculated in the constant base model, was as follows:

Interest rate risk is monitored and managed within approved policy limits and any temporary exceptions to policy in periods of rapid rate movement are approved and documented. The calculation of potential effects of hypothetical interest rate changes is based on numerous assumptions and should not be relied upon as indicative of actual results. Actual results would likely differ from simulated results due to the timing, magnitude, and frequency of interest rate changes as well as changes in market conditions and management strategies.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

An evaluation of Busey’s disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act, was carried out as of September 30, 2025, under the supervision and with the participation of its Chief Executive Officer, Chief Financial Officer, and several other members of senior management. Based on this evaluation, Busey’s Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2025, Busey’s disclosure controls and procedures were effective in ensuring that the information Busey is required to disclose in the reports Busey files or submits under the Exchange Act was (1) accumulated and communicated to Busey’s management (including the Chief Executive Officer and Chief Financial Officer) to allow timely decisions regarding required disclosure, and (2) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

During the three months ended September 30, 2025, no change occurred in Busey’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, Busey’s internal control over financial reporting.