First Busey CorporationNASDAQ: BUSE

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

· Issued by First Busey Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
SCOPE OF DISCUSSION
BUSINESS
Banking Center Markets
Busey's Conservative Banking Strategy
Business Combinations
CrossFirst Bankshares, Inc.
RESULTS OF OPERATIONS - THREE AND SIX MONTHS ENDED JUNE 30, 2026
Net Income
Non-GAAP Adjusting Items and Non-GAAP Measures
Operating Performance Metrics
Net Interest Income
Consolidated Average Balance Sheets and Interest Rates
Noninterest Income
Noninterest Expense
Efficiency Ratio
Taxes
FINANCIAL CONDITION
Balance Sheet
Portfolio Loans
Portfolio Composition
Concentration of Credit Risk
Allowance for Credit Losses and Provision for Loan Losses
Non-Performing Loans and Non-Performing Assets
Potential Problem Loans
Deposits
Liquidity
Off-Balance-Sheet Arrangements
Capital Resources
NON-GAAP FINANCIAL INFORMATION
FORWARD-LOOKING STATEMENTS
CRITICAL ACCOUNTING ESTIMATES
First Busey Corporation (BUSE) | 2026 Q2 - 62
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
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 six months ended June 30, 2026, and should be read in conjunction with Busey'sConsolidated Financial Statements (Unaudited) and the relatedNotes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report, as well asBusey's 2025 Annual Report.
BUSINESS
First Busey Corporation is an $18.19 billion financial holding company headquartered in Leawood, Kansas. First Busey's common stock is traded on The Nasdaq Global Select Market under the symbol "BUSE," and its depositary shares of Series B Preferred Stock are 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 80 banking centers located across five geographical regions and verticals spanning 10 states.
East Region - Busey Bank serves its East Region through 17 banking centers in the suburban Chicago market and three banking centers located in southwest Florida.
Midwest Region - Busey Bank serves its Midwest Region through 21 banking centers in central Illinois, including six in the Chicago MSA; 20 banking centers in the St. Louis MSA, including eight banking centers in eastern Missouri and 12 banking centers in western Illinois; and one banking center in Indianapolis, Indiana.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Central Region - Busey Bank serves its Central Region through three banking centers in the Kansas City MSA, including two locations in Leawood, Kansas and one in Kansas City, Missouri; one banking center in Wichita, Kansas; and three banking centers in Oklahoma, including two in Oklahoma City and one in Tulsa.
Texas Region - Busey Bank serves its Texas Region through four banking centers across the Dallas-Fort Worth MSA, including locations in Dallas, Frisco, and Fort Worth, Texas.
West Region - Busey Bank serves its West region through three banking centers in Arizona, located in Phoenix and Tucson; three banking centers in Colorado, located in Denver and Colorado Springs; and one banking center in Clayton, New Mexico.
Verticals - Transcending geographical boundaries, Busey operates in several industry verticals, including Life Equity Lending, Structured Finance, Energy Banking, 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 deposit1 franchise is a critical value driver of the institution. Busey remains substantially core deposit funded, with robust liquidity. As of June 30, 2026, Busey's loan to deposit ratio was 87.2% and core deposits represented 93.7% of total deposits. Busey maintains 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. 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 June 30, 2026, Busey's leverage ratio of Tier 1 capital to average assets was 11.9%, its common equity Tier 1 capital to risk weighted assets ratio was 12.5%, and its total capital to risk weighted assets ratio was 16.1%.
Business Combinations
CrossFirst Bankshares, Inc.
On March 1, 2025, Busey completed its acquisition of CrossFirst and its wholly-owned subsidiary, CrossFirst Bank. This transformative partnership helped create a premier commercial bank spanning 10 states.
CrossFirst Bank's results of operations were included in Busey's results of operations beginning March 1, 2025. First 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 inNote 2. Business Combinations in theNotes to the Consolidated Financial Statements (Unaudited).
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 "Non-GAAP Financial Information" included in this MD&A.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
RESULTS OF OPERATIONS - THREE AND SIX MONTHS ENDED JUNE 30, 2026
Net Income
Results of Busey's operations, by operating segment, are presented below:
Three Months Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 2026 2025
Net income
Banking
$ 58,735 $ 45,838 $ 108,975 $ 26,145
Wealth Management
7,498 5,823 13,665 12,042
FirsTech
(398) (544) (2,078) (783)
Other
(2,659) (3,713) (7,405) (19,990)
Net income
$ 63,176 $ 47,404 $ 113,157 $ 17,414
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
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. Busey also adjusts for net securities gains and losses to align with industry and research analyst reporting. The objective of Busey's 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:
Three Months Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 2026 2025
Pre-tax non-GAAP adjustments to net income by income/expense category
Net securities (gains) losses
$ (2,445) $ (5,997) $ (1,505) $ 9,771
Provision for credit losses
- 4,030 - 49,602
Salaries and employee benefits
2,045 11,557 18,169 27,435
Data processing
- 3,964 80 6,266
Furniture and equipment expenses
- 1 - 1
Professional fees
704 317 823 7,611
Other noninterest expense
377 761 754 1,313
Total pre-tax non-GAAP adjustments to net income
$ 681 $ 14,633 $ 18,321 $ 101,999
Pre-tax non-GAAP adjustments to net income by business objective
Net securities (gains) losses1
$ (2,445) $ (5,997) $ (1,505) $ 9,771
Initial provision for credit losses2
- 4,030 - 49,602
Other acquisition expenses3
1,196 16,600 6,440 42,626
Restructuring expenses4
1,930 - 13,386 -
Total pre-tax non-GAAP adjustments to net income
$ 681 $ 14,633 $ 18,321 $ 101,999
___________________________________________
1.During the six months ended June 30, 2025, Busey sold available for sale debt securities with a book value of approximately $205.6 million for a pre-tax loss of $15.5 million and related estimated tax benefit of $4.3 million, as part of a balance sheet repositioning strategy.
2.During the six months ended June 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, and a Day 2 provision for unfunded commitments of $3.1 million. During the three and six months ended June 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.
3.Other acquisition expenses related to the acquisition of CrossFirst, which was completed on March 1, 2025. Final expenses for the acquisition of M&M were also included for 2025.
4.Restructuring expenses were incurred in connection with the execution on additional synergies related to the CrossFirst acquisition and also in connection with the previously announced departure of Michael J. Maddox in the first quarter of 2026.
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 MD&A. See "Non-GAAP Financial Information."
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
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:
Three Months Ended June 30, Six Months Ended June 30,
(dollars in thousands, except per share amounts)
2026 2025 2026 2025
Net income (GAAP)
$ 63,176 $ 47,404 $ 113,157 $ 17,414
Adjusted net income (Non-GAAP)1
$ 63,687 $ 57,394 $ 126,898 $ 97,292
Net income available to common stockholders (GAAP)
$ 58,586 $ 47,249 $ 103,978 $ 17,259
Adjusted net income available to common stockholders (Non-GAAP)1
$ 59,097 $ 57,239 $ 117,719 $ 97,137
Diluted earnings per common share (GAAP)
$ 0.69 $ 0.52 $ 1.20 $ 0.22
Adjusted diluted earnings per common share (Non-GAAP)1
$ 0.69 $ 0.63 $ 1.36 $ 1.21
Return on average assets (Non-GAAP)1, 2
1.42 % 1.00 % 1.27 % 0.21 %
Adjusted return on average assets (Non-GAAP)1, 2
1.43 % 1.21 % 1.42 % 1.16 %
Return on average tangible common equity (Non-GAAP)1, 2, 3
14.49 % 12.03 % 12.77 % 2.88 %
Adjusted return on average tangible common equity (Non-GAAP)1, 2, 3
14.61 % 14.41 % 14.36 % 12.92 %
Pre-provision net revenue (Non-GAAP)1
$ 81,633 $ 64,216 $ 149,288 $ 92,908
Adjusted pre-provision net revenue (Non-GAAP)1
$ 84,759 $ 80,816 $ 169,114 $ 135,534
Pre-provision net revenue to average total assets (Non-GAAP)1, 2
1.83 % 1.35 % 1.67 % 1.10 %
Adjusted pre-provision net revenue to average total assets (Non-GAAP)1, 2
1.90 % 1.70 % 1.90 % 1.61 %
___________________________________________
1.For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see "Non-GAAP Financial Information," included in this MD&A.
2.Annualized measure.
3.Beginning in 2026, Busey revised, for all periods presented, its calculation of return on average tangible common equity and adjusted return on average tangible common equity to eliminate the effects of intangible asset amortization from the numerator of both calculations.
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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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
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)
Three Months Ended June 30,
2026 2025
(dollars in thousands) Average
Balance		 Income/
Expense
Yield/
Rate5
Average
Balance		 Income/
Expense
Yield/
Rate5
Assets
Interest-bearing bank deposits and federal funds sold
$ 123,868 $ 1,057 3.42 % $ 711,629 $ 7,461 4.21 %
Investment securities:
U.S. Government obligations
106,799 1,333 5.01 % 115,958 1,446 5.00 %
Obligations of states and political subdivisions1
262,964 2,845 4.34 % 241,568 2,691 4.47 %
Other securities
2,594,651 20,305 3.14 % 2,725,758 21,331 3.14 %
Restricted bank stock
85,153 1,127 5.31 % 58,354 543 3.73 %
Loans held for sale
8,358 122 5.85 % 6,899 102 5.93 %
Portfolio loans1, 2
13,326,579 198,477 5.97 % 13,840,190 214,663 6.22 %
Total interest-earning assets1, 3
16,508,372 $ 225,266 5.47 % 17,700,356 $ 248,237 5.63 %
Cash and due from banks
167,789 156,535
Premises and equipment
192,890 182,174
ACL
(172,134) (195,527)
Other assets
1,190,180 1,224,548
Total assets
$ 17,887,097 $ 19,068,086
Liabilities and stockholders' equity
Interest-bearing transaction deposits
$ 3,203,014 $ 13,463 1.69 % $ 3,188,993 $ 15,288 1.92 %
Savings and money market deposits
5,615,951 32,220 2.30 % 6,381,634 45,782 2.88 %
Time deposits
2,342,629 20,078 3.44 % 2,879,902 27,077 3.77 %
Federal funds purchased and repurchase agreements
169,008 1,098 2.61 % 141,978 886 2.50 %
Borrowings4
375,336 3,933 4.20 % 315,367 3,838 4.88 %
Junior subordinated debt issued to unconsolidated trusts
75,118 1,231 6.57 % 77,141 1,392 7.24 %
Total interest-bearing liabilities
11,781,056 $ 72,023 2.45 % 12,985,015 $ 94,263 2.91 %
Net interest spread1
3.02 % 2.72 %
Noninterest-bearing deposits
3,467,436 3,542,617
Other liabilities
240,118 255,872
Stockholders' equity
2,398,487 2,284,582
Total liabilities and stockholders' equity
$ 17,887,097 $ 19,068,086
Interest income / earning assets1, 3
$ 16,508,372 $ 225,266 5.47 % $ 17,700,356 $ 248,237 5.63 %
Interest expense / earning assets
16,508,372 72,023 1.75 % 17,700,356 94,263 2.14 %
Net interest margin1
$ 153,243 3.72 % $ 153,974 3.49 %
___________________________________________
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"Non-GAAP Financial Information" included in this MD&A.
2.Non-accrual loans are included in average portfolio loans.
3.Interest income includes tax-equivalent adjustments of $0.8 million for both the three months ended June 30, 2026, and the three months ended June 30, 2025.
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)
Six Months Ended June 30,
2026 2025
(dollars in thousands)
Average
Balance
Income/
Expense
Yield/
Rate5
Average
Balance
Income/
Expense
Yield/
Rate5
Assets
Interest-bearing bank deposits and federal funds sold
$ 131,494 $ 2,279 3.50 % $ 699,996 $ 15,045 4.33 %
Investment securities:
U.S. Government obligations
108,566 2,720 5.05 % 79,048 1,949 4.97 %
Obligations of states and political subdivisions1
264,193 5,665 4.32 % 217,410 4,222 3.92 %
Other securities
2,568,695 39,387 3.09 % 2,637,232 38,407 2.94 %
Restricted bank stock
83,396 2,007 4.85 % 54,770 1,302 4.79 %
Loans held for sale
6,724 195 5.85 % 5,181 157 6.11 %
Portfolio loans1, 2
13,423,566 399,375 6.00 % 11,850,318 354,507 6.03 %
Total interest-earning assets1, 3
16,586,634 $ 451,628 5.49 % 15,543,955 $ 415,589 5.39 %
Cash and due from banks
165,853 164,617
Premises and equipment
193,357 161,447
ACL
(173,759) (163,840)
Other assets
1,201,095 1,255,217
Total assets
$ 17,973,180 $ 16,961,396
Liabilities and stockholders' equity
Interest-bearing transaction deposits
$ 3,163,759 $ 25,968 1.66 % $ 2,919,452 $ 26,216 1.81 %
Savings and money market deposits
5,651,538 64,184 2.29 % 5,417,935 73,374 2.73 %
Time deposits
2,375,699 41,635 3.53 % 2,468,406 45,869 3.75 %
Federal funds purchased and repurchase agreements
164,938 1,994 2.44 % 143,400 1,762 2.48 %
Borrowings4
345,141 7,265 4.24 % 290,131 7,379 5.13 %
Junior subordinated debt issued to unconsolidated trusts
76,229 2,493 6.60 % 76,378 2,747 7.25 %
Total interest-bearing liabilities
11,777,304 $ 143,539 2.46 % 11,315,702 $ 157,347 2.80 %
Net interest spread1
3.03 % 2.59 %
Noninterest-bearing deposits
3,501,941 3,290,770
Other liabilities
259,754 244,129
Stockholders' equity
2,434,181 2,110,795
Total liabilities and stockholders' equity
$ 17,973,180 $ 16,961,396
Interest income / earning assets1, 3
$ 16,586,634 $ 451,628 5.49 % $ 15,543,955 $ 415,589 5.39 %
Interest expense / earning assets
16,586,634 143,539 1.75 % 15,543,955 157,347 2.04 %
Net interest margin1
$ 308,089 3.75 % $ 258,242 3.35 %
___________________________________________
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"Non-GAAP Financial Information" included in this MD&A.
2.Non-accrual loans have been included in average portfolio loans.
3.Interest income includes tax-equivalent adjustments of $1.7 million and $1.3 million for the six months ended June 30, 2026 and 2025, 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)
Notable changes in average assets and average liabilities are summarized as follows:
Three Months Ended June 30,
(dollars in thousands) 2026 2025 Change % Change
Average interest-earning assets $ 16,508,372 $ 17,700,356 $ (1,191,984) (6.7) %
Average interest-bearing liabilities 11,781,056 12,985,015 (1,203,959) (9.3) %
Average noninterest-bearing deposits 3,467,436 3,542,617 (75,181) (2.1) %
Total average deposits 14,629,030 15,993,146 (1,364,116) (8.5) %
Total average liabilities 15,488,610 16,783,504 (1,294,894) (7.7) %
Average noninterest-bearing deposits as a percent of total average deposits 23.7 % 22.2 % 150 bps
Total average deposits as a percent of total average liabilities 94.5 % 95.3 % (80) bps
Six Months Ended June 30,
(dollars in thousands) 2026 2025 Change % Change
Average interest-earning assets $ 16,586,634 $ 15,543,955 $ 1,042,679 6.7 %
Average interest-bearing liabilities 11,777,304 11,315,702 461,602 4.1 %
Average noninterest-bearing deposits 3,501,941 3,290,770 211,171 6.4 %
Total average deposits 14,692,937 14,096,563 596,374 4.2 %
Total average liabilities 15,538,999 14,850,601 688,398 4.6 %
Average noninterest-bearing deposits as a percent of total average deposits 23.8 % 23.3 % 50 bps
Total average deposits as a percent of total average liabilities 94.6 % 94.9 % (30) bps
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Changes in net interest income and net interest margin are summarized as follows:
Three Months Ended June 30,
(dollars in thousands) 2026 2025 Change % Change
Net interest income
Interest income, on a tax-equivalent basis1
$ 225,266 $ 248,237 $ (22,971) (9.3) %
Interest expense (72,023) (94,263) 22,240 23.6 %
Net interest income, on a tax-equivalent basis1
$ 153,243 $ 153,974 $ (731) (0.5) %
Net interest margin1, 2
3.72 % 3.49 % 23 bps
Six Months Ended June 30,
(dollars in thousands) 2026 2025 Change % Change
Net interest income
Interest income, on a tax-equivalent basis1
$ 451,628 $ 415,589 $ 36,039 8.7 %
Interest expense (143,539) (157,347) 13,808 8.8 %
Net interest income, on a tax-equivalent basis1
$ 308,089 $ 258,242 $ 49,847 19.3 %
Net interest margin1, 2
3.75 % 3.35 % 40 bps
___________________________________________
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 "Non-GAAP Financial Information" included in this MD&A.
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 asset originations to provide consistent and predictable net interest income performance across different interest rate environments. Busey continues strategic efforts to grow core customer 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:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Net interest spread1
3.02 % 2.72 % 3.03 % 2.59 %
___________________________________________
1.Net interest spread is calculated on a tax-equivalent basis.
Annualized net interest margins for the quarterly periods indicated were as follows:
2026 2025
First Quarter 3.77 % 3.16 %
Second Quarter 3.72 % 3.49 %
Third Quarter 3.58 %
Fourth Quarter 3.71 %
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 theNotes to Consolidated Financial Statements inBusey's 2025 Annual Report.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Noninterest Income
Changes in noninterest income are summarized in the tables below:
Three Months Ended June 30,
(dollars in thousands) 2026 2025 Change % Change
Noninterest income
Wealth management fees $ 19,981 $ 16,777 $ 3,204 19.1 %
Payment technology solutions 4,968 4,956 12 0.2 %
Treasury management services 4,789 4,569 220 4.8 %
Capital markets income 1,871 1,254 617 49.2 %
Card services and ATM fees 4,813 4,880 (67) (1.4) %
Other service charges on deposit accounts 1,407 1,513 (106) (7.0) %
Income on bank owned life insurance 1,637 1,745 (108) (6.2) %
Securities income:
Realized net gains (losses) on securities - 1 (1) (100.0) %
Unrealized net gains (losses) recognized on equity securities 2,445 5,996 (3,551) (59.2) %
Net securities gains (losses) 2,445 5,997 (3,552) (59.2) %
Other noninterest income 2,400 3,172 (772) (24.3) %
Total noninterest income $ 44,311 $ 44,863 $ (552) (1.2) %
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Six Months Ended June 30,
(dollars in thousands) 2026 2025 Change % Change
Noninterest income
Wealth management fees $ 39,351 $ 34,141 $ 5,210 15.3 %
Payment technology solutions 10,045 10,029 16 0.2 %
Treasury management services 9,245 7,406 1,839 24.8 %
Capital markets income 4,242 2,579 1,663 64.5 %
Card services and ATM fees 9,459 8,589 870 10.1 %
Other service charges on deposit accounts 2,913 3,046 (133) (4.4) %
Income on bank owned life insurance 3,253 3,191 62 1.9 %
Securities income:
Realized net gains (losses) on securities 23 (15,536) 15,559 100.1 %
Unrealized net gains (losses) recognized on equity securities 1,482 5,765 (4,283) (74.3) %
Net securities gains (losses) 1,505 (9,771) 11,276 115.4 %
Other noninterest income 6,563 6,876 (313) (4.6) %
Total noninterest income $ 86,576 $ 66,086 $ 20,490 31.0 %
Assets under care as of period end $ 16,505,694 $ 14,102,022 $ 2,403,672 17.0 %
Total noninterest income provided $44.3 million for the three months ended June 30, 2026, a decrease of 1.2% from the comparable period in 2025, resulting in part from declines in unrealized net gains on securities, which were elevated in the second quarter of 2025 due to Busey's equity ownership in a financial institution that was the target of an announced acquisition at a significant market premium. Total noninterest income provided $86.6 million for the six months ended June 30, 2026, an increase of 31.0% from the comparable period in 2025. Whereas the six months ended June 30, 2026, included six months of income as a larger organization after the acquisition of CrossFirst, the six months ended June 30, 2025, included only four months of income from CrossFirst following the acquisition, which was completed on March 1, 2025. The six months ended June 30, 2025, also included $15.5 million in net securities losses that were recorded in connection with a strategic balance sheet repositioning.
Wealth management fees provided income of $20.0 million for the three months ended June 30, 2026, representing an increase of 19.1% from the comparable period in 2025, and provided income of $39.4 million for the six months ended June 30, 2026, representing an increase of 15.3% from the comparable period for 2025, primarily due to increases in trust fee income. Busey's Wealth Management division ended the second quarter of 2026 with $16.51 billion in assets under care, an increase of 17.0% compared to the balance on June 30, 2025. Busey's portfolio management team continues to focus on long-term returns and managing risk in the face of volatile markets.
Payment technology solutions income is derived from Busey's payment processing company, FirsTech. Payment technology solutions provided income of $5.0 million for the three months ended June 30, 2026, representing an increase of 0.2% from the comparable period in 2025, and provided income of $10.0 million for the six months ended June 30, 2026, representing an increase of 0.2% from the comparable period in 2025, primarily due to increases in income from lockbox and merchant processing services.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Treasury management services, which consist primarily of business analysis and domestic wire transfers on commercial accounts, provided income of $4.8 million for the three months ended June 30, 2026, representing an increase of 4.8% from the comparable period in 2025, and provided income of $9.2 million for the six months ended June 30, 2026, representing an increase of 24.8% from the comparable period in 2025. Growth in treasury management services was primarily attributable to increased income from business analysis.
Capital markets income, which consists primarily of swap origination fees, foreign wire transfer fees on commercial accounts, syndication fees, and letter of credit fees, provided income of $1.9 million for the three months ended June 30, 2026, representing an increase of 49.2% from the comparable period in 2025, primarily due to increases in income from swap origination fees and letter of credit fees. Capital markets income provided $4.2 million for the six months ended June 30, 2026, representing an increase of 64.5% from the comparable period in 2025, primarily due to increases in income from swap origination fees and syndication fees.
Card services and ATM fees, which include both commercial and consumer accounts, provided income of $4.8 million for the three months ended June 30, 2026, representing a decrease of 1.4% from the comparable period in 2025, and provided income of $9.5 million for the six months ended June 30, 2026, representing an increase of 10.1% from the comparable period in 2025, primarily due to fluctuations in income from interchange fees.
Other service charges on deposit accounts provided income of $1.4 million for the three months ended June 30, 2026, representing a decrease of 7.0% from the comparable period in 2025, and provided income of $2.9 million for the six months ended June 30, 2026, representing a decrease of 4.4% from the comparable period in 2025. Declines were largely related to lower non-sufficient fund charges.
Income on bank owned life insurance provided $1.6 million for the three months ended June 30, 2026, representing a decrease of 6.2% from the comparable period in 2025. The decline was attributable to a decrease of $0.1 million in earnings on death proceeds, partially offset by an immaterial increase on the cash surrender value of the policies. Income on bank owned life insurance provided $3.3 million for the six months ended June 30, 2026, representing an increase of 1.9% from the comparable period in 2025, as a result of an increase of over $0.4 million on the cash surrender value of the policies, largely offset by a decrease of nearly $0.4 million in earnings on death proceeds.
Net securities gains of $2.4 million were recognized during the three months ended June 30, 2026, representing a decrease of 59.2% from net securities gains recognized during the comparable period in 2025, as a result of declines in unrealized net gains on securities, which were elevated in the second quarter of 2025 due to Busey's approximately 3% equity ownership in a financial institution that was the target of an announced acquisition at a significant market premium. Net securities gains of $1.5 million were recognized during the six months ended June 30, 2026, representing an increase of 115.4% over net securities losses recognized during the comparable period in 2025. Losses were realized during the six months ended June 30, 2025, in connection with a strategic balance sheet repositioning completed during the first quarter of 2025.
Other noninterest income provided $2.4 million for the three months ended June 30, 2026, representing a decrease of 24.3% from the comparable period in 2025, and provided $6.6 million for the six months ended June 30, 2026, representing a decrease of 4.6% from the comparable period in 2025. Decreases were primarily attributable to fluctuations in income recognized on private equity investments and mortgage revenue.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Noninterest Expense
Changes in noninterest expense are summarized in the tables below:
Three Months Ended June 30,
(dollars in thousands) 2026 2025 Change % Change
Noninterest expense
Salaries and employee benefits $ 67,677 $ 78,360 $ (10,683) (13.6) %
Data processing 8,868 14,021 (5,153) (36.8) %
Premises expenses:
Net occupancy expense of premises 7,850 7,832 18 0.2 %
Furniture and equipment expenses 2,336 2,409 (73) (3.0) %
Combined, net occupancy expense of premises and furniture and equipment expenses 10,186 10,241 (55) (0.5) %
Professional fees 3,041 2,874 167 5.8 %
Amortization of intangible assets 4,232 4,592 (360) (7.8) %
Interchange expense 1,096 1,297 (201) (15.5) %
FDIC insurance 2,349 2,424 (75) (3.1) %
Other noninterest expense 15,186 14,024 1,162 8.3 %
Total noninterest expense $ 112,635 $ 127,833 $ (15,198) (11.9) %
Income taxes $ 18,713 $ 17,109 $ 1,604 9.4 %
Effective income tax rate 22.9 % 26.5 % (360) bps
Efficiency ratio (Non-GAAP)1
54.0 % 55.3 % (130) bps
___________________________________________
1.Beginning in 2026, Busey now reports a single efficiency ratio, which was previously reported as the "adjusted efficiency ratio." The efficiency ratio is a non-GAAP financial measure. For a reconciliation of non-GAAP measures to the most directly comparable financial GAAP measures, see "Non-GAAP Financial Information" included in this MD&A.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Six Months Ended June 30,
(dollars in thousands) 2026 2025 Change % Change
Noninterest expense
Salaries and employee benefits $ 152,907 $ 145,923 $ 6,984 4.8 %
Data processing 18,732 23,596 (4,864) (20.6) %
Premises expenses:
Net occupancy expense of premises 15,502 13,631 1,871 13.7 %
Furniture and equipment expenses 4,513 4,153 360 8.7 %
Combined, net occupancy expense of premises and furniture and equipment expenses 20,015 17,784 2,231 12.5 %
Professional fees 6,280 12,385 (6,105) (49.3) %
Amortization of intangible assets 8,523 7,675 848 11.0 %
Interchange expense 2,212 2,640 (428) (16.2) %
FDIC insurance 4,800 4,591 209 4.6 %
Other noninterest expense 28,685 25,269 3,416 13.5 %
Total noninterest expense $ 242,154 $ 239,863 $ 2,291 1.0 %
Income taxes $ 32,389 $ 14,430 $ 17,959 124.5 %
Effective income tax rate 22.3 % 45.3 % (2,300) bps
Efficiency ratio (Non-GAAP)1
54.4 % 56.7 % (230) bps
Full-time equivalent associates as of period-end 1,833 1,950 (117) (6.0) %
___________________________________________
1.Beginning in 2026, Busey now reports a single efficiency ratio, which was previously reported as the "adjusted efficiency ratio." The efficiency ratio is a non-GAAP financial measure. For a reconciliation of non-GAAP measures to the most directly comparable financial GAAP measures, see "Non-GAAP Financial Information" included in this MD&A.
Total noninterest expense was $112.6 million for the three months ended June 30, 2026, representing a decrease of 11.9% from the comparable period in 2025. Excluding acquisition and restructuring expenses, adjusted noninterest expense2 totaled $109.5 million for the three months ended June 30, 2026, representing a decrease of 1.5% from the comparable period in 2025. Declines were primarily attributable to reductions in salaries and employee benefits and data processing. Total noninterest expense was $242.2 million for the six months ended June 30, 2026, representing an increase of 1.0% from the comparable period in 2025. Excluding acquisition and restructuring expenses, adjusted noninterest expense totaled $222.3 million for the six months ended June 30, 2026, representing an increase of 12.7% from the comparable period in 2025. Growth in noninterest expense was primarily attributable to increased expenses associated with Busey's larger organization and expanded branch network, which affected the full first half of 2026, but only four months of the first half of 2025 following the acquisition of CrossFirst on March 1, 2025.
2 Adjusted noninterest expense is a non-GAAP financial measure. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see "Non-GAAP Financial Information" included in this MD&A.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Salaries and employee benefits totaled $67.7 million for the three months ended June 30, 2026, representing a decrease of 13.6% from the comparable period in 2025. Excluding acquisition and restructuring expenses, which include severance, retention, and stock-based compensation expenses related to the CrossFirst acquisition, these expenses totaled $65.6 million for the three months ended June 30, 2026, representing a decrease of 1.8% from the comparable period in 2025. Busey's associate base declined by 117 full-time equivalent associates, from 1,950 at June 30, 2025 to 1,833 at June 30, 2026. Salaries and employee benefits totaled $152.9 million for the six months ended June 30, 2026, representing an increase of 4.8% from the comparable period in 2025. Excluding acquisition and restructuring expenses, these expenses totaled $134.7 million for the six months ended June 30, 2026, representing an increase of 13.7% from the comparable period in 2025. Busey's associate base and footprint broadened in connection with the CrossFirst acquisition, which was completed March 1, 2025, affecting four months during the first half of 2025 compared to six months during the first half of 2026.
Data processing expense totaled $8.9 million for the three months ended June 30, 2026, representing a decrease of 36.8% from the comparable period in 2025. Excluding acquisition and restructuring expenses, data processing expense totaled $8.9 million for the three months ended June 30, 2026, representing a decrease of 11.8% from the comparable period in 2025. Data processing expense totaled $18.7 million for the six months ended June 30, 2026, representing a decrease of 20.6% from the comparable period in 2025. Excluding acquisition and restructuring expenses, data processing expense totaled $18.7 million for the six months ended June 30, 2026, representing an increase of 7.6% from the comparable period in 2025. Increases were primarily attributable to Company-wide investments in technology enhancements, as well as inflation-driven price increases.
Combined, net occupancy expense of premises and furniture and equipment expense totaled $10.2 million for the three months ended June 30, 2026, representing a decrease of 0.5% from the comparable period in 2025. Combined, net occupancy expense of premises and furniture and equipment expense totaled $20.0 million for the six months ended June 30, 2026, representing an increase of 12.5% from the comparable period in 2025. Primary cost drivers in these expense categories include lease costs, repairs and maintenance, depreciation expense, real estate taxes, and utilities. Expense growth for the six months ended June 30, 2026, over the comparable period in 2025, resulted primarily from the addition of banking centers assumed in the CrossFirst acquisition, as well as new banking centers opened in 2025 and 2026.
Professional fees totaled $3.0 million for the three months ended June 30, 2026, representing an increase of 5.8% from the comparable period in 2025. Excluding acquisition and restructuring expenses, professional fees totaled $2.3 million for the three months ended June 30, 2026, representing a decrease of 8.6% from the comparable period in 2025. Professional fees totaled $6.3 million for the six months ended June 30, 2026, representing a decrease of 49.3% from the comparable period in 2025. Excluding acquisition and restructuring expenses, professional fees totaled $5.5 million for the six months ended June 30, 2026, representing an increase of 14.3% from the comparable period in 2025. Changes in professional fees were primarily related to legal and consulting expenses.
Amortization of intangible assets totaled $4.2 million for the three months ended June 30, 2026, representing a decrease of 7.8% from the comparable period in 2025, and totaled $8.5 million for the six months ended June 30, 2026, representing an increase of 11.0% from the comparable period for 2025. The CrossFirst acquisition added an estimated $81.8 million of finite-lived intangible assets. Busey uses an accelerated amortization methodology.
Interchange expense totaled $1.1 million for the three months ended June 30, 2026, representing a decrease of 15.5% from the comparable period in 2025, and totaled $2.2 million for the six months ended June 30, 2026, representing a decrease of 16.2% from the comparable period in 2025. Fluctuations in interchange expense relate to payment and volume activity at FirsTech.
FDIC insurance expense totaled $2.3 million for the three months ended June 30, 2026, representing a decrease of 3.1% from the comparable period in 2025, and totaled $4.8 million for the six months ended June 30, 2026, representing an increase of 4.6% from the comparable period in 2025.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Other noninterest expense totaled $15.2 million for the three months ended June 30, 2026, representing an increase of 8.3% from the comparable period in 2025. Excluding acquisition and restructuring expenses, these expenses totaled $14.8 million for the three months ended June 30, 2026, representing an increase of 11.7% from the comparable period in 2025. Other noninterest expense totaled $28.7 million for the six months ended June 30, 2026, representing an increase of 13.5% from the comparable period in 2025. Excluding acquisition and restructuring expenses, these expenses totaled $27.9 million for the six months ended June 30, 2026, representing an increase of 16.6% from the comparable period in 2025. Significant drivers of the changes in other noninterest expense included marketing, business development, and card service fees.
Efficiency Ratio
The efficiency ratio3, 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 54.0% for the three months ended June 30, 2026, compared to 55.3% for the same period in 2025, and was 54.4% for the six months ended June 30, 2026, compared to 56.7% for the same period in 2025.
Taxes
Busey's effective income tax rate was 22.9% for the three months ended June 30, 2026, and 22.3% for the six months ended June 30, 2026. Busey's effective income tax rates were lower than the combined federal and state statutory rate of approximately 26.0% primarily as a result of investments in federal transferrable income tax credits, tax exempt interest income, apportionment changes, and discrete adjustments related to equity award vestings. Busey continues to monitor evolving federal and state tax legislation and its potential impact on operations on an ongoing basis. As of June 30, 2026, Busey was under examination by the Illinois Department of Revenue for M&M's tax filings for the tax years 2022 and 2023.
3 The efficiency ratio is a non-GAAP financial measure. For a reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures, see "Non-GAAP Financial Information" included in this MD&A.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
FINANCIAL CONDITION
Balance Sheet
Changes in significant items on Busey'sConsolidated Balance Sheets (Unaudited) are summarized in the table below:
As of
(dollars in thousands) June 30,
2026		 December 31,
2025		 Change % Change
Assets
Debt securities available for sale $ 2,265,167 $ 2,162,548 $ 102,619 4.7 %
Debt securities held to maturity 703,988 746,385 (42,397) (5.7) %
Portfolio loans, net of ACL 13,030,950 13,393,776 (362,826) (2.7) %
Total assets 18,191,867 18,104,736 87,131 0.5 %
Liabilities
Deposits:
Noninterest-bearing 3,496,319 3,659,421 (163,102) (4.5) %
Interest-bearing 11,632,426 11,246,537 385,889 3.4 %
Total deposits 15,128,745 14,905,958 222,787 1.5 %
Securities sold under agreements to repurchase 144,061 166,929 (22,868) (13.7) %
Short-term borrowings 28,333 - 28,333 100.0 %
Long-term borrowings 95,325 113,806 (18,481) (16.2) %
Subordinated notes, net of unamortized issuance costs 99,603 99,395 208 0.2 %
Junior subordinated debt owed to unconsolidated trusts 62,473 77,328 (14,855) (19.2) %
Total liabilities 15,808,697 15,635,754 172,943 1.1 %
Stockholders' equity 2,383,170 2,468,982 (85,812) (3.5) %
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 states where Busey maintains lending offices. Busey attempts 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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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
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 loans to Busey's executive officers and directors, 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 lending activities can be found in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Portfolio Loans" ofBusey's 2025 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:
As of
(dollars in thousands) June 30,
2026		 December 31,
2025		 Change % Change
Commercial loans
C&I and other commercial $ 3,959,997 $ 4,229,208 $ (269,211) (6.4) %
CRE 5,452,781 5,550,018 (97,237) (1.8) %
Real estate construction 1,027,069 1,039,289 (12,220) (1.2) %
Total commercial loans 10,439,847 10,818,515 (378,668) (3.5) %
Retail loans
Retail real estate 2,116,360 2,154,616 (38,256) (1.8) %
Retail other 638,947 594,668 44,279 7.4 %
Total retail loans 2,755,307 2,749,284 6,023 0.2 %
Total portfolio loans 13,195,154 13,567,799 (372,645) (2.7) %
ACL (164,204) (174,023) 9,819 (5.6) %
Portfolio loans, net $ 13,030,950 $ 13,393,776 $ (362,826) (2.7) %
Continuing heavy payoff headwinds contributed to anticipated declines in portfolio loan balances during the six months ended June 30, 2026.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
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:
As of
June 30,
2026		 December 31,
2025
Commercial loans
C&I and other commercial 30.0 % 31.2 %
CRE 41.3 % 40.9 %
Real estate construction 7.8 % 7.6 %
Total commercial loans 79.1 % 79.7 %
Retail loans
Retail real estate 16.0 % 15.9 %
Retail other 4.9 % 4.4 %
Total retail loans 20.9 % 20.3 %
Total portfolio loans 100.0 % 100.0 %
Busey Bank originates loans across its regional operating model and through its specialty product lines, as described below:
•East - Suburban Chicago markets and southwest Florida
•Midwest - Central Illinois, the St. Louis MSA, 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, Structured Finance, Energy Banking, and SBA Lending products
The distribution of Busey Bank loans outstanding that were originated in each of these markets is presented in the tables below:
As of June 30, 2026
(dollars in thousands) C&I and other commercial CRE Real estate construction Retail real estate Retail other Total
Loans by region of origination
East
$ 679,467 $ 1,163,807 $ 124,172 $ 524,533 $ 57,140 $ 2,549,119
Midwest
1,192,076 2,043,519 318,310 1,033,771 9,754 4,597,430
Central
561,900 778,095 185,991 363,230 7,211 1,896,427
Texas
558,743 734,105 215,011 106,579 12 1,614,450
West
248,942 579,269 166,242 77,139 248 1,071,840
Verticals
718,869 153,986 17,343 11,108 564,582 1,465,888
Total portfolio loans
$ 3,959,997 $ 5,452,781 $ 1,027,069 $ 2,116,360 $ 638,947 13,195,154
ACL
(164,204)
Portfolio loans, net of ACL
$ 13,030,950
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
As of December 31, 2025
(dollars in thousands) C&I and other commercial CRE Real estate construction Retail real estate Retail other Total
Loans by region of origination1
East
$ 658,068 $ 1,173,323 $ 86,972 $ 521,515 $ 79,430 $ 2,519,308
Midwest
1,281,283 2,078,637 294,267 1,070,395 7,654 4,732,236
Central
621,370 828,888 206,332 359,062 13,220 2,028,872
Texas
592,692 786,899 276,881 110,746 3,215 1,770,433
West
244,347 525,820 155,017 80,558 483 1,006,225
Verticals
831,448 156,451 19,820 12,340 490,666 1,510,725
Total portfolio loans
$ 4,229,208 $ 5,550,018 $ 1,039,289 $ 2,154,616 $ 594,668 13,567,799
ACL
(174,023)
Portfolio loans, net of ACL
$ 13,393,776
___________________________________________
1.In 2026, Busey moved all of its banking centers in the St. Louis MSA from its East region to its Midwest region. In addition, Busey adjusted its methodology for allocation of purchase accounting, loan fees, and clearings. For comparative purposes, the table above reflects these changes applied to Busey's 2025 loan balances.
Commercial Real Estate Loans
CRE loans comprised 41.3% of Busey's total loan portfolio as of June 30, 2026, and CRE properties were 26.3% owner occupied. Owner occupied commercial real estate is generally dependent on the performance of the borrowers' businesses, whereas non-owner occupied commercial real estate is generally reliant on property cash flows generated by third-party tenants.
As of
(dollars in thousands) June 30, 2026 December 31, 2025
CRE by Occupancy
Non-owner occupied CRE $ 4,019,517 73.7 % $ 4,118,361 74.2 %
Owner occupied CRE 1,433,264 26.3 % 1,431,657 25.8 %
CRE $ 5,452,781 100.0 % $ 5,550,018 100.0 %
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
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.
As of June 30, 2026
CRE Loans Occupied By % of CRE Loans That Are Owner Occupied
(dollars in thousands) Non-Owner Owner
Industrial and warehousing $ 1,227,535 $ 724,537 $ 502,998 41.0 %
Apartments 867,891 867,704 187 - %
Retail 814,433 709,038 105,395 12.9 %
Traditional office 682,112 466,099 216,013 31.7 %
Specialty 534,152 205,969 328,183 61.4 %
Hotel 334,436 310,340 24,096 7.2 %
Medical office 290,682 145,217 145,465 50.0 %
Student housing 262,144 262,029 115 - %
Restaurant 151,043 37,328 113,715 75.3 %
Senior housing 136,207 132,236 3,971 2.9 %
Self-Storage 109,884 105,558 4,326 3.9 %
Nursing homes 46,808 45,450 1,358 2.9 %
Healthcare 20,117 20,000 117 0.6 %
Group homes 4,909 3,520 1,389 28.3 %
Land acquisition and development 90 - 90 100.0 %
Other 810 367 443 54.7 %
Total $ 5,483,253 $ 4,035,392 $ 1,447,861 26.4 %
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 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 loan losses, charged to income. Provision expenses for loan losses were recorded as follows:
Three Months Ended June 30,
Six Months Ended June 30,
(dollars in thousands) Location
2026
2025
2026
20251
Provision for loan losses
Provision for credit losses
$ 1,532 $ 1,005 $ 3,925 $ 43,457
___________________________________________
1.The six months ended June 30, 2025, included $42.4 million of provision for loan losses 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.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
The ACL and the ratio of ACL to portfolio loan balances is presented below by lending activity:
As of June 30, 2026 As of December 31, 2025
(dollars in thousands) Portfolio Loans ACL Ratio of ACL to
Portfolio Loans		 Portfolio Loans ACL Ratio of ACL to
Portfolio Loans
Commercial
C&I and other commercial $ 3,959,997 $ 57,419 1.45 % $ 4,229,208 $ 61,370 1.45 %
CRE 5,452,781 63,183 1.16 % 5,550,018 70,328 1.27 %
Real estate construction 1,027,069 14,855 1.45 % 1,039,289 11,568 1.11 %
Total commercial 10,439,847 135,457 1.30 % 10,818,515 143,266 1.32 %
Retail
Retail real estate 2,116,360 27,216 1.29 % 2,154,616 29,178 1.35 %
Retail other 638,947 1,531 0.24 % 594,668 1,579 0.27 %
Total retail 2,755,307 28,747 1.04 % 2,749,284 30,757 1.12 %
Total $ 13,195,154 $ 164,204 1.24 % $ 13,567,799 $ 174,023 1.28 %
As of June 30, 2026, Busey management believed the level of the allowance 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.
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.
First Busey Corporation (BUSE) | 2026 Q2 - 85
TABLE OF CONTENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
The following table sets forth information concerning non-performing assets and asset quality ratios:
As of
(dollars in thousands) June 30,
2026		 December 31,
2025		 Change % Change
Total assets $ 18,191,867 $ 18,104,736 $ 87,131 0.5 %
Portfolio loans 13,195,154 13,567,799 (372,645) (2.7) %
Loans 30 - 89 days past due 8,135 16,475 (8,340) (50.6) %
Non-performing assets
Non-performing loans:
Non-accrual loans $ 62,766 $ 51,198 $ 11,568 22.6 %
Loans 90+ days past due and still accruing 4,668 2,288 2,380 104.0 %
Total non-performing loans 67,434 53,486 13,948 26.1 %
OREO and other repossessed assets 2,871 4,626 (1,755) (37.9) %
Total non-performing assets 70,305 58,112 12,193 21.0 %
Substandard (excludes 90+ days past due) 155,737 116,402 39,335 33.8 %
Classified assets $ 226,042 $ 174,514 $ 51,528 29.5 %
ACL $ 164,204 $ 174,023 $ (9,819) (5.6) %
Bank Tier 1 Capital 2,168,464 2,150,048 18,416 0.9 %
Ratios
ACL to portfolio loans 1.24 % 1.28 % (4) bps
ACL to non-accrual loans 2.62 x 3.40 x (7,829) bps
ACL to non-performing loans 2.44 x 3.25 x (8,186) bps
ACL to non-performing assets 2.34 x 2.99 x (6,590) bps
Non-accrual loans to portfolio loans 0.48 % 0.38 % 10 bps
Non-performing loans to portfolio loans 0.51 % 0.39 % 12 bps
Non-performing assets to total assets 0.39 % 0.32 % 7 bps
Non-performing assets to portfolio loans and OREO and other repossessed assets 0.53 % 0.43 % 10 bps
Classified assets to Bank Tier 1 Capital and ACL 9.69 % 7.51 % 218 bps
Asset quality continues to be strong. Busey Bank maintains a well-diversified loan portfolio and, as a matter of policy and practice, limits concentration exposure in any particular loan segment. Busey's operating mandate and focus remain on emphasizing credit quality over asset growth.
Non-performing assets, which include non-performing loans, OREO, and other repossessed assets, increased to $70.3 million as of June 30, 2026, compared to $58.1 million as of December 31, 2025. Non-performing assets represented 0.39% of total assets as of June 30, 2026, compared to 0.32% as of December 31, 2025. The ACL was equal to 2.34 times the balance of non-performing assets as of June 30, 2026, compared to 2.99 times the balance of non-performing assets as of December 31, 2025.
Classified assets, which include non-performing assets and substandard loans, increased to $226.0 million as of June 30, 2026, compared to $174.5 million as of December 31, 2025. Classified assets represented 9.69% of the Bank's Tier 1 capital and ACL at June 30, 2026, compared to 7.51% at December 31, 2025.
First Busey Corporation (BUSE) | 2026 Q2 - 86
TABLE OF CONTENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
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 that 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 $155.7 million, or 1.2% of portfolio loans, as of June 30, 2026, compared to $116.4 million, or 0.9% of portfolio loans, as of December 31, 2025. Management continues to monitor these loans and work with the borrowers on restructurings, guarantees, additional collateral, or other planned actions. As of June 30, 2026, 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 1.5% to $15.13 billion as of June 30, 2026, compared to $14.91 billion as of December 31, 2025. Busey focuses on deepening its customer relationships to maintain and protect its strong core deposit4 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 93.7% of total deposits as of June 30, 2026.
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 $6.52 billion, or 43% of total deposits, as of June 30, 2026, compared to $6.46 billion, or 43% of total deposits, as of December 31, 2025. 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 estimated to be $5.30 billion, or 35% of total deposits, as of June 30, 2026, compared to $5.58 billion, or 37% of total deposits, as of December 31, 2025.
For additional information about Busey's deposits, see "Note 6. Deposits."
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.
4 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.
First Busey Corporation (BUSE) | 2026 Q2 - 87
TABLE OF CONTENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
Average liquid assets are summarized in the table below:
Three Months Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 2026 2025
Average liquid assets
Cash and due from banks $ 167,789 $ 156,535 $ 165,853 $ 164,617
Interest-bearing bank deposits 123,868 711,629 131,494 699,996
Less: Restricted and pledged cash and bank deposits (96,102) $ (78,659) (96,102) (74,740)
Total average liquid assets $ 195,555 $ 789,505 $ 201,245 $ 789,873
Average liquid assets as a percent of average total assets 1.1 % 4.1 % 1.1 % 4.7 %
Unencumbered cash and securities on Busey'sConsolidated Balance Sheets (Unaudited) are summarized in the table below:
As of
(dollars in thousands) June 30,
2026		 December 31,
2025
Unencumbered cash and securities
Total cash and cash equivalents $ 665,373 $ 280,227
Interest-bearing time deposits in other banks 14,450 13,825
Restricted and pledged cash and bank deposits (96,102) (96,102)
Debt securities available for sale 2,265,167 2,162,548
Debt securities available for sale pledged as collateral (618,327) (562,566)
Unencumbered cash and securities $ 2,230,561 $ 1,797,932
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:
As of
(dollars in thousands) June 30,
2026		 December 31,
2025
Additional available borrowing capacity
FHLB $ 2,267,851 $ 1,775,157
Federal Reserve Bank 1,823,426 1,585,816
Federal funds purchased 485,000 485,000
Revolving credit facility 50,000 40,000
Additional borrowing capacity $ 4,626,277 $ 3,885,973
Further, Busey could utilize brokered deposits as additional sources of liquidity, as needed.
As of June 30, 2026, 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.
First Busey Corporation (BUSE) | 2026 Q2 - 88
TABLE OF CONTENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
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:
As of
(dollars in thousands) June 30,
2026		 December 31,
2025
Outstanding loan commitments and standby letters of credit $ 4,109,842 $ 4,820,613
Reserve for unfunded commitments 14,286 12,964
The following table summarizes Busey's provision for unfunded commitments expenses (releases):
Three Months Ended June 30,
Six Months Ended June 30,
(dollars in thousands)
Location
2026
2025
2026
2025
Provision for unfunded commitments1
Provision for credit losses
$ 657 $ 4,695 $ 1,322 $ 7,836
___________________________________________
1.The six months ended June 30, 2025, included $7.2 million to establish an initial allowance for unfunded commitments in connection with the CrossFirst acquisition, which included a $4.0 million adjustment to the initial provision for unfunded commitments that was recorded in the second quarter of 2025 resulting from the adoption of a new CECL model.
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.
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 avoid regulatory limits 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 Busey and Busey Bank as of June 30, 2026:
Minimum Capital Requirements with
Capital Buffer		 As of June 30, 2026
Busey Busey
Bank
Common equity Tier 1 capital to risk weighted assets 7.00 % 12.53 % 14.65 %
Tier 1 capital to risk weighted assets 8.50 % 14.03 % 14.65 %
Total capital to risk weighted assets 10.50 % 16.10 % 15.63 %
Leverage ratio of Tier 1 capital to average assets 4.00 % 11.86 % 12.38 %
For further discussion of capital resources and requirements, see"Note 8. Regulatory Capital."
First Busey Corporation (BUSE) | 2026 Q2 - 89
TABLE OF CONTENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
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 in 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.
First Busey Corporation (BUSE) | 2026 Q2 - 90
TABLE OF CONTENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)
Calculation of Adjusted Net Income and Adjusted Diluted Earnings Per Common Share
Three Months Ended June 30, Six Months Ended June 30,
(dollars in thousands, except per share amounts) 2026 2025 2026 2025
Net income (GAAP)
[a] $ 63,176 $ 47,404 $ 113,157 $ 17,414
Day 2 provision for credit losses1
- - - 45,572
Adjustment of initial provision for unfunded commitments due to adoption of new model2
- 4,030 - 4,030
Other acquisition expenses
1,196 16,600 6,440 42,626
Restructuring expenses
1,930 - 13,386 -
Net securities (gains) losses
(2,445) (5,997) (1,505) 9,771
Related tax benefit3
(170) (4,971) (4,580) (27,040)
Non-recurring deferred tax adjustment4
- 328 - 4,919
Adjusted net income (Non-GAAP)
[b] 63,687 57,394 126,898 97,292
Preferred dividends
[c] 4,590 155 9,179 155
Adjusted net income available to common stockholders (Non-GAAP)
[d] $ 59,097 $ 57,239 $ 117,719 $ 97,137
Weighted average number of common shares outstanding, diluted (GAAP)
[e] 85,385,382 90,883,711 86,602,278 80,251,577
Diluted earnings per common share (GAAP)
[(a-c)÷e] $ 0.69 $ 0.52 $ 1.20 $ 0.22
Adjusted diluted earnings per common share (Non-GAAP)
[d÷e] $ 0.69 $ 0.63 $ 1.36 $ 1.21
___________________________________________
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 Statements of Income (Unaudited).
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 CECL model.
3.Tax benefits were calculated using tax rates of 25.0% and 26.5% for the six months ended June 30, 2026 and 2025, respectively. Tax benefits for quarterly periods were calculated as the year-to-date tax amounts less the tax reported for previous quarters during the year.
4.A deferred tax valuation adjustment was recorded in the first quarter of 2025 in connection with the CrossFirst acquisition and the expansion of Busey's footprint into new states. Additionally, 2025 included a write-off of deferred tax assets related to non-deductible compensation and acquisition-related expenses. Deferred tax adjustments are reflected within the income taxes line on the Statements of Income (Unaudited).
First Busey Corporation (BUSE) | 2026 Q2 - 91
TABLE OF CONTENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)
Calculation of Return On Average Assets, Return On Average Tangible Common Equity, and Related Adjusted Return Measures
Three Months Ended Six Months Ended
(dollars in thousands) June 30,
2026		 June 30,
2025		 June 30,
2026		 June 30,
2025
Net income (GAAP)
[a] $ 63,176 $ 47,404 $ 113,157 $ 17,414
Amortization of intangible assets
4,232 4,592 8,523 7,675
Tax effect of amortization of intangible assets1
(1,058) (1,256) (2,131) (2,035)
Preferred dividends
(4,590) (155) (9,179) (155)
Tangible net income available to common stockholders (Non-GAAP)
[b] $ 61,760 $ 50,585 $ 110,370 $ 22,899
Adjusted net income (Non-GAAP)2
[c] $ 63,687 $ 57,394 $ 126,898 $ 97,292
Amortization of intangible assets
4,232 4,592 8,523 7,675
Tax effect of amortization of intangible assets1
(1,058) (1,256) (2,131) (2,035)
Preferred dividends
(4,590) (155) (9,179) (155)
Adjusted tangible net income available to common stockholders (Non-GAAP)
[d] $ 62,271 $ 60,575 $ 124,111 $ 102,777
Average total assets
[e] $ 17,887,097 $ 19,068,086 $ 17,973,180 $ 16,961,396
Return on average assets (Non-GAAP)3
[a÷e] 1.42 % 1.00 % 1.27 % 0.21 %
Adjusted return on average assets (Non-GAAP)3
[c÷e] 1.43 % 1.21 % 1.42 % 1.16 %
Average common equity
$ 2,183,290 $ 2,180,963 $ 2,218,984 $ 2,057,372
Average goodwill and other intangible assets, net
(474,043) (494,473) (476,450) (452,978)
Average tangible common equity (Non-GAAP)
[f] $ 1,709,247 $ 1,686,490 $ 1,742,534 $ 1,604,394
Return on average tangible common equity (Non-GAAP)3, 4
[b÷f] 14.49 % 12.03 % 12.77 % 2.88 %
Adjusted return on average tangible common equity (Non-GAAP)3, 4
[d÷f] 14.61 % 14.41 % 14.36 % 12.92 %
___________________________________________
1.Tax effects were calculated using income tax rates of 25.0% and 26.5% for the six months ended June 30, 2026 and 2025, respectively. Tax effects for quarterly periods were calculated as the year-to-date tax amounts less the tax reported for previous quarters during the year.
2.A reconciliation is provided in the previous table.
3.Annualized measure.
4.Beginning in 2026, Busey revised, for all periods presented, its calculation of return on average tangible common equity and adjusted return on average tangible common equity to eliminate the effects of intangible asset amortization from the numerator of both calculations.
First Busey Corporation (BUSE) | 2026 Q2 - 92
TABLE OF CONTENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)
Calculation of Net Interest Margin and Adjusted Net Interest Margin
Three Months Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 2026 2025
Net interest income (GAAP)
$ 152,402 $ 153,183 $ 306,371 $ 256,914
Tax-equivalent adjustment1
841 791 1,718 1,328
Tax-equivalent net interest income (Non-GAAP)
[a] 153,243 153,974 308,089 258,242
Purchase accounting accretion related to business combinations
(4,150) (7,119) (9,544) (9,847)
Adjusted net interest income (Non-GAAP)
[b] $ 149,093 $ 146,855 $ 298,545 $ 248,395
Average interest-earning assets (Non-GAAP)
[c] $ 16,508,372 $ 17,700,356 $ 16,586,634 $ 15,543,955
Net interest margin (Non-GAAP)2
[a÷c] 3.72 % 3.49 % 3.75 % 3.35 %
Adjusted net interest margin (Non-GAAP)2
[b÷c] 3.62 % 3.33 % 3.63 % 3.22 %
___________________________________________
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.
Calculation of Pre-Provision Net Revenue and Related Measures
Three Months Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 2026 2025
Net interest income (GAAP)
$ 152,402 $ 153,183 $ 306,371 $ 256,914
Total noninterest income (GAAP)
44,311 44,863 86,576 66,086
Net security (gains) losses (GAAP)
(2,445) (5,997) (1,505) 9,771
Total noninterest expense (GAAP)
(112,635) (127,833) (242,154) (239,863)
Pre-provision net revenue (Non-GAAP)
[a] 81,633 64,216 149,288 92,908
Acquisition and restructuring (income) expenses, excluding initial provision expenses
3,126 16,600 19,826 42,626
Adjusted pre-provision net revenue (Non-GAAP)
[b] $ 84,759 $ 80,816 $ 169,114 $ 135,534
Average total assets
[c] $ 17,887,097 $ 19,068,086 $ 17,973,180 $ 16,961,396
Pre-provision net revenue to average total assets (Non-GAAP)1
[a÷c] 1.83 % 1.35 % 1.67 % 1.10 %
Adjusted pre-provision net revenue to average total assets (Non-GAAP)1
[b÷c] 1.90 % 1.70 % 1.90 % 1.61 %
___________________________________________
1.Annualized measure.
First Busey Corporation (BUSE) | 2026 Q2 - 93
TABLE OF CONTENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)
Calculation of Efficiency Ratio
Three Months Ended June 30, Six Months Ended June 30,
(dollars in thousands) 2026 2025 2026 2025
Net interest income (GAAP)
[a] $ 152,402 $ 153,183 $ 306,371 $ 256,914
Tax-equivalent adjustment1
841 791 1,718 1,328
Tax-equivalent net interest income (Non-GAAP)
[b] 153,243 153,974 308,089 258,242
Total noninterest income (GAAP)
44,311 44,863 86,576 66,086
Net security (gains) losses
(2,445) (5,997) (1,505) 9,771
Adjusted noninterest income (Non-GAAP)
[c] $ 41,866 $ 38,866 $ 85,071 $ 75,857
Operating revenue (Non-GAAP)
[d = a+c] $ 194,268 $ 192,049 $ 391,442 $ 332,771
Tax-equivalent operating revenue (Non-GAAP)2
[e = b+c] 195,109 192,840 393,160 334,099
Adjusted noninterest income to operating revenue (Non-GAAP)
[c÷d] 21.55 % 20.24 % 21.73 % 22.80 %
Total noninterest expense (GAAP)
$ 112,635 $ 127,833 $ 242,154 $ 239,863
Acquisition and restructuring expenses, excluding initial provision expenses
(3,126) (16,600) (19,826) (42,626)
Adjusted noninterest expense (Non-GAAP)3
109,509 111,233 222,328 197,237
Amortization of intangible assets
(4,232) (4,592) (8,523) (7,675)
Adjusted noninterest expense excluding amortization of intangible assets (Non-GAAP)4
[f] $ 105,277 $ 106,641 $ 213,805 $ 189,562
Efficiency ratio (Non-GAAP)5
[f÷e] 53.96 % 55.30 % 54.38 % 56.74 %
___________________________________________
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 2026, Busey changed the caption for this revenue measure, which was previously called "adjusted tax-equivalent revenue." The calculation itself has not changed.
3.Beginning in 2026, to better align with industry standards, Busey revised its calculation of adjusted noninterest expense, for all periods presented, to exclude any adjustment for amortization of intangible assets.
4.Beginning in 2026, Busey changed the caption for the efficiency ratio numerator from "adjusted noninterest expense" to "adjusted noninterest expense excluding amortization of intangible assets." The calculation itself has not changed.
5.Beginning in 2026, Busey now reports a single efficiency ratio, which was previously reported as the "adjusted efficiency ratio."
First Busey Corporation (BUSE) | 2026 Q2 - 94
TABLE OF CONTENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)
Calculation of Tangible Common Equity, and Related Measures and Ratio
As of
(dollars in thousands, except per share amounts) June 30,
2026		 December 31,
2025
Total assets (GAAP)
$ 18,191,867 $ 18,104,736
Goodwill and other intangible assets, net
(471,288) (480,729)
Tangible assets (Non-GAAP)1
[a] $ 17,720,579 $ 17,624,007
Total stockholders' equity (GAAP)
$ 2,383,170 $ 2,468,982
Preferred stock and additional paid in capital on preferred stock
(215,197) (215,197)
Common equity
[b] 2,167,973 2,253,785
Goodwill and other intangible assets, net
(471,288) (480,729)
Tangible common equity (Non-GAAP)1
[c] $ 1,696,685 $ 1,773,056
Tangible common equity to tangible assets (Non-GAAP)1
[c÷a] 9.57 % 10.06 %
Ending number of common shares outstanding (GAAP)
[d] 83,189,501 87,624,430
Book value per common share (Non-GAAP)
[b÷d] $ 26.06 $ 25.72
Tangible book value per common share (Non-GAAP)
[c÷d] $ 20.40 $ 20.23
Calculation of Core Deposits and Related Ratio
As of
(dollars in thousands) June 30,
2026		 December 31,
2025
Total deposits (GAAP)
[a] $ 15,128,745 $ 14,905,958
Brokered deposits, excluding brokered time deposits of $250,000 or more
(60,043) (70,140)
Time deposits of $250,000 or more
(896,354) (876,207)
Core deposits (Non-GAAP)
[b] $ 14,172,348 $ 13,959,611
Core deposits to total deposits (Non-GAAP)
[b÷a] 93.68 % 93.65 %
First Busey Corporation (BUSE) | 2026 Q2 - 95
TABLE OF CONTENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
FORWARD-LOOKING STATEMENTS
This Quarterly Report may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, 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 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, military conflicts, acts of war or threats thereof, or other adverse external events that could increase levels of political and economic unpredictability, contribute to rising energy and commodity prices, affect global supply chains, increase the volatility of financial markets, and other matters beyond our control (including the conflicts in the Middle East and Russia's invasion of Ukraine); (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) the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry, including investor and depositor sentiment regarding bank stability and liquidity; (7) new or revised accounting policies and practices as may be adopted by state and federal regulatory banking agencies, the FASB, the SEC, or the PCAOB; (8) changes in interest rates and prepayment rates of Busey's assets (including the impact of sustained elevated interest rates); (9) increased competition in the financial services sector (including from non-bank competitors such as credit unions, digital asset service providers, private credit, and fintech companies) and the inability to attract new customers; (10) 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; (11) the loss of key executives or associates, talent shortages, and employee turnover; (12) unexpected outcomes and costs of existing or new litigation, investigations, or other legal proceedings, inquiries, and regulatory actions involving Busey (including with respect to First Busey's Illinois franchise taxes); (13) fluctuations in the value of securities held in Busey's securities portfolio, including as a result of changes in interest rates; (14) 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 CRE loans); (15) the concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; (16) the level of non-performing assets on Busey's balance sheets; (17) interruptions involving information technology and communications systems or third-party vendors; (18) breaches or failures of information security controls or cybersecurity-related incidents; (19) the availability of future equity and debt issuances and other capital raising opportunities on favorable terms; (20) 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; (21) 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; (22) the ability to maintain an adequate level of allowance for credit losses on loans; (23) the effectiveness of Busey's risk management framework; and (24) 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 inBusey's 2025 Annual Report.
First Busey Corporation (BUSE) | 2026 Q2 - 96
TABLE OF CONTENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (UNAUDITED)
CRITICAL ACCOUNTING ESTIMATES
Busey's most significant accounting policies are described in "Note 1. Significant Accounting Policies" ofBusey's 2025 Annual Report. Certain of these accounting policies require management to use significant judgment and estimates, which can have a material impact on the carrying value of certain assets and liabilities. Busey considers these policies to be its critical accounting estimates. The judgment and assumptions made are based upon historical experience, future forecasts, or other factors that management believes to be reasonable under the circumstances. Because of the nature of the judgment and assumptions, actual results could differ from estimates, which could have a material effect on Busey's financial condition and results of operations.
For additional information regarding critical accounting estimates, see the section titled "Critical Accounting Estimates" included inItem 7 ofBusey's 2025 Annual Report. There have been no material changes in Busey's application of critical accounting estimates since December 31, 2025.

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