| DEBT SECURITIES |
NOTE 3. DEBT SECURITIES Busey's portfolio of debt securities includes both available for sale and held to maturity securities. The tables below provide the amortized cost, unrealized or unrecognized gains and losses, and fair values of debt securities, summarized by major category: | | | | | | | | | | | | | | | | | | | | | | | | | As of June 30, 2026 | | (dollars in thousands) | Amortized
Cost | | Unrealized | | Fair
Value | Gross Gains | | Gross Losses | Debt securities available for sale1 | | | | | | | | | | | | | | | | Obligations of U.S. government corporations and agencies | $ | 106,962 | | | $ | — | | | $ | (1,191) | | | $ | 105,771 | | Obligations of states and political subdivisions | 276,467 | | | 2,894 | | | (10,384) | | | 268,977 | | Asset-backed securities | 227,166 | | | 58 | | | (218) | | | 227,006 | | Commercial mortgage-backed securities | 160,834 | | | 116 | | | (11,828) | | | 149,122 | | Residential mortgage-backed securities | 1,604,567 | | | 3,435 | | | (135,420) | | | 1,472,582 | | Corporate debt securities | 43,027 | | | 313 | | | (1,631) | | | 41,709 | | | Total debt securities available for sale | $ | 2,419,023 | | | $ | 6,816 | | | $ | (160,672) | | | $ | 2,265,167 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Amortized
Cost | | Unrecognized | | Fair
Value | Gross Gains | | Gross Losses | | Debt securities held to maturity | | | | | | | | Commercial mortgage-backed securities | $ | 340,073 | | | $ | — | | | $ | (66,792) | | | $ | 273,281 | | Residential mortgage-backed securities | 363,915 | | | — | | | (57,893) | | | 306,022 | | | Total debt securities held to maturity | $ | 703,988 | | | $ | — | | | $ | (124,685) | | | $ | 579,303 | |
___________________________________________ 1.This table includes debt securities marked at par, with no gain or loss. | | | | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2025 | | (dollars in thousands) | Amortized
Cost | | Unrealized | | Fair
Value | | Gross Gains | | Gross Losses | | Debt securities available for sale1 | | | | | | | | | | | | | | | | Obligations of U.S. government corporations and agencies | $ | 111,876 | | | $ | 250 | | | $ | (80) | | | $ | 112,046 | | Obligations of states and political subdivisions | 270,682 | | | 3,089 | | | (9,898) | | | 263,873 | | Asset-backed securities | 265,203 | | | 412 | | | (35) | | | 265,580 | | Commercial mortgage-backed securities | 143,522 | | | 611 | | | (11,191) | | | 132,942 | | Residential mortgage-backed securities | 1,464,347 | | | 9,336 | | | (129,267) | | | 1,344,416 | | Corporate debt securities | 45,215 | | | 187 | | | (1,711) | | | 43,691 | | Total debt securities available for sale | $ | 2,300,845 | | | $ | 13,885 | | | $ | (152,182) | | | $ | 2,162,548 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Amortized
Cost | | Unrecognized | | Fair
Value | Gross Gains | | Gross Losses | Debt securities held to maturity | | | | | | | | Commercial mortgage-backed securities | $ | 367,825 | | | $ | — | | | $ | (65,210) | | | $ | 302,615 | | Residential mortgage-backed securities | 378,560 | | | — | | | (55,218) | | | 323,342 | | Total debt securities held to maturity | $ | 746,385 | | | $ | — | | | $ | (120,428) | | | $ | 625,957 | |
___________________________________________ 1.This table includes debt securities marked at par, with no gain or loss. Maturities of Debt Securities Amortized cost and fair value of debt securities, by contractual maturity or pre-refunded date, are shown below. Mortgages underlying mortgage-backed securities and asset-backed securities may be called or prepaid; therefore, actual maturities could differ from the contractual maturities. All mortgage-backed securities were issued by U.S. government corporations and agencies. | | | | | | | | | | | | | As of June 30, 2026 | | (dollars in thousands) | Amortized
Cost | | Fair
Value | | Debt securities available for sale | | | | | Due in one year or less | $ | 7,849 | | | $ | 7,840 | | | Due after one year through five years | 97,382 | | | 93,388 | | | Due after five years through ten years | 341,119 | | | 323,752 | | | Due after ten years | 1,972,673 | | | 1,840,187 | | | Debt securities available for sale | $ | 2,419,023 | | | $ | 2,265,167 | | | | | | | Debt securities held to maturity | | | | | Due in one year or less | $ | 3,956 | | | $ | 3,945 | | | Due after one year through five years | 34,434 | | | 33,093 | | | | | | | Due after ten years | 665,598 | | | 542,265 | | | Debt securities held to maturity | $ | 703,988 | | | $ | 579,303 | |
Gains and Losses on Debt Securities Available for Sale Realized gains and losses related to sales and calls of debt securities available for sale are summarized as follows: | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | (dollars in thousands) | 2026 | | 2025 | | 2026 | | 2025 | | Realized gains and losses on debt securities | | | | | | | | Gross gains on debt securities | $ | — | | | $ | 1 | | | $ | 24 | | | $ | 9 | | Gross losses on debt securities1 | — | | | — | | | (1) | | | (15,545) | | | Realized net gains (losses) on debt securities | $ | — | | | $ | 1 | | | $ | 23 | | | $ | (15,536) | |
___________________________________________ 1.During the first quarter of 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. Debt securities with carrying amounts of $711.8 million on June 30, 2026, and $744.2 million on December 31, 2025, were pledged as collateral for public deposits, securities sold under agreements to repurchase, and for other purposes as required. Debt Securities in an Unrealized or Unrecognized Loss Position The following information pertains to debt securities with gross unrealized or unrecognized losses, aggregated by investment category and the length of time that individual securities have been in a continuous loss position: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of June 30, 2026 | | Less than 12 months | | 12 months or more | | Total | | (dollars in thousands) | Fair
Value | | Unrealized
Losses | | Fair
Value | | Unrealized
Losses | | Fair
Value | | Unrealized
Losses | | Debt securities available for sale | | | | | | | | | | | | | | | | | | | | | | | | Obligations of U.S. government corporations and agencies1 | $ | 105,744 | | | $ | (1,191) | | | $ | 27 | | | $ | — | | | $ | 105,771 | | | $ | (1,191) | | Obligations of states and political subdivisions | 38,558 | | | (461) | | | 91,385 | | | (9,923) | | | 129,943 | | | (10,384) | | | Asset-backed securities | 162,814 | | | (218) | | | — | | | — | | | 162,814 | | | (218) | | | Commercial mortgage-backed securities | 62,252 | | | (447) | | | 72,914 | | | (11,381) | | | 135,166 | | | (11,828) | | | Residential mortgage-backed securities | 374,254 | | | (4,401) | | | 716,307 | | | (131,019) | | | 1,090,561 | | | (135,420) | | | Corporate debt securities | 2,486 | | | (4) | | | 23,150 | | | (1,627) | | | 25,636 | | | (1,631) | | | Debt securities available for sale with gross unrealized losses | $ | 746,108 | | | $ | (6,722) | | | $ | 903,783 | | | $ | (153,950) | | | $ | 1,649,891 | | | $ | (160,672) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair
Value | | Unrecognized
Losses | | Fair
Value | | Unrecognized
Losses | | Debt securities held to maturity | | | | | | | | | | | | | Commercial mortgage-backed securities | | | | | $ | 273,281 | | | $ | (66,792) | | | $ | 273,281 | | | $ | (66,792) | | | Residential mortgage-backed securities | | | | | 306,022 | | | (57,893) | | | 306,022 | | | (57,893) | | | Debt securities held to maturity with gross unrecognized losses | | | | | $ | 579,303 | | | $ | (124,685) | | | $ | 579,303 | | | $ | (124,685) | |
___________________________________________ 1.Losses on securities in a continuous loss position for 12 months or more were immaterial, rounding to zero thousand. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2025 | | Less than 12 months | | 12 months or more | | Total | | (dollars in thousands) | Fair
Value | | Unrealized
Losses | | Fair
Value | | Unrealized
Losses | | Fair
Value | | Unrealized
Losses | | Debt securities available for sale | | | | | | | | | | | | | | | | | | | | | | | | Obligations of U.S. government corporations and agencies | $ | 39,156 | | | $ | (80) | | | $ | — | | | $ | — | | | $ | 39,156 | | | $ | (80) | | Obligations of states and political subdivisions | 28,592 | | | (361) | | | 92,205 | | | (9,537) | | | 120,797 | | | (9,898) | | Asset-backed securities | 10,005 | | | (35) | | | — | | | — | | | 10,005 | | | (35) | | Commercial mortgage-backed securities | 4,986 | | | (48) | | | 71,830 | | | (11,143) | | | 76,816 | | | (11,191) | | Residential mortgage-backed securities | 84,023 | | | (708) | | | 765,361 | | | (128,559) | | | 849,384 | | | (129,267) | | Corporate debt securities | 5,969 | | | (20) | | | 29,097 | | | (1,691) | | | 35,066 | | | (1,711) | | | Debt securities available for sale with gross unrealized losses | $ | 172,731 | | | $ | (1,252) | | | $ | 958,493 | | | $ | (150,930) | | | $ | 1,131,224 | | | $ | (152,182) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair
Value | | Unrecognized
Losses | | Fair
Value | | Unrecognized
Losses | | Debt securities held to maturity | | | | | | | | | | | | Commercial mortgage-backed securities | | | | | $ | 302,615 | | | $ | (65,210) | | | $ | 302,615 | | | $ | (65,210) | | Residential mortgage-backed securities | | | | | 323,342 | | | (55,218) | | | 323,342 | | | (55,218) | | | Debt securities held to maturity with gross unrecognized losses | | | | | $ | 625,957 | | | $ | (120,428) | | | $ | 625,957 | | | $ | (120,428) | |
Additional information about debt securities in an unrealized or unrecognized loss position is presented in the tables below: | | | | | | | | | | | | | | | | | | | As of June 30, 2026 | | (dollars in thousands) | Available for Sale | | Held to Maturity | | Total | | Debt securities with gross unrealized or unrecognized losses, fair value | $ | 1,649,891 | | | $ | 579,303 | | | $ | 2,229,194 | | | Gross unrealized or unrecognized losses on debt securities | 160,672 | | | 124,685 | | | 285,357 | | | Ratio of gross unrealized or unrecognized losses to debt securities with gross unrealized or unrecognized losses | 9.7 | % | | 21.5 | % | | 12.8 | % | | | | | | | | Count of debt securities | 665 | | | 52 | | | 717 | | | Count of debt securities in an unrealized or unrecognized loss position | 463 | | | 52 | | | 515 | |
| | | | | | | | | | | | | | | | | | | As of December 31, 2025 | | (dollars in thousands) | Available for Sale | | Held to Maturity | | Total | | Debt securities with gross unrealized or unrecognized losses, fair value | $ | 1,131,224 | | | $ | 625,957 | | | $ | 1,757,181 | | | Gross unrealized or unrecognized losses on debt securities | 152,182 | | | 120,428 | | | 272,610 | | | Ratio of gross unrealized or unrecognized losses to debt securities with gross unrealized or unrecognized losses | 13.5 | % | | 19.2 | % | | 15.5 | % | | | | | | | | Count of debt securities | 637 | | | 52 | | | 689 | | | Count of debt securities in an unrealized or unrecognized loss position | 376 | | | 52 | | | 428 | |
Unrealized and unrecognized losses were related to changes in market interest rates and market conditions that do not represent credit-related impairments. Unless part of a corporate strategy or restructuring plan, Busey does not intend to sell securities that are in an unrealized or unrecognized loss position, and it is more likely than not that Busey will recover the amortized cost prior to being required to sell the debt securities. Full collection of the amounts due according to the contractual terms of the debt securities is expected; therefore, no ACL has been recorded in relation to debt securities, and the impairment related to noncredit factors on debt securities available for sale is recognized in AOCI, net of applicable taxes. As of June 30, 2026, Busey did not hold general obligation bonds of any single issuer that exceeded, in aggregate, 10% of Busey’s stockholders’ equity.
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