FIRST BUSEY CORP NV

The primary purposes of our investment securities portfolio are to provide a source of earnings by deploying funds that are not needed to fulfill loan demand, deposit redemptions, or other liquidity purposes; to serve as a tool for interest rate risk positioning; and to provide collateral for pledging purposes against public deposits and repurchase agreements, all while providing a source of liquidity.

We consider many factors in determining the composition of our investment portfolio including, but not limited to, credit quality, duration, interest rate risk, liquidity, tax-equivalent yield, regulatory considerations, and overall portfolio allocation. As of December 31, 2023, we did not hold general obligation bonds of any single issuer, the aggregate of which exceeded 10% of the Company’s stockholders’ equity.

Pledged securities totaled $837.4 million, or 28.3% of total debt securities, as of December 31, 2023, and $746.7 million, or 22.1% of total debt securities, as of December 31, 2022.

Debt securities available for sale are carried at fair value. Net unrealized gains or losses, net of tax, are recorded in stockholders’ equity, through AOCI. As of December 31, 2023, the fair value of debt securities available for sale was $2.1 billion, and the amortized cost was $2.3 billion. There were $0.2 million of gross unrealized gains and $247.2 million of gross unrealized losses, resulting in a net unrealized loss of $247.1 million.

The composition of debt securities available for sale was as follows (dollars in thousands):

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By maturity date, fair values and weighted average yields of debt securities available for sale as of December 31, 2023, are presented in the following table(dollars in thousands):

1. Securities are presented based upon final contractual maturity or pre-refunded date.

2. Weighted average yield calculated on a tax-equivalent basis, assuming a federal income tax rate of 21.0%.

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Debt Securities Held to Maturity

Debt securities held to maturity are carried at amortized cost. Unrecognized losses are included in OCI, and amortized into income over the contractual lives of the securities. An ACL balance will be established for debt securities held to maturity when applicable. No ACL was recorded for our portfolio of debt securities held to maturity as of December 31, 2023 or 2022.

As of December 31, 2023, the amortized cost of debt securities held to maturity was $872.6 million, and the fair value was $730.4 million. There were no gross unrecognized gains and $142.2 million of gross unrecognized losses.

The composition of debt securities held to maturity was as follows (dollars in thousands):

By maturity date, fair values and weighted average yields of debt securities held to maturity as of December 31, 2023, are presented in the following table(dollars in thousands):

1. Securities are presented based upon final contractual maturity or pre-refunded date.

Equity securities are carried at fair value. The fair value of equity securities was $9.8 million as of December 31, 2023, compared to $11.5 million as of December 31, 2022.

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