FIRST BUSEY CORP NV
For the period ended Dec 31, 2024. Filed Feb 27, 2025.
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FY2024 · Filed Feb 27, 2025
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Borrowings
Term Loan
On May 28, 2021, Busey entered into a Second Amended and Restated Credit Agreement, pursuant to which it has access to (1) a $40.0 million revolving line of credit with an initial termination date of April 30, 2022, and (2) a $60.0 million Term Loan with a maturity date of May 31, 2026. The loans had an annual interest rate of 1.75% plus the one-month LIBOR rate. On April 30, 2022, the agreement was amended, effecting an extension of the termination date for the revolving line of credit to April 30, 2023, and providing for the transition from a LIBOR-indexed interest rate to a SOFR-indexed interest rate. Under the terms of the amendment, the annual interest rate for the loans was established at 1.80% plus the one-month forward-looking term rate based on SOFR. The agreement has subsequently been amended twice to extend the termination date for the revolving line of credit, which is currently April 30, 2025.
During the first quarter of 2024, Busey paid the full $30.0 million balance remaining on the Term Loan, at which time the Term Loan carried interest at a rate of 7.13%. As of December 31, 2024, there was no balance outstanding on the revolving credit facility. The revolving credit facility incurs a non-usage fee based on any undrawn amounts.
Short-term Borrowings and Securities Sold Under Agreements to Repurchase
Short-term borrowings include FHLB advances that mature in less than one year from the date of origination, and the current portion of long-term debt due within 12 months. Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature daily.
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The following table sets forth the distribution of short-term borrowings and securities sold under agreements to repurchase, as well as the weighted average interest rates thereon(dollars in thousands):
| Years Ended December 31, | |||
|---|---|---|---|
| 2024 | 2023 | 2022 | |
| Securities sold under agreements to repurchase | |||
| Balance at end of period | $155,610 | $187,396 | $229,806 |
| Weighted average interest rate at end of period | 2.63% | 3.26% | 1.91% |
| Maximum outstanding at any month end in year-to-date period | $214,567 | $248,850 | $283,664 |
| Average daily balance for the year-to-date period | 147,588 | 200,702 | 243,690 |
| Weighted average interest rate during period1 | 2.91% | 2.58% | 0.60% |
| FHLB advances, current portion due within 12 months | |||
| Balance at end of period | $— | $— | $339,054 |
| Weighted average interest rate at end of period | —% | —% | 4.28% |
| Maximum outstanding at any month end in year-to-date period | $24,100 | $603,881 | $339,054 |
| Average daily balance for the year-to-date period | 7,018 | 241,382 | 25,845 |
| Weighted average interest rate during period1 | 5.54% | 4.90% | 4.28% |
| Term Loan, current portion due within 12 months | |||
| Balance at end of period | $— | $12,000 | $12,000 |
| Weighted average interest rate at end of period | —% | 7.14% | 5.92% |
| Maximum outstanding at any month end in year-to-date period | $12,000 | $12,000 | $12,000 |
| Average daily balance for the year-to-date period | 2,853 | 12,000 | 12,000 |
| Weighted average interest rate during period1 | 7.26% | 6.88% | 3.55% |
- The weighted average interest rate is computed by dividing total interest for the period by the average daily balance outstanding.
Subordinated Notes
On June 1, 2020, Busey issued $125.0 million of fixed-to-floating rate subordinated notes that mature on June 1, 2030. The subordinated notes, which qualify as Tier 2 capital for regulatory purposes, bear interest at an annual rate of 5.25% for the first five years after issuance and thereafter bear interest at a floating rate equal to a three-month benchmark rate plus a spread of 5.11%, as calculated on each applicable determination date. Interest on the subordinated notes is payable semi-annually on each June 1 and December 1 during the five-year fixed-term, and thereafter on March 1, June 1, September 1, and December 1 of each year, commencing on September 1, 2025. The subordinated notes have an optional redemption in whole or in part on any interest payment date on or after June 1, 2025. The subordinated notes are unsecured obligations of the Company.
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On June 2, 2022, Busey issued $100.0 million aggregate principal amount of 5.000% fixed-to-floating rate subordinated notes maturing June 15, 2032, which qualify as Tier 2 Capital for regulatory purposes. The price to the public for the subordinated notes was 100% of the principal amount of the subordinated notes. Interest on the subordinated notes accrues at a rate equal to (1) 5.000% per annum from the original issue date to, but excluding, June 15, 2027, payable semiannually in arrears, and (2) a floating rate per annum equal to a benchmark rate, which is expected to be the Three-Month Term SOFR (as defined in the subordinated notes), plus a spread of 252 bps from and including June 15, 2027, payable quarterly in arrears. The subordinated notes have an optional redemption in whole or in part on any interest payment date on or after June 15, 2027.
Associated with the M&M acquisition completed on April 1, 2024 (see“Note 2. Mergers and Acquisitions”), Busey acquired $4.0 million of 5.25% fixed-to-floating rate subordinated notes maturing December 4, 2030, which qualify as Tier 2 capital for regulatory purposes. Interest on the subordinated notes accrues at a rate equal to (1) 5.25% per annum from the original issue date to December 4, 2025, and (2) a floating rate per annum equal to a benchmark rate, which is expected to be the Three-Month Term SOFR (as defined in the subordinated notes), plus a spread of 497 bps from December 4, 2025. The subordinated notes have an optional redemption, in whole or in part, on or after December 4, 2025. At December 31, 2024, there was $0.1 million of fair value discount outstanding, to be accreted through the earliest optional redemption date.
Unamortized debt issuance costs related to subordinated notes are presented in the following table(dollars in thousands):
| As of December 31, | ||
|---|---|---|
| 2024 | 2023 | |
| Unamortized debt issuance costs | ||
| Subordinated notes issued in 2020 | $222 | $735 |
| Subordinated notes issued in 2022 | 1,004 | 1,383 |
| Total unamortized debt issuance costs | $1,226 | $2,118 |
Junior Subordinated Debt Owed to Unconsolidated Trusts
Busey maintains statutory trusts for the sole purpose of issuing and servicing trust preferred securities and related trust common securities. Proceeds from such issuances were used by the trusts to purchase junior subordinated notes of Busey, which are the sole assets of each trust. Concurrent with the issuance of the trust preferred securities, Busey issued guarantees for the benefit of the holders of the trust preferred securities. The trust preferred securities are instruments that qualify, and are treated, as Tier 1 regulatory capital. Busey owns all of the common securities of each trust. The trust preferred securities issued by each trust rank equally with the common securities in right of payment, except that if an event of default under the indenture governing the notes has occurred and is continuing, the preferred securities will rank senior to the common securities in right of payment. Busey had $74.8 million and $72.0 million of junior subordinated debt owed to unconsolidated trusts at December 31, 2024, and 2023, respectively. In connection with its acquisitions of Pulaski Financial Corp. in 2016 and M&M in 2024, Busey has acquired similar statutory trusts and the fair value adjustment is being accreted over their weighted average remaining lives, with a balance remaining to be accreted of $2.9 million and $2.6 million at December 31, 2024, and 2023, respectively.
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