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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Investment Securities
The primary purposes of Busey’s 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.
Busey considers many factors in determining the composition of its 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, 2024, Busey did not hold general obligation bonds of any single issuer, the aggregate of which exceeded 10% of Busey’s stockholders’ equity.
Pledged securities totaled $871.4 million, or 33.0% of total debt securities, as of December 31, 2024, and $837.4 million, or 28.3% of total debt securities, as of December 31, 2023.
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, 2024, the fair value of debt securities available for sale was $1.81 billion, and the amortized cost was $2.04 billion. There were $0.6 million of gross unrealized gains and $230.3 million of gross unrealized losses, resulting in a net unrealized loss of $229.7 million.
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The composition of debt securities available for sale was as follows (dollars in thousands):
| As of December 31, | ||
|---|---|---|
| 2024 | 2023 | |
| Debt securities available for sale | ||
| U.S. Treasury securities | $— | $15,946 |
| Obligations of U.S. government corporations and agencies | 1,400 | 5,832 |
| Obligations of states and political subdivisions | 139,829 | 172,845 |
| Asset-backed securities | 336,557 | 468,223 |
| Commercial mortgage-backed securities | 92,174 | 103,509 |
| Residential mortgage-backed securities | 1,087,210 | 1,111,312 |
| Corporate debt securities | 153,051 | 209,904 |
| Debt securities available for sale, fair value | $1,810,221 | $2,087,571 |
| Debt securities available for sale, amortized cost | $2,039,952 | $2,334,630 |
| Fair value as a percentage of amortized cost | 88.74% | 89.42% |
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By maturity date, fair values and weighted average yields of debt securities available for sale as of December 31, 2024, are presented in the following table(dollars in thousands):
| Due in 1 year or less | Due after 1 yearthrough 5 years | Due after 5 yearsthrough 10 years | Due after 10 years | |||||
|---|---|---|---|---|---|---|---|---|
| FairValue | WeightedAverageYield | FairValue | WeightedAverageYield | FairValue | WeightedAverageYield | FairValue | WeightedAverageYield | |
| Obligations of U.S. government corporations and agencies | $160 | 2.65% | $1,240 | 5.03% | $— | — | $— | — |
| Obligations of states and political subdivisions2 | 12,341 | 3.49% | 40,593 | 2.42% | 72,066 | 2.47% | 14,829 | 2.76% |
| Asset-backed securities | — | — | 473 | 5.95% | 304,995 | 6.15% | 31,089 | 6.11% |
| Commercial mortgage-backed securities | 5,966 | 2.87% | 4,233 | 2.92% | 34,094 | 2.34% | 47,881 | 2.44% |
| Residential mortgage-backed securities | 222 | 2.89% | 6,621 | 4.24% | 54,289 | 1.97% | 1,026,078 | 2.14% |
| Corporate debt securities | 71,717 | 1.31% | 51,754 | 2.16% | 29,580 | 3.72% | — | —% |
| Debt securities available for sale | $90,406 | 1.72% | $104,914 | 2.47% | $495,024 | 4.75% | $1,119,877 | 2.27% |
Securities are presented based upon final contractual maturity or pre-refunded date.
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 Busey’s portfolio of debt securities held to maturity as of December 31, 2024 or 2023.
As of December 31, 2024, the amortized cost of debt securities held to maturity was $826.6 million, and the fair value was $675.1 million. There were no gross unrecognized gains and $151.6 million of gross unrecognized losses.
The composition of debt securities held to maturity was as follows (dollars in thousands):
| As of December 31, | ||
|---|---|---|
| 2024 | 2023 | |
| Debt securities held to maturity | ||
| Commercial mortgage-backed securities | $415,530 | $428,526 |
| Residential mortgage-backed securities | 411,100 | 444,102 |
| Debt securities held to maturity, amortized cost | $826,630 | $872,628 |
| Debt securities held to maturity, fair value | $675,053 | $730,397 |
| Fair value as a percentage of amortized cost | 81.66% | 83.70% |
By maturity date, fair values and weighted average yields of debt securities held to maturity as of December 31, 2024, are presented in the following table(dollars in thousands):
| Due in 1 year or less | Due after 1 yearthrough 5 years | Due after 5 yearsthrough 10 years | Due after 10 years | |||||
|---|---|---|---|---|---|---|---|---|
| FairValue | WeightedAverageYield | FairValue | WeightedAverageYield | FairValue | WeightedAverageYield | FairValue | WeightedAverageYield | |
| Commercial mortgage-backed securities | $18,327 | 2.27% | $58,733 | 2.15% | $12,609 | 2.42% | $248,619 | 2.20% |
| Residential mortgage-backed securities | — | — | — | — | — | — | 336,765 | 2.20% |
| Debt securities held to maturity | $18,327 | 2.27% | $58,733 | 2.15% | $12,609 | 2.42% | $585,384 | 2.20% |
- 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 $15.9 million as of December 31, 2024, compared to $9.8 million as of December 31, 2023.
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