FIRST BUSEY CORP /NV/
For the period ended Mar 31, 2025. Filed May 9, 2025.
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Mar 31, 2025 · Filed May 9, 2025
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Allowance and Provision for Credit Losses
The ACL is a significant estimate on Busey’s unaudited consolidated financial statements, affecting both earnings and capital. The methodology adopted influences, and is influenced by, Busey’s overall credit risk management processes. 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 credit loss expense charged to income. Provision expenses (releases) were recorded as follows for each of the years indicated:
| Three Months Ended March 31, | ||
|---|---|---|
| (dollars in thousands) | 2025 | 2024 |
| Provision for credit losses | $42,452 | $5,038 |
The 2025 provision for credit losses includes $42.4 million provision expense recorded to establish an initial ACL for non-PCD loans immediately following the close of the CrossFirst acquisition in accordance with ASC 326-20-30-15. The remaining first quarter 2025 provision between Busey Bank and CrossFirst Bank was immaterial.
The ACL and the ratio of ACL to portfolio loan balances is presented below by lending activity:
| As of March 31, 2025 | As of December 31, 2024 | |||||
|---|---|---|---|---|---|---|
| (dollars in thousands) | Portfolio Loans | ACL | Ratio of ACL toPortfolio Loans | Portfolio Loans | ACL | Ratio of ACL toPortfolio Loans |
| Commercial | ||||||
| C&I and other commercial | $4,513,543 | $89,304 | 1.98% | $1,904,515 | $21,589 | 1.13% |
| CRE | 5,573,766 | 68,478 | 1.23% | 3,269,564 | 32,301 | 0.99% |
| Real estate construction | 1,051,179 | 8,689 | 0.83% | 378,209 | 3,345 | 0.88% |
| Total commercial | 11,138,488 | 166,471 | 1.49% | 5,552,288 | 57,235 | 1.03% |
| Retail | ||||||
| Retail real estate | 2,245,705 | 26,399 | 1.18% | 1,696,457 | 23,711 | 1.40% |
| Retail other | 484,164 | 2,340 | 0.48% | 448,342 | 2,458 | 0.55% |
| Total retail | 2,729,869 | 28,739 | 1.05% | 2,144,799 | 26,169 | 1.22% |
| Total | $13,868,357 | $195,210 | 1.41% | $7,697,087 | $83,404 | 1.08% |
As of March 31, 2025, management believed the level of the ACL to be appropriate based upon the information available. However, additional losses may be identified in the loan portfolio as new information is obtained. The ongoing impacts of CECL will be dependent upon changes in economic conditions and forecasts, originated and acquired loan portfolio composition, credit performance trends, portfolio duration, and other factors.
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