0001558370-21-014576 | 10-Q | XBRL Viewer

Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2021

Summary of changes in, the Company's stock option awards

A summary of the status of, and changes in, the Company's stock option awards for the nine months ended September 30, 2021 follows:


					Weighted-
			Weighted-		Average
			Average		Remaining
			Exercise		Contractual
	Shares		Price		Life
Outstanding at beginning of period		39,085	$	23.53		5.88
Expired		(7,479)		23.53
Outstanding at end of period		31,606	$	23.53		5.13

Exercisable at end of period		31,606	$	23.53		5.13

Summary of changes in the Company's RSU, PSU, and DSU awards

A summary of changes in the Company’s RSU, PSU, and DSU awards for the nine months ended September 30, 2021, is as follows:


	RSU Awards				PSU Awards				DSU Awards
			Weighted-				Weighted-				Weighted-
			Average				Average				Average
			Grant Date				Grant Date				Grant Date
	Shares		Fair Value		Shares⁽¹⁾		Fair Value		Shares		Fair Value
Nonvested at beginning of period		1,017,038	$	23.87		15,724	$	16.25		34,263	$	17.18
Granted		260,231		24.26		99,159		23.91		35,664		24.59
Dividend equivalents earned		33,388		23.07		—		—		3,716		23.15
Vested		(128,824)		22.88		—		—		(39,813)		18.08
Forfeited		(29,883)		24.88		(968)		23.48		—		—
Nonvested at end of period		1,151,950	$	24.02		113,915	$	22.86		33,830	$	24.59

Vested and outstanding at end of period										96,427	$	21.99

(1)

Shares for PSU awards represent target shares at grant date.

Schedule of Stock-based compensation expense

Stock-based compensation expense related to nonvested RSU, PSU, and DSU awards is presented in the table below (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Stock-based compensation
RSU awards	$	1,316	$	2,029	$	4,362	$	3,952
PSU awards		290		41		619		41
DSU awards		231		135		741		420
Total stock-based compensation	$	1,837	$	2,205	$	5,722	$	4,413

Schedule of Unamortized stock-based compensation expense

Unamortized stock-based compensation expense related to nonvested RSU, PSU, and DSU awards is presented in the table below (dollars in thousands):


	As of
	September 30,			December 31,
	2021			2020
Unamortized stock-based compensation
RSU awards	$	11,650		$	10,411
PSU awards		1,554			179
DSU awards		430			294
Total unamortized stock-based compensation	$	13,634		$	10,884

Weighted average period over which expense is to be recognized		3.0	yrs		3.0	yrs

Regulatory Capital (Tables)

9 Months Ended

Sep. 30, 2021

Regulatory Capital

Schedule of applicable holding company and bank regulatory capital requirements

The following tables summarize regulatory capital requirements applicable to the holding company its subsidiary bank (dollars in thousands):


	As of September 30, 2021
									Minimum
					Minimum				To Be Well
	Actual				Capital Requirement				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk Weighted Assets)
Consolidated	$	1,313,989	15.91	%	$	660,850	8.00	%	$	826,062	10.00	%
Busey Bank	$	1,306,293	15.87	%	$	658,612	8.00	%	$	823,265	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	1,060,756	12.84	%	$	495,637	6.00	%	$	660,850	8.00	%
Busey Bank	$	1,238,060	15.04	%	$	493,959	6.00	%	$	658,612	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	986,756	11.95	%	$	371,728	4.50	%	$	536,940	6.50	%
Busey Bank	$	1,238,060	15.04	%	$	370,469	4.50	%	$	535,123	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated	$	1,060,756	8.60	%	$	493,201	4.00	%		N/A	N/A
Busey Bank	$	1,238,060	10.06	%	$	492,170	4.00	%	$	615,212	5.00	%


	As of December 31, 2020
									Minimum
					Minimum				To Be Well
	Actual				Capital Requirement				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk Weighted Assets)
Consolidated	$	1,245,997	17.04	%	$	585,015	8.00	%	$	731,269	10.00	%
Busey Bank	$	1,131,875	15.50	%	$	584,082	8.00	%	$	730,103	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	983,033	13.44	%	$	438,761	6.00	%	$	585,015	8.00	%
Busey Bank	$	1,053,910	14.44	%	$	438,062	6.00	%	$	584,082	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	909,033	12.43	%	$	329,071	4.50	%	$	475,325	6.50	%
Busey Bank	$	1,053,910	14.44	%	$	328,546	4.50	%	$	474,567	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated	$	983,033	9.79	%	$	401,717	4.00	%		N/A	N/A
Busey Bank	$	1,053,910	10.52	%	$	400,581	4.00	%	$	500,727	5.00	%

Acquisitions - Cummins-American Corp. (Details) $ / shares in Units, $ in Thousands			3 Months Ended	9 Months Ended
	May 31, 2021 USD ($) $ / shares	May 28, 2021 USD ($) $ / shares	Sep. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Consideration paid
Goodwill			$ 317,766	$ 317,766	$ 311,536
CAC
Merger agreement
Share consideration conversion ratio	444.4783
Per share cash consideration entitled (in dollars per share) \| $ / shares	$ 14,173.96
Business acquisition share price \| $ / shares		$ 12,087.58
Measurement period adjustments			200
Special cash dividend		$ 60,000
Pre-tax acquisition expenses			8,400	11,400
Assets acquired:
Cash and cash equivalents	$ 298,637
Securities	702,367
Portfolio loans	430,470
Premises and equipment	17,034
Other intangible assets	17,340
Mortgage servicing rights	629
Other assets	8,176
Total assets acquired	1,474,653
Liabilities assumed:
Deposits	1,315,671
Other borrowings	16,651
Other liabilities	19,098
Total liabilities assumed	1,351,420
Net assets acquired	123,233
Consideration paid
Cash	70,358
Common stock	59,105
Total consideration paid	129,463
Goodwill	6,230		$ 6,200	$ 6,200
Fair value of PCD financial assets	60,500
Gross contractual amounts receivable relating to the PCD financial assets	65,200
Contractual cash flows specific to the PCD financial assets will not be collected	$ 4,200

Acquisitions (Tables)

9 Months Ended

Sep. 30, 2021

CAC

Schedule of fair value estimates of assets acquired and liabilities assumed

The following table presents the estimated fair value of CAC’s assets acquired and liabilities assumed as of May 31, 2021 (dollars in thousands):


	Fair Value
Assets acquired
Cash and cash equivalents	$	298,637
Securities		702,367
Portfolio loans, net of ACL		430,470
Premises and equipment		17,034
Other intangible assets		17,340
Mortgage servicing rights		629
Other assets		8,176
Total assets acquired		1,474,653

Liabilities assumed
Deposits		1,315,671
Other borrowings		16,651
Other liabilities		19,098
Total liabilities assumed		1,351,420

Net assets acquired	$	123,233

Consideration paid:
Cash	$	70,358
Common stock		59,105
Total consideration paid	$	129,463

Goodwill	$	6,230

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Assets
Cash and due from banks	$ 151,372	$ 118,824
Interest-bearing deposits	732,473	569,713
Total cash and cash equivalents	883,845	688,537
Debt securities available for sale	3,997,244	2,261,187
Equity securities	13,012	5,530
Loans held for sale, at fair value	20,225	42,813
Portfolio loans (net of ACL of $92,802 at September 30, 2021; $101,048 at December 31, 2020)	7,057,833	6,713,129
Premises and equipment, net	142,031	135,191
Right of use assets	11,068	7,714
Goodwill	317,766	311,536
Other intangible assets, net	61,125	51,985
Cash surrender value of bank owned life insurance	176,730	176,405
Other assets	218,451	150,020
Total assets	12,899,330	10,544,047
Deposits:
Noninterest-bearing	3,453,906	2,552,039
Interest-bearing	7,363,961	6,125,810
Total deposits	10,817,867	8,677,849
Securities sold under agreements to repurchase	241,242	175,614
Short-term borrowings	17,673	4,658
Long-term debt	49,233	4,757
Senior notes, net of unamortized issuance costs	39,910	39,809
Subordinated notes, net of unamortized issuance costs	182,637	182,226
Junior subordinated debt owed to unconsolidated trusts	71,593	71,468
Lease liabilities	11,120	7,757
Other liabilities	134,979	109,840
Total liabilities	11,566,254	9,273,978
Outstanding commitments and contingent liabilities (see Notes 10 and 16)
Stockholders' Equity
Common stock, ($.001 par value)	58	56
Additional paid-in capital	1,315,038	1,253,360
Retained earnings	75,643	20,830
Accumulated other comprehensive income (loss)	(1,366)	33,309
Total stockholders' equity before treasury stock	1,389,373	1,307,555
Treasury stock at cost	(56,297)	(37,486)
Total stockholders' equity	1,333,076	1,270,069
Total liabilities and stockholders' equity	$ 12,899,330	$ 10,544,047
Shares
Common shares issued	58,116,970	55,910,733
Less treasury shares	(2,289,986)	(1,506,354)
Common shares outstanding	55,826,984	54,404,379

Regulatory Capital

9 Months Ended

Sep. 30, 2021

Regulatory Capital

Regulatory Capital

Note 7: Regulatory Capital

The Company and its subsidiary bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory – and possibly additional discretionary – actions by regulators that, if undertaken, could have a direct material effect on the Company's consolidated financial statements. Capital amounts and classification also are subject to qualitative judgments by regulators about components, risk weightings, and other factors.

Banking regulations identify five capital categories for insured depository institutions: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. As of September 30, 2021, and December 31, 2020, all capital ratios of the Company and its subsidiary bank exceeded well capitalized levels under the applicable regulatory capital adequacy guidelines. Management believes that no events or changes have occurred subsequent to September 30, 2021, that would change this designation.

On March 27, 2020, the FDIC and other federal banking agencies published an interim final rule that provides those banking organizations adopting CECL during 2020 with the option to delay for two years the estimated impact of CECL on regulatory capital and to phase in the aggregate impact of the deferral on regulatory capital over a subsequent three-year period. On August 26, 2020, the CECL final rule was finalized and was substantially similar to the interim final rule. Under this final rule, because the Company has elected to use the deferral option, the regulatory capital impact of our transition adjustments recorded on January 1, 2020, from the adoption of CECL will be deferred for two years, until January 1, 2022. In addition, 25 percent of the ongoing impact of CECL on our ACL, retained earnings, and average total consolidated assets from January 1, 2020, through the end of the two-year deferral period, each as reported for regulatory capital purposes, will be added to the deferred transition amounts (“adjusted transition amounts”) and deferred for the two-year period. At the conclusion of the two-year period the adjusted transition amounts will be phased-in for regulatory capital purposes at a rate of 25 percent per year, with the phased-in amounts included in regulatory capital at the beginning of each year.

The following tables summarize regulatory capital requirements applicable to the holding company its subsidiary bank (dollars in thousands):


	As of September 30, 2021
									Minimum
					Minimum				To Be Well
	Actual				Capital Requirement				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk Weighted Assets)
Consolidated	$	1,313,989	15.91	%	$	660,850	8.00	%	$	826,062	10.00	%
Busey Bank	$	1,306,293	15.87	%	$	658,612	8.00	%	$	823,265	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	1,060,756	12.84	%	$	495,637	6.00	%	$	660,850	8.00	%
Busey Bank	$	1,238,060	15.04	%	$	493,959	6.00	%	$	658,612	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	986,756	11.95	%	$	371,728	4.50	%	$	536,940	6.50	%
Busey Bank	$	1,238,060	15.04	%	$	370,469	4.50	%	$	535,123	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated	$	1,060,756	8.60	%	$	493,201	4.00	%		N/A	N/A
Busey Bank	$	1,238,060	10.06	%	$	492,170	4.00	%	$	615,212	5.00	%


	As of December 31, 2020
									Minimum
					Minimum				To Be Well
	Actual				Capital Requirement				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk Weighted Assets)
Consolidated	$	1,245,997	17.04	%	$	585,015	8.00	%	$	731,269	10.00	%
Busey Bank	$	1,131,875	15.50	%	$	584,082	8.00	%	$	730,103	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	983,033	13.44	%	$	438,761	6.00	%	$	585,015	8.00	%
Busey Bank	$	1,053,910	14.44	%	$	438,062	6.00	%	$	584,082	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	909,033	12.43	%	$	329,071	4.50	%	$	475,325	6.50	%
Busey Bank	$	1,053,910	14.44	%	$	328,546	4.50	%	$	474,567	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated	$	983,033	9.79	%	$	401,717	4.00	%		N/A	N/A
Busey Bank	$	1,053,910	10.52	%	$	400,581	4.00	%	$	500,727	5.00	%

In July 2013, U.S. federal banking authorities approved the Basel III Rule for strengthening international capital standards. The Basel III Rule introduced a capital conservation buffer, composed entirely of Common Equity Tier 1 Capital, which is added to the minimum risk-weighted asset ratios. The capital conservation buffer is not a minimum capital requirement; however, banking institutions with a ratio of Common Equity Tier 1 to risk-weighted assets below the capital conservation buffer will face constraints on dividends, equity repurchases, and discretionary bonus payments based on the amount of the shortfall. In order to refrain from restrictions on dividends, equity repurchases, and discretionary bonus payments, banking institutions must maintain minimum ratios of (i) total capital to risk-weighted assets of at least 10.50%, (ii) Tier 1 Capital to risk-weighted assets of at least 8.50%, and (iii) Common Equity Tier 1 to risk-weighted assets of at least 7.00%.

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

+ References + Details

Fair Value Measurements - Additional Quantitative Information (Details) $ in Thousands	Sep. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans evaluated individually	$ 20,366	$ 20,246
Non-recurring basis
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans evaluated individually	3,753	2,771
OREO	51	106
Bank property held for sale	6,150	10,676
Non-recurring basis \| Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans evaluated individually	3,753	2,771
OREO	51	106
Bank property held for sale	6,150	10,676
Non-recurring basis \| Level 3 \| Appraisal of collateral \| Loans evaluated individually
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans evaluated individually	3,753	2,771
Non-recurring basis \| Level 3 \| Appraisal of collateral \| OREO
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
OREO	51	106
Non-recurring basis \| Level 3 \| Appraisal of collateral or real estate listing price \| Bank property held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Bank property held for sale	$ 6,150	$ 10,676
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral \| Loans evaluated individually \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans evaluated individually (percent)	(18.0)	(30.0)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral \| Loans evaluated individually \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans evaluated individually (percent)	(100.0)	(100.0)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral \| Loans evaluated individually \| Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Loans evaluated individually (percent)	(54.4)	(37.0)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral \| OREO \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
OREO (percent)	(33.0)	(25.0)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral \| OREO \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
OREO (percent)	(100.0)	(100.0)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral \| OREO \| Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
OREO (percent)	(67.9)	(54.5)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral or real estate listing price \| Bank property held for sale \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Bank property held for sale (percent)	(6.2)	(6.2)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral or real estate listing price \| Bank property held for sale \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Bank property held for sale (percent)	(64.9)	(64.9)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral or real estate listing price \| Bank property held for sale \| Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Bank property held for sale (percent)	(41.2)	(42.8)

Derivative Financial Instruments - Interest Rate Swaps Designated as Cash Flow Hedges (Details) - Cash Flow Hedging - Interest rate swap - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	Sep. 17, 2020
Derivative [Line Items]
Notional amount	$ 50,000		$ 50,000		$ 70,000
Weighted average fixed pay rates	1.79%		1.79%		1.80%
Weighted average variable 3 month LIBOR receive rates	0.12%		0.12%		0.22%
Weighted average maturity in years			2 years 11 months 15 days		2 years 10 months 6 days
Unrealized gains (losses), net of tax			$ (1,237)		$ (2,184)
Interest expense on swap transactions	$ 300	$ 300	900	$ 500
Unrealized loss to be reclassified from OCI to interest expense during next twelve months			(200)
Swap matured						$ 20,000
Other liabilities
Derivative [Line Items]
Fair value recorded in other liabilities	$ 1,700		$ 1,700		$ 3,100

Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2021

Summary of the interest-rate swaps designated as cash flow hedges

A summary of the interest-rate swaps designated as cash flow hedges is presented below (dollars in thousands):


	As of
	September 30,			December 31,
	2021			2020
Notional amount	$	50,000		$	70,000
Weighted average fixed pay rates		1.79	%		1.80	%
Weighted average variable 3-month LIBOR receive rates		0.12	%		0.22	%
Weighted average maturity, in years		2.96	yrs		2.85	yrs
Unrealized gains (losses), net of tax	$	(1,237)		$	(2,184)

Interest rate contract

Summary of Net gains (losses) relating to these derivative instruments

The following table reflects the net gains (losses) recorded in accumulated other comprehensive income (loss) and the unaudited Consolidated Statements of Income relating to cash flow derivative instruments for the periods presented (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Interest rate contracts
Gain (loss) recognized in OCI, net of tax	$	(5)	$	14	$	336	$	(2,233)
(Gain) loss reclassified from OCI to interest expense, net of tax		206		192		611		42
Net change in unrealized gains (losses) on cash flow hedges	$	201	$	206	$	947	$	(2,191)

Interest rate lock commitments and forward sales commitments

Summary of fair values of derivative assets and liabilities recorded in consolidated balance sheet

Amounts and fair values of mortgage banking derivatives included in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands):


		As of September 30, 2021				As of December 31, 2020
		Notional		Fair		Notional		Fair
	Location	Amount		Value		Amount		Value
Derivatives with positive fair value
Interest rate lock commitments	Other assets	$	31,480	$	538	$	45,004	$	1,201
Forward sales commitments	Other assets		117		1		978		32
Mortgage banking derivatives recorded in other assets		$	31,597	$	539	$	45,982	$	1,233

Derivatives with negative fair value
Interest rate lock commitments	Other liabilities	$	117	$	1	$	118	$	1
Forward sales commitments	Other liabilities		49,418		1,439		84,964		2,662
Mortgage banking derivatives recorded in other liabilities		$	49,535	$	1,440	$	85,082	$	2,663

Summary of Net gains (losses) relating to these derivative instruments

Net gains (losses) relating to these derivative instruments are summarized as follows for the periods presented (dollars in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,
	Location	2021		2020		2021		2020
Net gains (losses)
Interest rate lock commitments	Mortgage revenue	$	537	$	1,405	$	1,502	$	8,467
Forward sales commitments	Mortgage revenue		(1,438)		(3,874)		(3,616)		(15,699)
Net gains (losses)		$	(901)	$	(2,469)	$	(2,114)	$	(7,232)

Interest rate swap

Summary of fair values of derivative assets and liabilities recorded in consolidated balance sheet

Amounts and fair values of derivative assets and liabilities related to customer interest rate swaps recorded in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands):


	As of September 30, 2021
	Derivative Asset				Derivative Liability
	Notional		Fair		Notional		Fair
	Amount		Value		Amount		Value
Derivatives not designated as hedging instruments
Interest rate swaps – pay floating, receive fixed	$	332,856	$	19,420	$	91,711	$	1,910
Interest rate swaps – pay fixed, receive floating		91,711		1,910		332,856		19,420
Total derivatives not designated as hedging instruments	$	424,567	$	21,330	$	424,567	$	21,330


	As of December 31, 2020
	Derivative Asset				Derivative Liability
	Notional		Fair		Notional		Fair
	Amount		Value		Amount		Value
Derivatives not designated as hedging instruments
Interest rate swaps – pay floating, receive fixed	$	394,954	$	32,685	$	—	$	—
Interest rate swaps – pay fixed, receive floating		—		—		394,954		32,685
Total derivatives not designated as hedging instruments	$	394,954	$	32,685	$	394,954	$	32,685

Summary of Net gains (losses) relating to these derivative instruments

Changes in fair value of these derivative assets and liabilities are recorded in noninterest expense in the unaudited Consolidated Statements of Income and summarized as follows (dollars in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,
	Location	2021		2020		2021		2020
Interest rate swaps
Pay floating, receive fixed	Noninterest expense	$	(2,024)	$	(549)	$	(11,355)	$	25,790
Pay fixed, receive floating	Noninterest expense		2,024		549		11,355		(25,790)
Net change in fair value of interest rate swaps		$	—	$	—	$	—	$	—

Portfolio Loans- Distribution of portfolio loans (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Jun. 30, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Distributions of portfolio loans
Portfolio loans	$ 7,150,635		$ 6,814,177
ACL	(92,802)	$ (95,410)	(101,048)	$ (98,841)	$ (96,046)	$ (53,748)
Portfolio loans, net	7,057,833		6,713,129
Commercial Loans
Distributions of portfolio loans
Portfolio loans	1,931,863		2,014,576
ACL	(24,406)	(24,356)	(23,866)	(24,363)	(24,146)	(18,291)
Commercial Real Estate Loans
Distributions of portfolio loans
Portfolio loans	3,068,622		2,892,535
ACL	(39,831)	(39,974)	(46,230)	(45,917)	(42,680)	(21,190)
Real Estate Construction
Distributions of portfolio loans
Portfolio loans	430,857		461,786
ACL	(6,121)	(7,599)	(8,193)	(7,419)	(7,792)	(3,204)
Retail Real Estate
Distributions of portfolio loans
Portfolio loans	1,512,884		1,407,852
ACL	(19,352)	(20,505)	(21,992)	(20,184)	(20,405)	(10,495)
Retail Other
Distributions of portfolio loans
Portfolio loans	206,409		37,428
ACL	$ (3,092)	$ (2,976)	$ (767)	$ (958)	$ (1,023)	$ (568)

Portfolio Loans - Summarize TDRs (Details) $ in Thousands	3 Months Ended	9 Months Ended
Portfolio Loans - Summarize TDRs (Details) $ in Thousands	Sep. 30, 2020 USD ($) contract	Sep. 30, 2021 USD ($) contract	Sep. 30, 2020 USD ($) contract
Commercial
Financing Receivable, Impaired [Line Items]
Number of Contracts \| contract		1	3
Commercial \| Rate Modification
Financing Receivable, Impaired [Line Items]
Recorded Investment \| $		$ 444	$ 324
Commercial real estate
Financing Receivable, Impaired [Line Items]
Number of Contracts \| contract			1
Commercial real estate \| Rate Modification
Financing Receivable, Impaired [Line Items]
Recorded Investment \| $			$ 651
Retail Real Estate
Financing Receivable, Impaired [Line Items]
Number of Contracts \| contract	1		2
Retail Real Estate \| Payment Modification
Financing Receivable, Impaired [Line Items]
Recorded Investment \| $	$ 167		$ 353

Portfolio Loans and allowance for credit losses - Analysis of loans past due and still accruing or non-accrual status (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Loans past due
90+Days	$ 491	$ 1,371
Non-accrual Loans	25,369	22,930
30 to 59 Days
Loans past due
Loans past due, still accruing	4,224	6,794
60 to 89 Days
Loans past due
Loans past due, still accruing	2,222	784
Commercial
Loans past due
Non-accrual Loans	10,230	8,523
Commercial \| 30 to 59 Days
Loans past due
Loans past due, still accruing	1,092	243
Commercial \| 60 to 89 Days
Loans past due
Loans past due, still accruing	202
Commercial real estate
Loans past due
Non-accrual Loans	6,620	5,503
Commercial real estate \| 30 to 59 Days
Loans past due
Loans past due, still accruing	882
Real estate construction
Loans past due
Non-accrual Loans		1
Real estate construction \| 30 to 59 Days
Loans past due
Loans past due, still accruing		237
Real estate construction \| 60 to 89 Days
Loans past due
Loans past due, still accruing		235
Retail Real Estate
Loans past due
90+Days	491	1,305
Non-accrual Loans	8,482	8,799
Retail Real Estate \| 30 to 59 Days
Loans past due
Loans past due, still accruing	2,068	6,248
Retail Real Estate \| 60 to 89 Days
Loans past due
Loans past due, still accruing	2,020	400
Retail Other
Loans past due
90+Days		66
Non-accrual Loans	37	104
Retail Other \| 30 to 59 Days
Loans past due
Loans past due, still accruing	$ 182	66
Retail Other \| 60 to 89 Days
Loans past due
Loans past due, still accruing		$ 149

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash Flows Provided by (Used in) Operating Activities
Net income	$ 93,523	$ 71,999
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for credit losses	(10,365)	35,656
Amortization of intangible assets	8,200	7,569
Amortization of mortgage servicing rights	4,202	3,932
Depreciation and amortization of premises and equipment	8,723	9,384
Net amortization (accretion) of premium (discount) on portfolio loans acquired	(4,860)	(7,015)
Net amortization (accretion) of premium (discount) on investment securities	17,263	6,698
Net amortization (accretion) of premium (discount) on time deposits	(929)	(662)
Net amortization (accretion) of premium (discount) on FHLB advances and other borrowings	620	387
Impairment of OREO		43
Impairment of fixed assets held for sale		36
Impairment of mortgage servicing rights	(542)	604
Change in fair value of equity securities, net	(2,482)	1,234
(Gain) loss on sales of debt securities, net	(114)	(1,710)
(Gain) loss on sales of loans, net	(8,202)	(21,357)
(Gain) loss on sales of OREO	163	47
(Gain) loss on sales of premises and equipment	(1,007)	198
(Gain) loss on life insurance proceeds	(493)	(1,256)
Provision for deferred income taxes	2,326	(2,730)
Stock-based compensation	5,722	4,413
(Increase) decrease in cash surrender value of bank owned life insurance	(2,946)	(3,105)
Mortgage loans originated for sale	(214,096)	(770,186)
Proceeds from sales of mortgage loans	244,356	771,039
Net change in operating assets and liabilities:
(Increase) decrease in other assets	(12,791)	(3,435)
Increase (decrease) in other liabilities	(23,775)	(369)
Net cash provided by (used in) operating activities	102,496	101,414
Cash Flows Provided by (Used in) Investing Activities
Purchases of equity securities	(11,017)	(13,123)
Purchases of debt securities available for sale	(2,048,554)	(907,094)
Proceeds from sales of equity securities	7,254	33
Proceeds from sales of debt securities available for sale	290,955
Proceeds from paydowns and maturities of debt securities available for sale	641,754	477,370
Net cash received in (paid for) acquisitions (see Note 2)	228,279
Net (increase) decrease in loans	114,729	(439,679)
Cash paid for premiums on bank-owned life insurance	(118)	(120)
Purchases of premises and equipment	(4,041)	(3,158)
Proceeds from life insurance	3,232	2,512
Proceeds from disposition of premises and equipment	6,519	806
Proceeds from sales of OREO	1,452	492
Net cash provided by (used in) investing activities	(769,556)	(881,961)
Cash Flows Provided by (Used in) Financing Activities
Net increase (decrease) in deposits	816,551	740,967
Net change in federal funds purchased and securities sold under agreements to repurchase	48,977	(3,850)
Proceeds from other borrowings	72,500	142,634
Repayment of other borrowings	(15,500)	(74,000)
Proceeds from FHLB advances	5,000	4,000
Repayment of FHLB advances	(4,492)	(32,551)
Cash dividends paid	(37,953)	(36,017)
Purchase of treasury stock	(22,038)	(9,669)
Cash paid for withholding taxes on stock-based payments	(888)	(635)
Proceeds from stock options exercised		101
Issuance of treasury stock for ESPP	361
Common stock issuance costs	(150)
Net cash provided by (used in) financing activities	862,368	730,980
Net increase (decrease) in cash and cash equivalents	195,308	(49,567)
Cash and cash equivalents, beginning of period	688,537	529,288
Cash and cash equivalents, ending of period	883,845	479,721
Cash payments for:
Interest	16,257	41,987
Income taxes	9,641	19,395
Non-cash investing and financing activities:
OREO acquired in settlement of loans	$ 228	$ 2,482

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
Net unrealized holding gains (losses) on debt securities available for sale, taxes	$ 4,902	$ 682	$ 14,195	$ (9,577)
Reclassification adjustment for realized (gains) losses on debt securities available for sale included in net income, taxes	(1)	3	7	492
Net unrealized holding gains (losses) on cash flow hedges, taxes	2	(6)	(134)	890
Reclassification adjustment for realized (gains) losses on cash flow hedges included in net income, taxes	$ (82)	$ (76)	$ (243)	$ (16)

Stock-based Compensation - Award Status (Details) - Options - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Shares
Outstanding at beginning of period (in shares)	39,085
Expired (in shares)	(7,479)
Outstanding at end of period (in shares)	31,606	39,085
Exercisable at end of period (in shares)	31,606
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 23.53
Expired (in dollars per share)	23.53
Outstanding at end of Exercisable at end of period (in dollars per share)	23.53	$ 23.53
Exercisable at end of period (in dollars per share)	$ 23.53
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted-Average Remaining Contractual Life, Outstanding	5 years 1 month 17 days	5 years 10 months 17 days
Weighted-Average Remaining Contractual Life, Exercisable	5 years 1 month 17 days

Securities (Tables)

9 Months Ended

Sep. 30, 2021

Securities

Schedule of amortized cost, unrealized gains and losses and fair values of securities classified available for sale and held to maturity

The table below provides the amortized cost, unrealized gains and losses, and fair values of debt securities summarized by major category (dollars in thousands):


	As of September 30, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized				Fair
	Cost		Gains		Losses			ACL	Value
Debt securities available for sale
U.S. Treasury securities	$	185,636	$	72	$	(255)	$	—	$	185,453
Obligations of U.S. government corporations and agencies		37,784		1,213		—		—		38,997
Obligations of states and political subdivisions		288,023		8,743		(754)		—		296,012
Commercial mortgage-backed securities		607,097		5,278		(9,078)		—		603,297
Residential mortgage-backed securities		2,108,388		13,973		(19,753)		—		2,102,608
Asset-backed securities		468,618		323		(134)		—		468,807
Corporate debt securities		301,878		1,374		(1,182)		—		302,070
Total debt securities available for sale	$	3,997,424	$	30,976	$	(31,156)	$	—	$	3,997,244


	As of December 31, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized				Fair
	Cost		Gains		Losses			ACL	Value
Debt securities available for sale
U.S. Treasury securities	$	27,481	$	356	$	—	$	—	$	27,837
Obligations of U.S. government corporations and agencies		67,406		2,162		(49)		—		69,519
Obligations of states and political subdivisions		292,940		11,779		(8)		—		304,711
Commercial mortgage-backed securities		408,716		10,212		(312)		—		418,616
Residential mortgage-backed securities		1,344,047		24,571		(303)		—		1,368,315
Corporate debt securities		70,953		1,237		(1)		—		72,189
Total debt securities available for sale	$	2,211,543	$	50,317	$	(673)		—	$	2,261,187

Schedule of amortized cost and fair value of debt securities available for sale and held to maturity by contractual maturity

All mortgage-backed securities were issued by U.S. government corporations and agencies (dollars in thousands):


	As of September 30, 2021
	Amortized		Fair
	Cost		Value
Debt securities available for sale
Due in one year or less	$	103,158	$	103,787
Due after one year through five years		603,868		608,074
Due after five years through ten years		385,479		393,540
Due after ten years		2,904,919		2,891,843
Total debt securities available for sale	$	3,997,424	$	3,997,244

Schedule of realized gains and losses related to sales of securities

Realized gains and losses related to sales and calls of debt securities available for sale are summarized as follows (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Realized gains and losses on sales of debt securities
Gross security gains	$	—	$	11	$	524	$	1,718
Gross security (losses)		(5)		—		(410)		(8)
Net gains (losses) on sales of debt securities	$	(5)	$	11	$	114	$	1,710

Schedule of securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position

The following information pertains to debt securities with gross unrealized losses, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (dollars in thousands):


	As of September 30, 2021
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Debt securities available for sale
U.S. Treasury securities	$	180,317	$	(255)	$	—	$	—	$	180,317	$	(255)
Obligations of states and political subdivisions		55,434		(754)		—		—		55,434		(754)
Commercial mortgage-backed securities		434,220		(9,036)		3,063		(42)		437,283		(9,078)
Residential mortgage-backed securities		1,392,160		(19,707)		5,568		(46)		1,397,728		(19,753)
Asset-backed securities		51,183		(134)		—		—		51,183		(134)
Corporate debt securities		210,951		(1,182)		—		—		210,951		(1,182)
Total temporarily impaired securities	$	2,324,265	$	(31,068)	$	8,631	$	(88)	$	2,332,896	$	(31,156)


	As of December 31, 2020
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Debt securities available for sale
Obligations of U.S. government corporations and agencies	$	—	$	—	$	4,957	$	(49)	$	4,957	$	(49)
Obligations of states and political subdivisions		762		(8)		—		—		762		(8)
Commercial mortgage-backed securities		129,655		(312)		—		—		129,655		(312)
Residential mortgage-backed securities		89,997		(300)		139		(3)		90,136		(303)
Corporate debt securities		1,499		(1)		—		—		1,499		(1)
Total temporarily impaired securities	$	221,913	$	(621)	$	5,096	$	(52)	$	227,009	$	(673)

Portfolio Loans and allowance for credit losses - Risk grades of portfolio loans by origination year (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Loans
2021	$ 1,872,128
2020	1,432,087	$ 2,216,953
2019	977,044	1,168,069
2018	595,136	798,327
2017	500,258	699,747
2016		441,456
Prior	770,563	650,638
Revolving loans	1,003,419	838,987
Ending balance	7,150,635	6,814,177
Pass
Loans
Ending balance	6,448,171	6,016,748
Watch
Loans
Ending balance	479,566	554,970
Special Mention
Loans
Ending balance	145,634	150,481
Substandard
Loans
Ending balance	51,895	69,048
Substandard Non-accrual
Loans
Ending balance	25,369	22,930
Commercial
Loans
2021	494,584
2020	275,649	843,404
2019	139,989	190,061
2018	101,782	127,410
2017	91,027	118,185
2016		72,647
Prior	154,513	105,947
Revolving loans	674,318	556,922
Ending balance	1,931,863	2,014,576
Commercial \| Pass
Loans
2021	468,833
2020	265,204	812,536
2019	112,809	158,307
2018	90,292	107,565
2017	73,553	93,190
2016		61,847
Prior	132,127	79,970
Revolving loans	575,580	455,340
Ending balance	1,718,398	1,768,755
Commercial \| Watch
Loans
2021	15,078
2020	5,355	16,544
2019	19,783	22,247
2018	5,668	14,954
2017	7,545	13,724
2016		2,577
Prior	4,287	10,943
Revolving loans	57,392	55,959
Ending balance	115,108	136,948
Commercial \| Special Mention
Loans
2021	3,011
2020	1,143	6,402
2019	2,479	2,671
2018	4,385	2,069
2017	6,864	7,164
2016		6,763
Prior	12,484	13,733
Revolving loans	31,728	33,645
Ending balance	62,094	72,447
Commercial \| Substandard
Loans
2021	3,357
2020	3,504	7,772
2019	3,321	3,791
2018	1,437	2,371
2017	1,244	1,939
2016		819
Prior	5,552	1,233
Revolving loans	7,618	9,978
Ending balance	26,033	27,903
Commercial \| Substandard Non-accrual
Loans
2021	4,305
2020	444	150
2019	1,597	3,045
2018		451
2017	1,821	2,168
2016		641
Prior	63	68
Revolving loans	2,000	2,000
Ending balance	10,230	8,523
Commercial real estate
Loans
2021	729,627
2020	747,753	840,882
2019	603,588	628,303
2018	374,403	463,787
2017	299,213	437,776
2016		222,941
Prior	291,250	278,923
Revolving loans	22,787	19,923
Ending balance	3,068,622	2,892,535
Commercial real estate \| Pass
Loans
2021	655,907
2020	690,244	717,559
2019	463,830	503,977
2018	289,396	360,573
2017	257,618	384,843
2016		180,555
Prior	245,795	227,068
Revolving loans	20,453	18,797
Ending balance	2,623,243	2,393,372
Commercial real estate \| Watch
Loans
2021	41,596
2020	40,404	88,297
2019	130,282	110,526
2018	62,312	90,412
2017	27,226	33,734
2016		32,887
Prior	34,572	27,023
Revolving loans	1,878	398
Ending balance	338,270	383,277
Commercial real estate \| Special Mention
Loans
2021	27,115
2020	7,056	16,490
2019	7,551	8,858
2018	18,661	10,490
2017	10,436	10,505
2016		7,102
Prior	10,430	21,808
Revolving loans	276	233
Ending balance	81,525	75,486
Commercial real estate \| Substandard
Loans
2021	4,894
2020	9,289	17,445
2019	1,574	4,166
2018	2,072	1,491
2017	526	7,812
2016		2,111
Prior	429	1,377
Revolving loans	180	495
Ending balance	18,964	34,897
Commercial real estate \| Substandard Non-accrual
Loans
2021	114
2020	761	1,091
2019	352	776
2018	1,962	821
2017	3,407	882
2016		286
Prior	24	1,647
Ending balance	6,620	5,503
Real estate construction
Loans
2021	166,999
2020	150,214	200,184
2019	93,763	175,330
2018	4,193	64,362
2017	2,516	3,306
2016		1,071
Prior	1,372	1,445
Revolving loans	11,801	16,088
Ending balance	430,857	461,786
Real estate construction \| Pass
Loans
2021	160,719
2020	141,699	179,232
2019	93,701	171,663
2018	3,918	64,025
2017	899	1,468
2016		761
Prior	1,249	1,444
Revolving loans	11,801	16,088
Ending balance	413,986	434,681
Real estate construction \| Watch
Loans
2021	6,279
2020	6,115	18,485
2019	55	3,657
2018	276	337
2017	1,616	1,838
2016		164
Prior	123
Ending balance	14,464	24,481
Real estate construction \| Special Mention
Loans
2020		67
2019	7	10
Ending balance	7	77
Real estate construction \| Substandard
Loans
2020	2,400	2,400
2016		146
Ending balance	2,400	2,546
Real estate construction \| Substandard Non-accrual
Loans
Prior		1
Ending balance		1
Retail Real Estate
Loans
2021	435,305
2020	233,281	324,112
2019	109,330	164,938
2018	95,015	137,163
2017	97,553	137,949
2016		144,101
Prior	320,771	263,826
Revolving loans	221,629	235,763
Ending balance	1,512,884	1,407,852
Retail Real Estate \| Pass
Loans
2021	428,556
2020	230,120	319,302
2019	107,262	162,711
2018	92,875	135,065
2017	95,667	136,427
2016		140,600
Prior	313,708	257,147
Revolving loans	217,984	231,364
Ending balance	1,486,172	1,382,616
Retail Real Estate \| Watch
Loans
2021	2,641
2020	2,666	2,715
2019	1,982	2,053
2018	1,521	1,396
2017	352	349
2016		579
Prior	270	233
Revolving loans	2,292	2,939
Ending balance	11,724	10,264
Retail Real Estate \| Special Mention
Loans
2021	1,979
2020	29	509
2016		1,962
Ending balance	2,008	2,471
Retail Real Estate \| Substandard
Loans
2021	1,630
2020	321	899
2019	14	96
2018	73	56
2017	166	26
2016		727
Prior	2,210	1,631
Revolving loans	84	267
Ending balance	4,498	3,702
Retail Real Estate \| Substandard Non-accrual
Loans
2021	500
2020	145	687
2019	72	78
2018	546	646
2017	1,369	1,147
2016		233
Prior	4,582	4,815
Revolving loans	1,268	1,193
Ending balance	8,482	8,799
Retail Other
Loans
2021	45,614
2020	25,188	8,371
2019	30,373	9,437
2018	19,742	5,605
2017	9,949	2,531
2016		696
Prior	2,658	497
Revolving loans	72,885	10,291
Ending balance	206,409	37,428
Retail Other \| Pass
Loans
2021	45,614
2020	25,177	8,357
2019	30,366	9,430
2018	19,737	5,600
2017	9,935	2,516
2016		691
Prior	2,658	440
Revolving loans	72,885	10,290
Ending balance	206,372	37,324
Retail Other \| Substandard Non-accrual
Loans
2020	11	14
2019	7	7
2018	5	5
2017	14	15
2016		5
Prior		57
Revolving loans		1
Ending balance	37	104
Commercial Loans
Loans
Ending balance	1,931,863	2,014,576
Commercial Real Estate Loans
Loans
Ending balance	3,068,622	2,892,535
Real Estate Construction
Loans
Ending balance	430,857	461,786
Retail Real Estate
Loans
Ending balance	1,512,884	1,407,852
Retail Other
Loans
Ending balance	$ 206,409	$ 37,428

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Measurements

Schedule of financial assets and financial liabilities measured at fair value on a recurring basis

The following tables summarize financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2021, and December 31, 2020, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands):


	As of September 30, 2021
	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
Debt securities available for sale:
U.S. Treasury securities	$	—	$	185,453	$	—	$	185,453
Obligations of U.S. government corporations and agencies		—		38,997		—		38,997
Obligations of states and political subdivisions		—		296,012		—		296,012
Commercial mortgage-backed securities		—		603,297		—		603,297
Residential mortgage-backed securities		—		2,102,608		—		2,102,608
Asset-backed securities		—		468,807		—		468,807
Corporate debt securities		—		302,070		—		302,070
Equity securities		—		13,012		—		13,012
Loans held for sale		—		20,225		—		20,225
Derivative assets		—		21,869		—		21,869
Derivative liabilities		—		24,501		—		24,501


	As of December 31, 2020
	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
Debt securities available for sale:
U.S. Treasury securities	$	—	$	27,837	$	—	$	27,837
Obligations of U.S. government corporations and agencies		—		69,519		—		69,519
Obligations of states and political subdivisions		—		304,711		—		304,711
Commercial mortgage-backed securities		—		418,616		—		418,616
Residential mortgage-backed securities		—		1,368,315		—		1,368,315
Corporate debt securities		—		72,189		—		72,189
Equity securities		—		5,530		—		5,530
Loans held for sale		—		42,813		—		42,813
Derivative assets		—		33,918		—		33,918
Derivative liabilities		—		38,403		—		38,403

Schedule of assets and liabilities measured at fair value on a non-recurring basis

The following tables summarize assets and liabilities measured at fair value on a non-recurring basis for the periods presented, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands):


	As of September 30, 2021
	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
Loans evaluated individually	$	—	$	—	$	3,753	$	3,753
OREO		—		—		51		51
Bank property held for sale		—		—		6,150		6,150


	As of December 31, 2020
	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
Loans evaluated individually	$	—	$	—	$	2,771	$	2,771
OREO		—		—		106		106
Bank property held for sale		—		—		10,676		10,676

Schedule of quantitative information about Level 3 fair value measurements

The following table presents additional quantitative information about assets measured at fair value on a non-recurring basis for which the Company has utilized Level 3 inputs to determine fair value (dollars in thousands):


	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation	Unobservable	Range
September 30, 2021:	Estimate		Techniques	Input	(Weighted Average)
Loans evaluated individually	$	3,753	Appraisal of collateral	Appraisal adjustments	-18.0	%	to	-100.0	%	(-54.4)	%
OREO		51	Appraisal of collateral	Appraisal adjustments	-33.0	%	to	-100.0	%	(-67.9)	%
Bank property held for sale		6,150	Appraisal of collateral or real estate listing price	Appraisal adjustments	-6.2	%	to	-64.9	%	(-41.2)	%

December 31, 2020:
Loans evaluated individually	$	2,771	Appraisal of collateral	Appraisal adjustments	-30.0	%	to	-100.0	%	(-37.0)	%
OREO		106	Appraisal of collateral	Appraisal adjustments	-25.0	%	to	-100.0	%	(-54.5)	%
Bank property held for sale		10,676	Appraisal of collateral or real estate listing price	Appraisal adjustments	-6.2	%	to	-64.9	%	(-42.8)	%

Schedule of estimated fair values of financial instruments

Estimated fair values of financial instruments that are reported at amortized cost in the Company’s unaudited Consolidated Balance Sheets, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value, were as follows (dollars in thousands):


	As of September 30, 2021				As of December 31, 2020
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial assets
Level 1 inputs:
Cash and cash equivalents	$	883,845	$	883,845	$	688,537	$	688,537
Level 2 inputs:
Accrued interest receivable		33,545		33,545		33,240		33,240
Level 3 inputs:
Portfolio loans, net		7,057,833		7,108,483		6,713,129		6,755,425
Mortgage servicing rights		9,247		11,011		10,912		11,107
Other servicing rights		1,680		2,127		1,434		1,966

Financial liabilities
Level 2 inputs:
Time deposits	$	1,026,935	$	1,029,879	$	1,119,348	$	1,132,107
Securities sold under agreements to repurchase		241,242		241,242		175,614		175,614
Short-term borrowings		17,673		17,671		4,658		4,661
Long-term debt		49,233		49,323		4,757		5,014
Junior subordinated debt owed to unconsolidated trusts		71,593		62,840		71,468		59,943
Accrued interest payable		5,435		5,435		3,401		3,401
Level 3 inputs:
Senior notes, net of unamortized issuance costs		39,910		40,700		39,809		40,104
Subordinated notes, net of unamortized issuance costs		182,637		196,350		182,226		187,697

Leases - Lease-related balances (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Leases
Right of use assets	$ 11,068	$ 7,714
Lease liabilities	$ 11,120	$ 7,757
Weighted average lease term (in years)	6 years 7 months 6 days	5 years 11 months 4 days
Weighted average discount rate (in percent)	2.15%	2.82%
Option to extend	true

Stock-based Compensation - Restricted , Performance and Deferred Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 22, 2021	May 19, 2021	Mar. 24, 2021	Sep. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Additional disclosures
Compensation expense recognized				$ 1,837		$ 2,205	$ 5,722	$ 4,413
Period over which cost will be recognized							3 years		3 years
RSUs
Shares
Non-vested at beginning of period (in shares)					1,017,038		1,017,038
Granted (in shares)							260,231
Dividend equivalents earned (in shares)							33,388
Vested (in shares)							(128,824)
Forfeited (in shares)							(29,883)
Non-vested at end of period (in shares)				1,151,950			1,151,950		1,017,038
Weighted-Average Grant Date Fair Value
Non-vested at beginning of period (in dollars per share)					$ 23.87		$ 23.87
Granted (in dollars per share)							24.26
Dividend equivalents earned (in dollars per share)							23.07
Vested (in dollars per share)							22.88
Forfeited (in dollars per share)							24.88
Non-vested at end of period (in dollars per share)				$ 24.02			$ 24.02		$ 23.87
Additional disclosures
Compensation expense recognized				$ 1,316		2,029	$ 4,362	3,952
DSUs
Shares
Non-vested at beginning of period (in shares)					34,263		34,263
Granted (in shares)							35,664
Dividend equivalents earned (in shares)							3,716
Vested (in shares)							(39,813)
Non-vested at end of period (in shares)				33,830			33,830		34,263
Vested and Outstanding at end of period (in shares)				96,427			96,427
Weighted-Average Grant Date Fair Value
Non-vested at beginning of period (in dollars per share)					$ 17.18		$ 17.18
Granted (in dollars per share)							24.59
Dividend equivalents earned (in dollars per share)							23.15
Vested (in dollars per share)							18.08
Non-vested at end of period (in dollars per share)				$ 24.59			24.59		$ 17.18
Vested and Outstanding at end of period (in dollars per share)				$ 21.99			$ 21.99
Additional disclosures
Compensation expense recognized				$ 231		135	$ 741	420
PSUs
Shares
Non-vested at beginning of period (in shares)					15,724		15,724
Granted (in shares)					28,344		99,159
Forfeited (in shares)							(968)
Non-vested at end of period (in shares)				113,915			113,915		15,724
Weighted-Average Grant Date Fair Value
Non-vested at beginning of period (in dollars per share)					$ 16.25		$ 16.25
Granted (in dollars per share)							23.91
Forfeited (in dollars per share)							23.48
Non-vested at end of period (in dollars per share)				$ 22.86			$ 22.86		$ 16.25
Additional disclosures
Grant date fair value of the award					$ 700
Compensation expense recognized				$ 290		$ 41	$ 619	$ 41
PSUs \| Minimum
Additional disclosures
Vesting percentage (as a percent)					0.00%
PSUs \| Maximum
Shares
Granted (in shares)					39,682
Additional disclosures
Vesting percentage (as a percent)					140.00%
Market Based Performance Stock Units
Shares
Granted (in shares)					70,815
Additional disclosures
Grant date fair value of the award					$ 1,700
Market Based Performance Stock Units \| Minimum
Additional disclosures
Vesting percentage (as a percent)					0.00%
Market Based Performance Stock Units \| Maximum
Shares
Granted (in shares)					113,304
Additional disclosures
Vesting percentage (as a percent)					160.00%
2020 Equity Incentive Plan
Additional disclosures
Remaining shares available for issuance				1,038,975			1,038,975
2020 Equity Incentive Plan \| Members of management
Shares
Granted (in shares)	47,805
Additional disclosures
Grant date fair value of the award	$ 1,100
Vesting percentage (as a percent)	100.00%
2020 Equity Incentive Plan \| Members of management \| Minimum
Additional disclosures
Period over which cost will be recognized	3 years
2020 Equity Incentive Plan \| Members of management \| Maximum
Additional disclosures
Period over which cost will be recognized	5 years
2020 Equity Incentive Plan \| RSUs \| Members of management, including the Vice-Chairman of the Board
Shares
Granted (in shares)			212,426
Additional disclosures
Grant date fair value of the award			$ 5,200
Accelerated vesting provision, minimum requisite service period			1 year
Vesting percentage (as a percent)			100.00%
2020 Equity Incentive Plan \| RSUs \| Members of management, including the Vice-Chairman of the Board \| Minimum
Additional disclosures
Period over which cost will be recognized			1 year
2020 Equity Incentive Plan \| RSUs \| Members of management, including the Vice-Chairman of the Board \| Maximum
Additional disclosures
Period over which cost will be recognized			5 years
2020 Equity Incentive Plan \| DSUs \| Directors and Advisory Directors
Shares
Granted (in shares)			33,288
Additional disclosures
Grant date fair value of the award			$ 800
Period over which cost will be recognized			1 year
Vesting percentage (as a percent)			100.00%
2020 Equity Incentive Plan \| DSUs \| Directors
Shares
Granted (in shares)		2,376
Additional disclosures
Grant date fair value of the award		$ 100
Period over which cost will be recognized		1 year
Vesting percentage (as a percent)		100.00%

Portfolio Loans - Loans identified as impaired, segregated by category (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Loans identified as impaired
Unpaid Contractual Principal Balance	$ 25,717	$ 30,342
Recorded Investment with No Allowance	12,138	15,850
Recorded Investment with Allowance	8,228	4,396
Total Recorded Investment	20,366	20,246
Related Allowance	4,475	1,625
Average Recorded Investment	20,819	25,299
Collateral dependent loans secured by real estate or business assets	15,500
Commercial Loans
Loans identified as impaired
Unpaid Contractual Principal Balance	14,233	16,771
Recorded Investment with No Allowance	2,003	4,001
Recorded Investment with Allowance	8,203	4,371
Total Recorded Investment	10,206	8,372
Related Allowance	4,450	1,600
Average Recorded Investment	8,945	7,920
Commercial Real Estate Loans
Loans identified as impaired
Unpaid Contractual Principal Balance	7,188	7,406
Recorded Investment with No Allowance	6,222	6,067
Total Recorded Investment	6,222	6,067
Average Recorded Investment	6,906	9,349
Real Estate Construction
Loans identified as impaired
Unpaid Contractual Principal Balance	276	292
Recorded Investment with No Allowance	276	292
Total Recorded Investment	276	292
Average Recorded Investment	338	581
Retail Real Estate
Loans identified as impaired
Unpaid Contractual Principal Balance	4,020	5,873
Recorded Investment with No Allowance	3,637	5,490
Recorded Investment with Allowance	25	25
Total Recorded Investment	3,662	5,515
Related Allowance	25	25
Average Recorded Investment	$ 4,630	7,439
Retail Other
Loans identified as impaired
Average Recorded Investment		$ 10

Derivative Financial Instruments - Interest Rate Swaps Not Designated as Hedges (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Interest rate swap
Gains and losses on these derivative assets and liabilities recorded in non-interest expense in the unaudited Consolidated Statements of Income
Cash pledged to secure obligations	$ 26,300		$ 26,300		$ 36,000
Interest rate swap \| Not designated as hedging
Derivative Financial Instruments
Variable rate, commercial loans that are supported by the interest rate swap contracts	424,600		424,600		395,000
Notional Amount, Derivative Asset	424,567		424,567		394,954
Notional Amount, Derivative Liability	424,567		424,567		394,954
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other assets	21,330		21,330		32,685
Fair value recorded in other liabilities	21,330		21,330		32,685
Interest rate swaps - pay floating, receive fixed \| Not designated as hedging
Derivative Financial Instruments
Notional Amount, Derivative Asset	332,856		332,856		394,954
Notional Amount, Derivative Liability	91,711		91,711
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other assets	19,420		19,420		32,685
Fair value recorded in other liabilities	1,910		1,910
Interest rate swaps - pay fixed, receive floating \| Not designated as hedging
Derivative Financial Instruments
Notional Amount, Derivative Asset	91,711		91,711
Notional Amount, Derivative Liability	332,856		332,856		394,954
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other assets	1,910		1,910
Fair value recorded in other liabilities	19,420		19,420		$ 32,685
Non-interest expense \| Interest rate swap
Gains and losses on these derivative assets and liabilities recorded in non-interest expense in the unaudited Consolidated Statements of Income
Gain (loss) pay, floating receive fixed	(2,024)	$ (549)	(11,355)	$ 25,790
Gain (loss) pay fixed receive floating	$ 2,024	$ 549	$ 11,355	$ (25,790)

Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Significant Accounting Policies

Significant Accounting Policies

Note 1: Significant Accounting Policies

Nature of Operations

First Busey Corporation, a Nevada corporation organized in 1980, is a $12.9 billion financial holding company headquartered in Champaign, Illinois. Our common stock is traded on The Nasdaq Global Select Market under the symbol “BUSE.”

The Company operates and reports its business in three segments: Banking, Remittance Processing, and Wealth Management. The Banking operating segment provides a full range of banking services to individual and corporate customers through the Company’s wholly-owned bank subsidiary, Busey Bank, with banking centers in Illinois; the St. Louis, Missouri metropolitan area; southwest Florida; and Indianapolis, Indiana. The Remittance Processing operating segment provides technology-driven payment solutions for walk-in, lockbox, interactive voice recognition, and online bill payments, among others, through the Company’s subsidiary, FirsTech. The Wealth Management operating segment provides a full range of asset management, investment, brokerage, fiduciary, philanthropic advisory, tax preparation, and farm management services to individuals, businesses, and foundations.

Basis of Financial Statement Presentation

These unaudited consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements included in our 2020 Annual Report. These interim unaudited consolidated financial statements serve to update our 2020 Annual Report and may not include all information and notes necessary to constitute a complete set of financial statements.

We prepared these unaudited consolidated financial statements in conformity with GAAP. We have eliminated intercompany accounts and transactions. We have also reclassified certain prior year amounts to conform to the current period presentation. These reclassifications did not have a material impact on our consolidated financial condition or results of operations.

In our opinion, the unaudited consolidated financial statements reflect all normal, recurring adjustments needed to present fairly our results for the interim periods. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period.

COVID-19

First Busey has continued to operate as an essential community resource during these challenging and unprecedented times. Federal bank regulatory agencies, along with their state counterparts, have issued a steady stream of guidance responding to the COVID-19 pandemic and have taken a number of steps to help banks navigate the pandemic and mitigate its impact.

The Company remains vigilant as the negative impacts of COVID-19, such as further margin compression and a deterioration in asset quality, could impact future quarters.

As part of the CARES Act, Congress appropriated approximately $349 billion for the creation of the PPP and then authorized a second phase for an additional $310 billion in PPP loans. The program provided payroll assistance for the nation’s nearly 30 million small businesses—and select nonprofits—in the form of 100% government-guaranteed low-interest loans from the SBA. On December 27, 2020, the Economic Aid Act extended the authority to make PPP loans through March 31, 2021, and revised certain PPP requirements. On March 30, 2021, the President signed the PPP Extension Act of 2021, which extended the PPP application deadline to May 31, 2021, or until funding was exhausted, which occurred on May 28, 2021. First Busey served as a bridge for these programs, actively helping existing and new business clients sign up for this important financial resource.

The following table summarizes First Busey’s PPP loans as of September 30, 2021, (dollars in thousands):


	CARES		Economic Aid		PPP Loan
	Act		Act		Totals
Customers with PPP loans processed/acquired		4,595		2,753		7,348
PPP loans originated/acquired	$	765,212	$	324,593	$	1,089,805

Customers with PPP loans outstanding		121		1,499		1,620
PPP loans outstanding	$	17,364	$	165,746	$	183,110
PPP loans outstanding, amortized cost		17,325		160,906		178,231

PPP loan balance forgiveness:
Received	$	744,320	$	151,135	$	895,455
Balances submitted to the SBA for forgiveness		10,796		10,217		21,013

Use of Estimates

In preparing the accompanying unaudited consolidated financial statements in conformity with GAAP, the Company’s management is required to make estimates and assumptions that affect the amounts reported in the financial statements and the disclosures provided. Actual results could differ from those estimates. Material estimates which are particularly susceptible to significant change in the near term relate to the fair value of debt securities available for sale, fair value of assets acquired and liabilities assumed in business combinations, goodwill, income taxes, and the determination of the ACL.

Subsequent Events

The Company has evaluated subsequent events for potential recognition and/or disclosure through the date the unaudited consolidated financial statements included in this Quarterly Report were issued. There were no significant subsequent events for the quarter ended September 30, 2021, through the filing date of these unaudited consolidated financial statements.

Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2021

Accumulated Other Comprehensive Income (Loss).

Accumulated Other Comprehensive Income (Loss).

Note 14: Accumulated Other Comprehensive Income (Loss)

The following tables represent changes in accumulated other comprehensive income (loss) by component, net of tax, for the periods below (dollars in thousands):


		Three Months Ended September 30,
	2021						2020
		Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
Unrealized gains (losses) on debt securities available for sale
Balance at beginning of period	$	17,013	$	(4,850)	$	12,163	$	55,436	$	(15,802)	$	39,634
Unrealized holding gains (losses) on debt securities available for sale, net		(17,198)		4,902		(12,296)		(2,392)		682		(1,710)
Amounts reclassified from accumulated other comprehensive income, net		5		(1)		4		(11)		3		(8)
Balance at end of period	$	(180)	$	51	$	(129)	$	53,033	$	(15,117)	$	37,916

Unrealized gains (losses) on cash flow hedges
Balance at beginning of period	$	(2,012)	$	574	$	(1,438)	$	(3,633)	$	1,036	$	(2,597)
Unrealized holding gains (losses) on cash flow hedges, net		(7)		2		(5)		20		(6)		14
Amounts reclassified from accumulated other comprehensive income, net		288		(82)		206		268		(76)		192
Balance at end of period	$	(1,731)	$	494	$	(1,237)	$	(3,345)	$	954	$	(2,391)

Total accumulated other comprehensive income (loss)	$	(1,911)	$	545	$	(1,366)	$	49,688	$	(14,163)	$	35,525


	Nine Months Ended September 30,
	2021						2020
		Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
Unrealized gains (losses) on debt securities available for sale
Balance at beginning of period	$	49,644	$	(14,151)	$	35,493	$	21,192	$	(6,032)	$	15,160
Unrealized holding gains (losses) on debt securities available for sale, net		(49,801)		14,195		(35,606)		33,551		(9,577)		23,974
Amounts reclassified from accumulated other comprehensive income, net		(23)		7		(16)		(1,710)		492		(1,218)
Balance at end of period	$	(180)	$	51	$	(129)	$	53,033	$	(15,117)	$	37,916

Unrealized gains (losses) on cash flow hedges
Balance at beginning of period	$	(3,055)	$	871	$	(2,184)	$	(280)	$	80	$	(200)
Unrealized holding gains (losses) on cash flow hedges, net		470		(134)		336		(3,123)		890		(2,233)
Amounts reclassified from accumulated other comprehensive income, net		854		(243)		611		58		(16)		42
Balance at end of period	$	(1,731)	$	494	$	(1,237)	$	(3,345)	$	954	$	(2,391)

Total accumulated other comprehensive income (loss)	$	(1,911)	$	545	$	(1,366)	$	49,688	$	(14,163)	$	35,525

Earnings Per Common Share

9 Months Ended

Sep. 30, 2021

Earnings Per Common Share

Earnings Per Common Share

Note 13: Earnings Per Common Share

Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding, which include deferred stock units that are vested but not delivered. Diluted earnings per common share is computed using the treasury stock method and reflects the potential dilution that could occur if the Company’s outstanding stock options and warrants were exercised and RSUs were vested.

Earnings per common share have been computed as follows (dollars in thousands, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income	$	25,941	$	30,829	$	93,523	$	71,999
Shares:
Weighted average common shares outstanding		56,227,816		54,585,998		55,256,348		54,579,088
Dilutive effect of outstanding options, warrants, and restricted stock units as determined by the application of the treasury stock method		597,148		151,922		613,969		217,266
Dilutive effect of ESPP shares		7,554		—		2,518		—
Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation		56,832,518		54,737,920		55,872,835		54,796,354

Basic earnings per common share	$	0.46	$	0.56	$	1.69	$	1.32

Diluted earnings per common share	$	0.46	$	0.56	$	1.67	$	1.31

Shares that were excluded from the computation of diluted earnings per common share because their effect would have been anti-dilutive are summarized in the table below for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Anti-dilutive common stock equivalents
Options		—		39,085		—		39,085
RSU and DSU awards		47,805		261,091		97,067		261,091
PSU awards		85,571		—		95,511		—
Total anti-dilutive common stock equivalents		133,376		300,176		192,578		300,176

Borrowings - Amended and Restated Credit Agreement (Details) - USD ($)	Sep. 30, 2021	May 28, 2021	Dec. 31, 2020
Borrowings
Long-term debt	$ 49,233,000		$ 4,757,000
Term Loan
Borrowings
Issuance of debt		$ 60,000,000.0
Long-term debt	45,000,000
Revolving line of credit
Borrowings
Issuance of debt		$ 40,000,000.0
Second Amended and Restated Credit Agreement \| Term Loan
Borrowings
Long-term debt	57,000,000.0
Second Amended and Restated Credit Agreement \| Revolving line of credit
Borrowings
Balance outstanding	$ 0
Second Amended and Restated Credit Agreement \| One-month LIBOR rate
Borrowings
Interest rate (as a percent)		1.75%

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit). Cumulative Effect, Period of Adoption, Adjustment	Retained Earnings (Accumulated Deficit).	Accumulated other comprehensive income (loss)	Treasury Stock	Cumulative Effect, Period of Adoption, Adjustment	Total
Beginning balance at Dec. 31, 2019	$ 56	$ 1,248,216	$ (15,922)	$ (14,813)	$ 14,960	$ (27,985)	$ (15,922)	$ 1,220,434
Beginning Balance (in shares) at Dec. 31, 2019	54,788,772
Increase (decrease) in shareholders' equity
Net income				71,999				71,999
Other comprehensive income (loss)					20,565			20,565
Repurchase of stock						(9,669)		(9,669)
Repurchase of stock (in shares)	(407,850)
Issuance of treasury stock for employee stock purchase plan		(68)				504		436
Issuance of treasury stock for employee stock purchase plan (in shares)	26,651
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax		(2,648)				2,013		(635)
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax (in shares)	106,589
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax		(51)				152		101
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax (in shares)	8,069
Cash dividends common stock				(36,017)				(36,017)
Stock dividend equivalents restricted stock units		529		(529)
Stock-based compensation		4,413						4,413
Ending balance at Sep. 30, 2020	$ 56	1,250,391		4,718	35,525	(34,985)		1,255,705
Ending Balance (in shares) at Sep. 30, 2020	54,522,231
Beginning balance at Jun. 30, 2020	$ 56	1,248,045		(13,951)	37,037	(35,103)		1,236,084
Beginning Balance (in shares) at Jun. 30, 2020	54,516,000
Increase (decrease) in shareholders' equity
Net income				30,829				30,829
Other comprehensive income (loss)					(1,512)			(1,512)
Issuance of treasury stock for employee stock purchase plan		(23)				116		93
Issuance of treasury stock for employee stock purchase plan (in shares)	6,119
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax		(2)				2
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax (in shares)	112
Cash dividends common stock				(11,994)				(11,994)
Stock dividend equivalents restricted stock units		166		(166)
Stock-based compensation		2,205						2,205
Ending balance at Sep. 30, 2020	$ 56	1,250,391		4,718	35,525	(34,985)		1,255,705
Ending Balance (in shares) at Sep. 30, 2020	54,522,231
Beginning balance at Dec. 31, 2020	$ 56	1,253,360		20,830	33,309	(37,486)		1,270,069
Beginning Balance (in shares) at Dec. 31, 2020	54,404,379
Increase (decrease) in shareholders' equity
Net income				93,523				93,523
Other comprehensive income (loss)					(34,675)			(34,675)
Stock issued in acquisition, net of stock issuance costs (in shares)	2,206,237
Stock issued in acquisition, net of stock issuance costs	$ 2	58,953						58,955
Repurchase of stock						(22,038)		(22,038)
Repurchase of stock (in shares)	(905,000)
Issuance of treasury stock for employee stock purchase plan		(16)				377		361
Issuance of treasury stock for employee stock purchase plan (in shares)	14,658
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax		(3,738)				2,850		(888)
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax (in shares)	106,710
Cash dividends common stock				(37,953)				(37,953)
Stock dividend equivalents restricted stock units		757		(757)
Stock-based compensation		5,722						5,722
Ending balance at Sep. 30, 2021	$ 58	1,315,038		75,643	(1,366)	(56,297)		1,333,076
Ending Balance (in shares) at Sep. 30, 2021	55,826,984
Beginning balance at Jun. 30, 2021	$ 58	1,316,716		62,926	10,725	(44,734)		1,345,691
Beginning Balance (in shares) at Jun. 30, 2021	56,330,616
Increase (decrease) in shareholders' equity
Net income				25,941				25,941
Other comprehensive income (loss)					(12,091)			(12,091)
Stock issued in acquisition, net of stock issuance costs		(29)						(29)
Repurchase of stock						(14,790)		(14,790)
Repurchase of stock (in shares)	(625,000)
Issuance of treasury stock for employee stock purchase plan		(16)				377		361
Issuance of treasury stock for employee stock purchase plan (in shares)	14,658
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax		(3,738)				2,850		(888)
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax (in shares)	106,710
Cash dividends common stock				(12,956)				(12,956)
Stock dividend equivalents restricted stock units		268		(268)
Stock-based compensation		1,837						1,837
Ending balance at Sep. 30, 2021	$ 58	$ 1,315,038		$ 75,643	$ (1,366)	$ (56,297)		$ 1,333,076
Ending Balance (in shares) at Sep. 30, 2021	55,826,984

Stock-based Compensation (Details)	9 Months Ended
Stock-based Compensation (Details)	Sep. 30, 2021 shares
RSUs
Share-based Compensation
Number of shares of common stock per award	1
DSUs
Share-based Compensation
Number of shares of common stock per award	1
Vesting period	1 year
Settlement period	30 days
PSUs
Share-based Compensation
Number of shares of common stock per award	1
Minimum \| RSUs
Share-based Compensation
Requisite service periods	1 year
Maximum \| RSUs
Share-based Compensation
Requisite service periods	5 years

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2021

Significant Accounting Policies

Nature of operations

Nature of Operations

Basis of Financial Statement Presentation

COVID-19

The Company remains vigilant as the negative impacts of COVID-19, such as further margin compression and a deterioration in asset quality, could impact future quarters.

The following table summarizes First Busey’s PPP loans as of September 30, 2021, (dollars in thousands):


	CARES		Economic Aid		PPP Loan
	Act		Act		Totals
Customers with PPP loans processed/acquired		4,595		2,753		7,348
PPP loans originated/acquired	$	765,212	$	324,593	$	1,089,805

Customers with PPP loans outstanding		121		1,499		1,620
PPP loans outstanding	$	17,364	$	165,746	$	183,110
PPP loans outstanding, amortized cost		17,325		160,906		178,231

PPP loan balance forgiveness:
Received	$	744,320	$	151,135	$	895,455
Balances submitted to the SBA for forgiveness		10,796		10,217		21,013

Use of Estimates

Subsequent Events

Borrowings - Short-term borrowings (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Short-term borrowings
Short-term borrowings	$ 17,673	$ 4,658
Federal funds purchased	0	0
FHLB advances
Short-term borrowings
Short-term borrowings	5,673	$ 4,658
Term Loan, current portion due within 12 months
Short-term borrowings
Short-term borrowings	$ 12,000
Minimum
Short-term borrowings
Short-term borrowings, mature period	1 day
Maximum
Short-term borrowings
Short-term borrowings, mature period	90 days

Stock-based Compensation - Shares Remaining Available for Issuance (Details)	Sep. 30, 2021 shares
2021 Employee Stock Purchase Plan
Share-based Compensation
Shares Remaining Available for Issuance Pursuant to the Plans	585,342

Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Changes in accumulated other comprehensive income (loss) by component, net of tax
Beginning balance	$ 1,345,691	$ 1,236,084	$ 1,270,069	$ 1,220,434
Unrealized gains (losses) on debt securities available for sale:
Unrealized holding gains (losses) on debt securities available for sale, Tax Effect	(4,902)	(682)	(14,195)	9,577
Unrealized holding gains (losses) on debt securities available for sale, Net of Tax	(12,296)	(1,710)	(35,606)	23,974
Amounts reclassified from accumulated other comprehensive income, Tax Effect	(1)	3	7	492
Amounts reclassified from accumulated other comprehensive income, Net of Tax	4	(8)	(16)	(1,218)
Unrealized gains (losses) on cash flow hedges:
Unrealized holding gains (losses) on cash flow hedges, Tax Effect	(2)	6	134	(890)
Unrealized holding gains (losses) on cash flow hedges, Net of Tax	(5)	14	336	(2,233)
Amounts reclassified from accumulated other comprehensive income, Tax Effect	82	76	243	16
Amounts reclassified from accumulated other comprehensive income, Net of Tax	206	192	611	42
Ending balance	1,333,076	1,255,705	1,333,076	1,255,705
Accumulated other comprehensive income (loss)
Changes in accumulated other comprehensive income (loss) by component, net of tax
Beginning balance	10,725	37,037	33,309	14,960
Unrealized gains (losses) on cash flow hedges:
Accumulated other comprehensive income (loss) ending balance period, Before Tax	(1,911)	49,688	(1,911)	49,688
Accumulated other comprehensive income (loss) ending balance period, Tax Effect	545	(14,163)	545	(14,163)
Ending balance	(1,366)	35,525	(1,366)	35,525
Unrealized gains (losses) on debt securities available for sale
Changes in accumulated other comprehensive income (loss) by component, net of tax
Accumulated other comprehensive income (loss) beginning balance period, Before Tax	17,013	55,436	49,644	21,192
Accumulated other comprehensive income (loss) beginning balance period, Tax Effect	(4,850)	(15,802)	(14,151)	(6,032)
Beginning balance	12,163	39,634	35,493	15,160
Unrealized gains (losses) on debt securities available for sale:
Unrealized holding gains (losses) on debt securities available for sale, Before Tax	(17,198)	(2,392)	(49,801)	33,551
Unrealized holding gains (losses) on debt securities available for sale, Tax Effect	4,902	682	14,195	(9,577)
Unrealized holding gains (losses) on debt securities available for sale, Net of Tax	(12,296)	(1,710)	(35,606)	23,974
Amounts reclassified from accumulated other comprehensive income, Before Tax	5	(11)	(23)	(1,710)
Amounts reclassified from accumulated other comprehensive income, Tax Effect	(1)	3	7	492
Amounts reclassified from accumulated other comprehensive income, Net of Tax	4	(8)	(16)	(1,218)
Unrealized gains (losses) on cash flow hedges:
Accumulated other comprehensive income (loss) ending balance period, Before Tax	(180)	53,033	(180)	53,033
Accumulated other comprehensive income (loss) ending balance period, Tax Effect	51	(15,117)	51	(15,117)
Ending balance	(129)	37,916	(129)	37,916
Unrealized gains (losses) on cash flow hedges
Changes in accumulated other comprehensive income (loss) by component, net of tax
Accumulated other comprehensive income (loss) beginning balance period, Before Tax	(2,012)	(3,633)	(3,055)	(280)
Accumulated other comprehensive income (loss) beginning balance period, Tax Effect	574	1,036	871	80
Beginning balance	(1,438)	(2,597)	(2,184)	(200)
Unrealized gains (losses) on cash flow hedges:
Unrealized holding gains (losses) on cash flow hedges, Before Tax	(7)	20	470	(3,123)
Unrealized holding gains (losses) on cash flow hedges, Tax Effect	2	(6)	(134)	890
Unrealized holding gains (losses) on cash flow hedges, Net of Tax	(5)	14	336	(2,233)
Amounts reclassified from accumulated other comprehensive income, Before Tax	288	268	854	58
Amounts reclassified from accumulated other comprehensive income, Tax Effect	(82)	(76)	(243)	(16)
Amounts reclassified from accumulated other comprehensive income, Net of Tax	206	192	611	42
Accumulated other comprehensive income (loss) ending balance period, Before Tax	(1,731)	(3,345)	(1,731)	(3,345)
Accumulated other comprehensive income (loss) ending balance period, Tax Effect	494	954	494	954
Ending balance	$ (1,237)	$ (2,391)	$ (1,237)	$ (2,391)

Portfolio Loans (Tables)

9 Months Ended

Sep. 30, 2021

Portfolio Loans

Distribution of portfolio loans

Distributions of portfolio loans are as follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
Portfolio loans
Commercial	$	1,931,863	$	2,014,576
Commercial real estate		3,068,622		2,892,535
Real estate construction		430,857		461,786
Retail real estate		1,512,884		1,407,852
Retail other		206,409		37,428
Total portfolio loans	$	7,150,635	$	6,814,177

ACL		(92,802)		(101,048)

Portfolio loans, net	$	7,057,833	$	6,713,129

Summary of risk grades segregated by category of portfolio loans (excluding accretable purchase accounting adjustments and clearings)

The following table is a summary of risk grades segregated by category of portfolio loans (dollars in thousands):


	As of September 30, 2021
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual
Portfolio loans
Commercial	$	1,718,398	$	115,108	$	62,094	$	26,033	$	10,230
Commercial real estate		2,623,243		338,270		81,525		18,964		6,620
Real estate construction		413,986		14,464		7		2,400		—
Retail real estate		1,486,172		11,724		2,008		4,498		8,482
Retail other		206,372		—		—		—		37
Total portfolio loans	$	6,448,171	$	479,566	$	145,634	$	51,895	$	25,369


	As of December 31, 2020
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual
Portfolio loans
Commercial	$	1,768,755	$	136,948	$	72,447	$	27,903	$	8,523
Commercial real estate		2,393,372		383,277		75,486		34,897		5,503
Real estate construction		434,681		24,481		77		2,546		1
Retail real estate		1,382,616		10,264		2,471		3,702		8,799
Retail other		37,324		—		—		—		104
Total portfolio loans	$	6,016,748	$	554,970	$	150,481	$	69,048	$	22,930

Risk grades of portfolio loans, further sorted by origination

Risk grades of portfolio loans, further sorted by origination year are as follows (dollars in thousands):


	As of September 30, 2021
	Term Loans Amortized Cost Basis by Origination Year													Revolving
Risk Grade Ratings	2021		2020		2019		2018		2017			Prior		loans		Total
Commercial
Pass	$	468,833	$	265,204	$	112,809	$	90,292	$	73,553	$	132,127	$	575,580	$	1,718,398
Watch		15,078		5,355		19,783		5,668		7,545		4,287		57,392		115,108
Special Mention		3,011		1,143		2,479		4,385		6,864		12,484		31,728		62,094
Substandard		3,357		3,504		3,321		1,437		1,244		5,552		7,618		26,033
Substandard non-accrual		4,305		444		1,597		—		1,821		63		2,000		10,230
Total commercial		494,584		275,649		139,989		101,782		91,027		154,513		674,318		1,931,863

Commercial real estate
Pass		655,907		690,244		463,830		289,396		257,618		245,795		20,453		2,623,243
Watch		41,596		40,404		130,282		62,312		27,226		34,572		1,878		338,270
Special Mention		27,115		7,056		7,551		18,661		10,436		10,430		276		81,525
Substandard		4,894		9,289		1,574		2,072		526		429		180		18,964
Substandard non-accrual		114		761		352		1,962		3,407		24		—		6,620
Total commercial real estate		729,627		747,753		603,588		374,403		299,213		291,250		22,787		3,068,622

Real estate construction
Pass		160,719		141,699		93,701		3,918		899		1,249		11,801		413,986
Watch		6,279		6,115		55		276		1,616		123		—		14,464
Special Mention		—		—		7		—		—		—		—		7
Substandard		—		2,400		—		—		—		—		—		2,400
Substandard non-accrual		—		—		—		—		—		—		—		—
Total real estate construction		166,999		150,214		93,763		4,193		2,516		1,372		11,801		430,857

Retail real estate
Pass		428,556		230,120		107,262		92,875		95,667		313,708		217,984		1,486,172
Watch		2,641		2,666		1,982		1,521		352		270		2,292		11,724
Special Mention		1,979		29		—		—		—		—		—		2,008
Substandard		1,630		321		14		73		166		2,210		84		4,498
Substandard non-accrual		500		145		72		546		1,369		4,582		1,268		8,482
Total retail real estate		435,305		233,281		109,330		95,015		97,553		320,771		221,629		1,512,884

Retail other
Pass		45,614		25,177		30,366		19,737		9,935		2,658		72,885		206,372
Watch		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Substandard non-accrual		—		11		7		5		14		—		—		37
Total retail other		45,614		25,188		30,373		19,742		9,949		2,658		72,885		206,409

Total portfolio loans	$	1,872,128	$	1,432,087	$	977,044	$	595,136	$	500,258	$	770,563	$	1,003,419	$	7,150,635


	As of December 31, 2020
	Term Loans Amortized Cost Basis by Origination Year													Revolving
Risk Grade Ratings	2020		2019		2018		2017		2016			Prior		loans		Total
Commercial
Pass	$	812,536	$	158,307	$	107,565	$	93,190	$	61,847	$	79,970	$	455,340	$	1,768,755
Watch		16,544		22,247		14,954		13,724		2,577		10,943		55,959		136,948
Special Mention		6,402		2,671		2,069		7,164		6,763		13,733		33,645		72,447
Substandard		7,772		3,791		2,371		1,939		819		1,233		9,978		27,903
Substandard non-accrual		150		3,045		451		2,168		641		68		2,000		8,523
Total commercial		843,404		190,061		127,410		118,185		72,647		105,947		556,922		2,014,576

Commercial real estate
Pass		717,559		503,977		360,573		384,843		180,555		227,068		18,797		2,393,372
Watch		88,297		110,526		90,412		33,734		32,887		27,023		398		383,277
Special Mention		16,490		8,858		10,490		10,505		7,102		21,808		233		75,486
Substandard		17,445		4,166		1,491		7,812		2,111		1,377		495		34,897
Substandard non-accrual		1,091		776		821		882		286		1,647		—		5,503
Total commercial real estate		840,882		628,303		463,787		437,776		222,941		278,923		19,923		2,892,535

Real estate construction
Pass		179,232		171,663		64,025		1,468		761		1,444		16,088		434,681
Watch		18,485		3,657		337		1,838		164						24,481
Special Mention		67		10		—		—		—		—		—		77
Substandard		2,400		—		—		—		146		—		—		2,546
Substandard non-accrual		—		—		—		—		—		1		—		1
Total real estate construction		200,184		175,330		64,362		3,306		1,071		1,445		16,088		461,786

Retail real estate
Pass		319,302		162,711		135,065		136,427		140,600		257,147		231,364		1,382,616
Watch		2,715		2,053		1,396		349		579		233		2,939		10,264
Special Mention		509		—		—		—		1,962		—		—		2,471
Substandard		899		96		56		26		727		1,631		267		3,702
Substandard non-accrual		687		78		646		1,147		233		4,815		1,193		8,799
Total retail real estate		324,112		164,938		137,163		137,949		144,101		263,826		235,763		1,407,852

Retail other
Pass		8,357		9,430		5,600		2,516		691		440		10,290		37,324
Watch		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Substandard non-accrual		14		7		5		15		5		57		1		104
Total retail other		8,371		9,437		5,605		2,531		696		497		10,291		37,428

Total portfolio loans	$	2,216,953	$	1,168,069	$	798,327	$	699,747	$	441,456	$	650,638	$	838,987	$	6,814,177

Summary of portfolio loans that are past due and still accruing or on a non-accrual status

An analysis of the amortized cost basis of portfolio loans that are past due and still accruing, or on a non-accrual status, is as follows (dollars in thousands):


	As of September 30, 2021
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Past due and non-accrual loans
Commercial	$	1,092	$	202	$	—	$	10,230
Commercial real estate		882		—		—		6,620
Real estate construction		—		—		—		—
Retail real estate		2,068		2,020		491		8,482
Retail other		182		—		—		37
Total past due and non-accrual loans	$	4,224	$	2,222	$	491	$	25,369


	As of December 31, 2020
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Past due and non-accrual loans
Commercial	$	243	$	—	$	—	$	8,523
Commercial real estate		—		—		—		5,503
Real estate construction		237		235		—		1
Retail real estate		6,248		400		1,305		8,799
Retail other		66		149		66		104
Total past due and non-accrual loans	$	6,794	$	784	$	1,371	$	22,930

Summary of TDR loans

A summary of TDRs is as follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
TDRs
In compliance with modified terms	$	2,083	$	3,814
30 – 89 days past due		—		15
Non-performing TDRs		1,285		1,249
Total TDRs	$	3,368	$	5,078

The following tables summarize TDRs that occurred during the periods presented (dollars in thousands):

Three Months Ended September 30, 2021

Nine Months Ended September 30, 2021

Recorded Investment

Number of

Rate

Payment

Number of

Rate

Payment

Contracts

Modification ⁽¹⁾

Contracts

Modification ⁽¹⁾

Newly designated TDRs

Commercial

—

444

—


	Three Months Ended September 30, 2020						Nine Months Ended September 30, 2020
			Recorded Investment						Recorded Investment
	Number of		Rate		Payment		Number of		Rate		Payment
	Contracts		Modification ⁽¹⁾		Modification ⁽¹⁾		Contracts		Modification ⁽¹⁾		Modification ⁽¹⁾
Newly designated TDRs
Commercial		—	$	—	$	—		3	$	324	$	—
Commercial real estate		—		—		—		1		651		—
Retail real estate		1		—		167		2		—		353

(1)

TDRs may include multiple concessions; those that include an interest rate concession and payment concession are shown in the rate modification columns.

Schedule of details of impaired loans, segregated by category


	As of September 30, 2021
	Unpaid		Amortized
	Contractual		Cost		Amortized		Total				Average
	Principal		with No		Cost		Amortized		Related		Amortized
	Balance		Allowance		with Allowance		Cost		Allowance		Cost
Loans evaluated on an individual basis
Commercial	$	14,233	$	2,003	$	8,203	$	10,206	$	4,450	$	8,945
Commercial real estate		7,188		6,222		—		6,222		—		6,906
Real estate construction		276		276		—		276		—		338
Retail real estate		4,020		3,637		25		3,662		25		4,630
Retail other		—		—		—		—		—		—
Total loans evaluated individually	$	25,717	$	12,138	$	8,228	$	20,366	$	4,475	$	20,819


	As of December 31, 2020
	Unpaid		Amortized
	Contractual		Cost		Amortized		Total				Average
	Principal		with No		Cost		Amortized		Related		Amortized
	Balance		Allowance		with Allowance		Cost		Allowance		Cost
Loans evaluated on an individual basis
Commercial	$	16,771	$	4,001	$	4,371	$	8,372	$	1,600	$	7,920
Commercial real estate		7,406		6,067		—		6,067		—		9,349
Real estate construction		292		292		—		292		—		581
Retail real estate		5,873		5,490		25		5,515		25		7,439
Retail other		—		—		—		—		—		10
Total loans evaluated individually	$	30,342	$	15,850	$	4,396	$	20,246	$	1,625	$	25,299

Schedule of activity on the allowance for loan losses

The following tables detail activity in the ACL. Allocation of a portion of the ACL to one category does not preclude its availability to absorb losses in other categories (dollars in thousands):


	As of and for the Three Months Ended September 30, 2021
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
ACL beginning balance	$	24,356	$	39,974	$	7,599	$	20,505	$	2,976	$	95,410
Provision for credit losses		657		(25)		(1,503)		(1,155)		157		(1,869)
Charged-off		(764)		(191)		—		(155)		(98)		(1,208)
Recoveries		157		73		25		157		57		469
ACL ending balance	$	24,406	$	39,831	$	6,121	$	19,352	$	3,092	$	92,802


	As of and for the Nine Months Ended September 30, 2021
			Commercial		Real Estate		Retail
	Commercial		Real Estate		Construction		Real Estate		Retail Other		Total
ACL beginning balance	$	23,866	$	46,230	$	8,193	$	21,992	$	767	$	101,048
Day 1 PCD ⁽¹⁾		3,546		336		—		129		167		4,178
Provision for credit losses		(1,428)		(6,109)		(2,082)		(3,028)		2,282		(10,365)
Charged-off		(2,026)		(812)		(209)		(315)		(349)		(3,711)
Recoveries		448		186		219		574		225		1,652
ACL ending balance	$	24,406	$	39,831	$	6,121	$	19,352	$	3,092	$	92,802

(1)

The Day 1 PCD is attributable to the CAC acquisition.


	As of and for the Three Months Ended September 30, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
ACL beginning balance	$	24,146	$	42,680	$	7,792	$	20,405	$	1,023	$	96,046
Provision for credit losses		2,593		3,703		(381)		(383)		17		5,549
Charged-off		(2,500)		(569)		(18)		(139)		(171)		(3,397)
Recoveries		124		103		26		301		89		643
ACL ending balance	$	24,363	$	45,917	$	7,419	$	20,184	$	958	$	98,841


	As of and for the Nine Months Ended September 30, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance, prior to adoption of ASC 326-30	$	18,291	$	21,190	$	3,204	$	10,495	$	568	$	53,748
Adoption of ASC 326-30		715		9,306		2,954		3,292		566		16,833
Provision for credit losses		10,739		17,090		1,082		6,635		110		35,656
Charged-off		(5,682)		(1,833)		(18)		(1,139)		(575)		(9,247)
Recoveries		300		164		197		901		289		1,851
ACL ending balance	$	24,363	$	45,917	$	7,419	$	20,184	$	958	$	98,841

Schedule of allowance for loan losses and recorded investments in portfolio loans, by category

The following table presents the ACL and amortized cost of portfolio loans by category (dollars in thousands):


	As of September 30, 2021
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
ACL
Ending balance attributed to:
Loans individually evaluated for impairment	$	4,450	$	—	$	—	$	25	$	—	$	4,475
Loans collectively evaluated for impairment		19,956		39,831		6,121		19,327		3,092		88,327
ACL ending balance	$	24,406	$	39,831	$	6,121	$	19,352	$	3,092	$	92,802

Loans
Loans individually evaluated for impairment	$	10,206	$	6,222	$	276	$	3,662	$	—	$	20,366
Loans collectively evaluated for impairment		1,921,657		3,062,400		430,581		1,509,222		206,409		7,130,269
Loans ending balance	$	1,931,863	$	3,068,622	$	430,857	$	1,512,884	$	206,409	$	7,150,635


	As of December 31, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
ACL
Ending balance attributed to:
Loans individually evaluated for impairment	$	1,600	$	—	$	—	$	25	$	—	$	1,625
Loans collectively evaluated for impairment		22,266		46,230		8,193		21,967		767		99,423
ACL ending balance	$	23,866	$	46,230	$	8,193	$	21,992	$	767	$	101,048

Loans
Loans individually evaluated for impairment	$	8,372	$	6,067	$	292	$	5,515	$	—	$	20,246
Loans collectively evaluated for impairment		2,006,204		2,886,468		461,494		1,402,337		37,428		6,793,931
Loans ending balance	$	2,014,576	$	2,892,535	$	461,786	$	1,407,852	$	37,428	$	6,814,177

Portfolio Loans - Summary of risk grades segregated by category (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Loans
Portfolio loans	$ 7,150,635	$ 6,814,177
Pass
Loans
Portfolio loans	6,448,171	6,016,748
Watch
Loans
Portfolio loans	479,566	554,970
Special Mention
Loans
Portfolio loans	145,634	150,481
Substandard
Loans
Portfolio loans	51,895	69,048
Substandard Non-accrual
Loans
Portfolio loans	25,369	22,930
Commercial
Loans
Portfolio loans	1,931,863	2,014,576
Commercial \| Pass
Loans
Portfolio loans	1,718,398	1,768,755
Commercial \| Watch
Loans
Portfolio loans	115,108	136,948
Commercial \| Special Mention
Loans
Portfolio loans	62,094	72,447
Commercial \| Substandard
Loans
Portfolio loans	26,033	27,903
Commercial \| Substandard Non-accrual
Loans
Portfolio loans	10,230	8,523
Commercial real estate
Loans
Portfolio loans	3,068,622	2,892,535
Commercial real estate \| Pass
Loans
Portfolio loans	2,623,243	2,393,372
Commercial real estate \| Watch
Loans
Portfolio loans	338,270	383,277
Commercial real estate \| Special Mention
Loans
Portfolio loans	81,525	75,486
Commercial real estate \| Substandard
Loans
Portfolio loans	18,964	34,897
Commercial real estate \| Substandard Non-accrual
Loans
Portfolio loans	6,620	5,503
Real estate construction
Loans
Portfolio loans	430,857	461,786
Real estate construction \| Pass
Loans
Portfolio loans	413,986	434,681
Real estate construction \| Watch
Loans
Portfolio loans	14,464	24,481
Real estate construction \| Special Mention
Loans
Portfolio loans	7	77
Real estate construction \| Substandard
Loans
Portfolio loans	2,400	2,546
Real estate construction \| Substandard Non-accrual
Loans
Portfolio loans		1
Retail Real Estate
Loans
Portfolio loans	1,512,884	1,407,852
Retail Real Estate \| Pass
Loans
Portfolio loans	1,486,172	1,382,616
Retail Real Estate \| Watch
Loans
Portfolio loans	11,724	10,264
Retail Real Estate \| Special Mention
Loans
Portfolio loans	2,008	2,471
Retail Real Estate \| Substandard
Loans
Portfolio loans	4,498	3,702
Retail Real Estate \| Substandard Non-accrual
Loans
Portfolio loans	8,482	8,799
Retail Other
Loans
Portfolio loans	206,409	37,428
Retail Other \| Pass
Loans
Portfolio loans	206,372	37,324
Retail Other \| Substandard Non-accrual
Loans
Portfolio loans	37	104
Commercial Loans
Loans
Portfolio loans	1,931,863	2,014,576
Commercial Real Estate Loans
Loans
Portfolio loans	3,068,622	2,892,535
Real Estate Construction
Loans
Portfolio loans	430,857	461,786
Retail Real Estate
Loans
Portfolio loans	1,512,884	1,407,852
Retail Other
Loans
Portfolio loans	$ 206,409	$ 37,428

Leases - Lease Cost and Other Lease Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Lease Costs
Operating lease costs	$ 656	$ 622	$ 1,828	$ 1,877
Variable lease costs	94	99	394	401
Short-term lease costs	9	15	43	45
Total lease cost	759	736	2,265	2,323
Cash paid for amounts included in the measurement of lease liabilities
Operating lease cash flows - Fixed payments	620	616	1,756	1,839
Operating lease cash flows - Liability reduction	569	546	1,610	1,610
Right of use assets obtained during the period in exchange for operating lease liabilities	3,408		5,018	128
Rent expense under operating leases, included in net occupancy and equipment expense	$ 759	$ 736	2,265	$ 2,323
CAC
Cash paid for amounts included in the measurement of lease liabilities
Right of use assets obtained during the period in exchange for operating lease liabilities			$ 371

Borrowings - Securities sold under agreements to repurchase (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Borrowings
Securities sold under agreements to repurchase	$ 241,242	$ 175,614
Securities sold under agreements to repurchase, weighted average rate	0.08%	0.13%

Stock-based Compensation - Recognized and Unamortized Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Share-based Compensation
Total stock-based compensation expense	$ 1,837	$ 2,205	$ 5,722	$ 4,413
Total unamortized stock-based compensation expense	13,634		$ 13,634		$ 10,884
Weighted average period over which expense is to be recognized			3 years		3 years
RSUs
Share-based Compensation
Total stock-based compensation expense	1,316	2,029	$ 4,362	3,952
Total unamortized stock-based compensation expense	11,650		11,650		$ 10,411
PSUs
Share-based Compensation
Total stock-based compensation expense	290	41	619	41
Total unamortized stock-based compensation expense	1,554		1,554		179
DSUs
Share-based Compensation
Total stock-based compensation expense	231	$ 135	741	$ 420
Total unamortized stock-based compensation expense	$ 430		$ 430		$ 294

Borrowings - Long-term Debt (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Long-term debt
Long-term debt	$ 49,233	$ 4,757
FHLB advances
Long-term debt
Notes payable original maturity term	5 years	5 years
Interest rate (as a percent)	3.04%	3.04%
Notes payable, FHLB, original maturity of 5 years, collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock
Long-term debt
Long-term debt	$ 4,233	$ 4,757
Term Loan
Long-term debt
Long-term debt	$ 45,000

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
CONSOLIDATED BALANCE SHEETS (Unaudited)
Portfolio Loans, allowance for loan losses (in dollars)	$ 92,802	$ 101,048
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001

Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2021

Significant Accounting Policies

Summary of Paycheck Protection Program loans

The following table summarizes First Busey’s PPP loans as of September 30, 2021, (dollars in thousands):


	CARES		Economic Aid		PPP Loan
	Act		Act		Totals
Customers with PPP loans processed/acquired		4,595		2,753		7,348
PPP loans originated/acquired	$	765,212	$	324,593	$	1,089,805

Customers with PPP loans outstanding		121		1,499		1,620
PPP loans outstanding	$	17,364	$	165,746	$	183,110
PPP loans outstanding, amortized cost		17,325		160,906		178,231

PPP loan balance forgiveness:
Received	$	744,320	$	151,135	$	895,455
Balances submitted to the SBA for forgiveness		10,796		10,217		21,013

Operating Segments and Related Information

9 Months Ended

Sep. 30, 2021

Operating Segments and Related Information

Operating Segments and Related Information

Note 15: Operating Segments and Related Information

The Company has three reportable operating segments: Banking, Remittance Processing, and Wealth Management. The Banking operating segment provides a full range of banking services to individual and corporate customers through its banking center network in Illinois; the St. Louis, Missouri metropolitan area; southwest Florida; and Indianapolis, Indiana. The Remittance Processing operating segment provides solutions for online bill payments, lockbox, and walk-in payments. The Wealth Management operating segment provides a full range of asset management, investment, brokerage, fiduciary, philanthropic advisory, tax preparation, and farm management services to individuals, businesses, and foundations.

The Company’s three operating segments are strategic business units that are separately managed as they offer different products and services and have different marketing strategies.

The segment financial information provided below has been derived from information used by management to monitor and manage the financial performance of the Company. The accounting policies of the three segments are the same as those described in the summary of significant accounting policies in “Note 1. Significant Accounting Policies” to the Company’s 2020 Annual Report. The Company accounts for intersegment revenue and transfers at current market value.

Following is a summary of selected financial information for the Company’s operating segments. The “other” category included in the tables below consists of the Parent Company, First Busey Risk Management, and the elimination of intercompany transactions (dollars in thousands):


	Goodwill				Total Assets
	As of				As of
	September 30,		December 31,		September 30,		December 31,
	2021		2020		2021		2020
Operating segment
Banking	$	294,666	$	288,436	$	12,788,398	$	10,462,673
Remittance Processing		8,992		8,992		47,528		46,553
Wealth Management		14,108		14,108		60,496		46,504
Other		—		—		2,908		(11,683)
Consolidated total	$	317,766	$	311,536	$	12,899,330	$	10,544,047



	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net interest income
Banking	$	74,672	$	73,330	$	211,377	$	218,221
Remittance Processing		19		21		60		59
Wealth Management		—		—		—		—
Other		(3,936)		(3,598)		(11,247)		(8,281)
Total net interest income	$	70,755	$	69,753	$	200,190	$	209,999

Noninterest income
Banking	$	14,976	$	18,523	$	42,798	$	45,717
Remittance Processing		5,030		4,287		14,700		12,318
Wealth Management		13,746		10,662		39,333		32,681
Other		(493)		(1,187)		884		(2,950)
Total noninterest income	$	33,259	$	32,285	$	97,715	$	87,766

Noninterest expense
Banking	$	59,520	$	44,863	$	150,032	$	135,037
Remittance Processing		4,519		3,523		13,086		9,669
Wealth Management		7,679		6,497		20,961		19,725
Other		1,769		1,659		6,532		5,693
Total noninterest expense	$	73,487	$	56,542	$	190,611	$	170,124

Income before income taxes
Banking	$	31,996	$	41,441	$	114,507	$	93,245
Remittance Processing		530		785		1,674		2,708
Wealth Management		6,068		4,165		18,373		12,956
Other		(6,198)		(6,444)		(16,895)		(16,924)
Total income before income taxes	$	32,396	$	39,947	$	117,659	$	91,985

Net income
Banking	$	25,123	$	31,744	$	89,889	$	72,653
Remittance Processing		384		578		1,214		1,966
Wealth Management		4,719		3,166		14,285		9,847
Other		(4,285)		(4,659)		(11,865)		(12,467)
Total net income	$	25,941	$	30,829	$	93,523	$	71,999

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

+ Details

Portfolio Loans - Narrative (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
Portfolio Loans - Narrative (Details) $ in Thousands	Sep. 30, 2021 USD ($) loan	Sep. 30, 2020 USD ($) loan	Sep. 30, 2021 USD ($) loan	Sep. 30, 2020 USD ($) loan	Dec. 31, 2020 USD ($)
Distributions of portfolio loans
Net deferred loan origination (fees) costs	$ 4,900		$ 4,900		$ 2,400
Net accretable purchase accounting adjustments			10,100		10,900
Acquired two non-accrual loans from GSB	4,400		4,400
Gross interest income that would have been recorded if impaired loans had been current	300	$ 500	1,200	$ 1,400
Amount of interest collected and recognized on a cash basis	$ 400		$ 400
TDRs subsequently classified as non-performing and had payment defaults \| loan	0	0	0	0
Loans in the process of foreclosure	$ 200		$ 200
Retail Real Estate
Distributions of portfolio loans
Loans purchased	0	$ 0	32,200	$ 43,900
Retail Real Estate \| Non-performing TDRs
Distributions of portfolio loans
Loans classified as a TDR			$ 100
TDRs subsequently classified as non-performing and had payment defaults \| loan			1
Maximum \| Commercial Real Estate Loans
Distributions of portfolio loans
Limit where loans are processed through an expedited underwriting process			$ 1,000
Watch \| Commercial Loans
Distributions of portfolio loans
Limit above which loans are annually reviewed			1,000
Special Mention \| Commercial Loans
Distributions of portfolio loans
Limit above which loans are annually reviewed			350
PPP Loans
Distributions of portfolio loans
Amortized cost of the loans outstanding	$ 178,231		$ 178,231		$ 446,400

Significant Accounting Policies - COVID-19 (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2021 USD ($) customer	Dec. 31, 2020 USD ($)
COVID-19
Percentage of remaining loan maintains government guarantee	100.00%
PPP Loans
COVID-19
Customers with PPP loans processed \| customer	7,348
PPP loans originated	$ 1,089,805
Customers with PPP loans outstanding \| customer	1,620
PPP loans outstanding	$ 183,110
PPP loans outstanding, amortized cost	178,231	$ 446,400
Received	895,455
Applications in process	$ 21,013
CARES Act
COVID-19
Customers with PPP loans processed \| customer	4,595
PPP loans originated	$ 765,212
Customers with PPP loans outstanding \| customer	121
PPP loans outstanding	$ 17,364
PPP loans outstanding, amortized cost	17,325
Received	744,320
Applications in process	$ 10,796
Economic Aid Act
COVID-19
Customers with PPP loans processed \| customer	2,753
PPP loans originated	$ 324,593
Customers with PPP loans outstanding \| customer	1,499
PPP loans outstanding	$ 165,746
PPP loans outstanding, amortized cost	160,906
Received	151,135
Applications in process	$ 10,217

Leases (Tables)

9 Months Ended

Sep. 30, 2021

Leases

Summary of lease-related balances

The following table summarizes lease-related information and balances the Company reported in its unaudited Consolidated Balance Sheets for the periods presented (dollars in thousands):


	As of
	September 30,			December 31,
	2021			2020
Lease balances
Right of use assets	$	11,068		$	7,714
Lease liabilities		11,120			7,757

Supplemental information
Year through which lease terms extend		2031			2032
Weighted average remaining lease term (in years)		6.60			5.93
Weighted average discount rate		2.15	%		2.82	%

Schedule of lease costs and other lease information

The following tables represents lease costs and cash flows related to leases for the periods presented (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Lease costs
Operating lease costs	$	656	$	622	$	1,828	$	1,877
Variable lease costs		94		99		394		401
Short-term lease costs		9		15		43		45
Total lease cost	$	759	$	736	$	2,265	$	2,323

Cash flows related to leases
Cash paid for amounts included in the measurement of lease liabilities:
Operating lease cash flows – Fixed payments	$	620	$	616	$	1,756	$	1,839
Operating lease cash flows – Liability reduction		569		546		1,610		1,610
Right of use assets obtained during the period in exchange for operating lease liabilities⁽¹⁾		3,408		—		5,018		128

(1)

The nine months ended September 30, 2021, includes $371 related to a lease obtained in the acquisition of CAC.

Schedule of future undiscounted lease payments

Rent commitments were as follows (dollars in thousands):


	As of
	September 30,
	2021
Rent commitments
Remainder of 2021	$	621
2022		2,288
2023		2,071
2024		1,645
2025		1,416
Thereafter		3,921
Amounts representing interest		(842)
Present value of net future minimum lease payments	$	11,120

Acquisitions

9 Months Ended

Sep. 30, 2021

Acquisitions

Acquisitions

Note 2: Acquisitions

Cummins-American Corp.

Effective May 31, 2021, the Company completed its acquisition of CAC, the holding company for GSB. The partnership has enhanced the Company’s existing deposit, commercial banking, and wealth management presence in the Chicago-Naperville-Elgin, IL-IN-WI Metropolitan Statistical Area. GSB’s results of operations were included in the Company’s results of operations beginning June 1, 2021. First Busey operated GSB as a separate banking subsidiary until August 14, 2021, when it was merged with and into Busey Bank. At that time, all GSB banking centers became branches of Busey Bank.

Under terms of the definitive agreement, each share of CAC common stock issued and outstanding as of the effective date was converted into the right to receive 444.4783 shares of First Busey common stock and $14,173.96 in cash, which reflects the adjustments made to the cash consideration in accordance with the terms of the definitive agreement. The fair value of the common shares issued as part of the consideration paid for CAC was determined on the basis of the closing price of the Company’s common shares on the last trading day immediately preceding the acquisition date of May 31, 2021. As additional consideration provided to CAC’s shareholders in the merger, CAC paid a special dividend to its shareholders in the amount of $60.0 million, or $12,087.58 per share of CAC common stock, on May 28, 2021.

This transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged was recorded at estimated fair values on the date of acquisition. Fair values are considered provisional until final fair values are determined, or the measurement period has passed, but no later than one year from the acquisition date. Measurement period adjustments of $0.2 million were recorded in the third quarter of 2021 as more information became available regarding unrecorded liabilities.

As the total consideration paid for CAC exceeded the provisional fair value of net assets acquired, estimated goodwill of $6.2 million was recorded as a result of the acquisition. The amount of goodwill recognized as a result of this transaction is expected to be fully tax deductible for federal income tax purposes in accordance with the Company’s election pursuant to Section 338(h)(10) of the Internal Revenue Code. Goodwill recorded for this transaction reflects synergies expected from the acquisition and expansion within the Chicago-Naperville-Elgin, IL-IN-WI Metropolitan Statistical Area, and was assigned to the Banking operating segment.

The following table presents the estimated fair value of CAC’s assets acquired and liabilities assumed as of May 31, 2021 (dollars in thousands):


	Fair Value
Assets acquired
Cash and cash equivalents	$	298,637
Securities		702,367
Portfolio loans, net of ACL		430,470
Premises and equipment		17,034
Other intangible assets		17,340
Mortgage servicing rights		629
Other assets		8,176
Total assets acquired		1,474,653

Liabilities assumed
Deposits		1,315,671
Other borrowings		16,651
Other liabilities		19,098
Total liabilities assumed		1,351,420

Net assets acquired	$	123,233

Consideration paid:
Cash	$	70,358
Common stock		59,105
Total consideration paid	$	129,463

Goodwill	$	6,230

The fair value of PCD financial assets was $60.5 million on the date of acquisition. Gross contractual amounts receivable relating to the PCD financial assets was $65.2 million. The Company estimated, on the date of acquisition, that $4.2 million of the contractual cash flows specific to the PCD financial assets will not be collected.

During three and nine months ended September 30, 2021, First Busey incurred $8.4 million and $11.4 million, respectively, in pre-tax acquisition expenses related to the acquisition of CAC, comprised primarily of professional fees, compensation expense, and data processing expense.

Regulatory Capital (Details) $ in Thousands	Sep. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Total Capital (to Risk Weighted Assets), Amount
Actual, Amount	$ 1,313,989	$ 1,245,997
Minimum Capital Requirement, Amount	660,850	585,015
Minimum To Be Well Capitalized, Amount	$ 826,062	$ 731,269
Total Capital (to Risk Weighted Assets), Ratio
Actual, Ratio (as a percent)	15.91	17.04
Minimum Capital Requirement, Ratio (as a percent)	8.00	8.00
Minimum To Be Well Capitalized, Ratio (as a percent)	10.00	10.00
Tier 1 Capital (to Risk Weighted Assets), Amount
Actual, Amount	$ 1,060,756	$ 983,033
Minimum Capital Requirement, Amount	495,637	438,761
Minimum To Be Well Capitalized, Amount	$ 660,850	$ 585,015
Tier 1 Capital (to Risk Weighted Assets), Ratio
Actual, Ratio (as a percent)	12.84	13.44
Minimum Capital Requirement, Ratio (as a percent)	6.00	6.00
Minimum To Be Well Capitalized, Ratio (as a percent)	8.00	8.00
Common Equity Tier 1 Capital (to Risk Weighted Assets), Amount
Actual, Amount	$ 986,756	$ 909,033
Minimum Capital Requirement, Amount	371,728	329,071
Minimum To Be Well Capitalized, Amount	$ 536,940	$ 475,325
Common Equity Tier 1 Capital (to Risk Weighted Assets), Ratio
Actual, Ratio (as a percent)	11.95%	12.43%
Minimum Capital Requirement, Ratio (as a percent)	4.50%	4.50%
Minimum To Be Well Capitalized, Ratio (as a percent)	6.50%	6.50%
Tier 1 Capital (to Average Assets), Amount
Actual, Amount	$ 1,060,756	$ 983,033
Minimum Capital Requirement, Amount	$ 493,201	$ 401,717
Tier 1 Capital (to Average Assets), Ratio
Actual, Ratio (as a percent)	8.60	9.79
Minimum Capital Requirement, Ratio (as a percent)	4.00	4.00
Busey Bank
Total Capital (to Risk Weighted Assets), Amount
Actual, Amount	$ 1,306,293	$ 1,131,875
Minimum Capital Requirement, Amount	658,612	584,082
Minimum To Be Well Capitalized, Amount	$ 823,265	$ 730,103
Total Capital (to Risk Weighted Assets), Ratio
Actual, Ratio (as a percent)	15.87	15.50
Minimum Capital Requirement, Ratio (as a percent)	8.00	8.00
Minimum To Be Well Capitalized, Ratio (as a percent)	10.00	10.00
Tier 1 Capital (to Risk Weighted Assets), Amount
Actual, Amount	$ 1,238,060	$ 1,053,910
Minimum Capital Requirement, Amount	493,959	438,062
Minimum To Be Well Capitalized, Amount	$ 658,612	$ 584,082
Tier 1 Capital (to Risk Weighted Assets), Ratio
Actual, Ratio (as a percent)	15.04	14.44
Minimum Capital Requirement, Ratio (as a percent)	6.00	6.00
Minimum To Be Well Capitalized, Ratio (as a percent)	8.00	8.00
Common Equity Tier 1 Capital (to Risk Weighted Assets), Amount
Actual, Amount	$ 1,238,060	$ 1,053,910
Minimum Capital Requirement, Amount	370,469	328,546
Minimum To Be Well Capitalized, Amount	$ 535,123	$ 474,567
Common Equity Tier 1 Capital (to Risk Weighted Assets), Ratio
Actual, Ratio (as a percent)	15.04%	14.44%
Minimum Capital Requirement, Ratio (as a percent)	4.50%	4.50%
Minimum To Be Well Capitalized, Ratio (as a percent)	6.50%	6.50%
Tier 1 Capital (to Average Assets), Amount
Actual, Amount	$ 1,238,060	$ 1,053,910
Minimum Capital Requirement, Amount	492,170	400,581
Minimum To Be Well Capitalized, Amount	$ 615,212	$ 500,727
Tier 1 Capital (to Average Assets), Ratio
Actual, Ratio (as a percent)	10.06	10.52
Minimum Capital Requirement, Ratio (as a percent)	4.00	4.00
Minimum To Be Well Capitalized, Ratio (as a percent)	5.00	5.00

Stock-based Compensation

9 Months Ended

Sep. 30, 2021

Stock-based Compensation

Stock-based Compensation

Note 9: Stock-Based Compensation

Under the terms of the 2020 Equity Plan, the Company has granted RSU, DSU, and PSU awards. The Company grants RSUs to members of management periodically throughout the year. Each RSU is equivalent to one share of the Company’s common stock. These units have requisite service periods ranging from one to five years, subject to accelerated vesting upon eligible retirement from the Company. Recipients earn quarterly dividend equivalents on their respective units which entitle the recipients to additional units. Therefore, dividends earned each quarter compound based upon the updated unit balances.

The Company grants DSUs, which are restricted stock units with a deferred settlement date, to its directors and advisory directors. Each DSU is equivalent to one share of the Company’s common stock. DSUs vest over a one-year period following the grant date. These units generally are subject to the same terms as RSUs under the 2020 Equity Plan, except that, following vesting, settlement occurs within 30 days following the earlier of separation from the board or a

change in control of the Company. After vesting and prior to delivery, these units will continue to earn dividend equivalents.

The Company also grants PSU awards to members of management periodically throughout the year. Each PSU is equivalent to one share of the Company’s common stock. The number of units that ultimately vest will be determined based on the achievement of the market or other performance goals, subject to accelerated service-based vesting conditions upon eligible retirement from the Company.

The Company has outstanding stock options assumed from acquisitions.

Upon vesting/delivery, shares are expected (though not required) to be issued from treasury.

Stock Options

A summary of the status of, and changes in, the Company's stock option awards for the nine months ended September 30, 2021 follows:


					Weighted-
			Weighted-		Average
			Average		Remaining
			Exercise		Contractual
	Shares		Price		Life
Outstanding at beginning of period		39,085	$	23.53		5.88
Expired		(7,479)		23.53
Outstanding at end of period		31,606	$	23.53		5.13

Exercisable at end of period		31,606	$	23.53		5.13

The Company did not record any stock option compensation expense for the three or nine months ended September 30, 2021, or 2020. As of September 30, 2021, the Company did not have any unrecognized stock option expense.

Restricted Stock Unit, Performance-Based Restricted Stock Unit, and Deferred Stock Unit Awards

A summary of changes in the Company’s RSU, PSU, and DSU awards for the nine months ended September 30, 2021, is as follows:


	RSU Awards				PSU Awards				DSU Awards
			Weighted-				Weighted-				Weighted-
			Average				Average				Average
			Grant Date				Grant Date				Grant Date
	Shares		Fair Value		Shares⁽¹⁾		Fair Value		Shares		Fair Value
Nonvested at beginning of period		1,017,038	$	23.87		15,724	$	16.25		34,263	$	17.18
Granted		260,231		24.26		99,159		23.91		35,664		24.59
Dividend equivalents earned		33,388		23.07		—		—		3,716		23.15
Vested		(128,824)		22.88		—		—		(39,813)		18.08
Forfeited		(29,883)		24.88		(968)		23.48		—		—
Nonvested at end of period		1,151,950	$	24.02		113,915	$	22.86		33,830	$	24.59

Vested and outstanding at end of period										96,427	$	21.99

(1)

Shares for PSU awards represent target shares at grant date.

On March 24, 2021, under the terms of the 2020 Equity Plan, the Company granted 212,426 RSUs to members of management, including the Vice-Chairman of the Board. The grant date fair value of the award totaled $5.2 million and will be recognized as compensation expense over the requisite service period ranging from one year to five years. The

terms of these awards included an accelerated vesting provision upon eligible retirement from the Company, after a one-year minimum requisite service period. Subsequent to the requisite service period, the awards will become 100% vested. Further, the Company granted 33,288 DSUs to directors and advisory directors. The grant date fair value of the award totaled $0.8 million and will be recognized as compensation expense over the requisite service period of one year. Subsequent to the requisite service period, the awards will become 100% vested.

During the first quarter of 2021, the Company also granted a target of 70,815 market-based PSUs with a maximum award of 113,304 units. The actual number of units issued at the vesting date could range from 0% to 160% of the initial grant, depending on attaining the market-based total shareholder return performance goal. The grant date fair value of the award was $1.7 million and will be recognized in compensation expense over the performance period ending December 31, 2023.

Further, during the first quarter of 2021, the Company granted a target of 28,344 PSUs with a maximum award of 39,682 units. The actual number of units issued at the vesting date could range from 0% to 140% of the initial grant, depending on attaining a performance goal based upon the compounded annual revenue growth rate of the Remittance Processing segment. The grant date fair value of the award is $0.7 million and will be recognized in compensation expense over the performance period ending August 31, 2023, subject to achievement of the performance goal.

On May 19, 2021, under the terms of the 2020 Equity Plan, the Company granted 2,376 DSUs to directors. The grant date fair value of the award totaled $0.1 million and will be recognized as compensation expense over the requisite service period of one year. Subsequent to the requisite service period, the awards will become 100% vested.

On September 22, 2021, under the terms of the 2020 Equity Plan, the Company granted 47,805 RSUs to members of management. The grant date fair value of the award totaled $1.1 million and will be recognized as compensation expense over the requisite service period ranging from three year to five years. Subsequent to the requisite service period, the awards will become 100% vested.

Stock-based compensation expense related to nonvested RSU, PSU, and DSU awards is presented in the table below (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Stock-based compensation
RSU awards	$	1,316	$	2,029	$	4,362	$	3,952
PSU awards		290		41		619		41
DSU awards		231		135		741		420
Total stock-based compensation	$	1,837	$	2,205	$	5,722	$	4,413

Unamortized stock-based compensation expense related to nonvested RSU, PSU, and DSU awards is presented in the table below (dollars in thousands):


	As of
	September 30,			December 31,
	2021			2020
Unamortized stock-based compensation
RSU awards	$	11,650		$	10,411
PSU awards		1,554			179
DSU awards		430			294
Total unamortized stock-based compensation	$	13,634		$	10,884

Weighted average period over which expense is to be recognized		3.0	yrs		3.0	yrs

There were 1,038,975 shares remaining available for issuance pursuant to the 2020 Equity Incentive Plan as of September 30, 2021.

Borrowings - Senior notes and Subordinate Notes (Details) - USD ($) $ in Thousands	Jun. 01, 2020	May 25, 2017	Sep. 30, 2021	Dec. 31, 2020
Long-term debt
Unamortized debt issuance cost			$ 2,453	$ 2,965
3.75% notes maturing May 25, 2022 \| Senior notes
Long-term debt
Issuance of debt		$ 40,000
Interest rate (as a percent)		3.75%
Unamortized debt issuance cost			90	191
4.75% notes maturing May 25, 2027 \| Subordinated debt
Long-term debt
Issuance of debt		$ 60,000
Fixed payment term of note		5 years
Duration of fixed interest rate		5 years
Unamortized debt issuance cost			575	651
4.75% notes maturing May 25, 2027 \| First Five Years \| Subordinated debt
Long-term debt
Interest rate (as a percent)		4.75%
4.75% notes maturing May 25, 2027 \| Three-month LIBOR \| Subordinated debt
Long-term debt
Floating interest rate margin (as a percent)		2.919%
5.25% notes maturing June 1, 2030 \| Subordinated debt
Long-term debt
Issuance of debt	$ 125,000
Duration of fixed interest rate	5 years
Floating interest rate margin (as a percent)	5.11%
Unamortized debt issuance cost			$ 1,788	$ 2,123
5.25% notes maturing June 1, 2030 \| First Five Years \| Subordinated debt
Long-term debt
Interest rate (as a percent)	5.25%

Portfolio Loans - Activity in the allowance for loan losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Dec. 31, 2020
Activity in the allowance for loan losses
ACL beginning balance	$ 95,410	$ 96,046	$ 101,048	$ 53,748
Provision for credit losses	(1,869)	5,549	(10,365)	35,656
Charged-off	(1,208)	(3,397)	(3,711)	(9,247)
Recoveries	469	643	1,652	1,851
ACL ending balance	92,802	98,841	92,802	98,841
Allowance for loan losses Ending balance attributed to:
Loans individually evaluated for impairment					$ 4,475	$ 1,625
Loans collectively evaluated for impairment					88,327	99,423
Ending balance	95,410	98,841	101,048	53,748	92,802	101,048
Loans:
Loans individually evaluated for impairment					20,366	20,246
Loans collectively evaluated for impairment					7,130,269	6,793,931
Ending balance					7,150,635	6,814,177
Day 1 PCD
Activity in the allowance for loan losses
ACL beginning balance			4,178
Allowance for loan losses Ending balance attributed to:
Ending balance			4,178			4,178
Commercial Loans
Activity in the allowance for loan losses
ACL beginning balance	24,356	24,146	23,866	18,291
Provision for credit losses	657	2,593	(1,428)	10,739
Charged-off	(764)	(2,500)	(2,026)	(5,682)
Recoveries	157	124	448	300
ACL ending balance	24,406	24,363	24,406	24,363
Allowance for loan losses Ending balance attributed to:
Loans individually evaluated for impairment					4,450	1,600
Loans collectively evaluated for impairment					19,956	22,266
Ending balance	24,406	24,363	23,866	18,291	24,406	23,866
Loans:
Loans individually evaluated for impairment					10,206	8,372
Loans collectively evaluated for impairment					1,921,657	2,006,204
Ending balance					1,931,863	2,014,576
Commercial Loans \| Day 1 PCD
Activity in the allowance for loan losses
ACL beginning balance			3,546
Allowance for loan losses Ending balance attributed to:
Ending balance			3,546			3,546
Commercial Real Estate Loans
Activity in the allowance for loan losses
ACL beginning balance	39,974	42,680	46,230	21,190
Provision for credit losses	(25)	3,703	(6,109)	17,090
Charged-off	(191)	(569)	(812)	(1,833)
Recoveries	73	103	186	164
ACL ending balance	39,831	45,917	39,831	45,917
Allowance for loan losses Ending balance attributed to:
Loans collectively evaluated for impairment					39,831	46,230
Ending balance	39,831	45,917	46,230	21,190	39,831	46,230
Loans:
Loans individually evaluated for impairment					6,222	6,067
Loans collectively evaluated for impairment					3,062,400	2,886,468
Ending balance					3,068,622	2,892,535
Commercial Real Estate Loans \| Day 1 PCD
Activity in the allowance for loan losses
ACL beginning balance			336
Allowance for loan losses Ending balance attributed to:
Ending balance			336			336
Real Estate Construction
Activity in the allowance for loan losses
ACL beginning balance	7,599	7,792	8,193	3,204
Provision for credit losses	(1,503)	(381)	(2,082)	1,082
Charged-off		(18)	(209)	(18)
Recoveries	25	26	219	197
ACL ending balance	6,121	7,419	6,121	7,419
Allowance for loan losses Ending balance attributed to:
Loans collectively evaluated for impairment					6,121	8,193
Ending balance	6,121	7,419	8,193	3,204	6,121	8,193
Loans:
Loans individually evaluated for impairment					276	292
Loans collectively evaluated for impairment					430,581	461,494
Ending balance					430,857	461,786
Retail Real Estate
Activity in the allowance for loan losses
ACL beginning balance	20,505	20,405	21,992	10,495
Provision for credit losses	(1,155)	(383)	(3,028)	6,635
Charged-off	(155)	(139)	(315)	(1,139)
Recoveries	157	301	574	901
ACL ending balance	19,352	20,184	19,352	20,184
Allowance for loan losses Ending balance attributed to:
Loans individually evaluated for impairment					25	25
Loans collectively evaluated for impairment					19,327	21,967
Ending balance	19,352	20,184	21,992	10,495	19,352	21,992
Loans:
Loans individually evaluated for impairment					3,662	5,515
Loans collectively evaluated for impairment					1,509,222	1,402,337
Ending balance					1,512,884	1,407,852
Retail Real Estate \| Day 1 PCD
Activity in the allowance for loan losses
ACL beginning balance			129
Allowance for loan losses Ending balance attributed to:
Ending balance			129			129
Retail Other
Activity in the allowance for loan losses
ACL beginning balance	2,976	1,023	767	568
Provision for credit losses	157	17	2,282	110
Charged-off	(98)	(171)	(349)	(575)
Recoveries	57	89	225	289
ACL ending balance	3,092	958	3,092	958
Allowance for loan losses Ending balance attributed to:
Loans collectively evaluated for impairment					3,092	767
Ending balance	$ 3,092	958	767	568	3,092	767
Loans:
Loans collectively evaluated for impairment					206,409	37,428
Ending balance					$ 206,409	37,428
Retail Other \| Day 1 PCD
Activity in the allowance for loan losses
ACL beginning balance			167
Allowance for loan losses Ending balance attributed to:
Ending balance			$ 167			$ 167
Cumulative Effect, Period of Adoption, Adjustment
Activity in the allowance for loan losses
ACL ending balance		16,833		16,833
Allowance for loan losses Ending balance attributed to:
Ending balance		16,833		16,833
Cumulative Effect, Period of Adoption, Adjustment \| Commercial Loans
Activity in the allowance for loan losses
ACL ending balance		715		715
Allowance for loan losses Ending balance attributed to:
Ending balance		715		715
Cumulative Effect, Period of Adoption, Adjustment \| Commercial Real Estate Loans
Activity in the allowance for loan losses
ACL ending balance		9,306		9,306
Allowance for loan losses Ending balance attributed to:
Ending balance		9,306		9,306
Cumulative Effect, Period of Adoption, Adjustment \| Real Estate Construction
Activity in the allowance for loan losses
ACL ending balance		2,954		2,954
Allowance for loan losses Ending balance attributed to:
Ending balance		2,954		2,954
Cumulative Effect, Period of Adoption, Adjustment \| Retail Real Estate
Activity in the allowance for loan losses
ACL ending balance		3,292		3,292
Allowance for loan losses Ending balance attributed to:
Ending balance		3,292		3,292
Cumulative Effect, Period of Adoption, Adjustment \| Retail Other
Activity in the allowance for loan losses
ACL ending balance		566		566
Allowance for loan losses Ending balance attributed to:
Ending balance		$ 566		$ 566

Outstanding Commitments and Contingent Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Credit Commitments and Contingencies
Total commitments	$ 1,875,144	$ 1,793,307
Commitments to extend credit
Credit Commitments and Contingencies
Total commitments	1,836,815	1,754,370
Standby letters of credit
Credit Commitments and Contingencies
Total commitments	$ 38,329	$ 38,937

Fair Value Measurements - General Disclosures (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	$ 3,997,244	$ 2,261,187
Equity securities	13,012	5,530
Loans held for sale, at fair value	20,225	42,813
U.S. Treasury securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	185,453	27,837
Obligations of U.S. government corporations and agencies
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	38,997	69,519
Obligations of states and political subdivisions
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	296,012	304,711
Commercial mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	603,297	418,616
Residential mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	2,102,608	1,368,315
Asset-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	468,807
Corporate debt securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	302,070	72,189
Recurring basis
Financial assets and financial liabilities measured at fair value
Equity securities	13,012	5,530
Loans held for sale, at fair value	20,225	42,813
Recurring basis \| Derivative assets
Financial assets and financial liabilities measured at fair value
Derivative asset	21,869	33,918
Recurring basis \| Derivative liabilities
Financial assets and financial liabilities measured at fair value
Derivative liability	24,501	38,403
Recurring basis \| U.S. Treasury securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	185,453	27,837
Recurring basis \| Obligations of U.S. government corporations and agencies
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	38,997	69,519
Recurring basis \| Obligations of states and political subdivisions
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	296,012	304,711
Recurring basis \| Commercial mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	603,297	418,616
Recurring basis \| Residential mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	2,102,608	1,368,315
Recurring basis \| Asset-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	468,807
Recurring basis \| Corporate debt securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	302,070	72,189
Recurring basis \| Level 2
Financial assets and financial liabilities measured at fair value
Equity securities	13,012	5,530
Loans held for sale, at fair value	20,225	42,813
Recurring basis \| Level 2 \| Derivative assets
Financial assets and financial liabilities measured at fair value
Derivative asset	21,869	33,918
Recurring basis \| Level 2 \| Derivative liabilities
Financial assets and financial liabilities measured at fair value
Derivative liability	24,501	38,403
Recurring basis \| Level 2 \| U.S. Treasury securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	185,453	27,837
Recurring basis \| Level 2 \| Obligations of U.S. government corporations and agencies
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	38,997	69,519
Recurring basis \| Level 2 \| Obligations of states and political subdivisions
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	296,012	304,711
Recurring basis \| Level 2 \| Commercial mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	603,297	418,616
Recurring basis \| Level 2 \| Residential mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	2,102,608	1,368,315
Recurring basis \| Level 2 \| Asset-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	468,807
Recurring basis \| Level 2 \| Corporate debt securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	$ 302,070	$ 72,189

Derivative Financial Instruments

9 Months Ended

Sep. 30, 2021

Derivative Financial Instruments

Derivative Financial Instruments

Note 11: Derivative Financial Instruments

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. Additionally, the Company enters into derivative financial instruments, including interest rate lock commitments issued to residential loan customers for loans that will be held for sale, forward sales commitments to sell residential mortgage loans to investors, and interest rate swaps with customers and other third parties. See “Note 12: Fair Value Measurements” for further discussion of the fair value measurement of such derivatives.

Interest Rate Swaps Designated as Cash Flow Hedges

The Company entered into derivative instruments designated as cash flow hedges. For a derivative instrument that is designated and qualifies as a cash flow hedge, the change in fair value of the derivative instrument is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The change in fair value of components excluded from the assessment of effectiveness are recognized in current earnings.

Interest rate swaps with notional amounts totaling $50.0 million as of September 30, 2021, and $70.0 million as of December 31, 2020, were designated as cash flow hedges to hedge the risk of variability in cash flows (future interest payments) attributable to changes in the contractually specified 3-month LIBOR benchmark interest rate on the Company’s junior subordinated debt owed to unconsolidated trusts and were determined to be highly effective during the period. A $20.0 million swap matured on September 17, 2021, and the Company has one remaining swap. The gross aggregate fair value of the swaps of $1.7 million as of September 30, 2021, and $3.1 million as of December 31, 2020, is recorded in other liabilities in the unaudited Consolidated Balance Sheets, with changes in fair value recorded net of tax in other comprehensive income (loss). The Company expects its hedge to remain highly effective during the remaining term of the swap.

A summary of the interest-rate swaps designated as cash flow hedges is presented below (dollars in thousands):


	As of
	September 30,			December 31,
	2021			2020
Notional amount	$	50,000		$	70,000
Weighted average fixed pay rates		1.79	%		1.80	%
Weighted average variable 3-month LIBOR receive rates		0.12	%		0.22	%
Weighted average maturity, in years		2.96	yrs		2.85	yrs
Unrealized gains (losses), net of tax	$	(1,237)		$	(2,184)

Interest expense recorded on these swap transactions was $0.3 million and $0.9 million during the three and nine months ended September 30, 2021, respectively, and was $0.3 million and $0.5 million during the three and nine months ended September 30, 2020, respectively. The Company expects $0.2 million of the unrealized loss to be reclassified from OCI to interest expense during the next three months. This reclassified amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges subsequent to September 30, 2021.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Interest rate contracts
Gain (loss) recognized in OCI, net of tax	$	(5)	$	14	$	336	$	(2,233)
(Gain) loss reclassified from OCI to interest expense, net of tax		206		192		611		42
Net change in unrealized gains (losses) on cash flow hedges	$	201	$	206	$	947	$	(2,191)

The Company pledged $1.8 million in cash to secure its obligation under these contracts as of September 30, 2021, compared to $3.2 million pledged as of December 31, 2020.

Interest Rate Lock Commitments

Interest rate lock commitments that meet the definition of derivative financial instruments under ASC Topic 815, Derivatives and Hedging, are carried at their fair values in other assets or other liabilities in the unaudited consolidated financial statements, with changes in the fair values of the corresponding derivative financial assets or liabilities recorded as either a charge or credit to current earnings during the period in which the changes occurred.

Forward Sales Commitments

The Company economically hedges mortgage loans held for sale and interest rate lock commitments issued to its residential loan customers related to loans that will be held for sale by obtaining corresponding best-efforts forward sales commitments with an investor to sell the loans at an agreed-upon price at the time the interest rate locks are issued to the customers. Forward sales commitments that meet the definition of derivative financial instruments under ASC Topic 815, Derivatives and Hedging, are carried at their fair values in other assets or other liabilities in the unaudited consolidated financial statements. While such forward sales commitments generally served as an economic hedge to mortgage loans held for sale and interest rate lock commitments, the Company did not designate them for hedge accounting treatment. Changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred.

Amounts and fair values of mortgage banking derivatives included in the unaudited Consolidated Balance Sheets are summarized as follows (dollars in thousands):


		As of September 30, 2021				As of December 31, 2020
		Notional		Fair		Notional		Fair
	Location	Amount		Value		Amount		Value
Derivatives with positive fair value
Interest rate lock commitments	Other assets	$	31,480	$	538	$	45,004	$	1,201
Forward sales commitments	Other assets		117		1		978		32
Mortgage banking derivatives recorded in other assets		$	31,597	$	539	$	45,982	$	1,233

Derivatives with negative fair value
Interest rate lock commitments	Other liabilities	$	117	$	1	$	118	$	1
Forward sales commitments	Other liabilities		49,418		1,439		84,964		2,662
Mortgage banking derivatives recorded in other liabilities		$	49,535	$	1,440	$	85,082	$	2,663

Net gains (losses) relating to these derivative instruments are summarized as follows for the periods presented (dollars in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,
	Location	2021		2020		2021		2020
Net gains (losses)
Interest rate lock commitments	Mortgage revenue	$	537	$	1,405	$	1,502	$	8,467
Forward sales commitments	Mortgage revenue		(1,438)		(3,874)		(3,616)		(15,699)
Net gains (losses)		$	(901)	$	(2,469)	$	(2,114)	$	(7,232)

The impact of the net gains or losses on derivative financial instruments related to interest rate lock commitments issued to residential loan customers for loans that will be held for sale and forward sales commitments to sell residential mortgage loans to loan investors are almost entirely offset by a corresponding change in the fair value of loans held for sale.

Interest Rate Swaps Not Designated as Hedges

The Company may offer derivative contracts to its customers in connection with their risk management needs. The Company manages the risk associated with these contracts by entering into equal and offsetting derivative agreements with a third-party dealer. These contracts support variable rate, commercial loan relationships totaling $424.6 million and $395.0 million as of September 30, 2021, and December 31, 2020, respectively. These derivatives generally worked together as an economic interest rate hedge, but the Company did not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred.


	As of September 30, 2021
	Derivative Asset				Derivative Liability
	Notional		Fair		Notional		Fair
	Amount		Value		Amount		Value
Derivatives not designated as hedging instruments
Interest rate swaps – pay floating, receive fixed	$	332,856	$	19,420	$	91,711	$	1,910
Interest rate swaps – pay fixed, receive floating		91,711		1,910		332,856		19,420
Total derivatives not designated as hedging instruments	$	424,567	$	21,330	$	424,567	$	21,330


	As of December 31, 2020
	Derivative Asset				Derivative Liability
	Notional		Fair		Notional		Fair
	Amount		Value		Amount		Value
Derivatives not designated as hedging instruments
Interest rate swaps – pay floating, receive fixed	$	394,954	$	32,685	$	—	$	—
Interest rate swaps – pay fixed, receive floating		—		—		394,954		32,685
Total derivatives not designated as hedging instruments	$	394,954	$	32,685	$	394,954	$	32,685


		Three Months Ended September 30,				Nine Months Ended September 30,
	Location	2021		2020		2021		2020
Interest rate swaps
Pay floating, receive fixed	Noninterest expense	$	(2,024)	$	(549)	$	(11,355)	$	25,790
Pay fixed, receive floating	Noninterest expense		2,024		549		11,355		(25,790)
Net change in fair value of interest rate swaps		$	—	$	—	$	—	$	—

The Company pledged $26.3 million in cash to secure its obligation under these contracts as of September 30, 2021, compared to $36.0 million pledged as of December 31, 2020.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
Net income	$ 25,941	$ 30,829	$ 93,523	$ 71,999
Unrealized gains (losses) on debt securities available for sale:
Net unrealized holding gains (losses) on debt securities available for sale, net of taxes of $4,902, $682, $14,195, and ($9,577), respectively	(12,296)	(1,710)	(35,606)	23,974
Reclassification adjustment for realized (gains) losses on debt securities available for sale included in net income, net of taxes of ($1), $3, $7, and $492, respectively	4	(8)	(16)	(1,218)
Net change in unrealized gains (losses) on debt securities available for sale	(12,292)	(1,718)	(35,622)	22,756
Unrealized gains (losses) on cash flow hedges:
Net unrealized holding gains (losses) on cash flow hedges, net of taxes of $2, ($6), ($134), and $890, respectively	(5)	14	336	(2,233)
Reclassification adjustment for realized (gains) losses on cash flow hedges included in net income, net of taxes of ($82), ($76), ($243), and ($16), respectively	206	192	611	42
Net change in unrealized gains (losses) on cash flow hedges	201	206	947	(2,191)
Net change in accumulated other comprehensive income (loss)	(12,091)	(1,512)	(34,675)	20,565
Total comprehensive income	$ 13,850	$ 29,317	$ 58,848	$ 92,564

Leases

9 Months Ended

Sep. 30, 2021

Leases

Leases

Note 16: Leases

The Company has operating leases consisting primarily of equipment leases and real estate leases for banking centers, ATM locations, and office space. The following table summarizes lease-related information and balances the Company reported in its unaudited Consolidated Balance Sheets for the periods presented (dollars in thousands):


	As of
	September 30,			December 31,
	2021			2020
Lease balances
Right of use assets	$	11,068		$	7,714
Lease liabilities		11,120			7,757

Supplemental information
Year through which lease terms extend		2031			2032
Weighted average remaining lease term (in years)		6.60			5.93
Weighted average discount rate		2.15	%		2.82	%

The following tables represents lease costs and cash flows related to leases for the periods presented (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Lease costs
Operating lease costs	$	656	$	622	$	1,828	$	1,877
Variable lease costs		94		99		394		401
Short-term lease costs		9		15		43		45
Total lease cost	$	759	$	736	$	2,265	$	2,323

Cash flows related to leases
Cash paid for amounts included in the measurement of lease liabilities:
Operating lease cash flows – Fixed payments	$	620	$	616	$	1,756	$	1,839
Operating lease cash flows – Liability reduction		569		546		1,610		1,610
Right of use assets obtained during the period in exchange for operating lease liabilities⁽¹⁾		3,408		—		5,018		128

(1)

The nine months ended September 30, 2021, includes $371 related to a lease obtained in the acquisition of CAC.

As of September 30, 2021, the Company was obligated under noncancelable operating leases for office space and other commitments. Rent expense under operating leases, included in net occupancy and equipment expense, was $0.8 million and $2.3 million for the three and nine months ended September 30, 2021, respectively, compared to $0.7 million and $2.3 million for the three and nine months ended September 30, 2020, respectively.

Rent commitments were as follows (dollars in thousands):


	As of
	September 30,
	2021
Rent commitments
Remainder of 2021	$	621
2022		2,288
2023		2,071
2024		1,645
2025		1,416
Thereafter		3,921
Amounts representing interest		(842)
Present value of net future minimum lease payments	$	11,120

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2021	Nov. 04, 2021
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2021
Entity File Number	0-15950
Entity Registrant Name	FIRST BUSEY CORPORATION
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	37-1078406
Entity Address, Address Line One	100 W. University Ave.
Entity Address, City or Town	Champaign
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	61820
City Area Code	217
Local Phone Number	365-4544
Title of 12(b) Security	Common Stock, $.001 par value
Trading Symbol	BUSE
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		55,668,984
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000314489
Amendment Flag	false

Operating Segments and Related Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) segment	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)
Operating Segments and Related Information
Number of reportable segments \| segment			3
Number of operating segments \| segment			3
Goodwill	$ 317,766		$ 317,766		$ 311,536
Total Assets	12,899,330		12,899,330		10,544,047
Net interest income	70,755	$ 69,753	200,190	$ 209,999
Non-interest income:	33,259	32,285	97,715	87,766
Non-interest expense:	73,487	56,542	190,611	170,124
Income before income taxes	32,396	39,947	117,659	91,985
Net income:	25,941	30,829	93,523	71,999
Operating segments \| Banking
Operating Segments and Related Information
Goodwill	294,666		294,666		288,436
Total Assets	12,788,398		12,788,398		10,462,673
Net interest income	74,672	73,330	211,377	218,221
Non-interest income:	14,976	18,523	42,798	45,717
Non-interest expense:	59,520	44,863	150,032	135,037
Income before income taxes	31,996	41,441	114,507	93,245
Net income:	25,123	31,744	89,889	72,653
Operating segments \| Remittance Processing
Operating Segments and Related Information
Goodwill	8,992		8,992		8,992
Total Assets	47,528		47,528		46,553
Net interest income	19	21	60	59
Non-interest income:	5,030	4,287	14,700	12,318
Non-interest expense:	4,519	3,523	13,086	9,669
Income before income taxes	530	785	1,674	2,708
Net income:	384	578	1,214	1,966
Operating segments \| Wealth Management
Operating Segments and Related Information
Goodwill	14,108		14,108		14,108
Total Assets	60,496		60,496		46,504
Non-interest income:	13,746	10,662	39,333	32,681
Non-interest expense:	7,679	6,497	20,961	19,725
Income before income taxes	6,068	4,165	18,373	12,956
Net income:	4,719	3,166	14,285	9,847
Other
Operating Segments and Related Information
Total Assets	2,908		2,908		$ (11,683)
Net interest income	(3,936)	(3,598)	(11,247)	(8,281)
Non-interest income:	(493)	(1,187)	884	(2,950)
Non-interest expense:	1,769	1,659	6,532	5,693
Income before income taxes	(6,198)	(6,444)	(16,895)	(16,924)
Net income:	$ (4,285)	$ (4,659)	$ (11,865)	$ (12,467)

Employee Benefit Plans

9 Months Ended

Sep. 30, 2021

Employee Benefit Plans

Employee Benefit Plans

Note 8: Employee Benefit Plans

The First Busey Corporation 2021 Employee Stock Purchase Plan was approved at the Company’s 2021 Annual Meeting of Stockholders and details can be found within First Busey’s Definitive Proxy Statement filed with the SEC on April 8, 2021. The first offering under this plan began on July 1, 2021. There were 585,342 shares available for issuance under the 2021 Employee Stock Purchase Plan as of September 30, 2021.

For additional information related to the Company’s employee benefit plans, see the Company’s 2020 Annual Report.

Outstanding Commitments and Contingent Liabilities

9 Months Ended

Sep. 30, 2021

Outstanding Commitments and Contingent Liabilities

Outstanding Commitments and Contingent Liabilities

Note 10: Outstanding Commitments and Contingent Liabilities

Legal Matters

The Company is a party to legal actions which arise in the normal course of its business activities. In the opinion of management, the ultimate resolution of these matters is not expected to have a material effect on the Company’s financial position or results of operations.

Credit Commitments and Contingencies

A summary of the contractual amount of the Company’s exposure to off-balance-sheet risk relating to the Company’s commitments to extend credit and standby letters of credit follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
Financial instruments whose contract amounts represent credit risk
Commitments to extend credit	$	1,836,815	$	1,754,370
Standby letters of credit		38,329		38,937
Total commitments	$	1,875,144	$	1,793,307

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
Cash dividends, common stock (in dollars per share)	$ 0.23	$ 0.22	$ 0.69	$ 0.66
Stock dividends, restricted stock units (in dollars per share)	$ 0.23	$ 0.22	$ 0.69	$ 0.66

Outstanding Commitments and Contingent Liabilities (Tables)

9 Months Ended

Sep. 30, 2021

Outstanding Commitments and Contingent Liabilities

Schedule of contractual amount of exposure to off-balance-sheet risk


	As of
	September 30,		December 31,
	2021		2020
Financial instruments whose contract amounts represent credit risk
Commitments to extend credit	$	1,836,815	$	1,754,370
Standby letters of credit		38,329		38,937
Total commitments	$	1,875,144	$	1,793,307

Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Net income per share calculations for basic and diluted methods
Net income	$ 25,941	$ 30,829	$ 93,523	$ 71,999
Shares:
Weighted average common shares outstanding	56,227,816	54,585,998	55,256,348	54,579,088
Dilutive effect of outstanding options, warrants, and restricted stock units as determined by the application of the treasury stock method (in shares)	597,148	151,922	613,969	217,266
Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation	56,832,518	54,737,920	55,872,835	54,796,354
Basic earnings per common share (in dollars per share)	$ 0.46	$ 0.56	$ 1.69	$ 1.32
Diluted earnings per common share (in dollars per share)	$ 0.46	$ 0.56	$ 1.67	$ 1.31
Total anti-dilutive common stock equivalents	133,376	300,176	192,578	300,176
Options
Shares:
Total anti-dilutive common stock equivalents		39,085		39,085
RSUs and DSUs
Shares:
Total anti-dilutive common stock equivalents	47,805	261,091	97,067	261,091
PSUs
Shares:
Total anti-dilutive common stock equivalents	85,571		95,511
Employee Stock Purchase Plan Shares
Shares:
Dilutive effect of outstanding options, warrants, and restricted stock units as determined by the application of the treasury stock method (in shares)	7,554		2,518

Deposits

9 Months Ended

Sep. 30, 2021

Deposits

Deposits

Note 5: Deposits

The composition of deposits is as follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
Deposits
Demand deposits, noninterest-bearing	$	3,453,906	$	2,552,039
Interest-bearing transaction deposits		2,938,109		2,263,093
Saving deposits and money market deposits		3,398,917		2,743,369
Time deposits		1,026,935		1,119,348
Total deposits	$	10,817,867	$	8,677,849

Additional information about our deposits is as follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
Brokered savings deposits and money market deposits	$	2,002	$	2,251
Brokered time deposits		264		5,257
Aggregate amount of time deposits with a minimum denomination of $100,000		504,367		568,735
Aggregate amount of time deposits with a minimum denomination that meets or exceeds the FDIC insurance limit of $250,000		156,419		192,563

As of September 30, 2021, the scheduled maturities of time deposits are as follows (dollars in thousands):


	As of
	September 30,
	2021
Time deposits by schedule of maturities
October 1, 2021 – September 30, 2022	$	719,932
October 1, 2022 – September 30, 2023		188,639
October 1, 2023 – September 30, 2024		85,339
October 1, 2024 – September 30, 2025		20,008
October 1, 2025 – September 30, 2026		12,280
Thereafter		737
Total time deposits	$	1,026,935

Securities

9 Months Ended

Sep. 30, 2021

Securities

Securities

Note 3: Securities

The table below provides the amortized cost, unrealized gains and losses, and fair values of debt securities summarized by major category (dollars in thousands):


	As of September 30, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized				Fair
	Cost		Gains		Losses			ACL	Value
Debt securities available for sale
U.S. Treasury securities	$	185,636	$	72	$	(255)	$	—	$	185,453
Obligations of U.S. government corporations and agencies		37,784		1,213		—		—		38,997
Obligations of states and political subdivisions		288,023		8,743		(754)		—		296,012
Commercial mortgage-backed securities		607,097		5,278		(9,078)		—		603,297
Residential mortgage-backed securities		2,108,388		13,973		(19,753)		—		2,102,608
Asset-backed securities		468,618		323		(134)		—		468,807
Corporate debt securities		301,878		1,374		(1,182)		—		302,070
Total debt securities available for sale	$	3,997,424	$	30,976	$	(31,156)	$	—	$	3,997,244


	As of December 31, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized				Fair
	Cost		Gains		Losses			ACL	Value
Debt securities available for sale
U.S. Treasury securities	$	27,481	$	356	$	—	$	—	$	27,837
Obligations of U.S. government corporations and agencies		67,406		2,162		(49)		—		69,519
Obligations of states and political subdivisions		292,940		11,779		(8)		—		304,711
Commercial mortgage-backed securities		408,716		10,212		(312)		—		418,616
Residential mortgage-backed securities		1,344,047		24,571		(303)		—		1,368,315
Corporate debt securities		70,953		1,237		(1)		—		72,189
Total debt securities available for sale	$	2,211,543	$	50,317	$	(673)		—	$	2,261,187

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 (dollars in thousands):


	As of September 30, 2021
	Amortized		Fair
	Cost		Value
Debt securities available for sale
Due in one year or less	$	103,158	$	103,787
Due after one year through five years		603,868		608,074
Due after five years through ten years		385,479		393,540
Due after ten years		2,904,919		2,891,843
Total debt securities available for sale	$	3,997,424	$	3,997,244

Realized gains and losses related to sales and calls of debt securities available for sale are summarized as follows (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Realized gains and losses on sales of debt securities
Gross security gains	$	—	$	11	$	524	$	1,718
Gross security (losses)		(5)		—		(410)		(8)
Net gains (losses) on sales of debt securities	$	(5)	$	11	$	114	$	1,710

Debt securities with carrying amounts of $729.2 million on September 30, 2021, and $628.0 million December 31, 2020, were pledged as collateral for public deposits, securities sold under agreements to repurchase, and for other purposes as required.


	As of September 30, 2021
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Debt securities available for sale
U.S. Treasury securities	$	180,317	$	(255)	$	—	$	—	$	180,317	$	(255)
Obligations of states and political subdivisions		55,434		(754)		—		—		55,434		(754)
Commercial mortgage-backed securities		434,220		(9,036)		3,063		(42)		437,283		(9,078)
Residential mortgage-backed securities		1,392,160		(19,707)		5,568		(46)		1,397,728		(19,753)
Asset-backed securities		51,183		(134)		—		—		51,183		(134)
Corporate debt securities		210,951		(1,182)		—		—		210,951		(1,182)
Total temporarily impaired securities	$	2,324,265	$	(31,068)	$	8,631	$	(88)	$	2,332,896	$	(31,156)


	As of December 31, 2020
	Less than 12 months				12 months or more				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
Debt securities available for sale
Obligations of U.S. government corporations and agencies	$	—	$	—	$	4,957	$	(49)	$	4,957	$	(49)
Obligations of states and political subdivisions		762		(8)		—		—		762		(8)
Commercial mortgage-backed securities		129,655		(312)		—		—		129,655		(312)
Residential mortgage-backed securities		89,997		(300)		139		(3)		90,136		(303)
Corporate debt securities		1,499		(1)		—		—		1,499		(1)
Total temporarily impaired securities	$	221,913	$	(621)	$	5,096	$	(52)	$	227,009	$	(673)

Debt securities available for sale are not within the scope of CECL, however, the accounting for credit losses on these securities is affected by ASC 326-30. The Company’s debt security portfolio consisted of 1,274 securities as of September 30, 2021, compared to 1,114 securities as of December 31, 2020. The number of debt securities in the investment portfolio in an unrealized loss position was 294, representing an unrealized loss of 1.3% of the aggregate fair value, as of September 30, 2021, compared to 23 securities representing an unrealized loss of 0.3% of the aggregate fair value as of December 31, 2020. Unrealized losses related to changes in market interest rates and market conditions that do not represent credit-related impairments. Furthermore, the Company does not intend to sell such securities and it is more likely than not that the Company 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, the

impairment related to noncredit factors is recognized in accumulated other comprehensive income (loss), net of applicable taxes. As of September 30, 2021, the Company did not hold general obligation bonds of any single issuer, the aggregate of which exceeded 10% of the Company’s stockholders’ equity.

Leases - Future Rent Commitments (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Projected minimum rental payments under the terms of leases
Remainder of 2021	$ 621
2022	2,288
2023	2,071
2024	1,645
2025	1,416
Thereafter	3,921
Amounts representing interest	(842)
Present value of net future minimum lease payments	$ 11,120	$ 7,757

Portfolio Loans

9 Months Ended

Sep. 30, 2021

Portfolio Loans

Portfolio loans

Note 4: Portfolio Loans

Distributions of portfolio loans are as follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
Portfolio loans
Commercial	$	1,931,863	$	2,014,576
Commercial real estate		3,068,622		2,892,535
Real estate construction		430,857		461,786
Retail real estate		1,512,884		1,407,852
Retail other		206,409		37,428
Total portfolio loans	$	7,150,635	$	6,814,177

ACL		(92,802)		(101,048)

Portfolio loans, net	$	7,057,833	$	6,713,129

Net deferred loan origination costs included in the balances above were $4.9 million as of September 30, 2021, compared to $2.4 million as of December 31, 2020. Net accretable purchase accounting adjustments included in the balances above reduced loans by $10.1 million as of September 30, 2021, and $10.9 million as of December 31, 2020. The September 30, 2021, commercial balance includes loans originated under PPP with an amortized cost of $178.2 million, compared to $446.4 million in loans originated under PPP included in the December 31, 2020, balance.

There were no retail real estate loans purchased during the three months ended September 30, 2021 or 2020. During the nine months ended September 30, 2021, the Company purchased retail real estate loans totaling $32.2 million, compared to $43.9 million of retail real estate loan purchases in the nine months ended September 30, 2020.

The Company utilizes a loan grading scale to assign a risk grade to all of its loans. A description of the general characteristics of each grade is as follows:

●

Pass – This category includes loans that are all considered acceptable credits, ranging from investment or near investment grade, to loans made to borrowers who exhibit credit fundamentals that meet or exceed industry standards.

●

Watch – This category includes loans that warrant a higher-than-average level of monitoring to ensure that weaknesses do not cause the inability of the credit to perform as expected. These loans are not necessarily a problem due to other inherent strengths of the credit, such as guarantor strength, but have above average concern and monitoring.

●

Special mention – This category is for “Other Assets Specially Mentioned” loans that have potential weaknesses, which may, if not checked or corrected, weaken the asset or inadequately protect the Company’s credit position at some future date.

●

Substandard – This category includes “Substandard” loans, determined in accordance with regulatory guidelines, for which the accrual of interest has not been stopped. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

●

Substandard non-accrual – This category includes loans that have all the characteristics of a “Substandard” loan with additional factors that make collection in full highly questionable and improbable. Such loans are placed on non-accrual status and may be dependent on collateral with a value that is difficult to determine.

All loans are graded at their inception. Commercial lending relationships that are $1.0 million or less are usually processed through an expedited underwriting process. Most commercial loans greater than $1.0 million are included in a portfolio review at least annually. Commercial loans greater than $0.35 million that have a grading of special mention or worse are typically reviewed on a quarterly basis. Interim reviews may take place if circumstances of the borrower warrant a more frequent review. GSB’s policies were similar in nature to Busey Bank’s policies and the Company is migrating the legacy GSB portfolio and grading toward the Busey Bank policies. We acquired two non-accrual loans from GSB totaling $4.4 million, which are still outstanding as of September 30, 2021.

The following table is a summary of risk grades segregated by category of portfolio loans (dollars in thousands):


	As of September 30, 2021
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual
Portfolio loans
Commercial	$	1,718,398	$	115,108	$	62,094	$	26,033	$	10,230
Commercial real estate		2,623,243		338,270		81,525		18,964		6,620
Real estate construction		413,986		14,464		7		2,400		—
Retail real estate		1,486,172		11,724		2,008		4,498		8,482
Retail other		206,372		—		—		—		37
Total portfolio loans	$	6,448,171	$	479,566	$	145,634	$	51,895	$	25,369


	As of December 31, 2020
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual
Portfolio loans
Commercial	$	1,768,755	$	136,948	$	72,447	$	27,903	$	8,523
Commercial real estate		2,393,372		383,277		75,486		34,897		5,503
Real estate construction		434,681		24,481		77		2,546		1
Retail real estate		1,382,616		10,264		2,471		3,702		8,799
Retail other		37,324		—		—		—		104
Total portfolio loans	$	6,016,748	$	554,970	$	150,481	$	69,048	$	22,930

Risk grades of portfolio loans, further sorted by origination year are as follows (dollars in thousands):


	As of September 30, 2021
	Term Loans Amortized Cost Basis by Origination Year													Revolving
Risk Grade Ratings	2021		2020		2019		2018		2017			Prior		loans		Total
Commercial
Pass	$	468,833	$	265,204	$	112,809	$	90,292	$	73,553	$	132,127	$	575,580	$	1,718,398
Watch		15,078		5,355		19,783		5,668		7,545		4,287		57,392		115,108
Special Mention		3,011		1,143		2,479		4,385		6,864		12,484		31,728		62,094
Substandard		3,357		3,504		3,321		1,437		1,244		5,552		7,618		26,033
Substandard non-accrual		4,305		444		1,597		—		1,821		63		2,000		10,230
Total commercial		494,584		275,649		139,989		101,782		91,027		154,513		674,318		1,931,863

Commercial real estate
Pass		655,907		690,244		463,830		289,396		257,618		245,795		20,453		2,623,243
Watch		41,596		40,404		130,282		62,312		27,226		34,572		1,878		338,270
Special Mention		27,115		7,056		7,551		18,661		10,436		10,430		276		81,525
Substandard		4,894		9,289		1,574		2,072		526		429		180		18,964
Substandard non-accrual		114		761		352		1,962		3,407		24		—		6,620
Total commercial real estate		729,627		747,753		603,588		374,403		299,213		291,250		22,787		3,068,622

Real estate construction
Pass		160,719		141,699		93,701		3,918		899		1,249		11,801		413,986
Watch		6,279		6,115		55		276		1,616		123		—		14,464
Special Mention		—		—		7		—		—		—		—		7
Substandard		—		2,400		—		—		—		—		—		2,400
Substandard non-accrual		—		—		—		—		—		—		—		—
Total real estate construction		166,999		150,214		93,763		4,193		2,516		1,372		11,801		430,857

Retail real estate
Pass		428,556		230,120		107,262		92,875		95,667		313,708		217,984		1,486,172
Watch		2,641		2,666		1,982		1,521		352		270		2,292		11,724
Special Mention		1,979		29		—		—		—		—		—		2,008
Substandard		1,630		321		14		73		166		2,210		84		4,498
Substandard non-accrual		500		145		72		546		1,369		4,582		1,268		8,482
Total retail real estate		435,305		233,281		109,330		95,015		97,553		320,771		221,629		1,512,884

Retail other
Pass		45,614		25,177		30,366		19,737		9,935		2,658		72,885		206,372
Watch		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Substandard non-accrual		—		11		7		5		14		—		—		37
Total retail other		45,614		25,188		30,373		19,742		9,949		2,658		72,885		206,409

Total portfolio loans	$	1,872,128	$	1,432,087	$	977,044	$	595,136	$	500,258	$	770,563	$	1,003,419	$	7,150,635


	As of December 31, 2020
	Term Loans Amortized Cost Basis by Origination Year													Revolving
Risk Grade Ratings	2020		2019		2018		2017		2016			Prior		loans		Total
Commercial
Pass	$	812,536	$	158,307	$	107,565	$	93,190	$	61,847	$	79,970	$	455,340	$	1,768,755
Watch		16,544		22,247		14,954		13,724		2,577		10,943		55,959		136,948
Special Mention		6,402		2,671		2,069		7,164		6,763		13,733		33,645		72,447
Substandard		7,772		3,791		2,371		1,939		819		1,233		9,978		27,903
Substandard non-accrual		150		3,045		451		2,168		641		68		2,000		8,523
Total commercial		843,404		190,061		127,410		118,185		72,647		105,947		556,922		2,014,576

Commercial real estate
Pass		717,559		503,977		360,573		384,843		180,555		227,068		18,797		2,393,372
Watch		88,297		110,526		90,412		33,734		32,887		27,023		398		383,277
Special Mention		16,490		8,858		10,490		10,505		7,102		21,808		233		75,486
Substandard		17,445		4,166		1,491		7,812		2,111		1,377		495		34,897
Substandard non-accrual		1,091		776		821		882		286		1,647		—		5,503
Total commercial real estate		840,882		628,303		463,787		437,776		222,941		278,923		19,923		2,892,535

Real estate construction
Pass		179,232		171,663		64,025		1,468		761		1,444		16,088		434,681
Watch		18,485		3,657		337		1,838		164						24,481
Special Mention		67		10		—		—		—		—		—		77
Substandard		2,400		—		—		—		146		—		—		2,546
Substandard non-accrual		—		—		—		—		—		1		—		1
Total real estate construction		200,184		175,330		64,362		3,306		1,071		1,445		16,088		461,786

Retail real estate
Pass		319,302		162,711		135,065		136,427		140,600		257,147		231,364		1,382,616
Watch		2,715		2,053		1,396		349		579		233		2,939		10,264
Special Mention		509		—		—		—		1,962		—		—		2,471
Substandard		899		96		56		26		727		1,631		267		3,702
Substandard non-accrual		687		78		646		1,147		233		4,815		1,193		8,799
Total retail real estate		324,112		164,938		137,163		137,949		144,101		263,826		235,763		1,407,852

Retail other
Pass		8,357		9,430		5,600		2,516		691		440		10,290		37,324
Watch		—		—		—		—		—		—		—		—
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Substandard non-accrual		14		7		5		15		5		57		1		104
Total retail other		8,371		9,437		5,605		2,531		696		497		10,291		37,428

Total portfolio loans	$	2,216,953	$	1,168,069	$	798,327	$	699,747	$	441,456	$	650,638	$	838,987	$	6,814,177

An analysis of the amortized cost basis of portfolio loans that are past due and still accruing, or on a non-accrual status, is as follows (dollars in thousands):


	As of September 30, 2021
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Past due and non-accrual loans
Commercial	$	1,092	$	202	$	—	$	10,230
Commercial real estate		882		—		—		6,620
Real estate construction		—		—		—		—
Retail real estate		2,068		2,020		491		8,482
Retail other		182		—		—		37
Total past due and non-accrual loans	$	4,224	$	2,222	$	491	$	25,369


	As of December 31, 2020
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Past due and non-accrual loans
Commercial	$	243	$	—	$	—	$	8,523
Commercial real estate		—		—		—		5,503
Real estate construction		237		235		—		1
Retail real estate		6,248		400		1,305		8,799
Retail other		66		149		66		104
Total past due and non-accrual loans	$	6,794	$	784	$	1,371	$	22,930

Gross interest income recorded on 90+ days past due loans, and that would have been recorded on non-accrual loans if they had been accruing interest in accordance with their original terms, was $0.3 million and $1.2 million for the three and nine months ended September 30, 2021, respectively. Gross interest income recorded on 90+ days past due loans and that would have been recorded on non-accrual loans if they had been accruing interest in accordance with their original terms was $0.5 million and $1.4 million for the three and nine months ended September 30, 2020, respectively. The amount of interest collected on those loans and recognized on a cash basis that was included in interest income was $0.4 million for the three and nine months ended September 30, 2021, and was insignificant for the three and nine months ended September 30, 2020.

A summary of TDRs is as follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
TDRs
In compliance with modified terms	$	2,083	$	3,814
30 – 89 days past due		—		15
Non-performing TDRs		1,285		1,249
Total TDRs	$	3,368	$	5,078

The following tables summarize TDRs that occurred during the periods presented (dollars in thousands):

Three Months Ended September 30, 2021

Nine Months Ended September 30, 2021

Recorded Investment

Number of

Rate

Payment

Number of

Rate

Payment

Contracts

Modification ⁽¹⁾

Contracts

Modification ⁽¹⁾

Newly designated TDRs

Commercial

—

444

—


	Three Months Ended September 30, 2020						Nine Months Ended September 30, 2020
			Recorded Investment						Recorded Investment
	Number of		Rate		Payment		Number of		Rate		Payment
	Contracts		Modification ⁽¹⁾		Modification ⁽¹⁾		Contracts		Modification ⁽¹⁾		Modification ⁽¹⁾
Newly designated TDRs
Commercial		—	$	—	$	—		3	$	324	$	—
Commercial real estate		—		—		—		1		651		—
Retail real estate		1		—		167		2		—		353

(1)

TDRs may include multiple concessions; those that include an interest rate concession and payment concession are shown in the rate modification columns.

There were no TDRs that were entered into during the last 12 months that subsequently had payment defaults (a default occurs when a loan is 90 days or more past due or transferred to non-accrual) during the three and nine months ended September 30, 2021 or 2020. During the nine months ended September 30, 2021, one retail real estate loan for $0.1 million that had been a performing TDR for longer than 12 months, with a rate modification, became non-performing.

Gross interest income that would have been recorded in the three and nine months ended September 30, 2021 and 2020, if TDRs had performed in accordance with their original terms compared with their modified terms, was insignificant.

Modified loans with payment deferrals that fall under the CARES Act or revised Interagency Statement that suspended requirements under GAAP related to TDR classification are not included in the Company’s TDR totals.

As of September 30, 2021, the Company had $0.2 million of residential real estate in the process of foreclosure. The Company follows Federal Housing Finance Agency guidelines on single-family foreclosures and real estate owned evictions on portfolio loans, as well as all COVID-19 related state foreclosure and eviction orders.

The following tables provide details of loans evaluated individually, segregated by category. The Company evaluates loans with disparate risk characteristics on an individual basis. The unpaid contractual principal balance represents the customer outstanding balance excluding any partial charge-offs. Amortized cost represents customer balances net of any partial charge-offs recognized on the loan. Average amortized cost is calculated using the most recent four quarters (dollars in thousands):


	As of September 30, 2021
	Unpaid		Amortized
	Contractual		Cost		Amortized		Total				Average
	Principal		with No		Cost		Amortized		Related		Amortized
	Balance		Allowance		with Allowance		Cost		Allowance		Cost
Loans evaluated on an individual basis
Commercial	$	14,233	$	2,003	$	8,203	$	10,206	$	4,450	$	8,945
Commercial real estate		7,188		6,222		—		6,222		—		6,906
Real estate construction		276		276		—		276		—		338
Retail real estate		4,020		3,637		25		3,662		25		4,630
Retail other		—		—		—		—		—		—
Total loans evaluated individually	$	25,717	$	12,138	$	8,228	$	20,366	$	4,475	$	20,819


	As of December 31, 2020
	Unpaid		Amortized
	Contractual		Cost		Amortized		Total				Average
	Principal		with No		Cost		Amortized		Related		Amortized
	Balance		Allowance		with Allowance		Cost		Allowance		Cost
Loans evaluated on an individual basis
Commercial	$	16,771	$	4,001	$	4,371	$	8,372	$	1,600	$	7,920
Commercial real estate		7,406		6,067		—		6,067		—		9,349
Real estate construction		292		292		—		292		—		581
Retail real estate		5,873		5,490		25		5,515		25		7,439
Retail other		—		—		—		—		—		10
Total loans evaluated individually	$	30,342	$	15,850	$	4,396	$	20,246	$	1,625	$	25,299

Management's evaluation as to the ultimate collectability of loans includes estimates regarding future cash flows from operations and the value of property, real and personal, pledged as collateral. These estimates are affected by changing economic conditions and the economic prospects of borrowers. Collateral dependent loans are loans in which repayment is expected to be provided solely by the underlying collateral and there are no other available and reliable sources of repayment. Loans are written down to the lower of cost or fair value of underlying collateral, less estimated costs to sell. As of September 30, 2021, there were $15.5 million of collateral dependent loans secured by real estate or business assets.

Management estimates the ACL balance using relevant available information from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. The cumulative loss rate used as the basis for the estimate of credit losses is comprised of the Company’s historical loss experience beginning in 2010. As of September 30, 2021, the Company expects the markets in which it operates to experience continued economic uncertainty around the levels of delinquencies over the next 12 months. Management adjusted the historical loss experience for these expectations with an immediate reversion to historical loss rate beyond this forecast period. PPP loans were excluded from the ACL calculation as they are 100% government guaranteed.

The following tables detail activity in the ACL. Allocation of a portion of the ACL to one category does not preclude its availability to absorb losses in other categories (dollars in thousands):


	As of and for the Three Months Ended September 30, 2021
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
ACL beginning balance	$	24,356	$	39,974	$	7,599	$	20,505	$	2,976	$	95,410
Provision for credit losses		657		(25)		(1,503)		(1,155)		157		(1,869)
Charged-off		(764)		(191)		—		(155)		(98)		(1,208)
Recoveries		157		73		25		157		57		469
ACL ending balance	$	24,406	$	39,831	$	6,121	$	19,352	$	3,092	$	92,802


	As of and for the Nine Months Ended September 30, 2021
			Commercial		Real Estate		Retail
	Commercial		Real Estate		Construction		Real Estate		Retail Other		Total
ACL beginning balance	$	23,866	$	46,230	$	8,193	$	21,992	$	767	$	101,048
Day 1 PCD ⁽¹⁾		3,546		336		—		129		167		4,178
Provision for credit losses		(1,428)		(6,109)		(2,082)		(3,028)		2,282		(10,365)
Charged-off		(2,026)		(812)		(209)		(315)		(349)		(3,711)
Recoveries		448		186		219		574		225		1,652
ACL ending balance	$	24,406	$	39,831	$	6,121	$	19,352	$	3,092	$	92,802

(1)

The Day 1 PCD is attributable to the CAC acquisition.


	As of and for the Three Months Ended September 30, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
ACL beginning balance	$	24,146	$	42,680	$	7,792	$	20,405	$	1,023	$	96,046
Provision for credit losses		2,593		3,703		(381)		(383)		17		5,549
Charged-off		(2,500)		(569)		(18)		(139)		(171)		(3,397)
Recoveries		124		103		26		301		89		643
ACL ending balance	$	24,363	$	45,917	$	7,419	$	20,184	$	958	$	98,841


	As of and for the Nine Months Ended September 30, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance, prior to adoption of ASC 326-30	$	18,291	$	21,190	$	3,204	$	10,495	$	568	$	53,748
Adoption of ASC 326-30		715		9,306		2,954		3,292		566		16,833
Provision for credit losses		10,739		17,090		1,082		6,635		110		35,656
Charged-off		(5,682)		(1,833)		(18)		(1,139)		(575)		(9,247)
Recoveries		300		164		197		901		289		1,851
ACL ending balance	$	24,363	$	45,917	$	7,419	$	20,184	$	958	$	98,841

The following table presents the ACL and amortized cost of portfolio loans by category (dollars in thousands):


	As of September 30, 2021
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
ACL
Ending balance attributed to:
Loans individually evaluated for impairment	$	4,450	$	—	$	—	$	25	$	—	$	4,475
Loans collectively evaluated for impairment		19,956		39,831		6,121		19,327		3,092		88,327
ACL ending balance	$	24,406	$	39,831	$	6,121	$	19,352	$	3,092	$	92,802

Loans
Loans individually evaluated for impairment	$	10,206	$	6,222	$	276	$	3,662	$	—	$	20,366
Loans collectively evaluated for impairment		1,921,657		3,062,400		430,581		1,509,222		206,409		7,130,269
Loans ending balance	$	1,931,863	$	3,068,622	$	430,857	$	1,512,884	$	206,409	$	7,150,635


	As of December 31, 2020
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
ACL
Ending balance attributed to:
Loans individually evaluated for impairment	$	1,600	$	—	$	—	$	25	$	—	$	1,625
Loans collectively evaluated for impairment		22,266		46,230		8,193		21,967		767		99,423
ACL ending balance	$	23,866	$	46,230	$	8,193	$	21,992	$	767	$	101,048

Loans
Loans individually evaluated for impairment	$	8,372	$	6,067	$	292	$	5,515	$	—	$	20,246
Loans collectively evaluated for impairment		2,006,204		2,886,468		461,494		1,402,337		37,428		6,793,931
Loans ending balance	$	2,014,576	$	2,892,535	$	461,786	$	1,407,852	$	37,428	$	6,814,177

Portfolio Loans - Summary of TDRs (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Restructured loans
Total TDRs	$ 3,368	$ 5,078
In compliance with modified terms
Restructured loans
Total TDRs	2,083	3,814
30-89 days past due
Restructured loans
Total TDRs		15
Non-performing TDRs
Restructured loans
Total TDRs	$ 1,285	$ 1,249

CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Interest income
Interest and fees on loans	$ 65,163	$ 69,809	$ 189,132	$ 213,434
Interest and dividends on investment securities:
Taxable interest income	11,324	8,466	29,016	26,807
Non-taxable interest income	915	1,141	2,878	3,458
Other interest income	462	213	857	1,596
Total interest income	77,864	79,629	221,883	245,295
Interest expense
Deposits	3,059	6,105	10,086	26,053
Federal funds purchased and securities sold under agreements to repurchase	60	88	177	596
Short-term borrowings	112	30	195	215
Long-term debt	270	38	415	495
Senior notes	400	400	1,199	1,199
Subordinated notes	2,480	2,475	7,436	4,518
Junior subordinated debt owed to unconsolidated trusts	728	740	2,185	2,220
Total interest expense	7,109	9,876	21,693	35,296
Net interest income	70,755	69,753	200,190	209,999
Provision for credit losses	(1,869)	5,549	(10,365)	35,656
Net interest income after provision for credit losses	72,624	64,204	210,555	174,343
Noninterest income
Income on bank owned life insurance	999	1,022	3,439	4,361
Net gains (losses) on sales of securities	(5)	11	114	1,710
Unrealized gains (losses) recognized on equity securities	62	(437)	2,482	(1,234)
Other income	3,071	3,339	7,134	5,888
Total noninterest income	33,259	32,285	97,715	87,766
Noninterest expense
Salaries, wages, and employee benefits	41,949	32,839	107,222	95,397
Data processing	7,782	3,937	16,881	12,383
Net occupancy expense of premises	4,797	4,256	13,606	13,419
Furniture and equipment expenses	2,208	2,325	6,300	7,311
Professional fees	1,361	1,698	5,617	5,508
Amortization of intangible assets	3,149	2,493	8,200	7,569
Interchange expense	1,434	1,223	4,360	3,590
Other expense	10,807	7,771	28,425	24,947
Total noninterest expense	73,487	56,542	190,611	170,124
Income before income taxes	32,396	39,947	117,659	91,985
Income taxes	6,455	9,118	24,136	19,986
Net income	$ 25,941	$ 30,829	$ 93,523	$ 71,999
Basic earnings per common share (in dollars per share)	$ 0.46	$ 0.56	$ 1.69	$ 1.32
Diluted earnings per common share (in dollars per share)	0.46	0.56	1.67	1.31
Dividends declared per share of common stock (in dollars per share)	$ 0.23	$ 0.22	$ 0.69	$ 0.66
Wealth management fees
Noninterest income
Non-interest income	$ 13,749	$ 10,548	$ 39,335	$ 32,296
Fees for customer services
Noninterest income
Non-interest income	9,288	8,014	25,936	23,400
Remittance processing
Noninterest income
Non-interest income	4,355	3,995	13,122	11,466
Mortgage revenue
Noninterest income
Mortgage revenue	$ 1,740	$ 5,793	$ 6,153	$ 9,879

Employee Benefit Plans (Details)	Sep. 30, 2021 shares
2021 Employee Stock Purchase Plan
Employee Benefit Plans
Shares Remaining Available for Issuance Pursuant to the Plans	585,342

Borrowings (Tables)

9 Months Ended

Sep. 30, 2021

Borrowings

Schedule of distribution of securities sold under agreements to repurchase and short-term borrowings and weighted average interest rates

Securities sold under agreements to repurchase were as follows (dollars in thousands):


	As of
	September 30,			December 31,
	2021			2020
Securities sold under agreements to repurchase	$	241,242		$	175,614
Weighted average rate for securities sold under agreements to repurchase		0.08	%		0.13	%

Summary of long-term debt

Short-term borrowings are summarized as follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
Short-term borrowings
FHLB advances maturing in less than one year from date of origination, and the current portion of long-term FHLB advances due within 12 months	$	5,673	$	4,658
Term Loan, current portion due within 12 months		12,000		—
Total short-term debt	$	17,673	$	4,658

Federal funds purchased are short-term borrowings that generally mature between one and 90 days. The Company had no federal funds purchased as of September 30, 2021 or December 31, 2020.

Long-term debt is summarized as follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
Long-term debt
Notes payable, FHLB, original maturity of 5 years, collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock	$	4,233	$	4,757
Term Loan		45,000		—
Total long-term debt	$	49,233	$	4,757

Schedule of unamortized debt issuance cost

Unamortized debt issuance costs related to senior notes and subordinated notes are presented in the following table (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
Unamortized debt issuance costs
Senior notes issued in 2017	$	90	$	191
Subordinated notes issued in 2017		575		651
Subordinated notes issued in 2020		1,788		2,123
Total unamortized debt issuance costs	$	2,453	$	2,965

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=119993939&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

Fair Value Measurements

9 Months Ended

Sep. 30, 2021

Fair Value Measurements

Fair Value Measurements

Note 12: Fair Value Measurements

The fair value of an asset or liability is the price that would be received by selling that asset or paid in transferring that liability (exit price) in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. ASC Topic 820, Fair Value Measurement, establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

●

Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

●

Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

●

Level 3 Inputs – Unobservable inputs for determining the fair values of assets or liabilities that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to those Company assets and liabilities that are carried at fair value.

In general, fair value is based upon quoted market prices, when available. If such quoted market prices are not available, fair values are measured utilizing independent valuation techniques of identical or similar securities for which significant assumptions are derived primarily from or corroborated by observable data. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect, among other things, counterparty credit quality and the company's creditworthiness as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. While management believes the Company's valuation

methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Debt Securities Available for Sale

Debt securities classified as available for sale are reported at fair value utilizing Level 2 measurements. The Company obtains fair value measurements from an independent pricing service. The independent pricing service utilizes evaluated pricing models that vary by asset class and incorporate available trade, bid, and other market information. Because many fixed income securities do not trade on a daily basis, the independent pricing service applies available information, focusing on observable market data such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing to prepare evaluations.

The independent pricing service uses model processes, such as the Option Adjusted Spread model, to assess interest rate impact and develop prepayment scenarios. Models and processes take into account market conventions. For each asset class, a team of evaluators gathers information from market sources and integrates relevant credit information, perceived market movements, and sector news into the evaluated pricing applications and models.

Market inputs that the independent pricing service normally seeks for evaluations of securities, listed in approximate order of priority, include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications. The independent pricing service also monitors market indicators, industry, and economic events. For certain security types, additional inputs may be used or some of the market inputs may not be applicable. Evaluators may prioritize inputs differently on any given day for any security based on market conditions, and not all inputs listed are available for use in the evaluation process for each security evaluation on a given day. Because the data utilized was observable, the securities have been classified as Level 2.

Equity Securities

Equity securities are reported at fair value utilizing Level 1 or Level 2 measurements. As applicable, for mutual funds, unadjusted quoted prices in active markets for identical assets are utilized to determine fair value at the measurement date and are classified as Level 1. For stock, quoted prices for identical or similar assets in markets that are not active are utilized and classified as Level 2.

Loans Held for Sale

Loans held for sale are reported at fair value utilizing Level 2 measurements. The fair value of the mortgage loans held for sale are measured using observable quoted market or contract prices or market price equivalents and are classified as Level 2.

Derivative Assets and Derivative Liabilities

Derivative assets and derivative liabilities are reported at fair value utilizing Level 2 measurements. Fair values of derivative assets and liabilities are determined based on prices that are obtained from a third-party which uses observable market inputs. Derivative assets and liabilities are classified as Level 2.


	As of September 30, 2021
	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
Debt securities available for sale:
U.S. Treasury securities	$	—	$	185,453	$	—	$	185,453
Obligations of U.S. government corporations and agencies		—		38,997		—		38,997
Obligations of states and political subdivisions		—		296,012		—		296,012
Commercial mortgage-backed securities		—		603,297		—		603,297
Residential mortgage-backed securities		—		2,102,608		—		2,102,608
Asset-backed securities		—		468,807		—		468,807
Corporate debt securities		—		302,070		—		302,070
Equity securities		—		13,012		—		13,012
Loans held for sale		—		20,225		—		20,225
Derivative assets		—		21,869		—		21,869
Derivative liabilities		—		24,501		—		24,501


	As of December 31, 2020
	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
Debt securities available for sale:
U.S. Treasury securities	$	—	$	27,837	$	—	$	27,837
Obligations of U.S. government corporations and agencies		—		69,519		—		69,519
Obligations of states and political subdivisions		—		304,711		—		304,711
Commercial mortgage-backed securities		—		418,616		—		418,616
Residential mortgage-backed securities		—		1,368,315		—		1,368,315
Corporate debt securities		—		72,189		—		72,189
Equity securities		—		5,530		—		5,530
Loans held for sale		—		42,813		—		42,813
Derivative assets		—		33,918		—		33,918
Derivative liabilities		—		38,403		—		38,403

Certain financial assets and financial liabilities are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

Loans Evaluated Individually

The Company does not record portfolio loans at fair value on a recurring basis. However, periodically, a loan is evaluated individually and is reported at the fair value of the underlying collateral, less estimated costs to sell, if repayment is expected solely from the collateral. If the collateral value is not sufficient, a specific reserve is recorded. Collateral values are estimated using a combination of observable inputs, including recent appraisals, and unobservable inputs based on customized discounting criteria. Due to the significance of unobservable inputs, fair values of individually evaluated collateral dependent loans have been classified as Level 3.

OREO

Non-financial assets measured at fair value include OREO (upon initial recognition or subsequent impairment). OREO properties are measured using a combination of observable inputs, including recent appraisals, and unobservable inputs. Due to the significance of unobservable inputs, all OREO fair values have been classified as Level 3.

Bank Property Held for Sale

Bank property held for sale represents certain banking center office buildings which the Company has closed and consolidated with other existing banking centers. Bank property held for sale is measured at the lower of amortized cost or fair value less estimated costs to sell. Fair values were based upon discounted appraisals or real estate listing prices.

Due to the significance of unobservable inputs, fair values of all bank property held for sale have been classified as Level 3.


	As of September 30, 2021
	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
Loans evaluated individually	$	—	$	—	$	3,753	$	3,753
OREO		—		—		51		51
Bank property held for sale		—		—		6,150		6,150


	As of December 31, 2020
	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
Loans evaluated individually	$	—	$	—	$	2,771	$	2,771
OREO		—		—		106		106
Bank property held for sale		—		—		10,676		10,676


	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation	Unobservable	Range
September 30, 2021:	Estimate		Techniques	Input	(Weighted Average)
Loans evaluated individually	$	3,753	Appraisal of collateral	Appraisal adjustments	-18.0	%	to	-100.0	%	(-54.4)	%
OREO		51	Appraisal of collateral	Appraisal adjustments	-33.0	%	to	-100.0	%	(-67.9)	%
Bank property held for sale		6,150	Appraisal of collateral or real estate listing price	Appraisal adjustments	-6.2	%	to	-64.9	%	(-41.2)	%

December 31, 2020:
Loans evaluated individually	$	2,771	Appraisal of collateral	Appraisal adjustments	-30.0	%	to	-100.0	%	(-37.0)	%
OREO		106	Appraisal of collateral	Appraisal adjustments	-25.0	%	to	-100.0	%	(-54.5)	%
Bank property held for sale		10,676	Appraisal of collateral or real estate listing price	Appraisal adjustments	-6.2	%	to	-64.9	%	(-42.8)	%


	As of September 30, 2021				As of December 31, 2020
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial assets
Level 1 inputs:
Cash and cash equivalents	$	883,845	$	883,845	$	688,537	$	688,537
Level 2 inputs:
Accrued interest receivable		33,545		33,545		33,240		33,240
Level 3 inputs:
Portfolio loans, net		7,057,833		7,108,483		6,713,129		6,755,425
Mortgage servicing rights		9,247		11,011		10,912		11,107
Other servicing rights		1,680		2,127		1,434		1,966

Financial liabilities
Level 2 inputs:
Time deposits	$	1,026,935	$	1,029,879	$	1,119,348	$	1,132,107
Securities sold under agreements to repurchase		241,242		241,242		175,614		175,614
Short-term borrowings		17,673		17,671		4,658		4,661
Long-term debt		49,233		49,323		4,757		5,014
Junior subordinated debt owed to unconsolidated trusts		71,593		62,840		71,468		59,943
Accrued interest payable		5,435		5,435		3,401		3,401
Level 3 inputs:
Senior notes, net of unamortized issuance costs		39,910		40,700		39,809		40,104
Subordinated notes, net of unamortized issuance costs		182,637		196,350		182,226		187,697

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Significant Accounting Policies - Impact of new financial accounting standards (Details) $ in Billions	9 Months Ended
	Sep. 30, 2021 USD ($) segment
Significant Accounting Policies
Value of company \| $	$ 12.9
Number of operating segments \| segment	3

Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2021

Earnings Per Common Share

Schedule of computation of earnings per common share

Earnings per common share have been computed as follows (dollars in thousands, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income	$	25,941	$	30,829	$	93,523	$	71,999
Shares:
Weighted average common shares outstanding		56,227,816		54,585,998		55,256,348		54,579,088
Dilutive effect of outstanding options, warrants, and restricted stock units as determined by the application of the treasury stock method		597,148		151,922		613,969		217,266
Dilutive effect of ESPP shares		7,554		—		2,518		—
Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation		56,832,518		54,737,920		55,872,835		54,796,354

Basic earnings per common share	$	0.46	$	0.56	$	1.69	$	1.32

Diluted earnings per common share	$	0.46	$	0.56	$	1.67	$	1.31

Schedule of shares excluded from computation of diluted earnings per common share


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Anti-dilutive common stock equivalents
Options		—		39,085		—		39,085
RSU and DSU awards		47,805		261,091		97,067		261,091
PSU awards		85,571		—		95,511		—
Total anti-dilutive common stock equivalents		133,376		300,176		192,578		300,176

Deposits (Tables)

9 Months Ended

Sep. 30, 2021

Deposits

Schedule of composition of deposits

The composition of deposits is as follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
Deposits
Demand deposits, noninterest-bearing	$	3,453,906	$	2,552,039
Interest-bearing transaction deposits		2,938,109		2,263,093
Saving deposits and money market deposits		3,398,917		2,743,369
Time deposits		1,026,935		1,119,348
Total deposits	$	10,817,867	$	8,677,849

Additional information about our deposits is as follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
Brokered savings deposits and money market deposits	$	2,002	$	2,251
Brokered time deposits		264		5,257
Aggregate amount of time deposits with a minimum denomination of $100,000		504,367		568,735
Aggregate amount of time deposits with a minimum denomination that meets or exceeds the FDIC insurance limit of $250,000		156,419		192,563

Schedule of maturities of time deposits

As of September 30, 2021, the scheduled maturities of time deposits are as follows (dollars in thousands):


	As of
	September 30,
	2021
Time deposits by schedule of maturities
October 1, 2021 – September 30, 2022	$	719,932
October 1, 2022 – September 30, 2023		188,639
October 1, 2023 – September 30, 2024		85,339
October 1, 2024 – September 30, 2025		20,008
October 1, 2025 – September 30, 2026		12,280
Thereafter		737
Total time deposits	$	1,026,935

Borrowings

9 Months Ended

Sep. 30, 2021

Borrowings

Borrowings

Note 6: Borrowings

Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature daily. Securities sold under agreements to repurchase are reflected at the amount of cash received in connection with the transaction. The underlying securities are held by the Company’s safekeeping agent. The Company may be required to provide additional collateral based on fluctuations in the fair value of the underlying securities. Securities sold under agreements to repurchase were as follows (dollars in thousands):


	As of
	September 30,			December 31,
	2021			2020
Securities sold under agreements to repurchase	$	241,242		$	175,614
Weighted average rate for securities sold under agreements to repurchase		0.08	%		0.13	%

On May 28, 2021, the Company entered into a Second Amended and Restated Credit Agreement, pursuant to which the Company has access to (i) a $40.0 million revolving line of credit with a termination date of April 30, 2022, and (ii) a $60.0 million term loan with a maturity date of May 31, 2026. The loans have an annual interest rate of 1.75% plus the one-month LIBOR rate. Proceeds of the term loan were used to fund a part of the cash portion of the merger consideration related to the acquisition of CAC and for general corporate purposes. The revolving credit facility incurs a non-usage fee based on any undrawn amounts. As of September 30, 2021, there was no balance outstanding on the revolving credit facility and a total of $57.0 million outstanding on the term loan.

Short-term borrowings are summarized as follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
Short-term borrowings
FHLB advances maturing in less than one year from date of origination, and the current portion of long-term FHLB advances due within 12 months	$	5,673	$	4,658
Term Loan, current portion due within 12 months		12,000		—
Total short-term debt	$	17,673	$	4,658

Federal funds purchased are short-term borrowings that generally mature between one and 90 days. The Company had no federal funds purchased as of September 30, 2021 or December 31, 2020.

Long-term debt is summarized as follows (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
Long-term debt
Notes payable, FHLB, original maturity of 5 years, collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock	$	4,233	$	4,757
Term Loan		45,000		—
Total long-term debt	$	49,233	$	4,757

As of September 30, 2021, and December 31, 2020, funds borrowed from the FHLB, listed above, consisted of one variable-rate note maturing May 2023, with an interest rate of 3.04%.

On May 25, 2017, the Company issued $40.0 million of 3.75% senior notes that mature on May 25, 2022. The senior notes are payable semi-annually on each May 25 and November 25, commencing on November 25, 2017. The senior notes are not subject to optional redemption by the Company. Additionally, on May 25, 2017, the Company issued $60.0 million of fixed-to-floating rate subordinated notes that mature on May 25, 2027. The subordinated notes, which qualify as Tier 2 capital for First Busey, bear interest at an annual rate of 4.75% for the first five years after issuance and thereafter bear interest at a floating rate equal to three-month LIBOR plus a spread of 2.919%, as calculated on each applicable determination date. The subordinated notes are payable semi-annually on each May 25 and November 25, commencing on November 25, 2017, during the five-year fixed-term, and thereafter on February 25, May 25, August 25, and November 25 of each year, commencing on August 25, 2022. The subordinated notes have an optional redemption in whole or in part on any interest payment date on or after May 25, 2022. The senior notes and subordinated notes are unsecured obligations of the Company.

On June 1, 2020, the Company 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 First Busey, 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. The subordinated notes are 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.

Unamortized debt issuance costs related to senior notes and subordinated notes are presented in the following table (dollars in thousands):


	As of
	September 30,		December 31,
	2021		2020
Unamortized debt issuance costs
Senior notes issued in 2017	$	90	$	191
Subordinated notes issued in 2017		575		651
Subordinated notes issued in 2020		1,788		2,123
Total unamortized debt issuance costs	$	2,453	$	2,965

Fair Value Measurements - Segregated by Level of Valuation Inputs (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Financial assets:
Portfolio loans, net	$ 7,057,833	$ 6,713,129
Financial liabilities:
Short-term borrowings	17,673	4,658
Junior subordinated debt owed to unconsolidated trusts	71,593	71,468
Level 1 \| Carrying Amount
Financial assets:
Cash and cash equivalents	883,845	688,537
Level 1 \| Fair Value
Financial assets:
Cash and cash equivalents	883,845	688,537
Level 2 \| Carrying Amount
Financial assets:
Accrued interest receivable	33,545	33,240
Financial liabilities:
Time deposits	1,026,935	1,119,348
Securities sold under agreements to repurchase	241,242	175,614
Short-term borrowings	17,673	4,658
Long-term debt	49,233	4,757
Junior subordinated debt owed to unconsolidated trusts	71,593	71,468
Accrued interest payable	5,435	3,401
Level 2 \| Fair Value
Financial assets:
Accrued interest receivable	33,545	33,240
Financial liabilities:
Time deposits	1,029,879	1,132,107
Securities sold under agreements to repurchase	241,242	175,614
Short-term borrowings	17,671	4,661
Long-term debt	49,323	5,014
Junior subordinated debt owed to unconsolidated trusts	62,840	59,943
Accrued interest payable	5,435	3,401
Level 3 \| Carrying Amount
Financial assets:
Portfolio loans, net	7,057,833	6,713,129
Mortgage servicing rights	9,247	10,912
Other servicing rights	1,680	1,434
Level 3 \| Fair Value
Financial assets:
Portfolio loans, net	7,108,483	6,755,425
Mortgage servicing rights	11,011	11,107
Other servicing rights	2,127	1,966
Level 3 \| Senior notes \| Carrying Amount
Financial liabilities:
Long-term debt	39,910	39,809
Level 3 \| Senior notes \| Fair Value
Financial liabilities:
Long-term debt	40,700	40,104
Level 3 \| Subordinated debt \| Carrying Amount
Financial liabilities:
Long-term debt	182,637	182,226
Level 3 \| Subordinated debt \| Fair Value
Financial liabilities:
Long-term debt	$ 196,350	$ 187,697

Operating Segments and Related Information (Tables)

9 Months Ended

Sep. 30, 2021

Operating Segments and Related Information

Summary of information relating to operating segments


	Goodwill				Total Assets
	As of				As of
	September 30,		December 31,		September 30,		December 31,
	2021		2020		2021		2020
Operating segment
Banking	$	294,666	$	288,436	$	12,788,398	$	10,462,673
Remittance Processing		8,992		8,992		47,528		46,553
Wealth Management		14,108		14,108		60,496		46,504
Other		—		—		2,908		(11,683)
Consolidated total	$	317,766	$	311,536	$	12,899,330	$	10,544,047



	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net interest income
Banking	$	74,672	$	73,330	$	211,377	$	218,221
Remittance Processing		19		21		60		59
Wealth Management		—		—		—		—
Other		(3,936)		(3,598)		(11,247)		(8,281)
Total net interest income	$	70,755	$	69,753	$	200,190	$	209,999

Noninterest income
Banking	$	14,976	$	18,523	$	42,798	$	45,717
Remittance Processing		5,030		4,287		14,700		12,318
Wealth Management		13,746		10,662		39,333		32,681
Other		(493)		(1,187)		884		(2,950)
Total noninterest income	$	33,259	$	32,285	$	97,715	$	87,766

Noninterest expense
Banking	$	59,520	$	44,863	$	150,032	$	135,037
Remittance Processing		4,519		3,523		13,086		9,669
Wealth Management		7,679		6,497		20,961		19,725
Other		1,769		1,659		6,532		5,693
Total noninterest expense	$	73,487	$	56,542	$	190,611	$	170,124

Income before income taxes
Banking	$	31,996	$	41,441	$	114,507	$	93,245
Remittance Processing		530		785		1,674		2,708
Wealth Management		6,068		4,165		18,373		12,956
Other		(6,198)		(6,444)		(16,895)		(16,924)
Total income before income taxes	$	32,396	$	39,947	$	117,659	$	91,985

Net income
Banking	$	25,123	$	31,744	$	89,889	$	72,653
Remittance Processing		384		578		1,214		1,966
Wealth Management		4,719		3,166		14,285		9,847
Other		(4,285)		(4,659)		(11,865)		(12,467)
Total net income	$	25,941	$	30,829	$	93,523	$	71,999

Derivative Financial Instruments - Forward Sales Commitments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Interest rate lock commitments \| Other assets
Derivative Financial Instruments
Notional amount	$ 31,480		$ 31,480		$ 45,004
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other assets	538		538		1,201
Interest rate lock commitments \| Other liabilities
Derivative Financial Instruments
Notional amount	117		117		118
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other liabilities	1		1		1
Forward sales commitments \| Other assets
Derivative Financial Instruments
Notional amount	117		117		978
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other assets	1		1		32
Forward sales commitments \| Other liabilities
Derivative Financial Instruments
Notional amount	49,418		49,418		84,964
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other liabilities	1,439		1,439		2,662
Interest rate lock commitments and forward sales commitments \| Designated as hedging instrument
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income
Net gains (losses)	(901)	$ (2,469)	(2,114)	$ (7,232)
Interest rate lock commitments and forward sales commitments \| Other assets \| Designated as hedging instrument
Derivative Financial Instruments
Notional amount	31,597		31,597		45,982
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other assets	539		539		1,233
Interest rate lock commitments and forward sales commitments \| Other liabilities \| Designated as hedging instrument
Derivative Financial Instruments
Notional amount	49,535		49,535		85,082
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other liabilities	1,440		1,440		$ 2,663
Mortgage revenue \| Interest rate lock commitments \| Designated as hedging instrument
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income
Gross gains	537	1,405	1,502	8,467
Mortgage revenue \| Forward sales commitments \| Designated as hedging instrument
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income
Gross (losses)	$ (1,438)	$ (3,874)	$ (3,616)	$ (15,699)

Securities - General Disclosures (Details) $ in Thousands	3 Months Ended		9 Months Ended
Securities - General Disclosures (Details) $ in Thousands	Sep. 30, 2021 USD ($) security shares	Sep. 30, 2020 USD ($)	Sep. 30, 2021 USD ($) security shares	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($) security shares
Debt securities available for sale
Amortized Cost	$ 3,997,424		$ 3,997,424		$ 2,211,543
Gross Unrealized Gains	30,976		30,976		50,317
Gross Unrealized Losses	(31,156)		(31,156)		(673)
Fair Value	3,997,244		3,997,244		2,261,187
Debt securities available for sale, Amortized Cost
Due in one year or less	103,158		103,158
Due after one year through five years	603,868		603,868
Due after five years through ten years	385,479		385,479
Due after ten years	2,904,919		2,904,919
Amortized Cost	3,997,424		3,997,424		2,211,543
Debt securities available for sale, Fair Value
Due in one year or less	103,787		103,787
Due after one year through five years	608,074		608,074
Due after five years through ten years	393,540		393,540
Due after ten years	2,891,843		2,891,843
Fair Value	3,997,244		3,997,244		2,261,187
Realized gains and losses on sales of debt securities
Gross security gains		$ 11	524	$ 1,718
Gross security (losses)	(5)		(410)	(8)
Net gains (losses) on sales of debt securities	(5)	$ 11	114	$ 1,710
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross	2,324,265		2,324,265		221,913
Continuous unrealized losses existing for greater than 12 months, gross	8,631		8,631		5,096
Total, gross	2,332,896		2,332,896		227,009
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross	(31,068)		(31,068)		(621)
Continuous unrealized losses existing greater than 12 months, gross	(88)		(88)		(52)
Total, gross	$ (31,156)		$ (31,156)		$ (673)
Debt security portfolio \| shares	1,274		1,274		1,114
Number of securities in unrealized loss position \| security	294		294		23
Securities in unrealized loss position as a percentage of aggregate carrying value of investments	1.30%		1.30%		0.30%
Collateral
Realized gains and losses on sales of debt securities
Carrying amount of debt securities pledged as collateral for public deposits, securities sold under agreements to repurchase and for other purposes	$ 729,200		$ 729,200		$ 628,000
U.S. Treasury securities
Debt securities available for sale
Amortized Cost	185,636		185,636		27,481
Gross Unrealized Gains	72		72		356
Gross Unrealized Losses	(255)		(255)
Fair Value	185,453		185,453		27,837
Debt securities available for sale, Amortized Cost
Amortized Cost	185,636		185,636		27,481
Debt securities available for sale, Fair Value
Fair Value	185,453		185,453		27,837
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross	180,317		180,317
Total, gross	180,317		180,317
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross	(255)		(255)
Total, gross	(255)		(255)
Obligations of U.S. government corporations and agencies
Debt securities available for sale
Amortized Cost	37,784		37,784		67,406
Gross Unrealized Gains	1,213		1,213		2,162
Gross Unrealized Losses					(49)
Fair Value	38,997		38,997		69,519
Debt securities available for sale, Amortized Cost
Amortized Cost	37,784		37,784		67,406
Debt securities available for sale, Fair Value
Fair Value	38,997		38,997		69,519
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for greater than 12 months, gross					4,957
Total, gross					4,957
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing greater than 12 months, gross					(49)
Total, gross					(49)
Obligations of states and political subdivisions
Debt securities available for sale
Amortized Cost	288,023		288,023		292,940
Gross Unrealized Gains	8,743		8,743		11,779
Gross Unrealized Losses	(754)		(754)		(8)
Fair Value	296,012		296,012		304,711
Debt securities available for sale, Amortized Cost
Amortized Cost	288,023		288,023		292,940
Debt securities available for sale, Fair Value
Fair Value	296,012		296,012		304,711
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross	55,434		55,434		762
Total, gross	55,434		55,434		762
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross	(754)		(754)		(8)
Total, gross	(754)		(754)		(8)
Commercial mortgage-backed securities
Debt securities available for sale
Amortized Cost	607,097		607,097		408,716
Gross Unrealized Gains	5,278		5,278		10,212
Gross Unrealized Losses	(9,078)		(9,078)		(312)
Fair Value	603,297		603,297		418,616
Debt securities available for sale, Amortized Cost
Amortized Cost	607,097		607,097		408,716
Debt securities available for sale, Fair Value
Fair Value	603,297		603,297		418,616
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross	434,220		434,220		129,655
Continuous unrealized losses existing for greater than 12 months, gross	3,063		3,063
Total, gross	437,283		437,283		129,655
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross	(9,036)		(9,036)		(312)
Continuous unrealized losses existing greater than 12 months, gross	(42)		(42)
Total, gross	(9,078)		(9,078)		(312)
Residential mortgage-backed securities
Debt securities available for sale
Amortized Cost	2,108,388		2,108,388		1,344,047
Gross Unrealized Gains	13,973		13,973		24,571
Gross Unrealized Losses	(19,753)		(19,753)		(303)
Fair Value	2,102,608		2,102,608		1,368,315
Debt securities available for sale, Amortized Cost
Amortized Cost	2,108,388		2,108,388		1,344,047
Debt securities available for sale, Fair Value
Fair Value	2,102,608		2,102,608		1,368,315
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross	1,392,160		1,392,160		89,997
Continuous unrealized losses existing for greater than 12 months, gross	5,568		5,568		139
Total, gross	1,397,728		1,397,728		90,136
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross	(19,707)		(19,707)		(300)
Continuous unrealized losses existing greater than 12 months, gross	(46)		(46)		(3)
Total, gross	(19,753)		(19,753)		(303)
Asset-backed securities
Debt securities available for sale
Amortized Cost	468,618		468,618
Gross Unrealized Gains	323		323
Gross Unrealized Losses	(134)		(134)
Fair Value	468,807		468,807
Debt securities available for sale, Amortized Cost
Amortized Cost	468,618		468,618
Debt securities available for sale, Fair Value
Fair Value	468,807		468,807
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross	51,183		51,183
Total, gross	51,183		51,183
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross	(134)		(134)
Total, gross	(134)		(134)
Corporate debt securities
Debt securities available for sale
Amortized Cost	301,878		301,878		70,953
Gross Unrealized Gains	1,374		1,374		1,237
Gross Unrealized Losses	(1,182)		(1,182)		(1)
Fair Value	302,070		302,070		72,189
Debt securities available for sale, Amortized Cost
Amortized Cost	301,878		301,878		70,953
Debt securities available for sale, Fair Value
Fair Value	302,070		302,070		72,189
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross	210,951		210,951		1,499
Total, gross	210,951		210,951		1,499
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross	(1,182)		(1,182)		(1)
Total, gross	$ (1,182)		$ (1,182)		$ (1)

Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2021

Accumulated Other Comprehensive Income (Loss).

Accumulated Other Comprehensive Income (Loss)

The following tables represent changes in accumulated other comprehensive income (loss) by component, net of tax, for the periods below (dollars in thousands):


		Three Months Ended September 30,
	2021						2020
		Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
Unrealized gains (losses) on debt securities available for sale
Balance at beginning of period	$	17,013	$	(4,850)	$	12,163	$	55,436	$	(15,802)	$	39,634
Unrealized holding gains (losses) on debt securities available for sale, net		(17,198)		4,902		(12,296)		(2,392)		682		(1,710)
Amounts reclassified from accumulated other comprehensive income, net		5		(1)		4		(11)		3		(8)
Balance at end of period	$	(180)	$	51	$	(129)	$	53,033	$	(15,117)	$	37,916

Unrealized gains (losses) on cash flow hedges
Balance at beginning of period	$	(2,012)	$	574	$	(1,438)	$	(3,633)	$	1,036	$	(2,597)
Unrealized holding gains (losses) on cash flow hedges, net		(7)		2		(5)		20		(6)		14
Amounts reclassified from accumulated other comprehensive income, net		288		(82)		206		268		(76)		192
Balance at end of period	$	(1,731)	$	494	$	(1,237)	$	(3,345)	$	954	$	(2,391)

Total accumulated other comprehensive income (loss)	$	(1,911)	$	545	$	(1,366)	$	49,688	$	(14,163)	$	35,525


	Nine Months Ended September 30,
	2021						2020
		Before Tax		Tax Effect		Net of Tax		Before Tax		Tax Effect		Net of Tax
Unrealized gains (losses) on debt securities available for sale
Balance at beginning of period	$	49,644	$	(14,151)	$	35,493	$	21,192	$	(6,032)	$	15,160
Unrealized holding gains (losses) on debt securities available for sale, net		(49,801)		14,195		(35,606)		33,551		(9,577)		23,974
Amounts reclassified from accumulated other comprehensive income, net		(23)		7		(16)		(1,710)		492		(1,218)
Balance at end of period	$	(180)	$	51	$	(129)	$	53,033	$	(15,117)	$	37,916

Unrealized gains (losses) on cash flow hedges
Balance at beginning of period	$	(3,055)	$	871	$	(2,184)	$	(280)	$	80	$	(200)
Unrealized holding gains (losses) on cash flow hedges, net		470		(134)		336		(3,123)		890		(2,233)
Amounts reclassified from accumulated other comprehensive income, net		854		(243)		611		58		(16)		42
Balance at end of period	$	(1,731)	$	494	$	(1,237)	$	(3,345)	$	954	$	(2,391)

Total accumulated other comprehensive income (loss)	$	(1,911)	$	545	$	(1,366)	$	49,688	$	(14,163)	$	35,525

Derivative Financial Instruments - Net Gains (Losses) Recorded in Accumulated Other Comprehensive Income (Loss) (Details) - Interest rate contract - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Derivative [Line Items]
Cash pledged to secure obligations	$ 1,800		$ 1,800		$ 3,200
Cash Flow Hedging
Derivative [Line Items]
Gain (loss) recognized in OCI, net of tax	(5)	$ 14	336	$ (2,233)
(Gain) loss reclassified from OCI to interest expense, net of tax	206	192	611	42
Net change in unrealized gains (losses) on cash flow hedges	$ 201	$ 206	$ 947	$ (2,191)

Deposits (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Deposits
Demand deposits, noninterest-bearing	$ 3,453,906	$ 2,552,039
Interest-bearing transaction deposits	2,938,109	2,263,093
Saving deposits and money market deposits	3,398,917	2,743,369
Time deposits	1,026,935	1,119,348
Total deposits	10,817,867	8,677,849
Brokered saving deposits and money market deposits	2,002	2,251
Brokered time deposits	264	5,257
Aggregate amount of time deposits with a minimum denomination of $100,000	504,367	568,735
Aggregate amount of time deposits with a minimum denomination that meets or exceeds the FDIC insurance limit of $250,000	156,419	192,563
Maturities of time deposits
October 1, 2021 - September 30, 2022	719,932
October 1, 2021 - September 30, 2022	188,639
October 1, 2023 - September 30, 2024	85,339
October 1, 2024 - September 30, 2025	20,008
October 1, 2025 - September 30, 2026	12,280
Thereafter	737
Total time deposits	$ 1,026,935	$ 1,119,348