View Filing Data

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2011	Mar. 09, 2012	Jun. 30, 2011
Document and Entity Information
Entity Registrant Name	FIRST BUSEY CORP /NV/
Entity Central Index Key	0000314489
Document Type	10-K
Document Period End Date	Dec. 31, 2011
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 421.2
Entity Common Stock, Shares Outstanding		86,620,406
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
ASSETS
Cash and due from banks (Interest-bearing 2011 $219,879; 2010 $348,264)	$ 315,053	$ 418,965
Securities available for sale	831,749	599,459
Loans held for sale	15,249	49,684
Loans (net of allowance for loan losses 2011 $58,506; 2010 $76,038)	1,977,589	2,243,055
Premises and equipment	69,398	73,218
Goodwill	20,686	20,686
Other intangible assets	16,018	19,556
Cash surrender value of bank owned life insurance	37,882	37,425
Other real estate owned (OREO)	8,452	9,160
Deferred tax asset, net	48,236	64,240
Other assets	61,810	69,555
Total assets	3,402,122	3,605,003
Deposits:
Noninterest-bearing	503,118	460,661
Interest-bearing	2,260,336	2,455,705
Total deposits	2,763,454	2,916,366
Securities sold under agreements to repurchase	127,867	138,982
Long-term debt	19,417	43,159
Junior subordinated debt owed to unconsolidated trusts	55,000	55,000
Other liabilities	27,117	30,991
Total liabilities	2,992,855	3,184,498
Commitments and contingencies (see Note 18 - Commitments, Contingencies and Credit Risk)
Stockholders' Equity
Common stock, $.001 par value, authorized 200,000,000 shares; shares issued - 2011 88,287,132; 2010 80,790,132	88	81
Surplus	594,009	562,375
Retained earnings (deficit)	(238,085)	(249,418)
Accumulated other comprehensive income	13,124	9,032
Total stockholders' equity before treasury stock and unearned ESOP shares	441,800	453,522
Common stock shares held in treasury at cost - 2011 1,646,726; 2010 1,650,605	(32,116)	(32,183)
Unearned ESOP shares - 2011 20,000; 2010 40,000	(417)	(834)
Total stockholders' equity	409,267	420,505
Total liabilities and stockholders' equity	3,402,122	3,605,003
Series C Preferred stock
Stockholders' Equity
Preferred stock	$ 72,664
Series T Preferred stock
Stockholders' Equity
Preferred stock		99,590
Series B Preferred stock
Stockholders' Equity
Preferred stock		$ 31,862

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
Cash and due from banks, Interest-bearing (in dollars)	$ 219,879	$ 348,264
Loans, allowance for loan losses (in dollars)	$ 58,506	$ 76,038
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	88,287,132	80,790,132
Common stock shares held in treasury	1,646,726	1,650,605
Unearned ESOP, shares	20,000	40,000
Series C Preferred stock
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	72,664	0
Preferred stock, shares issued	72,664	0
Preferred stock, shares outstanding	72,664	0
Preferred stock, liquidation value (in dollars per share)	$ 1,000.00	$ 1,000.00
Series T Preferred stock
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	100,000
Preferred stock, shares outstanding	0	100,000
Preferred stock, liquidation value (in dollars per share)	$ 1,000.00	$ 1,000.00
Series B Preferred stock
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	318.6225	318.6225
Preferred stock, shares issued	0	318.6225
Preferred stock, shares outstanding	0	318.6225
Preferred stock, liquidation value (in dollars per share)	$ 100,000.00	$ 100,000.00

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Interest income:
Interest and fees on loans	$ 114,791	$ 138,860	$ 161,971
Interest and dividends on investment securities:
Taxable interest income	15,192	14,344	19,187
Non-taxable interest income	2,836	2,979	3,352
Total interest income	132,819	156,183	184,510
Interest expense:
Deposits	18,660	32,714	60,079
Securities sold under agreements to repurchase	367	554	1,093
Short-term borrowings	38	86	1,136
Long-term debt	1,442	2,930	4,900
Junior subordinated debt owed to unconsolidated trusts	1,919	2,748	2,901
Total interest expense	22,426	39,032	70,109
Net interest income	110,393	117,151	114,401
Provision for loan losses	20,000	42,000	251,500
Net interest income (loss) after provision for loan losses	90,393	75,151	(137,099)
Other income:
Trust fees	15,657	14,231	12,817
Commissions and brokers' fees, net	1,858	1,756	1,843
Remittance processing	9,196	9,349	13,032
Service charges on deposit accounts	12,616	11,490	12,358
Other service charges and fees	5,298	5,102	4,728
Gain on sales of loans	10,945	16,130	12,379
Security gains, net	170	1,018	130
Other	3,275	3,677	8,727
Total other income	59,015	62,753	66,014
Other expenses:
Salaries and wages	43,344	41,219	44,519
Employee benefits	9,896	9,693	9,086
Net occupancy expense of premises	8,897	9,135	9,886
Furniture and equipment expenses	5,277	5,962	7,288
Data processing	8,635	7,977	7,922
Amortization of intangible assets	3,538	4,088	4,361
Regulatory expense	4,109	6,978	8,580
Goodwill impairment			208,164
OREO expense	1,192	1,872	2,761
Other	19,677	18,286	25,128
Total other expenses	104,565	105,210	327,695
Income (loss) before income taxes	44,843	32,694	(398,780)
Income taxes	14,970	9,464	(75,667)
Net income (loss)	29,873	23,230	(323,113)
Preferred stock dividends and discount accretion	5,342	5,170	4,767
Income (loss) available for common stockholders	$ 24,531	$ 18,060	$ (327,880)
Basic earnings (loss) per share (in dollars per share)	$ 0.29	$ 0.27	$ (7.85)
Diluted earnings (loss) per share (in dollars per share)	$ 0.29	$ 0.27	$ (7.85)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Surplus	Retained Earnings (Deficit)	Accumulated Other Comprehensive Income	Treasury Stock	Unearned ESOP Shares	Comprehensive Income (Loss)
Balance at Dec. 31, 2008	$ 454,817		$ 38	$ 393,005	$ 85,810	$ 9,837	$ (32,205)	$ (1,668)
Comprehensive income (loss):
Net income (loss)	(323,113)				(323,113)				$ (323,113)
Other comprehensive income, net of tax:
Unrealized net holding gains (losses) arising during the period, net of tax (benefit) of $3,298, $550 and ($620) for the year 2011, 2010 and 2009, respectively	(947)								(947)
Reclassification adjustment, net of tax (benefit) of ($70), ($404) and ($52) for the year 2011, 2010 and 2009, respectively	(78)								(78)
Other comprehensive income (loss), net of tax (benefit) of $3,228, $146 and ($672) for the year 2011, 2010 and 2009, respectively	(1,025)					(1,025)			(1,025)
Comprehensive income (loss)	(324,138)								(324,138)
Issuance of 100,000 shares of preferred stock and warrants	100,000	$ 99,213		787
Issuance of 12,718,635 and 30,525,000 shares of common stock as a result of a registered direct offering, net of offering costs for the year 2010 and 2009, respectively	116,854		30	116,824
Issuance of 1,282 shares of treasury stock for option exercise and related tax benefit	(10)			(32)			22
Cash dividends common stock at $0.16, $0.16 and $.40 per share for the year 2011, 2010 and 2009, respectively	(15,153)				(15,153)
Employee stock ownership plan shares allocated	137			(280)				417
Stock based employee compensation	141			141
Preferred stock dividends and discount accretion	(4,520)	247		(247)	(4,520)
Balance at Dec. 31, 2009	328,128	99,460	68	510,198	(256,976)	8,812	(32,183)	(1,251)
Comprehensive income (loss):
Net income (loss)	23,230				23,230				23,230
Other comprehensive income, net of tax:
Unrealized net holding gains (losses) arising during the period, net of tax (benefit) of $3,298, $550 and ($620) for the year 2011, 2010 and 2009, respectively	834								834
Reclassification adjustment, net of tax (benefit) of ($70), ($404) and ($52) for the year 2011, 2010 and 2009, respectively	(614)								(614)
Other comprehensive income (loss), net of tax (benefit) of $3,228, $146 and ($672) for the year 2011, 2010 and 2009, respectively	220					220			220
Comprehensive income (loss)	23,450								23,450
Issuance of 72,664 shares of Series C preferred stock and 318.6225 shares of preferred stock or the year 2011 and 2010, respectively	31,862	31,862
Issuance of 12,718,635 and 30,525,000 shares of common stock as a result of a registered direct offering, net of offering costs for the year 2010 and 2009, respectively	52,454		13	52,441
Cash dividends common stock at $0.16, $0.16 and $.40 per share for the year 2011, 2010 and 2009, respectively	(10,617)				(10,617)
Stock dividends restricted stock units at $0.16 and $0.08 per share for the year 2011 and 2010, respectively	(15)				(15)
Employee stock ownership plan shares allocated	89			(328)				417
Stock based employee compensation	194			194
Preferred stock dividends and discount accretion	(5,040)	130		(130)	(5,040)
Balance at Dec. 31, 2010	420,505	131,452	81	562,375	(249,418)	9,032	(32,183)	(834)
Comprehensive income (loss):
Net income (loss)	29,873				29,873				29,873
Other comprehensive income, net of tax:
Unrealized net holding gains (losses) arising during the period, net of tax (benefit) of $3,298, $550 and ($620) for the year 2011, 2010 and 2009, respectively	4,192								4,192
Reclassification adjustment, net of tax (benefit) of ($70), ($404) and ($52) for the year 2011, 2010 and 2009, respectively	(100)								(100)
Other comprehensive income (loss), net of tax (benefit) of $3,228, $146 and ($672) for the year 2011, 2010 and 2009, respectively	4,092					4,092			4,092
Comprehensive income (loss)	33,965								$ 33,965
Conversion of 318.6225 shares of Series B preferred stock to 7,497,000 shares of common stock		(31,862)	7	31,855
Repurchase of 100,000 shares of Series T preferred stock	(100,000)	(99,590)		(410)
Issuance of 72,664 shares of Series C preferred stock and 318.6225 shares of preferred stock or the year 2011 and 2010, respectively	72,664	72,664
Issuance of 3,879 shares of treasury stock for employee stock purchase plan	18			(49)			67
Cash dividends common stock at $0.16, $0.16 and $.40 per share for the year 2011, 2010 and 2009, respectively	(13,555)				(13,555)
Stock dividends restricted stock units at $0.16 and $0.08 per share for the year 2011 and 2010, respectively	15			68	(53)
Employee stock ownership plan shares allocated	99			(318)				417
Stock based employee compensation	488			488
Preferred stock dividends and discount accretion	(4,932)				(4,932)
Balance at Dec. 31, 2011	$ 409,267	$ 72,664	$ 88	$ 594,009	$ (238,085)	$ 13,124	$ (32,116)	$ (417)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Unrealized net holding gains (losses) arising during the period, tax (benefit) (in dollars)	$ 3,298	$ 550	$ (620)
Reclassification adjustment, tax (benefit) (in dollars)	(70)	(404)	(52)
Other comprehensive income (loss), tax (benefit) (in dollars)	$ 3,228	$ 146	$ (672)
Conversion of Series B preferred stock to common stock, preferred stock shares converted	318.6225
Conversion of Series B preferred stock to common stock, common stock shares obtained	7,497,000
Repurchase of Series T preferred stock	100,000
Issuance of shares, preferred stock and warrants			100,000
Issuance of shares, preferred stock	72,664	318.6225
Issuance of shares of common stock as a result of a registered direct offering		12,718,635	30,525,000
Issuance of shares of treasury stock for employee stock purchase plan	3,879
Issuance of shares of treasury stock for option exercise and related tax benefit			1,282
Cash dividends, common stock (in dollars per share)	$ 0.16	$ 0.16	$ 0.40
Stock dividends, restricted stock units (in dollars per share)	$ 0.16	$ 0.08

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash Flows from Operating Activities
Net income (loss)	$ 29,873	$ 23,230	$ (323,113)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based and non-cash compensation	488	194	141
Depreciation and amortization	9,063	10,278	12,249
Provision for loan losses	20,000	42,000	251,500
Fair value adjustment on employee stock ownership plan shares allocated	(318)	(328)	(280)
Provision for deferred income taxes	12,776	2,111	(46,502)
Amortization of security premiums and discounts, net	6,625	4,773	5,160
Security gains, net	(170)	(1,018)	(130)
Gain on sales of loans, net	(10,945)	(16,130)	(12,379)
Settlement of post retirement benefit liabilities			(2,021)
Increase in cash surrender value of bank owned life insurance	(457)	(1,675)	(1,220)
Net (gain) loss on OREO properties	(197)	(516)	1,596
Goodwill impairment			208,164
Increase (decrease) in deferred compensation	48	(17)	28
Change in assets and liabilities:
Decrease (increase) in other assets	7,745	34,559	(33,635)
Decrease in other liabilities	(4,033)	(5,290)	(5,596)
Net cash provided by operating activities before loan originations and sales	70,498	92,171	53,962
Loans originated for sale	(521,970)	(710,102)	(694,812)
Proceeds from sales of loans	567,350	705,701	692,244
Net cash provided by operating activities	115,878	87,770	51,394
Securities available for sale:
Purchases	(374,297)	(252,496)	(205,119)
Proceeds from sales	12,754	43,217	17,030
Proceeds from maturities	127,757	176,108	244,861
Proceeds from sale of Federal Reserve Stock			1,845
Decrease in loans	233,901	362,472	211,365
Purchases of premises and equipment	(2,748)	(2,037)	(4,817)
Proceeds from sales of premises and equipment	1,043	157	1,133
Proceeds from sale of OREO properties	14,831	24,561	12,631
Net cash provided by investing activities	13,241	351,982	278,929
Cash Flows from Financing Activities
Net decrease in certificates of deposit	(202,709)	(410,246)	(350,353)
Net increase in demand deposits, money market and savings accounts	49,797	155,532	14,740
Net decrease in federal funds purchased and securities sold under agreements to repurchase	(11,115)	(3,343)	(40,655)
Net payments on short-term borrowings			(83,000)
Principal payments on long-term debt	(23,325)	(38,500)	(52,000)
Proceeds from issuance of Series T Preferred stock and warrants			100,000
Repurchase of Series T Preferred stock	(100,000)
Proceeds from issuance of Series C Preferred stock	72,664
Proceeds from issuance of Series B Preferred stock, net		31,862
Proceeds from issuance of Common stock, net		52,454	116,854
Cash dividends paid	(18,343)	(15,617)	(18,951)
Net cash used in financing activities	(233,031)	(227,858)	(313,365)
Net (decrease) increase in cash and due from banks	(103,912)	211,894	16,958
Cash and due from banks, beginning	418,965	207,071	190,113
Cash and due from banks, ending	315,053	418,965	207,071
Cash Payments for:
Interest	23,953	43,715	76,073
Income taxes	2,756	1,251
Non-cash Investing and Financing Activities:
Other real estate acquired in settlement of loans	13,926	15,964	18,348
Conversion of Series B Preferred stock to Common stock	31,862
Employee stock ownership plan shares allocated	417	417	417
Non-cash stock option activity			22
Dividends accrued	923	777	$ 722
Biaggi stock warrant conversion		$ 38
Securities available for sale transferred to loans	$ 2,361

Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Significant Accounting Policies

Significant Accounting Policies

Note 1. Significant Accounting Policies

Description of business:

First Busey Corporation (the “Company”) is a Nevada corporation and a financial holding company whose subsidiaries provide retail and commercial banking services, and remittance processing, and offer a full range of financial products and services, including depository, lending, security brokerage services, investment management and fiduciary services, to individual, corporate, institutional and governmental customers through its locations in downstate Illinois, Indianapolis, Indiana and southwest Florida. The Company and its subsidiaries are subject to competition from other financial institutions and non-financial institutions providing financial products and services. The Company and its subsidiaries are also subject to the regulations of certain regulatory agencies and undergo periodic examinations by those regulatory agencies.

The significant accounting and reporting policies for the Company and its subsidiaries follow:

Basis of consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries: Busey Bank (representing the August 2009 merger of Busey Bank, N.A. into Busey Bank) and its wholly-owned subsidiary FirsTech, Inc.; and Busey Wealth Management, Inc. and its wholly-owned subsidiaries Busey Trust Company and Busey Capital Management, Inc. The Company and its subsidiaries maintain various LLCs that hold specific assets for risk mitigation purposes and are consolidated into these financial statements. All significant intercompany balances and transactions have been eliminated in consolidation.

The financial statements also exclude the following wholly-owned variable interest entities: First Busey Statutory Trust II, First Busey Statutory Trust III and First Busey Statutory Trust IV because the Company is not the primary beneficiary.

The consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America and conform to predominant practice within the banking industry.

Use of estimates

In preparing the accompanying consolidated financial statements, the Company’s management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. 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 investment securities, the determination of the allowance for loan losses, including valuation of real estate and other collateral, ability to realize our deferred tax assets and the fair value of reporting unit goodwill.

Comprehensive income

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

Trust assets

Assets held for customers in a fiduciary or agency capacity, other than trust cash on deposit at the Company’s bank subsidiary, are not assets of the Company and, accordingly, are not included in the accompanying consolidated financial statements. Busey Trust Company had assets under care of $3.8 billion and $3.5 billion at December 31, 2011 and 2010, respectively.

Cash flows

For purposes of the consolidated statement of cash flows, cash and due from banks include cash on hand and amounts due from banks. Cash flows from Federal funds purchased and sold, short-term borrowings, and securities sold under agreements to repurchase are reported net, since their original maturities are less than three months. Cash flows from loans and deposits are also reported net.

Securities

Securities classified as available for sale are those debt securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity, and marketable equity securities. Any decision to sell a security classified as available for sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations and other similar factors. Securities available for sale are carried at fair value, with temporary unrealized gains and losses excluded from earnings and reported in other comprehensive income.

Declines in the fair value of available for sale securities below their amortized cost are evaluated to determine whether the loss is temporary or other-than-temporary. If the Company (a) has the intent to sell a debt security or (b) more likely than not will be required to sell the debt security before its anticipated recovery, then the Company recognizes the entire unrealized loss in earnings as an other-than-temporary loss. If neither of these conditions are met, the Company evaluates whether a credit loss exists. The impairment is separated into (a) the amount of the total impairment related to the credit loss and (b) the amount of total impairment related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings and the amount related to all other factors is recognized in other comprehensive income.

The Company also evaluates whether the decline in fair value of an equity security is temporary or other-than-temporary. In determining whether an unrealized loss on an equity security is temporary or other-than-temporary, management considers various factors, including the magnitude and duration of the impairment, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to hold the equity security to forecasted recovery.

Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

Loans held for sale

Loans held for sale are those loans the Company has the intent to sell in the foreseeable future. They consist of mortgage loans conforming to established guidelines and held for sale to investors and the secondary mortgage market. Loans held for sale are carried at the lower of aggregate cost or estimated fair value, as determined by aggregate outstanding commitments from investors or current investor yield requirements. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. Gains and losses on sales of loans are recognized at settlement dates and are determined by the difference between the sales proceeds and the carrying amount of the loans after allocating cost to servicing rights retained.

The Company enters into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (rate lock commitments). Rate lock commitments on mortgage loans that are intended to be sold are considered to be derivatives. Accordingly, such commitments along with any related fees received from potential borrowers are recorded at fair value, with changes in fair value recorded in the net gain or loss on sale of mortgage loans. Fair value is based on the change in estimated fair value of the underlying mortgage loan. The fair value is subject to change primarily due to changes in interest rates and is considered immaterial to the consolidated financial statements.

Loan servicing

Servicing assets are recognized as separate assets when rights are acquired or retained through the sale of mortgage loans. Mortgage servicing rights are initially recorded at fair value. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. Capitalized servicing rights are reported in other assets and are amortized into other income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets.

Mortgage servicing rights are periodically evaluated for impairment based on the fair value of those rights as compared to book value. Fair values are estimated using discounted cash flows based on current expected future prepayment rates. For purposes of measuring impairment, the rights must be stratified by one or more predominant risk characteristics of the underlying loans. The Company stratifies its capitalized mortgage servicing rights based on the origination date, interest rate, and type of the underlying loans. The amount of impairment recognized is the amount, if any, by which the amortized cost of the rights for each stratum exceeds its fair value. If the Company later determines that all or a portion of the impairment no longer exists for a particular group of loans, a reduction of the allowance may be recorded as an increase to income.

Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal and are recorded as income when earned. The amortization of mortgage servicing rights is netted against loan servicing fee income.

Loans

Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are stated at the amount of outstanding unpaid principal, adjusted for chargeoffs, the allowance for loan losses, and any deferred origination fees or costs on loans.

Loan origination and commitment fees, net of certain direct loan origination costs, are deferred and the net amount amortized as an adjustment of the related loan’s yield. The Company is generally amortizing these amounts over the contractual life. However, for long-term, fixed-rate mortgages the Company has anticipated prepayments and assumes an estimated economic life of 5 years or less. Commitment fees and costs are generally based upon a percentage of a customer’s unused line of credit and fees related to standby letters of credit and are recognized over the commitment period when the likelihood of exercise is remote. If the commitment is subsequently exercised during the commitment period, the remaining unamortized commitment fee at the time of exercise is recognized over the life of the loan as an adjustment of the yield.

Interest is accrued daily on the outstanding balances. The accrual of interest on loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in the process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

Interest accrued in the current year but not collected for loans that are placed on non-accrual status or charged-off is reversed against interest income. Interest accrued during the prior year but not collected for loans that are placed on non-accrual status or charged-off is charged against the allowance for loan losses. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Allowance for loan losses

The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance for loan losses when management believes the uncollectibility of the loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

In addition, regulatory agencies, as an integral part of their examination process, periodically review the allowance for loan losses, and may require the Company to make additions to the allowance based on their judgment about information available to them at the time of their examinations.

The allowance consists of specific and general components. The specific component considers loans that are classified as impaired. For such loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying amount of that loan. The general component covers non-classified loans and classified loans not considered impaired, and is based on historical loss experience adjusted for qualitative factors. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss experience.

Premises and equipment

Land is stated at cost less accumulated depreciation of depreciable land improvements. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed principally by the straight-line method over the estimated useful lives of the assets. The estimated useful lives for premises and equipment are:

Asset Description		Estimated Useful Life
Buildings and improvements		3 – 40 years
Furniture and equipment		2 – 10 years

Long-lived assets

Long-lived assets, including premises and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows from operations of the asset are less than the carrying value of the asset. The cash flows used for this analysis are those directly associated with and that are expected to arise as a direct result of the use and eventual disposition of the asset. An impairment loss would be measured by the amount by which the carrying value of the asset exceeds its fair value.

Other real estate owned

Other real estate owned (OREO) represents properties acquired through foreclosure or other proceedings in settlement of loans. OREO is held for sale and is recorded at the date of foreclosure at the fair value of the properties less estimated costs of disposal, which establishes a new cost basis. Any write-down to fair value at the time of transfer to OREO is charged to the allowance for loan losses. Property is evaluated regularly to ensure the recorded amount is supported by its current fair value, and valuation allowances to reduce the carrying amount to fair value less estimated costs to dispose are recorded as necessary. Revenue, expense, gains and losses from the operations of foreclosed assets are included in operations.

Goodwill

Goodwill represents the excess of the cost of a business acquired over the fair value of the new assets acquired. Goodwill is not amortized, but is subject to at least annual impairment assessments. The Company has established December 31 as the annual impairment assessment date. Accounting standards require a two step valuation approach to test for goodwill impairment. The first step is a screen for potential impairment and the second step measures the amount of impairment, if any. We estimate the fair value of our reporting units as of the measurement date utilizing valuation methodologies including the comparable transactions approach and the control premium approach. We then compare the estimated fair value of the reporting unit to the current carrying value of the reporting unit to determine if goodwill impairment had occurred as of the measurement date. As there was no impairment determined in step one at December 31, 2011 and 2010, step two of the accounting guidance is not required. It is possible we will evaluate our goodwill for impairment on a more frequent basis than annually. Future evaluations may result in further impairment.

During 2009, the Company recorded a full impairment of the goodwill associated with its banking operations totaling $208.2 million. See Note 7 — Goodwill and Other Intangible Assets for further discussion.

Cash surrender value of bank-owned life insurance

The Company has purchased life insurance policies on certain executives and senior officers. Life insurance is recorded at its cash surrender value.

ASC Topic 715, “Compensation—Retirement Benefits” required that an employer recognize a liability for post-employment benefits promised to an employee based on an arrangement between an employer and an employee. In an endorsement split-dollar arrangement, the employer owns and controls the policy, and the employer and employee split the life insurance policy’s cash surrender value and/or death benefits. If the employer agrees to maintain a life insurance policy during the employee’s retirement, the present value of the cost of maintaining the insurance policy would be accrued over the employee’s active service period. Similarly, if the employer agrees to provide the employee with a death benefit, the present value of the death benefit would be accrued over the employee’s active service period. During 2009, the Bank recorded a $2.0 million gain related to a partial settlement of the ASC Topic 715 post retirement obligations. In conjunction with the partial settlement, the ongoing expense associated with the new authoritative guidance under ASC Topic 715 was insignificant.

Transfers of financial assets

Transfers of financial assets are accounted for as sales only when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when: (1) the assets have been isolated from the Company, (2) the transferee obtains the right to pledge or exchange the assets it received, and no condition both constrains the transferee from taking advantage of its right to pledge or exchange and provides more than a modest benefit to the transferor, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets.

Income taxes

The Company is subject to income taxes in the U.S. federal and various state jurisdictions. The Company and its subsidiaries file consolidated federal and state income tax returns with each subsidiary computing its taxes on a separate entity basis. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. With few exceptions, the Company is no longer subject to U.S. federal, state or local tax examinations by tax authorities for the years before 2008. The provision for income taxes is based on income as reported in the financial statements.

We have maintained significant net deferred tax assets for deductible temporary differences, the largest of which relates to the net operating loss carryforward and the allowance for loan losses. For income tax return purposes, only net charge-offs are deductible, not the provision for loan losses. Under generally accepted accounting principles, a valuation allowance is required to be recognized if it is “more likely than not” that the deferred tax asset will not be realized. The determination of the recoverability of the deferred tax assets is highly subjective and dependent upon judgment concerning management’s evaluation of both positive and negative evidence, the forecasts of future income, applicable tax planning strategies, and assessments of the current and future economic and business conditions. We consider both positive and negative evidence regarding the ultimate recoverability of our deferred tax assets. Positive evidence includes the existence of taxes paid in available carry-back years, available tax planning strategies and the probability that taxable income will be generated in future periods, while negative evidence includes a cumulative loss in 2009 and 2008 and general business and economic trends. We evaluated the recoverability of our net deferred tax asset and established a valuation allowance for certain state net operating loss and credit carryforwards that are not expected to be fully realized. Management believes that it is more likely than not that the other deferred tax assets included in the accompanying Consolidated Balance Sheets will be fully realized. We have determined that no valuation allowance is required for any other deferred tax assets as of December 31, 2011, although there is no guarantee that those assets will be recognizable in future periods.

When applicable, the Company recognizes interest accrued related to unrecognized tax benefits and penalties in operating expenses. The Company had no accruals for payments of interest and penalties at December 31, 2011 and 2010.

At December 31, 2011, the Company was under examination by the Internal Revenue Service for tax years 2009 and 2010, which is expected to be finalized in the first quarter of 2012.

Reclassifications

Reclassifications have been made to certain prior year account balances, with no effect on net income (loss) or stockholders’ equity, to be consistent with the classifications adopted as of and for the year ended December 31, 2011.

Stock-based employee compensation

The Company’s equity incentive plans are designed to encourage ownership of our common stock by our employees and directors, to provide additional incentive for them to promote the success of our business, and to attract and retain talented personnel. All of our employees and directors and those of our subsidiaries are eligible to receive awards under the plans. See Note 16 — Stock Incentive Plans for further discussion.

Stock-based compensation cost recognized includes compensation costs for all share-based payments based on the grant-date fair value. The Company estimates the grant-date fair value of stock options using the Black-Scholes option pricing model. The Black-Scholes option pricing model was developed for use in estimating the fair value of traded options which have no vesting restrictions. Such models require the use of subjective assumptions, including expected stock price volatility.

The Company calculates the compensation cost of its non-vested stock awards (restricted stock units) based on the Company’s stock price on the grant date multiplied by the number of units granted. This cost is recorded over a specified requisite service period (i.e. vesting period) ranging from one to five years. As the units cliff vest and are subject only to a service condition, the cost is recorded using straight-line amortization. No compensation cost is recognized for unvested awards that are forfeited.

Cash flows resulting from the tax benefits of tax deductions in excess of the compensation cost recognized for share-based payments are to be presented as financing cash flows. The Company had no excess tax benefit cash inflows during the years ended December 31, 2011, 2010 and 2009.

Segment disclosure

Operating segments are components of a business that (i) engage in business activities from which it may earn revenues and incur expenses; (ii) have operating results that are reviewed regularly by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance; and (iii) for which discrete financial information is available. The Company’s segments are its three primary operating subsidiaries Busey Bank, FirsTech and Busey Wealth Management.

Earnings per share

Basic earnings per share is computed by dividing net income (loss) available to common stockholders for the year by the weighted average number of shares outstanding.

Diluted earnings per share is determined by dividing net income (loss) available to common stockholders for the period by the weighted average number of shares of common stock and common stock equivalents outstanding. Common stock equivalents assume exercise of stock options and vesting of restricted stock units and use of proceeds to purchase treasury stock at the average market price for the period. If the average market price for the period is less than the strike price of a stock option or grant price of a restricted stock unit, that option/restricted stock unit is considered anti-dilutive and is excluded from the calculation of common stock equivalents. At December 31, 2011, 957,922 outstanding options, 573,833 warrants, and 478,123 restricted stock units were anti-dilutive and excluded from the calculation of common stock equivalents. At December 31, 2010, none of the Company’s 1,351,593 outstanding options, 573,833 warrants, or 194,914 restricted stock units were potentially dilutive.

The following reflects net income (loss) per share calculations for basic and diluted methods:

	For the Years Ended December 31,
	2011		2010		2009
	(dollars and shares in thousands, except per share data)
Net income (loss) available to common stockholders	$	24,531	$	18,060	$	(327,880	)

Weighted average common shares outstanding	85,304		66,397		41,788
Dilutive effect of outstanding options and warrants as determined by the application of the treasury stock method	8		—		—

Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation	85,312		66,397		41,788

Basic earnings (loss) per common share	$	0.29	$	0.27	$	(7.85	)

Diluted earnings (loss) per common share	$	0.29	$	0.27	$	(7.85	)

Subsequent events

The Company has evaluated subsequent events for potential recognition and/or disclosure through the date the consolidated financial statements included in this Annual Report on Form 10-K were issued. There were no significant subsequent events for the year ended December 31, 2011 through the date of these financial statements.

Impact of new financial accounting standards

FASB ASC Topic 210, “Disclosures about Offsetting Assets and Liabilities.” New authoritative accounting guidance (Accounting Standards Update No. 2011-11) under ASC Topic 210 requires enhanced disclosure information about offsetting and related arrangements, to enable users of its financial statements to understand the effect of those on its financial position. This update will be effective for the annual periods beginning after January 1, 2013, and is not expected to have a significant impact on the Company’s financial statements.

FASB ASC Topic 220, “Presentation of Comprehensive Income.” New authoritative accounting guidance (Accounting Standards Update No. 2011-05) under ASC Topic 220 amends Topic 220, “Comprehensive Income,” to require all nonowner changes in stockholders’ equity to be presented in a single continuous statement of comprehensive income or in two separate but consecutive statements. This update will be effective for the annual periods beginning after December 15, 2011, and will result in a change to the presentation of comprehensive income in the Company’s financial statements.

FASB ASC Topic 310, “Receivables: Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.” On July 21, 2010, new authoritative accounting guidance (Accounting Standards Update No. 2010-20) under ASC Topic 310 was issued which requires an entity to provide more information in its disclosures about the credit quality of its financing receivables and the credit reserves held against them. This statement addresses only disclosures and does not change recognition or measurement. The new authoritative accounting guidance under ASC Topic 310 was effective for the Company’s financial statements as of December 31, 2010, as it relates to disclosures required as of the end of a reporting period. Disclosures that relate to activity during a reporting period became required for reporting periods beginning on or after January 1, 2011. Accounting Standards Update No. 2011-01, “Receivables (Topic 310)-Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20,” temporarily deferred the effective date for disclosures related to troubled debt restructurings to coincide with the effective date of a proposed accounting standard update related to troubled debt restructurings. Accounting Standards Update No. 2011-02, “Receivables (Topic 310)-A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring” clarifies which loan modifications constitute troubled debt restructurings. It is intended to help creditors in determining whether a modification of the terms of a receivable meet the criteria to be considered a troubled debt restructuring for the purpose of recording an impairment loss and for disclosure of troubled debt restructurings. Under the new guidance, in evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that both of the following exist: (a) the restructuring constitutes a concession; and (b) the debtor is experiencing financial difficulties. This update became effective for the Company on July 1, 2011, applying retrospectively to restructuring occurring on or after January 1, 2011 but did not have a significant impact on the Company’s financial statements.

FASB ASC Topic 350, “Intangibles — Goodwill and Other — When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts.” New authoritative accounting guidance (Accounting Standards Update No. 2010-28) under ASC Topic 350 modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. An entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. This update became effective for the Company on January 1, 2011 and did not have a significant impact on the Company’s financial statements. Accounting Standards Update No. 2011-08, “Intangibles — Goodwill and Other (Topic 350)-Testing Goodwill for Impairment,” issued in September 2011, simplifies how an entity tests goodwill for impairment. This update allows the option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. If it is more likely than not, using qualitative assessments, that the fair value of a reporting unit is less than its carrying amount, an entity must still perform the existing two-step impairment test. Otherwise, an entity would not be required to perform the test. This update was effective for the annual and interim goodwill impairment tests performed after December 15, 2011, and did not have a significant impact on the Company’s financial statements.

FASB ASC Topic 820, “Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs.” New authoritative accounting guidance (Accounting Standards Update No. 2011-04) under ASC Topic 820 amends Topic 820 to converge the fair value measurement guidance in U.S. generally accepted accounting principles and International Financial Reporting Standards. The guidance clarifies the application of existing fair value measurement requirements, changes certain principles in Topic 820 and requires additional disclosures. This update will be effective for the annual periods beginning after December 15, 2011, and is not expected to have a significant impact on the Company’s financial statements.

- Definition

The entire disclosure for the organization, consolidation and basis of presentation of financial statements disclosure, and significant accounting policies of the reporting entity. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

+ References + Details

Cash and Due from Banks

12 Months Ended

Dec. 31, 2011

Cash and Due from Banks.

Cash and Due from Banks

Note 2. Cash and Due from Banks

The Company’s bank subsidiary is required to maintain certain cash reserve balances with the Federal Reserve Bank of Chicago, which may be offset by cash on hand. The required reserve balances as of December 31, 2011 and 2010 were approximately $4.0 million and $3.4 million, respectively, including the clearing balance requirement.

Busey Bank has established a clearing balance requirement with the Federal Reserve Bank of Chicago to use Federal Reserve Bank services. As of December 31, 2011 and 2010, the clearing balance requirements totaled $2.8 million. These deposited funds generate earnings credits at market rates which offset service charges resulting from the use of Federal Reserve Bank services. The clearing balance requirement is included in the required reserve balance referred to above and may be increased, or otherwise adjusted, on approval of the Federal Reserve Bank based on estimated service charges; however, such adjustments will be made no more frequently than once per month.

The Company maintains its cash in deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. Management believes the Company is not exposed to any significant credit risk on cash and cash equivalents.

- Definition

The entire disclosure for cash and cash equivalent footnotes, which may include the types of deposits and money market instruments, applicable carrying amounts, restricted amounts and compensating balance arrangements. Cash and equivalents include: (1) currency on hand (2) demand deposits with banks or financial institutions (3) other kinds of accounts that have the general characteristics of demand deposits (4) short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments maturing within three months from the date of acquisition qualify.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 1
-Article 5

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 7
-Footnote 1
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 8, 9, 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 6
-Section H
-Subsection 3

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Cash
-URI http://asc.fasb.org/extlink&oid=6506951

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Cash Equivalents
-URI http://asc.fasb.org/extlink&oid=6507016

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6367179&loc=d3e4273-108586

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.1)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 6.H.3)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13728-122682

+ Details

Securities

12 Months Ended

Dec. 31, 2011

Securities

Securities

Note 3. Securities

The amortized cost and fair values of securities available for sale are summarized as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(dollars in thousands)
December 31, 2011:
U.S. Treasury securities	$	45,550	$	485	$	—		$	46,035
Obligations of U.S. government corporations and agencies	339,983		9,083		(35		)	349,031
Obligations of states and political subdivisions	149,368		5,193		(124		)	154,437
Residential mortgage-backed securities	271,787		6,374		(46		)	278,115
Corporate debt securities	2,532		73		(22		)	2,583
	809,220		21,208		(227		)	830,201
Mutual funds and other equity securities	219		1,329		—			1,548

	$	809,439	$	22,537	$	(227	)	$	831,749

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(dollars in thousands)
December 31, 2010:
U.S. Treasury securities	$	306	$	75	$	—		$	381
Obligations of U.S. government corporations and agencies	324,193		9,028		(86		)	333,135
Obligations of states and political subdivisions	74,691		2,340		(96		)	76,935
Residential mortgage-backed securities	180,578		3,662		(1,234		)	183,006
Corporate debt securities	1,443		56		—			1,499
	581,211		15,161		(1,416		)	594,956
Mutual funds and other equity securities	3,258		1,245		—			4,503

	$	584,469	$	16,406	$	(1,416	)	$	599,459

The amortized cost and fair value of debt securities available for sale as of December 31, 2011, by contractual maturity, are shown below. Mutual funds and other equity securities do not have stated maturity dates and therefore are not included in the following maturity summary. Mortgages underlying the residential mortgage-backed securities may be called or prepaid without penalties, therefore, actual maturities could differ from the contractual maturities. All residential mortgage-backed securities were issued by U.S. government agencies and corporations.

	Amortized		Fair
	Cost		Value
	(dollars in thousands)
Due in one year or less	$	115,684	$	116,957
Due after one year through five years	388,871		399,150
Due after five years through ten years	219,600		225,354
Due after ten years	85,065		88,740
	$	809,220	$	830,201

Gains and losses related to sales of securities are summarized as follows:

	For the Years Ended December 31,
	2011			2010			2009
	(dollars in thousands)
Gross security gains	$	174		$	1,025		$	188
Gross security losses	(4		)	(7		)	(58		)

Net security gains	$	170		$	1,018		$	130

The tax provision for these net realized gains and losses was insignificant for the years ended December 31, 2011 and 2009. It was $0.4 million for the year ended December 31, 2010.

Investment securities with carrying amounts of $359.9 million and $405.7 million on December 31, 2011 and 2010, respectively, were pledged as collateral on public deposits, securities sold under agreements to repurchase and for other purposes as required or permitted by law.

Information pertaining to securities with gross unrealized losses at December 31, 2011 and 2010 aggregated by investment category and length of time that individual securities have been in a continuous loss position follows:

	Continuous unrealized losses existing for less than 12 months, gross				Continuous unrealized losses existing greater than 12 months, gross				Total, gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(dollars in thousands)
December 31, 2011:
Obligations of U.S. government corporations and agencies	$	15,615	$	35	$	—	$	—	$	15,615	$	35
Obligations of states and political subdivisions	21,037		124		—		—		21,037		124
Residential mortgage-backed securities	16,428		46		—		—		16,428		46
Corporate debt securities	455		22						455		22

Total temporarily impaired securities	$	53,535	$	227	$	—	$	—	$	53,535	$	227

	Continuous unrealized losses existing for less than 12 months, gross				Continuous unrealized losses existing greater than 12 months, gross				Total, gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(dollars in thousands)
December 31, 2010:
Obligations of U.S. government corporations and agencies	$	15,698	$	86	$	—	$	—	$	15,698	$	86
Obligations of states and political subdivisions	8,452		96		—		—		8,452		96
Residential mortgage-backed securities	95,926		1,234		—		—		95,926		1,234

Total temporarily impaired securities	$	120,076	$	1,416	$	—	$	—	$	120,076	$	1,416

The total number of securities in the investment portfolio in an unrealized loss position as of December 31, 2011 was 45, which represented a loss of 0.42% of the aggregate carrying value. Based upon review of unrealized loss circumstances, the unrealized losses resulted from changes in market interest rates and liquidity, not from changes in the probability of receiving the contractual cash flows. The Company does not intend to sell the securities and it is more likely than not that the Company will recover the amortized cost prior to being required to sell the securities. Full collection of the amounts due according to the contractual terms of the securities is expected; therefore, the Company does not consider these investments to be other-than-temporarily impaired at December 31, 2011.

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and whether we have the intent to sell the security and it is more likely than not we will have to sell the security before recovery of its cost basis.

- Definition

Tabular disclosure of investments in certain debt and equity securities (and certain other trading assets) which include all debt and equity securities (other than those equity securities accounted for under the equity or cost methods of accounting) with readily determinable fair values. Other trading assets include assets that are carried on the balance sheet at fair value and held for trading purposes. A debt security represents a creditor relationship with an enterprise that is in the form of a security. Debt securities include, among other items, US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and all securitized debt instruments. An equity security represents an ownership interest in an enterprise or the right to acquire or dispose of an ownership interest in an enterprise at fixed or determinable prices. Equity securities include, among other things, common stock, certain preferred stock, warrant rights, call options, and put options, but do not include convertible debt. An entity may opt to provide the reader with additional narrative text to better understand the nature of investments in debt and equity securities (and other trading assets).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 115
-Paragraph 3, 19, 20, 21, 22, 137
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6379141&loc=d3e15032-111544

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27161-111563

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 320
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62557-112803

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27357-111563

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27290-111563

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27405-111563

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27232-111563

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Debt Security
-URI http://asc.fasb.org/extlink&oid=6509901
-Topic 320

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Equity Security
-URI http://asc.fasb.org/extlink&oid=6511694
-Topic 320

+ Details

Loans

12 Months Ended

Dec. 31, 2011

Loans.

Loans

Note 4. Loans

Geographic distributions of loans were as follows:

	December 31, 2011
	Illinois		Florida		Indiana		Total
	(dollars in thousands)

Commercial	$	375,238	$	10,830	$	21,787	$	407,855
Commercial real estate	793,769		135,360		51,087		980,216
Real estate construction	72,569		16,186		16,110		104,865
Retail real estate	410,844		120,190		9,112		540,146
Retail other	17,547		581		134		18,262
Total	$	1,669,967	$	283,147	$	98,230	$	2,051,344

Less held for sale(1)							15,249
							$	2,036,095

Less allowance for loan losses							58,506

Net loans							$	1,977,589

(1) Loans held for sale are included in retail real estate.

	December 31, 2010
	Illinois		Florida		Indiana		Total
	(dollars in thousands)

Commercial	$	395,629	$	17,523	$	26,241	$	439,393
Commercial real estate	887,601		140,734		44,482		1,072,817
Real estate construction	108,050		20,104		26,257		154,411
Retail real estate	501,871		141,914		13,311		657,096
Retail other	43,944		958		158		45,060
Total	$	1,937,095	$	321,233	$	110,449	$	2,368,777

Less held for sale(1)							49,684
							$	2,319,093

Less allowance for loan losses							76,038

Net loans							$	2,243,055

(1) Loans held for sale are included in retail real estate.

Net deferred loan origination costs included in the tables above were $0.7 million and $0.8 million as of December 31, 2011 and 2010, respectively.

The Company believes that sound loans are a necessary and desirable means of employing funds available for investment. Recognizing the Company’s obligations to its stockholders, depositors, and to the communities it serves, authorized personnel are expected to seek to develop and make sound, profitable loans that resources permit and that opportunity affords. The Company maintains lending policies and procedures in place designed to focus our lending efforts on the types, locations and duration of loans most appropriate for our business model and markets. While not specifically limited, the Company attempts to focus its lending on short to intermediate-term (0-7 years) loans in geographies within 125 miles of our lending offices. We make attempts to utilize government assisted lending programs, such as the Small Business Administration and United States Department of Agriculture lending programs, where prudent. Generally, loans are collateralized by assets, primarily real estate, of the borrowers and guaranteed by individuals. The loans are expected to be repaid from cash flows of the borrowers or from proceeds from the sale of selected assets of the borrowers.

Management reviews and approves the Company’s lending policies and procedures on a routine basis. Management routinely (at least quarterly) reviews our allowance for loan losses and reports related to loan production, loan quality, concentrations of credit, loan delinquencies and non-performing and potential problem loans. Our underwriting standards are designed to encourage relationship banking rather than transactional banking. Relationship banking implies a primary banking relationship with the borrower that includes, at minimum, an active deposit banking relationship in addition to the lending relationship. The integrity and character of the borrower are significant factors in our loan underwriting. As a part of underwriting, tangible positive or negative evidence of the borrower’s integrity and character are sought out. Additional significant underwriting factors beyond location, duration, a sound and profitable cash flow basis and the borrower’s character are the quality of the borrower’s financial history, the liquidity of the underlying collateral and the reliability of the valuation of the underlying collateral.

Total borrowing relationships, which include direct and indirect debt, are generally limited to $20 million, which is significantly less than our regulatory lending limit. Borrowing relationships exceeding $20 million are reviewed by our board of directors at least annually and more frequently by management. At no time is a borrower’s total borrowing relationship permitted to exceed our regulatory lending limit. Loans to related parties, including executive officers and the Company’s various directorates, are reviewed for compliance with regulatory guidelines and by our board of directors at least annually.

The Company maintains an independent loan review department that reviews the loans for compliance with the Company’s loan policy on a periodic basis. In addition to compliance with our policy, the loan review process reviews the risk assessments made by our credit department, lenders and loan committees. Results of these reviews are presented to management and the audit committee at least quarterly.

The Company’s lending can be summarized into five primary areas; commercial loans, commercial real estate loans, real estate construction loans, retail real estate loans, and other retail loans. The significant majority of the lending activity occurs in the Company’s Illinois markets, with the remainder in the Florida and Indiana markets. Due to the small scale of the Indiana loan portfolio and its geographical proximity to the Illinois portfolio, the Company believes that quantitative or qualitative segregation between Illinois and Indiana is not material or warranted.

Commercial Loans

Commercial loans typically comprise working capital loans or business expansion loans, including loans for asset purchases and other business loans. Commercial loans will generally be guaranteed in full or a significant amount by the primary owners of the business. Commercial loans are made based primarily on the historical and projected cash flow of the underlying borrower and secondarily on the underlying assets pledged as collateral by the borrower. The cash flows of the underlying borrower, however, may not perform consistent with historical or projected information. Further, the collateral securing loans may fluctuate in value due to individual economic or other factors. The Company has established minimum standards and underwriting guidelines for all commercial loan types.

Commercial Real Estate Loans

The Company is located in markets with significant academic presence. The academic presence in addition to the commercial environment provides for the majority of our commercial lending opportunities to be commercial real estate related. As the majority of our loan portfolio is within the commercial real estate class, our goal is to maintain a high quality, geographically diverse portfolio of commercial real estate loans. Commercial real estate loans are subject to underwriting standards and guidelines similar to commercial loans. Commercial real estate loans will generally be guaranteed in full or a significant amount by the primary owners of the business. The repayment of these loans is primarily dependent on the cash flows of the underlying property. However, the commercial real estate loan generally must be supported by an adequate underlying collateral value. The performance and the value of the underlying property may be adversely affected by economic factors or geographical and/or industry specific factors. These loans are subject to other industry guidelines that are closely monitored by the Company.

Real Estate Construction Loans

Real estate construction loans are typically commercial in nature. The loan proceeds are controlled by the Company and distributed for the improvement of real estate in which the Company holds a mortgage. Real estate construction loans will generally be guaranteed in full or a significant amount by the developer or primary owners of the business. These loans are subject to underwriting standards and guidelines similar to commercial loans. The loan generally must be supported by an adequate “as completed” value of the underlying project. In addition to the underlying project, the financial history of the developer and business owners weighs significantly in determining approval. The repayment of these loans is typically through permanent financing following completion of the construction. Real estate construction loans are inherently more risky than loans on completed properties as the unimproved nature and the financial risks of construction significantly enhance the risks of commercial real estate loans. These loans are closely monitored and subject to other industry guidelines.

Retail Real Estate Loans

Retail real estate loans are comprised of direct consumer loans that include residential real estate, residential real estate construction loans, home equity lines of credit and home equity loans. The Company sells substantially all of its long-term (10 years and over) retail real estate loans to secondary market purchasers. The Company does retain retail real estate loans having terms typically five years or less. As retail real estate loan underwriting is subject to specific regulations, the Company typically underwrites its retail real estate loans to conform to widely accepted standards. Several factors are considered in underwriting including the value of the underlying real estate and the debt to income and credit history of the borrower.

Retail Other Loans

Retail other loans consist of installment loans to individuals, primarily automotive loans. These loans are centrally underwritten utilizing the borrower’s financial history, including the Fair Isaac Corporation (“FICO”) credit scoring and information as to the underlying collateral. Repayment is expected from the cash flow of the borrower.

The Company utilizes a loan grading scale to assign a risk grade to all of its loans. Loans are graded on a scale of 1 through 10 with grades 2, 4 & 5 unused. A description of the general characteristics of the grades is as follows:

· Grades 1,3,6 — These grades include loans which are all considered strong credits with grade 1 being investment or near investment grade. A grade 3 loan is comprised of borrowers that exhibit credit fundamentals that exceed industry standards and loan policy guidelines. A grade 6 loan is comprised of borrowers that exhibit acceptable credit fundamentals.

· Grade 7- This grade includes loans on management’s “watch list” and is intended to be utilized on a temporary basis for a pass grade borrower where a significant risk-modifying action is anticipated in the near future.

· Grade 8- This grade is for “Other Assets Especially Mentioned” loans that have potential weaknesses which may, if not checked or corrected, weaken the asset or inadequately protect the Bank’s credit position at some future date.

· Grade 9- This grade includes “Substandard” loans, in accordance with regulatory guidelines, for which the accrual of interest has not been stopped. Assets so classified must have well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

· Grade 10- This grade includes “Doubtful” 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 having a value that is difficult to determine.

All loans are graded at inception of the loan. All commercial and commercial real estate loans above $0.5 million with a grading of 7 are reviewed annually and grade changes are made as necessary. All real estate construction loans above $0.5 million, regardless of the grade, are reviewed annually and grade changes are made as necessary. Interim grade reviews may take place if circumstances of the borrower warrant a more timely review. All loans above $0.5 million which are graded 8 are reviewed quarterly. Further, all loans graded 9 or 10 are reviewed at least quarterly.

The following table presents weighted average risk grades segregated by class of loans (excluding held-for-sale, non posted and clearings):

	December 31, 2011
	Weighted Avg. Risk Grade	Grades 1,3,6		Grade 7		Grade 8		Grade 9		Grade 10
	(dollars in thousands)
Illinois/Indiana
Commercial	5.12	$	298,332	$	43,566	$	28,172	$	17,884	$	9,071
Commercial real estate	5.75	617,247		95,553		69,185		54,670		8,201
Real estate construction	7.65	22,002		7,998		34,374		18,841		5,464
Retail real estate	3.67	378,355		8,581		3,561		4,041		4,768
Retail other	3.17	16,506		676		—		428		71
Total Illinois/Indiana		$	1,332,442	$	156,374	$	135,292	$	95,864	$	27,575

Florida
Commercial	6.32	$	5,471	$	4,329	$	191	$	271	$	568
Commercial real estate	6.44	73,021		21,296		18,677		17,124		5,242
Real estate construction	7.97	1,417		341		12,352		840		1,236
Retail real estate	4.14	89,195		2,227		20,071		4,470		3,719
Retail other	2.41	580		—		1		—		—
Total Florida		$	169,684	$	28,193	$	51,292	$	22,705	$	10,765
Total		$	1,502,126	$	184,567	$	186,584	$	118,569	$	38,340

	December 31, 2010
	Weighted Avg. Risk Grade	Grades 1,3,6		Grade 7		Grade 8		Grade 9		Grade 10
	(dollars in thousands)
Illinois/Indiana
Commercial	5.20	$	292,027	$	52,761	$	26,526	$	34,233	$	16,323
Commercial real estate	5.86	660,520		109,553		76,311		72,831		12,868
Real estate construction	7.41	33,489		24,582		49,353		20,026		6,857
Retail real estate	3.72	433,371		12,288		6,781		3,860		5,615
Retail other	4.00	35,989		2,720		4,740		653		—
Total Illinois/Indiana		$	1,455,396	$	201,904	$	163,711	$	131,603	$	41,663

Florida
Commercial	6.45	$	12,777	$	257	$	913	$	302	$	3,274
Commercial real estate	6.65	69,758		10,270		34,881		14,905		10,920
Real estate construction	8.22	525		927		12,874		3,321		2,457
Retail real estate	4.21	106,974		3,840		21,985		932		7,162
Retail other	3.42	805		16		127		—		10
Total Florida		$	190,839	$	15,310	$	70,780	$	19,460	$	23,823
Total		$	1,646,235	$	217,214	$	234,491	$	151,063	$	65,486

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of the principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

An age analysis of past due loans still accruing and non-accrual loans is as follows:

	December 31, 2011
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+ Days		loans
	(dollars in thousands)
Illinois/Indiana
Commercial	$	131	$	44	$	48	$	9,071
Commercial real estate	1,384		—		73		8,201
Real estate construction	—		—		—		5,464
Retail real estate	2,051		242		52		4,768
Retail other	23		2		—		71
Total Illinois/Indiana	$	3,589	$	288	$	173	$	27,575

Florida
Commercial	$	—	$	—	$	—	$	568
Commercial real estate	606		—		—		5,242
Real estate construction	—		—		—		1,236
Retail real estate	179		—		—		3,719
Retail other	—		50		—		—
Total Florida	$	785	$	50	$	—	$	10,765
Total	$	4,374	$	338	$	173	$	38,340

	December 31, 2010
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+ Days		loans
	(dollars in thousands)
Illinois/Indiana
Commercial	$	1,613	$	803	$	—	$	16,323
Commercial real estate	713		273		458		12,868
Real estate construction	—		620		—		6,857
Retail real estate	8,698		2,978		2,130		5,615
Retail other	2,226		653		30		—
Total Illinois/Indiana	$	13,250	$	5,327	$	2,618	$	41,663

Florida
Commercial	$	—	$	—	$	—	$	3,274
Commercial real estate	704		337		—		10,920
Real estate construction	175		—		—		2,457
Retail real estate	3,547		109		—		7,162
Retail other	28		—		—		10
Total Florida	$	4,454	$	446	$	—	$	23,823
Total	$	17,704	$	5,773	$	2,618	$	65,486

A loan is impaired when, based on current information and events, it is probable the Company will be unable to collect scheduled payments of principal and interest payments when due according to the terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loans and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. A loan is assessed for impairment by the Company if one of the following criteria is met: loans 60 days or more past due and over $0.25 million, loans graded 8 over $0.5 million or loans graded 9 or below.

Impairment is measured on a loan-by-loan basis for commercial and construction loans by either the present value of the expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogenous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment disclosures unless such loans are the subject of a restructuring agreement.

The Company actively seeks to reduce its investment in impaired loans. The primary tools to work through impaired loans are settlement with the borrowers or guarantors, foreclosure of the underlying collateral, loan sales to outside parties or restructuring. During the years ended December 31, 2011 and 2010, the Company sold loans, net of charge-offs, of $21.1 million and $30.7 million, respectively.

The gross interest income that would have been recorded in the years ended December 31, 2011, 2010 and 2009 if impaired loans had been current in accordance with their original terms was $6.0 million, $9.2 million, and $12.9 million, respectively. The amount of interest collected on those loans and recognized on a cash basis that was included in interest income was $1.0 million, $1.6 million and $3.8 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Our loan portfolio includes certain loans that have been modified in a troubled debt restructuring (TDR), where concessions have been granted to borrowers who have experienced financial difficulties. The company will restructure loans for our customers who appear to be able to meet the terms of their loan over the long-term, but who may be unable to meet the terms of the loan in the near term due to individual circumstances.

We consider the customer’s past performance, previous and current credit history, the individual circumstances surrounding the current difficulties and their plan to meet the terms of the loan in the future prior to restructuring the terms of the loan. Generally, all five primary areas of lending are restructured through short-term interest-rate relief, short-term principal payment relief, short-term principal and interest payment relief, or forbearance (debt forgiveness). Once a restructured loan has gone 90+ days past due or is placed on non-accrual status, it is included in the non-performing loan totals. A summary of restructured loans as of December 31, 2011 and December 31, 2010 is as follows:

	December 31, 2011		December 31, 2010
	(dollars in thousands)
Restructured loans:
In compliance with modified terms	$	32,380	$	26,765
30 — 89 days past due	1,257		1,468
Included in non-performing loans	12,601		10,320
Total	$	46,238	$	38,553

All TDRs are considered to be impaired for purposes of assessing the adequacy of the allowance for loan losses and for financial reporting purposes. When we modify loans in a TDR, we evaluate any possible impairment similar to other impaired loans based on present value of the expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. If we determine that the value of the TDR is less than the recorded investment in the loan, impairment is recognized through an allowance estimate in the period of the modification and in periods subsequent to the modification.

Performing loans classified as TDRs during the three and twelve months ended December 31, 2011, segregated by class, are shown below along with the recorded investment at December 31, 2011:

	Three Months Ended December 31, 2011			Twelve Months Ended December 31, 2011
	Number of contracts	Recorded investment		Number of contracts	Recorded investment
	(dollars in thousands)
Commercial	7	$	4,859	7	$	4,859
Commercial real estate	4	1,780		6	8,280
Real estate construction	1	1,615		1	1,615
Retail real estate	5	1,876		9	2,478
Retail other	—	—		—	—
Total	17	$	10,130	23	$	17,232

The seven commercial TDRs totaling $4.9 million for the three and twelve months ended December 31, 2011 were short-term principal payment relief. The commercial real estate TDRs for the three months ended December 31, 2011 consisted of two modifications for short-term principal payment relief totaling $0.5 million and two modifications of forbearance agreements totaling $1.3 million. The commercial real estate TDRs for the twelve months ended December 31, 2011 consisted of two modifications for short-term interest-rate relief totaling $6.5 million, two modifications for short-term principal payment relief totaling $0.5 million, and two modifications for forbearance agreements totaling $1.3 million. The real estate construction TDR for the three and twelve months ended December 31, 2011 was a short-term principal payment relief modification. The retail real estate TDRs for the three months ended December 31, 2011 consisted of one modification for short-term interest-rate relief totaling $0.1 million and four modifications for short-term principal payment relief totaling $1.8 million. The retail real estate TDRs for the twelve months ended December 31, 2011 consisted of five modification for short-term interest-rate relief totaling $0.7 million and four modifications for short-term principal payment relief totaling $1.8 million.

The gross interest income that would have been recorded in the three and twelve months ended December 31, 2011 if performing TDRs had been in accordance with their original terms instead of modified terms was insignificant.

TDR loans that were classified as non-performing and 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 twelve months ended December 31, 2011, segregated by class, are shown below along with the recorded investment at December 31, 2011:

	Three Months Ended December 31, 2011			Twelve Months Ended December 31, 2011
	Number of contracts	Recorded investment		Number of contracts	Recorded investment
	(dollars in thousands)
Commercial	5	$	2,971	5	$	2,971
Commercial real estate	5	2,450		6	4,950
Real estate construction	1	438		2	709
Retail real estate	9	1,778		11	3,241
Retail other	—	—		—	—
Total	20	$	7,637	24	$	11,871

The following tables provide details of impaired loans, segregated by category. The unpaid contractual principal balance represents the recorded balance prior to any partial charge-offs. The recorded investment represents customer balances net of any partial charge-offs recognized on the loan. The average recorded investment is calculated using the most recent four quarters.

	December 31, 2011
	Unpaid Contractual Principal Balance		Recorded Investment with No Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
	(dollars in thousands)
Commercial	$	19,612	$	11,658	$	2,889	$	14,547	$	697	$	13,541
Commercial real estate	31,419		20,969		4,960		25,929		2,247		32,631
Real estate construction	15,740		12,317		—		12,317		—		13,310
Retail real estate	28,597		23,419		—		23,419		—		28,748
Retail other	71		71		—		71		—		41
Total	$	95,439	$	68,434	$	7,849	$	76,283	$	2,944	$	88,271

	December 31, 2010
	Unpaid Contractual Principal Balance		Recorded Investment with No Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
	(dollars in thousands)
Commercial	$	29,387	$	13,103	$	6,751	$	19,854	$	3,125	$	15,155
Commercial real estate	44,538		29,358		7,407		36,765		3,464		40,120
Real estate construction	20,564		14,635		989		15,624		404		34,829
Retail real estate	46,443		28,967		7,801		36,768		3,806		38,773
Retail other	43		41		—		41		—		91
Total	$	140,975	$	86,104	$	22,948	$	109,052	$	10,799	$	128,968

Management’s opinion as to the ultimate collectability of loans is subject to 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.

Allowance for Loan Losses

The allowance for loan losses represents an estimate of the amount of losses believed inherent in our loan portfolio at the balance sheet date. The allowance for loan losses is evaluated geographically, by class of loans. The allowance calculation involves a high degree of estimation that management attempts to mitigate through the use of objective historical data where available. Loan losses are charged against the allowance for loan losses when management believes the uncollectibility of the loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Overall, we believe the allowance methodology is consistent with prior periods and the balance is adequate to cover the estimated losses in our loan portfolio at December 31, 2011 and December 31, 2010.

The general portion of the Company’s allowance contains two components: (i) a component for historical loss ratios, and (ii) a component for adversely graded loans. The historical loss ratio component is an annualized loss rate calculated using a sum-of-years digits weighted 20 quarter historical average.

The Company’s component for adversely graded loans attempts to quantify the additional risk of loss inherent in the grade 8 and grade 9 portfolios. The grade 9 portfolio has an additional allocation placed on those loans determined by a one-year charge-off percentage for the respective loan type/geography. The minimum additional reserve on a grade 9 loan was 3.25% and 3% as of December 31, 2011 and December 31, 2010, respectively, which is an estimate of the additional loss inherent in these loan grades based upon a review of overall historical charge-offs.

Grade 8 loans have an additional allocation placed on them determined by the trend difference of the respective loan type/geography’s rolling 12 and 20 quarter historical loss trends. If the rolling 12 quarter average is higher (more current information) than the rolling 20 quarter average, we add the additional amount to the allocation. The minimum additional amount for grade 8 loans is 1.25% based upon a review of the differences between the rolling 12 and 20 quarter historical loss averages by region.

The specific portion of the Company’s allowance relates to loans that are impaired, which includes non-performing loans, troubled debt restructurings and other loans determined to be impaired. The impaired loans are subtracted from the general loans and are allocated specific reserves as discussed above.

Impaired loans are reported at the fair value of the underlying collateral, less estimated costs to sell, if repayment is expected solely from the collateral. Collateral values are estimated using a combination of observable inputs, including recent appraisals discounted for collateral specific changes and current market conditions, and unobservable inputs based on customized discounting criteria. Due to the significant and rapid decline in real estate valuations in southwest Florida in recent years, valuations of collateral in this market are largely based upon current market conditions and unobservable inputs, which typically indicate a value less than appraised value.

The historical general quantitative allocation is adjusted for qualitative factors based on current general economic conditions and other qualitative risk factors both internal and external to the Company. In general, such valuation allowances are determined by evaluating, among other things: (i) Management & Staff; (ii) Loan Underwriting, Policy and Procedures; (iii) Internal/External Audit & Loan Review; (iv) Valuation of Underlying Collateral; (v) Macro and Local Economic Factor; (vi) Impact of Competition, Legal & Regulatory issues; (vii) Nature and Volume of Loan Portfolio; (viii) Concentrations of Credit; (ix) Net Charge-Off Trend; and (x) Non-Accrual, Past Due and Classified Trend. Management evaluates the degree of risk that each one of these components has on the quality of the loan portfolio on a quarterly basis. Based on each component’s risk factor, a qualitative adjustment to the reserve may be applied to the appropriate loan categories.

During the third quarter of 2011, we slightly adjusted the Florida qualitative factors relating to Valuation of Underlying Collateral, Impact of Competition, Legal & Regulatory issues and Nature and Volume of Loan Portfolio downward, as we have seen signs of stabilization. The adjustment of the Florida qualitative factors decreased our allowance requirements by $0.3 million at September 30, 2011 compared to the method used for June 30, 2011.

Changes in the allowance for loan losses were as follows:

	Years Ended December 31,
	2011			2010			2009
	(dollars in thousands)

Balance, beginning of year	$	76,038		$	100,179		$	98,671
Provision for loan losses	20,000			42,000			251,500
Recoveries applicable to loan balances previously charged-off	7,881			14,902			3,590
Loan balances charged-off	(45,413		)	(81,043		)	(253,582		)

Balance, end of year	$	58,506		$	76,038		$	100,179

The following table details activity on the allowance for loan losses. Allocation of a portion of the allowance to one category does not preclude its availability to absorb losses in other categories.

	As of and for the twelve months ended December 31, 2011
	Commercial			Commercial Real Estate			Real Estate Construction			Retail Real Estate			Retail Other			Unallocated		Total
	(dollars in thousands)
Beginning balance	$	13,840		$	32,795		$	11,903		$	14,947		$	2,553		$	—	$	76,038
Provision for loan loss	6,406			7,474			1,673			7,236			(2,789		)	—		20,000
Charged-off	(10,726		)	(14,298		)	(7,556		)	(12,165		)	(668		)	—		(45,413		)
Recoveries	1,562			1,047			1,268			2,615			1,389			—		7,881
Ending Balance	$	11,082		$	27,018		$	7,288		$	12,633		$	485		$	—	$	58,506

Amount allocated to:
Loans individually evaluated for impairment	$	697		$	2,247		$	—		$	—		$	—		$	—	$	2,944
Loans collectively evaluated for impairment	$	10,385		$	24,771		$	7,288		$	12,633		$	485		$	—	$	55,562
Ending Balance	$	11,082		$	27,018		$	7,288		$	12,633		$	485		$	—	$	58,506

Loans:
Loans individually evaluated for impairment	$	14,547		$	25,929		$	12,317		$	23,419		$	71		$	—	$	76,283
Loans collectively evaluated for impairment	$	393,308		$	954,287		$	92,548		$	501,478		$	18,191		$	—	$	1,959,812
Ending Balance	$	407,855		$	980,216		$	104,865		$	524,897		$	18,262		$	—	$	2,036,095

	As of and for the twelve months ended December 31, 2010
	Commercial			Commercial Real Estate			Real Estate Construction			Retail Real Estate			Retail Other			Unallocated			Total
	(dollars in thousands)
Beginning balance	$	9,824		$	38,249		$	37,490		$	12,753		$	1,440		$	423		$	100,179
Provision for loan loss	14,727			20,273			(8,560		)	14,432			1,128			—			42,000
Charged-off	(10,896		)	(28,576		)	(28,268		)	(12,751		)	(129		)	(423		)	(81,043		)
Recoveries	185			2,849			11,241			513			114			—			14,902
Ending Balance	$	13,840		$	32,795		$	11,903		$	14,947		$	2,553		$	—		$	76,038

Amount allocated to:
Loans individually evaluated for impairment	$	3,125		$	3,464		$	404		$	3,806		$	—		$	—		$	10,799
Loans collectively evaluated for impairment	$	10,715		$	29,331		$	11,499		$	11,141		$	2,553		$	—		$	65,239
Ending Balance	$	13,840		$	32,795		$	11,903		$	14,947		$	2,553		$	—		$	76,038

Loans:
Loans individually evaluated for impairment	$	19,854		$	36,765		$	15,624		$	36,768		$	41		$	—		$	109,052
Loans collectively evaluated for impairment	$	419,539		$	1,036,052		$	138,787		$	570,644		$	45,019		$	—		$	2,210,041
Ending Balance	$	439,393		$	1,072,817		$	154,411		$	607,412		$	45,060		$	—		$	2,319,093

Loan Servicing

12 Months Ended

Dec. 31, 2011

Loan Servicing

Loan Servicing

Note 5. Loan Servicing

The unpaid principal balances of loans serviced by the Company for the benefit of others are not included in the accompanying consolidated balance sheets. These unpaid principal balances were $1.31 billion and $1.17 billion as of December 31, 2011 and 2010, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and collection and foreclosure processing. Loan servicing income is recorded on the accrual basis and includes servicing fees from investors and certain charges collected from borrowers, such as late payment fees, and is net of amortization of capitalized mortgage servicing rights.

The balance of capitalized servicing rights included in other assets at December 31, 2011 and 2010, was $5.5 million and $5.3 million, respectively. The fair values of these servicing rights were $8.4 million and $7.5 million, respectively, at December 31, 2011 and 2010. The following summarizes mortgage servicing rights capitalized and amortized:

	For the Years Ended December 31,
	2011		2010		2009
	(dollars in thousands)

Mortgage servicing rights capitalized	$	2,741	$	3,537	$	3,379
Mortgage servicing rights amortized	$	2,530	$	2,478	$	1,424

Premises and Equipment

12 Months Ended

Dec. 31, 2011

Premises and Equipment

Premises and Equipment

Note 6. Premises and Equipment

Premises and equipment are summarized as follows:

	December 31,
	2011		2010
	(dollars in thousands)

Land and improvements	$	23,238	$	23,678
Buildings and improvements	62,520		62,788
Furniture and equipment	38,324		37,272
	124,082		123,738
Less accumulated depreciation	54,684		50,520
Total premises and equipment	$	69,398	$	73,218

Depreciation expense was $5.5 million, $6.2 million, and $7.9 million for the years ended December 31, 2011, 2010 and 2009, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Goodwill and Other Intangibles Assets

12 Months Ended

Dec. 31, 2011

Goodwill and Other Intangibles Assets

Goodwill and Other Intangibles Assets

Note 7: Goodwill and Other Intangibles Assets

Other than goodwill, the Company does not have any other intangible assets that are not amortized. Goodwill is tested for impairment using a two-step process that begins with an estimation of the fair value of a reporting unit, which for the Company is our operating segments. The first step is a screen for potential impairment and the second step measures the amount of impairment, if any. Based on the impairment testing performed at December 31, 2011, Busey Wealth Management and FirsTech did not have indicators of potential impairment based on the estimated fair value of those operating segments.

Based upon interim impairment testing in the third quarter of 2009, Busey Bank indicated potential impairment and was subjected to the second step of goodwill impairment testing. Busey Bank experienced significant operating losses driven by the deterioration in the real estate markets, primarily due to its presence in southwest Florida through its loan production office. The operating losses and the effects of the current economic environment on the valuation of financial institutions and the capital markets had a significant, negative effect on the fair value of Busey Bank. As a result of applying the second step of the impairment test, all remaining goodwill associated with our banking operations was fully impaired, totaling $208.2 million, including $3.4 million related to our banking operations but held at the parent company level.

The remaining goodwill is associated with the operations of Busey Wealth Management and FirsTech, which both have sustained quarterly and annual profits to date. However, it is possible we will evaluate our goodwill for impairment on a more frequent basis than annually. The evaluation may result in further impairment.

There were no changes in the carrying amount of goodwill by operating segment during 2011 or 2010. The carrying amount of goodwill by operating segment at December 31, 2011 and 2010 is as follows:

	December 31 Balance
	(dollars in thousands)
Goodwill:
FirsTech	$	8,992
Busey Wealth Management	11,694
Total Goodwill	$	20,686

Core deposit and customer relationship intangible assets are amortized on an accelerated or straight-line basis over the estimated period benefited up to 10 years. Other intangible asset disclosures are as follows:

	Balance at December 31, 2010		Amortization		Balance at December 31, 2011
	(dollars in thousands)
Amortized intangible assets:
Core deposit intangibles	$	12,698	$	2,325	$	10,373
Customer relationship intangibles	6,858		1,213		5,645
	$	19,556	$	3,538	$	16,018

	Core deposit intangible		Customer relationship intangible
	(dollars in thousands)
As of December 31, 2011:
Gross carrying amount	$	34,836	$	11,320
Accumulated amortization	24,463		5,675
	$	10,373	$	5,645

Estimated amortization expense:
2012	$	2,198	$	1,141
2013	2,050		1,057
2014	1,871		1,014
2015	1,719		973
2016	1,644		929
Thereafter	891		531
	$	10,373	$	5,645

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Deposits

12 Months Ended

Dec. 31, 2011

Deposits.

Deposits

Note 8. Deposits

The composition of deposits is as follows:

	December 31,
	2011		2010
	(dollars in thousands)
Demand deposits, noninterest-bearing	$	503,118	$	460,661
Interest-bearing transaction deposits	107,908		137,900
Savings deposits	188,297		181,482
Money market deposits	1,156,645		1,126,128
Time deposits	807,486		1,010,195
Total	$	2,763,454	$	2,916,366

The aggregate amount of time deposits with a minimum denomination of $100,000 was approximately $236.0 million and $312.9 million at December 31, 2011 and 2010, respectively. Brokered deposits of $29.9 million and $73.7 million are included in the balance of time deposits as of December 31, 2011 and 2010, respectively.

As of December 31, 2011, the scheduled maturities of time deposits, in thousands, are as follows:

2012	$	535,976
2013	156,174
2014	58,767
2015	25,213
2016	31,253
Thereafter	103
	$	807,486

Securities Sold Under Agreements to Repurchase

12 Months Ended

Dec. 31, 2011

Securities Sold Under Agreements to Repurchase.

Securities Sold Under Agreements to Repurchase

Note 9. Securities Sold Under Agreements to Repurchase

Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature either daily or within one year from the transaction date. 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 the fair value of the underlying securities. The following table sets forth the distribution of securities sold under agreements to repurchase and weighted average interest rates:

	December 31,
	2011			2010
	(dollars in thousands)
Balance	$	127,867		$	138,982
Weighted average interest rate at end of period	0.21		%	0.32		%
Maximum outstanding at any month end	$	142,557		$	141,276
Average daily balance	$	127,095		$	134,207
Weighted average interest rate during period (1)	0.29		%	0.41		%

(1)The weighted average interest rate is computed by dividing total interest for the period by the average daily balance outstanding.

Short-term Borrowings

12 Months Ended

Dec. 31, 2011

Short-term Borrowings

Short-term Borrowings

Note 10. Short-term Borrowings

Short-term borrowings consist of advances which mature in less than one year from date of origination. At December 31, 2011, the Company had an operating line in the amount of $20.0 million from its primary correspondent bank. The line, which is collateralized by the outstanding shares of Busey Bank, matures on May 31, 2012. The interest rate on advances from the line of credit is at LIBOR + 2.75%. The Company had no outstanding amounts on its operating line at December 31, 2011 or 2010.

Long-term Debt

12 Months Ended

Dec. 31, 2011

Long-term Debt.

Long-term Debt

Note 11. Long-term Debt

Long-term debt is summarized as follows:

	December 31,
	2011		2010
	(dollars in thousands)

Notes payable, JPMorgan Chase N.A., $2,085,000 term loan, ESOP related, at LIBOR + 1.15% (effective rate of 1.45% and 1.41% at December 31, 2011 and 2010, respectively), annual payments of $417,000, began December 2008, loan matures December 15, 2012.	$	417	$	834

Notes payable, Federal Home Loan Bank of Chicago, collateralized by all otherwise unpledged U.S. Treasury securities and obligations of U.S. government corporations and agencies, first mortgages on 1-4 family residential real estate loans and Federal Home Loan Bank stock.	19,000		42,325

	$	19,417	$	43,159

Our ESOP loan is collateralized by the unallocated shares of the plan and guaranteed by the Company.

As of December 31, 2011, funds borrowed from the Federal Home Loan Bank, listed above, consisted of fixed-rate advances maturing through May 2013, with interest rates ranging from 4.17% to 5.39%. The weighted average rate on these long-term advances was 4.68% and 4.90% as of December 31, 2011 and 2010, respectively.

As of December 31, 2011, the scheduled maturities of long-term debt, in thousands, are as follows:

2012	$	12,417
2013	7,000
	$	19,417

Junior Subordinated Debt Owed to Unconsolidated Trusts

12 Months Ended

Dec. 31, 2011

Junior Subordinated Debt Owed to Unconsolidated Trusts

Junior Subordinated Debt Owed to Unconsolidated Trusts

Note 12. Junior Subordinated Debt Owed to Unconsolidated Trusts

First Busey Corporation has established statutory trusts for the sole purpose of issuing trust preferred securities and related trust common securities. The proceeds from such issuances were used by the trusts to purchase junior subordinated notes of the Company, which are the sole assets of each trust. Concurrent with the issuance of the trust preferred securities, the Company issued guarantees for the benefit of the holders of the trust preferred securities. The trust preferred securities are issues that qualify, and are treated by the Company, as Tier I regulatory capital. The Company owns all of the common securities of each trust. The trust preferred securities issued by each trust rank equally with the common securities in right of payment, except that if an event of default under the indenture governing the notes has occurred and is continuing, the preferred securities will rank senior to the common securities in right of payment.

The table below summarizes the outstanding junior subordinated notes and the related trust preferred securities issued by each trust as of December 31, 2011:

	First Busey Statutory Trust II	First Busey Statutory Trust III	First Busey Statutory Trust IV

Junior Subordinated Notes:
Principal balance	$15,000,000	$10,000,000	$30,000,000
Annual interest rate(1)	3-mo LIBOR + 2.65%	3-mo LIBOR + 1.75%	3-mo LIBOR + 1.55%
Stated maturity date	June 17, 2034	June 15, 2035	June 15, 2036
Call date	June 17, 2009	June 15, 2010	June 15, 2011

Trust Preferred Securities:
Face value	$15,000,000	$10,000,000	$30,000,000
Annual distribution rate(1)	3-mo LIBOR + 2.65%	3-mo LIBOR + 1.75%	3-mo LIBOR + 1.55%
Issuance date	April 30, 2004	June 15, 2005	June 15, 2006
Distribution dates(2)	Quarterly	Quarterly	Quarterly

(1) First Busey Statutory Trust IV maintained a 5-year fixed coupon of 6.94% through June 10, 2011, subsequently converting to a floating 3-month LIBOR +1.55%.

(2) All cash distributions are cumulative.

The trust preferred securities are subject to mandatory redemption, in whole or in part, upon repayment of the junior subordinated notes at par value at the stated maturity date or upon redemption of the junior subordinated notes on a date no earlier than June 17, 2009, for First Busey Statutory Trust II, June 15, 2010, for First Busey Statutory Trust III, and June 15, 2011, for First Busey Statutory Trust IV. Prior to these respective redemption dates, the junior subordinated notes could have been redeemed by the Company (in which case the trust preferred securities would also be redeemed) after the occurrence of certain events that would have had a negative tax effect on the Company or the trusts, would have caused the trust preferred securities to no longer qualify for Tier 1 capital, or would have resulted in a trust being treated as an investment company. Each trust’s ability to pay amounts due on the trust preferred securities is solely dependent upon the Company making payment on the related junior subordinated notes. The Company’s obligations under the junior subordinated notes and other relevant trust agreements, in aggregate, constitute a full and unconditional guarantee by the Company of each trust’s obligations under the trust preferred securities issued by each trust. The Company has the right to defer payment of interest on the notes and, therefore, distributions on the trust preferred securities, for up to five years, but not beyond the stated maturity date in the table above, but does not expect to exercise this right.

In March 2005, the Board of Governors of the Federal Reserve System issued a final rule allowing bank holding companies to continue to include qualifying trust preferred securities in their Tier I Capital for regulatory capital purposes, subject to a 25% limitation to all core (Tier I) capital elements, net of goodwill and other intangible assets less any associated deferred tax liability. The final rule provided a five-year transition period, which was extended to March 31, 2011, for applications of the aforementioned quantitative limitation. As of December 31, 2011, 100% of the trust preferred securities noted in the table above qualified as Tier I capital under the final rule adopted in March 2005.

The Dodd-Frank Act mandates the Federal Reserve to establish minimum capital levels for bank holding companies on a consolidated basis that are as stringent as those required for insured depository institutions. The components of Tier 1 capital will be restricted to capital instruments that are currently considered to be Tier 1 capital for insured depository institutions. As a result, the proceeds of trust preferred securities will be excluded from Tier 1 capital unless such securities were issued prior to May 19, 2010 by bank holding companies with less than $15 billion of assets. As First Busey has assets of less than $15 billion, it will be able to maintain its trust preferred proceeds as capital but it will have to comply with new capital mandates in other respects, and it will not be able to raise Tier 1 capital in the future through the issuance of trust preferred securities.

Capital

12 Months Ended

Dec. 31, 2011

Capital

Capital

Note 13. Capital

Issuance of Preferred Stock Under Small Business Lending Fund

On August 25, 2011, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Treasury, pursuant to which the Company issued and sold to the Treasury 72,664 shares of its Senior Non-Cumulative Perpetual Preferred Stock, Series C (the “Series C Preferred Stock”), having a liquidation preference of $1,000 per share (the “Liquidation Amount”), for aggregate proceeds of $72,664,000 (which were used to partially finance the Company’s redemption of Series T Preferred Stock as described below). The SBLF is a U.S. Department of the Treasury lending program that encourages qualified community banks to partner with small businesses and entrepreneurs to create jobs and promote economic development in local communities.

The Series C Preferred Stock qualifies as Tier 1 capital for the Company. Non-cumulative dividends are payable quarterly on the Series C Preferred Stock, which began October 1, 2011. The dividend rate is calculated as a percentage of the aggregate “Liquidation Amount” of the outstanding Series C Preferred Stock and will be based on changes in the level of “Qualified Small Business Lending” or “QSBL” (as such terms are defined in the Purchase Agreement) by the Bank. Based upon the lack of increase in the Bank’s level of QSBL over the baseline level calculated under the terms of the Purchase Agreement, the dividend rate for the initial dividend period, which is from the date of issuance through September 30, 2011, was set at 5%. For the 2nd through 10th calendar quarters, the annual dividend rate may be adjusted to between 1% and 5%, to reflect the amount of change in the Bank’s level of QSBL. For the 11th calendar quarter through 4.5 years after issuance, the dividend rate will be fixed at between 1% and 7% based upon the level of QSBL as compared to the baseline. After 4.5 years from issuance, the dividend rate will increase to 9% (including a quarterly lending incentive fee of 0.5%).

The Series C Preferred Stock is non-voting, except in limited circumstances. The Company may redeem the shares of Series C Preferred Stock, in whole or in part, at any time at a redemption price equal to the sum of the Liquidation Amount per share and the per share amount of any unpaid dividends for the then-current period, subject to any required prior approval by the Company’s primary federal banking regulator.

Redemption of Series T Preferred Stock

The Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series T (the “Series T Preferred Stock”), was issued to the Treasury on March 6, 2009 in connection with the Company’s participation in the TARP Capital Purchase Program (“CPP”). On August 25, 2011, the Company entered into and consummated the transactions contemplated by a letter agreement (the “Repurchase Document”) with the Treasury. Under the Repurchase Document, the Company redeemed from the Treasury, in part using the proceeds from the issuance of the Series C Preferred Stock, all 100,000 outstanding shares of its Series T Preferred Stock, for a redemption price of approximately $100.1 million, including accrued but unpaid dividends to the date of redemption.

In connection with the Company’s participation in the CPP, the Company also issued to Treasury a warrant to purchase 1,147,666 shares of the Company’s common stock. Since the date of the Company’s participation in the CPP, it raised additional capital through a public offering of common stock and, as a result of that offering, the number of shares of common stock subject to the warrant were reduced by 50% to 573,833. At December 31, 2011, this warrant to purchase 573,833 shares of the Company’s common stock remained outstanding; however, on November 23, 2011 the Treasury completed an auction to sell to CCS LLC, an unrelated party, its warrant in a private transaction.

Common Stock Issuance

At December 31, 2010, the Company completed a registered direct offering, issuing 12,718,635 shares of its common stock at an offering price of $4.25 per share. The net proceeds after deducting underwriting discounts and commissions and estimated offering expenses was $52.5 million.

Series B Convertible Cumulative Preferred Stock Issuance and Subsequent Conversion

At December 28, 2010, the Company completed a registered direct offering, issuing 318.6225 shares of Series B Convertible Cumulative Preferred Stock (the “Series B Preferred Stock”) at a price of $100,000 per share, or $31.9 million in the aggregate. The Series B Preferred Stock had a liquidation preference of $100,000 per share and annual dividend of 9.0%.

On March 1, 2011, the Company’s stockholders approved the conversion of the shares of the Series B Preferred Stock issued December 28, 2010, at $4.25 per share, the same price at which the shares of common stock were issued in the common stock issuance, resulting in an additional 7,497,000 common shares outstanding. Following the conversion, no shares of Series B Preferred Stock remained outstanding.

Regulatory Capital

The ability of the Company to pay cash dividends to its stockholders and to service its debt historically was dependent on the receipt of cash dividends from its subsidiaries. However, our banking subsidiary sustained significant losses during 2008 and 2009 resulting in pressure on capital, which has been enhanced through injections by the Company. State chartered banks have certain statutory and regulatory restrictions on the amount of cash dividends they may pay. Due to the significant retained earnings deficit and the Company’s desire to maintain a strong capital position at Busey Bank, dividends were not paid out of the Bank in 2010 or 2011. Further, until such time as retained earnings have been restored, the Bank will not be permitted to pay dividends and we will need to request permission from the Bank’s primary regulator to receive any capital out of the Bank.

The Company and the Bank are subject to various regulatory capital requirements administered by federal and state 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 or the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and Tier I capital (as defined) to average assets (as defined). Management believes, as of December 31, 2011, that the Company and the Bank meet all capital adequacy requirements to which they are subject.

The Company and the Bank are subject to regulatory capital requirements administered by federal and state banking agencies that involve the quantitative measure of their assets, liabilities, and certain off-balance-sheet items, as calculated under regulatory accounting practices. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and, for the Bank, Tier 1 capital (as defined) to average assets (as defined). Failure to meet minimum capital requirements may cause regulatory bodies to initiate certain discretionary and/or mandatory actions that, if undertaken, may have a direct material effect on our financial statements. The Company, as a financial holding company, is required to be “well capitalized” in the two capital categories based on risk-weighted assets, as shown in the table below. We believe, as of December 31, 2011, that the Company and the Bank met all capital adequacy requirements to which they are subject, including the guidelines to be considered “well capitalized”.

					Minimum				Minimum
					Capital				To Be Well
	Actual				Requirement				Capitalized(1)
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(dollars in thousands)
As of December 31, 2011:

Total Capital (to Risk Weighted Assets)
Consolidated	$	407,801	18.65	%	$	174,946	8.00	%	$	218,682	10.00	%
Busey Bank	$	375,154	17.27	%	$	173,815	8.00	%	$	217,268	10.00	%

Tier I Capital (to Risk Weighted Assets)
Consolidated	$	379,483	17.35	%	$	87,473	4.00	%	$	131,210	6.00	%
Busey Bank	$	347,011	15.97	%	$	86,908	4.00	%	$	130,361	6.00	%

Tier I Capital (to Average Assets)
Consolidated	$	379,483	11.50	%	$	132,022	4.00	%	$	N/A	N/A
Busey Bank	$	347,011	10.60	%	$	130,924	4.00	%	$	163,654	5.00	%

As of December 31, 2010:

Total Capital (to Risk Weighted Assets)
Consolidated	$	422,821	17.55	%	$	192,783	8.00	%	N/A		N/A
Busey Bank	$	346,722	14.31	%	$	193,772	8.00	%	$	242,215	10.00	%

Tier I Capital (to Risk Weighted Assets)
Consolidated	$	391,571	16.25	%	$	96,392	4.00	%	N/A		N/A
Busey Bank	$	315,321	13.02	%	$	96,886	4.00	%	$	145,329	6.00	%

Tier I Capital (to Average Assets)
Consolidated	$	391,571	11.33	%	$	138,203	4.00	%	N/A		N/A
Busey Bank	$	315,321	9.14	%	$	137,926	4.00	%	$	172,408	5.00	%

(1) Pursuant to provisions contained in the Dodd-Frank Act, certain minimum capital requirements to be considered “well capitalized” to which the Company had not previously been subject became applicable to the Company on July 21, 2011.

- Definition

The entire disclosure for banks, savings institutions, and credit unions, for regulatory capital requirements imposed by the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS) or for any state imposed capital requirements, as applicable. The disclosure may include (1) a description of regulatory capital requirements (a) for capital adequacy purposes and (b) established by the prompt corrective action provisions of Section 38 of the Federal Depository Insurance Act; (2) the actual or possible material effects of noncompliance with such requirements; (3) whether the entity is in compliance with the regulatory capital requirements including (a) required and actual ratios and amounts of Tier 1 leverage, Tier 1 risk-based, and total risk-based capital, tangible capital (for savings institutions), and Tier 3 capital for market risk (for certain banks and bank holding companies), (b) factors that may significantly affect capital adequacy; (4) the prompt corrective action category in which the entity was classified as of its most recent notification; (5) whether management believes any conditions or events since notification have changed the entity's category. Also may include additional information that might be disclosed in situations where substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Audit and Accounting Guide (AAG)
-Number AAG-DEP
-Chapter 17
-Paragraph 15, 16, 17
-IssueDate 2006-05-01
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=6918689&loc=SL5958570-112826

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1E
-URI http://asc.fasb.org/extlink&oid=6918689&loc=SL5958574-112826

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1D
-URI http://asc.fasb.org/extlink&oid=6918689&loc=SL5958573-112826

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1F
-URI http://asc.fasb.org/extlink&oid=6918689&loc=SL5958575-112826

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=6918689&loc=SL5958569-112826

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1G
-URI http://asc.fasb.org/extlink&oid=6918689&loc=SL5958577-112826

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1C
-URI http://asc.fasb.org/extlink&oid=6918689&loc=SL5958572-112826

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1H
-URI http://asc.fasb.org/extlink&oid=6918689&loc=d3e65071-112826

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6918689&loc=SL5958568-112826

+ Details

Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

Income Taxes

Note 14. Income Taxes

The components of income taxes consist of:

	Years Ended December 31,
	2011		2010		2009
	(dollars in thousands)
Current	$	2,194	$	7,353	$	(29,165	)
Deferred	12,776		2,111		(46,502		)

Total income tax (benefit) expense	$	14,970	$	9,464	$	(75,667	)

A reconciliation of federal and state income taxes at statutory rates to the income taxes included in the statements of operations is as follows:

	Years Ended December 31,
	2011		2010		2009
	% of		% of		% of
	Pretax		Pretax		Pretax
	Income		Income		Loss

Income tax (benefit) at statutory rate	35.0	%	35.0	%	(35.0	)%
Effect of:
Goodwill impairment	—	%	—	%	18.3	%
Tax-exempt interest, net	(2.6	)%	(3.7	)%	(0.3	)%
State income taxes, net	2.1	%	2.0	%	(2.1	)%
Income on bank owned life insurance	(1.0	)%	(1.9	)%	(0.3	)%
ESOP dividends	(0.1	)%	(0.2	)%	—	%
Other, net	—	%	(2.3	)%	0.4	%

	33.4	%	28.9	%	(19.0	)%

Net deferred taxes, included in other assets at December 31, 2011 and 2010 in the accompanying balance sheets, include the following amounts of deferred tax assets and liabilities:

	2011			2010
	(dollars in thousands)
Deferred tax assets:
Allowance for loan losses	$	23,881		$	29,939
Stock-based compensation	795			575
Loan adjustments	131			255
Deferred compensation	1,956			2,294
Accrued vacation	511			455
Employee costs	385			564
Other	1,448			992
	$	29,107		$	35,074

Deferred tax liabilities:
Investment securities:
Unrealized gains on securities available for sale	$	(9,187	)	$	(5,959	)
Other	(2,004		)	(2,010		)
Basis in premises and equipment	(3,170		)	(3,430		)
Mortgage servicing assets	(2,232		)	(2,070		)
Basis in core deposit and customer intangibles	(6,538		)	(7,701		)
Deferred loan origination costs	(285		)	(332		)
	$	(23,416	)	$	(21,502	)
Net operating loss carryforward, net of valuation allowance	42,545			50,668
Net deferred tax asset	$	48,236		$	64,240

At December 31, 2011 and December 31, 2010, the Company had Federal and Illinois net operating loss carryforwards of $42.5 million and $50.7 million, respectively, which are available to offset future taxable income. These net operating loss carryforwards will expire in 2030.

The Company also had Indiana and Florida net operating loss carryforwards of $2.0 million, which will begin to expire in 2030. Due to the uncertainty as to whether we will be able to realize the Indiana and Florida carryforwards, the Company has a full valuation allowance of $2.0 million related to these net operating loss carryforwards.

Management believes that it is more likely than not that the other deferred tax assets included in the accompanying Consolidated Balance Sheets will be fully realized. We have determined that no valuation allowance is required for any other deferred tax assets as of December 31, 2011, although there is no guarantee that those assets will be recognizable in future periods.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Employee Benefit Plans

12 Months Ended

Dec. 31, 2011

Employee Benefit Plans

Employee Benefit Plans

Note 15. Employee Benefit Plans

Employees’ Stock Ownership Plan

The First Busey Corporation Employees’ Stock Ownership Plan (ESOP) is available to all full-time employees who meet certain age and length of service requirements. The ESOP trust fund is able to purchase common shares of the Company using the proceeds of bank borrowings which are generally secured by the common shares. The borrowings are to be repaid using fully deductible contributions to the trust fund. As the ESOP makes each payment of principal, an appropriate percentage of stock will be allocated to eligible employees’ accounts in accordance with applicable regulations under the Internal Revenue Code. Allocations of common stock released and forfeitures are based on the eligible compensation of each participant. Dividends on allocated shares of common stock are distributed directly to the participants, and dividends on unallocated shares are used to service the bank borrowings. All shares held by the ESOP, which were acquired prior to the issuance of FASB ASC Topic 718-40, “Employee Stock Ownership Plans” (ASC 718-40), are included in the computation of average common shares and common share equivalents. This accounting treatment is grandfathered under ASC 718-40 for shares purchased prior to December 31, 1992.

Compensation expense for shares released is equal to the fair market value of the shares when released. During 2011, 2010 and 2009, $0.1 million of compensation expense was recognized each year for the ESOP, releasing 20,000 shares to participant accounts in each year. Compensation expense related to the ESOP is included in the chart below under “Employee Benefits.” Compensation expense related to the ESOP, including related interest expense was $0.1 million, $0.1 million and $0.2 million, in the years ended December 31, 2011, 2010 and 2009, respectively.

All shares held in the ESOP which were acquired prior to December 31, 1992 were allocated as of December 31, 2006. The number of shares and associated fair values were 642,128 worth $3.2 million and 735,682 worth $3.5 million at December 31, 2011 and 2010, respectively.

Shares held in the ESOP which were acquired after December 31, 1992 and their fair values were as follows:

	2011			2010
		Fair			Fair
	Shares	Value		Shares	Value
	(dollars in thousands)
Allocated shares	210,876	$	1,054	210,874	$	991
Unallocated shares	20,000	100		40,000	188

Total	230,876	$	1,154	250,874	$	1,179

Profit Sharing Plan

All full-time employees who meet certain age and service requirements are eligible to participate in the Company’s profit-sharing plan. The contributions, if any, are determined solely by the Boards of Directors of the Company and its subsidiaries, and in no case may the annual contributions be greater than the amounts deductible for federal income tax purposes for that year.

The rights of the participants vest ratably over a five-year period, except for the 401(k) match portion, which vests immediately. Contributions to the plan were $2.9 million, $2.8 million and $1.7 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Expenses related to the employee benefit plans are included in the statements of income as follows:

	Years Ended December 31,
	2011		2010		2009
	(dollars in thousands)

Employee benefits	$	2,985	$	2,859	$	1,826
Interest on employee stock ownership plan debt	11		18		25

Total employer contributions	$	2,996	$	2,877	$	1,851

The Company sponsors deferred compensation plans for executive officers for deferral of performance bonuses. The deferred compensation expense reported was $0.2 million, $0.3 million and $0.2 million for the years ended December 31, 2011, 2010 and 2009, respectively. The deferred compensation liability was $4.3 million at December 31, 2011, 2010 and 2009.

Stock Incentive Plans

12 Months Ended

Dec. 31, 2011

Stock Incentive Plans

Stock Incentive Plans

Note 16. Stock Incentive Plans

Equity Incentive Plan

During the second quarter of 2010, the Company adopted the First Busey Corporation 2010 Equity Incentive Plan (“2010 Equity Plan”), which was approved at the annual stockholders meeting on May 19, 2010. The Company will no longer make any additional grants under prior plans. The prior plans include: the First Busey Corporation 1993 Restricted Stock Award Plan, the First Busey Corporation 1999 Stock Option Plan, the Main Street Trust, Inc. 2000 Stock Incentive Plan, and the First Busey Corporation 2004 Stock Option Plan.

Subject to permitted adjustments for certain corporate transactions, the maximum number of shares that may be delivered to participants, or their beneficiaries, under the 2010 Equity Plan is 4,000,000 shares of First Busey common stock. To the extent that any shares of stock covered by an award (including stock awards) under the 2010 Equity Plan, or the prior plans, are not delivered for any reason, including because the award is forfeited, canceled, settled in cash or shares are withheld to satisfy tax withholding requirements, such shares will not be deemed to have been delivered for purposes of determining the maximum number of shares of stock available for delivery and will again become available for usage under the 2010 Equity Plan. With respect to stock appreciation rights, or SARs, that are settled in stock, only actual shares delivered shall be counted for purposes of these limitations. If any option granted under the 2010 Equity Plan is exercised by tendering shares of stock, only the number of shares of stock issued net of the shares of stock tendered shall be counted for purposes of these limitations.

The 2010 Equity Plan’s effective date was May 19, 2010. The 2010 Equity Plan will continue in effect until terminated by the board of directors; provided that no awards may be granted under the 2010 Equity Plan after the ten-year anniversary of the effective date. Any awards that are outstanding after the tenth anniversary of the effective date will remain subject to the terms of the 2010 Equity Plan.

The following additional limits apply to awards under the 2010 Equity Plan:

· the maximum number of shares of stock that may be covered by options or SARs that are intended to be “performance-based compensation” which are granted to any one participant during any calendar year is 400,000 shares;

· the maximum number of shares of stock that may be covered by stock awards that are intended to be “performance-based compensation” which are granted to any one participant during any calendar year is 200,000 shares; and

· the maximum dollar amount of cash incentive awards or cash-settled stock awards intended to be “performance-based compensation” payable to any one participant with respect to any calendar year is $1,000,000.

Under the terms of the Company’s equity incentive plan, the Company is allowed, but not required to source stock option exercises from its inventory of treasury stock. The Company has historically sourced stock option exercises from its treasury stock inventory, including exercises for the year ended December 31, 2009. As of December 31, 2011, under the Company’s stock repurchase plan, 895,655 additional shares were authorized for repurchase. The repurchase plan has no expiration date and expires when the Company has repurchased all of the remaining authorized shares. Due to First Busey’s participation in the TARP CPP through August 25, 2011, it was not permitted to repurchase any shares of its common stock, other than in connection with benefit plans consistent with past practice. However, as described under “Note 13 — Capital,” as of August 25, 2011, the Company is no longer a participant in the TARP CPP, and therefore is no longer subject to these stock repurchase restrictions.

There were no stock options granted in 2011. The fair value of the stock options granted in 2010 and 2009, which vest over a one-year period, has been estimated using the Black-Scholes option pricing model with the following weighted average assumptions.

	2010			2009
	Director			Director

Number of options granted	67,500			67,500
Risk-free interest rate	1.98		%	2.70		%
Expected life, in years	4.9			4.6
Estimated Forfeiture Rate	—			—
Expected volatility	47.17		%	42.07		%
Expected dividend yield	3.01		%	3.92		%

Estimated fair value per option	$	1.48		$	2.08

Expected life and estimated forfeiture rate is based on historical exercise and termination behavior. Expected stock price volatility is based on historical volatility of the Company’s common stock and correlates with the expected life of the options. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues with a remaining term approximately equal to the expected life of the option. The expected dividend yield represents the annual dividend yield as of the date of grant. Management reviews and adjusts the assumptions used to calculate the fair value of an option as of each grant date to better reflect expected trends.

A summary of the status of the Company’s equity incentive plan for the years ended December 31, 2011, 2010, and 2009, and the changes during the years ending on those dates is as follows:

	2011				2010				2009
			Weighted-				Weighted-				Weighted-
			Average				Average				Average
			Exercise				Exercise				Exercise
	Shares		Price		Shares		Price		Shares		Price

Outstanding at beginning of year	1,351,593		$	16.09	1,592,755		$	16.12	1,918,888		$	17.11
Granted	—		—		67,500		4.49		67,500		7.53
Exercised	—		—		—		—		(4,883	)	11.29
Forfeited	(333,671	)	15.67		(308,662	)	13.70		(388,750	)	19.56
Outstanding at end of year	1,017,922		$	16.23	1,351,593		$	16.09	1,592,755		$	16.12

Exercisable at end of year	1,017,922		$	16.23	1,291,593		$	16.63	1,525,255		$	16.50

Intrinsic value of options exercised during the year			$	—			$	—			$	34
Weighted-average fair value per option for options granted during the year			$	—			$	1.48			$	2.08

In 2009, the Company issued 1,282 treasury shares in conjunction with stock option exercises. The difference between the number of shares issued and the number of options exercised is due to shares issued under net share settlement option. There were no cash proceeds from the exercise of stock options in 2009 as the one exercise was net share settled.

The following table summarizes information about stock options outstanding at December 31, 2011:

								Options
		Options Outstanding						Exercisable
					Weighted-
			Weighted-		Average
Range of			Average		Remaining
Exercise			Exercise		Contractual	Intrinsic			Intrinsic
Prices		Number	Price		Life	Value		Number	Value

$	4.49-7.53	105,000	$	6.01	8.00			105,000
12.00		158,904	12.00		0.22			158,904
16.00-16.03		156,439	16.00		1.22			156,439
17.12-19.74		597,579	19.22		3.38			597,579
		1,017,922	$	16.23	3.03	$	27	1,017,922	$	27

The Company recorded an insignificant amount of stock compensation expense during 2011, 2010 and 2009. As of December 31, 2011, the Company has no unrecognized stock option expense.

Restricted Stock Unit Plan

A summary of the changes in the Company’s non-vested stock awards (restricted stock units) for the year ended December 31, 2011, and 2010 is as follows (2010 was the first year with grants under this plan):

	2011			2010
		Weighted-			Weighted-
		Average			Average
		Exercise			Exercise
	Shares	Price		Shares	Price

Outstanding at beginning of year	194,914	$	4.75	—	$	—
Granted	273,154	5.17		191,579	4.75
Dividend equivalents earned	10,055	5.20		3,335	4.61
Forfeited	—	—		—	—
Outstanding at end of year	478,123	$	5.00	194,914	$	4.75

On September 21, 2011, under the terms of the 2010 Equity Incentive Plan, the Company granted 28,846 restricted stock units (“RSUs”) to a member of management. As the stock price on the grant date of September 21, 2011 was $4.16, total compensation cost to be recognized is $120,000. This cost will be recognized over a period of one to three years. Per the agreement, 9,615 units vest over a requisite service period of one year, 9,615 units vest over a requisite service period of two years, and the remaining 9,616 units vest over a requisite service period of three years. Subsequent to each requisite service period, the awards will vest 100%.

On July 26, 2011, under the terms of the 2010 Equity Incentive Plan, the Company granted 4,826 RSUs to the Chairman of the Board. As the stock price on the grant date of July 26, 2011 was $5.18, total compensation cost to be recognized is $25,000. This cost will be recognized over the requisite service period of one year following which the awards will vest 100%.

On July 13, 2011, under the terms of the 2010 Equity Incentive Plan, the Company granted 155,719 RSUs to certain members of management. As the stock price on the grant date of July 13, 2011 was $5.29, total compensation cost to be recognized is $823,750. This cost will be recognized over the requisite service period of five years following which the awards will vest 100%.

Also on July 13, 2011, under the terms of the 2010 Equity Incentive Plan, the Company granted 66,163 RSUs to certain members of management. As the stock price on the grant date of July 13, 2011 was $5.29, total compensation cost to be recognized is $350,000. This cost will be recognized over the requisite service period of two years following which the awards will vest 100%.

On June 21, 2011, under the terms of the 2010 Equity Incentive Plan, the Company granted 17,600 RSUs to directors. As the stock price on the grant date of June 21, 2011 was $5.25, total compensation cost to be recognized is $92,400. This cost will be recognized over the requisite service period of one year following which the awards will vest 100%.

On July 12, 2010, under the terms of the 2010 Equity Incentive Plan, the Company granted 191,579 RSUs to certain members of management. As the stock price on the grant date of July 12, 2010 was $4.75, total compensation cost to be recognized is $910,000. This cost will be recognized over the requisite service period of five years following which the awards will vest 100%.

In addition, all recipients earn quarterly dividends on their respective shares. These dividends will not be paid out during the vesting period, but instead will be used to purchase additional shares. Therefore, dividends earned each quarter will compound based upon the updated share balances. Dividends earned are reinvested at the market price of our stock on the dividend payment date. Upon vesting, shares are expected to be issued from treasury.

The Company recognized $0.4 million and $0.1 million of compensation expense related to non-vested RSUs for the years ended December 31, 2011 and December 31, 2010, respectively. As of December 31, 2011, there was $1.9 million of total unrecognized compensation cost related to these non-vested RSUs. This cost is expected to be recognized over a period of 3.3 years. The Company began granting RSUs during 2010 and no shares had vested as of December 31, 2011.

Transactions with Directors and Executive Officers

12 Months Ended

Dec. 31, 2011

Transactions with Directors and Executive Officers

Transactions with Directors and Executive Officers

Note 17. Transactions with Directors and Executive Officers

The Company and its subsidiaries have had, and may be expected to have in the future, banking transactions in the ordinary course of business with directors, executive officers, their immediate families and affiliated companies in which they have 10% or more beneficial ownership (commonly referred to as related parties), on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with others.

The following is an analysis of the changes in loans, in thousands, to related parties during the year ended December 31, 2011:

Balance at beginning of year	$	33,880
Deletion due to change in relationship	(238		)
New loans/ advances	19,555
Repayments	(16,125		)
Balance at end of year	$	37,072

Total unused commitments to directors and executive officers were $23.6 million at December 31, 2011.

Commitments, Contingencies and Credit Risk

12 Months Ended

Dec. 31, 2011

Commitments, Contingencies and Credit Risk

Commitments, Contingencies and Credit Risk

Note 18. Commitments, Contingencies and Credit Risk

Legal Matters

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

Credit Commitments and Contingencies

The Company and its subsidiary are parties to credit related financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

The Company and its subsidiary’s exposure to credit loss are represented by the contractual amount of those commitments. The Company and its subsidiary use the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

A summary of the contractual amount of the Company’s exposure to off-balance-sheet risk follows:

	December 31,
	2011		2010
	(dollars in thousands)
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit	$	501,249	$	498,143
Standby letters of credit	13,549		15,538

Commitments to extend credit are agreements to lend to a customer as long as no condition established in the contract has been violated. These commitments are generally at variable interest rates and generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for equity lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including bond financing and similar transactions and primarily have terms of one year or less. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company holds collateral, which may include accounts receivable, inventory, property and equipment, income producing properties, supporting those commitments if deemed necessary. In the event the customer does not perform in accordance with the terms of the agreement with the third party, the Company would be required to fund the commitment. The maximum potential amount of future payments the Company could be required to make is represented by the contractual amount shown in the summary above. If the commitment is funded, the Company would be entitled to seek recovery from the customer. At December 31, 2011 and 2010, no amounts have been recorded as liabilities for the Company’s potential obligations under these guarantees.

As of December 31, 2011, the Company had no futures, forwards, swaps or option contracts, or other financial instruments with similar characteristics with the exception of rate lock commitments on mortgage loans to be held for sale.

Lease Commitments

At December 31, 2011, 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 approximately $3.0 million, $2.9 million, and $3.1 million the years ended December 31, 2011, 2010 and 2009, respectively.

The projected minimum rental payments under the terms of the leases at December 31, 2011 in thousands, are as follows:

2012	$	2,171
2013	821
2014	751
2015	694
2016	186
Thereafter	1,593
	$	6,216

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value Measurements

Fair Value Measurements

Note 19 - Fair Value Measurements

The fair value of an asset or liability is the price that would be received to sell that asset or paid to transfer that liability 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. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. FASB ASC Topic 820 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 reporting entity 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 an entity’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.

There were no transfers between levels during the year ended December 31, 2011.

In general, fair value is based upon quoted market prices, where 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. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. 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. Furthermore, the reported fair value amounts have not been comprehensively revalued since the presentation dates, and therefore, estimates of fair value after the balance sheet date may differ significantly from the amounts presented herein.

Securities Available for Sale. Securities classified as available for sale are reported at fair value utilizing level 1 and level 2 measurements. For corporate debt, mutual funds and equity securities, unadjusted quoted prices in active markets for identical assets are utilized to determine fair value at the measurement date and have been classified as level 1 in the ASC 820 fair value hierarchy. For all other securities, the Company obtains fair value measurements from an independent pricing service. The independent pricing service evaluations are based on market data. 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 evaluated pricing applications apply available information as applicable through processes such as benchmark curves, benchmarking of like securities, sector groupings, and matrix pricing, to prepare evaluations. In addition, the independent pricing service uses model processes, such as the Option Adjusted Spread model to assess interest rate impact and develop prepayment scenarios. The models and processes take into account market convention. 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.

The 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. Information of this nature is a trigger to acquire further market data. 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 in the ASC 820 fair value hierarchy.

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of December 31, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
	(dollars in thousands)
2011
Securities available for sale:
U.S. Treasury securities	$	—	$	46,035	$	—	$	46,035
Obligations of U.S. government corporations and agencies	—		349,031		—		349,031
Obligations of states and political subdivisions	—		154,437		—		154,437
Residential mortgage-backed securities	—		278,115		—		278,115
Corporate debt securities	2,583		—		—		2,583
Mutual funds and other equity securities	1,548		—		—		1,548
	$	4,131	$	827,618	$	—	$	831,749

2010
Securities available for sale:
U.S. Treasury securities	$	—	$	381	$	—	$	381
Obligations of U.S. government corporations and agencies	—		333,135		—		333,135
Obligations of states and political subdivisions	—		76,935		—		76,935
Residential mortgage-backed securities	—		183,006		—		183,006
Corporate debt securities	1,499		—		—		1,499
Mutual funds and other equity securities	4,503		—		—		4,503
	$	6,002	$	593,457	$	—	$	599,459

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).

Impaired Loans. The Company does not record loans at fair value on a recurring basis. However, periodically, a loan is considered impaired and is reported at the fair value of the underlying collateral, less estimated costs to sell, if repayment is expected solely from the collateral. Impaired loans measured at fair value typically consist of loans on non-accrual status and restructured loans in compliance with modified terms. 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 the level 3 inputs, all impaired loan fair values have been classified as level 3.

Foreclosed Assets. Non-financial assets and non-financial liabilities measured at fair value include foreclosed assets (upon initial recognition or subsequent impairment). Foreclosed assets are measured using a combination of observable inputs, including recent appraisals and unobservable inputs based on customized discounting criteria. Due to the significance of the unobservable inputs, all foreclosed asset fair values have been classified as level 3 in the ASC 820 fair value hierarchy.

The following table summarizes assets and liabilities measured at fair value on a non-recurring basis as of December 31, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
	(dollars in thousands)
2011
Impaired loans	$	—	$	—	$	4,905	$	4,905
Foreclosed assets	—		—		794		794

2010
Impaired loans	$	—	$	—	$	12,149	$	12,149
Foreclosed assets	—		—		310		310

FASB ASC Topic 825 requires disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. The estimated fair value approximates carrying value for accrued interest. The methodologies for other financial assets and financial liabilities are discussed below:

Loans held for sale

Fair value of mortgage loans held for sale are based on commitments on hand from investors or prevailing market prices.

Fair values for on-balance-sheet commitments to originate loans held for sale are based on fees currently charged to enter into similar agreements, and for fixed-rate commitments also consider the difference between current levels of interest rates and the committed rates. The fair value of interest-rate lock commitments are considered immaterial.

Loans

Our performing loan portfolio consists of variable rate and fixed rate loans. For variable rate loans that reprice frequently with no significant change in credit risk, fair values are based on carrying amount. For certain homogeneous categories of loans, such as some residential mortgages, fair value is estimated using the quoted market prices for similar loans or securities backed by similar loans, adjusted for differences in loan characteristics. The fair value of other types of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Fair value of impaired loans is discussed above.

Deposits and securities sold under agreements to repurchase

The fair value of demand deposits, savings accounts, interest-bearing transaction accounts, and certain money market deposits is defined as the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit is estimated using a discounted cash flow calculation that applies interest rates currently offered for deposits of similar remaining maturities. The carrying amounts reported in the balance sheet for securities sold under agreements to repurchase approximate those liabilities’ fair values.

Long-term debt

Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate fair value of existing debt.

Junior subordinated debt owed to unconsolidated trusts

Rates currently available to the Company for instruments with similar terms and remaining maturities are used to estimate fair value of existing fixed rate instruments. For variable rate instruments, fair values are based on carrying values.

Commitments to extend credit and standby letters of credit

The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. As of December 31, 2011 and 2010, these items are insignificant.

The estimated fair values of the Company’s financial instruments at December 31 are as follows:

	2011				2010
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(dollars in thousands)
Financial assets:
Securities	$	831,749	$	831,749	$	599,459	$	599,459
Loans held for sale	15,249		15,569		49,684		50,331
Loans, net	1,977,589		2,008,603		2,243,055		2,282,681
Accrued interest receivable	11,121		11,121		12,633		12,633

Financial liabilities:
Deposits	$	2,763,454	$	2,773,599	$	2,916,366	$	2,928,240
Securities sold under agreements to repurchase	127,867		127,867		138,982		138,982
Long-term debt	19,417		20,138		43,159		44,934
Junior subordinated debt owed to unconsolidated trusts	55,000		55,000		55,000		54,547
Accrued interest payable	1,881		1,881		3,408		3,408

Other assets and liabilities of the Company that are not defined as financial instruments are not included in the above disclosures, such as property and equipment. Also, nonfinancial instruments typically not recognized in financial statements nevertheless may have value but are not included in the above disclosures. These include, among other items, the estimated earning potential of core deposit accounts, the earnings potential of loan servicing rights, the earnings potential of the trust operations, customer goodwill and similar items.

- 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

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13537-108611

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13433-108611

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13504-108611

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19296-110258

+ Details

Reportable Segments and Related Information

12 Months Ended

Dec. 31, 2011

Reportable Segments and Related Information

Reportable Segments and Related Information

Note 20. Reportable Segments and Related Information

Following the August 2009 merger of Busey Bank, N.A. into Busey Bank, the Company has three reportable segments, Busey Bank, FirsTech and Busey Wealth Management. Busey Bank provides a full range of banking services to individual and corporate customers through its branch network in downstate Illinois, through its branch in Indianapolis, Indiana, and through its branch network in southwest Florida. FirsTech provides remittance processing for online bill payments, lockbox and walk-in payments. Busey Wealth Management is the parent company of Busey Trust Company, which provides a full range of trust and investment management services, including estate and financial planning, securities brokerage, investment advice, tax preparation, custody services and philanthropic advisory services.

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

Busey Bank, N.A. information has been combined with the information presented for Busey Bank for 2009. The segment financial information provided below has been derived from the internal accounting system 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 footnote 1. The Company accounts for intersegment revenue and transfers at current market value.

The following summarized information relates to the Company’s reportable segments:

	Goodwill				Total Assets
As of December 31,	2011		2010		2011		2010
	(dollars in thousands)				(dollars in thousands)

Busey Bank	$	—	$	—	$	3,331,869	$	3,577,542
FirsTech	8,992		8,992		25,542		24,473
Busey Wealth Management	11,694		11,694		25,867		26,269
All Other	—		—		18,844		(23,281		)
Totals	$	20,686	$	20,686	$	3,402,122	$	3,605,003

	Year ended December 31,
	2011			2010			2009
	(dollars in thousands)

Interest income:
Busey Bank	$	132,501		$	155,921		$	184,267
FirsTech	66			56			48
Busey Wealth Management	255			248			235
All Other	(3		)	(42		)	(40		)
Total interest income	$	132,819		$	156,183		$	184,510

Interest expense:
Busey Bank	$	20,514		$	35,887		$	66,324
FirsTech	—			—			—
Busey Wealth Management	—			—			—
All Other	1,912			3,145			3,785
Total interest expense	$	22,426		$	39,032		$	70,109

Other income:
Busey Bank	$	35,940		$	40,341		$	40,163
FirsTech	9,287			9,493			13,128
Busey Wealth Management	14,841			13,822			12,642
All Other	(1,053		)	(903		)	81
Total other income	$	59,015		$	62,753		$	66,014

Net income (loss):
Busey Bank	$	28,504		$	21,230		$	(320,807	)
FirsTech	1,437			1,821			2,869
Busey Wealth Management	3,095			3,283			2,557
All Other	(3,163		)	(3,104		)	(7,732		)
Total net income (loss)	$	29,873		$	23,230		$	(323,113	)

- 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/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 131
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 29
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 33
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599

+ Details

Parent Company Only Financial Information

12 Months Ended

Dec. 31, 2011

Parent Company Only Financial Information

Parent Company Only Financial Information

Note 21. Parent Company Only Financial Information

Condensed financial data for First Busey Corporation is presented below.

BALANCE SHEETS

	December 31,
	2011		2010
	(dollars in thousands)

ASSETS

Cash and due from subsidiary banks	$	25,771	$	80,735
Securities purchased from subsidiary under agreements to resell	—		10,909
Securities available for sale	208		208
Loans	163		248
Investments in subsidiaries:
Bank	412,425		378,471
Non-bank	22,714		23,291
Premises and equipment, net	844		959
Other assets	9,487		11,928
Total assets	$	471,612	$	506,749

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Long-term debt	$	—	$	—
Long-term ESOP debt	417		834
Junior subordinated debentures owed to unconsolidated trusts	55,000		55,000
Other liabilities	6,928		30,410
Total liabilities	62,345		86,244

Total stockholders’ equity	409,267		420,505
Total liabilities and stockholders’ equity	$	471,612	$	506,749

STATEMENTS OF OPERATIONS

	Years Ended December 31,
	2011			2010			2009
	(dollars in thousands)
Operating income:
Dividends from subsidiaries:
Bank	$	—		$	—		$	9,200
Non-bank	3,750			1,900			3,000
Interest and dividend income	63			27			68
Other income	2,424			2,743			3,756
Total operating income	6,237			4,670			16,024

Expenses:
Salaries and employee benefits	3,620			2,595			3,458
Interest expense	1,963			3,197			3,900
Operating expense	2,623			2,612			6,945
Total expenses	8,206			8,404			14,303

Income (loss) before income tax benefit and distributions (in excess of) less than net income of subsidiaries	(1,969		)	(3,734		)	1,721

Income tax benefit	2,556			2,530			2,748

Income before distributions less than (in excess of) net income of subsidiaries	587			(1,204		)	4,469

Distributions less than (in excess of) net income (loss) of subsidiaries:
Bank	29,941			23,051			(327,139		)
Non-bank	(655		)	1,383			(443		)

Net income (loss)	$	29,873		$	23,230		$	(323,113	)

STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2011			2010			2009
	(dollars in thousands)
Cash Flows from Operating Activities
Net income (loss)	$	29,873		$	23,230		$	(323,113	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization	120			310			360
Distributions in excess of (less than) net income of subsidiaries	(29,286		)	(24,434		)	327,582
Goodwill impairment	—			—			3,364
Stock-based compensation	488			194			141
Fair value adjustment on employee stock ownership plan shares allocated	(318		)	(328		)	(280		)
Security gains, net	—			—			(84		)
Changes in assets and liabilities:
Decrease (increase) in other assets	1,479			(953		)	(365		)
(Decrease) increase in other liabilities	(22,630		)	22,128			1,626
Net cash (used in) provided by operating activities	(20,274		)	20,147			9,231

Cash Flows from Investing Activities
Proceeds from sales of securities available for sale	—			—			695
Purchases of securities available for sale	—			—			(75		)
Securities purchased under agreements to resell, net	10,909			16,095			(27,004		)
Decrease in loans	85			81			57
Proceeds from sales of premises and equipment	—			191			4
Purchases of premises and equipment	(5		)	(6		)	(57		)
Investment in subsidiary, net	—			(12,500		)	(136,000		)
Net cash provided by (used in) investing activities	10,989			3,861			(162,380		)

Cash Flows from Financing Activities
Proceeds from short-term debt	—			4,000			—
Principal payments on long-term debt	—			(13,000		)	(17,000		)
Principal payments on short-term debt	—			(4,000		)	(28,000		)
Proceeds from issuance of Series T Preferred stock and warrants	—			—			100,000
Repurchase of Series T Preferred Stock	(100,000		)	—			—
Proceeds from issuance of Series C Preferred stock	72,664			—			—
Proceeds from issuance of Series B Preferred stock, net	—			31,862			—
Proceeds from issuance of Common stock, net	—			52,454			116,854
Cash dividends paid	(18,343		)	(15,617		)	(18,951		)
Net cash (used in) provided by financing activities	(45,679		)	55,699			152,903

Net (decrease) increase in cash and due from subsidiary banks	(54,964		)	79,707			(246		)
Cash and due from subsidiary banks, beginning	80,735			1,028			1,274

Cash and due from subsidiary banks, ending	$	25,771		$	80,735		$	1,028

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

+ References + Details

Unaudited Interim Financial Data

12 Months Ended

Dec. 31, 2011

Unaudited Interim Financial Data

Unaudited Interim Financial Data

Note 22. Unaudited Interim Financial Data

The following table reflects summarized quarterly data for the periods described (unaudited), in thousands, except per share data:

	2011
	December 31		September 30		June 30		March 31

Interest income	$	31,229	$	32,811	$	33,873	$	34,906
Interest expense	4,751		5,084		6,032		6,559
Net interest income	26,478		27,727		27,841		28,347
Provision for loan losses	5,000		5,000		5,000		5,000
Noninterest income	15,012		14,718		13,746		15,539
Noninterest expense	27,991		25,724		25,185		25,665
Income before income taxes	8,499		11,721		11,402		13,221
Income taxes	2,753		4,151		3,955		4,111
Net income	$	5,746	$	7,570	$	7,447	$	9,110
Preferred stock dividends and discount accretion	1,234		1,049		1,283		1,776
Net income available to common stockholders	$	4,512	$	6,521	$	6,164	$	7,334

Basic earnings per share	$	0.05	$	0.08	$	0.07	$	0.09
Diluted earnings per share	$	0.05	$	0.08	$	0.07	$	0.09

	2010
	December 31		September 30		June 30		March 31

Interest income	$	37,039	$	38,467	$	39,984	$	40,693
Interest expense	7,628		8,832		10,884		11,688
Net interest income	29,411		29,635		29,100		29,005
Provision for loan losses	10,300		9,500		7,500		14,700
Noninterest income	17,205		14,850		14,404		16,294
Noninterest expense	25,288		27,042		27,667		25,213
Income (loss) before income taxes	11,028		7,943		8,337		5,386
Income taxes	3,722		1,921		2,652		1,169
Net income (loss)	$	7,306	$	6,022	$	5,685	$	4,217
Preferred stock dividends and discount accretion	1,322		1,283		1,283		1,282
Net income (loss) available to common stockholders	$	5,984	$	4,739	$	4,402	$	2,935

Basic earnings per share	$	0.09	$	0.07	$	0.07	$	0.04
Diluted earnings per share	$	0.09	$	0.07	$	0.07	$	0.04

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References + Details