0001558370-20-001665 | 10-K | XBRL Viewer

Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of estimated useful lives for premises and equipment


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

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Assets
Cash and due from banks	$ 136,546	$ 128,838
Interest-bearing deposits	392,742	111,135
Total cash and cash equivalents	529,288	239,973
Debt securities available for sale	1,648,257	697,685
Debt securities held to maturity (fair value 2019 $- ; 2018 $603,360)		608,660
Equity securities	5,952	6,169
Loans held for sale, at fair value	68,699	25,895
Portfolio loans (net of allowance for loan losses 2019 $53,748; 2018 $50,648)	6,633,501	5,517,780
Premises and equipment, net	151,267	117,672
Right of use asset	9,490
Goodwill	311,536	267,685
Other intangible assets, net	61,593	32,873
Cash surrender value of bank owned life insurance	173,595	128,491
Other assets	102,551	59,474
Total assets	9,695,729	7,702,357
Deposits:
Noninterest-bearing	1,832,619	1,464,700
Interest-bearing	6,069,777	4,784,621
Total deposits	7,902,396	6,249,321
Securities sold under agreements to repurchase	205,491	185,796
Short-term borrowings	8,551
Long-term debt	83,600	50,000
Senior notes, net of unamortized issuance costs	39,674	39,539
Subordinated notes, net of unamortized issuance costs	59,248	59,147
Junior subordinated debt owed to unconsolidated trusts	71,308	71,155
Lease liability	9,552
Other liabilities	95,475	52,435
Total liabilities	8,475,295	6,707,393
Outstanding commitments and contingent liabilities (see Note 16)
Stockholders' Equity
Common stock, $.001 par value, authorized 66,666,667 shares; 55,910,733 shares issued 2019 and 49,185,581 shares issued 2018	56	49
Additional paid-in capital	1,248,216	1,080,084
Accumulated deficit	(14,813)	(72,167)
Accumulated other comprehensive income (loss)	14,960	(6,812)
Total stockholders' equity before treasury stock	1,248,419	1,001,154
Treasury stock, at cost (2019 1,121,961 shares; 2018 310,745 shares)	(27,985)	(6,190)
Total stockholders' equity	1,220,434	994,964
Total liabilities and stockholders' equity	$ 9,695,729	$ 7,702,357
Common shares outstanding at period end	54,788,772	48,874,836

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 102,953	$ 98,928	$ 62,726
Unrealized gains (losses) on debt securities available for sale:
Net unrealized holding gains (losses) on debt securities available for sale, net of taxes	25,739	(4,670)	(2,174)
Net unrealized losses on debt securities transferred from held to maturity to available for sale, net of taxes	(3,244)
Reclassification adjustment for realized (gains) losses on debt securities	(523)	1,273	(672)
Net change in unrealized gains (losses) on debt securities available for sale	21,972	(3,397)	(2,846)
Unrealized gains (losses) on cash flow hedges:
Net unrealized holding gains (losses) on cash flow hedges, net of taxes	(202)
Reclassification adjustment for realized losses (gains) on cash flow hedges	2
Net change in unrealized gains (losses) on derivative instruments	(200)
Net change in accumulated other comprehensive income (loss)	21,772	(3,397)	(2,846)
Total comprehensive income	$ 124,725	$ 95,531	$ 59,880

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2019

Earnings Per Share

Schedule of computation of earnings per common share

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



	For the Years Ended December 31,
	2019		2018		2017
Net income	$	102,953	$	98,928	$	62,726
Shares:
Weighted average common shares outstanding		54,852		48,854		42,685
Dilutive effect of outstanding options, warrants and restricted stock units as determined by the application of the treasury stock method		280		361		441

Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation		55,132		49,215		43,126

Basic earnings per common share	$	1.88	$	2.02	$	1.47

Diluted earnings per common share	$	1.87	$	2.01	$	1.45

Premises and Equipment, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Premises and Equipment
Premises and equipment, gross	$ 232,768	$ 192,650
Less accumulated depreciation	81,501	74,978
Total premises and equipment, net	151,267	117,672
Depreciation expense	11,879	9,556	$ 8,615
Land and improvements
Premises and Equipment
Premises and equipment, gross	43,967	36,453
Buildings and improvements
Premises and Equipment
Premises and equipment, gross	134,473	108,137
Furniture and equipment
Premises and Equipment
Premises and equipment, gross	$ 54,328	$ 48,060

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Cash dividends, common stock (in dollars per share)	$ 0.84	$ 0.80	$ 0.72
Stock dividends, restricted stock units (in dollars per share)	$ 0.84	$ 0.80	0.72
Stock dividends, accrued restricted stock awards (in dollars per share)			$ 0.54

Portfolio loans and allowance for loan losses - Summary of risk grades segregated by category (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Loans
Portfolio loans	$ 6,687,249	$ 5,568,428
Pass
Loans
Portfolio loans	5,997,126	4,976,708
Watch
Loans
Portfolio loans	413,876	330,650
Special Mention
Loans
Portfolio loans	181,107	142,839
Substandard
Loans
Portfolio loans	75,215	86,060
Substandard Non-accrual
Loans
Portfolio loans	27,896	34,997
Commercial \| Pass
Loans
Portfolio loans	1,458,416	1,126,257
Commercial \| Watch
Loans
Portfolio loans	172,526	172,449
Commercial \| Special Mention
Loans
Portfolio loans	66,337	47,000
Commercial \| Substandard
Loans
Portfolio loans	41,273	42,532
Commercial \| Substandard Non-accrual
Loans
Portfolio loans	9,096	17,953
Commercial real estate \| Pass
Loans
Portfolio loans	2,477,398	2,106,711
Commercial real estate \| Watch
Loans
Portfolio loans	186,963	137,214
Commercial real estate \| Special Mention
Loans
Portfolio loans	105,487	85,148
Commercial real estate \| Substandard
Loans
Portfolio loans	26,204	36,205
Commercial real estate \| Substandard Non-accrual
Loans
Portfolio loans	9,178	10,298
Real estate construction \| Pass
Loans
Portfolio loans	351,923	268,069
Real estate construction \| Watch
Loans
Portfolio loans	45,262	14,562
Real estate construction \| Special Mention
Loans
Portfolio loans	3,928	3,899
Real estate construction \| Substandard
Loans
Portfolio loans	737	1,888
Real estate construction \| Substandard Non-accrual
Loans
Portfolio loans	630	18
Retail Real Estate \| Pass
Loans
Portfolio loans	1,661,691	1,448,964
Retail Real Estate \| Watch
Loans
Portfolio loans	9,125	6,425
Retail Real Estate \| Special Mention
Loans
Portfolio loans	5,355	6,792
Retail Real Estate \| Substandard
Loans
Portfolio loans	7,001	5,435
Retail Real Estate \| Substandard Non-accrual
Loans
Portfolio loans	8,935	6,698
Retail Other \| Pass
Loans
Portfolio loans	47,698	26,707
Retail Other \| Substandard Non-accrual
Loans
Portfolio loans	57	30
Commercial Loans
Loans
Portfolio loans	1,748,368	1,405,106
Commercial Real Estate Loans
Loans
Portfolio loans	2,793,417	2,366,823
Real Estate Construction
Loans
Portfolio loans	401,861	288,197
Retail Real Estate
Loans
Portfolio loans	1,693,769	1,480,133
Retail Other
Loans
Portfolio loans	$ 49,834	$ 28,169

Borrowings - Maturity period (Details) - USD ($)	12 Months Ended
Borrowings - Maturity period (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Maturity period
Federal Funds Purchased	$ 0	$ 0
Maximum maturity period of short-term debt	1 year

Outstanding Commitments and Contingent Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Outstanding Commitments and Contingent Liabilities

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

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


	December 31, 2019		December 31, 2018
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit	$	1,649,565	$	1,398,483
Standby letters of credit		42,581		32,156

Premises and Equipment, net

12 Months Ended

Dec. 31, 2019

Premises and Equipment, net

Premises and Equipment, net

Note 6. Premises and Equipment, net

Premises and equipment, net are summarized as follows (dollars in thousands):


	December 31,
	2019		2018
Land and improvements	$	43,967	$	36,453
Buildings and improvements		134,473		108,137
Furniture and equipment		54,328		48,060
		232,768		192,650
Less accumulated depreciation		81,501		74,978
Total premises and equipment, net	$	151,267	$	117,672

Depreciation expense was $11.9 million, $9.6 million, and $8.6 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Portfolio loans and allowance for loan losses - Distribution of portfolio loans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Distributions of portfolio loans
Portfolio loans	$ 6,687,249	$ 5,568,428
Allowance for loan losses	(53,748)	(50,648)	$ (53,582)	$ (47,795)
Portfolio loans, net	6,633,501	5,517,780
Net deferred loan origination costs	6,200	5,600
Net accretable purchase accounting adjustments	(20,200)	(13,900)
Commercial Loans
Distributions of portfolio loans
Portfolio loans	1,748,368	1,405,106
Allowance for loan losses	(18,291)	(17,829)	(14,779)	(13,303)
Commercial Real Estate Loans
Distributions of portfolio loans
Portfolio loans	2,793,417	2,366,823
Allowance for loan losses	(21,190)	(21,137)	(21,813)	(20,623)
Real Estate Construction
Distributions of portfolio loans
Portfolio loans	401,861	288,197
Allowance for loan losses	(3,204)	(2,723)	(2,861)	(1,870)
Retail Real Estate
Distributions of portfolio loans
Portfolio loans	1,693,769	1,480,133
Allowance for loan losses	(10,495)	(8,471)	(13,783)	(11,648)
Retail Other
Distributions of portfolio loans
Portfolio loans	49,834	28,169
Allowance for loan losses	$ (568)	$ (488)	$ (346)	$ (351)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended									12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Current expense:
Federal										$ 22,479	$ 18,076	$ 27,168
State										8,910	9,807	4,117
Deferred expense:
Federal										(380)	5,068	11,583
State										476	2,048	2,517
Total income tax expense	$ 7,146	$ 8,052	$ 6,702	$ 9,585	$ 8,891	$ 9,081	$ 8,749	$ 8,278		$ 31,485	$ 34,999	$ 45,385
Reconciliation of federal and state income taxes at statutory rates to the income taxes included in the statements of operations
Income tax at statutory rate (as a percent)										21.00%	21.00%	35.00%
TCJA (as a percent)												7.50%
Tax-exempt interest, net (as a percent)										(1.70%)	(1.30%)	(2.10%)
Stock incentive (as a percent)										(0.10%)	(0.30%)	(0.50%)
State income taxes, net (as a percent)										5.50%	7.30%	4.00%
Income on bank owned life insurance (as a percent)										(0.90%)	(0.60%)	(0.90%)
Tax credit investments										(1.30%)
Other, net (as a percent)										0.90%		(1.00%)
Total (as a percent)										23.40%	26.10%	42.00%
Deferred tax assets:
Unrealized losses on debt securities available for sale					2,716						$ 2,716
Allowance for loan losses	15,416				14,885					$ 15,416	14,885
Stock-based compensation	2,069				2,208					2,069	2,208
Deferred compensation	166				1,454					166	1,454
Affordable housing partnerships and other investments	777				691					777	691
Purchase accounting adjustments	11,301				4,563					11,301	4,563
Accrued vacation	827				744					827	744
Lease liability	2,650									2,650
Employee costs	1,048				260					1,048	260
Other	809				1,095					809	1,095
Total	35,063				28,616					35,063	28,616
Deferred tax liabilities:
Unrealized gains on debt securities available for sale	(6,032)									(6,032)
Basis in premises and equipment	(4,222)				(1,213)					(4,222)	(1,213)
Affordable housing partnerships and other investments	(1,411)				(1,868)					(1,411)	(1,868)
Purchase accounting adjustments	(1,023)				(1,102)					(1,023)	(1,102)
Mortgage servicing assets	(3,717)				(1,159)					(3,717)	(1,159)
Basis in core deposit and customer intangible assets	(17,120)				(9,299)					(17,120)	(9,299)
Deferred loan origination costs	(1,730)				(1,593)					(1,730)	(1,593)
Lease right of use asset	(2,633)									(2,633)
Unrealized gain on equity securities	(593)				(662)					(593)	(662)
Other	(508)				(322)					(508)	(322)
Deferred tax liabilities	(38,989)				(17,218)					(38,989)	(17,218)
Net operating loss carryforward, net of valuation allowance					33						33
Net deferred tax assets	(3,926)									(3,926)
Net deferred tax (liability) asset					11,431						11,431
Non-cash charge due to revaluation of Company's net deferred tax position following the enactment of the TCJA									$ 8,100
Operating loss carryforwards	0									0
Valuation allowance, deferred tax assets	$ 0				$ 0					$ 0	$ 0

Share-based Compensation - Restricted and Deferred Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions			12 Months Ended
	Sep. 25, 2019	Jul. 05, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Shares
Forfeited (in shares)			(1,580)
Weighted-Average Grant Date Fair Value
Forfeited (in dollars per share)			$ 31.44
Additional disclosures
Compensation expense recognized			$ 3.8	$ 3.5	$ 2.6
Amount of compensation cost to be recognized			$ 12.2
Period over which cost will be recognized			3 years 6 months
Restricted stock unit
Shares
Non-vested at beginning of year (in shares)			690,495
Granted (in shares)			216,411
Dividend equivalents earned (in shares)			24,127
Vested (in shares)			(107,537)
Forfeited (in shares)			(45,179)
Non-vested at end of year (in shares)			778,317	690,495
Weighted-Average Grant Date Fair Value
Non-vested at beginning of year (in dollars per share)			$ 26.14
Granted (in dollars per share)			26.73
Dividend equivalents earned (in dollars per share)			26.07
Vested (in dollars per share)			18.54
Forfeited (in dollars per share)			27.48
Non-vested at end of year (in dollars per share)			$ 27.27	$ 26.14
Additional disclosures
Stock Issued During Period Shares Equity Instruments Other than Options Vested and Related Tax Benefit			92,996
Restricted stock unit \| Members of management
Shares
Granted (in shares)	11,592
Stock price (in dollars per share)	$ 25.88	$ 26.78
Additional disclosures
Compensation expense recognized	$ 0.3	$ 5.3
Period over which cost will be recognized	3 years	5 years
Vesting percentage (as a percent)	100.00%	100.00%
Deferred stock units
Shares
Non-vested at beginning of year (in shares)			20,449
Granted (in shares)			20,984
Dividend equivalents earned (in shares)			2,685
Vested (in shares)			(21,277)
Non-vested at end of year (in shares)			21,261	20,449
Outstanding at end of year (in shares)			90,497
Weighted-Average Grant Date Fair Value
Non-vested at beginning of year (in dollars per share)			$ 27.93
Granted (in dollars per share)			26.78
Dividend equivalents earned (in dollars per share)			26.06
Vested (in dollars per share)			31.05
Non-vested at end of year (in dollars per share)			23.18	$ 27.93
Outstanding at end of year (in dollars per share)			$ 23.38
Deferred stock units \| Directors
Shares
Stock price (in dollars per share)		$ 26.78
Additional disclosures
Amount of compensation cost to be recognized		$ 0.6
Period over which cost will be recognized		1 year
Stock option awards
Additional disclosures
Compensation expense recognized			$ 0.1	$ 0.2
First Community 2016 Equity Incentive Plan \| Restricted stock unit \| Members of management
Shares
Granted (in shares)		10,644
First Community 2016 Equity Incentive Plan \| Deferred stock units \| Directors
Shares
Granted (in shares)		1,867
2010 Equity Incentive Plan \| Restricted stock unit \| Members of management
Shares
Granted (in shares)		185,400
2010 Equity Incentive Plan \| Restricted stock unit \| Chairman
Shares
Granted (in shares)		8,775
Stock price (in dollars per share)		$ 26.78
Additional disclosures
Compensation expense recognized		$ 0.2
Period over which cost will be recognized		5 years
Vesting percentage (as a percent)		100.00%
2010 Equity Incentive Plan \| Deferred stock units
Shares
Granted (in shares)		1,568
2010 Equity Incentive Plan \| Deferred stock units \| Directors
Shares
Granted (in shares)		17,549

Borrowings - Senior notes and Subordinate Notes (Details) - USD ($) $ in Thousands	May 25, 2017	Dec. 31, 2019	Dec. 31, 2018
Senior notes
Long-term debt
Issuance of debt	$ 40,000
Interest rate (as a percent)	3.75%
Unamortized debt issuance cost		$ 300	$ 500
Subordinated debt
Long-term debt
Issuance of debt	$ 60,000
Interest rate (as a percent)	4.75%
Term of debt instrument	5 years
Unamortized debt issuance cost		$ 800	$ 900
Three-month LIBOR \| Subordinated debt
Long-term debt
Floating interest rate margin (as a percent)	2.919%

Accumulated Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2019

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 20. Accumulated Other Comprehensive Income (Loss)

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


		Year Ended
		December 31,
		2019				2018				2017
		Before Tax	Tax Effect	Net of Tax		Before Tax	Tax Effect	Net of Tax		Before Tax	Tax Effect	Net of Tax
Unrealized gains (losses) on debt securities available for sale:
Balance at beginning of period	$	(9,528)	2,716	(6,812)	$	(4,777)	1,967	(2,810)	$	60	(24)	36
Unrealized holding gains (losses) on debt securities available for sale, net		35,990	(10,251)	25,739		(6,531)	1,861	(4,670)		(3,694)	1,520	(2,174)
Unrealized losses on debt securities transferred from held to maturity to available for sale		(4,537)	1,293	(3,244)		—	—	—		—	—	—
Amounts reclassified from accumulated other comprehensive income, net		(733)	210	(523)		1,780	(507)	1,273		(1,143)	471	(672)
Tax Cuts and Jobs Act of 2017 reclassification		—	—	—		—	(605)	(605)		—	—	—
Balance at end of period	$	21,192	(6,032)	15,160	$	(9,528)	2,716	(6,812)	$	(4,777)	1,967	(2,810)

Unrealized gains (losses) on cash flow hedges:
Balance at beginning of period		—	—	—		—	—	—		—	—	—
Unrealized holding gains (losses) on cash flow hedges, net		(283)	81	(202)		—	—	—		—	—	—
Amounts reclassified from accumulated other comprehensive income, net		3	(1)	2		—	—	—		—	—	—
Balance at end of period	$	(280)	80	(200)	$	—	—	—	$	—	—	—
Total accumulated other comprehensive income (loss)	$	20,912	(5,952)	14,960	$	(9,528)	2,716	(6,812)	$	(4,777)	1,967	(2,810)

Portfolio loans and allowance for loan losses - Summary of TDR loans (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Restructured loans
Total loans	$ 5,707	$ 8,838
In compliance with modified terms
Restructured loans
Total loans	5,005	8,319
30-89 days past due
Restructured loans
Total loans		127
Included in non-performing loans
Restructured loans
Total loans	$ 702	$ 392

Transactions with Related Parties

12 Months Ended

Dec. 31, 2019

Transactions with Related Parties

Transactions with Related Parties

Note 15. Transactions with Related Parties

The Company has had, and may be expected to have in the future, banking transactions in the ordinary course of business with related parties which include directors, executive officers, chief credit officers, their immediate families and affiliated companies in which they have 10% or more beneficial ownership, 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 to related parties as a group during the year ended December 31, 2019 (dollars in thousands):


Balance at beginning of year	$	32,794
Change in relationship		17,772
New loans/advances		29,212
Repayments		(26,451)
Balance at end of year	$	53,327

Total unused commitments to directors and executive officers were $17.2 million at December 31, 2019.

Regulatory Capital (Tables)

12 Months Ended

Dec. 31, 2019

Regulatory Capital

Schedule of applicable holding company and bank regulatory capital requirements

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


									Minimum
					Minimum				To Be Well
	Actual				Capital Requirement				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2019:
Total Capital (to Risk Weighted Assets)
Consolidated	$	1,036,143	14.03	%	$	590,826	8.00	%	$	738,532	10.00	%
Busey Bank	$	1,099,449	14.92	%	$	589,681	8.00	%	$	737,101	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	922,395	12.49	%	$	443,120	6.00	%	$	590,826	8.00	%
Busey Bank	$	1,045,701	14.19	%	$	442,261	6.00	%	$	589,681	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	848,395	11.49	%	$	332,340	4.50	%	$	480,046	6.50	%
Busey Bank	$	1,045,701	14.19	%	$	331,696	4.50	%	$	479,116	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated	$	922,395	9.88	%	$	373,360	4.00	%		N/A	N/A
Busey Bank	$	1,045,701	11.19	%	$	373,639	4.00	%	$	467,049	5.00	%


									Minimum
					Minimum				To Be Well
	Actual				Capital Requirement				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2018:
Total Capital (to Risk Weighted Assets)
Consolidated	$	894,572	14.83	%	$	482,638	8.00	%	$	603,297	10.00	%
Busey Bank	$	854,351	14.19	%	$	481,701	8.00	%	$	602,126	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	783,924	12.99	%	$	361,978	6.00	%	$	482,638	8.00	%
Busey Bank	$	803,703	13.35	%	$	361,276	6.00	%	$	481,701	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	709,924	11.77	%	$	271,484	4.50	%	$	392,143	6.50	%
Busey Bank	$	803,703	13.35	%	$	270,957	4.50	%	$	391,382	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated	$	783,924	10.36	%	$	302,704	4.00	%		N/A	N/A
Busey Bank	$	803,703	10.64	%	$	302,232	4.00	%	$	377,789	5.00	%

Portfolio loans and allowance for loan losses - Narrative (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($) contract loan	Dec. 31, 2018 USD ($) item contract	Dec. 31, 2017 USD ($)
Distributions of portfolio loans
Gross interest income that would have been recorded if impaired loans had been current	$ 2,300	$ 1,700	$ 1,400
Performing loans classified as TDRs \| contract		0
Minimum days past due for TDR loans to be classified as non-performing	90 days
Balance of all acquired loans	$ 1,700,000	$ 1,200,000	$ 1,800,000
Commercial Loans
Distributions of portfolio loans
Performing loans classified as TDRs \| loan	1
Retail Real Estate
Distributions of portfolio loans
TDRs subsequently classified as non-performing and had payment defaults \| contract	1
Maximum \| Commercial Real Estate Loans
Distributions of portfolio loans
Limit where loans are processed through an expedited underwriting process	$ 1,000
Watch \| Commercial Loans
Distributions of portfolio loans
Limit above which loans are annually reviewed	1,000
Special Mention
Distributions of portfolio loans
Limit above which loans are annually reviewed	350
In compliance with modified terms \| Retail Real Estate
Distributions of portfolio loans
Number of retail real estate modifications \| item		1
Loans classified as a TDR	$ 300	$ 100

Share-based Compensation

12 Months Ended

Dec. 31, 2019

Share-based Compensation

Share-based Compensation

Note 14. Share-based Compensation

Overview

During the first quarter of 2010, the Company adopted the 2010 Equity Plan, which was approved at the annual stockholders meeting on May 19, 2010. During the second quarter of 2015, the Company adopted an amendment to the 2010 Equity Plan, which was approved at the annual stockholders meeting on May 20, 2015.

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 1,333,333 shares of First Busey common stock. To the extent that any shares of stock covered by an award (including non-vested 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. 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. Any shares covered under the terms of a prior First Busey plan award that would otherwise become available for reuse under the terms of the prior plan will become available for issuance under the 2010 Equity Plan.

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. However, due to changes imposed by the TCJA, “performance-based compensation” only applies to arrangements subject to a written binding contract in effect on November 2, 2017, that have not subsequently been materially modified:

●

the maximum number of shares of stock that may be covered by options that are intended to be "performance-based compensation" which are granted to any one participant during any calendar year is 133,333 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 66,667 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.

The Company grants share-based compensation awards to its employees and members of its board of directors as provided for under the Company’s 2010 Equity Plan. Further, in 2017, the Company registered 443,619 shares of its common stock issuable in the future pursuant to First Community 2016 Equity Incentive Plan to legacy employees and directors of First Community and its subsidiaries and upon the exercise of currently outstanding equity awards under the First Community 2016 Equity Incentive Plan and the First Community Amended and Restated 2008 Equity Incentive Plan held by former employees of First Community and its subsidiaries. Pursuant to the terms of the First Community 2016 Equity Incentive Plan, the Company may grant awards with respect to First Busey common stock to legacy employees and directors of First Community or its subsidiaries, including but not limited to non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock and restricted stock units.

The Company currently grants share-based compensation in the form of restricted stock units and deferred stock units. The Company grants restricted stock units to members of management periodically throughout the year. Each restricted stock unit is equivalent to one share of the Company’s common stock. These units have requisite service periods ranging from one to five years. The Company annually grants share-based awards in the form of deferred stock units, which are restricted stock units with a deferred settlement date, to its board of directors. Each deferred stock unit is equivalent to one share of the Company’s common stock. The deferred stock units vest over a 12 month period following the grant date or on the date of the next Annual Meeting of Stockholders, whichever is earlier. These units generally are subject to the same terms as restricted stock units under the Company’s 2010 Equity Plan or the First Community 2016 Equity Plan, except that, following vesting, settlement occurs within 30 days following the earlier of separation from the board or a change in control of the Company. Subsequent to vesting and prior to delivery, these units will continue to earn dividend equivalents. The Company also has outstanding stock options granted prior to 2011 and stock options assumed from acquisitions.

Under the terms of the Company’s 2010 Equity Plan and First Community 2016 Equity Incentive Plan, the Company is allowed, but not required, to source stock option exercises and grants of restricted stock units and deferred stock units from its inventory of treasury stock. As of December 31, 2019, the Company held 1,121,961 shares in treasury. On February 3, 2015, First Busey’s board of directors authorized the Company to repurchase up to an aggregate of 666,667 shares of its common stock. The repurchase plan has no expiration date and replaced the prior repurchase plan originally approved in 2008. On May 22, 2019, First Busey’s board of directors approved an amendment to increase the authorized shares under the repurchase program by 1,000,000 shares. At December 31, 2019, the Company had 389,938 shares that may still be purchased under the plan. Subsequent to year end, on February 5, 2020, First Busey’s board of directors approved an amendment to increase the authorized shares under the repurchase program by 2,000,000 shares.

Stock Option Plan

In relation to the First Community acquisition, the Company assumed stock options that were previously issued under First Community incentive plans. The First Community Amended and Restated 2008 Equity Incentive Plan was approved by First Community shareholders. This plan was subsequently amended without approval by First Community shareholders to increase the number of shares available for issuance. The First Community 2016 Equity Incentive Plan was approved by First Community shareholders. At the effective time of the merger, each outstanding and unexercised option to purchase shares of First Community common stock held by an employee, whether vested or unvested, was converted into an option to purchase First Busey common stock. The converted option is equal to the number of shares of such First Community stock option multiplied by the option exchange ratio (rounded down to the nearest whole share), at an exercise price per share equal to the exercise price for each share of First Community common stock subject to such First Community stock option divided by the option exchange ratio (rounded up to the nearest whole cent). The option exchange ratio is the sum of the exchange ratio (0.396) multiplied by the closing sales price of a share of First Busey common stock on the Nasdaq Global Select Market on June 30, 2017, plus the cash consideration ($1.35), divided by the closing sales price of a share of First Busey common stock on the Nasdaq Global Select Market on June 30, 2017. Each First Community stock option assumed and converted continues to be subject to the same terms and conditions (including vesting periods), as applicable immediately prior to the effective time of the merger.

A summary of the status of the Company's stock option awards for the year ended December 31, 2019, and the changes during the year ended, is as follows:


	2019
		Weighted-
		Average
		Exercise
	Shares	Price
Outstanding at beginning of year	87,600	$	20.58
Converted options from First Community	—		—
Exercised	(25,351)		17.94
Forfeited	(3,297)		23.53
Expired	(5,767)		17.38
Outstanding at end of year	53,185	$	22.00

Exercisable at end of year	53,185	$	22.00

The following table summarizes information about stock options outstanding at December 31, 2019:


								Options
		Options Outstanding						Exercisable
					Weighted-
			Weighted-		Average
Range of			Average		Remaining
Exercise			Exercise		Contractual	Intrinsic			Intrinsic
Prices		Number	Price		Life	Value		Number	Value
$	12.57-13.47	7,852	$	13.43	0.49			7,852
	17.05	308		17.05	0.05			308
	23.53	45,025		23.53	6.88			45,025
		53,185	$	22.00	5.90	$	292	53,185	$	292

The Company recorded $0.1 million for the 12 months ended December 31, 2019 and $0.2 million for the 12 months ended December 31, 2018 and 2017 in stock option compensation expense related to the converted options from First Community. As of December 31, 2019, the Company did not have any unrecognized stock option expense.

Restricted Stock Unit Plan

A summary of the changes in the Company’s restricted stock units for the year ended December 31, 2019 is as follows:


	2019
		Weighted-
		Average
		Grant Date
	Shares	Fair Value
Outstanding at beginning of year	690,495	$	26.14
Granted	216,411		26.73
Dividend equivalents earned	24,127		26.07
Vested	(107,537)		18.54
Forfeited	(45,179)		27.48
Outstanding at end of year	778,317	$	27.27

Recipients earn quarterly dividend equivalents on their respective units which entitle the recipients to additional units. Therefore, dividends earned each quarter compound based upon the updated unit balances. Upon vesting/delivery, shares are expected (though not required) to be issued from treasury.

On July 5, 2019, under the terms of the 2010 Equity Incentive Plan, the Company granted 185,400 restricted stock units to members of management, and under the terms of the First Community 2016 Equity Incentive Plan, granted 10,644 restricted stock units to members of management who were legacy First Community employees. As the stock price on the grant date of July 5, 2019 was $26.78, total compensation cost to be recognized is $5.3 million. This cost will be recognized over a period of five years. Subsequent to the requisite service period, the awards will become 100% vested. Further, the Company granted 8,775 restricted stock units, under the terms of the 2010 Equity Incentive Plan, to the Chairman of the Board. As the stock price on the grant date of July 5, 2019 was $26.78, total compensation cost to be recognized is $0.2 million. This cost will be recognized over a period of five years. Subsequent to the requisite service period, the awards will become 100% vested. Finally, on September 25, 2019, under the terms of the 2010 Equity Incentive Plan, the Company granted 11,592 restricted stock units to a member of management. As the stock price on the grant date of September 25, 2019 was $25.88, total compensation cost to be recognized is $0.3 million. This cost will be recognized over a period of three years. Subsequent to the requisite service period, the awards will become 100% vested.

A description of restricted stock units granted in 2018 and 2017 under the terms of the 2010 Equity Plan or the First Community 2016 Equity Incentive Plan can be found in the Company’s Annual Reports on Form 10-K for the years ended December 31, 2018 and 2017.

Deferred Stock Unit Plan

A summary of the changes in the Company’s deferred stock units for the year ended December 31, 2019 is as follows:


	2019
		Weighted-
		Average
		Grant Date
	Shares	Fair Value
Non-vested at beginning of year	20,449	$	27.93
Granted	20,984		26.78
Dividend equivalents earned	2,685		26.06
Vested	(21,277)		31.05
Forfeited	(1,580)		31.44
Non-vested at end of year	21,261	$	23.18
Outstanding at end of year	90,497	$	23.38

On July 5, 2019, under the terms of the 2010 Equity Incentive Plan, the Company granted 17,549 deferred stock units to directors, and under the terms of the First Community 2016 Equity Incentive Plan, granted 1,867 deferred stock units to a director who was a legacy First Community director. In addition, under the terms of the 2010 Equity Incentive Plan, the Company granted 1,568 advisory deferred stock units to advisory directors. As the stock price on the grant date of July 5, 2019 was $26.78, total compensation cost to be recognized is $0.6 million. These costs will be recognized over the requisite service period of one year from the date of grant or the next Annual Meeting of Stockholders, whichever is earlier.

A description of deferred stock units granted in 2018 and 2017 under the terms of the 2010 Equity Plan or First Community 2016 Equity Incentive Plan can be found in the Company’s Annual Reports on Form 10-K for the years ended December 31, 2018 and 2017.

The Company issued 92,996 treasury shares in conjunction with the vesting of restricted stock units and settlement of deferred stock units in 2019. The difference between the number of shares issued and the number of vested units is due to shares issued under a net share settlement option.

The Company recognized $3.8 million, $3.5 million and $2.6 million of compensation expense related to both non-vested restricted stock units and deferred stock units for the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, there was $12.2 million of total unrecognized compensation cost related to these non-vested stock awards. This cost is expected to be recognized over a period of 3.5 years.

Derivative Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2019

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

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


	December 31, 2019			December 31, 2018
Notional amount	$	70,000		$	—
Weighted average fixed pay rates		1.80	%		—	%
Weighted average variable 3 month LIBOR receive rates		1.90	%		—	%
Weighted average maturity		3.86	yrs		—	yrs
Unrealized gains (losses)	$	(200)		$	—

Interest rate swap

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

The fair values of derivative assets and liabilities related to derivatives for customers for interest rate swaps recorded in the Consolidated Balance Sheets are summarized as follows (dollars in thousands):


		December 31, 2019		December 31, 2018
Fair value recorded in other assets	$	12,354	$	1,438
Fair value recorded in other liabilities		12,354		1,438

Summary of gross gains and losses on derivative assets and liabilities recorded in non-interest income and expense in consolidated statements of income

The gross gains and losses on these derivative assets and liabilities recorded in non-interest income and expense in the Consolidated Statements of Income for the year ended December 31, 2019, 2018 and 2017 are summarized as follows (dollars in thousands):


	December 31, 2019		December 31, 2018		December 31, 2017
Gross gains	$	10,915	$	1,176	$	262
Gross losses		(10,915)		(1,176)		(262)
Net gains (losses)	$	—	$	—	$	—

Interest rate contract

Summary of gross gains and losses on derivative assets and liabilities recorded in non-interest income and expense in consolidated statements of income

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


	Year Ended December 31, 2019
		Amount of (gain) loss recognized in OCI		Amount of (gain) loss reclassified from OCI to interest expense
Interest rate contracts	$	(202)	$	2

Interest rate lock commitments and forward sales commitments

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

The fair values of derivative assets and liabilities related to interest rate lock commitments and forward sales commitments recorded in the Consolidated Balance Sheets are summarized as follows (dollars in thousands):


	December 31, 2019		December 31, 2018
Fair value recorded in other assets	$	1,046	$	624
Fair value recorded in other liabilities		2,187		1,205

Summary of gross gains and losses on derivative assets and liabilities recorded in non-interest income and expense in consolidated statements of income

The gross gains and losses on these derivative assets and liabilities related to interest rate lock commitments and forward sales commitments recorded in non-interest income and expense in the Consolidated Statements of Income for the 12 months ended December 31, 2019, 2018 and 2017 are summarized as follows (dollars in thousands):


	December 31, 2019		December 31, 2018		December 31, 2017
Gross gains	$	7,003	$	3,494	$	14,724
Gross (losses)		(6,960)		(3,874)		(13,250)
Net gains (losses)	$	43	$	(380)	$	1,474

Leases (Tables)

12 Months Ended

Dec. 31, 2019

Leases

Schedule of lease costs and other lease information

The following tables represents lease costs and other lease information for the periods presented (dollars in thousands):


	Year Ended
Lease Costs	December 31, 2019
Operating lease costs	$	2,364
Variable lease costs		432
Short-term lease costs		84
Sublease income		-
Net lease cost	$	2,880

Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating lease cash flows – Fixed payments	$	2,296
Operating lease cash flows – Liability reduction		2,010
Right of use assets obtained during the period in exchange for operating lease liabilities		923
Weighted average lease term (in years)		7.20
Weighted average discount rate		3.08%

Schedule of future rent commitments

Rent commitments were as follows (dollars in thousands):


	December 31, 2019
2020	$	2,408
2021		1,781
2022		1,378
2023		1,221
2024		1,022
Thereafter		2,876
Amounts representing interest		(1,134)
Present value of net future minimum lease payments	$	9,552

Derivative Financial Instruments - Interest Rate Lock Commitments (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Interest Rate Lock Commitments
Derivative Financial Instruments
Notional amount	$ 69.1	$ 27.2

Parent Company Only Financial Information (Tables)

12 Months Ended

Dec. 31, 2019

Parent Company Only Financial Information

Balance Sheets

Condensed financial data for First Busey Corporation is presented below (dollars in thousands).

BALANCE SHEETS


	December 31,
	2019		2018
ASSETS
Cash and cash equivalents	$	14,952	$	72,007
Securities equity investments		5,923		6,162
Investments in subsidiaries:
Bank		1,417,941		1,088,710
Non-bank		806		—
Premises and equipment, net		68		67
Other assets		13,873		6,782
Total assets	$	1,453,563	$	1,173,728

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Short-term borrowings	$	6,000	$	—
Long-term debt		48,000		—
Senior notes, net of unamortized issuance costs		39,674		39,539
Subordinated notes, net of unamortized issuance costs		59,248		59,147
Junior subordinated debentures owed to unconsolidated trusts		71,308		71,155
Other liabilities		8,899		8,923
Total liabilities		233,129		178,764

Total stockholders' equity		1,220,434		994,964
Total liabilities and stockholders' equity	$	1,453,563	$	1,173,728

Statements of Income


	Years Ended December 31,
	2019		2018		2017
Operating income:
Dividends from subsidiaries:
Bank	$	70,000	$	—	$	—
Non-bank		—		17,000		4,000
Interest income		441		747		264
Security (losses) gains, net		(759)		2,322		—
Other income		10,224		8,096		6,890
Total operating income		79,906		28,165		11,154

Expense:
Salaries, wages and employee benefits		15,288		13,624		11,398
Interest expense		10,054		8,026		5,464
Operating expense		8,960		6,051		7,060
Total expense		34,302		27,701		23,922

Income (loss) before income tax benefit and equity in undistributed (in excess of) net income of subsidiaries		45,604		464		(12,768)
Income tax benefit		5,389		5,013		5,553
Income (loss) before equity in undistributed (in excess of) net income of subsidiaries		50,993		5,477		(7,215)

Equity in undistributed (in excess of) net income of subsidiaries:
Bank		51,604		103,309		68,635
Non-bank		356		(9,858)		1,306
Net income	$	102,953	$	98,928	$	62,726

Statements of Cash Flows


	Years Ended December 31,
	2019		2018		2017
Cash Flows from Operating Activities
Net income	$	102,953	$	98,928	$	62,726
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		420		232		487
Distributions less than net income of subsidiaries		(51,961)		(93,451)		(69,940)
Net security losses (gains)		759		(2,322)		—
Stock-based compensation		3,997		3,721		2,752
Changes in assets and liabilities:
Decrease (increase) in other assets		(4,279)		13,985		(1,105)
Increase (decrease) in other liabilities		(1,280)		1,341		(2,762)
Net cash provided by (used in) operating Activities		50,609		22,434		(7,842)

Cash Flows from Investing Activities
Purchase of equity securities		(520)		—		—
Net cash (outlay) for business acquisition		(90,722)		—		(61,371)
Purchases of premises and equipment		(31)		(46)		—
Net cash (used in) investing activities		(91,273)		(46)		(61,371)

Cash Flows from Financing Activities
Proceeds from charter amendment with subsidiary bank		—		40,000		40,000
Cash paid for withholding taxes on share based payments		(863)		(817)		(1,414)
Cash dividends paid		(45,171)		(39,010)		(30,707)
Repayments of debt		(6,000)		(5,500)		(9,800)
Proceeds from issuance of debt		60,000		—		98,312
Proceeds from stock options exercised		169		—		626
Purchase of treasury stock		(24,292)		—		—
Common stock issuance costs		(234)		—		(365)
Net cash (used in) provided by financing activities		(16,391)		(5,327)		96,652

Net (decrease) increase in cash and due from subsidiary bank		(57,055)		17,061		27,439
Cash and cash equivalents, beginning of period		72,007		54,946		27,507

Cash and cash equivalents, ending of period	$	14,952	$	72,007	$	54,946

Share-based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Compensation

Schedule of status of and changes in the Company's stock option awards


	2019
		Weighted-
		Average
		Exercise
	Shares	Price
Outstanding at beginning of year	87,600	$	20.58
Converted options from First Community	—		—
Exercised	(25,351)		17.94
Forfeited	(3,297)		23.53
Expired	(5,767)		17.38
Outstanding at end of year	53,185	$	22.00

Exercisable at end of year	53,185	$	22.00

Summary of stock options outstanding by range of exercise prices

The following table summarizes information about stock options outstanding at December 31, 2019:


								Options
		Options Outstanding						Exercisable
					Weighted-
			Weighted-		Average
Range of			Average		Remaining
Exercise			Exercise		Contractual	Intrinsic			Intrinsic
Prices		Number	Price		Life	Value		Number	Value
$	12.57-13.47	7,852	$	13.43	0.49			7,852
	17.05	308		17.05	0.05			308
	23.53	45,025		23.53	6.88			45,025
		53,185	$	22.00	5.90	$	292	53,185	$	292

Summary of the changes in company restricted stock units


	2019
		Weighted-
		Average
		Grant Date
	Shares	Fair Value
Outstanding at beginning of year	690,495	$	26.14
Granted	216,411		26.73
Dividend equivalents earned	24,127		26.07
Vested	(107,537)		18.54
Forfeited	(45,179)		27.48
Outstanding at end of year	778,317	$	27.27

Summary of the changes in company deferred stock units


	2019
		Weighted-
		Average
		Grant Date
	Shares	Fair Value
Non-vested at beginning of year	20,449	$	27.93
Granted	20,984		26.78
Dividend equivalents earned	2,685		26.06
Vested	(21,277)		31.05
Forfeited	(1,580)		31.44
Non-vested at end of year	21,261	$	23.18
Outstanding at end of year	90,497	$	23.38

Acquisitions - Mid Illinois Bancorp, Inc. (Details) - USD ($) $ / shares in Units, $ in Thousands			12 Months Ended
	Oct. 01, 2017	Jul. 02, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Business Acquisition
Per share cash consideration entitled (in dollars per share)		$ 1.35
Consideration paid:
Goodwill			$ 311,536	$ 267,685
Impairment charge			2,026	817	$ 99
Core deposit intangible assets
Consideration paid:
Intangible asset recorded			90,256
Non-recurring basis
Consideration paid:
Bank properties held for sale, net			4,004	1,832
Mid Illinois Bancorp, Inc.
Business Acquisition
Per share cash consideration entitled (in dollars per share)	$ 227.94
Number of common shares issued for acquisition	7.5149
Assets acquired:
Cash and cash equivalents	$ 39,443
Securities	208,003
Loans held for sale	5,031
Portfolio loans	356,651
Premises and equipment	16,551
Other intangible assets	11,531
Other assets	29,564
Total assets acquired	666,774
Liabilities assumed:
Deposits	505,917
Other borrowings	61,040
Other liabilities	10,497
Total liabilities assumed	577,454
Net assets acquired	89,320
Consideration paid:
Cash	40,507
Common stock	97,702
Total consideration paid	138,209
Goodwill	48,889
Aggregate principal outstanding	362,400
Fair value of performing loans, including loans held for sale	357,000
Amount expected to be accreted, gross	5,400
Contractual amount of PCI loans	7,600
Fair value of credit-impaired loans	$ 4,700
PCI loan outstanding amount			100
Mixed consideration in cash (in dollars per share)	$ 68.38
Mixed consideration in shares (in dollars per share)	5.2604
Total consideration in stock (as a percent)	70.00%
Total consideration in cash (as a percent)	30.00%
Mid Illinois Bancorp, Inc. \| Non-interest expense
Business Acquisition
Business acquisition expenses			$ 3,100		$ 2,500
Acquisition expenses related to professional and legal fees				$ 1,300

OREO (Details) - USD ($) $ in Thousands	12 Months Ended
OREO (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019
Foreclosed Real Estate
Other real estate owned (OREO)	$ 3,057	$ 1,283	$ 3,057
OREO
Other Real Estate, Beginning Balance	376	1,283
Additions, transfers from loans	4,872	4,025
Additions, fair value from acquisition	149
Sales of OREO	(2,277)	(4,914)
Capitalized improvements	2
Cash payments collected	(3)
Valuation allowance for OREO	(62)	(18)
Other Real Estate, Ending Balance	3,057	376
Commercial Real Estate Loans
Foreclosed Real Estate
Other real estate owned (OREO)	200	200	2,700
OREO
Other Real Estate, Beginning Balance	200
Other Real Estate, Ending Balance	2,700	200
Residential real estate
Foreclosed Real Estate
Other real estate owned (OREO)	200	200	400
Residential real estate in the process of foreclosure			$ 2,200
OREO
Other Real Estate, Beginning Balance	200
Other Real Estate, Ending Balance	$ 400	$ 200

Operating Segments and Related Information (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2019 USD ($) segment	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Operating Segments and Related Information
Number of reportable segments \| segment									3
Number of operating segments \| segment									3
Goodwill	$ 311,536				$ 267,685				$ 311,536	$ 267,685
Total Assets	9,695,729				7,702,357				9,695,729	7,702,357
Net interest income	71,936	$ 73,476	$ 73,428	$ 68,383	60,503	$ 60,774	$ 60,372	$ 59,757	287,223	241,406	$ 203,366
Non-interest income:	31,638	30,936	27,896	25,945	22,852	21,853	22,802	22,486	116,415	89,993	84,474
Non-interest expense:	65,490	68,121	68,020	57,163	48,769	45,929	47,305	51,040	258,794	193,043	174,426
Income before income taxes	35,717	32,880	30,787	35,054	34,181	35,940	33,611	30,195	134,438	133,927	108,111
Net income:	28,571	$ 24,828	$ 24,085	$ 25,469	25,290	$ 26,859	$ 24,862	$ 21,917	102,953	98,928	62,726
Banking
Operating Segments and Related Information
Goodwill	288,436				246,999				288,436	246,999
Remittance Processing
Operating Segments and Related Information
Goodwill	8,992				8,992				8,992	8,992
Wealth Management
Operating Segments and Related Information
Goodwill	14,108				11,694				14,108	11,694
Operating segments \| Banking
Operating Segments and Related Information
Goodwill	288,436				246,999				288,436	246,999
Total Assets	9,632,368				7,656,709				9,632,368	7,656,709
Net interest income									296,754	248,291	208,184
Non-interest income:									63,613	43,197	47,524
Non-interest expense:									211,559	154,455	139,521
Income before income taxes									138,401	132,604	110,884
Net income:									106,409	97,369	65,704
Operating segments \| Remittance Processing
Operating Segments and Related Information
Goodwill	8,992				8,992				8,992	8,992
Total Assets	44,209				39,278				44,209	39,278
Net interest income									76	67	60
Non-interest income:									16,450	15,876	12,137
Non-interest expense:									10,990	10,749	8,704
Income before income taxes									5,536	5,194	3,493
Net income:									4,060	3,710	2,007
Operating segments \| Wealth Management
Operating Segments and Related Information
Goodwill	14,108				11,694				14,108	11,694
Total Assets	32,760				20,992				32,760	20,992
Net interest income										327	321
Non-interest income:									39,075	31,621	27,270
Non-interest expense:									24,534	19,283	17,079
Income before income taxes									14,541	12,665	10,512
Net income:									11,135	9,372	6,229
Other
Operating Segments and Related Information
Total Assets	$ (13,608)				$ (14,622)				(13,608)	(14,622)
Net interest income									(9,607)	(7,279)	(5,199)
Non-interest income:									(2,723)	(701)	(2,457)
Non-interest expense:									11,711	8,556	9,122
Income before income taxes									(24,040)	(16,536)	(16,778)
Net income:									$ (18,651)	$ (11,523)	$ (11,214)

Borrowings

12 Months Ended

Dec. 31, 2019

Borrowings

Borrowings

Note 9. Borrowings

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

Federal funds purchased are short-term borrowings that generally mature between one and 90 days. The Company had no federal funds purchased at December 31, 2019 and 2018.

Short-term borrowings include FHLB advances which mature in less than one year from date of origination.

On January 29, 2019, the Company entered into an Amended and Restated Credit Agreement providing for a $60.0 million Term Loan with a maturity date of November 30, 2023. The Term Loan has an annual interest rate of one-month LIBOR plus a spread of 1.50%. The proceeds of the Term Loan were used to fund the cash consideration related to the acquisition of Banc Ed. The Company had $54.0 million outstanding indebtedness on December 31, 2019, comprised of $6.0 million of short-term borrowings and $48.0 million of long-term debt.

The Amended and Restated Credit Agreement also retained the Company’s $20.0 million revolving facility with a maturity date of April 30, 2019. On April 19, 2019, the Company entered into an amendment to the Amended and Restated Credit Agreement to extend the maturity of its revolving loan facility to April 30, 2020. The revolving facility

incurs a non-usage fee based on the undrawn amount. The Company had no outstanding balance under the revolving facility on December 31, 2019 or 2018.

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


	December 31,		December 31,
	2019		2018
Notes payable, FHLB, ranging in original maturity from 5 to 10 years, collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock.	$	35,600	$	50,000
Term Loan		48,000		—
Total long-term borrowings	$	83,600	$	50,000

As of December 31, 2019, funds borrowed from the FHLB, listed above, consisted of variable-rate notes maturing through September 2024, with interest rates ranging from 1.25% to 3.04%. The weighted average rate on these long-term advances was 1.53% as of December 31, 2019. As of December 31, 2018, funds borrowed from the FHLB, listed above, consisted of variable-rate notes maturing through September 2024, with interest rates ranging from 2.20% to 2.41%. The weighted average rate on these long-term advances was 2.28% as of December 31, 2018.

On May 25, 2017, the Company issued $40.0 million of 3.75% senior notes that mature on May 25, 2022. The senior notes are payable semi-annually on each May 25 and November 25, commencing on November 25, 2017. The senior notes are not subject to optional redemption by the Company. Additionally, on May 25, 2017, the Company issued $60.0 million of fixed-to-floating rate subordinated notes that mature on May 25, 2027. The subordinated notes, which qualify as Tier 2 capital for First Busey, bear interest at an annual rate of 4.75% for the first five years after issuance and thereafter bear interest at a floating rate equal to three-month LIBOR plus a spread of 2.919%, as calculated on each applicable determination date. The subordinated notes are payable semi-annually on each May 25 and November 25, commencing on November 25, 2017 during the five year fixed-term and thereafter on February 25, May 25, August 25 and November 25 of each year, commencing on August 25, 2022. The subordinated notes have an optional redemption in whole or in part on any interest payment date on or after May 25, 2022. The senior notes and subordinated notes are unsecured obligations of the Company. Unamortized debt issuance costs related to the senior notes and subordinated notes totaled $0.3 million and $0.8 million, respectively, at December 31, 2019. Unamortized debt issuance costs related to the senior notes and subordinated notes totaled $0.5 million and $0.9 million, respectively, at December 31, 2018.

Junior Subordinated Debt Owed to Unconsolidated Trusts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Junior subordinated debt owed to unconsolidated trusts
Junior subordinated debt owed to unconsolidated trusts	$ 71,308	$ 71,155
Trust Preferred Securities
Junior subordinated debt owed to unconsolidated trusts
Percentage limit on inclusion of qualifying trust preferred securities in Tier I Capital	25.00%
Trust preferred securities qualified as Tier I capital (as a percent)	100.00%
Maximum of holding companies assets retained	$ 15,000,000
Junior Subordinated Notes \| Trust Preferred Securities
Junior subordinated debt owed to unconsolidated trusts
Maximum period to defer payment of interest on the notes and, therefore, distributions on the trust preferred securities	5 years
Parent
Junior subordinated debt owed to unconsolidated trusts
Junior subordinated debt owed to unconsolidated trusts	$ 71,308	$ 71,155

Parent Company Only Financial Information - Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
ASSETS
Cash and cash equivalents	$ 529,288	$ 239,973
Equity securities	5,952	6,169
Investments in subsidiaries:
Premises and equipment, net	151,267	117,672
Other assets	102,551	59,474
Total assets	9,695,729	7,702,357
Liabilities:
Short-term borrowings	8,551
Long-term debt	83,600	50,000
Senior notes, net of unamortized issuance costs	39,674	39,539
Subordinated notes, net of unamortized issuance costs	59,248	59,147
Junior subordinated debentures owed to unconsolidated trusts	71,308	71,155
Other liabilities	95,475	52,435
Total liabilities	8,475,295	6,707,393
Total stockholders' equity	1,220,434	994,964	$ 935,003	$ 594,314
Total liabilities and stockholders' equity	9,695,729	7,702,357
Parent
ASSETS
Cash and cash equivalents	14,952	72,007
Equity securities	5,923	6,162
Investments in subsidiaries:
Bank	1,417,941	1,088,710
Non-bank	806
Premises and equipment, net	68	67
Other assets	13,873	6,782
Total assets	1,453,563	1,173,728
Liabilities:
Short-term borrowings	6,000
Long-term debt	48,000
Senior notes, net of unamortized issuance costs	39,674	39,539
Subordinated notes, net of unamortized issuance costs	59,248	59,147
Junior subordinated debentures owed to unconsolidated trusts	71,308	71,155
Other liabilities	8,899	8,923
Total liabilities	233,129	178,764
Total stockholders' equity	1,220,434	994,964
Total liabilities and stockholders' equity	$ 1,453,563	$ 1,173,728

Transactions with Related Parties (Tables)

12 Months Ended

Dec. 31, 2019

Transactions with Related Parties

Schedule of the analysis of the changes in loans to related parties

The following is an analysis of the changes in loans to related parties as a group during the year ended December 31, 2019 (dollars in thousands):


Balance at beginning of year	$	32,794
Change in relationship		17,772
New loans/advances		29,212
Repayments		(26,451)
Balance at end of year	$	53,327

Share-based Compensation (Details) - USD ($)	12 Months Ended
Share-based Compensation (Details) - USD ($)	Dec. 31, 2019	Feb. 05, 2020	May 22, 2019	Dec. 31, 2018	Dec. 31, 2017	Feb. 03, 2015
Share-based Compensation
Period from effective date after which no awards may be granted	10 years
Number of shares held in treasury	1,121,961			310,745
Shares authorized for repurchase under stock repurchase plan		2,000,000	1,000,000			666,667
Number of shares that may yet be purchased	389,938
Restricted stock unit
Share-based Compensation
Number of shares of common stock per award	1
Minimum \| Restricted stock unit
Share-based Compensation
Requisite service periods	1 year
Minimum \| Deferred stock units
Share-based Compensation
Vesting period	12 months
Maximum \| Restricted stock unit
Share-based Compensation
Requisite service periods	5 years
Directors \| Deferred stock units
Share-based Compensation
Number of shares of common stock per award	1
Settlement period	30 days
2010 Equity Incentive Plan
Share-based Compensation
Maximum number of shares that may be delivered to participants	1,333,333
2010 Equity Incentive Plan \| Maximum \| Options and SARs
Share-based Compensation
Shares available for grant during any calendar year	133,333
2010 Equity Incentive Plan \| Maximum \| Stock awards
Share-based Compensation
Shares available for grant during any calendar year	66,667
2010 Equity Incentive Plan \| Maximum \| Cash incentive awards and cash-settled stock awards
Share-based Compensation
Amount of award payable with respect to any calendar year	$ 1,000,000
First Community 2016 Equity Incentive Plan
Share-based Compensation
Maximum number of shares that may be delivered to participants					443,619

Derivative Financial Instruments - Net Gains (Losses) Relating to the Cash Flow Derivative Instruments (Details) - Interest rate contract $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Derivative [Line Items]
Derivative cash pledged	$ 300
Cash Flow Hedging
Derivative [Line Items]
Amount of (gain) loss recognized in OCI	(202)
Amount of (gain) loss reclassified from OCI to interest expense	$ 2

Portfolio loans and allowance for loan losses

12 Months Ended

Dec. 31, 2019

Portfolio loans and allowance for loan losses

Portfolio loans and allowance for loan losses

Note 4. Portfolio loans and allowance for loan losses

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


	December 31,
	2019		2018
Commercial	$	1,748,368	$	1,405,106
Commercial real estate		2,793,417		2,366,823
Real estate construction		401,861		288,197
Retail real estate		1,693,769		1,480,133
Retail other		49,834		28,169
Portfolio loans	$	6,687,249	$	5,568,428

Allowance for loan losses		(53,748)		(50,648)
Portfolio loans, net	$	6,633,501	$	5,517,780

Net deferred loan origination costs included in the tables above were $6.2 million and $5.6 million as of December 31, 2019 and 2018, respectively. Net accretable purchase accounting adjustments included in the table above reduced loans by $20.2 million and $13.9 million as of December 31, 2019 and 2018, respectively.

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

●

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

●

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

●

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

●

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

●

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

All loans are graded at their inception. Most commercial lending relationships that are $1.0 million or less are processed through an expedited underwriting process. Most commercial loans greater than $1.0 million are included in a portfolio review at least annually. Commercial loans greater than $0.35 million that have a grading of special mention or worse are reviewed on a quarterly basis. Interim reviews may take place if circumstances of the borrower warrant a more timely review.

The following table is a summary of risk grades segregated by category of portfolio loans (excluding accretable purchase accounting adjustments and clearings) (dollars in thousands):


	December 31, 2019
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual
Commercial	$	1,458,416	$	172,526	$	66,337	$	41,273	$	9,096
Commercial real estate		2,477,398		186,963		105,487		26,204		9,178
Real estate construction		351,923		45,262		3,928		737		630
Retail real estate		1,661,691		9,125		5,355		7,001		8,935
Retail other		47,698		—		—		—		57
Total	$	5,997,126	$	413,876	$	181,107	$	75,215	$	27,896


	December 31, 2018
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual
Commercial	$	1,126,257	$	172,449	$	47,000	$	42,532	$	17,953
Commercial real estate		2,106,711		137,214		85,148		36,205		10,298
Real estate construction		268,069		14,562		3,899		1,888		18
Retail real estate		1,448,964		6,425		6,792		5,435		6,698
Retail other		26,707		—		—		—		30
Total	$	4,976,708	$	330,650	$	142,839	$	86,060	$	34,997

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


	December 31, 2019
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Commercial	$	1,075	$	1,014	$	199	$	9,096
Commercial real estate		2,653		3,121		584		9,178
Real estate construction		19		—		—		630
Retail real estate		5,021		1,248		828		8,935
Retail other		52		68		—		57
Total	$	8,820	$	5,451	$	1,611	$	27,896


	December 31, 2018
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Commercial	$	158	$	140	$	775	$	17,953
Commercial real estate		148		558		—		10,298
Real estate construction		121		—		58		18
Retail real estate		4,578		1,368		766		6,698
Retail other		48		2		2		30
Total	$	5,053	$	2,068	$	1,601	$	34,997

The gross interest income that would have been recorded in the years ended December 31, 2019, 2018 and 2017 if impaired loans had been current in accordance with their original terms was approximately $2.3 million, $1.7 million, and $1.4 million, respectively. The amount of interest collected on impaired loans and recognized on a cash basis that was included in interest income was insignificant in both 2019 and 2018 and was $0.3 million in 2017.

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


	December 31,
	2019		2018
In compliance with modified terms	$	5,005	$	8,319
30 — 89 days past due		—		127
Included in non-performing loans		702		392
Total	$	5,707	$	8,838

Loans still outstanding, classified as TDRs during the 12 months ended December 31, 2019 consisted of one commercial loan for short-term interest rate relief, with a recorded investment of $0.3 million. Loans classified as TDRs during the 12 months ended December 31, 2018 consisted of one retail real estate modifications for short-term interest rate relief, with a recorded investment of $0.1 million.

The gross interest income that would have been recorded in the 12 months ended December 31, 2019 and 2018 if performing TDRs had been in accordance with their original terms instead of modified terms was insignificant.

One commercial real estate TDR, that was entered into during the last 12 months, was subsequently 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 12 months ended December 31, 2019, which was then transferred to OREO by year end. There were no TDRs that were entered into during the prior 12 months that were subsequently classified as non-performing and had payment defaults during the 12 months ended December 31, 2018.

The following tables provide details of loans identified as impaired, 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 (dollars in thousands).


	December 31, 2019
	Unpaid		Recorded
	Contractual		Investment		Recorded		Total				Average
	Principal		with No		Investment		Recorded		Related		Recorded
	Balance		Allowance		with Allowance		Investment		Allowance		Investment
Commercial	$	14,415	$	4,727	$	5,026	$	9,753	$	3,330	$	13,774
Commercial real estate		14,487		9,883		2,039		11,922		1,049		16,678
Real estate construction		1,116		974		—		974		—		873
Retail real estate		15,581		13,898		474		14,372		474		14,003
Retail other		87		58		—		58		—		42
Total	$	45,686	$	29,540	$	7,539	$	37,079	$	4,853	$	45,370


	December 31, 2018
	Unpaid		Recorded
	Contractual		Investment		Recorded		Total				Average
	Principal		with No		Investment		Recorded		Related		Recorded
	Balance		Allowance		with Allowance		Investment		Allowance		Investment
Commercial	$	21,442	$	6,858	$	12,001	$	18,859	$	4,319	$	13,364
Commercial real estate		19,079		13,082		4,498		17,580		1,181		18,077
Real estate construction		478		453		—		453		—		712
Retail real estate		14,418		13,196		61		13,257		61		14,110
Retail other		117		33		—		33		—		40
Total	$	55,534	$	33,622	$	16,560	$	50,182	$	5,561	$	46,303

Management's evaluation as to the ultimate collectability of loans includes estimates regarding future cash flows from operations and the value of property, real and personal, pledged as collateral. These estimates are affected by changing economic conditions and the economic prospects of borrowers.

Allowance for Loan Losses

The Company holds acquired loans from business combinations with uncollected principal balances. These loans are carried net of a fair value adjustment for credit risk and interest rates and are only included in the allowance calculation to the extent that the reserve requirement exceeds the fair value adjustment. As the acquired loans renew, it is generally necessary to establish an allowance, which represents an amount that, in management’s opinion, will be adequate to absorb probable credit losses in such loans. The recorded investment of all acquired loans totaled approximately $1.7 billion, $1.2 billion and $1.8 billion as of December 31, 2019, 2018 and 2017, respectively.

The following table details activity in 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 (dollars in thousands):


	Year Ended December 31, 2019
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	17,829	$	21,137	$	2,723	$	8,471	$	488	$	50,648
Provision for loan losses		4,893		3,002		(70)		2,102		479		10,406
Charged-off		(6,478)		(3,257)		—		(1,162)		(863)		(11,760)
Recoveries		2,047		308		551		1,084		464		4,454
Ending balance	$	18,291	$	21,190	$	3,204	$	10,495	$	568	$	53,748


	Year Ended December 31, 2018
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	14,779	$	21,813	$	2,861	$	13,783	$	346	$	53,582
Provision for loan losses		5,767		3,227		(259)		(4,824)		518		4,429
Charged-off		(3,968)		(4,352)		(97)		(1,815)		(712)		(10,944)
Recoveries		1,251		449		218		1,327		336		3,581
Ending balance	$	17,829	$	21,137	$	2,723	$	8,471	$	488	$	50,648


	Year Ended December 31, 2017
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	13,303	$	20,623	$	1,870	$	11,648	$	351	$	47,795
Provision for loan losses		(1,091)		2,439		581		3,263		111		5,303
Charged-off		(994)		(1,965)		(48)		(2,691)		(541)		(6,239)
Recoveries		3,561		716		458		1,563		425		6,723
Ending balance	$	14,779	$	21,813	$	2,861	$	13,783	$	346	$	53,582

The following table presents the allowance for loan losses and recorded investments in portfolio loans by category (dollars in thousands):


	As of December 31, 2019
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Allowance for loan losses
Ending balance attributed to:
Loans individually evaluated for impairment	$	3,330	$	1,049	$	—	$	474	$	—	$	4,853
Loans collectively evaluated for impairment		14,961		20,141		3,204		10,021		568		48,895
Ending balance	$	18,291	$	21,190	$	3,204	$	10,495	$	568	$	53,748

Loans:
Loans individually evaluated for impairment	$	9,740	$	10,018	$	539	$	13,676	$	58	$	34,031
Loans collectively evaluated for impairment		1,738,615		2,781,495		400,887		1,679,397		49,776		6,650,170
PCI loans evaluated for impairment		13		1,904		435		696		—		3,048
Ending balance	$	1,748,368	$	2,793,417	$	401,861	$	1,693,769	$	49,834	$	6,687,249


	As of December 31, 2018
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Allowance for loan losses
Ending balance attributed to:
Loans individually evaluated for impairment	$	4,319	$	1,181	$	—	$	61	$	—	$	5,561
Loans collectively evaluated for impairment		13,510		19,956		2,723		8,410		488		45,087
Ending balance	$	17,829	$	21,137	$	2,723	$	8,471	$	488	$	50,648

Loans:
Loans individually evaluated for impairment	$	18,441	$	15,318	$	453	$	13,159	$	33	$	47,404
Loans collectively evaluated for impairment		1,386,247		2,349,243		287,744		1,466,876		28,136		5,518,246
PCI loans evaluated for impairment		418		2,262		—		98		—		2,778
Ending balance	$	1,405,106	$	2,366,823	$	288,197	$	1,480,133	$	28,169	$	5,568,428

Share-based Compensation - Award Status (Details)			12 Months Ended
Share-based Compensation - Award Status (Details)	Jul. 02, 2017 $ / shares	Jun. 30, 2017 $ / shares	Dec. 31, 2019 $ / shares shares
Additional disclosures
Per share cash consideration entitled (in dollars per share)	$ 1.35
First Community
Additional disclosures
Share consideration conversion ratio		0.396
Per share cash consideration entitled (in dollars per share)		$ 1.35
Stock option awards
Shares
Outstanding at beginning of year (in shares) \| shares			87,600
Exercised (in shares) \| shares			(25,351)
Forfeited (in shares) \| shares			(3,297)
Expired (in shares) \| shares			(5,767)
Outstanding at end of year (in shares) \| shares			53,185
Exercisable at end of year (in shares) \| shares			53,185
Weighted-Average Exercise Price
Outstanding at beginning of year (in dollars per share)			$ 20.58
Exercised (in dollars per share)			17.94
Forfeited (in dollars per share)			23.53
Expired (in dollars per share)			17.38
Outstanding at end of year (in dollars per share)			22.00
Exercisable at end of year (in dollars per share)			$ 22.00

Borrowings - Long-term Debt (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Long-term debt
Notes payable, FHLB, ranging in original maturity from seven to ten years, collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock	$ 35,600	$ 50,000
Term Loan	48,000
Total long-term borrowings	83,600	50,000
FHLB advances
Long-term debt
Total long-term borrowings	$ 83,600	$ 50,000
Weighted average rate (as a percent)	1.53%	2.28%
FHLB advances \| Minimum
Long-term debt
Notes payable original maturity term	5 years	5 years
Interest rate (as a percent)	1.25%	2.20%
FHLB advances \| Maximum
Long-term debt
Notes payable original maturity term	10 years	10 years
Interest rate (as a percent)	3.04%	2.41%

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Taxes

Income Taxes

Note 12. Income Taxes

The components of income taxes consist of (dollars in thousands):


	Years Ended December 31,
	2019		2018		2017
Current expense:
Federal	$	22,479	$	18,076	$	27,168
State		8,910		9,807		4,117
Deferred expense:
Federal		(380)		5,068		11,583
State		476		2,048		2,517
Total income tax expense	$	31,485	$	34,999	$	45,385

A reconciliation of federal and state income taxes at statutory rates to the income taxes included in the accompanying Consolidated Statements of Income is as follows:


	Years Ended December 31,
	2019		2018		2017
	% of		% of		% of
	Pretax		Pretax		Pretax
	Income		Income		Income
Income tax at federal statutory rate	21.0	%	21.0	%	35.0	%
Effect of:
TCJA	—	%	—	%	7.5	%
Tax-exempt interest, net	(1.7)	%	(1.3)	%	(2.1)	%
Stock incentive	(0.1)	%	(0.3)	%	(0.5)	%
State income taxes, net	5.5	%	7.3	%	4.0	%
Income on bank owned life insurance	(0.9)	%	(0.6)	%	(0.9)	%
Tax credit investments	(1.3)	%	—	%	—	%
Other, net	0.9	%	—	%	(1.0)	%
	23.4	%	26.1	%	42.0	%

On December 22, 2017, TCJA was signed into law and became effective January 2018. The TCJA reduced the corporate tax rate as well as adjusted tax rates, deductions and exemptions for individuals and businesses alike. The Company took a non-recurring, non-cash charge of $8.1 million in the fourth quarter of 2017 as a result of the revaluation of the Company’s net deferred tax position following the enactment of the TCJA.

Net deferred taxes at December 31, 2019 and 2018 in the accompanying Consolidated Balance Sheets, include the following amounts of deferred tax assets and liabilities (dollars in thousands).


	2019		2018
Deferred tax assets:
Unrealized losses on debt securities available for sale	$	—	$	2,716
Allowance for loan losses		15,416		14,885
Stock-based compensation		2,069		2,208
Deferred compensation		166		1,454
Affordable housing partnerships and other investments		777		691
Purchase accounting adjustments		11,301		4,563
Accrued vacation		827		744
Lease liability		2,650		—
Employee costs		1,048		260
Other		809		1,095
	$	35,063	$	28,616

Deferred tax liabilities:
Unrealized gains on debt securities available for sale		(6,032)		—
Basis in premises and equipment		(4,222)		(1,213)
Affordable housing partnerships and other investments		(1,411)		(1,868)
Purchase accounting adjustments		(1,023)		(1,102)
Mortgage servicing assets		(3,717)		(1,159)
Basis in core deposit and customer intangible assets		(17,120)		(9,299)
Deferred loan origination costs		(1,730)		(1,593)
Lease right of use asset		(2,633)		—
Unrealized gain on equity securities		(593)		(662)
Other		(508)		(322)
	$	(38,989)	$	(17,218)
Net operating loss carryforward, net of valuation allowance		—		33
Net deferred tax (liability) asset	$	(3,926)	$	11,431

At December 31, 2019, the Company had no net operating loss carryforward remaining.

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. The Company has determined that no valuation allowance is required for any deferred tax assets as of December 31, 2019 and 2018.

Transactions with Related Parties (Details) $ in Thousands	12 Months Ended
Transactions with Related Parties (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Analysis of the changes in loans to related parties
Balance at beginning of year	$ 32,794
Change in relationship	17,772
New loans/advances	29,212
Repayments	(26,451)
Balance at end of year	53,327
Directors and executive officers
Analysis of the changes in loans to related parties
Total unused commitments	$ 17,200

OREO

12 Months Ended

Dec. 31, 2019

OREO.

OREO

Note 5. OREO

OREO represents properties acquired through foreclosure or other proceedings in settlement of loans and is included in other assets in the accompanying Consolidated Balance Sheets. At December 31, 2019, the Company held $2.7 million in commercial OREO, $0.4 million in residential OREO and an insignificant amount of other repossessed assets. At December 31, 2018, the Company held $0.2 million in commercial OREO, $0.2 million in residential OREO and an insignificant amount of other repossessed assets. At December 31, 2019 the Company had $2.2 million of residential real estate in the process of foreclosure.

The following table summarizes activity related to OREO (dollars in thousands):


	Year Ended		Year Ended
	December 31, 2019		December 31, 2018
OREO:
Beginning balance	$	376	$	1,283
Additions, transfers from loans		4,872		4,025
Additions, fair value from acquisition		149		—
Sales of OREO		(2,277)		(4,914)
Capitalized improvements		2		—
Cash payments collected		(3)		—
Valuation allowance for OREO		(62)		(18)
Ending balance	$	3,057	$	376

Goodwill and Other Intangible Assets - Estimated Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Goodwill and other intangibles assets
Net carrying amount	$ 61,593	$ 32,873
Estimated amortization expense:
Net carrying amount	61,593	32,873
Core deposit intangible assets
Goodwill and other intangibles assets
Gross carrying amount	90,256
Accumulated amortization	39,156
Net carrying amount	51,100	31,836
Estimated amortization expense:
2020	7,753
2021	7,259
2022	6,749
2023	6,225
2024	5,686
Thereafter	17,428
Net carrying amount	51,100	31,836
Customer relationship intangible assets
Goodwill and other intangibles assets
Gross carrying amount	24,208
Accumulated amortization	13,715
Net carrying amount	10,493	1,037
Estimated amortization expense:
2020	2,188
2021	1,926
2022	1,664
2023	1,403
2024	1,141
Thereafter	2,171
Net carrying amount	$ 10,493	$ 1,037

Parent Company Only Financial Information - Statements of Cash Flows (Details) - USD ($) $ in Thousands		12 Months Ended
	Oct. 12, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash Flows from Operating Activities
Net income		$ 102,953	$ 98,928	$ 62,726
Adjustments to reconcile net income to net cash provided by (used in)
Depreciation and amortization		11,879	9,556	8,615
Net security losses (gains)		(733)	1,780	(362)
Stock-based compensation		3,997	3,721	2,752
Changes in assets and liabilities:
Decrease (increase) in other assets		5,397	9,580	8,925
(Decrease) increase in other liabilities		(7,380)	2,195	(4,193)
Net cash provided by operating activities		80,800	202,547	253,358
Cash Flows from Investing Activities
Purchase of equity securities		(550)
Purchases of premises and equipment		(13,238)	(11,618)	(14,980)
Net cash provided by (used in) investing activities		64,958	(55,350)	(293,850)
Cash Flows from Financing Activities
Proceeds from charter amendment with subsidiary bank	$ 40,000
Cash paid for withholding taxes on share-based payments		(863)	(1,208)	(2,274)
Cash dividends paid		(45,171)	(39,010)	(30,707)
Proceeds from stock options exercised		169	392	906
Purchase of treasury stock		(24,292)
Common stock issuance costs		(234)		(365)
Net cash provided by (used in) financing activities		143,557	(260,496)	227,058
Net (decrease) increase in cash and due from subsidiary bank		289,315	(113,299)	186,566
Cash and cash equivalents, beginning of period		239,973	353,272	166,706
Cash and cash equivalents, ending of period		529,288	239,973	353,272
Parent
Cash Flows from Operating Activities
Net income		102,953	98,928	62,726
Adjustments to reconcile net income to net cash provided by (used in)
Depreciation and amortization		420	232	487
Distributions less than net income of subsidiaries		(51,961)	(93,451)	(69,940)
Net security losses (gains)		759	(2,322)
Stock-based compensation		3,997	3,721	2,752
Changes in assets and liabilities:
Decrease (increase) in other assets		(4,279)	13,985	(1,105)
(Decrease) increase in other liabilities		(1,280)	1,341	(2,762)
Net cash provided by operating activities		50,609	22,434	(7,842)
Cash Flows from Investing Activities
Purchase of equity securities		(520)
Net cash (outlay) received for business acquisition		(90,722)		(61,371)
Purchases of premises and equipment		(31)	(46)
Net cash provided by (used in) investing activities		(91,273)	(46)	(61,371)
Cash Flows from Financing Activities
Proceeds from charter amendment with subsidiary bank			40,000	40,000
Cash paid for withholding taxes on share-based payments		(863)	(817)	(1,414)
Cash dividends paid		(45,171)	(39,010)	(30,707)
Repayments of debt		(6,000)	(5,500)	(9,800)
Proceeds from issuance of debt		60,000		98,312
Proceeds from stock options exercised		169		626
Purchase of treasury stock		(24,292)
Common stock issuance costs		(234)		(365)
Net cash provided by (used in) financing activities		(16,391)	(5,327)	96,652
Net (decrease) increase in cash and due from subsidiary bank		(57,055)	17,061	27,439
Cash and cash equivalents, beginning of period		72,007	54,946	27,507
Cash and cash equivalents, ending of period		$ 14,952	$ 72,007	$ 54,946

Operating Segments and Related Information (Tables)

12 Months Ended

Dec. 31, 2019

Operating Segments and Related Information

Summary of information relating to operating segments

Following is a summary of selected financial information for the Company’s operating segments (dollars in thousands):


	Goodwill				Total Assets
	December 31, 2019		December 31, 2018		December 31, 2019		December 31, 2018
Banking	$	288,436	$	246,999	$	9,632,368	$	7,656,709
Remittance Processing		8,992		8,992		44,209		39,278
Wealth Management		14,108		11,694		32,760		20,992
Other		—		—		(13,608)		(14,622)
Totals	$	311,536	$	267,685	$	9,695,729	$	7,702,357


	Years ended December 31,
	2019		2018		2017
Net interest income:
Banking	$	296,754	$	248,291	$	208,184
Remittance Processing		76		67		60
Wealth Management		—		327		321
Other		(9,607)		(7,279)		(5,199)
Total net interest income	$	287,223	$	241,406	$	203,366

Non-interest income:
Banking	$	63,613	$	43,197	$	47,524
Remittance Processing		16,450		15,876		12,137
Wealth Management		39,075		31,621		27,270
Other		(2,723)		(701)		(2,457)
Total non-interest income	$	116,415	$	89,993	$	84,474

Non-interest expense:
Banking	$	211,559	$	154,455	$	139,521
Remittance Processing		10,990		10,749		8,704
Wealth Management		24,534		19,283		17,079
Other		11,711		8,556		9,122
Total non-interest expense	$	258,794	$	193,043	$	174,426

Income before income taxes:
Banking	$	138,401	$	132,604	$	110,884
Remittance Processing		5,536		5,194		3,493
Wealth Management		14,541		12,665		10,512
Other		(24,040)		(16,536)		(16,778)
Total income before income taxes	$	134,438	$	133,927	$	108,111

Net income:
Banking	$	106,409	$	97,369	$	65,704
Remittance Processing		4,060		3,710		2,007
Wealth Management		11,135		9,372		6,229
Other		(18,651)		(11,523)		(11,214)
Total net income	$	102,953	$	98,928	$	62,726

OREO (Tables)

12 Months Ended

Dec. 31, 2019

OREO.

Summary of activity related to OREO

The following table summarizes activity related to OREO (dollars in thousands):


	Year Ended		Year Ended
	December 31, 2019		December 31, 2018
OREO:
Beginning balance	$	376	$	1,283
Additions, transfers from loans		4,872		4,025
Additions, fair value from acquisition		149		—
Sales of OREO		(2,277)		(4,914)
Capitalized improvements		2		—
Cash payments collected		(3)		—
Valuation allowance for OREO		(62)		(18)
Ending balance	$	3,057	$	376

Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Changes in accumulated other comprehensive income (loss) by component, net of tax
Accumulated other comprehensive income (loss) beginning balance period, Net of Tax	$ 994,964	$ 935,003	$ 594,314
Unrealized gains (losses) on debt securities available for sale:
Unrealized holding gains (losses) on debt securities available for sale, Tax Effect	(10,251)	1,861	1,520
Unrealized holding gains (losses) on debt securities available for sale, Net of Tax	25,739	(4,670)	(2,174)
Unrealized losses on debt securities transferred from held to maturity to available for sale, Tax Effect	1,293
Unrealized losses on debt securities transferred from held to maturity to available for sale, Net of Tax	(3,244)
Amounts reclassified from accumulated other comprehensive income, Tax Effect	(210)	507	(471)
Amounts reclassified from accumulated other comprehensive income, Net of Tax	523	(1,273)	672
Unrealized gains (losses) on cash flow hedges:
Unrealized holding gains (losses) on cash flow hedges, Tax Effect	(81)
Unrealized holding gains (losses) on cash flow hedges, Net of Tax	(202)
Amounts reclassified from accumulated other comprehensive income, Tax Effect	1
Reclassification adjustment for realized losses (gains) on cash flow hedges	2
Accumulated other comprehensive income (loss) ending balance period, Net of Tax	1,220,434	994,964	935,003
Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income (loss) by component, net of tax
Accumulated other comprehensive income (loss) beginning balance period, Before Tax	(9,528)	(4,777)
Accumulated other comprehensive income (loss) beginning balance period, Tax Effect	2,716	1,967
Accumulated other comprehensive income (loss) beginning balance period, Net of Tax	(6,812)	(2,810)	36
Unrealized gains (losses) on debt securities available for sale:
Tax Cuts and Jobs Act of 2017 reclassification		(605)
Unrealized gains (losses) on cash flow hedges:
Accumulated other comprehensive income (loss) ending balance period, Before Tax	20,912	(9,528)	(4,777)
Accumulated other comprehensive income (loss) ending balance period, Tax Effect	(5,952)	2,716	1,967
Accumulated other comprehensive income (loss) ending balance period, Net of Tax	14,960	(6,812)	(2,810)
Unrealized gains (losses) on debt securities available for sale
Changes in accumulated other comprehensive income (loss) by component, net of tax
Accumulated other comprehensive income (loss) beginning balance period, Before Tax	(9,528)	(4,777)	60
Accumulated other comprehensive income (loss) beginning balance period, Tax Effect	2,716	1,967	(24)
Accumulated other comprehensive income (loss) beginning balance period, Net of Tax	(6,812)	(2,810)	36
Unrealized gains (losses) on debt securities available for sale:
Unrealized holding gains (losses) on debt securities available for sale, Before Tax	35,990	(6,531)	(3,694)
Unrealized holding gains (losses) on debt securities available for sale, Tax Effect	(10,251)	1,861	1,520
Unrealized holding gains (losses) on debt securities available for sale, Net of Tax	25,739	(4,670)	(2,174)
Unrealized losses on debt securities transferred from held to maturity to available for sale, Before Tax	(4,537)
Unrealized losses on debt securities transferred from held to maturity to available for sale, Tax Effect	1,293
Unrealized losses on debt securities transferred from held to maturity to available for sale, Net of Tax	(3,244)
Amounts reclassified from accumulated other comprehensive income, Before Tax	(733)	1,780	(1,143)
Amounts reclassified from accumulated other comprehensive income, Tax Effect	210	(507)	471
Amounts reclassified from accumulated other comprehensive income, Net of Tax	(523)	1,273	(672)
Tax Cuts and Jobs Act of 2017 reclassification		(605)
Unrealized gains (losses) on cash flow hedges:
Accumulated other comprehensive income (loss) ending balance period, Before Tax	21,192	(9,528)	(4,777)
Accumulated other comprehensive income (loss) ending balance period, Tax Effect	(6,032)	2,716	1,967
Accumulated other comprehensive income (loss) ending balance period, Net of Tax	15,160	$ (6,812)	$ (2,810)
Unrealized gains (losses) on cash flow hedges
Unrealized gains (losses) on debt securities available for sale:
Amounts reclassified from accumulated other comprehensive income, Before Tax	3
Unrealized gains (losses) on cash flow hedges:
Unrealized holding gains (losses) on cash flow hedges, Before Tax	(283)
Unrealized holding gains (losses) on cash flow hedges, Tax Effect	81
Unrealized holding gains (losses) on cash flow hedges, Net of Tax	(202)
Amounts reclassified from accumulated other comprehensive income, Tax Effect	(1)
Reclassification adjustment for realized losses (gains) on cash flow hedges	(2)
Accumulated other comprehensive income (loss) ending balance period, Before Tax	(280)
Accumulated other comprehensive income (loss) ending balance period, Tax Effect	80
Accumulated other comprehensive income (loss) ending balance period, Net of Tax	$ (200)

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Significant Accounting Policies

Principles of consolidation

The Consolidated Financial Statements include the accounts of the Company and its subsidiaries which includes First Busey Risk Management, Inc., Deed of Trust Services Corporation and Busey Bank, including Busey Bank’s wholly-owned subsidiaries FirsTech, Inc., Pulaski Service Corporation 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 Consolidated Financial Statements. All intercompany balances and transactions have been eliminated in consolidation.

The Consolidated Financial Statements exclude the following wholly-owned variable interest entities: First Busey Statutory Trust II, First Busey Statutory Trust III, First Busey Statutory Trust IV, Pulaski Financial Statutory Trust I and Pulaski Financial Statutory Trust II because the Company is not the primary beneficiary.

Use of Estimates

Use of estimates

In preparing the accompanying Consolidated Financial Statements in conformity with GAAP, the Company’s management is required to make estimates and assumptions that affect the amounts reported in the Financial Statements and the disclosures provided. Actual results could differ from those estimates. Material estimates which are particularly susceptible to significant change in the near-term relate to the fair value of investment securities, fair value of assets acquired and liabilities assumed in business combinations, goodwill, income taxes and the determination of the allowance for loan losses.

Comprehensive income (loss)

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 debt securities and unrealized gains and losses on cash flow hedges, are reported as a separate component within the equity section of the balance sheet, such items, along with net income, are components of comprehensive income (loss).

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. The Company had assets under care of $9.7 billion and $7.1 billion at December 31, 2019 and 2018, respectively.

Cash and cash equivalents

Cash and cash equivalents include cash and due from banks, interest-bearing deposits with banks and federal funds sold. Cash and cash equivalents have original maturities of three months or less. Accordingly, the carrying amount of such instruments is considered a reasonable estimate of fair value. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions and repurchase agreements.

The Company maintains its cash in deposit accounts the balance of 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.

Securities

Debt securities classified as held to maturity are those debt securities that the Company has the intent and ability to hold to maturity and are carried at amortized cost.

Debt 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. Any decision to sell a security classified as available for sale would be based on 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. Debt securities available for sale are carried at fair value, with unrealized gains and losses reported in other comprehensive income (loss), net of taxes.

Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. With the adoption of Accounting Standards Update (“ASU”) 2017-08, "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities" the amortization period for certain callable debt securities held at a premium, are amortized to the earliest call date. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

Management evaluates debt securities for OTTI on a quarterly basis, or more frequently, if economic or market conditions warrant an evaluation. Declines in the fair value of debt securities below their amortized cost are evaluated to determine whether they are temporary or OTTI. If the Company (i) has the intent to sell a debt security or (ii) it is more likely than not that the Company will be required to sell the debt security before its anticipated recovery, the Company recognizes the entire unrealized loss in earnings as an OTTI loss. If neither of these conditions are met, the Company evaluates whether a credit loss exists. The impairment is separated into (i) the amount of the total impairment related to the credit loss and (ii) the amount of total impairment related to all other factors. The amount of the total OTTI related to the credit loss is recognized in earnings and the amount related to all other factors is recognized in other comprehensive income (loss).

With the adoption of ASU 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," equity securities are carried at fair value with changes in fair value recognized in earnings.

Loans held for sale

Loans held for sale include mortgage loans which the Company intends to sell to investors and/or the secondary mortgage market. Loans held for sale are recorded at fair value, as the Company has elected to apply the fair value method of accounting, with changes in fair value recognized in earnings. Fair value adjustments are recorded as an adjustment to mortgage revenues. The fair value of loans held for sale is measured using observable quoted market or contract prices or market price equivalents, consistent with those used by other market participants. Direct loan origination fees and costs related to loans accounted for at fair value are recognized when earned.

Loan servicing

Servicing assets are recognized when servicing rights are acquired or retained through the sale of mortgage and government-guaranteed commercial loans. The unpaid principal balances of loans serviced by the Company for the benefit of others totaled $2.2 billion and are not included in the accompanying Consolidated Balance Sheets. Servicing rights are initially recorded at fair value which is determined using 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 non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. The amortization of mortgage servicing rights is included in mortgage revenue. The amortization of government-guaranteed commercial loans is included in other income.

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 expected prepayment rates and other inputs. For purposes of measuring impairment, the servicing rights are stratified by one or more predominant characteristics of the underlying loans. The amount of valuation allowance 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 reversal of the allowance may be recorded in current period earnings. The Company had no impairment recorded at December 31, 2019 or 2018.

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.

Portfolio loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are reported at the principal balance outstanding, net of purchase premiums and discounts or net deferred origination fees or costs, charge-offs, and the allowance for loan losses.

Loan origination fees, net of certain direct loan origination costs, are deferred and the net amount is amortized as an adjustment of the related loan’s yield. The Company amortizes the net amount over the contractual life of the related loan.

Interest income is accrued daily on outstanding loan balances. 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. Past due status is based on the contractual terms of the loan.

Interest accrued but not collected for loans that are placed on non-accrual status or charged-off is reversed against interest income. The interest on non-accrual loans is accounted for on the cost-recovery method, until returned 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.

Troubled debt restructurings

The Company’s 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 a loan for its customer after evaluating whether the borrower is able to meet the terms of the loan over the long term, though unable to meet the terms of the loan in the near term due to individual circumstances.

The Company considers the customer’s past performance, previous and current credit history, the individual circumstances surrounding the customer’s current difficulties and the customer’s plan to meet the terms of the loan in the

future prior to restructuring the terms of the loan. Generally, restructurings consist of short-term interest rate relief, short-term principal payment relief, short-term principal and interest payment relief or forbearance (debt forgiveness). A restructured loan that exceeds 90 days past due or is placed on non-accrual status, is classified as non-performing.

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 the Company modifies a loan in a TDR, it evaluates any possible impairment similar to other impaired loans based on present value of the expected future cash flows discounted at the loan’s original effective interest rate, the loan’s observable market price, or the fair value of the collateral if the loan is collateral dependent. If the Company determines that the fair value of the TDR is less than the recorded investment in the loan, impairment is recognized through a charge to the allowance for loan losses in the period of the modification and in periods subsequent to the modification.

Purchased credit-impaired loans

The Company holds loans acquired through business combinations, some of which have shown evidence of credit deterioration since origination. These purchased credit-impaired (“PCI”) loans are initially recorded at fair value on the acquisition date. Accordingly, the seller’s allowance for loan losses is not carried over or recorded as of the acquisition date.

PCI loans are reviewed individually or are aggregated into pools of loans based on common risk characteristics. The Company estimates the amount and timing of expected cash flows and the excess of the cash flows expected to be collected over the recorded investment, if material, is the accretable yield and is recognized as interest income over the life. The excess of the contractual cash flows over the cash flows expected to be collected is the non-accretable difference.

Over the life of the loans, expected cash flows continue to be estimated and any increases in expected cash flows over those expected at acquisition date are adjusted through the accretable yield on a prospective basis. Any subsequent decreases in expected cash flows are recognized by recording an allowance for loan losses.

Allowance for loan losses

The allowance for loan losses represents an estimate of the amount of probable losses believed to be inherent in the Company’s loan portfolio at the Consolidated Balance Sheet date. 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 probable. Subsequent recoveries, if any, are credited to the allowance. Overall, the Company believes the allowance methodology is consistent with prior periods and the balance was adequate to cover the estimated losses in the Company’s loan portfolio at December 31, 2019 and 2018.

The allowance for loan losses is calculated by segmenting the loan portfolio by product type, geography and risk classification. The Company’s loan portfolio consists of commercial, commercial real estate, real estate construction, retail real estate, and retail other loans. Segmentation based on product type captures the risk of credit loss inherent in each category including fluctuations in underlying collateral values, changes in operating cash flows, changes in borrower characteristics, and changes in economic and other factors. Segmentation by geography and risk classification further enhances Management’s evaluation of these factors in the assessment of the adequacy of the allowance for loan loss.

The allowance for loan loss consists of a general reserve and a specific reserve. The general portion of the Company’s allowance is developed based on historical loss ratios adjusted for qualitative factors which management believes capture inherent loss not reflected in historical loss experience. Historical loss ratios are an annualized rate based on the

previous five years of loss history with more consideration given to the most recent loss experience. Qualitative factors are estimated by considering risk factors both internal and external to the Company. Specifically, management considers the following when estimating qualitative factors: (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 Factors; (vi) Impact of Competition, Legal & Regulatory Issues; (vii) Nature and Volume of Loan Portfolio; (viii) Concentrations of Credit; (ix) Net Charge-Off Trends; and (x) Non-Accrual, Past Due and Classified Trends. Management evaluates the probable impact from the degree of risk that each one of these components has on the quality of the loan portfolio on a quarterly basis.

The specific portion of the Company’s allowance relates to loans that are identified as impaired, which includes non-performing loans, TDRs and other loans determined to be impaired. A loan is considered impaired when, based on current information and events, it is probable the Company will be unable to collect scheduled 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 loan 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.

If a loan is impaired, impairment is measured on a loan-by-loan basis for commercial and construction loans based on 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 less cost to sell, if the loan is collateral dependent. Loans are considered collateral dependent if repayment is expected solely from the sale of 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.

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 unless such loans are the subject of a TDR.

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 revision as more information becomes available.

Premises and equipment, net

Land is carried at cost less accumulated depreciation of depreciable land improvements. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed 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	3	—	10	years

Long-lived assets

Long-lived assets, including premises and equipment, right of use asset 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 is 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

OREO represents properties acquired through foreclosure or other proceedings in settlement of loans. OREO is recorded at the fair value of the property less estimated costs of disposal, which establishes a new cost basis. Any adjustment to fair value at the time of transfer to OREO is charged to the allowance for loan losses. OREO 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 earnings.

Goodwill and other intangibles

Goodwill represents the excess of the consideration transferred in a business combination over the fair value of the net 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. As part of this analysis, the reporting unit's carrying value is compared to its fair value.

The Company estimates the fair value of its reporting units as of the measurement date utilizing valuation methodologies including the comparable transactions approach and the control premium approach. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. There was no impairment as of December 31, 2019 or 2018. See “Note 7. Goodwill and Other Intangible Assets” for further discussion.

Other intangible assets consists of core deposit and acquired customer relationship intangible assets arising from acquisitions and are amortized over their estimated useful lives.

Cash surrender value of bank-owned life insurance

Cash surrender value of bank owned life insurance

The Company has purchased or acquired through acquisitions life insurance policies on certain executives and senior officers. Life insurance is recorded at its cash surrender value, which estimates its fair value.

ASC Topic 715, Compensation—Retirement Benefits requires an employer to 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. The Company has an accrued liability, included in other liabilities, for these arrangements.

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: (i) the assets have been isolated from the Company, (ii) the transferee obtains the right to pledge or exchange the assets it receives, and no condition both constrains the transferee from taking advantage of its right to pledge or exchange and provides more than a trivial benefit to the transferor, and (iii) 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 2015.

Under GAAP, a valuation allowance is required to be recognized if it is more likely than not that the deferred tax assets 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.

Management believes that it is more likely than not that the deferred tax assets included in the accompanying Consolidated Financial Statements will be fully realized. The Company determined that no valuation allowance was required as of December 31, 2019.

Positions taken in tax returns may be subject to challenge upon examination by the taxing authorities. Uncertain tax positions are initially recognized in the Consolidated Financial Statements when it is more likely than not the position will not be sustained upon examination by the tax authorities. Such tax positions are both initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement with the tax authority, assuming full knowledge of the position and all relevant facts. 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, 2019 or 2018.

At December 31, 2019, the Company was not under examination by any tax authority; however, Banc Ed, which the Company acquired on January 31, 2019, is under examination by the Illinois Department of Revenue for the 2009 to 2016 income tax filings.

Treasury Stock

Treasury stock acquired is recorded at cost. Treasury stock issued is valued based on the “first-in, first-out” method. Gains and losses on issuance are recorded as increases or decreases to additional paid-in capital.

Stock-based employee compensation

During the first 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. During the second quarter of 2015, the Company adopted an amendment to revise some technical terms to the 2010 Equity Plan, which was approved at the annual stockholders meeting on May 20, 2015, and can be found as Appendix C of the Company’s Proxy Statement for the 2015 Annual Meeting of Stockholders. The Company grants share-based compensation awards to its employees and members of its board of directors as provided for under the Company’s 2010 Equity Plan. In addition, pursuant to the terms of the First Community 2016 Equity Incentive Plan, the Company may grant awards with respect to First Busey common stock to legacy employees and directors of First Community or its subsidiaries.

The Company’s equity incentive plans are designed to encourage ownership of its common stock by its employees and directors, to provide additional incentive for them to promote the success of the Company’s business, and to attract and retain talented personnel. All of the Company’s employees and directors and those of its subsidiaries are eligible to receive awards under the plans. See “Note 14. Share-based Compensation” for further discussion.

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 restricted stock units cliff vest, the cost is recorded using straight-line amortization. The Company does not estimate forfeitures in determining the amount of compensation expense to recognize. Compensation expense for unvested awards that are forfeited is reversed in the period forfeited.

Segment disclosure

Operating segments are components of a business that (i) engage in business activities from which the component may earn revenues and incur expenses; (ii) has 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 operations are managed along three operating segments consisting of Banking, Remittance Processing and Wealth Management. See “Note 21. Operating Segments and Related Information” for further discussion.

Business Combinations

Business combinations are accounted for under ASC Topic 805, Business Combinations, using the acquisition method of accounting. The acquisition method of accounting requires an acquirer to recognize the assets acquired and the liabilities assumed at the acquisition date measured at their estimated fair values as of that date. To determine the fair values, the Company may rely on third-party valuations, such as appraisals, or internal valuations based on discounted cash flow analyses or other valuation techniques. Under the acquisition method of accounting, the Company will identify the acquirer and the closing date and apply applicable recognition principles.

Operating results are included with the Company’s results of operations since each date of acquisition. Acquisition related costs are costs the Company incurs to effect a business combination. Those costs may include legal, accounting, valuation, other professional or consulting fees, system conversions and marketing costs. The Company will account for acquisition related costs as expenses in the periods in which the costs are incurred and the services are received. Costs that the Company expects, but is not obligated to incur in the future, to effect its plan to exit an activity of an acquiree or to terminate the employment of an acquiree’s employees are not liabilities at the acquisition date. Instead, the Company will recognize these costs in its post-combination Financial Statements in accordance with other applicable accounting guidance.

Derivative Financial Instruments

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. Additionally, the Company enters into derivative financial instruments, including interest rate lock commitments issued to residential loan customers for loans that will be held for sale, forward sales commitments to sell residential mortgage loans to investors and interest rate swaps with customers and other third parties.

Interest Rate Swaps Designated as Cash Flow Hedges: Starting in the third quarter of 2019, the Company entered into derivative instruments designated as cash flow hedges. For derivative instruments that are designated and qualify as a cash flow hedge, the change in fair value of the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Change in fair value of components excluded from the assessment of effectiveness are recognized in current earnings.

Interest Rate Lock Commitments. Commitments to originate loans held for sale (interest rate lock commitments), which primarily consist of commitments to originate fixed-rate residential mortgage loans, are recorded at their fair value in other assets or other liabilities in the Consolidated Financial Statements, with changes in the fair value of the

corresponding derivative financial assets or liabilities recorded as either a charge or credit to mortgage revenues during the period in which the changes occurred.

Forward Sales Commitments. As a general rule, the Company economically hedges loans held for sale and interest rate lock commitments issued to its residential loan customers related to loans that will be held for sale by obtaining corresponding best-efforts forward sales commitments with an investor to sell the loans at an agreed-upon price at the time the interest rate locks are issued to the customers. Forward sales commitments that meet the definition of derivative financial instruments under ASC Topic 815, Derivatives and Hedging, are carried at their fair value in other assets or other liabilities in the Consolidated Financial Statements. The Company does not designate these forward sales commitments for hedge accounting treatment, and accordingly, changes in fair value of the corresponding derivative financial asset or liability are recorded as either a charge or credit to mortgage revenue during the period in which the changes occur.

Revenue

ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” outlines a single model for companies to use in accounting for revenue arising from contracts with customers and supersedes most prior revenue recognition guidance, including industry-specific guidance. ASU 2014-09 requires that companies recognize revenue based on the value of transferred goods or services as they occur in the contract and establishes additional disclosures. The Company’s revenue is comprised of net interest income, which is explicitly excluded from the scope of ASU 2014-09, and non-interest income. The Company has evaluated its non-interest income and the nature of its contracts with customers and determined that further disaggregation of revenue beyond what is presented in the accompanying Consolidated Financial Statements was not necessary. The Company satisfies its performance obligations on its contracts with customers as services are rendered so there is limited judgment involved in applying Topic 606 that affects the determination of the timing and amount of revenue from contracts with customers.

Descriptions of the Company’s primary revenue generating activities that are within Topic 606, and are presented in the accompanying Consolidated Statements of Income as components of non-interest income, include wealth management fees, remittance processing, and fees for customer services. Wealth management fees represents monthly fees due from wealth management customers as consideration for managing the customers' assets. Wealth management and trust services include custody of assets, investment management, fees for trust services and other fiduciary activities. Also included are fees received from a third party broker-dealer as part of a revenue sharing agreement for fees earned from customers that the Company refers to the third party. Revenue is recognized when the performance obligation is completed, which is generally monthly. Remittance processing represents transaction-based fees for pay processing solutions such as online bill payments, lockbox and walk-in payments. Revenue is recognized when the performance obligation is completed, which is generally monthly. Fees for customer services represent general service fees for monthly account maintenance and activity or transaction-based fees and consists of transaction-based revenue, time-based revenue, or item-based revenue. Revenue is recognized when the performance obligation is completed which is generally monthly for account maintenance services or when a transaction has been completed. Payment for such performance obligations are generally received at the time the performance obligations are satisfied.

Leases

Effective January 1, 2019, a determination is made at inception if an arrangement contains a lease. For arrangements that contain a lease, the Company recognizes the lease on the balance sheet as a right of use asset and corresponding lease liability. Lease-related assets, or right of use assets, are recognized on the lease commencement date at amounts equal to the respective lease liabilities, adjusted for prepaid lease payments, initial direct costs, and lease incentives received. Lease-related liabilities are recognized at the present value of the remaining contractual fixed lease payments, discounted using our incremental borrowing rate. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred.

Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. If not readily determinable, the Company utilizes its incremental borrowing rate at lease inception, on a collateralized basis, over a similar term. For operating leases existing prior to January 1, 2019, the Company used a borrowing rate that corresponded to the remaining lease term.

The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right of use asset and lease liability.

Off-balance sheet arrangements

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

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. These commitments may be secured based on management’s credit evaluation of the borrower.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer’s obligation 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, and 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. As of December 31, 2019 and 2018, no amounts were recorded as liabilities for the Company’s potential obligations under these guarantees.

Fair value of financial instruments

Fair value of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in “Note 18. Fair Value Measurements.” Fair value estimates involve uncertainties and matters of significant

judgement regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.

Reclassifications

Reclassifications have been made to certain prior year account balances, with no effect on net income or stockholders’ equity, to be consistent with the classifications adopted as of and for the year ended December 31, 2019.

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. On February 5, 2020, First Busey’s board of directors approved an amendment to increase the authorized shares under the repurchase program by 2,000,000 shares. Other than this item, there were no significant subsequent events for the year ended December 31, 2019 through the filing date of these Consolidated Financials.

Impact of recently adopted accounting standards

On January 1, 2019, the Company adopted ASU 2016-02 “Leases (Topic 842)” and all subsequent ASUs that modified Topic 842. The Company made the following elections for all leases in connection with the adoption of this guidance:

●

The Company elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs;

●

The Company did not elect the hindsight practical expedient;

●

The Company elected the optional transition method that allows companies to use the effective date as the date of initial application on transition. As a result, the Company did not adjust comparative period financial information or make the newly required lease disclosures for periods before the effective date;

●

The Company elected not to apply the above guidance to short-term leases;

●

The Company elected to separate the lease components from the nonlease components and exclude the nonlease components from the right of use asset and lease liability; and

●

The Company did not elect the land easement practical expedient.

At the date of adoption, the Company recorded approximately $8.1 million on its Consolidated Balance Sheets to reflect the right of use asset and associated lease liability. The Company utilized its incremental borrowing rate, on a collateralized basis, for the remaining contractual lease term.

ASU 2017-08, "Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities." ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium, requiring the premium to be amortized to the earliest call date. ASU 2017-08 does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This guidance was effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements.

ASU 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." ASU 2017-12 amends Topic 815 to reduce the cost and complexity of applying hedge accounting and expands the types of relationships that qualify for hedge accounting. The guidance eliminates the requirement to separately measure and report hedge ineffectiveness, requires all items that affect earnings to be presented in the same income statement line as the hedged item, provides for applying hedge accounting to additional hedging strategies, provides for new approaches to measuring the hedged item in fair value hedges of interest rate risk, and eases the requirements for effective testing and hedge documentation. This guidance was effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. During the first quarter of 2019, the Company adopted this guidance, reassessed classification of certain investments, and transferred $573.6 million of debt securities from held to maturity to available for sale.

ASU 2018-07, "Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. This guidance was effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of this guidance did not have a material impact on the Company’s Consolidated Financial Statements.

Recently issued accounting standards

ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." ASU 2016-13 implements a change from the current impaired loss model to an expected credit loss model over the life of an instrument, including loans and securities held to maturity. The expected credit loss model is expected to result in earlier recognition of losses. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 including interim periods with those years. The Company has executed a project plan to implement this guidance. The project plan included an assessment of data, development of methodologies, model validation, parallel runs, refining qualitative factors and forecast periods and evaluating related disclosures. Management is finalizing macroeconomic conditions and forecast assumptions to be used in our CECL model; however, we expect an initial increase to the allowance for credit losses, including the increase in reserve for unfunded commitments, of approximately 25% to 45% above the existing allowance for loan loss levels. The anticipated initial increase to the allowance for credit losses is expected to be substantially attributable to the fair value marks on prior acquisitions and the reserve required on unfunded commitments. When finalized, this one-time increase will be recorded, net of tax, as an adjustment to beginning retained earnings.

Internal controls over financial reporting specifically related to CECL have been designed and are being evaluated; however, all internal controls related to CECL implementation are not operational. The Company is in the final stages of completing the formal governance and approval process. Ongoing impacts of the CECL methodology will be dependent upon changes in economic conditions and forecasts, originated and acquired loan portfolio composition, portfolio duration, and other factors.

Leases - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
Leases - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Leases
Right of use asset	$ 9,490
Lease liability	9,552
Rent expense under operating leases, included in net occupancy and equipment expense	$ 2,880	$ 2,400	$ 3,700

Regulatory Capital (Details) - USD ($) $ in Thousands	Oct. 12, 2018	Dec. 31, 2019	Dec. 31, 2018
Regulatory Capital
Distribution received through chartered amendment	$ 40,000
Total Capital (to Risk Weighted Assets), Amount
Actual, Amount		$ 1,036,143	$ 894,572
Minimum Capital Requirement, Amount		590,826	482,638
Minimum To Be Well Capitalized, Amount		$ 738,532	$ 603,297
Total Capital (to Risk Weighted Assets), Ratio
Actual, Ratio (as a percent)		14.03%	14.83%
Minimum Capital Requirement, Ratio (as a percent)		8.00%	8.00%
Minimum To Be Well Capitalized, Ratio (as a percent)		10.00%	10.00%
Tier 1 Capital (to Risk Weighted Assets), Amount
Actual, Amount		$ 922,395	$ 783,924
Minimum Capital Requirement, Amount		443,120	361,978
Minimum To Be Well Capitalized, Amount		$ 590,826	$ 482,638
Tier 1 Capital (to Risk Weighted Assets), Ratio
Actual, Ratio (as a percent)		12.49%	12.99%
Minimum Capital Requirement, Ratio (as a percent)		6.00%	6.00%
Minimum To Be Well Capitalized, Ratio (as a percent)		8.00%	8.00%
Common Equity Tier 1 Capital (to Risk Weighted Assets), Amount
Actual, Amount		$ 848,395	$ 709,924
Minimum Capital Requirement, Amount		332,340	271,484
Minimum To Be Well Capitalized, Amount		$ 480,046	$ 392,143
Common Equity Tier 1 Capital (to Risk Weighted Assets), Ratio
Actual, Ratio (as a percent)		11.49%	11.77%
Minimum Capital Requirement, Ratio (as a percent)		4.50%	4.50%
Minimum To Be Well Capitalized, Ratio (as a percent)		6.50%	6.50%
Tier 1 Capital (to Average Assets), Amount
Actual, Amount		$ 922,395	$ 783,924
Minimum Capital Requirement, Amount		$ 373,360	$ 302,704
Tier 1 Capital (to Average Assets), Ratio
Actual, Ratio (as a percent)		9.88%	10.36%
Minimum Capital Requirement, Ratio (as a percent)		4.00%	4.00%
Busey Bank
Total Capital (to Risk Weighted Assets), Amount
Actual, Amount		$ 1,099,449	$ 854,351
Minimum Capital Requirement, Amount		589,681	481,701
Minimum To Be Well Capitalized, Amount		$ 737,101	$ 602,126
Total Capital (to Risk Weighted Assets), Ratio
Actual, Ratio (as a percent)		14.92%	14.19%
Minimum Capital Requirement, Ratio (as a percent)		8.00%	8.00%
Minimum To Be Well Capitalized, Ratio (as a percent)		10.00%	10.00%
Tier 1 Capital (to Risk Weighted Assets), Amount
Actual, Amount		$ 1,045,701	$ 803,703
Minimum Capital Requirement, Amount		442,261	361,276
Minimum To Be Well Capitalized, Amount		$ 589,681	$ 481,701
Tier 1 Capital (to Risk Weighted Assets), Ratio
Actual, Ratio (as a percent)		14.19%	13.35%
Minimum Capital Requirement, Ratio (as a percent)		6.00%	6.00%
Minimum To Be Well Capitalized, Ratio (as a percent)		8.00%	8.00%
Common Equity Tier 1 Capital (to Risk Weighted Assets), Amount
Actual, Amount		$ 1,045,701	$ 803,703
Minimum Capital Requirement, Amount		331,696	270,957
Minimum To Be Well Capitalized, Amount		$ 479,116	$ 391,382
Common Equity Tier 1 Capital (to Risk Weighted Assets), Ratio
Actual, Ratio (as a percent)		14.19%	13.35%
Minimum Capital Requirement, Ratio (as a percent)		4.50%	4.50%
Minimum To Be Well Capitalized, Ratio (as a percent)		6.50%	6.50%
Tier 1 Capital (to Average Assets), Amount
Actual, Amount		$ 1,045,701	$ 803,703
Minimum Capital Requirement, Amount		373,639	302,232
Minimum To Be Well Capitalized, Amount		$ 467,049	$ 377,789
Tier 1 Capital (to Average Assets), Ratio
Actual, Ratio (as a percent)		11.19%	10.64%
Minimum Capital Requirement, Ratio (as a percent)		4.00%	4.00%
Minimum To Be Well Capitalized, Ratio (as a percent)		5.00%	5.00%

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Net income per share calculations for basic and diluted methods
Net income									$ 102,953	$ 98,928	$ 62,726
Shares:
Weighted average common shares outstanding									54,852,000	48,854,000	42,685,000
Dilutive effect of outstanding options, warrants and restricted stock units as determined by the application of the treasury stock method (in shares)									280,000	361,000	441,000
Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation									55,132,000	49,215,000	43,126,000
Basic earnings per common share (in dollars per share)	$ 0.52	$ 0.45	$ 0.43	$ 0.48	$ 0.52	$ 0.55	$ 0.51	$ 0.45	$ 1.88	$ 2.02	$ 1.47
Diluted earnings per common share (in dollars per share)	$ 0.52	$ 0.45	$ 0.43	$ 0.48	$ 0.51	$ 0.55	$ 0.51	$ 0.45	$ 1.87	$ 2.01	$ 1.45
Warrants
Anti-dilutive securities excluded from the calculation of common stock equivalents
Number of anti-dilutive securities (in shares)									191,278	191,278
Restricted stock unit
Anti-dilutive securities excluded from the calculation of common stock equivalents
Number of anti-dilutive securities (in shares)									201,029	172,571

Fair Value Measurements - Additional Quantitative Information (Details) $ in Thousands	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	$ 37,079	$ 50,182
OREO	3,057	376	$ 1,283
Carrying Amount
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Carrying value	25,500
Non-recurring basis
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	2,686	10,999
OREO	55	55
Bank property held for sale	4,004	1,832
Non-recurring basis \| Level 3
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	2,686	10,999
OREO	55	55
Bank property held for sale	4,004	1,832
Non-recurring basis \| Level 3 \| Appraisal of collateral \| Impaired loans
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans	2,686	10,999
Non-recurring basis \| Level 3 \| Appraisal of collateral \| OREO
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
OREO	55	55
Non-recurring basis \| Level 3 \| Appraisal of collateral or real estate listing price \| Bank property held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Bank property held for sale	$ 4,004	$ 1,832
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral \| Impaired loans \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans (percent)	(2.9)	(3.3)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral \| Impaired loans \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans (percent)	(100.0)	(100.0)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral \| Impaired loans \| Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Impaired loans (percent)	(57.8)	(24.1)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral \| OREO \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
OREO (percent)	(25.0)	(25.0)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral \| OREO \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
OREO (percent)	(100.0)	(100.0)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral \| OREO \| Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
OREO (percent)	(65.0)	(65.0)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral or real estate listing price \| Bank property held for sale \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Bank property held for sale (percent)	(6.2)	0.0
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral or real estate listing price \| Bank property held for sale \| Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Bank property held for sale (percent)	(71.3)	(35.1)
Appraisal adjustments \| Non-recurring basis \| Level 3 \| Appraisal of collateral or real estate listing price \| Bank property held for sale \| Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Bank property held for sale (percent)	(40.7)	(28.3)

Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Other Intangible Assets

Schedule of carrying amount of goodwill by operating segment


	Balance at		Balance at
	December 31, 2019		December 31, 2018
Goodwill:
Banking	$	288,436	$	246,999
Remittance Processing		8,992		8,992
Wealth Management		14,108		11,694
Total goodwill	$	311,536	$	267,685

Schedule of other intangible asset disclosures


	Balance at		2019		Balance at		2018
	December 31, 2019		Amortization		December 31, 2018		Amortization
Amortized intangible assets:
Core deposit intangible assets	$	51,100	$	7,963	$	31,836	$	5,535
Customer relationship intangible assets		10,493		1,584		1,037		319
	$	61,593	$	9,547	$	32,873	$	5,854

Schedule of carrying amount of amortized intangible assets


			Customer
	Core deposit		relationship
	intangible		intangible
As of December 31, 2019:
Gross carrying amount	$	90,256	$	24,208
Accumulated amortization		39,156		13,715
	$	51,100	$	10,493

Estimated amortization expense at December 31, 2019:
2020	$	7,753	$	2,188
2021		7,259		1,926
2022		6,749		1,664
2023		6,225		1,403
2024		5,686		1,141
Thereafter		17,428		2,171
	$	51,100	$	10,493

Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Dec. 31, 2019	Feb. 27, 2020	Jun. 30, 2019
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2019
Entity File Number	0-15950
Entity Registrant Name	FIRST BUSEY CORPORATION
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	37-1078406
Entity Address, Address Line One	100 W. University Avenue
Entity Address, City or Town	Champaign
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	61820
City Area Code	217
Local Phone Number	365-4544
Title of 12(b) Security	Common Stock ($0.001 par value)
Trading Symbol	BUSE
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 1.3
Entity Common Stock, Shares Outstanding		54,541,061
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Entity Central Index Key	0000314489
Amendment Flag	false

Leases

12 Months Ended

Dec. 31, 2019

Leases

Leases

Note 22. Leases

The Company has operating leases consisting primarily of equipment leases and real estate leases. The Company leases real estate property for bank branches, ATM locations, and office space with terms extending through 2032. As of December 31, 2019, the Company reported $9.5 million of right of use asset and $9.6 million lease liability in its Consolidated Balance Sheets.

The following tables represents lease costs and other lease information for the periods presented (dollars in thousands):


	Year Ended
Lease Costs	December 31, 2019
Operating lease costs	$	2,364
Variable lease costs		432
Short-term lease costs		84
Sublease income		-
Net lease cost	$	2,880

Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating lease cash flows – Fixed payments	$	2,296
Operating lease cash flows – Liability reduction		2,010
Right of use assets obtained during the period in exchange for operating lease liabilities		923
Weighted average lease term (in years)		7.20
Weighted average discount rate		3.08%

At December 31, 2019, 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 $2.9 million, $2.4 million and $3.7 million for the year ended December 31, 2019, 2018 and 2017, respectively.

Rent commitments were as follows (dollars in thousands):


	December 31, 2019
2020	$	2,408
2021		1,781
2022		1,378
2023		1,221
2024		1,022
Thereafter		2,876
Amounts representing interest		(1,134)
Present value of net future minimum lease payments	$	9,552

Regulatory Capital

12 Months Ended

Dec. 31, 2019

Regulatory Capital

Regulatory Capital

Note 11. Regulatory Capital

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

Banking regulations identify five capital categories for insured depository institutions: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. As of December 31, 2019 and 2018, all capital ratios of the Company and the Bank exceeded the well capitalized levels under the applicable regulatory capital adequacy guidelines. Management believes that no events or changes have occurred subsequent to December 31, 2019 that would change this designation.

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


									Minimum
					Minimum				To Be Well
	Actual				Capital Requirement				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2019:
Total Capital (to Risk Weighted Assets)
Consolidated	$	1,036,143	14.03	%	$	590,826	8.00	%	$	738,532	10.00	%
Busey Bank	$	1,099,449	14.92	%	$	589,681	8.00	%	$	737,101	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	922,395	12.49	%	$	443,120	6.00	%	$	590,826	8.00	%
Busey Bank	$	1,045,701	14.19	%	$	442,261	6.00	%	$	589,681	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	848,395	11.49	%	$	332,340	4.50	%	$	480,046	6.50	%
Busey Bank	$	1,045,701	14.19	%	$	331,696	4.50	%	$	479,116	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated	$	922,395	9.88	%	$	373,360	4.00	%		N/A	N/A
Busey Bank	$	1,045,701	11.19	%	$	373,639	4.00	%	$	467,049	5.00	%


									Minimum
					Minimum				To Be Well
	Actual				Capital Requirement				Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2018:
Total Capital (to Risk Weighted Assets)
Consolidated	$	894,572	14.83	%	$	482,638	8.00	%	$	603,297	10.00	%
Busey Bank	$	854,351	14.19	%	$	481,701	8.00	%	$	602,126	10.00	%

Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	783,924	12.99	%	$	361,978	6.00	%	$	482,638	8.00	%
Busey Bank	$	803,703	13.35	%	$	361,276	6.00	%	$	481,701	8.00	%

Common Equity Tier 1 Capital (to Risk Weighted Assets)
Consolidated	$	709,924	11.77	%	$	271,484	4.50	%	$	392,143	6.50	%
Busey Bank	$	803,703	13.35	%	$	270,957	4.50	%	$	391,382	6.50	%

Tier 1 Capital (to Average Assets)
Consolidated	$	783,924	10.36	%	$	302,704	4.00	%		N/A	N/A
Busey Bank	$	803,703	10.64	%	$	302,232	4.00	%	$	377,789	5.00	%

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

weighted assets of at least 7.0%, (ii) Tier 1 capital to risk-weighted assets of at least 8.5%, and (iii) Total capital to risk-weighted assets of at least 10.5%.

The ability of the Company to pay cash dividends to its stockholders and to service its debt is dependent on the receipt of cash dividends from its subsidiaries. Under applicable regulatory requirements, an Illinois state-chartered bank such as Busey Bank may not pay dividends in excess of its net profits. Because Busey Bank had been in an accumulated deficit position from 2009 through 2018, it was not able to pay dividends in prior years. With prior approval from its regulators, however, an Illinois state-chartered bank in that situation was able to reduce its capital stock by amending its charter to decrease the authorized number of shares, and then make a subsequent distribution to its holding company. Using this approach, and with the approval of its regulators, Busey Bank has distributed funds to the Company, most recently in the amount of $40.0 million on October 12, 2018. Busey Bank returned to positive retained earnings in the second quarter of 2018 and, in 2019, returned to paying dividends.

- Definition

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

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+ Details

Deposits (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Deposits
Demand deposits, noninterest-bearing	$ 1,832,619	$ 1,464,700
Interest-bearing transaction deposits	1,989,854	1,435,574
Saving deposits and money market deposits	2,545,073	1,852,044
Time deposits	1,534,850	1,497,003
Total deposits	7,902,396	6,249,321
Reciprocal brokered transaction deposits included in savings deposits and money market funds	12,500	17,500
Time deposits minimum denomination of $100,000 or more	854,100	673,700
Time deposits minimum denomination of $250,000 or more	297,400	264,100
Brokered deposits included in the balance of time deposits	5,500	262,500
Deposits
2020	1,012,295
2021	283,684
2022	127,593
2023	64,920
2024	46,347
Thereafter	11
Total	$ 1,534,850	$ 1,497,003

Fair Value Measurements - Segregated by Level of Valuation Inputs (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Financial assets:
Fair Value		$ 603,360
Portfolio loans, net	6,633,501	5,517,780
Mortgage servicing rights	2,200,000
Financial liabilities:
Short-term borrowings	8,551
Junior subordinated debt owed to unconsolidated trusts	71,308	71,155
Level 1 \| Carrying Amount
Financial assets:
Cash and cash equivalents	529,288	239,973
Level 1 \| Fair Value
Financial assets:
Cash and cash equivalents	529,288	239,973
Level 2 \| Carrying Amount
Financial assets:
Fair Value		608,660
Accrued interest receivable	27,109	22,314
Financial liabilities:
Time deposits	1,534,850	1,497,003
Securities sold under agreements to repurchase	205,491	185,796
Short-term borrowings	8,551
Long-term debt	83,600	50,000
Junior subordinated debt owed to unconsolidated trusts	71,308	71,155
Accrued interest payable	5,000	6,568
Level 2 \| Fair Value
Financial assets:
Fair Value		603,360
Accrued interest receivable	27,109	22,314
Financial liabilities:
Time deposits	1,538,597	1,482,301
Securities sold under agreements to repurchase	205,491	185,796
Short-term borrowings	8,552
Long-term debt	83,614	49,873
Junior subordinated debt owed to unconsolidated trusts	74,153	65,182
Accrued interest payable	5,000	6,568
Level 3 \| Carrying Amount
Financial assets:
Portfolio loans, net	6,633,501	5,517,780
Mortgage servicing rights	12,326	3,315
Other servicing rights	1,071	781
Level 3 \| Fair Value
Financial assets:
Portfolio loans, net	6,648,560	5,473,063
Mortgage servicing rights	18,193	11,051
Other servicing rights	1,740	1,443
Level 3 \| Senior notes \| Carrying Amount
Financial liabilities:
Long-term debt	39,674	39,539
Level 3 \| Senior notes \| Fair Value
Financial liabilities:
Long-term debt	40,099	39,452
Level 3 \| Subordinated debt \| Carrying Amount
Financial liabilities:
Long-term debt	59,248	59,147
Level 3 \| Subordinated debt \| Fair Value
Financial liabilities:
Long-term debt	$ 61,514	$ 58,186

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED BALANCE SHEETS
Held to maturity, fair value		$ 603,360
Portfolio Loans, allowance for loan losses (in dollars)	$ 53,748	$ 50,648
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	66,666,667	66,666,667
Common stock, shares issued	55,910,733	49,185,581
Treasury Stock, Shares	1,121,961	310,745

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock First Community	Common Stock Mid Illinois Bancorp, Inc.	Common Stock	Additional Paid-in Capital First Community	Additional Paid-in Capital Mid Illinois Bancorp, Inc.	Additional Paid-in Capital	Accumulated (Deficit) Pulaski	Accumulated (Deficit)	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Pulaski	First Community	Mid Illinois Bancorp, Inc.	Total
Accumulated other comprehensive income (loss) beginning balance period, Net of Tax at Dec. 31, 2016			$ 39			$ 781,716		$ (163,689)	$ 36	$ (23,788)				$ 594,314
Beginning Balance (in shares) at Dec. 31, 2016			38,236,287
Increase (decrease) in shareholders' equity
Net income								62,726						62,726
Other comprehensive income (loss)									(2,846)					(2,846)
Issuance of treasury stock for employee stock purchase plan						(540)				1,016				476
Issuance of treasury stock for employee stock purchase plan (in shares)			16,842
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax						(5,521)				4,864				(657)
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax (in shares)			79,459
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax						(3,139)				3,765				626
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax (in shares)			64,941
Stock issued in acquisition of Banc Ed, net of stock issuance costs	$ 7	$ 3		$ 211,575	$ 97,594							$ 211,582	$ 97,597
Stock issued in acquisition of Banc Ed, net of stock issuance costs (in shares)	7,200,559	3,115,503
Cash dividends common stock								(30,697)						(30,697)
Stock dividend equivalents restricted stock units						452		(452)
Stock dividend accrued on restricted stock awards assumed with the Pulaski Financial Corp. acquisition at $0.54 per share							$ (10)				$ (10)
Return of equity trust shares										(860)				(860)
Return of equity trust shares (in shares)			(28,648)
Stock-based compensation						2,752								2,752
Accumulated other comprehensive income (loss) ending balance period, Net of Tax at Dec. 31, 2017			$ 49			1,084,889		(132,122)	(2,810)	(15,003)				935,003
Ending Balance (in shares) at Dec. 31, 2017			48,684,943
Increase (decrease) in shareholders' equity
Net income								98,928						98,928
Other comprehensive income (loss)									(3,397)					(3,397)
Tax Cuts and Jobs Act of 2017 reclassification								605	(605)
Issuance of treasury stock for employee stock purchase plan						(275)				811				536
Issuance of treasury stock for employee stock purchase plan (in shares)			19,442
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax						(5,930)				4,924				(1,006)
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax (in shares)			104,637
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax						(2,889)				3,078				189
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax (in shares)			65,814
Cash dividends common stock								(39,010)						(39,010)
Stock dividend equivalents restricted stock units						568		(568)
Stock-based compensation						3,721								3,721
Accumulated other comprehensive income (loss) ending balance period, Net of Tax at Dec. 31, 2018			$ 49			1,080,084		(72,167)	(6,812)	(6,190)				994,964
Ending Balance (in shares) at Dec. 31, 2018			48,874,836
Increase (decrease) in shareholders' equity
Net income								102,953						102,953
Other comprehensive income (loss)									21,772					21,772
Issuance of treasury stock for employee stock purchase plan						137				487				624
Issuance of treasury stock for employee stock purchase plan (in shares)			25,698
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax						(2,600)				382				(2,218)
Net issuance of treasury stock for restricted/deferred stock unit vesting and related tax (in shares)			92,996
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax						(104)				1,628				1,524
Net issuance of treasury stock for stock options exercised, net of shares redeemed and related tax (in shares)			13,486
Stock issued in acquisition of Banc Ed, net of stock issuance costs			$ 7			166,274								166,281
Stock issued in acquisition of Banc Ed, net of stock issuance costs (in shares)			6,725,152
Repurchase of stock										(24,292)				(24,292)
Repurchase of stock (in shares)			(943,396)
Cash dividends common stock								(45,171)						(45,171)
Stock dividend equivalents restricted stock units						428		(428)
Stock-based compensation						3,997								3,997
Accumulated other comprehensive income (loss) ending balance period, Net of Tax at Dec. 31, 2019			$ 56			$ 1,248,216		$ (14,813)	$ 14,960	$ (27,985)				$ 1,220,434
Ending Balance (in shares) at Dec. 31, 2019			54,788,772

Portfolio loans and allowance for loan losses (Tables)

12 Months Ended

Dec. 31, 2019

Portfolio loans and allowance for loan losses

Schedule of distribution of portfolio loans

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


	December 31,
	2019		2018
Commercial	$	1,748,368	$	1,405,106
Commercial real estate		2,793,417		2,366,823
Real estate construction		401,861		288,197
Retail real estate		1,693,769		1,480,133
Retail other		49,834		28,169
Portfolio loans	$	6,687,249	$	5,568,428

Allowance for loan losses		(53,748)		(50,648)
Portfolio loans, net	$	6,633,501	$	5,517,780

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

The following table is a summary of risk grades segregated by category of portfolio loans (excluding accretable purchase accounting adjustments and clearings) (dollars in thousands):


	December 31, 2019
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual
Commercial	$	1,458,416	$	172,526	$	66,337	$	41,273	$	9,096
Commercial real estate		2,477,398		186,963		105,487		26,204		9,178
Real estate construction		351,923		45,262		3,928		737		630
Retail real estate		1,661,691		9,125		5,355		7,001		8,935
Retail other		47,698		—		—		—		57
Total	$	5,997,126	$	413,876	$	181,107	$	75,215	$	27,896


	December 31, 2018
					Special				Substandard
	Pass		Watch		Mention		Substandard		Non-accrual
Commercial	$	1,126,257	$	172,449	$	47,000	$	42,532	$	17,953
Commercial real estate		2,106,711		137,214		85,148		36,205		10,298
Real estate construction		268,069		14,562		3,899		1,888		18
Retail real estate		1,448,964		6,425		6,792		5,435		6,698
Retail other		26,707		—		—		—		30
Total	$	4,976,708	$	330,650	$	142,839	$	86,060	$	34,997

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

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


	December 31, 2019
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Commercial	$	1,075	$	1,014	$	199	$	9,096
Commercial real estate		2,653		3,121		584		9,178
Real estate construction		19		—		—		630
Retail real estate		5,021		1,248		828		8,935
Retail other		52		68		—		57
Total	$	8,820	$	5,451	$	1,611	$	27,896


	December 31, 2018
	Loans past due, still accruing						Non-accrual
	30-59 Days		60-89 Days		90+Days		Loans
Commercial	$	158	$	140	$	775	$	17,953
Commercial real estate		148		558		—		10,298
Real estate construction		121		—		58		18
Retail real estate		4,578		1,368		766		6,698
Retail other		48		2		2		30
Total	$	5,053	$	2,068	$	1,601	$	34,997

Summary of restructured loans

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


	December 31,
	2019		2018
In compliance with modified terms	$	5,005	$	8,319
30 — 89 days past due		—		127
Included in non-performing loans		702		392
Total	$	5,707	$	8,838

Schedule of details of impaired loans, segregated by category


	December 31, 2019
	Unpaid		Recorded
	Contractual		Investment		Recorded		Total				Average
	Principal		with No		Investment		Recorded		Related		Recorded
	Balance		Allowance		with Allowance		Investment		Allowance		Investment
Commercial	$	14,415	$	4,727	$	5,026	$	9,753	$	3,330	$	13,774
Commercial real estate		14,487		9,883		2,039		11,922		1,049		16,678
Real estate construction		1,116		974		—		974		—		873
Retail real estate		15,581		13,898		474		14,372		474		14,003
Retail other		87		58		—		58		—		42
Total	$	45,686	$	29,540	$	7,539	$	37,079	$	4,853	$	45,370


	December 31, 2018
	Unpaid		Recorded
	Contractual		Investment		Recorded		Total				Average
	Principal		with No		Investment		Recorded		Related		Recorded
	Balance		Allowance		with Allowance		Investment		Allowance		Investment
Commercial	$	21,442	$	6,858	$	12,001	$	18,859	$	4,319	$	13,364
Commercial real estate		19,079		13,082		4,498		17,580		1,181		18,077
Real estate construction		478		453		—		453		—		712
Retail real estate		14,418		13,196		61		13,257		61		14,110
Retail other		117		33		—		33		—		40
Total	$	55,534	$	33,622	$	16,560	$	50,182	$	5,561	$	46,303

Schedule of activity on the allowance for loan losses


	Year Ended December 31, 2018
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	14,779	$	21,813	$	2,861	$	13,783	$	346	$	53,582
Provision for loan losses		5,767		3,227		(259)		(4,824)		518		4,429
Charged-off		(3,968)		(4,352)		(97)		(1,815)		(712)		(10,944)
Recoveries		1,251		449		218		1,327		336		3,581
Ending balance	$	17,829	$	21,137	$	2,723	$	8,471	$	488	$	50,648


	Year Ended December 31, 2017
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Beginning balance	$	13,303	$	20,623	$	1,870	$	11,648	$	351	$	47,795
Provision for loan losses		(1,091)		2,439		581		3,263		111		5,303
Charged-off		(994)		(1,965)		(48)		(2,691)		(541)		(6,239)
Recoveries		3,561		716		458		1,563		425		6,723
Ending balance	$	14,779	$	21,813	$	2,861	$	13,783	$	346	$	53,582

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

The following table presents the allowance for loan losses and recorded investments in portfolio loans by category (dollars in thousands):


	As of December 31, 2019
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Allowance for loan losses
Ending balance attributed to:
Loans individually evaluated for impairment	$	3,330	$	1,049	$	—	$	474	$	—	$	4,853
Loans collectively evaluated for impairment		14,961		20,141		3,204		10,021		568		48,895
Ending balance	$	18,291	$	21,190	$	3,204	$	10,495	$	568	$	53,748

Loans:
Loans individually evaluated for impairment	$	9,740	$	10,018	$	539	$	13,676	$	58	$	34,031
Loans collectively evaluated for impairment		1,738,615		2,781,495		400,887		1,679,397		49,776		6,650,170
PCI loans evaluated for impairment		13		1,904		435		696		—		3,048
Ending balance	$	1,748,368	$	2,793,417	$	401,861	$	1,693,769	$	49,834	$	6,687,249


	As of December 31, 2018
			Commercial		Real Estate		Retail Real
	Commercial		Real Estate		Construction		Estate		Retail Other		Total
Allowance for loan losses
Ending balance attributed to:
Loans individually evaluated for impairment	$	4,319	$	1,181	$	—	$	61	$	—	$	5,561
Loans collectively evaluated for impairment		13,510		19,956		2,723		8,410		488		45,087
Ending balance	$	17,829	$	21,137	$	2,723	$	8,471	$	488	$	50,648

Loans:
Loans individually evaluated for impairment	$	18,441	$	15,318	$	453	$	13,159	$	33	$	47,404
Loans collectively evaluated for impairment		1,386,247		2,349,243		287,744		1,466,876		28,136		5,518,246
PCI loans evaluated for impairment		418		2,262		—		98		—		2,778
Ending balance	$	1,405,106	$	2,366,823	$	288,197	$	1,480,133	$	28,169	$	5,568,428

Outstanding Commitments and Contingent Liabilities

12 Months Ended

Dec. 31, 2019

Outstanding Commitments and Contingent Liabilities

Outstanding Commitments and Contingent Liabilities

Note 16. Outstanding Commitments and Contingent Liabilities

Legal Matters

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

Credit Commitments and Contingencies


	December 31, 2019		December 31, 2018
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit	$	1,649,565	$	1,398,483
Standby letters of credit		42,581		32,156

Unaudited Interim Financial Data

12 Months Ended

Dec. 31, 2019

Unaudited Interim Financial Data

Unaudited Interim Financial Data

Note 24. Unaudited Interim Financial Data

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


	2019
	December 31		September 30		June 30		March 31
Total interest income	$	88,796	$	91,691	$	91,466	$	84,281
Total interest expense		16,860		18,215		18,038		15,898
Net interest income		71,936		73,476		73,428		68,383
Provision for loan losses		2,367		3,411		2,517		2,111
Total non-interest income		31,638		30,936		27,896		25,945
Total non-interest expense		65,490		68,121		68,020		57,163
Income before income taxes		35,717		32,880		30,787		35,054
Income taxes		7,146		8,052		6,702		9,585
Net income	$	28,571	$	24,828	$	24,085	$	25,469

Basic earnings per share	$	0.52	$	0.45	$	0.43	$	0.48
Diluted earnings per share	$	0.52	$	0.45	$	0.43	$	0.48


	2018
	December 31		September 30		June 30		March 31
Total interest income	$	74,314	$	72,761	$	70,325	$	68,633
Total interest expense		13,811		11,987		9,953		8,876
Net interest income		60,503		60,774		60,372		59,757
Provision for loan losses		405		758		2,258		1,008
Total non-interest income		22,852		21,853		22,802		22,486
Total non-interest expense		48,769		45,929		47,305		51,040
Income before income taxes		34,181		35,940		33,611		30,195
Income taxes		8,891		9,081		8,749		8,278
Net income	$	25,290	$	26,859	$	24,862	$	21,917

Basic earnings per share	$	0.52	$	0.55	$	0.51	$	0.45
Diluted earnings per share	$	0.51	$	0.55	$	0.51	$	0.45

Deposits

12 Months Ended

Dec. 31, 2019

Deposits

Deposits

Note 8. Deposits

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


	December 31, 2019		December 31, 2018
Demand deposits, noninterest-bearing	$	1,832,619	$	1,464,700
Interest-bearing transaction deposits		1,989,854		1,435,574
Saving deposits and money market deposits		2,545,073		1,852,044
Time deposits		1,534,850		1,497,003
Total	$	7,902,396	$	6,249,321

The Company held brokered savings deposits and money market deposits of $12.5 million and $17.5 million at December 31, 2019 and 2018, respectively.

The aggregate amount of time deposits with a minimum denomination of $100,000 was approximately $854.1 million and $673.7 million at December 31, 2019 and 2018, respectively. The aggregate amount of time deposits with a minimum denomination that meets or exceeds the FDIC insurance limit of $250,000 was approximately $297.4 million and $264.1 million at December 31, 2019 and 2018, respectively. The Company held brokered time deposits of $5.5 million and $262.5 million at December 31, 2019 and 2018, respectively.

As of December 31, 2019, the scheduled maturities of time deposits are as follows (dollars in thousands):


2020	$	1,012,295
2021		283,684
2022		127,593
2023		64,920
2024		46,347
Thereafter		11
	$	1,534,850

Derivative Financial Instruments

12 Months Ended

Dec. 31, 2019

Derivative Financial Instruments

Derivative Financial Instruments

Note 17. Derivative Financial Instruments

Interest Rate Swaps Designated as Cash Flow Hedges: Starting in the third quarter of 2019, the Company entered into derivative instruments designated as a cash flow hedges. For derivative instruments that are designated and qualify as a cash flow hedge, the change in fair value of the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Change in fair value of components excluded from the assessment of effectiveness are recognized in current earnings.

Interest rate swaps with notional amounts totaling $70.0 million as of December 31, 2019 were designated as cash flow hedges to hedge the risk of variability in cash flows (future interest payments) attributable to changes in the contractually specified 3 month LIBOR benchmark interest rate on the Company’s junior subordinated debt owed to unconsolidated trusts and were determined to be highly effective during the period. The gross aggregate fair value of the swaps of $0.3 million is recorded in other liabilities in the Consolidated Financial Statements at December 31, 2019, with changes in fair value recorded net of tax in other comprehensive income. The Company expects the hedges to remain highly effective during the remaining terms of the swaps.

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


	December 31, 2019			December 31, 2018
Notional amount	$	70,000		$	—
Weighted average fixed pay rates		1.80	%		—	%
Weighted average variable 3 month LIBOR receive rates		1.90	%		—	%
Weighted average maturity		3.86	yrs		—	yrs
Unrealized gains (losses)	$	(200)		$	—

Interest income (expense) recorded on these swap transactions were insignificant during the 12 months ended December 31, 2019. The Company expects an insignificant amount of the unrealized gain (loss) to be reclassified from Other Comprehensive Income (“OCI”) to interest expense during the next 12 months. This reclassified amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations and the addition of other hedges subsequent to December 31, 2019.


	Year Ended December 31, 2019
		Amount of (gain) loss recognized in OCI		Amount of (gain) loss reclassified from OCI to interest expense
Interest rate contracts	$	(202)	$	2

The Company pledged $0.3 million in cash to secure its obligation under these contracts at December 31, 2019.

Interest Rate Lock Commitments. At December 31, 2019 and 2018, the Company had issued $69.1 million and $27.2 million, respectively, of unexpired interest rate lock commitments to loan customers. Such interest rate lock commitments that meet the definition of derivative financial instruments under ASC Topic 815, Derivatives and Hedging, are carried at their fair values in other assets or other liabilities in the Consolidated Financial Statements, with changes in the fair values of the corresponding derivative financial assets or liabilities recorded as either a charge or credit to current earnings during the period in which the changes occurred.

Forward Sales Commitments. At December 31, 2019 and 2018, the Company had issued $135.3 million and $48.6 million, respectively, of unexpired forward sales commitments to mortgage loan investors. Typically, the Company economically hedges mortgage loans held for sale and interest rate lock commitments issued to its residential loan customers related to loans that will be held for sale by obtaining corresponding best-efforts forward sales commitments with an investor to sell the loans at an agreed-upon price at the time the interest rate locks are issued to the customers. Forward sales commitments that meet the definition of derivative financial instruments under ASC Topic 815, Derivatives and Hedging, are carried at their fair values in other assets or other liabilities in the Consolidated Financial Statements. While such forward sales commitments generally served as an economic hedge to the mortgage loans held for sale and interest rate lock commitments, the Company did not designate them for hedge accounting treatment. Changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred.


	December 31, 2019		December 31, 2018
Fair value recorded in other assets	$	1,046	$	624
Fair value recorded in other liabilities		2,187		1,205


	December 31, 2019		December 31, 2018		December 31, 2017
Gross gains	$	7,003	$	3,494	$	14,724
Gross (losses)		(6,960)		(3,874)		(13,250)
Net gains (losses)	$	43	$	(380)	$	1,474

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

Interest Rate Swaps Not Designated as Hedges. The Company may offer derivative contracts to its customers in connection with their risk management needs. The Company manages the risk associated with these contracts by entering into an equal and offsetting derivative with a third-party dealer. With notional values of $580.8 million and $243.7 million at December 31, 2019 and 2018, respectively, these contracts support variable rate, commercial loan relationships totaling $290.4 million and $121.8 million, respectively. These derivatives generally worked together as an economic interest rate hedge, but the Company did not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes occurred.


		December 31, 2019		December 31, 2018
Fair value recorded in other assets	$	12,354	$	1,438
Fair value recorded in other liabilities		12,354		1,438


	December 31, 2019		December 31, 2018		December 31, 2017
Gross gains	$	10,915	$	1,176	$	262
Gross losses		(10,915)		(1,176)		(262)
Net gains (losses)	$	—	$	—	$	—

The Company pledged $18.1 million in cash to secure its obligation under these contracts at December 31, 2019. The Company pledged $1.0 million in cash to secure its obligation under these contracts at December 31, 2018.

Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Note 7. Goodwill and Other Intangible Assets

Other than goodwill, the Company does not have any other intangible assets that are not amortized. The Company’s goodwill is associated with its three operating segments, Banking, Remittance Processing and Wealth Management. Goodwill is tested annually for impairment, and as part of this analysis, the reporting unit's carrying value is compared to its fair value. Based on the impairment testing performed at December 31, 2019, there were no indicators of potential impairment based on the estimated fair value of those operating segments. All three operating segments have sustained quarterly and annual earnings.

During 2019, the Company recorded, in the Banking operating segment, goodwill totaling $41.4 million and other intangible assets totaling $27.2 million in connection with the acquisition of Banc Ed. In addition, $5.4 million of other intangible assets was recorded in the Wealth Management operating segment in 2019 in connection with the acquisition

of Banc Ed. Further, in 2019 the Company recorded, in the Wealth Management operating segment, goodwill totaling $2.4 million and other intangible assets totaling $5.7 million relating to the acquisition of IST. During 2018, the Company adjusted goodwill by $1.7 million relating to the acquisition of Mid Illinois as it finalized its assessment of the initial fair value of assets acquired and liabilities assumed. The carrying amount of goodwill by operating segment, at December 31, 2019 and 2018 is as follows (dollars in thousands):


	Balance at		Balance at
	December 31, 2019		December 31, 2018
Goodwill:
Banking	$	288,436	$	246,999
Remittance Processing		8,992		8,992
Wealth Management		14,108		11,694
Total goodwill	$	311,536	$	267,685

Core deposit and customer relationship intangible assets are amortized over the estimated period benefited. Other intangible asset disclosures are as follows (dollars in thousands):


	Balance at		2019		Balance at		2018
	December 31, 2019		Amortization		December 31, 2018		Amortization
Amortized intangible assets:
Core deposit intangible assets	$	51,100	$	7,963	$	31,836	$	5,535
Customer relationship intangible assets		10,493		1,584		1,037		319
	$	61,593	$	9,547	$	32,873	$	5,854


			Customer
	Core deposit		relationship
	intangible		intangible
As of December 31, 2019:
Gross carrying amount	$	90,256	$	24,208
Accumulated amortization		39,156		13,715
	$	51,100	$	10,493

Estimated amortization expense at December 31, 2019:
2020	$	7,753	$	2,188
2021		7,259		1,926
2022		6,749		1,664
2023		6,225		1,403
2024		5,686		1,141
Thereafter		17,428		2,171
	$	51,100	$	10,493

Employee Benefit Plans

12 Months Ended

Dec. 31, 2019

Employee Benefit Plans

Employee Benefit Plans

Note 13. Employee Benefit Plans

Employees’ Stock Ownership Plan

Prior to 2014, the First Busey Corporation Employees' Stock Ownership Plan (“ESOP”) was available to all full-time employees who met certain age and length of service requirements. Effective in 2014, the ESOP was frozen, all shares were fully vested and there were no new contributions under the ESOP. On October 31, 2019 First Busey’s board of directors elected to terminate the ESOP and filed a determination letter in February 2020. Dividends on allocated shares of common stock are distributed directly to the participants. All shares held by the ESOP, which were acquired prior to the issuance of ASC Topic 718-40, Employee Stock Ownership Plans, are included in the computation of average common shares and common share equivalents. This accounting treatment is grandfathered under ASC Topic 718-40 for shares purchased prior to December 31, 1992.

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 113,866 worth $3.1 million and 115,602 worth $2.8 million at December 31, 2019 and 2018, respectively. Shares held in the ESOP which were acquired after December 31, 1992 and associated fair values were 36,719 worth $1.0 million and 36,639 worth $0.9 million at December 31, 2019 and 2018, respectively.

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. Expenses related to the employee benefit plans are $5.8 million, $5.4 million and $5.1 million for the years ended December 31, 2019, 2018 and 2017, respectively.

Deferred Compensation Plan

The Company had sponsored deferred compensation plans for executive officers for deferral of compensation. Effective March 28, 2018, the deferred compensation plan was terminated and account balances were distributed in April 2019. The 2019 deferred compensation liability was impacted by the Banc Ed acquisition. The deferred compensation expense reported was $0.1 million for the year ended December 31, 2019 and $0.3 million for the years ended December 31, 2018 and 2017. The deferred compensation liability was $0.4 million and $6.4 million at December 31, 2019 and 2018, respectively. The December 31, 2019 Banc Ed deferred compensation liability of $0.4 million was settled in January 2020.

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	12 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Interest income:
Interest and fees on loans	$ 304,193	$ 251,249	$ 202,643
Interest and dividends on investment securities:
Taxable interest income	41,090	27,595	16,359
Non-taxable interest income	4,631	4,698	3,856
Other interest income	6,320	2,491	1,444
Total interest income	356,234	286,033	224,302
Interest expense:
Deposits	55,077	32,601	12,932
Federal funds purchased and securities sold under agreements to repurchase	2,348	1,626	978
Short-term borrowings	1,041	1,536	1,096
Long-term debt	2,608	906	550
Senior notes	1,599	1,598	962
Subordinated notes	2,924	3,110	1,892
Junior subordinated debt owed to unconsolidated trusts	3,414	3,250	2,526
Total interest expense	69,011	44,627	20,936
Net interest income	287,223	241,406	203,366
Provision for loan losses	10,406	4,429	5,303
Net interest income after provision for loan losses	276,817	236,977	198,063
Non-interest income:
Mortgage revenue	11,703	5,545	11,140
Income on bank owned life insurance	5,795	3,726	2,579
Net gains on sales of securities	741	(1,831)	1,143
Unrealized (losses) gains recognized on equity securities	(759)	2,162
Other income	8,649	6,193	5,307
Total non-interest income	116,415	89,993	84,474
Non-interest expense:
Salaries, wages and employee benefits	140,473	107,844	95,633
Data processing	21,511	16,383	16,716
Net occupancy expense of premises	18,176	14,803	13,830
Furniture and equipment expenses	9,506	7,233	7,089
Professional fees	11,104	5,389	6,814
Amortization of intangible assets	9,547	5,854	5,245
Other expense	48,477	35,537	29,099
Total non-interest expense	258,794	193,043	174,426
Income before income taxes	134,438	133,927	108,111
Income taxes	31,485	34,999	45,385
Net income	$ 102,953	$ 98,928	$ 62,726
Basic earnings per common share (in dollars per share)	$ 1.88	$ 2.02	$ 1.47
Diluted earnings per common share (in dollars per share)	1.87	2.01	1.45
Dividends declared per share of common stock (in dollars per share)	$ 0.84	$ 0.80	$ 0.72
Wealth management fees
Non-interest income:
Non-interest income	$ 38,561	$ 30,974	$ 27,037
Fees for customer services
Non-interest income:
Non-interest income	36,683	28,879	25,841
Remittance processing
Non-interest income:
Non-interest income	$ 15,042	$ 14,345	$ 11,427

Significant Accounting Policies - Narrative (Details) $ in Millions	3 Months Ended	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2019 USD ($) segment	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Trust assets
Assets under care		$ 9,700.0	$ 7,100.0
Loan servicing and portfolio loans
Unpaid principal balances of loans serviced		2,200.0
Impairment charges		0.0	0.0
Goodwill
Goodwill impairment		0.0	0.0
Income taxes
Non-cash charge due to revaluation of Company's net deferred tax position following the enactment of the TCJA	$ 8.1
Valuation allowance		0.0
Accruals for payments of interest and penalties		0.0	0.0
Stock-based employee compensation
Compensation expense recognized		$ 3.8	$ 3.5	$ 2.6
Segment disclosure
Number of operating segments \| segment		3
Buildings and improvements \| Minimum
Premises and Equipment, net
Estimated Useful Life		3 years
Buildings and improvements \| Maximum
Premises and Equipment, net
Estimated Useful Life		40 years
Furniture and equipment \| Minimum
Premises and Equipment, net
Estimated Useful Life		3 years
Furniture and equipment \| Maximum
Premises and Equipment, net
Estimated Useful Life		10 years
Restricted stock unit \| Minimum
Stock-based employee compensation
Requisite service periods		1 year
Restricted stock unit \| Maximum
Stock-based employee compensation
Requisite service periods		5 years

Goodwill and Other Intangible Assets - Amortized Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Amortized intangible assets:
Balance at the beginning of period	$ 32,873
Amortization of intangible assets	9,547	$ 5,854	$ 5,245
Balance at the end of period	61,593	32,873
Core deposit intangible assets
Amortized intangible assets:
Balance at the beginning of period	31,836
Amortization of intangible assets	7,963	5,535
Balance at the end of period	51,100	31,836
Customer relationship intangible assets
Amortized intangible assets:
Balance at the beginning of period	1,037
Amortization of intangible assets	1,584	319
Balance at the end of period	$ 10,493	$ 1,037

Portfolio loans and allowance for loan losses - Loans identified as impaired, segregated by category (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Loans identified as impaired
Unpaid Contractual Principal Balance	$ 45,686	$ 55,534
Recorded Investment with No Allowance	29,540	33,622
Recorded Investment with Allowance	7,539	16,560
Total Recorded Investment	37,079	50,182
Related Allowance	4,853	5,561
Average Recorded Investment	45,370	46,303
Commercial Loans
Loans identified as impaired
Unpaid Contractual Principal Balance	14,415	21,442
Recorded Investment with No Allowance	4,727	6,858
Recorded Investment with Allowance	5,026	12,001
Total Recorded Investment	9,753	18,859
Related Allowance	3,330	4,319
Average Recorded Investment	13,774	13,364
Commercial Real Estate Loans
Loans identified as impaired
Unpaid Contractual Principal Balance	14,487	19,079
Recorded Investment with No Allowance	9,883	13,082
Recorded Investment with Allowance	2,039	4,498
Total Recorded Investment	11,922	17,580
Related Allowance	1,049	1,181
Average Recorded Investment	16,678	18,077
Real Estate Construction
Loans identified as impaired
Unpaid Contractual Principal Balance	1,116	478
Recorded Investment with No Allowance	974	453
Total Recorded Investment	974	453
Average Recorded Investment	873	712
Retail Real Estate
Loans identified as impaired
Unpaid Contractual Principal Balance	15,581	14,418
Recorded Investment with No Allowance	13,898	13,196
Recorded Investment with Allowance	474	61
Total Recorded Investment	14,372	13,257
Related Allowance	474	61
Average Recorded Investment	14,003	14,110
Retail Other
Loans identified as impaired
Unpaid Contractual Principal Balance	87	117
Recorded Investment with No Allowance	58	33
Total Recorded Investment	58	33
Average Recorded Investment	$ 42	$ 40

Junior Subordinated Debt Owed to Unconsolidated Trusts

12 Months Ended

Dec. 31, 2019

Junior Subordinated Debt Owed to Unconsolidated Trusts

Junior Subordinated Debt Owed to Unconsolidated Trusts

Note 10. Junior Subordinated Debt Owed to Unconsolidated Trusts

First Busey maintains statutory trusts for the sole purpose of issuing and servicing 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 instruments that qualify, and are treated by the Company, as Tier 1 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. In connection with the Pulaski acquisition in 2016, the Company acquired similar statutory trusts maintained by Pulaski and the fair value adjustment is being accreted over the weighted average remaining life. The Company had $71.3 million and $71.2 million of junior subordinated debt owed to unconsolidated trusts at December 31, 2019 and 2018, respectively.

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. 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, in which case the distributions on the trust preferred securities will also be deferred, for up to five years, but not beyond the stated maturity date.

Under current banking regulations, bank holding companies are allowed to include qualifying trust preferred securities in their Tier 1 Capital for regulatory capital purposes, subject to a 25% limitation to all core (Tier 1) capital elements, net of goodwill and other intangible assets less any associated deferred tax liability. As of December 31, 2019, 100% of the trust preferred securities qualified as Tier 1 capital under the final rule adopted in March 2005.

The Dodd-Frank Act mandated the Federal Reserve to establish minimum capital levels for holding companies on a consolidated basis as stringent as those required for FDIC-insured institutions. A result of this change is that the proceeds of hybrid instruments, such as trust preferred securities, are excluded from capital over a phase-out period. However, if such securities were issued prior to May 19, 2010 by bank holding companies with less than $15.0 billion of assets, they may be retained, subject to certain restrictions. Because the Company has assets of less than $15.0 billion, it is able to maintain its trust preferred proceeds as capital, but the Company has to comply with new capital mandates in other respects and will not be able to raise capital in the future through the issuance of trust preferred securities.

Significant Accounting Policies - Impact of new financial accounting standards (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)	Jan. 01, 2019 USD ($)
Recently Issued Accounting Standards
Lease, Practical Expedients, Package [true false]		true
Lease, Practical Expedient, Use of Hindsight [true false]		false
Right of use asset		$ 9,490
Lease liability		$ 9,552
Allowance for credit losses \| Credit concentration risk \| Minimum
Recently Issued Accounting Standards
Percentage increase in reserve for unfunded commitments above the existing allowance for loan loss levels		25
Allowance for credit losses \| Credit concentration risk \| Maximum
Recently Issued Accounting Standards
Percentage increase in reserve for unfunded commitments above the existing allowance for loan loss levels		45
Accounting Standards Update 2016-02 \| Restatement
Recently Issued Accounting Standards
Right of use asset			$ 8,100
Lease liability			$ 8,100
Accounting Standards Update 2017-12
Recently Issued Accounting Standards
Transferred securities from held to maturity to available-for-sale	$ 573,600	$ 0

Earnings Per Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share

Earnings Per Share

Note 19. Earnings Per Share

Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding, which include deferred stock units that are vested but not delivered.

Diluted earnings per common share is computed using the treasury stock method and reflects the potential dilution that could occur if the Company’s outstanding stock options and warrants were exercised and restricted stock units were vested. At December 31, 2019, 191,278 warrants and 201,029 restricted stock units were anti-dilutive and excluded from the calculation of common stock equivalents. At December 31, 2018, 191,278 warrants and 172,571 restricted stock units were anti-dilutive and excluded from the calculation of common stock equivalents.

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



	For the Years Ended December 31,
	2019		2018		2017
Net income	$	102,953	$	98,928	$	62,726
Shares:
Weighted average common shares outstanding		54,852		48,854		42,685
Dilutive effect of outstanding options, warrants and restricted stock units as determined by the application of the treasury stock method		280		361		441

Weighted average common shares outstanding, as adjusted for diluted earnings per share calculation		55,132		49,215		43,126

Basic earnings per common share	$	1.88	$	2.02	$	1.47

Diluted earnings per common share	$	1.87	$	2.01	$	1.45

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash Flows from Operating Activities
Net income	$ 102,953	$ 98,928	$ 62,726
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	10,406	4,429	5,303
Amortization of intangible assets	9,547	5,854	5,245
Amortization of mortgage servicing rights	2,710	1,531	1,511
Depreciation and amortization of premises and equipment	11,879	9,556	8,615
Net amortization (accretion) of premium (discount) on portfolio loans	(10,905)	(10,452)	(12,205)
Net amortization (accretion) of premium (discount) on investment securities	6,106	8,311	6,665
Net amortization (accretion) of premium (discount) on time deposits	(1,648)	(243)	(392)
Net amortization (accretion) of premium (discount) on FHLB advances and other borrowings	309	146	140
Impairment of OREO	62	18	42
Impairment of fixed assets held for sale	2,026	817	99
Impairment of leases	348	146
Change in fair value of equity securities, net	759	(2,162)
(Gain) loss on sales of securities, net	(733)	1,780	(362)
(Gain) loss on sale of loans, net	(16,819)	(10,446)	(45,443)
(Gain) loss on sale of OREO	(102)	(384)	(1,632)
(Gain) loss on sale of premises and equipment	113	162	(327)
Realized (gain) loss on preferred stock and equity securities	(8)	51	(781)
(Gain) loss on life insurance proceeds	(1,604)	(666)	(227)
Provision for deferred income taxes	96	7,116	14,100
Stock-based and non-cash compensation	3,997	3,721	2,752
Decrease in deferred compensation	(6,781)	(3,780)	(757)
Increase in cash surrender value of bank owned life insurance	(4,191)	(3,060)	(2,352)
Mortgage loans originated for sale	(667,515)	(425,322)	(1,487,726)
Proceeds from sales of mortgage loans	641,778	504,721	1,693,632
Net change in operating assets and liabilities:
Decrease in other assets	5,397	9,580	8,925
(Decrease) increase in other liabilities	(7,380)	2,195	(4,193)
Net cash provided by operating activities	80,800	202,547	253,358
Cash Flows from Investing Activities
Purchases of debt securities held to maturity		(217,766)	(352,679)
Purchase of equity securities	(550)
Purchases of debt securities available for sale	(408,941)	(124,234)	(141,685)
Purchase of FHLB stock	(3,700)
Proceeds from sales of equity securities	1,474	920
Proceeds from sales of debt securities available for sale	227,371	122,584	139,765
Proceeds from paydowns and maturities of debt securities held to maturity	14,422	50,560	11,268
Proceeds from paydowns and maturities of debt securities available for sale	541,753	163,582	193,294
Proceeds from the redemption of FHLB stock	5,369	4,864	6,090
Net cash (received) paid in acquisitions	(61,481)		26,979
Net change in loans	(244,333)	(49,864)	(169,150)
Cash paid for premiums on bank-owned life insurance	(6)
Purchases of premises and equipment	(13,238)	(11,618)	(14,980)
Proceeds from life insurance	3,915
Proceeds from disposition of premises and equipment	424	324	2,224
Capitalized expenditures on OREO	(2)
Proceeds from sale of OREO	2,481	5,298	5,024
Net cash provided by (used in) investing activities	64,958	(55,350)	(293,850)
Cash Flows from Financing Activities
Net change in deposits	215,519	123,600	111,788
Net change in federal funds purchased and securities sold under agreements to repurchase	(30,904)	(118,770)	28,898
Proceeds from other borrowings	60,000		98,312
Repayment of other borrowings	(6,000)	(5,500)	(9,800)
Net change in short-term FHLB advances	(23,443)	(220,000)	60,300
Repayments of long-term FHLB advances	(1,224)		(30,000)
Cash dividends paid	(45,171)	(39,010)	(30,707)
Purchase of treasury stock	(24,292)
Cash paid for withholding taxes on share-based payments	(863)	(1,208)	(2,274)
Proceeds from stock options exercised	169	392	906
Common stock issuance costs	(234)		(365)
Net cash provided by (used in) financing activities	143,557	(260,496)	227,058
Net increase (decrease) in cash and cash equivalents	289,315	(113,299)	186,566
Cash and cash equivalents, beginning of period	239,973	353,272	166,706
Cash and cash equivalents, ending of period	529,288	239,973	353,272
Cash Payments for:
Interest	70,577	40,639	19,342
Income taxes	24,725	23,183	26,419
Non-cash Investing and Financing Activities:
OREO acquired in settlement of loans	4,872	4,025	$ 1,417
Other assets transferred to equity investments		$ 4,000
Transfer of debt securities held to maturity to available for sale	$ 593,548

Parent Company Only Financial Information - Statements of Income (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Dividends from subsidiaries:
Other income									$ 8,649	$ 6,193	$ 5,307
Expense:
Salaries, wages and employee benefits									140,473	107,844	95,633
Interest expense	$ 16,860	$ 18,215	$ 18,038	$ 15,898	$ 13,811	$ 11,987	$ 9,953	$ 8,876	69,011	44,627	20,936
Income tax benefit	(7,146)	(8,052)	(6,702)	(9,585)	(8,891)	(9,081)	(8,749)	(8,278)	(31,485)	(34,999)	(45,385)
Distributions less than (in excess of) net income of subsidiaries:
Net income	$ 28,571	$ 24,828	$ 24,085	$ 25,469	$ 25,290	$ 26,859	$ 24,862	$ 21,917	102,953	98,928	62,726
Parent
Dividends from subsidiaries:
Bank									70,000
Non-bank										17,000	4,000
Interest income									441	747	264
Security (losses) gains, net									(759)	2,322
Other income									10,224	8,096	6,890
Total operating income									79,906	28,165	11,154
Expense:
Salaries, wages and employee benefits									15,288	13,624	11,398
Interest expense									10,054	8,026	5,464
Operating expense									8,960	6,051	7,060
Total expense									34,302	27,701	23,922
Income (loss) before income tax benefit and equity in undistributed (in excess of) net income of subsidiaries									45,604	464	(12,768)
Income tax benefit									5,389	5,013	5,553
Income (loss) before equity in undistributed (in excess of) net income of subsidiaries									50,993	5,477	(7,215)
Distributions less than (in excess of) net income of subsidiaries:
Bank									51,604	103,309	68,635
Non-bank									356	(9,858)	1,306
Net income									$ 102,953	$ 98,928	$ 62,726

Acquisitions

12 Months Ended

Dec. 31, 2019

Acquisitions

Acquisitions

Note 2. Acquisitions

First Community Financial Partners, Inc.

On July 2, 2017, the Company completed its acquisition of First Community, which was headquartered in Joliet, Illinois. First Busey operated First Community Financial Bank as a separate subsidiary from July 3, 2017 until November 3, 2017, when it was merged with and into Busey Bank. At that time, First Community Financial Bank’s banking centers became banking centers of Busey Bank.

Under the terms of the merger agreement with First Community, at the effective time of the acquisition, each share of First Community common stock issued and outstanding was converted into the right to receive 0.396 shares of the Company’s common stock, cash in lieu of fractional shares and $1.35 cash consideration per share. The market value of the 7.2 million shares of First Busey common stock issued at the effective time of the acquisition was approximately $211.1 million based on First Busey’s closing stock price of $29.32 on June 30, 2017. In addition, certain options to purchase shares of First Community common stock that were outstanding at the acquisition date were converted into options to purchase shares of First Busey common stock, adjusted for the 0.44 option exchange ratio, and the fair value was included in the purchase price. The purchase price included cash payouts relating to unconverted stock options and restricted stock units outstanding as of the acquisition date.

This transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at their estimated fair values on the date of acquisition. The total consideration paid, which was used to determine the amount of goodwill resulting from the transaction, also included the fair value of outstanding First Community stock options that were converted into options to purchase

common shares of First Busey and cash paid out relating to stock options and restricted stock units not converted. As the total consideration paid for First Community exceeded the net assets acquired, goodwill of $116.0 million was recorded as a result of the acquisition. Goodwill recorded in the transaction, which reflected the synergies expected from the acquisition and the greater revenue opportunities from the Company’s broader service capabilities in the Chicagoland area, is not tax deductible, and was assigned to the Banking operating segment.

First Busey did not incur any expenses for the 12 months ended December 31, 2019 related to the acquisition of First Community and incurred $0.1 million in pre-tax expenses related to the acquisition of First Community for the 12 months ended December 31, 2018, primarily for professional and legal fees. First Busey incurred $4.5 million in pre-tax expenses related to the acquisition of First Community for the 12 months ended December 31, 2017, including professional and legal fees of $1.6 million to directly consummate the acquisition, all of which were reported as a component of non-interest expense in the accompanying Consolidated Financial Statements. The remainder of the expenses primarily related to data processing conversion expenses and restructuring expenses.

The following table presents the fair value of First Community assets acquired and liabilities assumed as of July 2, 2017 (dollars in thousands):



	Fair Value
Assets acquired:
Cash and cash equivalents	$	60,686
Securities		165,843
Loans held for sale		905
Portfolio loans		1,096,583
Premises and equipment		18,094
OREO		722
Other intangible assets		13,979
Other assets		41,755
Total assets acquired		1,398,567

Liabilities assumed:
Deposits		1,134,355
Other borrowings		125,751
Other liabilities		11,862
Total liabilities assumed		1,271,968

Net assets acquired	$	126,599

Consideration paid:
Cash	$	24,557
Cash payout of options and restricted stock units		6,182
Common stock		211,120
Fair value of stock options assumed		722
Total consideration paid	$	242,581

Goodwill	$	115,982

aggregate principal outstanding and aggregate fair value of the acquired performing loans, including loans held for sale, was $1.1 billion. The difference between the aggregate principal balance outstanding and aggregate fair value of $14.4 million is expected to be accreted over the estimated remaining life of the respective loans in a manner that approximates the level yield method. As of the acquisition date, the aggregate principal balance outstanding of PCI loans totaled $17.9 million and the aggregate fair value of PCI loans totaled $12.5 million, which became such loans’ new carrying value. At December 31, 2019, PCI loans related to this transaction with a carrying value of $1.7 million were outstanding.

The following table provides the unaudited pro forma information for the results of operations for the 12 months ended December 31, 2017, as if the acquisition had occurred January 1, 2017. The pro forma results combine the historical results of First Community into the Company's Consolidated Statements of Income, including the impact of purchase accounting adjustments including loan discount accretion, intangible assets amortization, deposit accretion and premises accretion, net of taxes. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2017. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, expense efficiencies or asset dispositions (dollars in thousands, except per share data):


		Pro Forma
	Year Ended
		December 31, 2017
Total revenues (net interest income plus non-interest income)	$	316,417
Net income		67,413
Diluted earnings per common share		1.47

Mid Illinois Bancorp, Inc.

On October 1, 2017, the Company completed its acquisition of Mid Illinois and its wholly owned bank subsidiary South Side Bank, under which each share of Mid Illinois common stock issued and outstanding as of the effective time was converted into, at the election of the stockholder the right to receive, either (i) $227.94 in cash, (ii) 7.5149 shares of the Company’s common stock, or (iii) mixed consideration of $68.38 in cash and 5.2604 shares of the Company’s common stock, subject to certain adjustments and proration. In the aggregate, total consideration consisted of 70% stock and 30% cash. Mid Illinois stockholders electing the cash consideration option were subject to proration under the terms of the merger agreement with Mid Illinois and ultimately received a mixture of cash and stock consideration. First Busey operated South Side Bank as a separate bank subsidiary from October 2, 2017 until March 16, 2018, when it was merged with and into Busey Bank. At that time, South Side Bank’s banking centers became banking centers of Busey Bank.

This transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged were recorded at their estimated fair values on the date of acquisition. An adjustment to the fair value was recorded in the first quarter of 2018 as additional information became available. As the total consideration paid for Mid Illinois exceeded the net assets acquired, goodwill of $48.9 million was recorded as a result of the acquisition. Goodwill recorded in the transaction, which reflected the synergies expected from the acquisition and expansion within the greater Peoria area, is not tax deductible, and was assigned to the Banking operating segment.

First Busey did not incur any expenses for the 12 months ended December 31, 2019 related to the acquisition of Mid Illinois. First Busey incurred $3.1 million of pre-tax expenses related to the acquisition of Mid Illinois for the 12 months ended December 31, 2018, primarily for salaries, wages and employee benefits expense, professional and legal fees and data conversion expenses, all of which are reported as a component of non-interest expense in the accompanying Consolidated Financial Statements. First Busey incurred $2.5 million in pre-tax expenses related to the acquisition of Mid Illinois for the 12 months ended December 31, 2017, including professional and legal fees of $1.3 million to directly consummate the acquisition, all of which were reported as a component of non-interest expense in the accompanying Consolidated Financial Statements.

The following table presents the fair value of Mid Illinois assets acquired and liabilities assumed as of October 1, 2017 (dollars in thousands):



	Fair Value
Assets acquired:
Cash and cash equivalents	$	39,443
Securities		208,003
Loans held for sale		5,031
Portfolio loans		356,651
Premises and equipment		16,551
Other intangible assets		11,531
Other assets		29,564
Total assets acquired		666,774

Liabilities assumed:
Deposits		505,917
Other borrowings		61,040
Other liabilities		10,497
Total liabilities assumed		577,454

Net assets acquired	$	89,320

Consideration paid:
Cash	$	40,507
Common stock		97,702
Total consideration paid	$	138,209

Goodwill	$	48,889

The loans acquired in this transaction were recorded at fair value with no carryover of any existing allowance for loan losses. Loans that were not deemed to be credit-impaired at the acquisition date were accounted for under FASB ASC 310-20, Receivables-Nonrefundable Fees and Other Costs, and were subsequently considered as part of the Company’s determination of the adequacy of the allowance for loan losses. PCI loans were accounted for under ASC 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality. As of the acquisition date, the aggregate principal outstanding was $362.4 million and aggregate fair value of the acquired performing loans was $357.0 million, including loans held for sale. The difference between the aggregate principal balance outstanding and aggregate fair value of $5.4 million is expected to be accreted over the estimated remaining life of the respective loans in a manner that approximates the level yield method. As of the acquisition date, the aggregate principal balance outstanding of PCI loans totaled $7.6 million and the aggregate fair value of PCI loans totaled $4.7 million, which became such loans’ new carrying value. At December 31, 2019, PCI loans related to this transaction with a carrying value of $0.1 million were outstanding.

The Banc Ed Corp.

On January 31, 2019, the Company completed its acquisition of Banc Ed. TheBANK, Banc Ed’s wholly-owned bank subsidiary, was operated as a separate subsidiary from the completion of the acquisition until October 4, 2019 when it was merged with and into Busey Bank. At that time, TheBANK’s banking centers became banking centers of Busey Bank.

Under the terms of the Merger Agreement with Banc Ed, at the effective time of the acquisition, each share of Banc Ed common stock issued and outstanding was converted into the right to receive 8.2067 shares of the Company’s common stock, cash in lieu of fractional shares and $111.53 cash consideration per share. The market value of the 6.7 million shares of First Busey common stock issued at the effective time of the acquisition was approximately $166.5 million based on First Busey’s closing stock price of $24.76 on January 31, 2019.

This transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged was recorded at estimated fair values on the date of acquisition. Recorded fair value adjustments were disclosed as of March 31, 2019 and adjustments totaling $5.2 million were made to the fair value assigned to various assets and liabilities as more information became available. The measurement period adjustments included a clarification in the interpretation of tax regulations that resulted in the $4.6 million reversal of a deferred tax liability that was initially recorded in connection with the acquisition. As the total consideration paid for Banc Ed exceeded the net assets acquired, goodwill of $41.4 million was recorded as a result of the acquisition. Goodwill recorded in the transaction, which reflected the synergies expected from the acquisition and expansion within the St. Louis MSA, is not tax deductible and was assigned to the Banking operating segment.

First Busey incurred $13.7 million in pre-tax expenses related to the acquisition of Banc Ed for the 12 months ended December 31, 2019, primarily for salaries, wages and employee benefits, professional and legal fees and deconversion expenses, all of which are reported as a component of non-interest expense in the accompanying Consolidated Financial Statements. Of this amount, $2.3 million were considered transaction costs and primarily related to legal and professional fees associated with the acquisition. First Busey incurred $0.4 million in pre-tax expenses related to the acquisition of Banc Ed for the 12 months ended December 31, 2018, primarily for professional and legal fees, all of which are reported as a component of non-interest expense in the accompanying Consolidated Financial Statements.

The following table presents the fair value of Banc Ed assets acquired and liabilities assumed as of January 31, 2019 (dollars in thousands):



	Fair Value
Assets acquired:
Cash and cash equivalents	$	42,013
Securities		692,716
Loans held for sale		2,157
Portfolio loans		873,336
Premises and equipment		32,156
Other intangible assets		32,617
Mortgage servicing rights		6,946
Other assets		57,332
Total assets acquired		1,739,273

Liabilities assumed:
Deposits		1,439,203
Other borrowings		63,439
Other liabilities		20,153
Total liabilities assumed		1,522,795

Net assets acquired	$	216,478

Consideration paid:
Cash	$	91,400
Common stock		166,515
Total consideration paid	$	257,915

Goodwill	$	41,437

The loans acquired in this transaction were recorded at fair value with no carryover of any existing allowance for loan losses. Loans that were not deemed to be credit-impaired at the acquisition date were accounted for under FASB ASC 310-20, Receivables-Nonrefundable Fees and Other Costs, and were subsequently considered as part of the Company’s determination of the adequacy of the allowance for loan losses. PCI loans were accounted for under ASC 310-30, Receivables — Loans and Debt Securities Acquired with Deteriorated Credit Quality. As of the acquisition date, the aggregate principal balance outstanding and aggregate fair value of the acquired performing loans were $889.3 million and $871.0 million, respectively. The difference between the carrying value and aggregate fair value of $17.0 million will be accreted over the estimated remaining life of the respective loans in a manner that approximates the level yield method. As of the acquisition date, the aggregate principal balance outstanding of PCI loans totaled $3.9 million and the aggregate fair value of PCI loans totaled $2.3 million. The accretable discount of $0.2 million on PCI loans represents the amount by which the undiscounted expected cash flows on such loans exceed their carrying value. The amount by which the contractual payments exceeds the undiscounted expected cash flows represents the non-accretable difference. At December 31, 2019, the carrying value of PCI loans acquired from Banc Ed was $1.3 million.

The following table provides the unaudited pro forma information for the results of operations for the 12 months ended December 31, 2019 and 2018, as if the acquisition had occurred January 1, 2018. The pro forma results combine the historical results of Banc Ed into the Company’s Consolidated Statements of Income, including the impact of purchase accounting adjustments such as loan discount accretion, intangible assets amortization, deposit accretion and premises accretion, net of taxes. The pro forma results have been prepared for comparative purposes only and are not necessarily indicative of the results that would have been obtained had the acquisition actually occurred on January 1, 2018. No

assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, expense efficiencies or asset dispositions (dollars in thousands, except per share amounts):



	Years Ended December 31,
		2019	2018
Total revenues (net interest income plus non-interest income)	$	409,324	$	411,633
Net income		113,640		118,361
Diluted earnings per common share		2.03		2.15

Investors’ Security Trust Company

On August 31, 2019, the Company completed its acquisition by Busey Bank of IST, a Fort Myers, Florida wealth management firm. While the partnership is expected to add to the Company’s wealth management offerings, it is not expected to have any immediate, material impact on the Company’s earnings or overall business.

This transaction was accounted for using the acquisition method of accounting and, accordingly, assets acquired, liabilities assumed, and consideration exchanged was recorded at estimated fair values on the date of acquisition. Fair values are considered provisional until final fair values are determined or the measurement period has passed, but no later than one year from the acquisition date. Reviews of third party valuations are still being performed by management.

First Busey incurred $0.9 million in pre-tax expenses related to the acquisition of IST for the 12 months ended December 31, 2019, primarily for professional and legal fees, which are reported as a component of non-interest expense in the accompanying Consolidated Financial Statements.

Significant Accounting Policies - Off-balance Sheet Arrangements (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Feb. 05, 2020	Dec. 31, 2018
Obligation with Joint and Several Liability Arrangement [Line Items]
Increase in authorized shares under the repurchase program	389,938
Standby letters of credit
Obligation with Joint and Several Liability Arrangement [Line Items]
Term of debt instrument	1 year
Liabilities for potential obligations	$ 0.0		$ 0.0
Subsequent event
Obligation with Joint and Several Liability Arrangement [Line Items]
Increase in authorized shares under the repurchase program		2,000,000

Derivative Financial Instruments - Interest Rate Swaps Designated as Cash Flow Hedges (Details) - Interest rate swap - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Derivative [Line Items]
Notional amount	$ 580,800	$ 243,700
Variable rate, commercial loans that are supported by the interest rate swap contracts	290,400	$ 121,800
Cash Flow Hedging
Derivative [Line Items]
Notional amount	$ 70,000
Weighted average fixed pay rates	1.80%
Weighted average variable 3 month LIBOR receive rates	1.90%
Weighted average maturity	3 years 10 months 9 days	0 years
Unrealized gains (losses)	$ (200)
Other liabilities
Derivative [Line Items]
Derivative Liability	12,354	$ 1,438
Other liabilities \| Cash Flow Hedging
Derivative [Line Items]
Derivative Liability	$ 300

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Taxes

Schedule of the components of income taxes

The components of income taxes consist of (dollars in thousands):


	Years Ended December 31,
	2019		2018		2017
Current expense:
Federal	$	22,479	$	18,076	$	27,168
State		8,910		9,807		4,117
Deferred expense:
Federal		(380)		5,068		11,583
State		476		2,048		2,517
Total income tax expense	$	31,485	$	34,999	$	45,385

Schedule of the reconciliation of federal and state income taxes at statutory rates to the income taxes included in the statements of income


	Years Ended December 31,
	2019		2018		2017
	% of		% of		% of
	Pretax		Pretax		Pretax
	Income		Income		Income
Income tax at federal statutory rate	21.0	%	21.0	%	35.0	%
Effect of:
TCJA	—	%	—	%	7.5	%
Tax-exempt interest, net	(1.7)	%	(1.3)	%	(2.1)	%
Stock incentive	(0.1)	%	(0.3)	%	(0.5)	%
State income taxes, net	5.5	%	7.3	%	4.0	%
Income on bank owned life insurance	(0.9)	%	(0.6)	%	(0.9)	%
Tax credit investments	(1.3)	%	—	%	—	%
Other, net	0.9	%	—	%	(1.0)	%
	23.4	%	26.1	%	42.0	%

Schedule of the deferred tax assets and liabilities

Net deferred taxes at December 31, 2019 and 2018 in the accompanying Consolidated Balance Sheets, include the following amounts of deferred tax assets and liabilities (dollars in thousands).


	2019		2018
Deferred tax assets:
Unrealized losses on debt securities available for sale	$	—	$	2,716
Allowance for loan losses		15,416		14,885
Stock-based compensation		2,069		2,208
Deferred compensation		166		1,454
Affordable housing partnerships and other investments		777		691
Purchase accounting adjustments		11,301		4,563
Accrued vacation		827		744
Lease liability		2,650		—
Employee costs		1,048		260
Other		809		1,095
	$	35,063	$	28,616

Deferred tax liabilities:
Unrealized gains on debt securities available for sale		(6,032)		—
Basis in premises and equipment		(4,222)		(1,213)
Affordable housing partnerships and other investments		(1,411)		(1,868)
Purchase accounting adjustments		(1,023)		(1,102)
Mortgage servicing assets		(3,717)		(1,159)
Basis in core deposit and customer intangible assets		(17,120)		(9,299)
Deferred loan origination costs		(1,730)		(1,593)
Lease right of use asset		(2,633)		—
Unrealized gain on equity securities		(593)		(662)
Other		(508)		(322)
	$	(38,989)	$	(17,218)
Net operating loss carryforward, net of valuation allowance		—		33
Net deferred tax (liability) asset	$	(3,926)	$	11,431

Accumulated Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2019

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Other Comprehensive Income (Loss).

Note 20. Accumulated Other Comprehensive Income (Loss)

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


		Year Ended
		December 31,
		2019				2018				2017
		Before Tax	Tax Effect	Net of Tax		Before Tax	Tax Effect	Net of Tax		Before Tax	Tax Effect	Net of Tax
Unrealized gains (losses) on debt securities available for sale:
Balance at beginning of period	$	(9,528)	2,716	(6,812)	$	(4,777)	1,967	(2,810)	$	60	(24)	36
Unrealized holding gains (losses) on debt securities available for sale, net		35,990	(10,251)	25,739		(6,531)	1,861	(4,670)		(3,694)	1,520	(2,174)
Unrealized losses on debt securities transferred from held to maturity to available for sale		(4,537)	1,293	(3,244)		—	—	—		—	—	—
Amounts reclassified from accumulated other comprehensive income, net		(733)	210	(523)		1,780	(507)	1,273		(1,143)	471	(672)
Tax Cuts and Jobs Act of 2017 reclassification		—	—	—		—	(605)	(605)		—	—	—
Balance at end of period	$	21,192	(6,032)	15,160	$	(9,528)	2,716	(6,812)	$	(4,777)	1,967	(2,810)

Unrealized gains (losses) on cash flow hedges:
Balance at beginning of period		—	—	—		—	—	—		—	—	—
Unrealized holding gains (losses) on cash flow hedges, net		(283)	81	(202)		—	—	—		—	—	—
Amounts reclassified from accumulated other comprehensive income, net		3	(1)	2		—	—	—		—	—	—
Balance at end of period	$	(280)	80	(200)	$	—	—	—	$	—	—	—
Total accumulated other comprehensive income (loss)	$	20,912	(5,952)	14,960	$	(9,528)	2,716	(6,812)	$	(4,777)	1,967	(2,810)

Leases - Future Rent Commitments (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Projected minimum rental payments under the terms of leases
2020	$ 2,408
2021	1,781
2022	1,378
2023	1,221
2024	1,022
Thereafter	2,876
Amounts representing interest	(1,134)
Present value of net future minimum lease payments	$ 9,552

Unaudited Interim Financial Data (Tables)

12 Months Ended

Dec. 31, 2019

Unaudited Interim Financial Data

Schedule reflecting the summarized quarterly data

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


	2019
	December 31		September 30		June 30		March 31
Total interest income	$	88,796	$	91,691	$	91,466	$	84,281
Total interest expense		16,860		18,215		18,038		15,898
Net interest income		71,936		73,476		73,428		68,383
Provision for loan losses		2,367		3,411		2,517		2,111
Total non-interest income		31,638		30,936		27,896		25,945
Total non-interest expense		65,490		68,121		68,020		57,163
Income before income taxes		35,717		32,880		30,787		35,054
Income taxes		7,146		8,052		6,702		9,585
Net income	$	28,571	$	24,828	$	24,085	$	25,469

Basic earnings per share	$	0.52	$	0.45	$	0.43	$	0.48
Diluted earnings per share	$	0.52	$	0.45	$	0.43	$	0.48


	2018
	December 31		September 30		June 30		March 31
Total interest income	$	74,314	$	72,761	$	70,325	$	68,633
Total interest expense		13,811		11,987		9,953		8,876
Net interest income		60,503		60,774		60,372		59,757
Provision for loan losses		405		758		2,258		1,008
Total non-interest income		22,852		21,853		22,802		22,486
Total non-interest expense		48,769		45,929		47,305		51,040
Income before income taxes		34,181		35,940		33,611		30,195
Income taxes		8,891		9,081		8,749		8,278
Net income	$	25,290	$	26,859	$	24,862	$	21,917

Basic earnings per share	$	0.52	$	0.55	$	0.51	$	0.45
Diluted earnings per share	$	0.51	$	0.55	$	0.51	$	0.45

Fair Value Measurements

12 Months Ended

Dec. 31, 2019

Fair Value Measurements

Fair Value Measurements

Note 18. Fair Value Measurements

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

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

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

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

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

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

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

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

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. For certain security types, additional inputs may be used or some of the market inputs may not be applicable. Evaluators may prioritize inputs differently on any given

day for any security based on market conditions, and not all inputs listed are available for use in the evaluation process for each security evaluation on a given day. Because the data utilized was observable, the securities have been classified as level 2.

Equity Securities. Equity securities are reported at fair value utilizing level 1 or level 2 measurements. For mutual funds, 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. For stock, quoted prices for identical or similar assets in markets that are not active are utilized and classified as level 2.

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

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

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of December 31, 2019 and 2018, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands):


	Level 1		Level 2		Level 3		Total
December 31, 2019	Inputs		Inputs		Inputs		Fair Value
Debt securities available for sale
U.S. Treasury securities	$	—	$	51,737	$	—	$	51,737
Obligations of U.S. government corporations and agencies		—		163,000		—		163,000
Obligations of states and political subdivisions		—		268,291		—		268,291
Commercial mortgage-backed securities		—		139,287		—		139,287
Residential mortgage-backed securities		—		921,966		—		921,966
Corporate debt securities		—		103,976		—		103,976
Equity securities		—		5,952		—		5,952
Loans held for sale		—		68,699		—		68,699
Derivative assets		—		13,400		—		13,400
Derivative liabilities		—		14,821		—		14,821


	Level 1		Level 2		Level 3		Total
December 31, 2018	Inputs		Inputs		Inputs		Fair Value
Debt securities available for sale
U.S. Treasury securities	$	—	$	25,411	$	—	$	25,411
Obligations of U.S. government corporations and agencies		—		52,342		—		52,342
Obligations of states and political subdivisions		—		170,044		—		170,044
Commercial mortgage-backed securities		—		1,942		—		1,942
Residential mortgage-backed securities		—		315,748		—		315,748
Corporate debt securities		—		132,198		—		132,198
Equity securities		6,169		—		—		6,169
Loans held for sale		—		25,895		—		25,895
Derivative assets		—		2,062		—		2,062
Derivative liabilities		—		2,643		—		2,643

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 portfolio loans at fair value on a recurring basis. However, periodically, a loan is identified as 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 unobservable inputs, all impaired loan fair values have been classified as level 3.

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

Bank Property Held for Sale. Bank property held for sale represents certain banking center office buildings which the Company has closed and consolidated with other existing banking centers. Bank property held for sale is measured at the lower of amortized cost or fair value less estimated costs to sell. The fair values were based upon discounted appraisals or real estate listing price. Due to the significance of the unobservable inputs, all bank property held for sale fair values have been classified as level 3.

The following table summarizes assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2019 and 2018, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value (dollars in thousands):


	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
December 31, 2019
Impaired loans	$	—	$	—	$	2,686	$	2,686
OREO		—		—		55		55
Bank property held for sale		—		—		4,004		4,004


December 31, 2018
Impaired loans	$	—	$	—	$	10,999	$	10,999
OREO		—		—		55		55
Bank property held for sale		—		—		1,832		1,832

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


	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation	Unobservable	Range
	Estimate		Techniques	Input	(Weighted Average)
December 31, 2019
Impaired loans	$	2,686	Appraisal of collateral	Appraisal adjustments	- 2.9	%	to	- 100.0	%
					(-57.8)%
OREO		55	Appraisal of collateral	Appraisal adjustments	- 25.0	%	to	- 100.0	%
					(-65.0)%
Bank property held for sale		4,004	Appraisal of collateral or real estate listing price	Appraisal adjustments	- 6.2	%	to	- 71.3	%
					(-40.7)%

December 31, 2018
Impaired loans	$	10,999	Appraisal of collateral	Appraisal adjustments	- 3.3	%	to	- 100.0	%
					(-24.1)%
OREO		55	Appraisal of collateral	Appraisal adjustments	- 25.0	%	to	- 100.0	%
					(-65.0)%
Bank property held for sale		1,832	Appraisal of collateral or real estate listing price	Appraisal adjustments	- 0.0	%	to	- 35.1	%
					(-28.3)%

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


	December 31, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial assets:
Level 1 inputs:
Cash and cash equivalents	$	529,288	$	529,288	$	239,973	$	239,973
Level 2 inputs:
Debt securities held to maturity		—		—		608,660		603,360
Accrued interest receivable		27,109		27,109		22,314		22,314
Level 3 inputs:
Portfolio loans, net		6,633,501		6,648,560		5,517,780		5,473,063
Mortgage servicing rights		12,326		18,193		3,315		11,051
Other servicing rights		1,071		1,740		781		1,443

Financial liabilities:
Level 2 inputs:
Time deposits	$	1,534,850	$	1,538,597	$	1,497,003	$	1,482,301
Securities sold under agreements to repurchase		205,491		205,491		185,796		185,796
Short-term borrowings		8,551		8,552		—		—
Long-term debt		83,600		83,614		50,000		49,873
Junior subordinated debt owed to unconsolidated trusts		71,308		74,153		71,155		65,182
Accrued interest payable		5,000		5,000		6,568		6,568
Level 3 inputs:
Senior notes, net of unamortized issuance costs		39,674		40,099		39,539		39,452
Subordinated notes, net of unamortized issuance costs		59,248		61,514		59,147		58,186

In addition to the financial instruments in the above table, the Company owns Visa Class B shares, recorded at a nominal carrying value. These shares are subject to certain transfer restrictions currently and will be convertible into Visa Class A shares upon final resolution of certain litigation matters involving Visa. Further, the Company also owns private equity investments, and investments in limited partnerships, limited liability companies and other investments with a carrying value of $25.5 million as of December 31, 2019. These investments are not required to be consolidated and are included in other assets in the Consolidated Financial Statements.

- Definition

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

+ References + Details

Derivative Financial Instruments - Interest Rate Swaps Not Designated as Hedges (Details) - Interest rate swap - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Derivative Financial Instruments
Notional amount	$ 580,800	$ 243,700
Variable rate, commercial loans that are supported by the interest rate swap contracts	290,400	121,800
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income
Derivative cash pledged	18,100	1,000
Non-interest income
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income
Gross gains	10,915	1,176	$ 262
Non-interest expense
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income
Gross (losses)	(10,915)	(1,176)	$ (262)
Other assets
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other assets	12,354	1,438
Other liabilities
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other liabilities	$ 12,354	$ 1,438

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unrealized holding gains (losses) on debt securities available for sale, Tax Effect	$ (10,251)	$ 1,861	$ 1,520
Tax expense (benefit) on unrealized gains on debt securities transferred from held to maturity to available for sale	1,293
Tax expense (benefit) on reclassification adjustment for realized (gains) losses on debt securities available for sale included in net income	210	(507)	471
Tax expense (benefit) on unrealized holding gains (losses) on cash flow hedges	81
Tax expense (benefit) on reclassification adjustment for realized (gains) losses on cash flow hedges included in net income	$ (1)

Premises and Equipment, net (Tables)

12 Months Ended

Dec. 31, 2019

Premises and Equipment, net

Summary of premises and equipment, net

Premises and equipment, net are summarized as follows (dollars in thousands):


	December 31,
	2019		2018
Land and improvements	$	43,967	$	36,453
Buildings and improvements		134,473		108,137
Furniture and equipment		54,328		48,060
		232,768		192,650
Less accumulated depreciation		81,501		74,978
Total premises and equipment, net	$	151,267	$	117,672

Unaudited Interim Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Unaudited Interim Financial Data
Total interest income	$ 88,796	$ 91,691	$ 91,466	$ 84,281	$ 74,314	$ 72,761	$ 70,325	$ 68,633	$ 356,234	$ 286,033	$ 224,302
Total interest expense	16,860	18,215	18,038	15,898	13,811	11,987	9,953	8,876	69,011	44,627	20,936
Net interest income	71,936	73,476	73,428	68,383	60,503	60,774	60,372	59,757	287,223	241,406	203,366
Provision for loan losses	2,367	3,411	2,517	2,111	405	758	2,258	1,008	10,406	4,429	5,303
Total non-interest income	31,638	30,936	27,896	25,945	22,852	21,853	22,802	22,486	116,415	89,993	84,474
Total non-interest expense	65,490	68,121	68,020	57,163	48,769	45,929	47,305	51,040	258,794	193,043	174,426
Income before income taxes	35,717	32,880	30,787	35,054	34,181	35,940	33,611	30,195	134,438	133,927	108,111
Income taxes	7,146	8,052	6,702	9,585	8,891	9,081	8,749	8,278	31,485	34,999	45,385
Net income	$ 28,571	$ 24,828	$ 24,085	$ 25,469	$ 25,290	$ 26,859	$ 24,862	$ 21,917	$ 102,953	$ 98,928	$ 62,726
Basic earnings per share (in dollars per share)	$ 0.52	$ 0.45	$ 0.43	$ 0.48	$ 0.52	$ 0.55	$ 0.51	$ 0.45	$ 1.88	$ 2.02	$ 1.47
Diluted earnings per share (in dollars per share)	$ 0.52	$ 0.45	$ 0.43	$ 0.48	$ 0.51	$ 0.55	$ 0.51	$ 0.45	$ 1.87	$ 2.01	$ 1.45

Parent Company Only Financial Information

12 Months Ended

Dec. 31, 2019

Parent Company Only Financial Information

Parent Company Only Financial Information

Note 23. Parent Company Only Financial Information

Condensed financial data for First Busey Corporation is presented below (dollars in thousands).

BALANCE SHEETS


	December 31,
	2019		2018
ASSETS
Cash and cash equivalents	$	14,952	$	72,007
Securities equity investments		5,923		6,162
Investments in subsidiaries:
Bank		1,417,941		1,088,710
Non-bank		806		—
Premises and equipment, net		68		67
Other assets		13,873		6,782
Total assets	$	1,453,563	$	1,173,728

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Short-term borrowings	$	6,000	$	—
Long-term debt		48,000		—
Senior notes, net of unamortized issuance costs		39,674		39,539
Subordinated notes, net of unamortized issuance costs		59,248		59,147
Junior subordinated debentures owed to unconsolidated trusts		71,308		71,155
Other liabilities		8,899		8,923
Total liabilities		233,129		178,764

Total stockholders' equity		1,220,434		994,964
Total liabilities and stockholders' equity	$	1,453,563	$	1,173,728

STATEMENTS OF INCOME


	Years Ended December 31,
	2019		2018		2017
Operating income:
Dividends from subsidiaries:
Bank	$	70,000	$	—	$	—
Non-bank		—		17,000		4,000
Interest income		441		747		264
Security (losses) gains, net		(759)		2,322		—
Other income		10,224		8,096		6,890
Total operating income		79,906		28,165		11,154

Expense:
Salaries, wages and employee benefits		15,288		13,624		11,398
Interest expense		10,054		8,026		5,464
Operating expense		8,960		6,051		7,060
Total expense		34,302		27,701		23,922

Income (loss) before income tax benefit and equity in undistributed (in excess of) net income of subsidiaries		45,604		464		(12,768)
Income tax benefit		5,389		5,013		5,553
Income (loss) before equity in undistributed (in excess of) net income of subsidiaries		50,993		5,477		(7,215)

Equity in undistributed (in excess of) net income of subsidiaries:
Bank		51,604		103,309		68,635
Non-bank		356		(9,858)		1,306
Net income	$	102,953	$	98,928	$	62,726

STATEMENTS OF CASH FLOWS


	Years Ended December 31,
	2019		2018		2017
Cash Flows from Operating Activities
Net income	$	102,953	$	98,928	$	62,726
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		420		232		487
Distributions less than net income of subsidiaries		(51,961)		(93,451)		(69,940)
Net security losses (gains)		759		(2,322)		—
Stock-based compensation		3,997		3,721		2,752
Changes in assets and liabilities:
Decrease (increase) in other assets		(4,279)		13,985		(1,105)
Increase (decrease) in other liabilities		(1,280)		1,341		(2,762)
Net cash provided by (used in) operating Activities		50,609		22,434		(7,842)

Cash Flows from Investing Activities
Purchase of equity securities		(520)		—		—
Net cash (outlay) for business acquisition		(90,722)		—		(61,371)
Purchases of premises and equipment		(31)		(46)		—
Net cash (used in) investing activities		(91,273)		(46)		(61,371)

Cash Flows from Financing Activities
Proceeds from charter amendment with subsidiary bank		—		40,000		40,000
Cash paid for withholding taxes on share based payments		(863)		(817)		(1,414)
Cash dividends paid		(45,171)		(39,010)		(30,707)
Repayments of debt		(6,000)		(5,500)		(9,800)
Proceeds from issuance of debt		60,000		—		98,312
Proceeds from stock options exercised		169		—		626
Purchase of treasury stock		(24,292)		—		—
Common stock issuance costs		(234)		—		(365)
Net cash (used in) provided by financing activities		(16,391)		(5,327)		96,652

Net (decrease) increase in cash and due from subsidiary bank		(57,055)		17,061		27,439
Cash and cash equivalents, beginning of period		72,007		54,946		27,507

Cash and cash equivalents, ending of period	$	14,952	$	72,007	$	54,946

Leases - Lease Cost and Other Lease Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Lease Costs
Operating lease costs	$ 2,364
Variable lease costs	432
Short-term lease costs	84
Net lease cost	2,880	$ 2,400	$ 3,700
Cash paid for amounts included in the measurement of lease liabilities
Operating lease cash flows - Fixed payments	2,296
Operating lease cash flows - Liability reduction	2,010
Right of use assets obtained during the period in exchange for operating lease liabilities	$ 923
Weighted average lease term (in years)	7 years 2 months 12 days
Weighted average discount rate (in percent)	3.08%

Employee Benefit Plans (Details) - USD ($) $ in Millions	12 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Employees' Stock Ownership Plan
Number of allocated shares acquired prior to December 31, 1992	113,866	115,602
Associated fair values of allocated shares acquired prior to December 31, 1992	$ 3.1	$ 2.8
Shares
Allocated shares	36,719	36,639
Fair Value
Allocated shares, Fair Value	$ 1.0	$ 0.9
Profit Sharing Plan
Vesting period	5 years
Expenses related to employee benefit plans
Employee benefits	$ 5.8	5.4	$ 5.1
Deferred compensation plans for deferral of performance bonuses
Deferred compensation expense	0.1	0.3	$ 0.3
Deferred compensation liability	0.4	$ 6.4
Banc Ed
Deferred compensation plans for deferral of performance bonuses
Deferred compensation liability	$ 0.4

Deposits (Tables)

12 Months Ended

Dec. 31, 2019

Deposits

Schedule of composition of deposits

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


	December 31, 2019		December 31, 2018
Demand deposits, noninterest-bearing	$	1,832,619	$	1,464,700
Interest-bearing transaction deposits		1,989,854		1,435,574
Saving deposits and money market deposits		2,545,073		1,852,044
Time deposits		1,534,850		1,497,003
Total	$	7,902,396	$	6,249,321

Schedule of maturities of time deposits

As of December 31, 2019, the scheduled maturities of time deposits are as follows (dollars in thousands):


2020	$	1,012,295
2021		283,684
2022		127,593
2023		64,920
2024		46,347
Thereafter		11
	$	1,534,850

Borrowings - Amended and Restated Credit Agreement (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Jan. 29, 2019	Dec. 31, 2018
Revolving loan facility
Borrowings
Maximum borrowing capacity		$ 20,000
Outstanding amounts	$ 0		$ 0
Term Loan
Borrowings
Maximum borrowing capacity		$ 60,000
Outstanding amounts	54,000
Short-term borrowings balance for the period ending	6,000
Long-term borrowings balance for the period ending	$ 48,000
Interest rate (as a percent)		1.50%

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Derivative Financial Instruments - Forward Sales Commitments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Forward sales commitments
Derivative Financial Instruments
Notional amount	$ 135,300	$ 48,600
Interest rate lock commitments and forward sales commitments
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income
Net gains (losses)	43	(380)	$ 1,474
Interest rate lock commitments and forward sales commitments \| Other assets
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other assets	1,046	624
Interest rate lock commitments and forward sales commitments \| Other liabilities
Fair values of derivative assets and liabilities recorded in consolidated balance sheets
Fair value recorded in other liabilities	2,187	1,205
Non-interest income \| Interest rate lock commitments and forward sales commitments
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income
Gross gains	7,003	3,494	14,724
Non-interest expense \| Interest rate lock commitments and forward sales commitments
Gross gains and losses on derivative assets and liabilities recorded in Consolidated Statements of Income
Gross (losses)	$ (6,960)	$ (3,874)	$ (13,250)

Debt Securities - General Disclosures (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2019 USD ($) item shares	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($) item shares	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Debt Securities
Equity securities consisting of common stock and money market mutual funds, fair value	$ 5,952		$ 5,952	$ 6,169
Unrealized (losses) gains recognized on equity securities			(759)	2,162
Debt securities available for sale
Amortized Cost	1,627,065		1,627,065	707,213
Gross Unrealized Gains	22,021		22,021	798
Gross Unrealized Losses	(829)		(829)	(10,326)
Fair Value	1,648,257		1,648,257	697,685
Debt securities held to maturity
Amortized Cost				608,660
Gross Unrealized Gains				1,827
Gross Unrealized Losses				(7,127)
Fair Value				603,360
Debt securities available for sale, Amortized Cost
Due in one year or less	149,566		149,566
Due after one year through five years	355,497		355,497
Due after five years through ten years	228,518		228,518
Due after ten years	893,484		893,484
Amortized Cost	1,627,065		1,627,065	707,213
Debt securities available for sale, Fair Value
Due in one year or less	150,109		150,109
Due after one year through five years	361,500		361,500
Due after five years through ten years	232,950		232,950
Due after ten years	903,698		903,698
Fair Value	1,648,257		1,648,257	697,685
Realized gains and losses related to sales and calls of securities AFS
Gross security gains			1,318		$ 1,259
Gross security (losses)			(585)	(1,780)	(116)
Net (losses) gains on sales of securities			733	(1,780)	$ 1,143
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross	122,991		122,991	190,737
Continuous unrealized losses existing for greater than 12 months, gross	53,851		53,851	417,336
Total, gross	176,842		176,842	608,073
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross	(448)		(448)	(1,231)
Continuous unrealized losses existing greater than 12 months, gross	(381)		(381)	(9,095)
Total, gross	$ (829)		$ (829)	(10,326)
Debt securities held to maturity, Fair Value
Continuous unrealized losses existing for less than 12 months, gross				98,669
Continuous unrealized losses existing for greater than 12 months, gross				299,707
Total, gross				398,376
Debt securities held to maturity, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross				(1,219)
Continuous unrealized losses existing for greater than 12 months, gross				(5,908)
Total, gross				(7,127)
Security portfolio evaluated for other-than-temporary impairment \| shares	1,178		1,178
Number of securities in unrealized loss position \| item	55		55
Securities in unrealized loss position as a percentage of aggregate carrying value of investments	0.47%		0.47%
Collateral
Realized gains and losses related to sales and calls of securities AFS
Carrying amount of investment securities pledged as collateral	$ 704,700		$ 704,700	498,300
U.S. Treasury securities
Debt securities available for sale
Amortized Cost	51,472		51,472	25,824
Gross Unrealized Gains	265		265	1
Gross Unrealized Losses				(414)
Fair Value	51,737		51,737	25,411
Debt securities available for sale, Amortized Cost
Amortized Cost	51,472		51,472	25,824
Debt securities available for sale, Fair Value
Fair Value	51,737		51,737	25,411
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross				995
Continuous unrealized losses existing for greater than 12 months, gross				24,343
Total, gross				25,338
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross				(4)
Continuous unrealized losses existing greater than 12 months, gross				(410)
Total, gross				(414)
Obligations of U.S. government corporations and agencies
Debt securities available for sale
Amortized Cost	160,364		160,364	53,096
Gross Unrealized Gains	2,684		2,684	7
Gross Unrealized Losses	(48)		(48)	(761)
Fair Value	163,000		163,000	52,342
Debt securities available for sale, Amortized Cost
Amortized Cost	160,364		160,364	53,096
Debt securities available for sale, Fair Value
Fair Value	163,000		163,000	52,342
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross	6,362		6,362	749
Continuous unrealized losses existing for greater than 12 months, gross				50,744
Total, gross	6,362		6,362	51,493
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross	(48)		(48)	(3)
Continuous unrealized losses existing greater than 12 months, gross				(758)
Total, gross	(48)		(48)	(761)
Obligations of states and political subdivisions
Debt securities available for sale
Amortized Cost	262,492		262,492	171,131
Gross Unrealized Gains	5,810		5,810	484
Gross Unrealized Losses	(11)		(11)	(1,571)
Fair Value	268,291		268,291	170,044
Debt securities held to maturity
Amortized Cost				33,947
Gross Unrealized Gains				68
Gross Unrealized Losses				(87)
Fair Value				33,928
Debt securities available for sale, Amortized Cost
Amortized Cost	262,492		262,492	171,131
Debt securities available for sale, Fair Value
Fair Value	268,291		268,291	170,044
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross	4,981		4,981	49,893
Continuous unrealized losses existing for greater than 12 months, gross	1,548		1,548	77,651
Total, gross	6,529		6,529	127,544
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross	(11)		(11)	(460)
Continuous unrealized losses existing greater than 12 months, gross				(1,111)
Total, gross	(11)		(11)	(1,571)
Debt securities held to maturity, Fair Value
Continuous unrealized losses existing for less than 12 months, gross				9,531
Continuous unrealized losses existing for greater than 12 months, gross				9,538
Total, gross				19,069
Debt securities held to maturity, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross				(33)
Continuous unrealized losses existing for greater than 12 months, gross				(54)
Total, gross				(87)
Commercial mortgage-backed securities
Debt securities available for sale
Amortized Cost	137,733		137,733	2,003
Gross Unrealized Gains	1,700		1,700
Gross Unrealized Losses	(146)		(146)	(61)
Fair Value	139,287		139,287	1,942
Debt securities held to maturity
Amortized Cost				59,054
Gross Unrealized Gains				11
Gross Unrealized Losses				(1,003)
Fair Value				58,062
Debt securities available for sale, Amortized Cost
Amortized Cost	137,733		137,733	2,003
Debt securities available for sale, Fair Value
Fair Value	139,287		139,287	1,942
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross	33,322		33,322
Continuous unrealized losses existing for greater than 12 months, gross	2,044		2,044	1,942
Total, gross	35,366		35,366	1,942
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross	(144)		(144)
Continuous unrealized losses existing greater than 12 months, gross	(2)		(2)	(61)
Total, gross	(146)		(146)	(61)
Debt securities held to maturity, Fair Value
Continuous unrealized losses existing for less than 12 months, gross				12,067
Continuous unrealized losses existing for greater than 12 months, gross				45,041
Total, gross				57,108
Debt securities held to maturity, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross				(212)
Continuous unrealized losses existing for greater than 12 months, gross				(791)
Total, gross				(1,003)
Residential mortgage-backed securities
Debt securities available for sale
Amortized Cost	912,308		912,308	322,646
Gross Unrealized Gains	10,282		10,282	245
Gross Unrealized Losses	(624)		(624)	(7,143)
Fair Value	921,966		921,966	315,748
Debt securities held to maturity
Amortized Cost				515,659
Gross Unrealized Gains				1,748
Gross Unrealized Losses				(6,037)
Fair Value				511,370
Debt securities available for sale, Amortized Cost
Amortized Cost	912,308		912,308	322,646
Debt securities available for sale, Fair Value
Fair Value	921,966		921,966	315,748
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross	78,326		78,326	48,387
Continuous unrealized losses existing for greater than 12 months, gross	50,259		50,259	247,573
Total, gross	128,585		128,585	295,960
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross	(245)		(245)	(496)
Continuous unrealized losses existing greater than 12 months, gross	(379)		(379)	(6,647)
Total, gross	(624)		(624)	(7,143)
Debt securities held to maturity, Fair Value
Continuous unrealized losses existing for less than 12 months, gross				77,071
Continuous unrealized losses existing for greater than 12 months, gross				245,128
Total, gross				322,199
Debt securities held to maturity, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross				(974)
Continuous unrealized losses existing for greater than 12 months, gross				(5,063)
Total, gross				(6,037)
Corporate debt securities
Debt securities available for sale
Amortized Cost	102,696		102,696	132,513
Gross Unrealized Gains	1,280		1,280	61
Gross Unrealized Losses				(376)
Fair Value	103,976		103,976	132,198
Debt securities available for sale, Amortized Cost
Amortized Cost	102,696		102,696	132,513
Debt securities available for sale, Fair Value
Fair Value	103,976		103,976	132,198
Debt securities available for sale, Fair Value
Continuous unrealized losses existing for less than 12 months, gross				90,713
Continuous unrealized losses existing for greater than 12 months, gross				15,083
Total, gross				105,796
Debt securities available for sale, Unrealized Losses
Continuous unrealized losses existing for less than 12 months, gross				(268)
Continuous unrealized losses existing greater than 12 months, gross				(108)
Total, gross				$ (376)
Accounting Standards Update 2017-12
Realized gains and losses related to sales and calls of securities AFS
Transferred securities from held to maturity to available-for-sale		$ 573,600	$ 0
Unrealized loss related to transfer of securities from held to maturity to AFS		$ 4,800
Accounting Standards Update 2016-13
Realized gains and losses related to sales and calls of securities AFS
Transferred securities from held to maturity to available-for-sale	15,400
Unrealized gain in fair value	$ 200

Fair Value Measurements - General Disclosures (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	$ 1,648,257	$ 697,685
Equity securities	5,952	6,169
Loans held for sale, at fair value	68,699	25,895
Derivative assets
Financial assets and financial liabilities measured at fair value
Fair value recorded in other assets	13,400
Derivative liabilities
Financial assets and financial liabilities measured at fair value
Fair value recorded in other liabilities	14,821
U.S. Treasury securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	51,737	25,411
Obligations of U.S. government corporations and agencies
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	163,000	52,342
Obligations of states and political subdivisions
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	268,291	170,044
Commercial mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	139,287	1,942
Residential mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	921,966	315,748
Corporate debt securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	103,976	132,198
Level 2 \| Derivative assets
Financial assets and financial liabilities measured at fair value
Fair value recorded in other assets	13,400
Level 2 \| Derivative liabilities
Financial assets and financial liabilities measured at fair value
Fair value recorded in other liabilities	14,821
Recurring basis
Financial assets and financial liabilities measured at fair value
Equity securities	5,952	6,169
Loans held for sale, at fair value	68,699	25,895
Recurring basis \| Derivative assets
Financial assets and financial liabilities measured at fair value
Fair value recorded in other assets		2,062
Recurring basis \| Derivative liabilities
Financial assets and financial liabilities measured at fair value
Fair value recorded in other liabilities		2,643
Recurring basis \| U.S. Treasury securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	51,737	25,411
Recurring basis \| Obligations of U.S. government corporations and agencies
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	163,000	52,342
Recurring basis \| Obligations of states and political subdivisions
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	268,291	170,044
Recurring basis \| Commercial mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	139,287	1,942
Recurring basis \| Residential mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	921,966	315,748
Recurring basis \| Corporate debt securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	103,976	132,198
Recurring basis \| Level 1
Financial assets and financial liabilities measured at fair value
Equity securities		6,169
Recurring basis \| Level 2
Financial assets and financial liabilities measured at fair value
Equity securities	5,952
Loans held for sale, at fair value	68,699	25,895
Recurring basis \| Level 2 \| Derivative assets
Financial assets and financial liabilities measured at fair value
Fair value recorded in other assets		2,062
Recurring basis \| Level 2 \| Derivative liabilities
Financial assets and financial liabilities measured at fair value
Fair value recorded in other liabilities		2,643
Recurring basis \| Level 2 \| U.S. Treasury securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	51,737	25,411
Recurring basis \| Level 2 \| Obligations of U.S. government corporations and agencies
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	163,000	52,342
Recurring basis \| Level 2 \| Obligations of states and political subdivisions
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	268,291	170,044
Recurring basis \| Level 2 \| Commercial mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	139,287	1,942
Recurring basis \| Level 2 \| Residential mortgage-backed securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	921,966	315,748
Recurring basis \| Level 2 \| Corporate debt securities
Financial assets and financial liabilities measured at fair value
Debt securities available for sale	$ 103,976	$ 132,198

Acquisitions (Tables)

12 Months Ended

Dec. 31, 2019

First Community

Schedule of fair value estimates of assets acquired and liabilities assumed

The following table presents the fair value of First Community assets acquired and liabilities assumed as of July 2, 2017 (dollars in thousands):



	Fair Value
Assets acquired:
Cash and cash equivalents	$	60,686
Securities		165,843
Loans held for sale		905
Portfolio loans		1,096,583
Premises and equipment		18,094
OREO		722
Other intangible assets		13,979
Other assets		41,755
Total assets acquired		1,398,567

Liabilities assumed:
Deposits		1,134,355
Other borrowings		125,751
Other liabilities		11,862
Total liabilities assumed		1,271,968

Net assets acquired	$	126,599

Consideration paid:
Cash	$	24,557
Cash payout of options and restricted stock units		6,182
Common stock		211,120
Fair value of stock options assumed		722
Total consideration paid	$	242,581

Goodwill	$	115,982

Schedule of unaudited pro forma results of operations for the acquisition


		Pro Forma
	Year Ended
		December 31, 2017
Total revenues (net interest income plus non-interest income)	$	316,417
Net income		67,413
Diluted earnings per common share		1.47

Mid Illinois Bancorp, Inc.

Schedule of fair value estimates of assets acquired and liabilities assumed

The following table presents the fair value of Mid Illinois assets acquired and liabilities assumed as of October 1, 2017 (dollars in thousands):



	Fair Value
Assets acquired:
Cash and cash equivalents	$	39,443
Securities		208,003
Loans held for sale		5,031
Portfolio loans		356,651
Premises and equipment		16,551
Other intangible assets		11,531
Other assets		29,564
Total assets acquired		666,774

Liabilities assumed:
Deposits		505,917
Other borrowings		61,040
Other liabilities		10,497
Total liabilities assumed		577,454

Net assets acquired	$	89,320

Consideration paid:
Cash	$	40,507
Common stock		97,702
Total consideration paid	$	138,209

Goodwill	$	48,889

Banc Ed

Schedule of fair value estimates of assets acquired and liabilities assumed

The following table presents the fair value of Banc Ed assets acquired and liabilities assumed as of January 31, 2019 (dollars in thousands):



	Fair Value
Assets acquired:
Cash and cash equivalents	$	42,013
Securities		692,716
Loans held for sale		2,157
Portfolio loans		873,336
Premises and equipment		32,156
Other intangible assets		32,617
Mortgage servicing rights		6,946
Other assets		57,332
Total assets acquired		1,739,273

Liabilities assumed:
Deposits		1,439,203
Other borrowings		63,439
Other liabilities		20,153
Total liabilities assumed		1,522,795

Net assets acquired	$	216,478

Consideration paid:
Cash	$	91,400
Common stock		166,515
Total consideration paid	$	257,915

Goodwill	$	41,437

Schedule of unaudited pro forma results of operations for the acquisition



	Years Ended December 31,
		2019	2018
Total revenues (net interest income plus non-interest income)	$	409,324	$	411,633
Net income		113,640		118,361
Diluted earnings per common share		2.03		2.15

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Measurements

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


	Level 1		Level 2		Level 3		Total
December 31, 2019	Inputs		Inputs		Inputs		Fair Value
Debt securities available for sale
U.S. Treasury securities	$	—	$	51,737	$	—	$	51,737
Obligations of U.S. government corporations and agencies		—		163,000		—		163,000
Obligations of states and political subdivisions		—		268,291		—		268,291
Commercial mortgage-backed securities		—		139,287		—		139,287
Residential mortgage-backed securities		—		921,966		—		921,966
Corporate debt securities		—		103,976		—		103,976
Equity securities		—		5,952		—		5,952
Loans held for sale		—		68,699		—		68,699
Derivative assets		—		13,400		—		13,400
Derivative liabilities		—		14,821		—		14,821


	Level 1		Level 2		Level 3		Total
December 31, 2018	Inputs		Inputs		Inputs		Fair Value
Debt securities available for sale
U.S. Treasury securities	$	—	$	25,411	$	—	$	25,411
Obligations of U.S. government corporations and agencies		—		52,342		—		52,342
Obligations of states and political subdivisions		—		170,044		—		170,044
Commercial mortgage-backed securities		—		1,942		—		1,942
Residential mortgage-backed securities		—		315,748		—		315,748
Corporate debt securities		—		132,198		—		132,198
Equity securities		6,169		—		—		6,169
Loans held for sale		—		25,895		—		25,895
Derivative assets		—		2,062		—		2,062
Derivative liabilities		—		2,643		—		2,643

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


	Level 1		Level 2		Level 3		Total
	Inputs		Inputs		Inputs		Fair Value
December 31, 2019
Impaired loans	$	—	$	—	$	2,686	$	2,686
OREO		—		—		55		55
Bank property held for sale		—		—		4,004		4,004


December 31, 2018
Impaired loans	$	—	$	—	$	10,999	$	10,999
OREO		—		—		55		55
Bank property held for sale		—		—		1,832		1,832

Schedule of quantitative information about Level 3 fair value measurements


	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation	Unobservable	Range
	Estimate		Techniques	Input	(Weighted Average)
December 31, 2019
Impaired loans	$	2,686	Appraisal of collateral	Appraisal adjustments	- 2.9	%	to	- 100.0	%
					(-57.8)%
OREO		55	Appraisal of collateral	Appraisal adjustments	- 25.0	%	to	- 100.0	%
					(-65.0)%
Bank property held for sale		4,004	Appraisal of collateral or real estate listing price	Appraisal adjustments	- 6.2	%	to	- 71.3	%
					(-40.7)%

December 31, 2018
Impaired loans	$	10,999	Appraisal of collateral	Appraisal adjustments	- 3.3	%	to	- 100.0	%
					(-24.1)%
OREO		55	Appraisal of collateral	Appraisal adjustments	- 25.0	%	to	- 100.0	%
					(-65.0)%
Bank property held for sale		1,832	Appraisal of collateral or real estate listing price	Appraisal adjustments	- 0.0	%	to	- 35.1	%
					(-28.3)%

Schedule of estimated fair values of financial instruments


	December 31, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial assets:
Level 1 inputs:
Cash and cash equivalents	$	529,288	$	529,288	$	239,973	$	239,973
Level 2 inputs:
Debt securities held to maturity		—		—		608,660		603,360
Accrued interest receivable		27,109		27,109		22,314		22,314
Level 3 inputs:
Portfolio loans, net		6,633,501		6,648,560		5,517,780		5,473,063
Mortgage servicing rights		12,326		18,193		3,315		11,051
Other servicing rights		1,071		1,740		781		1,443

Financial liabilities:
Level 2 inputs:
Time deposits	$	1,534,850	$	1,538,597	$	1,497,003	$	1,482,301
Securities sold under agreements to repurchase		205,491		205,491		185,796		185,796
Short-term borrowings		8,551		8,552		—		—
Long-term debt		83,600		83,614		50,000		49,873
Junior subordinated debt owed to unconsolidated trusts		71,308		74,153		71,155		65,182
Accrued interest payable		5,000		5,000		6,568		6,568
Level 3 inputs:
Senior notes, net of unamortized issuance costs		39,674		40,099		39,539		39,452
Subordinated notes, net of unamortized issuance costs		59,248		61,514		59,147		58,186

Acquisitions - First Community Financial Partners, Inc. (Details) $ / shares in Units, $ in Thousands, shares in Millions			12 Months Ended
	Jul. 02, 2017 USD ($) $ / shares	Jun. 30, 2017 USD ($) $ / shares shares	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($) $ / shares	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Business Acquisition
Per share cash consideration entitled (in dollars per share) \| $ / shares	$ 1.35
Consideration paid:
Goodwill			$ 311,536	$ 267,685
Portfolio Loans, allowance for loan losses (in dollars)			53,748	50,648	$ 53,582	$ 47,795
First Community
Business Acquisition
Share consideration conversion ratio	0.396
Number of common shares issued for acquisition \| shares		7.2
Market value of common stock issued		$ 211,100
Share price \| $ / shares		$ 29.32
Options to purchase common stock, conversion ratio	0.44
Assets acquired:
Cash and cash equivalents	$ 60,686
Securities	165,843
Loans held for sale	905
Portfolio loans	1,096,583
Premises and equipment	18,094
OREO	722
Other intangible assets	13,979
Other assets	41,755
Total assets acquired	1,398,567
Liabilities assumed:
Deposits	1,134,355
Other borrowings	125,751
Other liabilities	11,862
Total liabilities assumed	1,271,968
Net assets acquired	126,599
Consideration paid:
Cash	24,557
Cash payout of options and restricted stock units	6,182
Common stock	211,120
Fair value of stock options assumed	722
Total consideration paid	242,581
Goodwill	115,982
Fair value of performing loans, including loans held for sale	1,100,000
Amount expected to be accreted, gross	14,400
Contractual amount of PCI loans	17,900
Fair value of credit-impaired loans	$ 12,500
PCI loan outstanding amount			1,700
Total revenues (net interest income plus non-interest income)				316,417
Net income				$ 67,413
Diluted earnings per common share (in dollars per share) \| $ / shares				$ 1.47
First Community \| Non-interest expense
Business Acquisition
Business acquisition expenses			$ 100		4,500
Acquisition expenses related to professional and legal fees					$ 1,600

Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Significant Accounting Policies

Significant Accounting Policies

Note 1. Significant Accounting Policies

Nature of operations

First Busey Corporation is a financial holding company organized under the laws of Nevada. The Company’s 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 Illinois, Missouri, southwest Florida and Indianapolis, Indiana. The Company and its subsidiaries are 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:

Principles of consolidation

Use of estimates

Comprehensive income (loss)

Trust assets

Cash and cash equivalents

Securities

Debt securities classified as held to maturity are those debt securities that the Company has the intent and ability to hold to maturity and are carried at amortized cost.

Loans held for sale

Loan servicing

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.

Portfolio loans

Troubled debt restructurings

Purchased credit-impaired loans

Allowance for loan losses

Premises and equipment, net


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

Long-lived assets

Other real estate owned

Goodwill and other intangibles

Other intangible assets consists of core deposit and acquired customer relationship intangible assets arising from acquisitions and are amortized over their estimated useful lives.

Cash surrender value of bank owned life insurance

Transfers of financial assets

Income taxes

Treasury Stock

Stock-based employee compensation

Segment disclosure

Business Combinations

Derivative Financial Instruments

corresponding derivative financial assets or liabilities recorded as either a charge or credit to mortgage revenues during the period in which the changes occurred.

Off-balance sheet arrangements

Fair value of financial instruments

Revenue

Leases

Reclassifications

Subsequent events

Impact of recently adopted accounting standards

●

The Company elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs;

●

The Company did not elect the hindsight practical expedient;

●

The Company elected not to apply the above guidance to short-term leases;

●

The Company elected to separate the lease components from the nonlease components and exclude the nonlease components from the right of use asset and lease liability; and

●

The Company did not elect the land easement practical expedient.

Recently issued accounting standards

Debt Securities (Tables)

12 Months Ended

Dec. 31, 2019

Debt Securities

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

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


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2019:	Cost		Gains		Losses		Value
Debt securities available for sale
U.S. Treasury securities	$	51,472	$	265	$	—	$	51,737
Obligations of U.S. government corporations and agencies		160,364		2,684		(48)		163,000
Obligations of states and political subdivisions		262,492		5,810		(11)		268,291
Commercial mortgage-backed securities		137,733		1,700		(146)		139,287
Residential mortgage-backed securities		912,308		10,282		(624)		921,966
Corporate debt securities		102,696		1,280		—		103,976
Total	$	1,627,065	$	22,021	$	(829)	$	1,648,257


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2018:	Cost		Gains		Losses		Value
Debt securities available for sale
U.S. Treasury securities	$	25,824	$	1	$	(414)	$	25,411
Obligations of U.S. government corporations and agencies		53,096		7		(761)		52,342
Obligations of states and political subdivisions		171,131		484		(1,571)		170,044
Commercial mortgage-backed securities		2,003		—		(61)		1,942
Residential mortgage-backed securities		322,646		245		(7,143)		315,748
Corporate debt securities		132,513		61		(376)		132,198
Total	$	707,213	$	798	$	(10,326)	$	697,685

Debt securities held to maturity
Obligations of states and political subdivisions	$	33,947	$	68	$	(87)	$	33,928
Commercial mortgage-backed securities		59,054		11		(1,003)		58,062
Residential mortgage-backed securities		515,659		1,748		(6,037)		511,370
Total	$	608,660	$	1,827	$	(7,127)	$	603,360

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


	Debt securities available for sale
	Amortized		Fair
December 31, 2019:	Cost		Value
Due in one year or less	$	149,566	$	150,109
Due after one year through five years		355,497		361,500
Due after five years through ten years		228,518		232,950
Due after ten years		893,484		903,698
Total	$	1,627,065	$	1,648,257

Schedule of realized gains and losses related to sales of securities

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


	For the Years Ended December 31,
	2019		2018		2017
Gross security gains	$	1,318	$	—	$	1,259
Gross security (losses)		(585)		(1,780)		(116)
Net gains (losses) on sales of securities⁽¹⁾	$	733	$	(1,780)	$	1,143

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

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


	Less than 12 months, gross				12 months or more, gross				Total, gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2019:	Value		Losses		Value		Losses		Value		Losses
Debt securities available for sale
U.S. Treasury securities	$	—	$	—	$	—	$	—	$	—	$	—
Obligations of U.S. government corporations and agencies		6,362		(48)		—		—		6,362		(48)
Obligations of states and political subdivisions⁽²⁾		4,981		(11)		1,548		—		6,529		(11)
Commercial mortgage-backed securities		33,322		(144)		2,044		(2)		35,366		(146)
Residential mortgage-backed securities		78,326		(245)		50,259		(379)		128,585		(624)
Corporate debt securities		—		—		—		—		—		—
Total temporarily impaired securities	$	122,991	$	(448)	$	53,851	$	(381)	$	176,842	$	(829)

(2)

Unrealized losses for greater than 12 months, gross, was less than one thousand dollars.


	Less than 12 months, gross				12 months or more, gross				Total, gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2018:	Value		Losses		Value		Losses		Value		Losses
Debt securities available for sale
U.S. Treasury securities	$	995	$	(4)	$	24,343	$	(410)	$	25,338	$	(414)
Obligations of U.S. government corporations and agencies		749		(3)		50,744		(758)		51,493		(761)
Obligations of states and political subdivisions		49,893		(460)		77,651		(1,111)		127,544		(1,571)
Commercial mortgage-backed securities		—		—		1,942		(61)		1,942		(61)
Residential mortgage-backed securities		48,387		(496)		247,573		(6,647)		295,960		(7,143)
Corporate debt securities		90,713		(268)		15,083		(108)		105,796		(376)
Total temporarily impaired securities	$	190,737	$	(1,231)	$	417,336	$	(9,095)	$	608,073	$	(10,326)

Debt securities held to maturity
Obligations of states and political subdivisions	$	9,531	$	(33)	$	9,538	$	(54)	$	19,069	$	(87)
Commercial mortgage-backed securities		12,067		(212)		45,041		(791)		57,108		(1,003)
Residential mortgage-backed securities		77,071		(974)		245,128		(5,063)		322,199		(6,037)
Total temporarily impaired securities	$	98,669	$	(1,219)	$	299,707	$	(5,908)	$	398,376	$	(7,127)

Portfolio loans and allowance for loan losses - Analysis of loans past due and still accruing or non-accrual status (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Loans past due
Loans past due, still accruing	$ 1,611	$ 1,601
Non-accrual Loans	27,896	34,997
Amount of interest collected and recognized on a cash basis			$ 300
30 to 59 Days
Loans past due
Loans past due, still accruing	8,820	5,053
60 to 89 Days
Loans past due
Loans past due, still accruing	5,451	2,068
Commercial
Loans past due
Loans past due, still accruing	199	775
Non-accrual Loans	9,096	17,953
Commercial \| 30 to 59 Days
Loans past due
Loans past due, still accruing	1,075	158
Commercial \| 60 to 89 Days
Loans past due
Loans past due, still accruing	1,014	140
Commercial real estate
Loans past due
Loans past due, still accruing	584
Non-accrual Loans	9,178	10,298
Commercial real estate \| 30 to 59 Days
Loans past due
Loans past due, still accruing	2,653	148
Commercial real estate \| 60 to 89 Days
Loans past due
Loans past due, still accruing	3,121	558
Real estate construction
Loans past due
Loans past due, still accruing		58
Non-accrual Loans	630	18
Real estate construction \| 30 to 59 Days
Loans past due
Loans past due, still accruing	19	121
Retail Real Estate
Loans past due
Loans past due, still accruing	828	766
Non-accrual Loans	8,935	6,698
Retail Real Estate \| 30 to 59 Days
Loans past due
Loans past due, still accruing	5,021	4,578
Retail Real Estate \| 60 to 89 Days
Loans past due
Loans past due, still accruing	1,248	1,368
Retail Other
Loans past due
Loans past due, still accruing		2
Non-accrual Loans	57	30
Retail Other \| 30 to 59 Days
Loans past due
Loans past due, still accruing	52	48
Retail Other \| 60 to 89 Days
Loans past due
Loans past due, still accruing	$ 68	$ 2

Acquisitions - The Banc Ed Corp. (Details) $ / shares in Units, $ in Thousands, shares in Millions				12 Months Ended
	Mar. 31, 2019 USD ($)	Jan. 31, 2019 USD ($) $ / shares shares	Jul. 02, 2017 $ / shares	Dec. 31, 2019 USD ($) $ / shares	Dec. 31, 2018 USD ($) $ / shares	Dec. 31, 2017 USD ($)
Merger agreement
Per share cash consideration entitled (in dollars per share) \| $ / shares			$ 1.35
(Decrease) increase in other liabilities				$ (7,380)	$ 2,195	$ (4,193)
Consideration paid
Goodwill				311,536	267,685
Banc Ed
Merger agreement
Share consideration conversion ratio		8.2067
Per share cash consideration entitled (in dollars per share) \| $ / shares		$ 111.53
Number of common shares issued for acquisition \| shares		6.7
Market value of common stock issued		$ 166,500
Adjustments to the fair value assigned to various assets and liabilities	$ 5,200
Common stock		$ 166,515
Share price \| $ / shares		$ 24.76
Reversal of a deferred tax liability				4,600
Transaction costs				2,300
Assets acquired:
Cash and cash equivalents		$ 42,013
Securities		692,716
Loans held for sale		2,157
Portfolio loans		873,336
Premises and equipment		32,156
Other intangible assets		32,617
Mortgage servicing rights		6,946
Other assets		57,332
Total assets acquired		1,739,273
Liabilities assumed:
Deposits		1,439,203
Other borrowings		63,439
Other liabilities		20,153
Total liabilities assumed		1,522,795
Net assets acquired		216,478
Consideration paid
Cash		91,400
Common stock		166,515
Total consideration paid		257,915
Goodwill		41,437
Aggregate principal outstanding		889,300
Fair value of performing loans, including loans held for sale		871,000
Amount expected to be accreted, gross		17,000
Contractual amount of PCI loans		3,900
Accretable discount on PCI loans		200
Fair value of credit-impaired loans		$ 2,300		1,300
Banc Ed \| Pro Forma
Consideration paid
Total revenues (net interest income plus non-interest income)				409,324,000	411,633,000
Net income				$ 113,640,000	$ 118,361,000
Diluted earnings per common share (in dollars per share) \| $ / shares				$ 2.03	$ 2.15
Banc Ed \| Non-interest expense
Merger agreement
Business acquisition expenses				$ 13,700	$ 400
IST \| Non-interest expense
Merger agreement
Business acquisition expenses				$ 900

Operating Segments and Related Information

12 Months Ended

Dec. 31, 2019

Operating Segments and Related Information

Operating Segments and Related Information

Note 21. Operating Segments and Related Information

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

The Company’s three operating segments are strategic business units that are separately managed as they offer different products and services and have different marketing strategies. The “other” category consists of the Parent Company and the elimination of intercompany transactions.

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

Following is a summary of selected financial information for the Company’s operating segments (dollars in thousands):


	Goodwill				Total Assets
	December 31, 2019		December 31, 2018		December 31, 2019		December 31, 2018
Banking	$	288,436	$	246,999	$	9,632,368	$	7,656,709
Remittance Processing		8,992		8,992		44,209		39,278
Wealth Management		14,108		11,694		32,760		20,992
Other		—		—		(13,608)		(14,622)
Totals	$	311,536	$	267,685	$	9,695,729	$	7,702,357


	Years ended December 31,
	2019		2018		2017
Net interest income:
Banking	$	296,754	$	248,291	$	208,184
Remittance Processing		76		67		60
Wealth Management		—		327		321
Other		(9,607)		(7,279)		(5,199)
Total net interest income	$	287,223	$	241,406	$	203,366

Non-interest income:
Banking	$	63,613	$	43,197	$	47,524
Remittance Processing		16,450		15,876		12,137
Wealth Management		39,075		31,621		27,270
Other		(2,723)		(701)		(2,457)
Total non-interest income	$	116,415	$	89,993	$	84,474

Non-interest expense:
Banking	$	211,559	$	154,455	$	139,521
Remittance Processing		10,990		10,749		8,704
Wealth Management		24,534		19,283		17,079
Other		11,711		8,556		9,122
Total non-interest expense	$	258,794	$	193,043	$	174,426

Income before income taxes:
Banking	$	138,401	$	132,604	$	110,884
Remittance Processing		5,536		5,194		3,493
Wealth Management		14,541		12,665		10,512
Other		(24,040)		(16,536)		(16,778)
Total income before income taxes	$	134,438	$	133,927	$	108,111

Net income:
Banking	$	106,409	$	97,369	$	65,704
Remittance Processing		4,060		3,710		2,007
Wealth Management		11,135		9,372		6,229
Other		(18,651)		(11,523)		(11,214)
Total net income	$	102,953	$	98,928	$	62,726

Debt Securities

12 Months Ended

Dec. 31, 2019

Debt Securities

Debt Securities

Note 3. Debt securities

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


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2019:	Cost		Gains		Losses		Value
Debt securities available for sale
U.S. Treasury securities	$	51,472	$	265	$	—	$	51,737
Obligations of U.S. government corporations and agencies		160,364		2,684		(48)		163,000
Obligations of states and political subdivisions		262,492		5,810		(11)		268,291
Commercial mortgage-backed securities		137,733		1,700		(146)		139,287
Residential mortgage-backed securities		912,308		10,282		(624)		921,966
Corporate debt securities		102,696		1,280		—		103,976
Total	$	1,627,065	$	22,021	$	(829)	$	1,648,257


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
December 31, 2018:	Cost		Gains		Losses		Value
Debt securities available for sale
U.S. Treasury securities	$	25,824	$	1	$	(414)	$	25,411
Obligations of U.S. government corporations and agencies		53,096		7		(761)		52,342
Obligations of states and political subdivisions		171,131		484		(1,571)		170,044
Commercial mortgage-backed securities		2,003		—		(61)		1,942
Residential mortgage-backed securities		322,646		245		(7,143)		315,748
Corporate debt securities		132,513		61		(376)		132,198
Total	$	707,213	$	798	$	(10,326)	$	697,685

Debt securities held to maturity
Obligations of states and political subdivisions	$	33,947	$	68	$	(87)	$	33,928
Commercial mortgage-backed securities		59,054		11		(1,003)		58,062
Residential mortgage-backed securities		515,659		1,748		(6,037)		511,370
Total	$	608,660	$	1,827	$	(7,127)	$	603,360

In adopting ASU 2017-12, the Company reassessed the classification of certain investments during the first quarter of 2019 and reclassified $573.6 million of securities from held to maturity to available for sale. The transfer occurred at fair value and had a related unrealized loss of $4.8 million recorded in other comprehensive income. During the fourth quarter of 2019, the Company reclassified the remaining $15.4 million of securities from held to maturity to available for sale in anticipation of the adoption of ASU 2016-13. The transfer occurred at fair value and had a related unrealized gain of $0.2 million recorded in other comprehensive income. At December 31, 2019, the Company did not hold any debt securities classified as held to maturity.

The amortized cost and fair value of debt securities as of December 31, 2019, by contractual maturity or pre-refunded date, are shown below. Mortgages underlying mortgage-backed securities may be called or prepaid; therefore, actual maturities could differ from the contractual maturities. All mortgage-backed securities were issued by U.S. government agencies and corporations (dollars in thousands).


	Debt securities available for sale
	Amortized		Fair
December 31, 2019:	Cost		Value
Due in one year or less	$	149,566	$	150,109
Due after one year through five years		355,497		361,500
Due after five years through ten years		228,518		232,950
Due after ten years		893,484		903,698
Total	$	1,627,065	$	1,648,257

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


	For the Years Ended December 31,
	2019		2018		2017
Gross security gains	$	1,318	$	—	$	1,259
Gross security (losses)		(585)		(1,780)		(116)
Net gains (losses) on sales of securities⁽¹⁾	$	733	$	(1,780)	$	1,143

(1)

Net gains (losses) on sales of securities reported on the Consolidated Statements of Income includes sale of equity securities, excluded in this table.

Debt securities with carrying amounts of $704.7 million and $498.3 million on December 31, 2019 and 2018 respectively, were pledged as collateral for public deposits, securities sold under agreements to repurchase and for other purposes as required or permitted by law.


	Less than 12 months, gross				12 months or more, gross				Total, gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2019:	Value		Losses		Value		Losses		Value		Losses
Debt securities available for sale
U.S. Treasury securities	$	—	$	—	$	—	$	—	$	—	$	—
Obligations of U.S. government corporations and agencies		6,362		(48)		—		—		6,362		(48)
Obligations of states and political subdivisions⁽²⁾		4,981		(11)		1,548		—		6,529		(11)
Commercial mortgage-backed securities		33,322		(144)		2,044		(2)		35,366		(146)
Residential mortgage-backed securities		78,326		(245)		50,259		(379)		128,585		(624)
Corporate debt securities		—		—		—		—		—		—
Total temporarily impaired securities	$	122,991	$	(448)	$	53,851	$	(381)	$	176,842	$	(829)

(2)

Unrealized losses for greater than 12 months, gross, was less than one thousand dollars.


	Less than 12 months, gross				12 months or more, gross				Total, gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
December 31, 2018:	Value		Losses		Value		Losses		Value		Losses
Debt securities available for sale
U.S. Treasury securities	$	995	$	(4)	$	24,343	$	(410)	$	25,338	$	(414)
Obligations of U.S. government corporations and agencies		749		(3)		50,744		(758)		51,493		(761)
Obligations of states and political subdivisions		49,893		(460)		77,651		(1,111)		127,544		(1,571)
Commercial mortgage-backed securities		—		—		1,942		(61)		1,942		(61)
Residential mortgage-backed securities		48,387		(496)		247,573		(6,647)		295,960		(7,143)
Corporate debt securities		90,713		(268)		15,083		(108)		105,796		(376)
Total temporarily impaired securities	$	190,737	$	(1,231)	$	417,336	$	(9,095)	$	608,073	$	(10,326)

Debt securities held to maturity
Obligations of states and political subdivisions	$	9,531	$	(33)	$	9,538	$	(54)	$	19,069	$	(87)
Commercial mortgage-backed securities		12,067		(212)		45,041		(791)		57,108		(1,003)
Residential mortgage-backed securities		77,071		(974)		245,128		(5,063)		322,199		(6,037)
Total temporarily impaired securities	$	98,669	$	(1,219)	$	299,707	$	(5,908)	$	398,376	$	(7,127)

Debt securities are periodically evaluated for OTTI. As of December 31, 2019, the Company’s debt security portfolio consisted of 1,178 securities. The total number of debt securities in the investment portfolio in an unrealized loss position as of December 31, 2019 was 55, and represented a loss of 0.47% of the aggregate amortized cost. The unrealized losses relate to changes in market interest rates and market conditions that do not represent credit-related impairments. Furthermore, the Company does not intend to sell such securities and it is more likely than not that the Company will recover the amortized cost prior to being required to sell the debt securities. Full collection of the amounts due according to the contractual terms of the debt securities is expected; therefore, the Company does not consider these investments to be OTTI at December 31, 2019. As of December 31, 2019, the Company did not hold general obligation bonds of any single issuer, the aggregate of which exceeded 10% of the Company’s stockholders’ equity.

Borrowings (Tables)

12 Months Ended

Dec. 31, 2019

Borrowings

Summary of long-term debt

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


	December 31,		December 31,
	2019		2018
Notes payable, FHLB, ranging in original maturity from 5 to 10 years, collateralized by FHLB deposits, residential and commercial real estate loans and FHLB stock.	$	35,600	$	50,000
Term Loan		48,000		—
Total long-term borrowings	$	83,600	$	50,000

- Definition

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

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28541-108399

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

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28551-108399

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

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

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

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

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

+ Details

Outstanding Commitments and Contingent Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Commitments to extend credit
Credit Commitments and Contingencies
Financial instruments whose contract amounts represent credit risk	$ 1,649,565	$ 1,398,483
Standby letters of credit
Credit Commitments and Contingencies
Financial instruments whose contract amounts represent credit risk	$ 42,581	$ 32,156

Goodwill and Other Intangible Assets - Goodwill (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($) segment	Jan. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Jul. 02, 2017 USD ($)
Goodwill and other intangibles assets
Number of operating segments \| segment	3
Total goodwill	$ 311,536		$ 267,685
First Community
Goodwill and other intangibles assets
Total goodwill				$ 115,982
Other intangible assets				13,979
Banc Ed
Goodwill and other intangibles assets
Total goodwill		$ 41,437
Other intangible assets		$ 32,617
Pulaski
Goodwill and other intangibles assets
Total goodwill				$ 116,000
Mid Illinois
Goodwill and other intangibles assets
Changes in the carrying amount of goodwill	1,700
Banking
Goodwill and other intangibles assets
Total goodwill	288,436		246,999
Banking \| Banc Ed
Goodwill and other intangibles assets
Total goodwill	41,400
Other intangible assets	27,200
Remittance Processing
Goodwill and other intangibles assets
Total goodwill	8,992		8,992
Wealth Management
Goodwill and other intangibles assets
Total goodwill	14,108		$ 11,694
Other intangible assets	5,400
Wealth Management \| IST
Goodwill and other intangibles assets
Total goodwill	2,400
Other intangible assets	$ 5,700

Share-based Compensation - Options Outstanding (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Additional disclosures
Compensation expense recognized	$ 3,800,000	$ 3,500,000	$ 2,600,000
Period over which cost will be recognized	3 years 6 months
Stock option awards
Options Outstanding
Number (in shares)	53,185
Weighted-Average Exercise Price (in dollars per share)	$ 22.00
Weighted-Average Remaining Contractual Life	5 years 10 months 24 days
Intrinsic Value (in dollars)	$ 292
Options Exercisable
Number (in shares)	53,185
Intrinsic Value (in dollars)	$ 292
Additional disclosures
Compensation expense recognized	$ 100,000	$ 200,000
$10.43-$13.47 \| Stock option awards
Range of Exercise Prices
Low end of the range (in dollars per share)	$ 12.57
High end of the range (in dollars per share)	$ 13.47
Options Outstanding
Number (in shares)	7,852
Weighted-Average Exercise Price (in dollars per share)	$ 13.43
Weighted-Average Remaining Contractual Life	5 months 26 days
Options Exercisable
Number (in shares)	7,852
$17.05 \| Stock option awards
Options Outstanding
Number (in shares)	308
Weighted-Average Exercise Price (in dollars per share)	$ 17.05
Weighted-Average Remaining Contractual Life	18 days
Options Exercisable
Number (in shares)	308
$23.53 \| Stock option awards
Options Outstanding
Number (in shares)	45,025
Weighted-Average Exercise Price (in dollars per share)	$ 23.53
Weighted-Average Remaining Contractual Life	6 years 10 months 17 days
Options Exercisable
Number (in shares)	45,025

Portfolio loans and allowance for loan losses - Activity in the allowance for loan losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2019	Dec. 31, 2018
Activity in the allowance for loan losses
Beginning balance	$ 50,648	$ 53,582	$ 47,795
Provision for loan losses	10,406	4,429	5,303
Charged-off	(11,760)	(10,944)	(6,239)
Recoveries	4,454	3,581	6,723
Ending balance	53,748	50,648	53,582
Allowance for loan losses Ending balance attributed to:
Loans individually evaluated for impairment				$ 4,853	$ 5,561
Loans collectively evaluated for impairment				48,895	45,087
Ending balance	50,648	53,582	47,795	53,748	50,648
Loans:
Loans individually evaluated for impairment				34,031	47,404
Loans collectively evaluated for impairment				6,650,170	5,518,246
PCI loans evaluated for impairment				3,048	2,778
Ending balance				6,687,249	5,568,428
Commercial Loans
Activity in the allowance for loan losses
Beginning balance	17,829	14,779	13,303
Provision for loan losses	4,893	5,767	(1,091)
Charged-off	(6,478)	(3,968)	(994)
Recoveries	2,047	1,251	3,561
Ending balance	18,291	17,829	14,779
Allowance for loan losses Ending balance attributed to:
Loans individually evaluated for impairment				3,330	4,319
Loans collectively evaluated for impairment				14,961	13,510
Ending balance	18,291	14,779	13,303	18,291	17,829
Loans:
Loans individually evaluated for impairment				9,740	18,441
Loans collectively evaluated for impairment				1,738,615	1,386,247
PCI loans evaluated for impairment				13	418
Ending balance				1,748,368	1,405,106
Commercial Real Estate Loans
Activity in the allowance for loan losses
Beginning balance	21,137	21,813	20,623
Provision for loan losses	3,002	3,227	2,439
Charged-off	(3,257)	(4,352)	(1,965)
Recoveries	308	449	716
Ending balance	21,190	21,137	21,813
Allowance for loan losses Ending balance attributed to:
Loans individually evaluated for impairment				1,049	1,181
Loans collectively evaluated for impairment				20,141	19,956
Ending balance	21,190	21,813	20,623	21,190	21,137
Loans:
Loans individually evaluated for impairment				10,018	15,318
Loans collectively evaluated for impairment				2,781,495	2,349,243
PCI loans evaluated for impairment				1,904	2,262
Ending balance				2,793,417	2,366,823
Real Estate Construction
Activity in the allowance for loan losses
Beginning balance	2,723	2,861	1,870
Provision for loan losses	(70)	(259)	581
Charged-off		(97)	(48)
Recoveries	551	218	458
Ending balance	3,204	2,723	2,861
Allowance for loan losses Ending balance attributed to:
Loans collectively evaluated for impairment				3,204	2,723
Ending balance	3,204	2,861	1,870	3,204	2,723
Loans:
Loans individually evaluated for impairment				539	453
Loans collectively evaluated for impairment				400,887	287,744
PCI loans evaluated for impairment				435
Ending balance				401,861	288,197
Retail Real Estate
Activity in the allowance for loan losses
Beginning balance	8,471	13,783	11,648
Provision for loan losses	2,102	(4,824)	3,263
Charged-off	(1,162)	(1,815)	(2,691)
Recoveries	1,084	1,327	1,563
Ending balance	10,495	8,471	13,783
Allowance for loan losses Ending balance attributed to:
Loans individually evaluated for impairment				474	61
Loans collectively evaluated for impairment				10,021	8,410
Ending balance	10,495	13,783	11,648	10,495	8,471
Loans:
Loans individually evaluated for impairment				13,676	13,159
Loans collectively evaluated for impairment				1,679,397	1,466,876
PCI loans evaluated for impairment				696	98
Ending balance				1,693,769	1,480,133
Retail Other
Activity in the allowance for loan losses
Beginning balance	488	346	351
Provision for loan losses	479	518	111
Charged-off	(863)	(712)	(541)
Recoveries	464	336	425
Ending balance	568	488	346
Allowance for loan losses Ending balance attributed to:
Loans collectively evaluated for impairment				568	488
Ending balance	$ 568	$ 346	$ 351	568	488
Loans:
Loans individually evaluated for impairment				58	33
Loans collectively evaluated for impairment				49,776	28,136
Ending balance				$ 49,834	$ 28,169