Business Context and Reporting Period
Company: First Busey Corporation (BUSE)
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Overview: First Busey is a financial holding company headquartered in Leawood, Kansas, operating through its subsidiary Busey Bank. The company operates 79 banking centers across 10 states. The 2025 fiscal year was defined by the strategic acquisition of CrossFirst Bankshares, Inc. on March 1, 2025, which expanded the company's footprint and asset base significantly. The company also completed the acquisition of Merchants and Manufacturers Bank Corporation in April 2024.
Key Financial Metrics
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Total Assets | $18.10 billion | $12.05 billion | +50.3% |
| Total Deposits | $14.91 billion | $9.98 billion | +49.3% |
| Portfolio Loans (Net) | $13.39 billion | $7.61 billion | +75.9% |
| Net Interest Income (GAAP) | $569.6 million | $322.6 million | +76.6% |
| Net Interest Margin (TE) | 3.51% | 2.95% | +56 bps |
| Total Noninterest Income | $150.0 million | $139.7 million | +7.4% |
| Total Noninterest Expense | $480.2 million | $301.5 million | +59.3% |
| Net Income (GAAP) | $135.3 million | $113.7 million | +19.0% |
| Diluted EPS (GAAP) | $1.47 | $1.98 | -25.8% |
| Adjusted Diluted EPS (Non-GAAP) | $2.53 | $2.09 | +21.1% |
| Return on Average Assets | 0.76% | 0.94% | -18 bps |
| Efficiency Ratio (Non-GAAP) | 63.22% | 62.00% | +122 bps |
| Adjusted Efficiency Ratio (Non-GAAP) | 55.76% | 61.27% | -551 bps |
Material Changes vs. Prior Period
- Acquisition Impact: The 2025 results were significantly impacted by the CrossFirst acquisition. Total assets grew by $6.06 billion, and portfolio loans increased by $5.87 billion. Noninterest expenses rose by $178.7 million, primarily due to $54.6 million in acquisition and restructuring expenses and increased operating costs from the expanded footprint.
- Net Interest Income: Net interest income surged 76.6% to $569.6 million, driven by a 48.5% increase in average interest-earning assets and a 56 basis point expansion in the net interest margin to 3.51%.
- Provision for Credit Losses: The provision for credit losses increased to $52.7 million in 2025 from $7.5 million in 2024. This increase included a $42.4 million "Day 2" provision to establish an initial allowance for non-PCD loans acquired from CrossFirst.
- Asset Quality: Non-performing loans increased to $53.5 million (0.39% of portfolio loans) from $23.2 million (0.30%), largely due to purchased credit deteriorated (PCD) loans assumed in the CrossFirst acquisition. The Allowance for Credit Losses (ACL) to non-performing loans ratio remained strong at 3.25x.
- Capitalization: The company issued Series A and Series B preferred stock in 2025. As of December 31, 2025, the company remained "well capitalized" with a Common Equity Tier 1 ratio of 12.43% and a Leverage Ratio of 11.93%.
Guidance, Outlook, and Risks
- Management Commentary: Management emphasizes a conservative banking strategy with a focus on credit quality over asset growth. The company expects to realize $25.0 million in annual pre-tax expense synergies from the CrossFirst acquisition, with 100% realization targeted for 2026.
- Outlook: The company anticipates continued growth in core deposits and loan portfolios. Management notes that asset quality remains strong despite the increase in non-performing assets from the acquisition.
- Key Risks:
- Regulatory: As a bank holding company with over $10 billion in assets, Busey is subject to heightened regulatory requirements, including the Volcker Rule, Durbin Amendment interchange fee limits, and CFPB oversight.
- Interest Rate Risk: The company faces risks from changes in interest rates and yield curve dynamics, which could compress net interest margins or affect asset valuations.
- Credit Risk: Concentrations in Commercial Real Estate (CRE) loans (40.9% of the portfolio) expose the company to economic downturns and sector-specific volatility.
- Legal Contingency: An ongoing dispute with the Illinois Secretary of State regarding franchise taxes, penalties, and interest could result in a liability exceeding $28.0 million, though the company disputes the methodology and amount.
Investor Verification Checklist
- Acquisition Integration: Verify the progress of the CrossFirst integration and the realization of the projected $25.0 million in annual synergies.
- Illinois Franchise Tax Dispute: Monitor the status of the litigation with the Illinois Secretary of State regarding the potential $28.0 million+ tax liability.
- Asset Quality Trends: Track the performance of the acquired loan portfolio, specifically the resolution of PCD loans and the stability of the non-performing loan ratio.
- Capital Management: Review the company's capital deployment strategy, including the recent issuance of preferred stock and the planned redemption of trust preferred securities in 2026.
- Non-GAAP Adjustments: Scrutinize the reconciliation between GAAP and Non-GAAP metrics, particularly the treatment of acquisition-related expenses and the "Day 2" provision for credit losses.