FIRST BUSEY CORP NV

Loans are considered past due if the required principal or interest payments have not been received as of the date such payments were due. Loans are placed on non-accrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory guidelines. Loans may be placed on non-accrual status regardless of whether or not such loans are considered past due. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Typically, loans are secured by collateral. When a loan is classified as non-accrual and determined to be collateral dependent, it is appropriately reserved or charged down through the ACL to the fair value of our interest in the underlying collateral less estimated costs to sell. Our loan portfolio is collateralized primarily by real estate.

The following table sets forth information concerning non-performing loans and performing restructured loans, as of each of the dates indicated (dollars in thousands):

Asset quality remains strong both by Busey’s historical trends and by current industry trends, and our operating mandate and focus have been on emphasizing credit quality over asset growth.

Non-performing loan balances increased to $8.2 million as of September 30, 2024, compared to $7.8 million as of December 31, 2023. Non-performing loans represented 0.11% of portfolio loans as of September 30, 2024, compared to 0.10% as of December 31, 2023. Our allowance for credit losses provided coverage of 10.34 times our non-performing loans at September 30, 2024, compared to 11.74 times at December 31, 2023.

Non-performing assets, which includes non-performing loans, OREO, and other repossessed assets, increased to $8.3 million as of September 30, 2024, compared to $7.9 million as of December 31, 2023. Non-performing assets represented 0.07% of total assets as of September 30, 2024, compared to 0.06% as of December 31, 2023. Our allowance for credit losses provided coverage of 10.26 times our non-performing assets at September 30, 2024, compared to 11.55 times at December 31, 2023.

Classified assets, which includes non-performing assets and substandard loans, increased to $89.0 million as of September 30, 2024, compared to $72.3 million as of December 31, 2023. Classified assets represented 5.89% of Busey Bank’s Tier 1 capital and ACL at September 30, 2024, compared to 4.97% at December 31, 2023.

Net charge-offs totaled $0.2 million and $15.3 million for the three and nine months ended September 30, 2024, respectively, compared to $0.3 million and $1.8 million for the comparable periods in 2023. Increases in net charge-offs during the nine months ended September 30, 2024, were significantly attributable to a single C&I credit relationship.

Asset quality metrics remain dependent upon market-specific economic conditions, and specific measures may fluctuate from period to period. If economic conditions were to deteriorate, we would expect the credit quality of our loan portfolio to decline and loan defaults to increase.