FIRST BUSEY CORP NV

Changes in noninterest expense are summarized as follows for the periods presented(dollars in thousands):

1. The efficiency ratio and adjusted efficiency ratio are non-GAAP financial measures. For a reconciliation of non-GAAP measures to the most directly comparable financial GAAP measures, see“Item 2. Management’s Discussion and Analysis—Non-GAAP Financial Information” included in this Quarterly Report.

1. The efficiency ratio and adjusted efficiency ratio are non-GAAP financial measures. For a reconciliation of non-GAAP measures to the most directly comparable financial GAAP measures, see“Item 2. Management’s Discussion and Analysis—Non-GAAP Financial Information” included in this Quarterly Report.

Total noninterest expense was $75.9 million for the three months ended September 30, 2024, a 7.0% increase from the comparable period in 2023. Non-operating acquisition and restructuring expenses contributed $1.9 million to total noninterest expense for the three months ended September 30, 2024, compared to $0.1 million for the comparable period in 2023. Excluding non-operating expenses, noninterest expense was $74.0 million for the three months ended September 30, 2024, a 4.4% increase from the comparable period in 2023.

Total noninterest expense was $222.2 million for the nine months ended September 30, 2024, a 5.5% increase from the comparable period in 2023. Non-operating acquisition and restructuring expenses contributed $4.6 million to total noninterest expense for the nine months ended September 30, 2024, compared to $0.1 million for the comparable period in 2023. Excluding non-operating expenses, noninterest expense was $217.6 million for the nine months ended September 30, 2024, a 3.4% increase from the comparable period in 2023.

Busey remains deliberate in our efforts to prudently manage expenses and expects to realize increased rates of M&M acquisition synergies during the final quarter of 2024.

Salaries, wages, and employee benefits were $44.6 million for the three months ended September 30, 2024, a 12.4% increase from the comparable period in 2023, and were $130.2 million for the nine months ended September 30, 2024, an 8.6% increase from the comparable period in 2023. Busey recorded $0.1 million and $1.3 million of non-operating expenses for salaries, wages, and employee benefits for the three and nine months ended September 30, 2024, respectively; in comparison we did not record any non-operating expense in this category during the three and nine months ended September 30, 2023. Our total associate base consisted of 1,510 full-time equivalents as of September 30, 2024, compared to 1,484 at September 30, 2023. The increase in our associate-base was largely due to the M&M acquisition. Current trends continue to reflect a competitive labor market, maintaining pressure on costs related to attracting and maintaining our skilled workforce.

Data processing expense was $6.9 million for the three months ended September 30, 2024, a 16.5% increase from the comparable period in 2023. Excluding non-operating expenses, data processing expense was $6.8 million for the three months ended September 30, 2024, a 15.0% increase from the comparable period in 2023. Data processing expense was $20.6 million for the nine months ended September 30, 2024, a 17.7% increase from the comparable period in 2023. Excluding non-operating expenses, data processing expense was $20.0 million for the nine months ended September 30, 2024, a 14.6% increase from the comparable period in 2023. Increases were primarily attributable to Company-wide investments in technology enhancements, as well as inflation-driven price increases.

Combined, net occupancy expense of premises and furniture and equipment expense totaled $6.3 million for the three months ended September 30, 2024, a 0.8% increase from the comparable period in 2023, and $19.1 million for the nine months ended September 30, 2024, a 0.7% increase from the comparable period in 2023. Primary cost drivers in these expense categories include lease costs, repairs and maintenance, depreciation expense, real estate taxes, and utilities.

Professional fees were $3.1 million for the three months ended September 30, 2024, a 102.2% increase from the comparable period in 2023. Excluding non-operating expenses, professional fees were $1.7 million for the three months ended September 30, 2024, a 19.4% increase from the comparable period in 2023, primarily as a result of increases in consulting fees and audit and accounting expenses. Professional fees were $7.9 million for the nine months ended September 30, 2024, a 72.0% increase from the comparable period in 2023. Excluding non-operating expenses, professional fees were $6.0 million for the nine months ended September 30, 2024, a 32.6% increase from the comparable period in 2023, primarily as a result of increases in consulting fees and legal costs.

Amortization of intangible assets was $2.5 million for the three months ended September 30, 2024, a 0.3% decrease from the comparable period in 2023, and $7.6 million for the nine months ended September 30, 2024, a 4.6% decrease from the comparable period for 2023. Decreases were due to the use of an accelerated amortization methodology.

Interchange expense was $1.4 million for the three months ended September 30, 2024, a 24.3% decrease from the comparable period in 2023, and was $4.7 million for the nine months ended September 30, 2024, a 14.8% decrease from the comparable period in 2023. Fluctuations in interchange expense relate to payment and volume activity at FirsTech.

FDIC insurance expense was $1.4 million for the three months ended September 30, 2024, a 4.2% decrease from the comparable period in 2023, and $4.3 million for the nine months ended September 30, 2024, a 4.7% decrease from the comparable period in 2023.

Other noninterest expense was $9.7 million for the three months ended September 30, 2024, a 17.3% decrease from the comparable period in 2023, and was $28.0 million for the nine months ended September 30, 2024, an 11.8% decrease from the comparable period in 2023. In connection with Busey’s adoption of ASU 2023-02 on January 1, 2024, Busey began recording amortization of New Markets Tax Credits as income tax expense instead of other noninterest expense, resulting in decreases in other noninterest expense of $2.3 million and $6.7 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. Further changes in other noninterest expense are attributable to multiple items, including the provision for unfunded commitments, sales of other real estate owned, marketing, and business development expenses.