FIRST BUSEY CORP /NV/

If securities or industry analysts do not publish or cease publishing research reports about Busey, if they adversely change their recommendations regarding Busey’s stock, or if Busey’s operating results do not meet their expectations, the price of Busey’s stock could decline.

The trading market for Busey’s common stock is significantly influenced by research and reports from industry analysts. Limited or negative analyst coverage could reduce the stock’s demand, market price, and trading volume. Downgrades, unfavorable comparisons with competitors, or operating results that fall short of analyst’s expectations may further negatively affect stock performance. The cessation of analyst coverage could exacerbate these challenges, diminishing interest in Busey’s stock and affecting stock performance.

Busey faces significant competition from traditional financial institutions and emerging non‑bank competitors threatening market share.

Busey operates in highly competitive markets across its geographic footprint, competing with national and regional banks, community banks, credit unions, and a range of non‑bank financial services providers, including fintech companies offering digital‑first products and platforms. Advances in financial technology have enabled non‑banks and large technology firms to provide services historically offered by regulated financial institutions, such as payment processing, credit products, and deposit‑like alternatives.

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Innovations including digital wallets, peer‑to‑peer lending platforms, and blockchain‑enabled financial services continue to reshape customer expectations and may increase the risk of disintermediation. To remain competitive, Busey must continue to invest in technology, enhance digital capabilities, and respond to evolving customer preferences.

Failure to effectively manage competitive pressures could result in reduced loan and deposit balances, lower fee income, and diminished profitability, any of which could materially and adversely affect Busey’s financial condition and results of operations.

Rapid technological change, digital innovation, and emerging artificial intelligence capabilities present competitive, operational, and compliance risks.

The financial services industry is undergoing significant digital transformation, requiring continual investment to meet evolving customer expectations for convenience, personalization, security, and speed. Failure to effectively adopt, integrate, or govern new technologies—including generative AI—may impair Busey’s ability to attract and retain customers, compete with technologically advanced financial firms, or achieve anticipated efficiencies. The increasing use of artificial intelligence across the industry also introduces risks related to cybersecurity, data privacy, intellectual property, fraud prevention, model governance, and evolving regulatory requirements. Generative AI, in particular, enables more sophisticated impersonation, social‑engineering, and fraud schemes, increasing the need for robust controls, monitoring, and oversight.

Busey relies on third‑party technology providers for critical functions, and deficiencies in their performance, security practices, or Busey’s oversight could result in operational disruptions, service interruptions, or compliance failures. Inadequate management of these technology‑related risks—including risks arising from rapid adoption of artificial intelligence—could lead to operational inefficiencies, elevated costs, regulatory exposure, diminished competitiveness, or cybersecurity incidents, and could materially and adversely affect Busey’s financial condition and results of operations.

Acquisitions and strategic combinations are important to Busey’s growth strategy, but they involve significant regulatory, operational, financial, and strategic risks.

Acquisitions and strategic combinations offer opportunities to expand market presence, diversify revenue streams, and enhance operational scale. However, acquisitions inherently involve significant uncertainties and risks. Each transaction requires extensive evaluation of financial, operational, cultural, and regulatory factors, and Busey must successfully integrate acquired operations while maintaining service quality, customer relationships, and internal controls. The execution and integration challenges associated with acquisitions can affect multiple areas of the business. These risks may be heightened by differences in business models, product offerings, compliance programs, or organizational cultures between Busey and the acquired institution.

Regulatory Approvals and Conditions:

•Bank mergers and acquisitions require approvals from multiple regulators and may be delayed, conditioned, or denied.

•Approvals may impose restrictions on operations, capital, or business practices that reduce expected benefits.

•Timing uncertainty around regulatory processes can increase integration costs and execution risk.

Due Diligence Limitations and Legacy Liabilities:

•Pre‑closing diligence has inherent limits and may not identify all credit, operational, legal, tax, compliance, Bank Secrecy Act and Anti-Money Laundering regulations, fair lending, environmental, or cybersecurity issues.

•Post‑closing discovery of legacy risks, including litigation, contractual obligations, off‑balance‑sheet exposures, or regulatory remediation, can increase costs and reduce anticipated returns.

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Integration, Technology, Data, and Cybersecurity:

•Integrating systems, data, processes, models, and vendors is complex and may create operational disruptions or control gaps.

•Data conversions and core or digital platform migrations present risks related to data integrity, customer experience, and business continuity.

•Integration periods can heighten vulnerability to cyber incidents, fraud, and third‑party risk, including from new or inherited vendors.

Customer, Cultural, and Talent Retention:

•Harmonizing organizational cultures and compensation structures is challenging and may affect morale and productivity.

•Loss of key personnel or relationship managers, or deterioration in customer experience, can lead to client attrition and reduced business volumes.

•Retention and severance arrangements may increase expenses and dilute near‑term results.

Credit Quality, Valuation, and Purchase Accounting:

•Acquired portfolios may perform below expectations due to borrower‑specific, collateral, or concentration risks, among others.

•Fair value marks, credit loss allowances, and other purchase accounting adjustments may be larger than expected and affect earnings.

•Subsequent adverse performance could require additional provisions, write‑downs, or other valuation adjustments.

Financing, Capital, and Dilution:

•Transactions may require new debt or equity financing, increasing leverage, reducing liquidity, or diluting existing stockholder positions.

•Use of capital for acquisitions may reduce flexibility for other strategic investments or stockholder returns.

•Financing terms, covenants, or market conditions may limit post‑closing operating discretion.

Contractual, Legal, and Reputational Risk:

•Change‑of‑control provisions in customer, vendor, or employment contracts may trigger renegotiations, terminations, or penalties.

•Disputes, litigation, or claims related to the transaction or legacy activities may arise.

•Missteps in execution can damage brand and stakeholder trust, affecting customer acquisition and retention.

Internal Controls, Compliance, and Governance:

•Integrating control environments, policies, and risk management frameworks—including compliance with the Sarbanes-Oxley Act of 2002 and model risk management—may expose gaps or require material remediation efforts.

•Misalignment in risk appetite or governance practices can impair decision‑making and oversight.

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Synergies, Timing, and Strategic Fit:

•Cost savings, revenue synergies, and strategic benefits may be smaller than projected, take longer to realize, or not materialize.

•Management distraction during the transaction and integration phases can adversely affect ongoing operations and strategic execution.

•Market availability and pricing of targets may limit opportunities or require terms that reduce expected returns.

Goodwill and Intangible Assets:

•Acquisitions typically result in goodwill and other intangibles, which are subject to periodic assessments and potential impairment.

•Any impairment charges could negatively affect reported earnings.

The risks above can lead to higher operating and integration costs, reduced revenue, credit losses, increased provisions, system and control remediation expenses, customer attrition, litigation, regulatory burdens, capital strain, and dilution. Individually or in the aggregate, these factors could disrupt operations, reduce profitability, and impair capital and liquidity, any of which could materially and adversely affect Busey’s financial condition and results of operations.

Introduction of new products and services carries financial and strategic risks.

Busey strives to serve customers with a competitive product set and relevant services. While introducing new lines of business or innovative products and services supports this goal, these efforts carry inherent risks. Competitive pressures, underdeveloped markets, or unforeseen challenges can lead to delayed timelines and missed profitability targets. Significant investments in technology and marketing may not yield the desired outcomes. These risks may materially adversely affect Busey’s financial condition and results of operations.

The rapid evolution of digital assets and emerging regulatory frameworks introduces new competitive, compliance, and operational risks for Busey.

The rapid evolution of digital assets and emerging regulatory frameworks introduces new competitive, compliance, and operational risks for Busey. While Busey does not currently offer digital asset products such as cryptocurrencies or stablecoins, increasing global adoption of digital assets and distributed‑ledger technologies continues to influence customer expectations and competitive dynamics. Recent U.S. legislative and regulatory initiatives—including the enactment of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act in 2025, which establishes federal standards for payment stablecoin issuers, and ongoing Congressional efforts to finalize broader crypto‑market structure legislation such as the Digital Asset Market Clarity Act—signal a shift toward more comprehensive oversight of digital‑asset activities.

These regulatory developments may affect Busey even without offering digital‑asset products, including through increased expectations related to cybersecurity, anti‑money‑laundering controls, sanctions compliance, custody arrangements, data governance, and vendor‑risk management.

The competitive landscape is also evolving as traditional financial institutions, fintech companies, and technology firms leverage innovations such as stablecoin‑based payments, blockchain settlements, and digital‑wallet ecosystems. These developments may accelerate disintermediation risks or shift customer behavior toward alternative financial platforms that offer new capabilities, higher transaction speeds, or programmable payment features. To remain competitive, Busey must assess emerging technologies, invest in modern infrastructure, and maintain the flexibility to scale operational capabilities in response to changing market demand. Failure to do so could impede Busey’s ability to offer competitive products, attract and retain customers, or respond to strategic opportunities.

Inadequate oversight or adaptation to these developments could lead to increased operational complexity, reduced competitiveness, and financial impacts that materially and adversely affect Busey’s financial condition and results of operations.

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