FIRST BUSEY CORP /NV/BUSE
FIRST BUSEY CORP /NV/ Income Taxes Disclosure
NOTE 13. INCOME TAXES
Income Tax Expenses
The following table presents components of Busey’s income taxes included in the accompanying Consolidated Statements of Income:
| Years Ended December 31, | |||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Income taxes | |||||||||||||||||
| Current expense: | |||||||||||||||||
| Federal | $ | 33,596 | $ | 26,696 | $ | 20,139 | |||||||||||
| State | 9,708 | 11,533 | 14,120 | ||||||||||||||
| Deferred expense: | |||||||||||||||||
| Federal | (579) | 1,561 | (1,557) | ||||||||||||||
| State | 8,653 | (177) | (1,363) | ||||||||||||||
| Total income taxes | $ | 51,378 | $ | 39,613 | $ | 31,339 | |||||||||||
The following table provides a reconciliation of federal and state income taxes at statutory rates to the income taxes included in the accompanying Consolidated Statements of Income:
| Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||
Income taxes at federal statutory rate | $ | 39,194 | 21.0 | % | $ | 32,194 | 21.0 | % | $ | 32,320 | 21.0 | % | |||||||||||||||||||||||
State and local income taxes (net of federal income tax effect)1 | 14,470 | 7.8 | % | 10,890 | 7.1 | % | 10,072 | 6.5 | % | ||||||||||||||||||||||||||
Tax credit investments: | |||||||||||||||||||||||||||||||||||
Low income housing tax credits | (7,954) | (4.3) | % | (5,657) | (3.7) | % | (11,243) | (7.3) | % | ||||||||||||||||||||||||||
New markets tax credits | (9,008) | (4.8) | % | (9,474) | (6.2) | % | (2,416) | (1.6) | % | ||||||||||||||||||||||||||
Other credits | (1,589) | (0.9) | % | (883) | (0.6) | % | (1,306) | (0.8) | % | ||||||||||||||||||||||||||
Nontaxable or nondeducitble items: | |||||||||||||||||||||||||||||||||||
Tax-exempt interest, net | (2,148) | (1.2) | % | (1,141) | (0.7) | % | (1,493) | (1.0) | % | ||||||||||||||||||||||||||
Compensation | 3,079 | 1.7 | % | 407 | 0.3 | % | (217) | (0.1) | % | ||||||||||||||||||||||||||
Other nontaxable or nondeductible | 546 | 0.2 | % | (381) | (0.3) | % | (793) | (0.5) | % | ||||||||||||||||||||||||||
Other items: | |||||||||||||||||||||||||||||||||||
Investment in partnerships | 14,692 | 7.9 | % | 13,244 | 8.6 | % | 5,714 | 3.7 | % | ||||||||||||||||||||||||||
Other | 96 | 0.1 | % | 414 | 0.3 | % | 701 | 0.5 | % | ||||||||||||||||||||||||||
Income taxes and effective income tax rate | $ | 51,378 | 27.5 | % | $ | 39,613 | 25.8 | % | $ | 31,339 | 20.4 | % | |||||||||||||||||||||||
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1.State taxes in Illinois for 2025, 2024, and 2023 made up the majority (greater than 50%) of the tax effect in this category.
Deferred Income Taxes
Net deferred taxes, reported in other assets or other liabilities on Busey’s Consolidated Balance Sheets, include the deferred tax assets and liabilities presented in the following table:
| As of December 31, | |||||||||||
| (dollars in thousands) | 2025 | 2024 | |||||||||
| Deferred taxes | |||||||||||
| Deferred tax assets: | |||||||||||
| ACL | $ | 70,282 | $ | 23,685 | |||||||
| Unrealized loss on cash flow hedge | 2,744 | 7,256 | |||||||||
| Unrealized losses on securities available for sale, net | 43,634 | 61,479 | |||||||||
| Unrealized losses on securities held to maturity | 6,335 | 8,068 | |||||||||
| Stock-based compensation | 8,089 | 6,431 | |||||||||
| Purchase accounting adjustments | 3,695 | 2,076 | |||||||||
| Accrued vacation | 713 | 493 | |||||||||
| Lease liabilities | 8,016 | 2,951 | |||||||||
| Employee costs | 12,359 | 5,725 | |||||||||
| Tax credits | 2,873 | — | |||||||||
| State net operating loss carryovers | 712 | — | |||||||||
| Other | 1,931 | — | |||||||||
| Deferred tax assets before valuation allowances | 161,383 | 118,164 | |||||||||
| Valuation allowances | (712) | — | |||||||||
| Total deferred tax assets | 160,671 | 118,164 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Basis in premises and equipment | (6,716) | (2,419) | |||||||||
| Affordable housing partnerships and other investments | (8,920) | (8,011) | |||||||||
| Purchase accounting adjustments | (927) | (1,022) | |||||||||
| Mortgage servicing assets | (872) | (745) | |||||||||
| Basis in core deposit, customer intangible assets, and asset purchase goodwill | (20,427) | (3,325) | |||||||||
| Deferred loan origination costs | (1,836) | (3,317) | |||||||||
| Right of use assets | (7,427) | (2,835) | |||||||||
| Unrealized gain on equity securities | (1,268) | (172) | |||||||||
| Other | (900) | (856) | |||||||||
| Total deferred tax liabilities | (49,293) | (22,702) | |||||||||
| Net deferred tax asset | $ | 111,378 | $ | 95,462 | |||||||
Management has determined that it is more likely than not that the net deferred tax assets included in the accompanying Consolidated Financial Statements will be fully realized with the exception of Kansas net operating losses acquired as part of the CrossFirst acquisition. Prior to acquisition, CrossFirst generated $20.5 million of Kansas net operating losses from tax years 2019 through 2025, which are indefinitely lived. As of December 31, 2025, Management has determined that it is more likely than not that these net operating losses will not be realized due to the lack of profitability reported by the entities included in the Kansas filing group. Based on this determination, Busey established a $0.7 million valuation allowance against the acquired Kansas state net operating losses for the year ended December 31, 2025. No valuation allowance was required for any deferred tax assets as of December 31, 2024.
Income Tax Payments
Income tax payments by jurisdiction, excluding payments for tax credit investments, are presented in the following table:
| Years Ended December 31, | |||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
Income tax payments by jurisdiction | |||||||||||||||||
Federal | $ | 16,794 | $ | 11,200 | $ | 18,300 | |||||||||||
Illinois1 | * | * | 5,240 | ||||||||||||||
Other | 4,115 | 1,707 | 1,868 | ||||||||||||||
Total income tax payments | $ | 20,909 | $ | 12,907 | $ | 25,408 | |||||||||||
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1.The amount of income taxes paid during the years ended December 31, 2025 and 2024, does not meet the five percent disaggregation threshold.
For additional information about Busey’s accounting policies related to income taxes, see “Income Taxes” in “Note 1. Significant Accounting Policies.”
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.