Breaking Down First Busey Corporation (BUSE) Financial Health: Key Insights for Investors

You're looking at First Busey Corporation (BUSE) right now, trying to map its regional bank stability against a tough rate environment, and honestly, the Q3 2025 numbers show a clear split in the narrative. The good news is they're executing a smart balance sheet optimization, which drove net interest margin (NIM) up to 3.58% and helped deliver a strong quarterly net income of $57.1 million. That's a defintely solid performance, plus their Wealth Management assets under care hit $14.96 billion, showing fee income strength. But, you have to be a realist: the credit quality trend is shifting, with net charge-offs jumping sharply to nearly $5.85 million in Q3 2025, a crucial metric to watch as we head into 2026. So, the question isn't just about the 1.33% adjusted Return on Average Assets (ROAA); it's about whether their capital strength, with Common Equity Tier 1 Capital at 12.33%, can fully absorb the rising credit risk while the bank continues its strategic growth.

Revenue Analysis

You need to know where First Busey Corporation (BUSE) makes its money, especially with the recent acquisition and rate changes. The direct takeaway is this: First Busey Corporation's revenue engine is firing on both cylinders-lending and fee-based services-but the lending side, or Exploring First Busey Corporation (BUSE) Investor Profile: Who's Buying and Why?, is the dominant driver, and its growth is accelerating dramatically in 2025.

For the trailing twelve months (TTM) ending September 30, 2025, the company generated $\mathbf{\$583.91}$ million in total revenue, marking a strong $\mathbf{30.63\%}$ year-over-year growth. This is a defintely strong acceleration from the $\mathbf{3.25\%}$ growth seen in the full fiscal year 2024, showing the immediate impact of strategic moves like the CrossFirst Bank acquisition.

Primary Revenue Streams: The NII vs. Fee Split

As a regional bank, First Busey Corporation's revenue structure is classic: Net Interest Income (NII) and Noninterest Income (fee-based services). NII is the profit made from lending money (interest earned on loans and securities) minus the cost of funding those loans (interest paid on deposits). Historically, NII has accounted for about $\mathbf{71.4\%}$ of the company's total revenue, making it the primary source. In Q3 2025, this reliance was even more pronounced, driven by higher interest rates and a larger asset base.

Here's the quick math on the Q3 2025 revenue composition, which totaled $\mathbf{\$196.3}$ million:

What this table hides is the massive growth in NII, which jumped $\mathbf{88\%}$ year-over-year in Q3 2025. That's a huge spike, and it's mostly due to the CrossFirst acquisition closing and the higher yield on earning assets. The full-year 2025 revenue is expected to be around $\mathbf{\$728.31}$ million, reflecting this strong interest-driven performance.

Fee-Based Segments and Growth Drivers

While Net Interest Income is the muscle, the Noninterest Income segments provide critical diversification and stability. These fee-based businesses are less sensitive to interest rate fluctuations, offering a buffer against credit cycle shifts. First Busey Corporation splits this noninterest revenue across three main areas, which have seen significant boosts from the CrossFirst integration:

• Wealth Management: Hit a record high revenue in Q1 2025.
• Treasury Management Services: Income increased by $\mathbf{65.1\%}$ in Q2 2025 compared to Q1 2025, thanks to the new commercial services.
• Card Services and ATM Fees: Increased $\mathbf{31.6\%}$ in Q2 2025 over the prior quarter, largely from adding CrossFirst corporate card services.

The strategic move to acquire CrossFirst Bankshares, Inc. in the first quarter of 2025 has clearly accelerated revenue growth, particularly in the fee-based segments and through increased net interest income. The increase in noninterest income, even as a smaller portion of the total, is a positive sign for revenue quality. You want to see that fee income growing because it means the company is successfully cross-selling services like wealth management and payment technology solutions (FirsTech, Inc.) across its expanded footprint in states like Illinois, Missouri, Florida, and Indiana.

Profitability Metrics

You want to know if First Busey Corporation (BUSE) is making money efficiently, and the short answer is yes, they've staged a sharp recovery in 2025, but you need to watch the underlying operational engine. Their strategic moves in Q3 2025 have delivered strong profitability, especially when compared to the broader US banking sector.

The core of a bank's profitability is the Net Interest Margin (NIM) (the difference between what they earn on loans and pay on deposits). First Busey Corporation reported an adjusted NIM of 3.58% for the third quarter of 2025. This is a solid figure. For context, while large US banks are projected to hold an average NIM around 2.39% for Q3 2025, BUSE's result sits comfortably within the typical 3.5% to 4.5% range for regional and community banks, showing their core lending business is performing well.

Here's the quick math on their Q3 2025 performance, using Net Interest Income (NII) plus Noninterest Income as a proxy for Total Operating Revenue:

• Net Interest Income (Proxy for Gross Profit): $155.14 million
• Pre-Provision Net Revenue (PPNR) (Proxy for Operating Profit): $76.6 million
• Net Income: $57.1 million

Translating those raw numbers into margins gives us a clearer picture of their financial health, especially after a challenging start to the year. You can see the full breakdown of our analysis on the company's financial standing in Breaking Down First Busey Corporation (BUSE) Financial Health: Key Insights for Investors.

The trend in profitability is the most compelling story here. First Busey Corporation's net income has shown a clear, strong recovery throughout 2025, moving from a net loss of ($30.0 million) in Q1 2025 to net income of $47.4 million in Q2 2025, and then climbing to $57.1 million in Q3 2025. That's a defintely impressive turn, largely driven by operational efficiency gains.

Operational efficiency is where the management team earned their paychecks. The efficiency ratio (noninterest expense as a percentage of total revenue) improved to 58.5% in Q3 2025. This is a strong showing, comparing favorably to the expected Q3 2025 average of around 61.2% for major US banks. The improvement wasn't accidental; management intentionally ran off $794.6 million of high-cost, non-relationship deposits with a weighted average cost of 4.45%. This strategic move directly lowered their cost of funds and expanded the NIM, proving that disciplined cost management translates directly to higher profits. The key action here is to monitor if they can sustain this efficiency ratio below 60% as they continue to integrate their recent acquisition.

Debt vs. Equity Structure

You're looking at First Busey Corporation (BUSE)'s balance sheet to understand how they fund their growth, and the picture is clear: they lean heavily on equity, not debt. This conservative approach is typical for a well-managed regional bank, but it's still important to see the numbers. The key takeaway is that the company's leverage is very low compared to its peers, which provides a substantial buffer against economic downturns.

As of the third quarter of 2025, First Busey Corporation (BUSE) reported total stockholders' equity of approximately $2.449 billion. In contrast, total borrowings-the debt component-stood at just $272.971 million. This is a defintely solid capital base, and it's the kind of strength that lets a bank weather market volatility without panic. The quick math here shows a very low debt-to-equity (D/E) ratio (a leverage ratio showing how much a company's financing comes from debt versus equity) which is a strong indicator of financial stability.

Debt-to-Equity and Industry Comparison

The total debt-to-equity ratio for First Busey Corporation (BUSE) sits at a remarkably low 0.11. To put that into perspective, the average debt-to-equity ratio for US Regional Banks is around 0.5 as of November 2025. This means for every dollar of shareholder equity, First Busey Corporation (BUSE) uses only 11 cents of debt, while the average regional bank uses 50 cents. It's a significant difference that points to a conservative, well-capitalized strategy.

What this estimate hides is the composition of that debt. First Busey Corporation (BUSE) had no short-term borrowings as of September 30, 2025, meaning their debt is almost entirely long-term and structured. This includes:

• Long-term borrowings of $92.431 million
• Subordinated notes of $103.283 million
• Junior subordinated debt of $77.257 million

This long-term, no-short-term-debt structure gives the company predictability and less exposure to immediate interest rate risk. You can dive deeper into the ownership structure by Exploring First Busey Corporation (BUSE) Investor Profile: Who's Buying and Why?

Recent Capital Optimization Moves

First Busey Corporation (BUSE) has been actively managing its capital structure in 2025, focusing on optimization and extending maturity profiles. In May 2025, the company strategically refinanced $110 million of its 5.25% subordinated notes due in 2028 with new 5.125% subordinated notes that don't mature until 2031. This move reduces interest expense and pushes repayment risk further out. Also in May, the company issued $25 million in 8.25% Fixed-Rate Series B Non-Cumulative Perpetual Preferred Stock (a hybrid of debt and equity) to further bolster its capital base.

The company's credit profile remains strong, reflecting this disciplined approach. KBRA affirmed its senior unsecured debt rating at BBB+, its subordinated debt rating at BBB, and its short-term debt rating at K2 in May 2025, with a Stable Outlook on all long-term ratings. This is a clear signal from the rating agencies that First Busey Corporation (BUSE)'s balance between debt financing and equity funding is prudent, prioritizing capital strength and stability over aggressive leverage.

Liquidity and Solvency

You need to know if First Busey Corporation (BUSE) has the immediate cash to cover its short-term obligations, and the answer is yes, but you must look beyond the standard industrial ratios. For a bank holding company, liquidity is less about a high current ratio and more about capital strength and stable deposit funding. First Busey's Q3 2025 metrics show a strong, deliberate effort to optimize its funding structure, which is the real measure of its near-term financial health.

The traditional liquidity positions-Current and Quick Ratios-are less informative for a financial institution, but they still tell a story. The company reports a current ratio and quick ratio of approximately 0.90. For a non-bank, this sub-1.0 ratio would be a red flag, but for a bank, it's typical because loans (the core asset) are not considered 'current' in the same way inventory is. The real strength is in the quality of its capital and deposit base, which acts as the ultimate liquidity buffer.

Working capital, the difference between current assets and current liabilities, is better understood through the lens of regulatory capital for a bank. First Busey Corporation's capital ratios are robust, reflecting a solid ability to absorb unexpected losses and maintain liquidity. As of September 30, 2025, the Common Equity Tier 1 Capital grew to 12.33%, and the Tangible Common Equity to Tangible Assets ratio rose to a healthy 9.9%. That's a strong capital foundation, defintely a key strength.

• Common Equity Tier 1 Capital: 12.33% (as of 9/30/2025).
• Tangible Common Equity to Tangible Assets: 9.9% (as of 9/30/2025).

Looking at the cash flow statements gives you a clearer picture of how First Busey Corporation is managing its balance sheet in the current rate environment. The strategic focus is on reducing high-cost funding. In the third quarter of 2025, the company executed a targeted reduction of $794.6 million in high-cost, non-relationship deposits, which included a reduction of $228.2 million in brokered deposits. This action directly lowers the cost of funds, improving future operating cash flow.

Here's the quick math on cash flow trends: Trailing Twelve Months (TTM) Cash from Investing Activities was a significant outflow of approximately $1.12 billion, reflecting investments in the loan and securities portfolios, plus the CrossFirst acquisition. However, the company reported a general cash flow inflow of approximately $170.3 million in Q3 2025, which helps bolster overall liquidity, plus they expect another $90.5 million in cash flows from maturing securities in Q4 2025. This shows a clear, active management of the investment portfolio to generate near-term liquidity.

The key liquidity strengths are not in the current ratio, but in the deliberate, strategic management of the balance sheet. The reduction in expensive deposits and the strong capital ratios show a bank positioning itself for stability. The main opportunity here is that this balance sheet optimization should translate into better net interest margins (NIM) and, eventually, stronger operating cash flow. To dig deeper into the drivers of these strategic moves, you should check out Exploring First Busey Corporation (BUSE) Investor Profile: Who's Buying and Why?

Valuation Analysis

You're looking at First Busey Corporation (BUSE) and wondering if the current price reflects its true value. Based on key metrics in November 2025, the stock appears undervalued from a fundamental perspective, even though its trailing Price-to-Earnings (P/E) ratio looks high compared to peers. The market is defintely pricing in some near-term risks, but the long-term potential looks compelling.

The stock is trading near the lower end of its recent range. Over the last 12 months, First Busey Corporation (BUSE) has traded between a 52-week low of $18.40 and a 52-week high of $28.30. With the stock price currently hovering around the $22.40 to $23.16 range, it sits closer to the low, suggesting a potential entry point if you believe the headwinds are temporary.

Is First Busey Corporation (BUSE) Overvalued or Undervalued?

The valuation picture is mixed, which is common in today's market, but the core data points toward undervaluation. Here's the quick math: the discounted cash flow (DCF) fair value estimate is a staggering $51.05, suggesting a significant discount to the current price. Still, you need to weigh that against the relative multiples.

The Price-to-Book (P/B) ratio is a critical measure for banks, comparing the stock price to the company's net asset value. First Busey Corporation (BUSE)'s P/B ratio is approximately 0.8x, which is below 1.0. Generally, a P/B below 1.0 suggests the market values the company at less than the value of its assets, indicating a potential undervaluation. Its Price-to-Earnings (P/E) ratio, however, tells a different story on its own.

Here is a snapshot of the key valuation multiples as of late 2025:

The high trailing P/E of 20.6x is a red flag, but the forward P/E of 9.00x suggests analysts expect earnings per share (EPS) to more than double in the coming year. That's a huge forecast-a 43.1% annual earnings growth is expected. This projected growth is what keeps the DCF value so high and is the core of the bull case.

Dividend Health and Analyst View

The dividend is a bright spot for income-focused investors. First Busey Corporation (BUSE) offers an attractive forward dividend yield of approximately 4.51%. The company pays an annualized dividend of $1.00 per share.

You need to watch the payout ratio, which is the percentage of earnings paid out as dividends. The trailing twelve-month (TTM) payout ratio is high at around 86.96%. This is a bit stretched, but the forward payout ratio is much healthier at 41.77%. This again hinges on the expected earnings growth materializing.

Wall Street analysts are cautious realists right now, giving the stock a consensus Hold rating. Out of seven brokerages, the ratings break down to four Hold and three Buy recommendations.

• Consensus Rating: Hold
• Consensus Price Target: $26.33
• Implied Upside: ~17.82% from the current price

The average price target of $26.33 suggests a decent upside, but it's still far from the DCF estimate. The market is clearly waiting for proof that the high expected earnings growth will actually happen. For a deeper dive into who is buying and why, you should read Exploring First Busey Corporation (BUSE) Investor Profile: Who's Buying and Why?

Next Step: Finance: Monitor the Q4 2025 earnings release for any changes to the 2026 EPS forecast, as the valuation hinges on that forward P/E of 9.00x.

Risk Factors

You're looking for a clear-eyed view of First Busey Corporation (BUSE), and the story is one of a bank navigating a major acquisition while managing credit and funding risks. The short takeaway is this: the integration of CrossFirst Bank is a near-term headwind, but the most pressing financial risk to watch now is the sudden uptick in credit losses.

Honestly, the biggest internal challenge is managing the fallout and integration of the CrossFirst acquisition. While the merger is meant to drive growth, it initially hit the bottom line hard. First Busey Corporation (BUSE) reported a net loss of $(30.0) million, or $(0.44) per diluted common share, in the first quarter of 2025, largely due to one-time acquisition expenses and a strategic balance sheet repositioning that involved net securities losses. Here's the quick math: total noninterest expense jumped 62.7% compared to the first quarter of 2024. Still, management anticipates annual pre-tax expense synergies of $25.0 million, with 50% of that expected to be realized in 2025, which should help offset those initial costs.

The external and operational risks boil down to two main areas: asset quality and interest rate sensitivity. For a bank, credit quality is everything, and this is where a new risk has emerged. Net charge-offs-loans management believes will not be collected-spiked to nearly $5.85 million in the third quarter of 2025. To be fair, that's a massive jump from just $247,000 in the same quarter a year prior, and it casts a fresh spotlight on the underlying credit risk in the loan portfolio. This is defintely a metric to monitor closely.

• Integration Risk: Realizing the full $25.0 million in expected synergies from the CrossFirst acquisition.
• Credit Risk: Managing the sharp increase in net charge-offs to $5.85 million in Q3 2025.
• Interest Rate Risk: Sensitivity to rate cuts, where a -100 basis point parallel rate shock is modeled to decrease Net Interest Income (NII) by 1.3% over the next year.

On the interest rate front, the company has been proactive. They've been working hard to shed expensive funding sources, a key action. They intentionally ran off $794.6 million of high-cost, non-relationship deposits-deposits with a weighted average cost of 4.45%-during the third quarter of 2025 alone. This action helped push their total deposit cost of funds down from 2.21% in Q2 2025 to 2.15% in Q3 2025. Plus, they're using off-balance sheet hedging and embedding rate protection in new loan originations to stabilize NII in a potentially lower rate environment.

The market also still has valuation concerns. Despite improving adjusted financial metrics-like an adjusted Return on Average Assets (ROAA) of 1.33% in Q3 2025-some analysts still see the stock trading roughly 49% above its fair value, suggesting a risk of a valuation correction if momentum slows. You can dive deeper into who is currently holding the stock and why its valuation is debated by reading Exploring First Busey Corporation (BUSE) Investor Profile: Who's Buying and Why?

Here is a summary of the key financial risks and the company's direct mitigation actions as of the 2025 fiscal year:

The core action for you is to watch the credit quality trend in the next quarter's report; if the net charge-off number continues to climb, the risk narrative shifts from integration management to asset quality erosion.

Growth Opportunities

The growth story for First Busey Corporation (BUSE) in 2025 is defintely a tale of integration and balance sheet optimization, driven primarily by the transformative CrossFirst Bankshares acquisition. Your near-term opportunity hinges on management's ability to capture the projected cost savings while expanding the newly combined commercial banking footprint.

The biggest lever for future growth is the acquisition of CrossFirst, which was completed on March 1, 2025, creating a premier commercial bank spanning ten states. This move immediately broadened First Busey Corporation's market reach, but the real financial payoff comes from the expected operational efficiencies (synergies). Management anticipates annual pre-tax expense synergies of $25.0 million from this deal, and they are on track to realize 50% of that amount during 2025. That's a direct boost to the bottom line.

Future Revenue and Earnings Estimates

When you look at the consensus estimates for the full fiscal year 2025, the impact of the acquisition and subsequent balance sheet work is clear, though analysts still show a range of outcomes. For the full year, the consensus revenue estimate sits around $718.9 million. Earnings per Share (EPS) projections are more volatile, but the consensus is approximately $2.48 per share for 2025. To be fair, this is a significant jump from the prior year, but still reflects some pressure from the interest rate environment.

Here's the quick math on recent performance: First Busey Corporation's actual third-quarter 2025 results showed revenue of $196.3 million and Non-GAAP EPS of $0.64, both beating analyst consensus estimates. This strong Q3 performance, coupled with an improved Net Interest Margin (NIM) of 3.58%, suggests the integration is working and the core lending business is holding up.

Strategic Initiatives and Competitive Edge

Beyond the acquisition, management is focused on a disciplined organic growth strategy and smart balance sheet management. They are actively reducing reliance on high-cost funding, having cut over $794.6 million in high-cost, non-relationship deposits in Q3 2025 alone. This is a critical move to lower the overall cost of funds and support future Net Interest Margin expansion.

First Busey Corporation also maintains a key competitive advantage through its diverse fee-income streams, which provide a buffer against interest rate fluctuations. This is not just a bank; it's a full-service financial partner. Exploring First Busey Corporation (BUSE) Investor Profile: Who's Buying and Why?

The noninterest income segment is a major strength, contributing 67.9% of total noninterest income (excluding securities gains/losses) in Q3 2025. This income is driven by three main areas:

• Wealth Management: Record revenue and a platform with $13.68 billion in assets under care.
• FirsTech, Inc.: The company's proprietary payment technology solutions.
• Treasury Management: Essential services for commercial clients.

The focus on these non-lending services positions the company well for sustained growth, even if loan demand softens. This diversification is a major structural advantage over less-complex regional banks.