Executive Summary

Strong quarter following CrossFirst integration: adjusted diluted EPS rose to $0.63 vs $0.57 in Q1; GAAP diluted EPS was $0.52 . Net interest margin expanded 33 bps QoQ to 3.49% (3.33% adjusted) on higher loan yields and funding optimization .
Versus Wall Street: Adjusted EPS modestly beat S&P Global consensus ($0.63 vs $0.624), and revenue of ~$199.1M* topped ~$193.4M*; focus shifts to sustaining NIM while deposit costs normalize (beta guided to 45–50%) . Values retrieved from S&P Global.*
Funding mix improvement and capital actions: brokered balances cut by ~$369M with $353.6M remaining (2.2% of deposits); $125M sub debt redeemed using proceeds from 8.25% Series B preferred issued in May .
Integration progressing: 50% of identified $25M annual cost saves targeted for 2025 and 100% in 2026; adjusted efficiency ratio improved to 55.3% (vs 58.7% in Q1) .
Watch items: elevated noninterest expense due to integration, medical office net charge-off of $12.9M, and Illinois franchise tax inquiry escalated to an administrative hearing (preliminary claim >$28M), which management intends to vigorously contest .

What Went Well and What Went Wrong

What Went Well

NIM expansion and earnings power: Net interest margin rose to 3.49% (3.33% adjusted), driven by +54 bps loan yield, +8 bps purchase accretion, and lower borrowing costs; adjusted EPS hit $0.63, adjusted ROATCE 13.61% .
Funding optimization: Brokered deposits cut by $368.6M in Q2, with brokered at 2.2% of deposits; deposit cost of funds at 2.21% with beta expected to normalize to 45–50% .
Integration milestones and scale: Bank merger completed June 20; management notes “transformational partnership” expanding to 78 locations across 10 states and enhancing offerings in wealth and payments .

What Went Wrong

Higher operating expense during integration: Total noninterest expense rose 14.1% QoQ and 68.4% YoY; adjusted noninterest expense increased to $106.6M (28.6% QoQ) as systems and personnel costs ramped .
Credit costs: Net charge-offs were $12.9M, primarily one legacy medical office credit; provision included $4.7M for unfunded commitments (with $4.0M model adjustment) .
Legal overhang: Illinois franchise tax matter escalated with preliminary ISOS claim estimation >$28M; management disputes methodology and cannot reasonably estimate loss; potential future liabilities could be material if accrual becomes necessary .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Net Interest Income ($USD Millions)	$82.532	$103.731	$153.183
Operating Revenue (Non-GAAP, $USD Millions)	$116.311	$140.722	$192.049
Diluted EPS (GAAP, $)	$0.47	$(0.44)	$0.52
Adjusted Diluted EPS (Non-GAAP, $)	$0.53	$0.57	$0.63
Net Interest Margin (Tax-Equivalent, %)	3.03%	3.16%	3.49%
Adjusted NIM (%)	3.00%	3.08%	3.33%
Efficiency Ratio (%)	62.64%	77.13%	63.91%
Adjusted Efficiency Ratio (%)	60.89%	58.70%	55.30%
Pre-Provision Net Revenue ($USD Millions)	$40.682	$28.692	$64.216
Adjusted PPNR ($USD Millions)	$42.617	$54.718	$80.816

Consensus vs Actual (S&P Global, standardized):

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue Consensus Mean ($USD Millions)*	116.091	140.772	193.392
Revenue Actual ($USD Millions)*	115.526	72.635	199.072
Primary EPS Consensus Mean ($)*	0.51	0.53	0.624
Primary EPS Actual ($)*	0.53	0.57	0.63

Values retrieved from S&P Global.*

Segment noninterest income ($USD Thousands):

Component	Q2 2024	Q1 2025	Q2 2025
Wealth management fees	$15,917	$17,364	$16,777
Payment technology solutions	$5,915	$5,073	$4,956
Treasury management services	$2,145	$3,017	$4,981
Card services & ATM fees	$3,430	$3,709	$4,880
Other svc charges on deposits	$2,321	$1,533	$1,513
Mortgage revenue	$478	$329	$776
BOLI income	$1,442	$1,446	$1,745
Net securities gains (losses)	$(353)	$(15,768)	$5,997
Other noninterest income	$2,131	$4,520	$3,238
Total noninterest income	$33,703	$21,223	$44,863

Key KPIs and balance metrics:

KPI	Q2 2024	Q1 2025	Q2 2025
Core deposits / total deposits (%)	96.42%	89.73%	92.52%
Deposit cost of funds (%)	—	1.91%	2.21%
Brokered deposits ($USD Millions)	$43.089	$722.224	$353.6
Wealth AUC ($USD Billions)	$13.02	$13.68	$14.10
CET1 ratio (estimated) (%)	13.20%	12.00%	12.22%
NPA / total assets (%)	0.08%	0.31%	0.31%
NPLs / portfolio loans (%)	0.11%	0.39%	0.40%
TCE / tangible assets (%)	8.30%	8.83%	9.27%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Deposit beta normalization	2025	45–50% of Fed Funds upper limit (Q1)	45–50% of Fed Funds upper limit (Q2)	Maintained
Total cost of deposits range	2H25	—	2.00–2.15% expected in 2H25	New detail
NII rate sensitivity	+100 bps shock	~+1.8% (Q1)	+2.8% over next 12 months	Raised
Brokered deposits reduction	Q3 2025	—	Projected additional ~$155M reduction	New
Expense synergies	2025–2026	$25M annual; 50% FY25 / 100% FY26 (Q1)	$25M annual; 50% FY25 / 100% FY26 (Q2)	Maintained
Dividend (common)	Q2 2025	$0.25 (Q1 paid)	$0.25 paid in Q2	Maintained
Capital actions	2025	—	Redeem $125M sub notes; issued 8.6M Series B depositary shares (8.25%); repurchased 1.012M shares	Implemented

Earnings Call Themes & Trends

Note: No public earnings call transcript was posted; IR provided the earnings release and investor presentation only .

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
M&A integration	Q1: CrossFirst closed 3/1; bank merger planned 6/20; early NIM lift; TBV accretive	Bank merger completed 6/20; systems conversion; synergies tracking; 78 locations	Improving execution
Deposit costs & beta	Q1: cost of funds up to 1.91%; beta to normalize at 45–50%	Cost of funds 2.21%; still elevated from mix; normalize to 45–50% beta; 2H25 cost guided 2.00–2.15%	Normalization path
NIM drivers	Q1: +21 bps QoQ; loan yields, accretion, lower borrowings	+33 bps QoQ; loan yields (+54 bps), accretion (+8), lower borrowings (+4), offset by deposit cost (-25)	Positive
Wealth & AUC	Q1: AUC $13.68B; record revenue	AUC $14.10B; segment revenue $17.0M; 45%+ margin; new MD hires	Growing
Payments (FirsTech)	Q1: modest decline; strategy reset underway	Revenue $5.4M LTM $21.7M; pipeline building; mix shift to integrated receivables/merchant/online	Repositioning
Regulatory/legal	Q1: regulatory expenses noted	ISOS franchise tax hearing; preliminary >$28M claim disputed; no accrual	Elevated risk monitoring

Management Commentary

“This quarter's bank merger and data conversion represents a significant milestone...This transformational partnership allows us to enhance Busey’s rich 157-year legacy…” — Van A. Dukeman, Chairman & CEO .
On margin drivers: “Balance sheet optimization continued, achieving substantial improvement in net interest margin (+33 bps QoQ excluding purchase accretion)...initiatives to reduce high cost non-relationship funding.” .
On synergies: “Annual pre-tax expense synergy estimates...remain on track at $25.0 million, and we expect 50%...in 2025 and 100% in 2026.” .

Q&A Highlights

No public call transcript available; IR hosted release and investor presentation only . Management materials clarified: NIM bridge components and expected deposit beta normalization ; funding optimization and brokered reduction plan ; synergy timing and expense run-rate progress ; capital actions (sub debt redemption; preferred issuance) .

Estimates Context

Q2 2025: Adjusted EPS modestly beat S&P Global consensus ($0.63 vs $0.624*) and revenue beat (~$199.1M* vs ~$193.4M*). Q1 2025 and Q4 2024 adjusted EPS were above consensus ($0.57 vs $0.53*; $0.53 vs $0.51*). Values retrieved from S&P Global.*
Note: S&P Global standardized “Revenue” may differ from company’s reported “Operating revenue” ($192.0M in Q2) due to methodology; investors should anchor comparisons consistently .

Key Takeaways for Investors

Margin/Funding: NIM expansion to 3.49% with a path to deposit cost normalization (beta 45–50%) and further brokered run-off supports NII resilience into 2H25 .
Integration/Synergies: Cost saves cadence (50% in FY25; 100% in FY26) and efficiency ratio improvements (55.3% adjusted) underpin operating leverage .
Capital/Actions: Preferred issuance and sub debt redemption reduce future interest costs; CET1 at ~12.22% provides flexibility alongside buybacks and dividend continuity .
Credit Quality: NPAs stable at 0.31% of assets; watch medical office credit charge-off and classified asset trend (7.7% of capital) amid CRE seasoning/paydowns .
Legal Watch: Illinois franchise tax hearing introduces headline risk; no accrual pending reasonable estimate, but potential future liabilities could be material if required .
Fee Mix: Wealth AUC growth to $14.10B and treasury/card services scale from CrossFirst support diversified noninterest income even as payments strategy resets .
Near-term trade: Positive setup on NIM/funding optimization and synergy delivery; monitor deposit cost trajectory and any developments on the ISOS matter for sentiment .