XML 35 R19.htm IDEA: XBRL DOCUMENT v3.24.0.1
Subordinated Debentures and Notes
 12 Months Ended
Dec. 31, 2023
Subordinated Borrowings [Abstract]  
Subordinated Debentures and Notes SUBORDINATED DEBENTURES AND NOTES
The following table summarizes the Company’s subordinated debentures at December 31:
AmountMaturity DateInitial Call Date (1)Interest Rate
($ in thousands)20232022
EFSC Clayco Statutory Trust I$3,196 $3,196 December 17, 2033December 17, 2008
Floats @ 3 month term SOFR + 2.85%
EFSC Capital Trust II5,155 5,155 June 17, 2034June 17, 2009
Floats @ 3 month term SOFR + 2.65%
EFSC Statutory Trust III11,341 11,341 December 15, 2034December 15, 2009
Floats @ 3 month term SOFR + 1.97%
EFSC Clayco Statutory Trust II4,124 4,124 September 15, 2035September 15, 2010
Floats @ 3 month term SOFR + 1.83%
EFSC Statutory Trust IV10,310 10,310 December 15, 2035December 15, 2010
Floats @ 3 month term SOFR + 1.44%
EFSC Statutory Trust V4,124 4,124 September 15, 2036September 15, 2011
Floats @ 3 month term SOFR + 1.60%
EFSC Capital Trust VI14,433 14,433 March 30, 2037March 30, 2012
Floats @ 3 month term SOFR + 1.60%
EFSC Capital Trust VII4,124 4,124 December 15, 2037December 15, 2012
Floats @ 3 month term SOFR + 2.25%
JEFFCO Stat Trust I 7,732 7,732 February 22, 2031February 22, 2011
Fixed @ 10.20%
JEFFCO Stat Trust II (2)4,604 4,550 March 17, 2034March 17, 2009
Floats @ 3 month term SOFR + 2.75%
Trinity Capital Trust III (2)5,473 5,406 September 8, 2034September 8, 2009
Floats @ 3 month term SOFR + 2.70%
Trinity Capital Trust IV 10,310 10,310 November 23, 2035August 23, 2010
Fixed @ 6.88%
Trinity Capital Trust V (2)8,195 8,032 December 15, 2036September 15, 2011
Floats @ 3 month term SOFR + 1.65%
Total junior subordinated debentures93,121 92,837 
5.75% Fixed-to-floating rate subordinated notes
63,250 63,250 June 1, 2030June 1, 2025
Fixed @ 5.75% until
June 1, 2025, then floats @ Benchmark rate (3 month term SOFR) + 5.66%
Debt issuance costs(387)(654)
Total fixed-to-floating rate subordinated notes62,863 62,596 
Total subordinated debentures and notes$155,984 $155,433 
(1) Callable each quarter after initial call date.
(2) Purchase accounting adjustments are reflected in the balance and also impact the effective interest rate.

The Company has 13 unconsolidated statutory business trusts. These trusts issued preferred securities that were sold to third parties. The sole purpose of the trusts was to invest the proceeds in junior subordinated debentures of the Company that have terms identical to the trust preferred securities. The subordinated debentures, which are the sole assets of the trusts, are subordinate and junior in right of payment to all present and future senior and subordinated indebtedness and certain other financial conditions of the Company. The Company fully and unconditionally guarantees each trust’s securities obligations. Under current regulations, the trust preferred securities are included in tier 1 capital for regulatory capital purposes, subject to certain limitations.

The trust preferred securities are redeemable in whole or in part on or after their respective call dates. Mandatory redemption dates may be shortened if certain conditions are met. The securities are classified as subordinated debentures in the Company’s consolidated balance sheets. Interest on the subordinated debentures held by the trusts is recorded as interest expense in the Company’s Consolidated Statements of Income. The Company’s investment in these trusts of $2.9 million at December 31, 2023 is included in other investments in the consolidated balance sheets. The Company has fixed the interest rate on a portion of its junior subordinated debentures through a series of
interest rate swaps. For further discussion of the interest rate swaps and the corresponding terms, see “Note 6 – Derivative Financial Instruments.”

On November 1, 2016, the Company issued $50 million of fixed-to-floating rate subordinated notes. The notes initially bore a fixed annual interest rate of 4.75%, with interest payable semiannually in arrears on May 1 and November 1 of each year, commencing May 1, 2017. On November 1, 2021, the Company redeemed the $50.0 million of subordinated debentures at par. A loss of $0.7 million on the redemption was recognized for the write-off of unamortized debt issuance costs.
On May 21, 2020, EFSC issued $63.3 million of 5.75% fixed-to-floating rate subordinated notes due in 2030 in a public offering (the “2030 Notes”). From and including the date of issuance to, but excluding, June 1, 2025, the 2030 Notes will bear interest at a rate equal to 5.75% per annum, payable semiannually in arrears on each June 1 and December 1. From and including June 1, 2025 to, but excluding, the maturity date or the date of earlier redemption, the 2030 Notes will bear interest at a floating rate per annum equal to a benchmark rate (which is expected to be three-month term SOFR (as defined in the Indenture, dated May 21, 2020, between EFSC and U.S. Bank National Association, as trustee, and subsequent First Supplemental Indenture)), plus 566.0 basis points, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, commencing on September 1, 2025. Notwithstanding the foregoing, in event that the benchmark rate is less than zero, then the benchmark rate shall be deemed to be zero. The Company’s obligation to make payments of principal and interest on the notes is subordinate and junior in right of payment to all of its senior debt. Current regulatory guidance allows for this subordinated debt to be treated as tier 2 regulatory capital for the first five years of its term, subject to certain limitations, and then phased out of tier 2 capital pro rata over the next five years.