TRUST PREFERRED DEBENTURES

12 Months Ended

Dec. 31, 2023

The Company formed Midland Trust, a statutory trust under the Delaware Statutory Trust Act. Midland Trust issued a pool of $10.0 million of floating rate cumulative trust preferred securities with a liquidation amount of $1,000 per security. The Company issued $10.3 million of subordinated debentures to the Midland Trust in exchange for ownership of all the common securities of the Midland Trust.

In addition, the Company assumed the obligations of subordinated debentures in conjunction with the acquisitions of Grant Park Bancshares, Inc., Love Savings Holding Company, and Centrue Financial Corporation. The subordinated debentures were issued to Grant Park Statutory Trust I, Love Savings/Heartland Capital Trust III, Love Savings/Heartland Capital Trust IV and Centrue Statutory Trust II and were recorded by the Company at fair value at the acquisition date with the discount amortizing into interest expense over the life of the liability.

The Company is not considered the primary beneficiary of the trusts; therefore, the trusts are not consolidated in the Company’s financial statements, but rather the subordinated debentures, net of unamortized purchase discount, are shown as liabilities. The Company’s investments in the common stock of the trusts, totaling $1.9 million, are included in other assets.

The following table summarizes the terms of each issuance:


							At December 31, 2023				At December 31, 2022
(dollars in thousands)	Date of issuance	Issuance Amount		Shares Issued	Variable Rate	Maturity Date	Carrying Amount		Rate		Carrying Amount		Rate
Grant Park Statutory Trust I	12/19/2003	$	3,093	3,000	SOFR plus 2.85%	1/23/2034	$	2,454	8.52	%	$	2,410	7.26	%
Midland States Preferred Securities Trust	3/26/2004	10,310		10,000	SOFR plus 2.75%	4/23/2034	10,284		8.42	%	10,282		7.07	%
Centrue Statutory Trust II	4/22/2004	10,310		10,000	SOFR plus 2.65%	6/17/2034	8,468		8.32	%	8,358		7.39	%
Love Savings/Heartland Capital Trust III	11/30/2006	20,619		20,000	SOFR plus 1.75%	12/31/2036	15,110		7.42	%	14,870		6.52	%
Love Savings/Heartland Capital Trust IV	6/6/2007	20,619		20,000	SOFR plus 1.47%	9/6/2037	14,300		7.13	%	14,055		6.20	%
Total trust preferred debentures		$	64,951				$	50,616			$	49,975

For all of the debentures mentioned above, interest is payable quarterly. The debentures and the common securities issued by each of the trusts are redeemable in whole or in part on dates each quarter at the redemption price plus interest accrued to the redemption date, as specified in the trust indenture document. The debentures are also redeemable in whole or in part from time to time upon the occurrence of “special events” defined within the indenture document. Subject to certain exceptions and limitations, the Company may, from time to time, defer subordinated debenture interest payments, which would result in a deferral of distribution payments on the related trust preferred securities, and, with certain exceptions, prevent the Company from declaring or paying cash distributions on common stock or debt securities that rank pari passu or junior to the subordinated debentures.

All of the trust preferred debentures above may be included in Tier 1 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.