Terms

Series

Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series C

Liquidation Preference

$25.00

Coupon Rate

7%

Rate Type

Fixed

Annual Dividend

$1.75

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

August 20, 2025

First Call Price

$25.00

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness, Other Non-Equity Claims, Subsidiary Creditors And Depositors (Structural Subordination); Pari Passu With: Series A Preferred Stock, Other Parity Preferred Stock; Senior To: Common Stock, Junior Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.025

Shares Offered

4,400,000

Prospectus Summary

First Midwest Bancorp, Inc. is offering 4,400,000 depositary shares, each representing a 1/40th interest in a share of its Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series C, priced at $25 per depositary share (liquidation preference of $1,000 per underlying preferred share). The Series C pays a fixed 7.000% per annum coupon ($1.75 annually / $0.4375 quarterly per depositary share) and is first callable on August 20, 2025. Critically, dividends are non-cumulative — if the board does not declare a dividend in any quarter, that payment is permanently lost and holders have no claim to it in future periods. The Series C Preferred Stock ranks senior to First Midwest's common stock and other junior equity, and pari passu with its Series A Preferred Stock, but is junior to all existing and future debt obligations and non-equity claims — approximately $17.3 billion in liabilities as of March 31, 2020. Because First Midwest is a bank holding company, the preferred is structurally subordinated to all obligations of its principal subsidiary, First Midwest Bank, whose depositors and creditors have priority over holding company creditors. A regulatory capital treatment event (loss of Tier 1 Capital qualification due to a change in law or regulation) gives the issuer the right to redeem all — but not part — of the Series C within 90 days, subject to Federal Reserve approval, at par plus declared and unpaid dividends. At a $25 offering price, the Series C yields 7.00% per annum. Dividends are paid quarterly on February 20, May 20, August 20, and November 20, with a record date 15 calendar days prior to each payment date. For individual (non-corporate) U.S. holders meeting applicable holding period requirements, dividends qualify for the preferential 15%/20% qualified dividend income (QDI) tax rate; corporate holders may be eligible for the dividends-received deduction (DRD), subject to sufficient earnings and profits. Dividends may be interrupted — without accumulation — if the board does not declare them, if regulatory capital constraints are violated, or if a senior preferred series exists that has not been fully paid; additionally, if full dividends on parity stock have not been paid, Series C dividends are pro-rated rather than paid in full.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If First Midwest has not paid or set aside full dividends on the Series C Preferred Stock for the most recently completed dividend period, it cannot pay dividends on its common stock or any other junior stock, and cannot repurchase or redeem parity stock (such as the Series A Preferred Stock) except in limited circumstances.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 75 (Strong)