10-K

Securities And Exchange Commission
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008
Commission File Number: 0-28846

Centrue Financial Corporation

(Exact name of Registrant as specified in its charter)

Delaware	36-3145350
(State or other jurisdiction of	(I.R.S. Employer Identification
incorporation or organization)	Number)

7700 Bonhomme Avenue, St. Louis, Missouri 63105
(Address of principal executive offices, including zip code)

(314) 505-5500
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

	Name of Each Exchange
Title of Exchange Class	which Registered
Common Stock ($1.00 par value)	The NASDAQ Stock Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 403 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Exchange Act. Yes o No þ

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	þ
Non-accelerated filer	o	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b of the Exchange Act).
Yes o No þ.

As of February 23, 2009, the Registrant had issued and outstanding 6,028,491 shares of the Registrant’s Common Stock. The aggregate market value of the voting stock held by non-affiliates of the Registrant as of June 30, 2008, the last business day of the Registrant’s most recently completed second quarter, was $56,676,633.*

* Based on the last reported price of $11.04 of an actual transaction in the Registrant’s Common Stock on June 30, 2008, and reports of beneficial ownership filed by directors and executive officers of the Registrant. Shares of Common Stock held by any executive officer or director of the Registrant have been excluded from the foregoing computation because such persons may be deemed to be affiliates; provided, however, such determination of shares owned by affiliates does not constitute an admission of affiliate status or beneficial interest in shares of the Registrant’s Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the Proxy Statement for the 2009 Annual Meeting of Stockholders (the “2009 Proxy Statement”) are incorporated by reference into Part III of this Form 10-K.

As used in this report, the terms “we,” “us,” “our,” “Centrue” and the “Company” mean Centrue Financial Corporation and its subsidiary, unless the context indicates another meaning, and the term “Common Stock” means our common stock, par value $1.00 per share.

CENTRUE FINANCIAL CORPORATION
Form 10-K Index

		Page
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	14
Item 1B.	Unresolved Staff Comments	18
Item 2.	Properties	19
Item 3.	Legal Proceedings	19
Item 4.	Submission of Matters to a Vote of Security Holders	19
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
Item 6.	Selected Consolidated Financial Data	23
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	54
Item 8.	Financial Statements and Supplementary Data	54
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	102
Item 9A.	Controls and Procedures	102
Item 9B.	Other Information	102
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	103
Item 11.	Executive Compensation	103
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	103
Item 13.	Certain Relationships and Related Transactions, and Director Independence	104
Item 14.	Principal Accountant Fees and Services	104
Item 15.	Exhibits and Financial Statement Schedules	104

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Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

PART I

Item 1. Business

THE COMPANY

Centrue Financial Corporation

Centrue Financial Corporation (the “Company”) is a bank holding company incorporated in Delaware in 1982 for the purpose of becoming a holding company registered under the Bank Holding Company Act of 1956, as amended (the “Act”). The Company is a publicly traded banking company with assets of $1.4 billion at year-end 2008 and is headquartered in St. Louis, Missouri. On November 13, 2006, the Company (formerly known as UnionBancorp, Inc. now known as Centrue Financial Corporation) merged with Centrue Financial Corporation (former Centrue), parent of Centrue Bank with the Company being the surviving entity in the merger. Operating results of former Centrue are included in the consolidated financial statements since the date of the acquisition. As a result of this merger, the Company solidified its market share in the northern and central Illinois markets, expanded its customer base to enhance deposit fee income, marketed additional products and services to new customers and reduced operating costs through economies of scale.

The Company operates one wholly owned subsidiary: Centrue Bank (the “Bank”), employing 302 full-time equivalent employees at December 31, 2008. The Company has responsibility for the overall conduct, direction, and performance of its subsidiary. The Company provides various services, establishes Company-wide policies and procedures, and provides other resources as needed, including capital.

Subsidiary

At December 31, 2008, the Bank had $1.4 billion in total assets, $1.0 billion in total deposits, and thirty offices (twenty-eight full-service bank branches and two back-room sales support non-banking facilities) located in markets extending from the far western and southern suburbs of the Chicago metropolitan area across Central Illinois down to the metropolitan St. Louis area.

The Bank is engaged in commercial and retail banking and offers a broad range of lending, depository, and related financial services, including accepting deposits; commercial and industrial, consumer, and real estate lending; trust and asset management services; and other banking services tailored for consumer, commercial and industrial, and public or governmental customers.

Competition

The Company’s market area is highly competitive with numerous commercial banks, savings and loan associations and credit unions. In addition, financial institutions, based in surrounding communities and in the southern and western metro area of Chicago and the suburban metro area of St. Louis, actively compete for customers within the Company’s market area. The Company also faces competition from finance companies, insurance companies, mortgage companies, securities brokerage firms, money market funds, loan production offices and other providers of financial services.

The Company competes for loans principally through the range and quality of the services it provides and through competitive interest rates and loan fees. The Company believes that its long-standing presence in the communities it serves and personal service philosophy enhance its ability to compete favorably in attracting and retaining individual and business customers. The Company actively solicits deposit-related customers and competes for deposits by offering customers personal attention, professional service and competitive interest rates.

1.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

Under the Gramm-Leach-Bliley Act of 1999, effective March 2000, securities firms and insurance companies that elect to become financial holding companies may acquire banks and other financial institutions. The Gramm-Leach-Bliley Act, and future action stemming from the Act, is expected to continue to significantly change the competitive environment in which the Company and Centrue Bank conduct business. The financial services industry is also likely to become more competitive as further technological advances enable more companies to provide financial services. These technological advances may diminish the importance of depository institutions and other financial intermediaries in the transfer of funds between parties.

SUPERVISION AND REGULATION

General

Financial institutions and their holding companies are extensively regulated under federal and state law. As a result, the growth and earnings performance of the Company can be affected not only by management decisions and general economic conditions, but also by the requirements of applicable state and federal statutes and regulations and the policies of various governmental regulatory authorities, including the Illinois Department of Financial and Professional Regulation (the “IDFPR”), the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the Federal Deposit Insurance Corporation (the “FDIC”), the Internal Revenue Service and state taxing authorities and the Securities and Exchange Commission (the “SEC”). The effect of applicable statutes, regulations and regulatory policies can be significant, and cannot be predicted with a high degree of certainty.

Federal and state laws and regulations generally applicable to financial institutions, such as the Company and its subsidiary, regulate, among other things, the scope of business, investments, reserves against deposits, capital levels relative to operations, the nature and amount of collateral for loans, the establishment of branches, mergers, consolidations and dividends. The system of supervision and regulation applicable to the Company and its subsidiary establishes a comprehensive framework for their respective operations and is intended primarily for the protection of the FDIC’s deposit insurance funds and the depositors, rather than the shareholders, of financial institutions.

The following is a summary of the material elements of the regulatory framework that applies to the Company and its subsidiaries. It does not describe all of the statutes, regulations and regulatory policies that apply to the Company and its subsidiaries, nor does it restate all of the requirements of the statutes, regulations and regulatory policies that are described. As such, the following is qualified in its entirety by reference to the applicable statutes, regulations and regulatory policies. Any change in applicable law, regulations or regulatory policies may have a material effect on the business of the Company and its subsidiaries. See also “Recent Developments” under Management’s Discussion and Analysis.

The Company

General. The Company, as the sole stockholder of Centrue Bank, is a bank holding company. As a bank holding company, the Company is registered with, and is subject to regulation by, the Federal Reserve under the Bank Holding Company Act, as amended (the “BHCA”). In accordance with Federal Reserve policy, the Company is expected to act as a source of financial strength to Centrue Bank and to commit resources to support Centrue Bank in circumstances where the Company might not do so absent such policy. Under the BHCA, the Company is subject to periodic examination by the Federal Reserve and is required to file with the Federal Reserve periodic reports of operations and such additional information as the Federal Reserve may require. The Company is also subject to regulation by the IDFPR under the Illinois Bank Holding Company Act, as amended.

2.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

Investments and Activities. Under the BHCA, a bank holding company must obtain Federal Reserve approval before: (i) acquiring, directly or indirectly, ownership or control of any voting shares of another bank or bank holding company if, after the acquisition, it would own or control more than 5% of the shares of the other bank or bank holding company (unless it already owns or controls the majority of such shares); (ii) acquiring all or substantially all of the assets of another bank; or (iii) merging or consolidating with another bank holding company. Subject to certain conditions (including certain deposit concentration limits established by the BHCA), the Federal Reserve may allow a bank holding company to acquire banks located in any state of the United States without regard to whether the acquisition is prohibited by the law of the state in which the target bank is located. In approving interstate acquisitions, however, the Federal Reserve is required to give effect to applicable state law limitations on the aggregate amount of deposits that may be held by the acquiring bank holding company and its insured depository institution affiliates in the state in which the target bank is located (provided that those limits do not discriminate against out-of-state depository institutions or their holding companies) and state laws which require that the target bank have been in existence for a minimum period of time (not to exceed five years) before being acquired by an out-of-state bank holding company.

The BHCA also generally prohibits the Company from acquiring direct or indirect ownership or control of more than 5% of the voting shares of any company which is not a bank and from engaging in any business other than that of banking, managing and controlling banks or furnishing services to banks and their subsidiaries. This general prohibition is subject to a number of exceptions. The principal exception allows bank holding companies to engage in, and to own shares of companies engaged in, certain businesses found by the Federal Reserve to be “so closely related to banking ... as to be a proper incident thereto.” Under current regulations of the Federal Reserve, the Company is permitted to engage in a variety of banking-related businesses, including the operation of a thrift, consumer finance or equipment leasing business, the operation of a computer service bureau (including software development), and the operation of mortgage banking and brokerage businesses. The BHCA generally does not place territorial restrictions on the domestic activities of non-bank subsidiaries of bank holding companies.

In November, 1999, the Gramm-Leach-Bliley Act (“GLB Act”) was signed into law. Under the GLB Act, bank holding companies that meet certain standards and elect to become “financial holding companies” are permitted to engage in a wider range of activities than those permitted for bank holding companies, including securities and insurance activities. Specifically, a bank holding company that elects to become a financial holding company may engage in any activity that the Federal Reserve Board, in consultation with the Secretary of the Treasury, determines is (i) financial in nature or incidental thereto, or (ii) complementary to any such financial-in-nature activity, provided that such complementary activity does not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally. A bank holding company may elect to become a financial holding company only if each of its depository institution subsidiaries is well-capitalized, well-managed, and has a Community Reinvestment Act rating of “satisfactory” or better at their most recent examination.

3.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

The GLB Act specifies many activities that are financial in nature, including lending, exchanging, transferring, investing for others, or safeguarding money or securities; underwriting and selling insurance; providing financial, investment or economic advisory services; underwriting, dealing in, or making a market in securities; and those activities currently permitted for bank holding companies that are so closely related to banking or managing or controlling banks, as to be a proper incident thereto.

The GLB Act changed federal laws to facilitate affiliation between banks and entities engaged in securities and insurance activities. The law also established a system of functional regulation under which banking activities, securities activities, and insurance activities conducted by financial holding companies and their subsidiaries and affiliates will be separately regulated by banking, securities, and insurance regulators, respectively. The Company has no current plans to register as a financial holding company.

Federal law also prohibits any person or company from acquiring “control” of a bank or bank holding company without prior notice to the appropriate federal bank regulator. “Control” is defined in certain cases as the acquisition of 10% or more of the outstanding shares of a bank or bank holding company.

Capital Requirements. Bank holding companies are required to maintain minimum levels of capital in accordance with Federal Reserve capital adequacy guidelines. If capital falls below minimum guideline levels, a bank holding company, among other things, may be denied approval to acquire or establish additional banks or non-bank businesses.

The Federal Reserve’s capital guidelines establish the following minimum regulatory capital requirements for bank holding companies: a risk-based requirement expressed as a percentage of total risk-weighted assets, and a leverage requirement expressed as a percentage of total assets. The risk-based requirement consists of a minimum ratio of total capital to total risk-weighted assets of 8%, at least one-half of which must be Tier 1 capital. The leverage requirement consists of a minimum ratio of Tier 1 capital to total assets of 3% for the most highly rated companies, with a minimum requirement of 4% for all others. For purposes of these capital standards, Tier 1 capital consists primarily of permanent stockholders’ equity less intangible assets (other than certain mortgage servicing rights and purchased credit card relationships). Total capital consists primarily of Tier 1 capital plus certain other debt and equity instruments which do not qualify as Tier 1 capital and a portion of the company’s allowance for loan and lease losses.

The risk-based and leverage standards described above are minimum requirements. Higher capital levels will be required if warranted by the particular circumstances or by the risk profiles of individual banking organizations. For example, the Federal Reserve’s capital guidelines contemplate that additional capital may be required to take adequate account of, among other things, interest rate risk, or the risks posed by concentrations of credit, nontraditional activities or securities trading activities. Further, any banking organization experiencing or anticipating significant growth would be expected to maintain capital ratios, including tangible capital positions (i.e., Tier 1 capital less all intangible assets), well above the minimum levels.

4.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

As of December 31, 2008, the Company had regulatory capital as follows:

	Risk-Based Capital Ratio		Leverage Capital Ratio
Company		12.2%		8.1%

The risk-based capital ratio and the leverage capital ratio were 4.2% and 4.1% respectively, in excess of the Federal Reserve’s minimum requirements. See Note 17 in the Notes in Consolidated Financial Statements for further information.

Dividends. The Company is organized under the Delaware General Corporation Law (the “DGCL”). The DGCL allows the Company to pay dividends only out of its surplus (as defined and computed in accordance with the provisions of the DGCL) or if the Company has no such surplus, out of its net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.

Additionally, the Federal Reserve has issued a policy statement with regard to the payment of cash dividends by bank holding companies. The policy statement provides that a bank holding company should not pay cash dividends which exceed its net income or which can only be funded in ways that weaken the bank holding company’s financial health, such as by borrowing. The Federal Reserve also possesses enforcement powers over bank holding companies and their non-bank subsidiaries to prevent or remedy actions that represent unsafe or unsound practices or violations of applicable statutes and regulations. Among these powers is the ability to proscribe the payment of dividends by banks and bank holding companies.

As a result of the Company’s issuance of Fixed Rate Cumulative Perpetual Preferred Stock, Series C (the “Preferred Shares”) to the U. S. Department of Treasury (the “Treasury”) pursuant to the Troubled Asset Relief Program’s (“TARP”) Capital Purchase Plan (“CPP”), the Company is restricted in the payment of dividends and, without the Treasury’s consent, may not declare or pay any dividend on the Company’s common stock other than its current quarterly cash dividend of $0.14 per share, as adjusted for any stock dividend or stock split. This restriction no longer applies on the earlier to occur of January 9, 2012 (the third anniversary of the issuance of the Preferred Shares to the Treasury) or the date on which the Company has redeemed all of the Preferred Shares issued or the date on which the Treasury has transferred all of the Preferred Shares to third parties not affiliated with the Treasury. In addition, as long as the Preferred Shares are outstanding, dividend payments are prohibited until all accrued and unpaid dividends are paid on such Preferred Shares, subject to certain limited exceptions.

Federal Securities Regulation. The Company’s common stock is registered with the SEC under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Consequently, the Company is subject to the information, proxy solicitation, insider trading and other restrictions and requirements of the SEC under the Exchange Act.

5.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

The SEC and the NASDAQ have adopted regulations and policies under the Sarbanes-Oxley Act of 2002 that will apply to the Company as a registered company under the Exchange Act and as a NASDAQ-traded company. The Sarbanes-Oxley Act of 2002 was enacted in response to public concerns regarding corporate accountability in connection with accounting scandals. The stated goals of the Sarbanes-Oxley Act are to increase corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies, and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. The Sarbanes-Oxley Act generally applies to all companies that file or are required to file periodic reports with the SEC, under the Exchange Act.

The Sarbanes-Oxley Act includes very specific additional disclosure requirements and new corporate governance rules requiring the SEC and securities exchanges to adopt extensive additional disclosure, corporate governance and other related rules, and mandates further studies of certain issues by the SEC. The Sarbanes-Oxley Act represents significant federal involvement in matters traditionally left to state regulatory systems, such as the regulation of the accounting profession, and to state corporate law, such as the relationship between a board of directors and management and between a board of directors and its committees. Sarbanes-Oxley section 404 requires significant oversight of a public company’s internal control over the financial statements. For accelerated filers, the rules require them to provide management’s report on internal control over financial reporting by December 31, 2008. The rule further requires an accelerated filer to have an external auditor’s attestation report on internal control over financial reporting as of December 31, 2008. During 2008, the Company incurred approximately $178,500 in additional expenses to comply with the provisions of the Sarbanes-Oxley Act.

Recent Developments

The Emergency Economic Stabilization Act of 2008 (“EESA”) was enacted on October 3, 2008. Pursuant to EESA, the Treasury has the authority to among other things, purchase up to $700 billion of mortgages, mortgage-backed securities and certain other financial instruments from financial institutions for the purpose of stabilizing and providing liquidity to the U.S. financial markets. Pursuant to its authority under EESA, the Treasury created the TARP CPP under which the Treasury was authorized to invest in non-voting, senior preferred stock of U.S. banks and savings associations or their holding companies.

The Company elected to participate in the CPP and on January 9, 2009, completed the sale of $32.7 million in preferred shares to the Treasury. The Company issued 32,668 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series C (the “Preferred Shares”), with a $1,000 per share liquidation preference, and a warrant to purchase up to 508,320 shares of the Company’s common stock at an exercise price of $9.64 per share (the “Warrant”).

The Preferred Shares issued by the Company pay cumulative dividends of 5% a year for the first five years and 9% a year thereafter. After three years, the Company may, at its option, redeem the Preferred Shares at their liquidation preference plus accrued and unpaid dividends. Both the Preferred Shares and the Warrant will be accounted for as components of regulatory Tier 1 capital. Among other restrictions, the securities purchase agreement between the Company and the Treasury limits the Company’s ability to repurchase its stock and subjects the Company to certain executive compensation limitations. The restrictions on stock repurchases are in effect until the earlier to occur of January 9, 2012 (the third anniversary of the issuance of the Preferred Shares to Treasury) or the date on which the Company has redeemed all of the Preferred Shares issued or the date on which the Treasury has transferred all of the Preferred Shares to third parties not affiliated with the Treasury.

6.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

The American Recovery and Reinvestment Act of 2009 (“ARRA”) was enacted on February 17, 2009. Among other things, ARRA sets forth additional limits on executive compensation at all financial institutions receiving federal funds under any program, including the CPP, both retroactively and prospectively. The executive compensation restrictions in ARRA, which will be further described in rules and regulations to be established, include among others: limits on compensation incentives, prohibitions on “Golden Parachute Payments”, the establishment by publicly registered CPP recipients of a board compensation committee comprised entirely of independent directors for the purpose of reviewing employee compensation plans, and the requirement of a non-binding vote on executive pay packages at each annual shareholder meeting until the government funds are repaid. The full impact of the ARRA is not yet certain because additional regulatory action is required.

Centrue Bank

Centrue Bank is an Illinois-chartered bank, the deposit accounts of which are insured by the FDIC. Centrue Bank is also a member of the Federal Reserve System (“member bank”). As an Illinois-chartered, FDIC-insured member bank, Centrue Bank is subject to the examination, supervision, reporting and enforcement requirements of the IDFPR, as the chartering authority for Illinois banks, the Federal Reserve, as the primary federal regulator of member banks, and the FDIC, as administrator of deposit insurance.

Deposit Insurance. As an FDIC-insured institution, Centrue Bank is required to pay deposit insurance premium assessments to the FDIC.

Pursuant to the Federal Deposit Insurance Reform Act of 2005 (the “FDIRA”) in 2006, the previously separate deposit insurance funds for banks and savings associations were merged into a single deposit insurance fund administered by the FDIC. Centrue Bank’s deposits are insured up to applicable limitations by that deposit insurance fund.

Following the adoption of the FDIRA, the FDIC has the opportunity, through its rulemaking authority, to better price deposit insurance for risk than was previously authorized. The FDIC adopted regulations that create a system of risk-based assessments. Under the regulations, there are four risk categories, and each insured institution is assigned to a risk category based on capital levels and supervisory ratings. Well-capitalized institutions with CAMELS composite ratings of 1 or 2 are placed in Risk Category I while other institutions are placed in Risk Categories II, III or IV depending on their capital levels and CAMELS composite ratings. The assessment rates may be changed by the FDIC as necessary to maintain the insurance fund at the reserve ratio designated by the FDIC, which currently is 1.25% of insured deposits. The FDIC may set the reserve ratio annually at between 1.15% and 1.50% of insured deposits. Deposit insurance assessments will be collected for a quarter, at the end of the next quarter. Assessments are based on deposit balances at the end of the quarter, except for institutions with $1 billion or more in assets, such as Centrue Bank, and any institution that becomes insured on or after January 1, 2007 which will have their assessment base determined using average daily balances of insured deposits.

7.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

As of September 30, 2008, the reserve ratio of the deposit insurance fund fell to 0.76%. On October 7, 2008, the FDIC established a restoration plan to restore the reserve ratio to at least 1.15% within five years (effective February 27, 2009 the FDIC extended this time to seven years) and proposed rules increasing the assessment rate for deposit insurance and making adjustments to the assessment system. On December 16, 2008, the FDIC adopted and issued a final rule increasing the rates banks pay for deposit insurance uniformly by 7 basis points (annualized) effective January 1, 2009. Under the final rule, risk-based rates for the first quarter 2009 assessment will range between 12 and 50 basis points (annualized). The 2009 first quarter assessment rates established by the FDIC provide that the highest rated institutions, those in Risk Category I, will pay premiums of between 12 and 14 basis points and the lowest rated institutions, those in Risk Category IV, will pay premiums of 50 basis points. On February 27, 2009, the FDIC adopted a final rule amending the way that the assessment system differentiates for risk and setting new assessment rates beginning with the second quarter of 2009. Beginning April 1, 2009, for the highest rated institutions, those in Risk Category I, the initial base assessment rate will be between 12 and 16 basis points and for the lowest rated institutions, those in Risk Category IV, the initial base assessment rate will be 45 basis points. The final rule modifies the means to determine a Risk Category I institution’s initial base assessment rate. It also provides for the following adjustments to an institution’s assessment rate: (1) a decrease for long-term unsecured debt, including most senior and subordinated debt and, for small institutions, a portion of Tier 1 capital; (2) an increase for secured liabilities above a threshold amount; and (3) for institutions in risk categories other than Risk Category I, an increase for brokered deposits above a threshold amount. After applying these adjustments, for the highest rated institutions, those in Risk Category I, the total base assessment rate will be between 7 and 24 basis points and for the lowest rated institutions, those in Risk Category IV, the total base assessment rate will be between 40 and 77.5 basis points.

On February 27, 2009, the FDIC also adopted an interim rule, with a request for comments, that imposes an emergency special assessment of up to 20 basis points of an institution’s assessment base as of June 30, 2009, which will be collected on September 30, 2009. This interim rule also provides for possible additional special assessments of up to 10 basis points at the end of any calendar quarter whenever the FDIC estimates that the deposit insurance fund reserve ratio will fall to a level that the FDIC believes would adversely affect public confidence or to a level close to zero or negative.

On November 21, 2008, the FDIC adopted final regulations implementing the Temporary Liquidity Guarantee Program (“TLGP”) pursuant to which depository institutions could elect to participate. Pursuant to the TLGP, the FDIC will (i) guarantee, through the earlier of maturity or June 30, 2012, certain newly issued senior unsecured debt issued by participating institutions on or after October 14, 2008 and before June 30, 2009 (the “Debt Guarantee”), and (ii) provide full FDIC deposit insurance coverage for non-interest bearing deposit transaction accounts regardless of dollar amount for an additional fee assessment by the FDIC (the “Transaction Account Guarantee”). These accounts are mainly payment-processing accounts, such as business payroll accounts. The Transaction Account Guarantee will expire on December 31, 2009. Participating institutions will be assessed a 10 basis point surcharge on the portion of eligible accounts that exceeds the general limit on deposit insurance coverage.

Coverage under the TLGP was available to any eligible institution that did not elect to opt out of the TLGP on or before December 5, 2008. Centrue Bank did not opt out of the Transaction Account Guarantee portion of the TLGP. The Company and Centrue Bank opted out of the Debt Guarantee program.

8.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

In 2006, the FDIC adopted a final rule allocating a one-time assessment credit among insured financial institutions. This credit may be used to offset deposit insurance assessments (not to include FICO assessments) beginning in 2007. The Company began taking advantage of this credit in 2007 and expects to realize benefit from this credit thru the second quarter of 2009.

The FDIC may terminate the deposit insurance of any insured depository institution if the FDIC determines, after a hearing, that the institution (i) has engaged or is engaging in unsafe or unsound practices, (ii) is in an unsafe or unsound condition to continue operations or (iii) has violated any applicable law, regulation, order, or any condition imposed in writing by, or written agreement with, the FDIC. The FDIC may also suspend deposit insurance temporarily during the hearing process for a permanent termination of insurance, if the institution has no tangible capital. Management of the Company is not aware of any activity or condition that could result in termination of the deposit insurance of Centrue Bank.

FICO Assessments. FDIC insured institutions are also subject to assessments to cover interest payments due on the outstanding obligations of the Financing Corporation (“FICO”). FICO was created in 1987 to finance the recapitalization of the Federal Savings and Loan Insurance Corporation. These FICO assessments are in addition to amounts assessed by the FDIC for deposit insurance until the final maturity of the outstanding FICO obligations in 2019. FDIC insured institutions will share the cost of the interest on the FICO bonds on a pro rata basis. During the year ended December 31, 2008, the FICO assessment rate for DIF members ranged between approximately 0.0110% of deposits and approximately 0.0114% of deposits. During the year ended December 31, 2008, Centrue Bank paid FICO assessments totaling $115,866. For the first quarter of 2009, the rate established by the FDIC for the FICO assessment is 0.0114% of deposits.

Supervisory Assessments. All Illinois banks are required to pay supervisory assessments to the IDFPR to fund the operations of the IDFPR. The amount of the assessment is calculated based on the institution’s total assets, including consolidated subsidiaries, as reported to the IDFPR. During the year ended December 31, 2008, Centrue Bank paid supervisory assessments to the IDFPR totaling $195,845.

Capital Requirements. The Federal Reserve has established the following minimum capital standards for state-chartered Federal Reserve System member banks, such as Centrue Bank: a leverage requirement consisting of a minimum ratio of Tier 1 capital to total assets of 3% for the most highly-rated banks with a minimum requirement of at least 4% for all others, and a risk-based capital requirement consisting of a minimum ratio of total capital to total risk-weighted assets of 8%, at least one-half of which must be Tier 1 capital. For purposes of these capital standards, Tier 1 capital and total capital consist of substantially the same components as Tier 1 capital and total capital under the Federal Reserve’s capital guidelines for bank holding companies (see “--The Company--Capital Requirements”).

The capital requirements described above are minimum requirements. Higher capital levels will be required if warranted by the particular circumstances or risk profiles of individual institutions. For example, the regulations of the Federal Reserve provide that additional capital may be required to take adequate account of, among other things, interest rate risk or the risks posed by concentrations of credit, nontraditional activities or securities trading activities.

9.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

During the year ended December 31, 2008, Centrue Bank was not required by the Federal Reserve to increase its capital to an amount in excess of the minimum regulatory requirement. As of December 31, 2008, Centrue Bank had regulatory capital as follows:

	Risk-Based Capital Ratio		Leverage Capital Ratio
Centrue Bank		12.8%		9.4%

The risk-based capital ratio and the leverage capital ratio are 4.8% and 5.4% in excess of the Federal Reserve’s minimum requirements. See Note 17 in the Notes in Consolidated Financial Statements for further information.

Federal law provides the federal banking regulators with broad power to take prompt corrective action to resolve the problems of undercapitalized institutions. The extent of the regulators’ powers depends on whether the institution in question is “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized,” in each case as defined by regulation. Depending upon the capital category to which an institution is assigned, the regulators’ corrective powers include: requiring the institution to submit a capital restoration plan; limiting the institution’s asset growth and restricting its activities; requiring the institution to issue additional capital stock (including additional voting stock) or to be acquired; restricting transactions between the institution and its affiliates; restricting the interest rate the institution may pay on deposits; ordering a new election of directors of the institution; requiring that senior executive officers or directors be dismissed; prohibiting the institution from accepting deposits from correspondent banks; requiring the institution to divest certain subsidiaries; prohibiting the payment of principal or interest on subordinated debt; and ultimately, appointing a receiver for the institution. As of December 31, 2008, Centrue Bank was considered well capitalized.

Additionally, institutions insured by the FDIC may be liable for any loss incurred by, or reasonably expected to be incurred by, the FDIC in connection with the default of commonly controlled FDIC insured depository institutions or any assistance provided by the FDIC to commonly controlled FDIC insured depository institutions in danger of default.

Dividends. Under the Illinois Banking Act, Illinois-chartered banks may not pay dividends in excess of their net profits then on hand, after deducting losses and bad debts. The Federal Reserve Act also imposes limitations on the amount of dividends that may be paid by state member banks, such as Centrue Bank. Generally, a member bank may pay dividends out of its undivided profits, in such amounts and at such times as the bank’s board of directors deems prudent. Without prior Federal Reserve approval, however, a state member bank may not pay dividends in any calendar year which, in the aggregate, exceed such bank’s calendar year-to-date net income plus such bank’s retained net income for the two preceding calendar years.

The payment of dividends by any financial institution or its holding company is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations, and a financial institution generally is prohibited from paying any dividends if, following payment thereof, the institution would be undercapitalized. As described above, Centrue Bank exceeded its minimum capital requirements under applicable guidelines and had approximately $3.49 million available to be paid as dividends to the Company as of December 31, 2008. Notwithstanding the availability of funds for dividends, however, the Federal Reserve may prohibit the payment of any dividends by Centrue Bank if the Federal Reserve determines such payment would constitute an unsafe or unsound practice.

10.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

Insider Transactions. Centrue Bank is subject to certain restrictions imposed by federal law on extensions of credit to the Company, on investments in the stock or other securities of the Company and the acceptance of the stock or other securities of the Company as collateral for loans. Certain limitations and reporting requirements are also placed on extensions of credit by Centrue Bank to its directors and officers, to directors and officers of the Company, to principal stockholders of the Company, and to “related interests” of such directors, officers and principal stockholders. In addition, federal law and regulations may affect the terms upon which any person becoming a director or officer of the Company or a principal stockholder of the Company may obtain credit from the banks with which Centrue Bank maintains a correspondent relationship.

Safety and Soundness Standards. The federal banking agencies have adopted guidelines which establish operational and managerial standards to promote the safety and soundness of federally insured depository institutions. The guidelines set forth standards for internal controls, information systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, compensation, fees and benefits, asset quality and earnings.

In general, the safety and soundness guidelines prescribe the goals to be achieved in each area, and each institution is responsible for establishing its own procedures to achieve those goals. If an institution fails to comply with any of the standards set forth in the guidelines, the institution’s primary federal regulator may require the institution to submit a plan for achieving and maintaining compliance. If an institution fails to submit an acceptable compliance plan, or fails in any material respect to implement a compliance plan that has been accepted by its primary federal regulator, the regulator is required to issue an order directing the institution to cure the deficiency. Until the deficiency cited in the regulator’s order is cured, the regulator may restrict the institution’s rate of growth, require the institution to increase its capital, restrict the rates the institution pays on deposits or require the institution to take any action the regulator deems appropriate under the circumstances. Noncompliance with the standards established by the safety and soundness guidelines may also constitute grounds for other enforcement action by the federal banking regulators, including cease and desist orders and civil money penalty assessments.

Branching Authority. Illinois banks, such as Centrue Bank, have the authority under Illinois law to establish branches anywhere in the State of Illinois, subject to receipt of all required regulatory approvals. Additionally, Centrue Bank has authority under Missouri law to establish branches anywhere in the State of Missouri, subject to receipt of all required regulatory approvals.

Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the “Riegle-Neal Act”), both state and national banks are allowed to establish interstate branch networks through acquisitions of other banks, subject to certain conditions, including certain limitations on the aggregate amount of deposits that may be held by the surviving bank and all of its insured depository institution affiliates. Illinois law permits interstate mergers, subject to certain conditions, including a prohibition against interstate mergers involving an Illinois bank that has been in existence and continuous operation for fewer than five years.

11.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

The establishment of new interstate branches or the acquisition of individual branches of a bank in another state (rather than the acquisition of an out-of-state bank in its entirety) is allowed by the Riegle-Neal Act only if specifically authorized by state law. Certain states permit out-of-state banks to establish de novo branches or acquire branches from another bank although the laws of some of these states require a reciprocal provision under the law of the state where the bank establishing or acquiring the branch is chartered. Illinois law permits out-of-state banks to establish branches in Illinois in this manner, and Illinois-chartered banks may branch into other states in this manner if the law of the state in which the branch will be established or acquired so authorizes even if the law of such state requires a reciprocal provision under Illinois law.

State Bank Activities. Under federal law and FDIC regulations, FDIC insured state banks are prohibited, subject to certain exceptions, from making or retaining equity investments of a type, or in an amount, that are not permissible for a national bank. Federal law and FDIC regulations also prohibit FDIC insured state banks and their subsidiaries, subject to certain exceptions, from engaging as principal in any activity that is not permitted for a national bank or its subsidiary, respectively, unless the bank meets, and continues to meet, its minimum regulatory capital requirements and the FDIC determines the activity would not pose a significant risk to the deposit insurance fund of which the bank is a member.

The GLB Act also authorizes insured state banks to engage in financial activities, through subsidiaries, similar to the activities permitted for financial holding companies. If a state bank wants to establish a subsidiary engaged in financial activities, it must meet certain criteria, including that it and all of its affiliated insured depository institutions are well-capitalized and have a Community Reinvestment Act rating of at least “satisfactory” and that it is well-managed. There are capital deduction and financial statement requirements and financial and operational safeguards that apply to subsidiaries engaged in financial activities. Such a subsidiary is considered to be an affiliate of the bank and there are limitations on certain transactions between a bank and a subsidiary engaged in financial activities of the same type that apply to transactions with a bank’s holding company and its subsidiaries.

Reserve Requirement. Federal Reserve regulations, as presently in effect, require depository institutions including Centrue Bank to maintain cash reserves against their net transaction accounts (primarily NOW and regular checking accounts). Effective October 9, 2008, the Federal Reserve Banks are now authorized to pay interest on such reserves.

EXECUTIVE OFFICERS

The term of office for the executive officers of the Company is from the date of election until the next annual organizational meeting of the Board of Directors. In addition to the information provided in the 2009 Proxy Statement, the names and ages of the executive officers of the Company, as well as the offices of the Company and the Subsidiary held by these officers on that date, and principal occupations for the past five years are set forth below.

Thomas A. Daiber, 51, is the President & Chief Executive Officer of Centrue Financial Corporation and Centrue Bank. Mr. Daiber joined the former Centrue Financial in October of 2002 as its President and Chief Executive Officer.

Kurt R. Stevenson, 42, is the Senior Executive Vice President & Chief Financial Officer of Centrue Financial Corporation and Centrue Bank and has held that role since 2003.

Donald M. Davis, 48, is the Market President for the Company’s St. Louis market area, a position held since he joined the former Centrue Bank in 2006. He had previously worked for National City Bank as its Senior Vice President of Commercial Real Estate since 2005. Mr. Davis worked for Allegiant Bancorp, Inc. from 1997 to 2005 as its Senior Vice President/Commercial Business Development Officer.

12.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

Steven E. Flahaven, 53, is the Company’s Executive Vice President & Head of Commercial Banking, a position held since 2006. Beginning in 2004, he acted as the Senior Vice President and Senior Commercial Loan Officer. Mr. Flahaven joined UnionBank in 2002 as its Vice President and Senior Lender.

Everett J. Solon, 56, is the Market President for the Company’s Streator, Dwight, Ottawa and Peru locations, a position held since 2003. In 2007, he also acted as the Company’s Head of Mortgage Banking.

Robert L. Davidson, 63, is the Company’s Executive Vice President, Chief Investment Officer and ALCO Manager, a position held since January of 2006. He had previously served as the Company’s Senior Vice President, Chief Investment Officer and ALCO Manager since 2001.

Roger D. Dotson, 61, is the Company’s Executive Vice President, a position held since late 2007. In this capacity, he is responsible for oversight in the operations, IT, deposit operations, and loan operations areas. He had previously served as the Company’s Head of Retail Banking. Mr. Dotson joined the former Centrue Bank as their Regional President in 2005. Prior to joining the Company, Mr. Dotson served as the President & CEO of Illinois Community Bank located in Effingham, Illinois.

Heather M. Hammitt, 34, is the Company’s Executive Vice President & Head of Human Resources & Corporate Communications. Ms. Hammitt joined UnionBancorp in March of 1998 and has served in various positions of management in the human resources department during that time.

Kenneth A. Jones, 45, is the Company’s Executive Vice President & Chief Credit Officer. Mr. Jones joined UnionBank in October 2000 and, prior to his current position, he served in the role of Commercial Collector.

Diane F. Leto, 47, is the Company’s Executive Vice President & Head of Operations. As of January 1, 2009, she was appointed as Chief Risk Officer. She has been with the Company since June of 2004. Prior to joining the Company, Ms. Leto was the Senior Vice President of Operations for Castle Bank located in DeKalb, Illinois.

Ricky R. Parks, 43, is the Market President for the Company’s Fairview Heights, Aviston, Belleville, Effingham and St. Rose locations. Mr. Parks joined the former Centrue Bank in January of 2004 as a Senior Vice President and Senior Lender and in October of 2004 was named its Regional Bank President. Prior to joining Centrue, Mr. Parks worked for Union Planters Bank from September of 1991 until January of 2004 in the Metro-East St. Louis market and held the position of Senior Vice President & Commercial Team Leader prior to his departure.

Mary Jane Raymond, 52, is the Company’s Executive Vice President & Head of Retail Banking. Ms. Raymond joined the former Centrue in March of 2005 as a Vice President/Regional Sales Manager. Prior to joining Centrue, Ms. Raymond worked as a Vice President for Regions Bank from May of 1997 to March of 2005.

13.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

Available Information

Our Internet address is www.centrue.com. There we make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our SEC reports can be accessed through the investor relations section of our Web site. The information found on our Web site is not part of this or any other report we file with or furnish to the SEC.

Item 1A. Risk Factors

An investment in the Company’s common stock is subject to risks inherent to the Company’s business. The material risk and uncertainties that management believes affect the Company are described below. Before making an investment decision, you should carefully consider the risks and uncertainties described below, together with all of the other information included or incorporated by reference in this report. The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties that management is not aware of or focused on or that management currently deems immaterial may also impair the Company’s business operations. This report is qualified in its entirety by these risk factors. See also, “Special Note Regarding Forward-Looking Statements” and “Recent Developments.”

If any of the following risks actually occur, the Company’s financial condition and results of operations could be materially and adversely affected. If this were to happen, the value of the Company’s common stock could decline significantly, and you could lose all or part of your investment.

References to “we,” “us,” and “our” in this section refer to the Company and its subsidiary, unless otherwise specified or unless the context otherwise requires.

Risks Related to the Company’s Business

We are subject to current financial market risk.

In 2008 and continuing in 2009, governments, regulators and central banks in the United States and worldwide have taken numerous steps to increase liquidity and to restore investor confidence, but asset values have continued to decline and access to liquidity continues to be very limited.

The EESA authorizes the U. S. Treasury to, among other things, purchase up to $700 billion of mortgages, mortgage-backed securities and certain other financial instruments from financial institutions and their holding companies, under TARP. The purpose of TARP is to restore confidence and stability to the United States banking system and to encourage financial institutions to increase their lending to customers and to each other. Under the Capital Purchase Program, which we participated in, the U. S. Treasury is purchasing equity securities from participating institutions. For more information regarding our participation in the Capital Purchase Program, see the discussion under the caption “Recent Developments” in “Item 1 – Business” of Part I of this Annual Report on Form 10-K. The EESA also increased federal deposit insurance on most deposit accounts from $100,000 to $250,000. This increase is in place until the end of 2009 and is not covered by deposit insurance premiums paid by the banking industry. The ARRA, which was signed into law on February 17, 2009, includes a wide array of programs intended to stimulate the economy and provide for extensive infrastructure, energy, health and education needs. The failure of these significant legislative measures to help stabilize the financial markets and a continuation or worsening of current financial market conditions could materially and adversely affect our business, financial condition, results of operations, access to credit or the trading price of our Common Shares.

14.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

The EESA and the ARRA followed, and have been followed by, numerous actions by the Federal Reserve Board, the United States Congress, the U. S. Treasury, the FDIC, the SEC and others to address the current liquidity and credit crisis that has followed the sub-prime mortgage meltdown that began in 2007. These measures include homeowner relief that encourages loan restructuring and modification; the establishment of significant liquidity and credit facilities for financial institutions and investment banks; the lowering of the federal funds rate; emergency action against short selling practices; a temporary guaranty program for money market funds; the establishment of a commercial paper funding facility to provide back-stop liquidity to commercial paper issuers; and coordinated international efforts to address illiquidity and other weaknesses in the banking sector. The purpose of these legislative and regulatory actions is to stabilize the United States banking system. The EESA, the ARRA and the other regulatory initiatives described above may not have their desired effects. If the volatility in the markets continues and economic conditions fail to improve or worsen, our business, financial condition and results of operations could be materially and adversely affected.

We are subject to interest rate risk.

The Company’s earnings and cash flows are largely dependent upon its net interest income. Interest rates are highly sensitive to many factors that are beyond the Company’s control, including general economic conditions and policies of various governmental and regulatory agencies and, in particular, the Federal Reserve. Changes in monetary policy, including changes in interest rates, could influence not only the interest the Company receives on loans and securities and the amount of interest it pays on deposits and borrowings, but such changes could also affect (i) the Company’s ability to originate loans and obtain deposits, (ii) the fair value of the Company’s financial assets and liabilities, and (iii) the average duration of the Company’s mortgage-backed securities portfolio and other interest-earning assets. If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, the Company’s net interest income, and therefore earnings, could be adversely affected. Earnings could also be adversely affected if the interest rates received on loans and other investments fall more quickly than the interest rates paid on deposits and other borrowings.

Although management believes it has implemented effective asset and liability management strategies to reduce the potential effects of changes in interest rates on the Company’s results of operations, any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on the Company’s financial condition and results of operations. Also, the Company’s interest rate risk modeling techniques and assumptions likely may not fully predict or capture the impact of actual interest rate changes on the Company’s balance sheet. See Part II sections “Net Interest Income” and “Interest Rate Risk” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for further discussion related to the Company’s management of interest rate risk.

We are subject to lending risk.

As of December 31, 2008 approximately 81.0% of the Company’s loan portfolio consisted of commercial, financial, and agricultural, real estate construction, and commercial real estate loans (collectively, “commercial loans”). Commercial loans are generally viewed as having more inherent risk of default than residential mortgage loans or retail loans. Also, the commercial loan balance per borrower is typically larger than that for residential mortgage loans and retail loans, inferring higher potential losses on an individual loan basis. Because the Company’s loan portfolio contains a number of commercial loans with large balances, the deterioration of one or a few of these loans could cause a significant increase in nonperforming loans. An increase in nonperforming loans could result in a net loss of earnings from these loans, an increase in the provision for loan losses, and an increase in loan charge offs, all of which could have a material adverse effect on the Company’s financial condition and results of operations. See Part II “Loans” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for further discussion of credit risks related to different loan types.

15.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

We are subject to economic conditions of our geographic market.

The Company’s success depends to a large degree on the general economic conditions of the geographic markets served by the Bank in the States of Illinois and Missouri and, to a lesser extent, contiguous states. The local economic conditions on these areas have a significant impact on the generation of the Bank’s commercial, real estate commercial, and real estate construction loans; the ability of borrowers to repay these loans; and the value of the collateral securing these loans. Adverse changes in the economic conditions of the counties in which we operate could also negatively impact the financial results of the Company’s operations and have a negative effect on its profitability. For example, these factors could lead to reduced interest income and an increase in the provision for loan losses.

A portion of the loans in the Company’s portfolio is secured by real estate. Most of these loans are secured by properties located in the north central, east central, south central and St. Louis’s suburban east counties of Illinois, as well as, the St. Louis metro area of Missouri. Negative conditions in the real estate markets where collateral for a mortgage loan is located could adversely affect the borrower’s ability to repay the loan and the value of the collateral securing the loan. Real estate values are affected by various factors, including changes in general or regional economic conditions, supply and demand for properties and governmental rules or policies.

We are subject to current levels of unprecedented market volatility.

The capital and credit markets have been experiencing volatility and disruption for more than a year. In recent months, the volatility and disruption have reached unprecedented levels. In some cases, the markets have produced downward pressure on stock prices and credit availability for certain issuers without regard to those issuers’ underlying financial strength. If current levels of market disruption and volatility continue or worsen, there can be no assurance that we will not experience an adverse effect, which may be material, on our ability to access capital and on our business, financial condition and results of operations.

Our allowance for loan losses may be insufficient.

Managing the Company’s allowance for loan losses is based upon, among other things, (1) historical experience, (2) an evaluation of local and national economic conditions, (3) regular reviews of delinquencies and loan portfolio quality, (4) current trends regarding the volume and severity of past due and problem loans, (5) the existence and effect of concentrations of credit, and (6) results of regulatory examinations. Based upon such factors, management makes various assumptions and judgments about the ultimate collectability of the respective loan portfolios. Although the Company believes that the allowance for loan losses is adequate, there can be no assurance that such allowance will prove sufficient to cover future losses. Future adjustments may be necessary if economic conditions change or adverse developments arise with respect to nonperforming or performing loans or if regulatory supervision changes. Material additions to the allowance for loan losses would result in a material decrease in the Company’s net income, and possibly its capital, and could result in the inability to pay dividends, among other adverse consequences.

16.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

Mergers and Acquisitions may disrupt our business and dilute stockholder value.

The Company regularly evaluates mergers and acquisition opportunities and conducts due diligence activities related to possible transactions with other financial institutions and financial services companies. As a result, negotiations may take place and future mergers or acquisitions involving cash, debt, or equity securities may occur at any time. The Company seeks merger or acquisition partners that are culturally similar, have experienced management, and possess either significant market presence or have potential for improved profitability through financial management, economies of scale, or expanded services.

Acquiring or merging with other banks, businesses, and acquiring branches involves potential adverse impact to the Company’s financial results and various other risks commonly associated with mergers and acquisitions, including, among other things:

• Difficulty in estimating the value of the target company

• Payment of a premium over book and market values that may dilute the Company’s tangible book value and earnings per share in the short and long term

• Potential exposure to unknown or contingent liabilities of the target company

• Exposure to potential asset quality issues of the target company

• There may be volatility in reported income as goodwill impairment losses could occur irregularly and in varying amounts

• Difficulty and expense of integrating the operations and personnel of the target company

• Inability to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits

• Potential disruption to the Company’s business

• Potential diversion of the Company’s management’s time and attention

• The possible loss of key employees and customers of the target company

• Potential changes in banking or tax laws or regulations that may affect the target company

Details of the Company’s recent acquisition activity are presented in Note 2, “Business Acquisitions and Divestitures,” of the notes to consolidated financial statements within Part II, Item 8.

Our information systems may experience an interruption or breach in security.

The Company relies heavily on communications and information systems to conduct its business. Any failure, interruption, or breach in security of these systems could result in failures or disruptions in the Company’s customer relationship management, general ledger, deposit, loan, and other systems. While the Company has policies and procedures designed to prevent or limit the effect of the failure, interruption, or security breach of its information systems, we cannot assure you that any such failures, interruptions, or security breaches will not occur or, if they do occur, that they will be adequately addressed. The occurrence of any failures, interruptions, or security breaches of the Company’s information systems could damage the Company’s reputation, result in a loss of customer business, subject the Company to additional regulatory scrutiny, or expose the Company to civil litigation and possible financial liability, any of which could have a material adverse effect on the Company’s financial condition and results of operations.

17.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

Risks Associated with the Company’s Industry

We operate in a highly regulated industry.

The banking industry is heavily regulated. The banking business of the Company and the Bank are subject, in certain respects, to regulation by the Federal Reserve, the FDIC, the IDFPR and the SEC. The Company’s success depends not only on competitive factors but also on state and federal regulations affecting banks and bank holding companies. The regulations are primarily intended to protect depositors, not stockholders or other security holders. The ultimate effect of recent and proposed changes to the regulation of the financial institution industry cannot be predicted. Regulations now affecting the Company may be modified at any time, and there is no assurance that such modifications, if any, will not adversely affect the Company’s business.

We operate in an industry that is interrelated such that defaults by other larger institutions could adversely affect financial markets generally.

The commercial soundness of many financial institutions may be closely interrelated as a result of relationships between the institutions. As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses or defaults by other institutions. This is sometimes referred to as “systemic risk” and may adversely affect our business.

We operate in an industry that is significantly affected by general business and economic conditions.

The Company’s operations and profitability are impacted by general business and economic conditions in the United States and abroad. These conditions include short-term and long-term interest rates, inflation, money supply, political issues, legislative and regulatory changes, fluctuations in both debt and equity capital markets, broad trends in industry and finance, and the strength of the U. S. economy and the local economies in which the Company operates, all of which are beyond the Company’s control. Deterioration in economic conditions could result in an increase in loan delinquencies and nonperforming assets, decreases in loan collateral values, and a decrease in demand for the Company’s products and services among other things, any of which could have a material adverse impact on the Company’s financial condition and results of operations.

Item 1B. Unresolved Staff Comments

None.

18.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

Item 2. Properties

At December 31, 2008, the Company operated thirty offices (twenty-seven full-service bank branches and two back-room sales support nonbanking facilities in Illinois and one full-service bank branch in Missouri). The principal offices of the Company are located in St. Louis, Missouri. All of the Company’s offices are owned by Centrue Bank and are not subject to any mortgage or material encumbrance, with the exception of four offices that are leased: one is located in LaSalle County in Illinois, one in Will County in Illinois, one in St. Clair County in Illinois and one in St. Louis County in Missouri. The Company believes that its current facilities are adequate for its existing business.

AFFILIATE	MARKETS SERVED	PROPERTY/TYPE LOCATION
The Company		Administrative Office: St. Louis, MO
Centrue Bank	Bureau, Champaign, Clinton, DeKalb, Effingham, Grundy, Kankakee, Kendall, LaSalle, Livingston, St. Clair and Will Counties in Illinois	Main Office: Streator, IL Twenty-seven banking offices and two non-banking offices located in markets served.
	St. Louis County in Missouri	One banking office

In addition to the banking locations listed above, Centrue Bank owns thirty automated teller machines, some of which are housed within banking offices and some of which are independently located.

At December 31, 2008, the properties and equipment of the Company had an aggregate net book value of approximately $32.4 million.

Item 3. Legal Proceedings

Neither the Company nor its subsidiary are involved in any pending legal proceedings other than routine legal proceedings occurring in the normal course of business, which, in the opinion of management, in the aggregate, are not material to the Company’s consolidated financial condition.

Item 4. Submission of Matters to a Vote of Security Holders

None.

19.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

PART II

Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Company’s Common Stock was held by approximately 911 stockholders of record as of February 23, 2009, and is traded on The NASDAQ Stock Market under the symbol “TRUE.” The table below indicates the high and low sales prices of the Common Stock as reported by NASDAQ for transactions of which the Company is aware, and the dividends declared per share for the Common Stock during the periods indicated. Because the Company is not aware of the price at which certain private transactions in the Common Stock have occurred, the prices shown may not necessarily represent the complete range of prices at which transactions in the Common Stock have occurred during such periods.

	Stock Sales				Cash Dividends
	High		Low
2008
First Quarter	$	22.94	$	17.26	$	0.13
Second Quarter		19.90		11.03		0.14
Third Quarter		16.00		9.12		0.14
Fourth Quarter		14.57		5.70		0.14
2007
First Quarter	$	19.93	$	18.99	$	0.12
Second Quarter		20.55		18.50		0.13
Third Quarter		20.31		18.95		0.13
Fourth Quarter		24.90		19.19		0.13

The holders of the Common Stock are entitled to receive dividends as declared by the board of directors of the Company, which considers payment of dividends quarterly. Upon the consummation of an acquisition in 1996, preferential dividends were required to be paid or accrued quarterly, with respect to the outstanding shares of Preferred Stock. In preparation for participation in the U. S. Department of the Treasury’s Capital Purchase Program, the Company has added a Fixed Rate Cumulative Preferred Stock, Series C. This preferred securities series to be issued by the Company will pay cumulative dividends of 5% a year for the first five years and 9% thereafter.

The ability of the Company to pay dividends in the future will be primarily dependent upon its receipt of dividends from Centrue Bank. In determining cash dividends, the Board of Directors considers the earnings, capital requirements, debt and dividend servicing requirements, financial ratio guidelines it has established, financial condition of the Company and other relevant factors. Centrue Bank’s ability to pay dividends to the Company and the Company’s ability to pay dividends to its stockholders are also subject to certain regulatory restrictions.

20.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

The Company has paid regular cash dividends on the Common Stock since it commenced operations in 1982. There can be no assurance, however, that any such dividends will be paid by the Company or that such dividends will not be reduced or eliminated in the future. The timing and amount of dividends will depend upon the earnings, capital requirements and financial condition of the Company and Centrue Bank, as well as the general economic conditions and other relevant factors affecting the Company and its subsidiaries. In 2008, the Company entered into a new loan agreement with Bank of America replacing the Company’s prior loan agreement. The loan agreement contains a dividend restriction specifying that the Company cannot declare or pay dividends in excess of 40% of the then current year’s earnings without prior consent. In addition, the terms of the Series A Preferred Stock, and the Series B Preferred Stock issued to certain of Prairie’s preferred stockholders prohibit the payment of dividends by the Company on the Common Stock during any period for which dividends on the respective series of Preferred Stock are in arrears. Additionally, the securities purchase agreement, between the Company and the Treasury limits the payment of dividends on the Common Stock to the current quarterly cash dividend of $0.14 per share.

The following graph shows a comparison of cumulative total returns for Centrue Financial Corporation, the NASDAQ Stock Market (US Companies) and an index of SNL Midwest Bank Stocks for the five-year period beginning January 1, 2004 and ending on December 31, 2008. The graph was prepared at our request by SNL Financial LC, Charlottesville, Virginia.

COMPARISON OF CUMULATIVE TOTAL RETURN
(ASSUMES $100 INVESTED ON JANUARY 1, 2004)

	Period Ending
Index	12/31/03		12/31/04		12/31/05		12/31/06		12/31/07		12/31/08
Centrue Financial Corporation		100.00		99.11		101.37		94.86		112.50		32.07
NASDAQ Composite		100.00		108.59		110.08		120.56		132.39		78.72
SNL Midwest Bank		100.00		112.84		108.73		125.68		97.96		64.44

21.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

The following table provides information about purchases of the Company’s common stock by the Company during the fourth quarter 2008:

Period	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
10/01/08 –10/31/08	—	—	—	395,078
11/01/08 –11/30/08	—	—	—	395,078
12/01/08 –12/31/08	—	—	—	395,078
Total (1)	—	—	—	395,078

(1) The Company repurchased no shares of stock during the quarter ended December 31, 2008. The 2007 repurchase program approved on July 24, 2007 authorized the Company to repurchase an additional 500,000 shares, or approximately 8% of the Company’s currently issued and outstanding shares, in the open market or privately negotiated transactions over an 18 month period commencing immediately following the completion of the 2006 stock repurchase program. This program expired on January 24, 2009.

22.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

Item 6. Selected Financial Data

The following table presents selected consolidated financial data for the five years ended December 31, 2008:

	2008			2007			2006			2005			2004
Statement of Income Data
Interest income	$	73,518		$	83,576		$	43,858		$	34,697		$	34,898
Interest expense		33,944			44,735			21,351			13,704			13,231
Net interest income		39,574			38,841			22,507			20,993			21,667
Provision for loan losses		8,082			675			(1,275	)		250			1,924
Net interest income after provision for loan losses		31,492			38,166			23,782			20,743			19,743
Noninterest income		13,409			15,665			6,688			6,298			12,378
Noninterest expense		35,745			37,333			22,723			21,343			24,860
Income before income taxes		9,156			16,498			7,747			5,698			7,261
Income taxes		2,766			5,175			2,145			1,319			2,173
Income from continuing operations (after taxes)		6,390			11,323			5,602			4,379			5,088
Loss on discontinued operations		—			—			(415	)		(206	)		(285	)
Net income	$	6,390		$	11,323		$	5,187		$	4,173		$	4,803
Preferred stock dividends		207			207			207			207			207
Net income for common stockholders	$	6,183		$	11,116		$	4,980		$	3,966		$	4,596
Per Share Data
Basic earnings per common shares from continuing operations	$	1.02		$	1.75		$	1.31		$	1.06		$	1.21
Basic earnings per common share		1.02			1.75			1.21			1.01			1.14
Diluted earnings per common share from continuing operations		1.02			1.74			1.30			1.04			1.19
Diluted earnings per common share		1.02			1.74			1.20			0.99			1.12
Dividends per common stock		0.55			0.51			0.48			0.44			0.40
Dividend payout ratio for common stock		53.71	%		29.17	%		27.05	%		43.39	%		35.10	%
Book value per common stock	$	19.14		$	19.50		$	18.23		$	17.23		$	17.30
Basic weighted average common shares outstanding		6,033,896			6,341,693			4,119,235			3,943,741			4,033,608
Diluted weighted average common shares outstanding		6,042,296			6,380,659			4,163,836			4,002,908			4,109,999
Period-end common shares outstanding		6,028,491			6,071,546			6,455,068			3,806,876			4,032,144
Balance Sheet Data
Securities	$	252,562		$	249,331		$	298,692		$	196,440		$	191,661
Loans		1,004,390			957,285			836,944			417,525			419,275
Allowance for loan losses		15,018			10,755			10,835			8,362			9,732
Total assets		1,401,881			1,364,999			1,283,025			676,222			669,546
Total deposits		1,049,220			1,033,022			1,026,610			543,841			512,477
Stockholders’ equity		115,908			118,876			118,191			66,075			70,247
Earnings Performance Data
Return on average total assets		0.47	%		0.85	%		0.69	%		0.63	%		0.65	%
Return on average stockholders’ equity		5.43			9.53			6.69			6.06			7.06
Net interest margin ratio		3.32			3.35			3.41			3.56			3.34
Efficiency ratio (1)		64.32			66.67			76.81			77.78			82.90
Asset Quality Ratios
Nonperforming assets to total end of period assets		1.64	%		0.51	%		1.08	%		0.62	%		0.69	%
Nonperforming loans to total end of period loans		1.03			0.43			1.40			0.96			1.00
Net loan charge-offs to total average loans		0.38			0.08			0.22			0.39			0.23
Allowance for loan losses to total loans		1.50			1.12			1.29			2.00			2.32
Allowance for loan losses to nonperforming loans		145.55			262.96			92.14			208.84			231.60
Capital Ratios
Average equity to average assets		8.69	%		8.90	%		10.35	%		10.39	%		9.27	%
Total capital to risk adjusted assets		12.18			10.23			11.94			13.33			14.30
Tier 1 leverage ratio		8.10			7.69			7.90			9.03			9.54

(1) Calculated as noninterest expense less amortization of intangibles and expenses related to other real estate owned divided by the sum of net interest income before provisions for loan losses and total noninterest income excluding securities gains and losses and gains on sale of assets.

23.

Centrue Financial Corporation

Securities And Exchange Commission

Form 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion provides an analysis of the Company’s results of operations and financial condition of Centrue Financial Corporation for the three years ended December 31, 2008. Management’s discussion and analysis (MD&A) should be read in conjunction with “Selected Consolidated Financial Data,” the consolidated financial statements of the Company, and the accompanying notes thereto. Unless otherwise stated, all earnings per share data included in this section and throughout the remainder of this discussion are presented on a fully diluted basis. All financial information is in thousands (000’s), except per share data.

24.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934 as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by the use of words such as “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “planned” or “potential” or similar expressions.

The Company’s ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company and the subsidiaries include, but are not limited to, changes in: interest rates; general economic conditions; legislative/regulatory changes; monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality and composition of the loan or securities portfolios; demand for loan products; deposit flows; competition; demand for financial services in the Company’s market areas; the Company’s implementation of new technologies; the Company’s ability to develop and maintain secure and reliable electronic systems; and accounting principles, policies, and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Critical Accounting Policies and Estimates

Note 1 to our Consolidated Financial Statements for the year ended December 31, 2008 contains a summary of our significant accounting policies. Various elements of our accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments. Our policy with respect to the methodologies used to determine the allowance for loan losses is our most critical accounting policy. The policy is important to the presentation of our financial condition and results of operations, and it involves a higher degree of complexity and requires management to make difficult and subjective judgments, which often require assumptions or estimates about highly uncertain matters. The use of different judgments, assumptions and estimates could result in material differences in our results of operations or financial condition.

The following is a description of our critical accounting policy and an explanation of the methods and assumptions underlying its application.

Allowance for Loan Losses: The allowance for loan losses represents management’s estimate of probable credit losses inherent in the loan portfolio. Estimating the amount of the allowance for loan losses requires significant judgment and the use of estimates related to the amount and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans based on historical loss experience, and consideration of current economic trends and conditions, all of which may be susceptible to significant change. The loan portfolio also represents the largest asset type on the consolidated balance sheet. Loan losses are charged off against the allowance, while recoveries of amounts previously charged off are credited to the allowance. A provision for loan losses is charged to operations based on management’s periodic evaluation of the factors previously mentioned, as well as other pertinent factors.

25.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

The allowance for loan losses is based on an estimation computed pursuant to the requirements of Financial Accounting Standards Board (“FASB”) Statement No. 5, “Accounting for Contingencies” and FASB Statements Nos. 114 and 118, “Accounting by Creditors for Impairment of a Loan,” the analysis of the allowance for loan losses consists of three components: (i) specific credit allocation established for expected losses resulting from analysis developed through specific credit allocations on individual loans for which the recorded investment in the loan exceeds its fair value; (ii) general portfolio allocation based on historical loan loss experience for each loan category; and (iii) subjective reserves based on general economic conditions as well as specific economic factors in markets in which the Company operates.

The specific credit allocation component of the allowances for loan losses is based on an analysis of individual loans and historical loss experience for each loan category. The specific credit allocations are based on regular analysis of all loans over a fixed-dollar amount where the internal credit rating is at or below a predetermined classification. These analyses involve a high degree of judgment in estimating the amount of loss associated with specific loans, including estimating the amount and timing of future cash flows and collateral values.

The general portfolio allocation component of the allowance for loan losses is determined statistically using a loss analysis that examines historical loan loss experience. The loss analysis is performed quarterly and loss factors are updated regularly based on actual experience. The general portfolio allocation element of the allowance for loan losses also includes consideration of the amounts necessary for concentrations and changes in portfolio mix and volume.

There are many factors affecting the allowance for loan losses; some are quantitative while others require qualitative judgment. The process for determining the allowance (which management believes adequately considers all of the potential factors which might possibly result in credit losses) includes subjective elements and, therefore, may be susceptible to significant change. To the extent actual outcomes differs from management estimates, additional provision for credit losses could be required that could adversely affect the Company’s earnings or financial position in future periods.

Securities: Available-for-sale securities are those that the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as available-for-sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. Securities available-for-sale are carried at fair value with unrealized gains or losses, net of the related income tax effect, reported in other comprehensive income. Declines in the fair value of securities below their cost that are other than temporary are reflected as realized losses. The fair values of securities available for sale is determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). If the securities could not be priced using quoted market prices, observable market activity or comparable trades, the financial market was considered not active and the assets were classified as Level 3. The assets included in Level 3 are trust preferred CDO’s. These securities were historically priced using Level 2 inputs. In 2008, the decline in the level of observable inputs and market activity for trust preferred CDOs by the measurement date was significant and resulted in unreliable external pricing. As such, these investments are now considered Level 3 inputs and are priced using an internal model. The following information is incorporated into the pricing model utilized in determining individual security valuations:

26.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

• historical and current performance of the underlying collateral

• deferral/default rates

• collateral coverage ratios

• break in yield calculations

• cash flow projections

• required liquidity and credit premiums

• financial trend analysis with respect to the individual issuing financial institutions and insurance companies

Due to market conditions as well as the limited trading activity of these securities, the market value of the securities is highly sensitive to assumption changes and market volatility.

The Company evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic and market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuer’s financial condition, the Company may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition.

For additional discussion on securities, see Notes 3 and 5 of “Notes to Consolidated Financial Statements” in Item 8 of this Form 10-K.

Goodwill: Costs in excess of the estimated fair value of identified assets acquired through purchase transactions are recorded as an asset of the Company. As per Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets”, an annual impairment analysis is required to be performed to determine if the asset is impaired and needs to be written down to its fair value. This assessment is conducted as of December 31 of each year or more frequently if conditions warrant. Per the December 31, 2008 analysis, no impairment was identified as a result of these tests. In making these impairment analyses, management must make subjective assumptions regarding the fair value of the Company’s assets and liabilities. It is possible that these judgments may change over time as market conditions or Company strategies change, and these changes may cause the Company to record impairment changes to adjust the goodwill to its estimated fair value.

Deferred Income Taxes: Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are also recognized for operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to an amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

General

Centrue Financial Corporation (the “Company”) is a bank holding company organized under the laws of the State of Delaware. On November 13, 2006, the Company (formerly known as UnionBancorp, Inc. now known as Centrue Financial Corporation) merged with Centrue Financial Corporation (former Centrue), parent of Centrue Bank with the Company being the surviving entity in the merger. Operating results of former Centrue are included in the consolidated financial statements since the date of the acquisition. The Company provides a full range of products and services to individual and corporate

27.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

customers located in the north central, east central, south central, suburban west area of Chicago, suburban metro east area of St. Louis, and northwest Illinois areas. These products and services include demand, time, and savings deposits; lending; and mortgage banking. Additionally, brokerage, asset management, and trust services will be provided to our customers after the sale of these product lines on a referral basis to third party providers that acquired the business. The Company is subject to competition from other financial institutions, including banks, thrifts and credit unions, as well as nonfinancial institutions providing financial services. Additionally, the Company and its subsidiary Centrue Bank (the “Bank”) are subject to regulations of certain regulatory agencies and undergo periodic examinations by those regulatory agencies.

Merger, Acquisition and Divestiture Activity

     Completed Transactions

On March 28, 2008 the Company completed the sale of its Hanover and Elizabeth branches to Apple River State Bank headquartered in Apple River, Illinois. Apple River assumed approximately $22,700 in deposits and acquired $14,700 in loans, and $401 in premises and equipment. The net gain on the sale was $482.

On June 6, 2008 the Company completed the sale of its Manlius and Tampico branches to Peoples National Bank headquartered in Kewanee, Illinois. Peoples National assumed approximately $29,500 in deposits and acquired $17,600 in loans, and $214 in premises and equipment. The net gain on the sale was $629.

On August 29, 2008 the Company completed the sale of its Asset Management product line to Vezzetti Capital Management. There was no gain or loss recorded on this transaction.

On September 18, 2008 the Company completed the sale of its brokerage product line. The net loss on sale was $29.

     Announced Transactions

On September 15, 2008, the Company entered into an agreement to sell its Trust unit of their Wealth Management division to Hometown National Bank headquartered in LaSalle, Illinois. The Definitive Purchase and Assumption Agreement entered into calls for Hometown to purchase the customers associated with this product line. The transaction was executed on January 23, 2009. There was no gain or loss recorded on this transaction.

Results of Operations

     Net Income

          2008 compared to 2007. Net income equaled $6,390 or $1.02 per diluted share for the year ended December 31, 2008 as compared to net income of $11,323 or $1.74 per diluted share for the year ended December 31, 2007. This represents a 43.6% decrease in net income and a 41.4% decrease in diluted per share earnings in the current fiscal year over fiscal 2007.

28.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

The Company’s annual results declined in 2008 versus 2007 primarily due to a $7,407 increase in the provision for loan losses and a $2,735 non-cash impairment charge related to trust preferred securities. These two factors are largely reflective of continued deterioration of general economic conditions and the extraordinary volatility in the securities markets experienced in fourth quarter 2008. These items were offset by decreases in noninterest expenses due to the impact of selling four branches in the first and second quarter of 2008 and management initiatives to reduce costs. Thus, the Company had a fewer number of full-time equivalents that led to lower payroll and benefit costs. Additionally, occupancy, telephones and data line expense levels were lower. Also positively contributing to results were gains on sales of callable securities and branches recorded in the first and second quarters of 2008.

Return on average assets was 0.47% for the year ended December 31, 2008 compared to 0.85% for the same period in 2007. Return on average stockholders’ equity was 5.43% for the year ended December 31, 2008 compared to 9.53% for the same period in 2007.

          2007 compared to 2006. Net income equaled $11,323 or $1.74 per diluted share for the year ended December 31, 2007 as compared to net income of $5,187 or $1.20 per diluted share for the year ended December 31, 2006. Net income for continuing operations equaled $11,323 or $1.74 per diluted share as compared to net income of $5,602 or $1.30 per diluted share. This represents a 118.3% increase in net income and a 45.0% increase in diluted per share earnings in the current fiscal year over fiscal 2006.

The Company’s annual results for continuing operations improved in 2007 versus 2006 due to volume related increases in net interest income and other fee based revenue largely related to a full year’s operating results from the Centrue merger and organic loan growth generated in the St. Louis market. These improvements were partially offset by increases in noninterest expenses associated with operating twenty-one additional branches resulting from the merger and an increased provision for loan losses.

Return on average assets was 0.85% for the year ended December 31, 2007 compared to 0.69% for the same period in 2006. Return on average stockholders’ equity was 9.53% for the year ended December 31, 2007 compared to 6.69% for the same period in 2006.

          Net Interest Income/ Margin

Net interest income is the difference between income earned on interest-earning assets and the interest expense incurred for the funding sources used to finance these assets. Changes in net interest income generally occur due to fluctuations in the volume of earning assets and paying liabilities and rates earned and paid, respectively, on those assets and liabilities. The net yield on total interest-earning assets, also referred to as net interest margin, represents net interest income divided by average interest-earning assets. Net interest margin measures how efficiently the Company uses its earning assets and underlying capital. The Company’s long-term objective is to manage those assets and liabilities to provide the largest possible amount of income while balancing interest rate, credit, liquidity and capital risks. For purposes of this discussion, both net interest income and margin have been adjusted to a fully tax equivalent basis for certain tax-exempt securities and loans.

          2008 compared to 2007. Net interest income, on a tax equivalent basis, was $40,554 for the year ended December 31, 2008, compared with $39,958 earned during the same period in 2007. This represented an increase of $596 or 1.5%. Tax-equivalent interest income declined $10,195 as compared to 2007. The increase in interest-earning assets increased interest income by $1,945, while a 99 basis point decline in the average rate earned on interest-earning assets reduced interest income by $12,140. Interest expense declined $10,791 as compared to 2007. The increase in interest-bearing liabilities increased interest expense by $1,079, but the shift to less expensive wholesale borrowing, coupled with an overall 107 basis point decrease in the average rate paid on interest-bearing liabilities reduced interest expense by $11,870.

29.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

The net interest margin decreased 3 basis points to 3.32% for the year ended December 31, 2008 from 3.35% during the same period in 2007. The Company’s margin has been pressured by falling short-term interest rates, as approximately 40% of the Company’s loan portfolio is tied to prime or LIBOR and immediately reprices downward upon a rate change; whereas, pricing on deposits have remained at relatively high competitive levels. Due largely to continued competition in pricing loans and deposits, the protracted economic downturn, and the Company’s interest rate sensitivity, the margin will likely remain under pressure throughout 2009.

          2007 compared to 2006. Net interest income, on a tax equivalent basis, was $39,958 for the year ended December 31, 2007, compared with $23,099 earned during the same period in 2006. This represented an increase of $16,859 or 72.9%. The improvement in net interest income was largely related to an increase in earning assets due to the addition of the former Centrue’s loan and investment portfolios for a full year in 2007 and organic loan growth generated primarily in the St. Louis market. This was offset by increases in deposit balances and a shift in the mix of funding liabilities from lower costing non-interest bearing deposits to higher costing time deposits.

The $40,238 increase in interest income resulted from improvements of $37,453 related to volume and $2,785 due to rates. The majority of the change in interest income was related to a $437,690 improvement in average loans largely related to the 2006 merger and organic loan growth generated from the St. Louis market. Also, contributing were yield increases of 42 basis points in the loan portfolio and 29 basis points in the security portfolio.

The $23,379 increase in interest expense resulted from increases of $20,381 due to volume and $2,998 associated with rate. The majority of the change was attributable to a $487,557 increase in average interest-bearing liabilities related to the 2006 merger and 69 basis point increases in rates paid on total time deposits.

The net interest margin decreased 6 basis points to 3.35% for the year ended December 31, 2007 from 3.41% during the same period in 2006. Adversely impacting margin levels was a funding shift into higher costing time and wholesale deposits away from lower costing non-maturing deposits. The changes in deposit composition, as well as a generally higher cost of funds during the year, put pressure on the margin.

30.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

AVERAGE BALANCE SHEET
AND ANALYSIS OF NET INTEREST INCOME

	For the Years Ended December 31, 2008
	Average Balance			2007 Interest Income/ Expense		Average Rate			Average Balance			2006 Interest Income/ Expense		Average Rate			Average Balance			Interest Income/ Expense		Average Rate
ASSETS
Interest-earning assets
Interest-earning deposits	$	2,891		$	13		0.45	%	$	2,362		$	33		1.40	%	$	736		$	16		2.18	%
Securities
Taxable		185,507			8,992		4.85			237,078			12,473		5.26			183,443			8,785		4.79
Non-taxable		38,843			2,208		5.68			40,950			2,248		5.49			21,711			1,478		6.81
Total securities (tax equivalent)		224,350			11,200		4.99			278,028			14,721		5.29			205,154			10,263		5.00
Federal funds sold		2,567			54		2.10			10,811			545		5.04			6,846			364		5.31
Loans
Commercial		191,578			11,965		6.25			180,714			14,962		8.28			121,435			8,957		7.38
Real estate		791,033			50,630		6.40			708,734			53,480		7.55			334,119			23,529		7.03
Installment and other		9,413			636		6.76			13,210			952		7.21			9,414			1,326		14.08
Gross loans (tax equivalent)		992,024			63,231		6.37			902,658			69,394		7.69			464,968			33,812		7.27
Total interest-earnings assets		1,221,832			74,498		6.10			1,193,859			84,693		7.09			677,704			44,455		6.56
Noninterest-earning assets
Cash and cash equivalents		28,415								31,692								18,818
Premises and equipment, net		33,992								35,747								16,618
Other assets		69,919								73,579								36,074
Total non-interest-earning assets		132,326								141,018								71,510
Total assets	$	1,354,158							$	1,334,877							$	749,214
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities
NOW accounts		105,800			1,211		1.14	%		105,417			1,740		1.65	%	$	74,328			1,313		1.77	%
Money market accounts		155,001			4,083		2.63			126,614			4,861		3.84			62,778			1,876		2.99
Savings deposits		87,615			319		0.36			96,838			655		0.68			45,343			315		0.69
Time $100,000 and over		216,112			7,945		3.68			226,605			12,010		5.30			209,030			9,093		4.35
Other time deposits		343,456			13,997		4.08			387,530			18,294		4.72			137,470			5,608		4.14
Federal funds purchased and repurchase agreements		42,148			760		1.80			43,859			1,881		4.29			9,947			407		4.09
Advances from FHLB		119,800			3,279		2.74			64,964			2,834		4.36			46,499			1,823		3.92
Notes payable		41,077			2,350		5.72			32,428			2,460		7.59			11,303			921		8.15
Total interest-bearing liabilities		1,111,009			33,944		3.06			1,084,255			44,735		4.13			596,698			21,356		3.58
Noninterest-bearing liabilities
Noninterest-bearing deposits		114,994								120,355								68,650
Other liabilities		10,545								11,459								6,355
Total noninterest-bearing liabilities		125,539								131,814								75,005
Stockholders’ equity		117,610								118,808								77,511
Total liabilities and stockholders’ equity	$	1,354,158							$	1,334,877							$	749,214
Net interest income (tax equivalent)				$	40,554							$	39,958							$	23,099
Net interest income (tax equivalent) to total earning assets							3.32	%							3.35	%							3.41	%
Interest-bearing liabilities to earning assets		90.93	%							90.82	%							88.05	%

(1)	Average balance and average rate on securities classified as available-for-sale are based on historical amortized cost balances.
(2)	Interest income and average rate on non-taxable securities are reflected on a tax equivalent basis based upon a statutory federal income tax rate of 34%.
(3)	Nonaccrual loans are included in the average balances.
(4)	Overdraft loans are excluded in the average balances.

31.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

The Company’s net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, referred to as “volume change.” It is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds referred to as “rate change.” The following table reflects the changes in net interest income stemming from changes in interest rates and from asset and liability volume, including mix. Any variance attributable jointly to volume and rate changes is allocated to the volume and rate variances in proportion to the relationship of the absolute dollar amount of the change in each.

RATE/VOLUME ANALYSIS OF
NET INTEREST INCOME

	For the Years Ended December 31,
	2008 Compared to 2007									2007 Compared to 2006
	Change Due to									Change Due to
	Volume			Rate			Net			Volume		Rate			Net
Interest-income:
Interest-earning deposits	$	3		$	(23	)	$	(20	)	$	23	$	(6	)	$	17
Investment securities:
Taxable		(2,640	)		(841	)		(3,481	)		2,822		866			3,688
Non-taxable		(128	)		88			(40	)		1,056		(286	)		770
Federal funds sold		(300	)		(191	)		(491	)		200		(19	)		181
Loans		5,010			(11,173	)		(6,163	)		33,352		2,230			35,582
Total interest income		1,945			(12,140	)		(10,195	)		37,453		2,785			40,238
Interest expense:
NOW accounts		45			(574	)		(529	)		513		(86	)		427
Money market accounts		1,098			(1,876	)		(778	)		2,451		534			2,985
Savings deposits		(35	)		(301	)		(336	)		348		(8	)		340
Time, $100,000 and over		(255	)		(3,810	)		(4,065	)		8,554		1,553			10,107
Other time deposits		(1,744	)		(2,553	)		(4,297	)		4,652		844			5,496
Federal funds purchased and repurchase agreements		(507	)		(614	)		(1,121	)		1,454		20			1,474
Advances from FHLB		1,899			(1,454	)		445			806		205			1,011
Notes payable		578			(688	)		(110	)		1,603		(64	)		1,539
Total interest expense		1,079			(11,870	)		(10,791	)		20,381		2,998			23,379
Net interest income	$	866		$	(270	)	$	596		$	17,072	$	(213	)	$	16,859

Provision for Loan Losses. The amount of the provision for loan losses is based on management’s evaluations of the loan portfolio, with particular attention directed toward nonperforming, impaired and other potential problem loans. During these evaluations, consideration is also given to such factors as management’s evaluation of specific loans, the level and composition of impaired loans, other nonperforming loans, other identified potential problem loans, historical loss experience, results of examinations by regulatory agencies, results of the independent asset quality review process, the market value of collateral, the estimate of discounted cash flows, the strength and availability of guarantees, concentrations of credits, and various other factors, including concentration of credit risk in various industries and current economic conditions.

32.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

          2008 compared to 2007. The 2008 provision for loan losses charged to operating expense totaled $8,082, an increase of $7,407 in comparison to $675 recorded in the 2007 period. The increase in the provision was the result of identifying and addressing problem credits and the continued deterioration of economic conditions. Specifically, nine relationships were identified during 2008 where large specific provisions were recorded. As part of an ongoing review of the commercial loan portfolio, seven additional large credits with a deterioration in their financial condition were identified. Action plans were implemented, resulting in $28,300 being classified as impaired. Of this total, $3,500 is for three relationships that are nonperforming and classified as nonaccrual. There were four relationships totaling $24,800 that were still performing assets at December 31, 2008. Two of the relationships totaling $6,100 were making monthly payments and were less than 30 days past due on December 31, 2008. The two other relationships totaling $18,700 are residential development projects and were down graded to impaired due to slow sales driven by the current economic climate. In each of these instances, the borrower has developed an action plan to improve sales. If sales do not improve, the performing status of these credits will be re-evaluated.

For the two previously identified relationships disclosed in the Company’s quarterly report on Form 10 Q for the first quarter 2008 filed on May 9, 2008, we continue to carry $8,300 as other real estate owned for one of these relationships. The Company is actively marketing the remaining parcel and no additional write-downs related to this credit have been taken other than the $1,200 charge-off taken during the third quarter. On the second relationship identified earlier in the year, the $7,300 loan was restructured in the fourth quarter with no additional provision or loss being taken. This restructuring was not considered to be a troubled debt restructuring. The remaining parcel with a balance of $3,700 remains in other assets but is under contract with a closing anticipated by mid-2009.

The Company proactively reviews loans for potential impairment regardless of the payment or performance status. This approach results in some relationships being classified as impaired but still performing.

The following factors also impacted 2008 provision levels:

• increase in nonperforming and action list loans since year-end;

• increase in the level of past due loans.

Net charge-offs for the year ended December 31, 2008 were $3,819 compared with $755 in the same period of 2007. Annualized net charge-offs increased to 0.38% of average loans for 2008 compared to 0.09% in the same period in 2007.

Management continues to diligently monitor the loan portfolio, paying particular attention to borrowers with residential real estate exposure. While virtually all of these relationships are performing, the economic outlook for this industry will likely remain extremely challenging well into 2009. Should the economic climate deteriorate from current levels, borrowers may experience repayment difficulty, and the level of nonperforming loans, charge-offs and delinquencies could rise requiring further increases in the provision for loan losses.

          2007 compared to 2006. The 2007 provision for loan losses charged to operating expense totaled $675, an increase of $1,950 in comparison to recording a negative provision of ($1,275) in the 2006 period. The increase in the provision was the result of identifying and addressing problem credits and the recent deteriorating economic conditions in a timely fashion. Results for 2006 included negative provisions largely due to the pay-off of one $4,400 loan relationship that was classified as impaired in late 2005 with a specific reserve allocation of $1,500. The following factors also impacted 2007 provision levels:

33.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

• decrease in nonperforming and action list loans since year-end;

• decrease in the level of past due loans;

• higher than anticipated recoveries; and

• many loans that were charged off during 2007 had previously been allocated a specific reserve.

Net charge-offs for the year ended December 31, 2007 were $755 compared with $1,019 in the same period of 2006. Annualized net charge-offs decreased to 0.09% of average loans for 2007 compared to 0.22% in the same period in 2006.

          Noninterest Income. Noninterest income consists of a wide variety of fee-based revenues from bank-related service charges on deposits and mortgage revenues. Also included in this category are revenues generated by the Company’s brokerage, trust and asset management services as well as increases in cash surrender value on bank-owned life insurance. The following table summarizes the Company’s noninterest income:

NONINTEREST INCOME
(Dollars in Thousands)

	Years Ended December 31,
	2008			2007			2006
Service charges	$	7,303		$	6,789		$	2,473
Trust income		750			942			858
Mortgage banking income		1,525			1,743			1,113
Brokerage commissions and fees		254			795			326
Bank owned life insurance		1,022			991			628
Securities gains (losses)		848			(29	)		(104	)
Other than temporary impairment on securities		(2,735	)		—			—
Gain on sale of Oreo		379			1,107			—
Gain on sale of other assets		1,309			—			—
Other income		2,754			3,327			1,394
Total noninterest income	$	13,409		$	15,665		$	6,688

          2008 compared to 2007. Noninterest income totaled $13,409 for the year ended December 31, 2008, as compared to $15,665 for the same period in 2007. This represented a decrease of $2,256 or 14.4% in 2008 over the prior period. Excluding $199 in 2008 nonrecurring activity (other than temporary impairment losses on trust preferred securities and gains on sale of four branches and other assets, securities gains, and OREO gains) and $1,078 of nonrecurring activity recorded in 2007, noninterest income showed a year-over-year decrease of $979 or 6.7%.

Excluding all nonrecurring activity from both periods, the decline was primarily the result of volume related reductions in the mortgage banking division and the sale of the asset management and brokerage business lines which were finalized in the third and fourth quarters. These decreases were partially offset by growth in service charges and NSF fees on deposit accounts.

          2007 compared to 2006. Noninterest income from continuing operations totaled $15,665 for the year ended December 31, 2007, as compared to $6,688 for the same period in 2006. This represented an increase of $8,977 or 134.2% in 2007 over the prior period. Excluding net securities losses and the gains on sale of other assets, noninterest income shows a year-over-year increase of $7,795 or 114.8%.

34.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

The growth was primarily the result of improvements in service charges and NSF fees on deposit accounts, electronic banking services (included in “other income”), and revenue generated from the mortgage banking division as a result of a full year’s activity from the November 2006 merger. Also contributing to the increase were gains on sale of properties held in other real estate (included in the category “gain on sale of OREO”), increased revenue generated from the brokerage product line, and income earned on accrued interest related to a federal tax refund.

          Noninterest Expense. Noninterest expense for continuing operations is comprised primarily of compensation and employee benefits, occupancy and other operating expense. The following table summarizes the Company’s noninterest expense:

NONINTEREST EXPENSE
(Dollars in Thousands)

	Years Ended December 31,
	2008		2007		2006
Salaries and employee benefits	$	16,283	$	17,635	$	12,181
Occupancy expense, net		3,598		4,043		1,714
Furniture and equipment expenses		2,673		2,621		2,276
Marketing		1,228		1,035		697
Supplies and printing		470		653		421
Telephone		772		834		490
Data processing		1,309		1,650		788
Amortization of intangible assets		2,607		2,307		416
Other expense		6,805		6,555		3,740
Total noninterest expense	$	35,745	$	37,333	$	22,723

          2008 compared to 2007. Noninterest expense totaled $35,745 for the year ended December 31, 2008, as compared to $37,333 for the same period in 2007. This represented a decrease of $1,588 or 4.3% in 2008 from 2007.

The decrease was reported across many categories due to management’s initiatives to reduce costs. Furthermore, four branches were sold in 2008 which led to further reductions in the number of full-time equivalent employees which decreased payroll & benefit costs as well as lowered occupancy, telephone and data line expense levels. Also contributing were decreases in wealth management operating expenses and data processing costs. Offsetting these decreases were increases related to marketing, loan related expense due to growth in the portfolio, and goodwill valuation adjustments taken related to the sale of the wealth management business (included in amortization of intangible assets).

          2007 compared to 2006. Noninterest expense for continuing operations totaled $37,333 for the year ended December 31, 2007, as compared to $22,723 for the same period in 2006. This represented an increase of $14,610 or 64.3% in 2007 from 2006.

The increase was experienced in all categories and primarily due to higher costs associated with operating twenty-one additional branches for a full year’s activity from the November 2006 merger. Also contributing were increases in professional fees related to Sarbanes-Oxley compliance, core deposit amortization, accelerated depreciation expense for assets being phased out, and valuation adjustments taken on properties held in other real estate taken in light of recent economic downturns. Offsetting these increases were cost savings related to the completion of integration activities which reduced operating costs and fifty-four full-time equivalent employees.

35.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

          Applicable Income Taxes. Income tax expense for the periods included benefits for tax-exempt income, tax-advantaged investments and general business tax credits offset by the effect of nondeductible expenses. The following table shows the Company’s income before income taxes, as well as applicable income taxes and the effective tax rate for each of the past three years:

	Years Ended December 31,
	2008			2007			2006
Income from continuing operations before income taxes	$	9,156		$	16,498		$	7,747
Applicable income taxes		2,766			5,175			2,145
Effective tax rates		30.2	%		31.4	%		27.7	%

The Company recorded income tax expense of $2,766 and $5,175 for 2008 and 2007, respectively. Effective tax rates equaled 30.2% and 31.4% respectively, for such periods. The Company’s effective tax rate was lower than statutory rates due to several factors. First, the Company derives interest income from municipal securities and loans, which are exempt from federal tax and certain U. S. government agency securities, which are exempt from state tax. Second, the Company derives income from bank owned life insurance policies, which is exempt from federal and state tax. Finally, state income taxes are recorded net of the federal tax benefit, which lowers the combined effective tax rate.

Preferred Stock Dividends. The Company paid $207 of preferred stock dividends in 2008, 2007 and 2006. With the issuance of the new Fixed Rate Cumulative Perpetual Preferred Stock, Series C, for the Company’s participation in the U. S. Department of Treasury’s Capital Purchase Program, the Company expects to pay approximately $1,633 of additional dividends in 2009.

Earnings Review by Business Segment

The Company’s internal reporting and planning process focuses on four primary lines of business (Segment(s)): Retail, Commercial, Treasury and Wealth Management. See Note 21 of the Notes to Consolidated Financial Statements for the presentation of the condensed income statement and total assets for each Segment.

The financial information presented was derived from the Company’s internal profitability reporting system that is used by management to monitor and manage the financial performance of the Company. This information is based on internal management accounting policies which have been developed to reflect the underlying economics of the Segments and, to the extent practicable, to portray the Segment as if it operated on a standalone basis. Thus, each Segment, in addition to its direct revenues and expenses, assets and liabilities, includes an allocation of shared support function expenses. The Retail, Commercial, Treasury, and Wealth Management Segments also include funds transfer adjustments to appropriately reflect the cost of funds on loans made and funding credits on deposits generated. Apart from these adjustments, the accounting policies used are similar to those described in Note 1 of the Notes to Consolidated Financial Statements.

Since there are no comprehensive authorities for management accounting equivalent to U.S. generally accepted accounting principles, the information presented is not necessarily comparable with similar information from other financial institutions. In addition, methodologies used to measure, assign and allocate certain items may change from time-to-time to reflect, among other things, accounting estimate refinements, changes in risk profiles, changes in customers or product lines and changes in management structure.

36.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

          Retail Segment. The Retail Segment (Retail) provides retail banking services to individual customers through the Company’s branch locations in Illinois and Missouri. The services provided by this Segment include consumer lending, checking, savings, money market and CD accounts, safe deposit rental, ATM’s and other traditional and electronic banking services.

          2008 compared to 2007. Retail generated $5,196 or 81.3% of total segment net income in 2008 as compared to $2,492 or 22.0% in 2007. Retail assets were $255,028 at December 31, 2008 and represented 18.2% of total consolidated assets. This compared to $306,156 or 22.4% at December 31, 2007.

For 2008, net income increased due to stronger revenues on electronic banking services and gain on sale of other assets for the branch sales which occurred in 2008. Additionally, noninterest expenses were lower across most categories as well as allocated expenses were lower in 2008 than in 2007. These positive variances were slightly offset by higher IT costs, debit card expenses, and other deposit account expenses. The decline in the retail assets was primarily related to the decline in the held residential mortgages portfolio.

          2007 compared to 2006. Retail represented 22.0% of total segment net income in 2007 and 26.3% in 2006. Retail assets were $306,156 at December 31, 2007 and represented 22.4% of total consolidated assets. This compared to $240,872 at December 31, 2006.

The growth from 2006 to 2007 was primarily the result of operating twenty-one additional branches for a full year’s activity from the November 2006 merger. This increased the net interest income, other revenue and other expense categories.

          Commercial Segment. The Commercial Segment (Commercial) provides commercial banking services to business customers served through the Company’s full service branch channels located in Illinois and Missouri. The services provided by this Segment include lending, business checking and deposits, cash management, and other traditional as well as electronic commercial banking services.

          2008 compared to 2007. Commercial generated $3,807 or 59.6% of total segment net income in 2008 as compared to $8,855 or 78.2% in 2007. Commercial assets were $803,069 at December 31, 2008 and represented 57.3% of total consolidated assets. This compared to $741,861 or 54.4% at December 31, 2007.

          Net income for the 2008 decreased to $3,807 as compared to $8,855 for the same period in 2007. The decrease is attributable to the $8,082 provision for loan loss recorded in 2008 as compared to the $632 provision in 2007. The increase in the provision was the result of identifying additional problem credits and the continued deterioration of the economic conditions. Additionally, there was a large gain on sale of OREO recorded and service revenue was higher during 2007 leading to a decrease in noninterest income between these periods. Offsetting these negative variances is lower noninterest expenses and lower income tax related due to decreased pre-tax earnings in 2008. The growth in the assets was due primarily to organic loan growth generated primarily in the St. Louis market.

          2007 compared to 2006. Commercial represented 78.2% of total segment net income in 2007 and 86.9% in 2006. Commercial assets were $741,861 at December 31, 2007 and represented 54.4% of total consolidated assets. This compared to $686,495 at December 31, 2006.

37.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

          The growth from 2006 to 2007 was primarily the result of the increase in earning asset portfolio due to the addition of the former Centrue’s loan portfolio for a full year and organic growth generated primarily in the St. Louis market. The increase in the provision was the result of identifying and addressing problem credits and the recent deteriorating economic conditions in a timely fashion. Results for 2006 included negative provisions largely due to the pay-off of one $4,400 loan relationship that was classified as impaired in late 2005 with a specific reserve allocation of $1,500.

          Treasury Segment. The Treasury Segment (Treasury) is the area of the bank responsible for managing the investment portfolio and acquiring wholesale funding for loan activity. Additionally, this area is responsible for assisting in the management of liquidity and interest rate risk.

          2008 compared to 2007. The Treasury Segment net loss was $(421) or (6.6%) of total segment net income in 2008 as compared to a net loss of $(298) or (2.6%) for the same period in 2007. Treasury assets were $277,597 at December 31, 2008, or 19.8% of consolidated assets. This compares to $268,484 or 19.7% at December 31, 2007.

          Treasury’s net income for 2008 was impacted by a $2,735 non-cash other than temporary impairment charge recorded for certain trust preferred securities which is partially offset by the gains on sales from called securities earlier in 2008. This negative variance is also slightly offset by lower noninterest expenses, lower allocated expenses and lower income taxes in 2008. In comparison to 2007 results, there was also a slight improvement in the margin attributable to lower funding costs on wholesale funds.

          In 2008, the assets were increased in the latter part of the year to better position the portfolio and leverage the current rate environment.

          2007 compared to 2006. In 2007, the reduction in the investment portfolio was caused by the selling of investments and using the proceeds to fund the loan growth experienced in the Commercial Segment. Net interest income grew as a result of having the combined investment portfolio for a full year after the merge in November 2006.

          Treasury represented (2.6%) of total segment net income in 2007 as compared to (10.5%) in 2006. Treasury assets were $268,484 at December 31, 2007 representing 19.7% of total consolidated assets. This compared to $328,841 or 25.6% at December 31, 2006.

          Wealth Management Segment. The Wealth Management Segment (Wealth) provides trust services, estate administration, financial planning, employee benefit plan administration, asset management, and brokerage transaction services. With the sale of these product lines in 2008 and the first quarter of 2009, this segment will not exist going forward.

          2008 compared to 2007. The Wealth net loss increased during 2008 to $(1,039) or (16.3%) of total segment net income in 2008 as compared to $(365) or (3.2%) for the same period in 2007. This is primarily due to the write-down of goodwill related to the sale of asset management, brokerage and trust product lines that occurred throughout 2008. With the disposition of asset management and brokerage during the year, noninterest income declined as well as noninterest expenses. To partially offset these negative variances, allocations decreased in 2008 and the tax benefit was also larger in 2008. Wealth assets were $162 at December 31, 2008 as compared to $1,289 at December 31, 2007. This decline was the result of selling asset management and brokerage product lines.

38.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations

(In Thousands, Except Share Data)

          2007 compared to 2006. Wealth represented (3.2%) of total segment net income in 2007 and (5.6%) in 2006. Wealth assets were $1,289 at December 31, 2007 and represented 0.1% of total consolidated assets. This compared to $1,330 or 0.1% at December 31, 2006.

          The improvement in earnings from 2006 to 2007 was the result of the sale of the Insurance business unit in late 2006. See Note 22 in the Notes to Consolidated Financial Statements for additional details on this transaction. Additionally in 2007, the revenue increased due to increased revenue from the brokerage product line.

Interest Rate Sensitivity Management

The business of the Company and the composition of its balance sheet consist of investments in interest-earning assets (primarily loans and securities) which are primarily funded by interest-bearing liabilities (deposits and borrowings). All of the financial instruments of the Company are for other than trading purposes. Such financial instruments have varying levels of sensitivity to changes in market rates of interest. The operating income and net income of Centrue Bank depends, to a substantial extent, on “rate differentials,” i.e., the differences between the income Centrue Bank receives from loans, securities, and other earning assets and the interest expense they pay to obtain deposits and other liabilities. These rates are highly sensitive to many factors that are beyond the control of Centrue Bank, including general economic conditions and the policies of various governmental and regulatory authorities.

The Company measures its overall interest rate sensitivity through a net interest income analysis. The net interest income analysis measures the change in net interest income in the event of hypothetical changes in interest rates. This analysis assesses the risk of changes in net interest income in the event of a sudden and sustained 100 to 200 basis point increase in market interest rates or a 100 to 200 basis point decrease in market rates. Due to the current rate environment, this analysis was done in 2008 using a 50 basis point decrease in rates verses the normal 100 to 200 basis point decrease. The interest rates scenarios are used for analytical purposes and do not necessarily represent management’s view of future market movements.

The tables below present the Company’s projected changes in net interest income for 2008 and 2007 for the various rate shock levels.

	Change in Net Interest Income Over One Year Horizon
	December 31, 2008						December 31, 2007
	Change						Change
	$			%			$			%
+200 bp	$	728			2.08	%	$	305			0.74	%
+100 bp		295			0.84			509			1.23
+ 50 bp		166			0.47			502			1.21
Base		—			—			—			—
- 50 bp		(179	)		(0.51	)		(654	)		(1.58	)

Based on the Company’s model at December 31, 2008, the effect of an immediate 200 basis point increase in interest rates would increase the Company’s net interest income by 2.08% or approximately $728. The effect of an immediate 50 basis point decrease in rates would decrease the Company’s net interest income by $179 or 0.51%.

39.

Centrue Financial Corporation
Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations
(In Thousands, Except Share Data)

Based on the Company’s model at December 31, 2007, the effect of an immediate 200 basis point increase in interest rates would increase the Company’s net interest income by 0.74% or approximately $305. The effect of an immediate 50 basis point decrease in rates would decrease the Company’s net interest income by $654 or 1.58%.

Throughout 2008, management continued to position our balance sheet to maximize the net interest margin. Throughout the year, steps were taken to lower our funding costs in reaction to FOMC rate reductions. The mix of our funding portion of the balance sheet has been adjusted to align it with our asset sensitive portion of the balance sheet to create better spreads in various sectors. With these changes, we have been able to reposition our funding and align it better with the shorter end of the yield curve which minimizes our exposure to the volatility found at the longer end of the yield curve. In the latter part of the year the Company began extending the duration of some of its borrowings to lock in lower rates.

Computations of the prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, loan prepayments and deposit run-off rates and should not be relied upon as indicative of actual results. Actual values may differ from those projections set forth above, should market conditions vary from the assumptions used in preparing the analysis. Further, the computations do not contemplate actions the Company may undertake in response to changes in interest rates.

Financial Condition

          Loans and Asset Quality. Outstanding loans totaled $1,004,390 at December 31, 2008 compared to $957,285 at December 31, 2007, representing an increase of $47,105 or 4.9%. The loan growth was largely generated in the St. Louis market and was concentrated in commercial real estate lending activity. Excluding $30,100 in loans related to branch sales recorded in the first and second quarters of 2008, loans grew $77,200 or 8.1% since year-end 2007. The Company has no direct exposure to sub prime mortgages.

          The Company offers a broad range of products, including agribusiness, commercial, residential, and installment loans, designed to meet the credit needs of its borrowers. The Company’s loans are diversified by borrower and industry group.

The following table describes the composition of loans by major categories outstanding:

LOAN PORTFOLIO

	Aggregate Principal Amount December 31,
	2008			2007			2006			2005			2004
Commercial	$	152,807		$	181,210		$	154,829		$	91,537		$	91,941
Agricultural		16,914			21,861			23,118			26,694			28,718
Real estate:
Commercial mortgages		460,920			362,920			274,909			126,503			129,597
Construction		164,820			159,274			116,608			68,508			38,882
Agricultural		17,339			23,560			27,624			33,033			30,601
1-4 family mortgages		185,666			198,208			226,884			57,920			77,566
Installment		5,267			8,611			11,998			12,747			21,502
Other		657			1,641			974			583			468
Total loans	$	1,004,390		$	957,285		$	836,944		$	417,525		$	419,275
Allowance for loan losses		(15,018	)		(10,755	)		(10,835	)		(8,362	)		(9,732	)
Loans, net	$	989,372		$	946,530		$	826,109		$	409,163		$	409,543

40.

Centrue Financial Corporation
Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations
(In Thousands, Except Share Data)

LOAN PORTFOLIO

	Aggregate Principal Amount Percentage of Total Loan Portfolio December 31,
	2008			2007			2006			2005			2004
Commercial		15.21	%		18.93	%		18.50	%		21.92	%		21.93	%
Agricultural		1.68			2.28			2.76			6.39			6.85
Real estate:
Commercial mortgages		45.89			37.91			32.85			30.31			30.91
Construction		16.41			16.64			13.93			16.41			9.27
Agricultural		1.73			2.46			3.30			7.91			7.30
1-4 family mortgages		18.49			20.71			27.11			13.87			18.50
Installment		0.52			0.90			1.43			3.05			5.13
Other loans		0.07			0.17			0.12			0.14			0.11
Gross loans		100.00	%		100.00	%		100.00	%		100.00	%		100.00	%

As of December 31, 2008 and 2007, commitments of Centrue Bank under standby letters of credit and unused lines of credit totaled approximately $258,471 and $271,856, respectively.

Stated loan maturities (including rate loans reset to market interest rates) of the total loan portfolio, net of unearned income, at December 31, 2008 were as follows:

STATED LOAN MATURITIES ⁽¹⁾

	Within 1 Year		1 to 5 Years		After 5 Years		Total
Commercial		90,726		49,459		12,622		152,807
Agricultural		13,633		2,358		923		16,914
Real estate		283,526		306,203		239,016		828,745
Installment		1,406		3,049		1,469		5,924
Total	$	389,291	$	361,069	$	254,030	$	1,004,390

⁽¹⁾ Maturities based upon contractual maturity dates

The maturities presented above are based upon contractual maturities. Many of these loans are made on a short-term basis with the possibility of renewal at time of maturity. All loans, however, are reviewed on a continuous basis for creditworthiness.

Rate sensitivities of the total loan portfolio, net of unearned income, at December 31, 2008 were as follows:

LOAN REPRICING

	Within 1 Year		1 to 5 Years		After 5 Years		Total
Fixed rate		73,988		223,781		100,944		398,713
Variable rate		514,411		77,189		3,759		595,359
Nonaccrual		6,956		1,415		1,947		10,318
Total	$	595,355	$	302,385	$	106,650	$	1,004,390

41.

Centrue Financial Corporation
Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations
(In Thousands, Except Share Data)

          Nonperforming Assets. The Company’s financial statements are prepared on the accrual basis of accounting, including the recognition of interest income on its loan portfolio, unless a loan is placed on nonaccrual status. Loans are placed on nonaccrual status when there are serious doubts regarding the collectibility of all principal and interest due under the terms of the loans. If a loan is placed on nonaccrual status, the loan does not generate current period income for the Company and any amounts received are generally applied first to principal and then to interest. It is the policy of the Company not to renegotiate the terms of a loan because of a delinquent status. Rather, a loan is generally transferred to nonaccrual status if it is not in the process of collection and is delinquent in payment of either principal or interest beyond 90 days.

The classification of a loan as nonaccrual does not necessarily indicate that the principal is uncollectible, in whole or in part. The Bank makes a determination as to collectibility on a case-by-case basis and considers both the adequacy of the collateral and the other resources of the borrower in determining the steps to be taken to collect nonaccrual loans. The final determination as to the steps taken is made based upon the specific facts of each situation. Alternatives that are typically considered to collect nonaccrual loans are foreclosure, collection under guarantees, loan restructuring, or judicial collection actions.

Other nonperforming assets consist of real estate acquired through loan foreclosures or other workout situations and other assets acquired through repossessions.

Each of the Company’s loans is assigned a rating based upon an internally developed grading system. A separate credit administration department also reviews grade assignments on a quarterly basis. Management continuously monitors nonperforming, impaired, and past due loans to prevent further deterioration of these loans. The Company has an independent loan review function which is separate from the lending function and is responsible for the review of new and existing loans.

The following table sets forth a summary of nonperforming assets:

NONPERFORMING ASSETS

	December 31,
	2008			2007			2006			2005			2004
Nonaccrual loans	$	10,318		$	4,090		$	11,759		$	3,082		$	3,649
Loans 90 days past due and still accruing interest		—			—			—			922			553
Total nonperforming loans		10,318			4,090			11,759			4,004			4,202
Other real estate owned		12,723			2,937			2,136			203			420
Total nonperforming assets	$	23,041		$	7,027		$	13,895		$	4,207		$	4,622
Nonperforming loans to total end of period loans		1.03	%		0.43	%		1.40	%		0.96	%		1.00	%
Nonperforming assets to total end of period loans		2.29			0.73			1.66			1.01			1.10
Nonperforming assets to total end of period assets		1.64			0.51			1.08			0.62			0.69

The level of nonperforming loans at December 31, 2008 increased 152.3% to $10,318 versus the $4,090 that existed as of December 31, 2007. The increase of $6,228 was largely related to the deterioration of several large loan relationships during 2008. The level of nonperforming loans to total end of period loans was 1.03% at December 31, 2008, as compared to 0.43% at December 31, 2007. The reserve coverage ratio (allowance to nonperforming loans) was reported at 145.55% as of December 31, 2008 as compared to 262.96% as of December 31, 2007.

42.

Centrue Financial Corporation
Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations
(In Thousands, Except Share Data)

          Other Potential Problem Loans. The Company has other potential problem loans that are currently performing, but where some concerns exist regarding the nature of the borrowers’ projects in our current economic environment. During the fourth quarter, management identified $24,800 of loans that are currently performing but due to the economic environment facing these borrowers were classified by management as impaired. Excluding nonperforming loans and loans that management has classified as impaired, there are other potential problem loans that totaled $9,181 at December 31, 2008 as compared to $1,485 at December 31, 2007. Included in this amount is a purchased participation for $7,053. Early in 2009, it came to our attention that the lead bank was reevaluating the relationship’s credit quality rating and status. At December 31, 2008 this loan was performing. The classification of these loans, however, does not imply that management expects losses on each of these loans, but believes that a higher level of scrutiny and closer monitoring is prudent under the circumstances. Such classifications relate to specific concerns for each individual borrower and do not relate to any concentration risk common to all loans in this group.

The Company proactively reviews loans for potential impairment regardless of the payment or performance status. This approach results in some relationships being classified as impaired but still performing.

The following table sets forth a summary of other real estate owned and other collateral acquired at December 31, 2008:

OTHER REAL ESTATE OWNED

	Number of Parcels		Net Book Carrying Value
Developed property		10	$	4,296
Vacant land or unsold lots		3		8,427
Total other real estate owned		13	$	12,723

          Allowance for Loan Losses. At December 31, 2008, the allowance for loan losses was $15,018 or 1.50% of total loans as compared to $10,755 or 1.12% at December 31, 2007. The Company recorded a provision of $8,082 to the allowance for loan losses in 2008 due largely to the deterioration of the overall economic conditions, workout activities on previously identified relationships and the identification of several additional relationships requiring workouts.

The methodology utilized by management to calculate the FAS 5 portion of the ALLL adequacy analysis is based upon historical losses over the last twenty quarters or 5 year average. The actual historical loss factors decreased since the earliest year rolling off had higher losses than the 2008 quarters being added. Increases to the SFAS 5 factors were needed to reflect increasing economic risk. This combines with the transfer of $24,800 of higher risk loans from the SFAS 5 pool to the SFAS 114 impaired component of the Company’s allowance calculation, resulted in a net decrease in the SFAS 5 portion of the allowance.

In conjunction with the Centrue merger, the Company acquired $436,459 in gross loans. Centrue’s allowance for loan losses at the acquisition date, not allocated to impaired loans, was $4,767. The Company applied the guidance required under the American Institute of Certified Public Accountants Statement of Position 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer (“SOP 03-3”) and determined that certain loans acquired in the merger had evidence of deterioration of credit quality since origination and were probable that all contractual required payments would not be collected on these loans. The Company determined that 54 loans with a book value totaling approximately $11,796 and a fair value of $9,379 were within the guidelines set forth under SOP 03-3. The Company recorded these at their fair value and reduced the allowance for loan losses by $2,416. Accordingly, the Company recorded $4,767 of allowance for loan losses on loans not subject to SOP 03-3.

43.

Centrue Financial Corporation
Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations
(In Thousands, Except Share Data)

In originating loans, the Company recognizes that credit losses will be experienced and the risk of loss will vary with, among other things, the following:

• general economic conditions;

• the type of loan being made;

• the creditworthiness of the borrower over the term of the loan; and

• in the case of a collateralized loan, the quality of the collateral for such a loan.

The allowance for loan losses represents the Company’s estimate of the allowance necessary to provide for probable incurred losses in the loan portfolio by analyzing the following:

• ultimate collectibility of the loans in its portfolio;

• incorporating feedback provided by internal loan staff;

• the independent loan review function; and

• information provided by examinations performed by regulatory agencies.

The Company regularly evaluates the adequacy of the allowance for loan losses. Commercial credits are graded using a system that is in compliance with regulatory classifications by the loan officers and the loan review function validates the officers’ grades. In the event that the loan review function downgrades the loan, it is included in the allowance analysis at the lower grade. To establish the appropriate level of the allowance, a sample of loans (including impaired and nonperforming loans) are reviewed and classified as to potential loss exposure.

Based on an estimation computed pursuant to the requirements of Financial Accounting Standards Board (“FASB”) Statement No. 5, “Accounting for Contingencies,” and FASB Statements Nos. 114 and 118, “Accounting by Creditors for Impairment of a Loan,” the analysis of the allowance for loan losses consists of three components:

• specific credit allocation established for expected losses resulting from analysis developed through specific credit allocations on individual loans for which the recorded investment in the loan exceeds its fair value;

• general portfolio allocation based on historical loan loss experience for each loan category; and

• subjective reserves based on general economic conditions as well as specific economic factors in the markets in which the Company operates.

The specific credit allocation component of the allowance for loan losses is based on a regular analysis of loans over a fixed-dollar amount where the internal credit rating is at or below a predetermined classification. The fair value of the loan is determined based on either the present value of expected future cash flows discounted at the loan’s effective interest rate, the market price of the loan, or, if the loan is collateral dependent, the fair value of the underlying collateral less cost of sale.

The general portfolio allocation component of the allowance for loan losses is determined statistically using a loss migration analysis that examines historical loan loss experience. The loss migration analysis is performed quarterly and loss factors are updated regularly based on actual experience. The general portfolio allocation element of the allowance for loan losses also includes consideration of the amounts necessary for concentrations and changes in portfolio mix and volume.

44.

Centrue Financial Corporation
Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations
(In Thousands, Except Share Data)

The allowance for loan losses is based on estimates, and ultimate losses will vary from current estimates. These estimates are reviewed monthly, and as adjustments, either positive or negative, become necessary, a corresponding increase or decrease is made in the provision for loan losses. The methodology used to determine the adequacy of the allowance for loan losses is consistent with prior years.

A strategy to reduce exposure to construction lending that began earlier in 2008 continued in the fourth quarter with construction and land development loans declining by $12,000 or 6.8% from first quarter 2008 and $3,000 or 1.8% from third quarter 2008. Construction and land development loans now represent 16.4% of the total loan portfolio, down from 17.4% recorded in the first quarter 2008. In comparison to December 31, 2007, this category grew $21,496 to 18.0% of the total portfolio as of June 30, 2008. Since June 30, 2008, it declined $15,848 to 16.4% of the total portfolio. The Company has no direct exposure to sub-prime mortgages.

Management continues to diligently monitor the loan portfolio, paying particular attention to borrowers with residential real estate exposure. While virtually all of these relationships are performing, the economic outlook for this industry will likely remain extremely challenging well into 2009. Should the economic climate deteriorate from current levels, borrowers may experience repayment difficulty, and the level of nonperforming loans, charge-offs and delinquencies could rise requiring further increases in the provision for loan losses.

The following table presents a detailed analysis of the Company’s allowance for loan losses:

ALLOWANCE FOR LOAN LOSSES

	December 31,
	2008		2007		2006			2005		2004
Beginning balance	$	10,755	$	10,835	$	8,362		$	9,732	$	9,011
Charge-offs:
Commercial		479		797		552			342		1,497
Real estate mortgages		3,545		651		1,044			1,611		389
Installment and other loans		82		119		88			367		578
Total charge-offs		4,106		1,567		1,684			2,320		2,464
Recoveries:
Commercial	$	208	$	442		223			394		1,021
Real estate mortgages		27		263		357			208		230
Installment and other loans		52		107		85			98		184
Total recoveries	$	287	$	812		665			700		1,435
Net charge-offs		3,819		755		1,019			1,620		1,029
Provision for loan losses	$	8,082	$	675		(1,275	)		250		1,924
Reduction due to sale of loans		—		—		—			—		174
Increase due to merger		—		—		4,767			—		—
Ending balance	$	15,018	$	10,755	$	10,835		$	8,362	$	9,732
Period end total loans	$	1,004,390	$	957,285	$	836,944		$	417,525	$	419,275
Average loans	$	992,024	$	902,658	$	464,968		$	411,783	$	447,605

45.

Centrue Financial Corporation
Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations
(In Thousands, Except Share Data)

ALLOWANCE FOR LOAN LOSS RATIOS

	December 31,
	2008			2007			2006			2005			2004
Ratio of net charge-offs to average loans		0.38	%		0.08	%		0.22	%		0.39	%		0.23	%
Ratio of provision for loan losses to average loans		0.81			0.07			(0.27	)		0.06			0.43
Ratio of allowance for loan losses to ending total loans		1.50			1.12			1.29			2.00			2.32
Ratio of allowance for loan losses to total nonperforming loans		145.55			262.96			92.14			208.84			231.60

The following table sets forth an allocation of the allowance for loan losses among the various loan categories:

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
(Dollars in Thousands)

	December 31,
	2008					2007					2006					2005					2004
	Amount		Loan Category to Gross Loans			Amount		Loan Category to Gross Loans			Amount		Loan Category to Gross Loans			Amount		Loan Category to Gross Loans			Amount		Loan Category to Gross Loans
Commercial		2,717		16.89	%		4,013		21.21	%	$	4,888		21.26	%	$	7,386		28.32	%	$	6,035		28.78	%
Real estate		12,201		82.52			6,553		77.72			5,668		77.19			773		68.49			3,311		65.98
Installment and other loans		100		0.59			189		1.07			279		1.55			203		3.19			386		5.24
Total	$	15,018		100.00	%	$	10,755		100.00	%	$	10,835		100.00	%	$	8,362		100.00	%	$	9,732		100.00	%

          Securities Activities. The primary objective of the Company’s $252,562 securities portfolio, which represented 18.7% of the Company’s average earning asset base as of December 31, 2008, as compared to 23.3% as of December 31, 2007, is to minimize interest rate risk, maintain sufficient liquidity, and maximize return. In managing the securities portfolio, the Company minimizes any credit risk and avoids investments in sophisticated and complex investment products. The portfolio includes several callable agency debentures, adjustable rate mortgage pass-throughs, and collateralized mortgage obligations. Corporate bonds consist of investment grade obligations of public corporations. Equity securities consist primarily of trust preferred stock as well as CRA, FAMC and IBBI stock. The Company does not hold any securities containing Fannie Mae or Freddie Mac equities.

          The Company’s financial planning anticipates income streams generated by the securities portfolio based on normal maturity and reinvestment. Securities classified as available-for-sale, carried at fair value, were $241,851 at December 31, 2008 compared to $238,661 at December 31, 2007. The Company does not have any securities classified as trading or held-to-maturity. The Company also holds $10,711 and $10,670 of Federal Reserve and Federal Home Loan Bank stock which are classified as restricted securities as of December 31, 2008 and December 31, 2007, respectively.

          As of December 31, 2008, the Company held nine pooled trust preferred securities involving three hundred issuers with a total book value of $25,200. The investments in trust-preferred securities receive principal and interest payments from several pools of subordinated capital debentures with each pool containing issuance by a minimum of twenty two banks or, in a few instances, capital notes from insurance companies. During the fourth quarter, the Company recorded a pre-tax non-cash impairment charge totaling $2,735 based upon management’s determination that certain trust preferred securities with an aggregate cost of $5,800 were other than temporarily impaired. This charge largely reflects deteriorating cash flows within one of these pools and illiquidity and credit concerns within the financial markets.

46.

Centrue Financial Corporation
Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations
(In Thousands, Except Share Data)

          Management has determined that the remaining $22,100 of trust-preferred securities is deemed to be only temporarily impaired at this time. An unrealized loss of approximately $3,300 associated with these securities has been recorded, on an after-tax basis, through stockholders’ equity as a component of other comprehensive income.

          Should the economic climate deteriorate from current levels, the underlying credits may experience repayment difficulty, and the level of deferrals and defaults could increase requiring additional impairment charges in future quarters. Centrue does not hold any securities containing sub-prime mortgages or Fannie Mae or Freddie Mac equities.

The following table describes the composition of securities by major category and maturity:

SECURITIES PORTFOLIO
(Dollars in Thousands)

	December 31,
	2008					2007					2006
	Amount		% of Portfolio			Amount		% of Portfolio			Amount		% of Portfolio
Available-for-Sale
U.S. government agencies		16,995		7.03			103,624		43.42			126,039		43.43
U.S. government agency mortgage backed securities		143,378		59.28			47,784		20.02			69,579		23.97
States and political subdivisions		38,202		15.80			41,561		17.41			41,471		14.29
Collateralized mortgage obligations		20,004		8.27			24,077		10.09			27,237		9.39
Corporate bonds		1,928		0.80			2,741		1.15			8,764		3.02
Other securities		21,344		8.82			18,874		7.91			17,134		5.90
Total	$	241,851		100.00	%	$	238,661		100.00	%	$	290,224		100.00	%

The following table sets forth the contractual, callable or estimated maturities and yields of the debt securities portfolio as of December 31, 2008. Mortgage backed and collateralized mortgage obligation securities are included at estimated maturity.

MATURITY SCHEDULE
(Dollars in Thousands)

		Maturing
		Within 1 Year					After 1 but Within 5 Years					After 5 but Within 10 Years					After 10 Years					Total
	Amount			Yield			Amount		Yield			Amount		Yield			Amount		Yield			Amount
Available-for-Sale
U.S. government agencies and corporations			560		4.881	%		13,188		5.331	%		3,247		6.000	%		—		—	%		16,995
U.S. government agency mortgage backed securities			—		—			4,324		4.697			11,987		4.804			127,067		4.846			143,378
States and political subdivisions (1)			3,284		5.918			26,175		5.602			3,983		6.072			4,760		5.693			38,202
Collateralized mortgage obligations			—		—			—		—			394		5.432			19,610		5.551			20,004
Collateralized debt obligations			—		—			—		—			—		—			19,848		5.380			19,848
Other securities			1,496		4.172			—		—			—		—			—		—			1,496
Corporate bonds			1,928		5.138			—		—			—		—			—		—			1,928
Total		$	7,268				$	43,687				$	19,611				$	171,285				$	241,851

⁽¹⁾ Rates on obligations of states and political subdivisions have been adjusted to tax equivalent yields using a 34% income tax rate

47.

Centrue Financial Corporation
Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations
(In Thousands, Except Share Data)

          Deposit Activities. Deposits are attracted through the offering of a broad variety of deposit instruments, including checking accounts, money market accounts, regular savings accounts, term certificate accounts (including “jumbo” certificates in denominations of $100,000 or more), and retirement savings plans. The Company’s average balance of total deposits was $1,022,978 for 2008, representing a decrease of $40,381 or 3.8% compared with the average balance of total deposits for 2007 of $1,063,359.

The following table sets forth certain information regarding Centrue Bank’s average deposits:

AVERAGE DEPOSITS
(Dollars in Thousands)

	For the Years Ended December 31,
		2008							2007								2006
	Average Amount		% of Total			Average Rate Paid			Average Amount		% of Total			Average Rate Paid			Average Amount		% of Total			Average Rate Paid
Non-interest-bearing demand deposits	$	114,994		11.24	%		—	%	$	120,355		11.32	%		—	%	$	68,650		11.49	%		—	%
Savings accounts		87,615		8.56			0.36			96,838		9.11			0.68			45,343		7.59			0.69
Interest-bearing demand deposits		260,801		25.50			2.03			232,031		21.82			2.84			137,106		22.94			2.33
Time, less than $100,000		343,456		33.57			4.08			387,530		36.44			4.72			137,470		23.00			4.14
Time, $100,000 or more		216,112		21.13			3.68			226,605		21.31			5.30			209,030		34.98			4.35
Total deposits	$	1,022,978		100.00	%		2.69	%	$	1,063,359		100.00	%		3.53	%	$	597,599		100.00	%		3.05	%

As of December 31, 2008, average time deposits over $100,000 represented 21.13% of total average deposits, compared with 21.31% of total average deposits as of December 31, 2007. The Company’s large denomination time deposits are generally from customers within the local market areas of its subsidiary bank and provide a greater degree of stability than is typically associated with brokered deposit customers with limited business relationships.

The following table sets forth the remaining maturities for time deposits of $100,000 or more at December 31, 2008:

TIME DEPOSITS OF $100,000 OR MORE
(Dollars in Thousands)

Maturity Range
Three months or less	$	150,091
Over three months through six months		31,078
Over six months through twelve months		26,202
Over twelve months		53,821
Total	$	261,192

48.

Centrue Financial Corporation
Management’s Discussion And Analysis Of Financial Condition And
Results Of Operations
(In Thousands, Except Share Data)

          Return on Equity and Assets. The following table presents various ratios for the Company:

RETURN ON EQUITY AND ASSETS

	For the Years Ended December 31,
	2008			2007			2006
Return on average assets		0.47	%		0.85	%		0.69	%
Return on average equity		5.43			9.53			6.69
Average equity to average assets		8.69			8.90			10.35
Dividend payout ratio for common stock		53.71			29.17			27.05

     Liquidity

The Company manages its liquidity position with the objective of maintaining sufficient funds to respond to the needs of depositors and borrowers and to take advantage of earnings enhancement opportunities. In addition to the normal inflow of funds from core-deposit growth together with repayments and maturities of loans and investments, the Company utilizes other short-term funding sources such as brokered time deposits, securities sold under agreements to repurchase, overnight federal funds purchased from correspondent banks and the acceptance of short-term deposits from public entities, and Federal Home Loan Bank advances.

The Company monitors and manages its liquidity position on several bases, which vary depending upon the time period. As the time period is expanded, other data is factored in, including estimated loan funding requirements, estimated loan payoffs, investment portfolio maturities or calls, and anticipated depository buildups or runoffs.

The Company classifies all of its securities as available-for-sale, thereby maintaining significant liquidity. The Company’s liquidity position is further enhanced by structuring its loan portfolio interest payments as monthly and by the significant representation of retail credit and residential mortgage loans in the Company’s loan portfolio, resulting in a steady stream of loan repayments. In managing its investment portfolio, the Company provides for staggered maturities so that cash flows are provided as such investments mature.

The Company’s cash flows are comprised of three classifications: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. Cash flows provided by operating activities and investing activities offset by cash flows used in financing activities resulted in a net decrease in cash and cash equivalents of $16,614 from December 31, 2007 to December 31, 2008.

During 2008, the Company experienced net cash outflows of $125,410 in investing activities primarily due to large increases in loans. In contrast, net cash inflows of $90,574 were provided by financing activities due to increases in deposits and advances from the Federal Home Loan Bank and $18,222 from operating activities largely due to increases to provision and net income.

Centrue Bank’s securities portfolio, federal funds sold, and cash and due from bank deposit balances serve as the primary sources of liquidity for the Company. At December 31, 2008, 28.1% of Centrue Bank’s interest-bearing liabilities were in the form of time deposits of $100,000 and over. Management believes these deposits to be a stable source of funds. However, if a large number of these time deposits matured at approximately the same time and were not renewed, Centrue Bank’s liquidity could be adversely affected.

49.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

(In Thousands, Except Share Data)

Currently, the maturities of Centrue Bank’s large time deposits are spread throughout the year, with 57.5% maturing in the first quarter of 2009, 11.9% maturing in the second quarter of 2009, 10.0% maturing in the third and fourth quarters of 2009, and the remaining 20.6% maturing thereafter. Centrue Bank monitors those maturities in an effort to minimize any adverse effect on liquidity.

At December 31, 2008, the Company’s borrowings included $10,000 each for Centrue Statutory Trust II and Centrue Statutory Trust III, $19,115 payable to the Company’s principal correspondent bank, $140,285 in FHLB advances, $46,306 in securities sold under agreements to repurchase and a shareholder note for $711. The note to the Company’s principal correspondent bank is renewable annually, requires quarterly interest payments, and is collateralized by the Company’s stock in the Bank. The shareholder note requires bi-annual payments of $100 at an imputed interest rate.

The Company’s principal source of funds for repayment of the indebtedness is dividends from Centrue Bank. At December 31, 2008, approximately $3,490 was available for dividends without regulatory approval.

Contractual Obligations

The Company has entered into contractual obligations and commitments and off-balance sheet financial instruments. The following tables summarize the Company’s contractual cash obligations and other commitments and off-balance sheet instruments as of December 31, 2008:

	Payments Due by Period
Contractual Obligations	Within 1 Year		1-3 Years		4-5 Years		After 5 Years		Total
Short-term debt		8,865		—		—		250		9,115
Long-term debt		165		2,356		2,190		6,000		10,711
Certificates of deposit		434,731		150,811		8,322		145		594,009
Operating leases		289		608		612		306		1,815
Severance payments		45		—		—		—		45
Series B Mandatory redeemable preferred stock		—		268		—		—		268
Subordinated Debentures		—		—		—		20,620		20,620
FHLB Advances		82,023		53,200		62		5,000		140,285
Total contractual cash obligations		526,118		207,243		11,186		32,321		776,868

Commitments, Contingencies, and Off-Balance Sheet Financial Instruments

Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, often including obtaining collateral at exercise of the commitment. At December 31, 2008, the Company had $245,778 in outstanding loan commitments including outstanding commitments for various lines of credit. The Company also has $12,693 of standby letters of credit as of December 31, 2008. See Note 18 of the Notes to the Consolidated Financial Statements for additional information on loan commitments and standby letters of credit.

50.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

(In Thousands, Except Share Data)

Capital Resources

          Stockholders’ Equity

The Company is committed to managing capital for maximum shareholder benefit and maintaining strong protection for depositors and creditors. Stockholders’ equity at December 31, 2008 was $115,908, a decrease of $2,968 or 2.5%, from December 31, 2007. The change in stockholders’ equity was largely the result of a $4,529 decrease in accumulated other comprehensive income related to the unrealized loss on the securities portfolio. Average equity as a percentage of average assets was 8.69% at December 31, 2008, compared to 8.90% at December 31, 2007. Book value per common share equaled $19.14 at December 31, 2008, a decrease from $19.50 reported at the end of 2007.

          Stock Repurchase Programs

The 2006 repurchase program was completed on July 23, 2007. The 2007 repurchase program approved on July 24, 2007 authorized the company to repurchase an additional 500,000 shares, or approximately 8% of the Company’s currently issued and outstanding shares, in the open market or privately negotiated transactions over an 18 month period. This program expired on January 24, 2009.

          Capital Measurements

The Company and Centrue Bank are expected to meet a minimum risk-based capital to risk-weighted assets ratio of 8%, of which at least one-half (or 4%) must be in the form of Tier 1 (core) capital. The remaining one-half (or 4%) may be in the form of Tier 1 (core) or Tier 2 (supplementary) capital. The amount of loan loss allowance that may be included in capital is limited to 1.25% of risk-weighted assets. The ratio of Tier 1 (core) and the combined amount of Tier 1 (core) and Tier 2 (supplementary) capital to risk-weighted assets for the Company was 10.0% and 12.2%, respectively, at December 31, 2008. The increase in the respective capital ratios was primarily due to the Company decreasing its Goodwill that reduces Tier 1 (core) capital and increasing its allowance for loan losses that can be used to increase Tier 2 (supplementary) capital. The Company is currently, and expects to continue to be, in compliance with these guidelines.

As of December 31, 2008, the Tier 2 risk-based capital was comprised of $13,237 in allowance for loan losses (limited to 1.25% of risk-weighted assets) and $10,000 of subordinated debt. The Series A Preferred Stock is convertible into common stock, subject to certain adjustments intended to offset the amount of losses incurred by the Company upon the post-closing sale of certain securities acquired in conjunction with a previous acquisition.

51.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

(In Thousands, Except Share Data)

The following table sets forth an analysis of the Company’s capital ratios:

RISK-BASED CAPITAL RATIOS

(Dollars in Thousands)

	December 31,									Minimum Capital Ratios			Well Capitalized Ratios
	2008			2007			2006
Tier 1 risk-based capital	$	105,581		$	101,831		$	99,869
Tier 2 risk-based capital		23,237			10,755			10,835
Total capital	$	128,818		$	112,586		$	110,704
Risk-weighted assets	$	1,058,969		$	1,102,602		$	926,874
Capital ratios:
Tier 1 risk-based capital		10.0	%		9.2	%		10.8	%		4.0	%		N/A
Total risk-based capital		12.2			10.2			11.9			8.0			N/A
Leverage ratio		8.1			7.7			7.9			4.0			N/A

Impact of Inflation, Changing Prices, and Monetary Policies

The financial statements and related financial data concerning the Company have been prepared in accordance with accounting principles generally accepted in the United States of America which require the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation. The primary effect of inflation on the operations of the Company is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, changes in interest rates have a more significant effect on the performance of a financial institution than do the effects of changes in the general rate of inflation and changes in prices. Interest rates do not necessarily move in the same direction or in the same magnitude as the prices of goods and services. Interest rates are highly sensitive to many factors which are beyond the control of the Company, including the influence of domestic and foreign economic conditions and the monetary and fiscal policies of the United States government and federal agencies, particularly the FRB.

Recent Developments

On January 9, 2009, the Company completed the sale of $32,668 of preferred stock and a warrant to purchase common stock to the United States Department of Treasury (the “U. S. Treasury”) under the U. S. Treasury’s Capital Purchase Program under the Emergency Economic Stabilization Act of 2008 (“EESA”).

The Company issued and sold (1) 32,668 shares of Fixed Rate Cumulative Perpetual Preferred Stock Series C, liquidation preference of $1,000 per share (the “Series C Preferred Shares”), and (2) a ten-year warrant (the “Warrant”) to purchase up to 508,320 shares of the Company’s common stock (“Common Stock”) at an exercise price of $9.64 per share or an aggregate purchase price of $4,900 in cash. Cumulative dividends on the Series C Preferred Shares will accrue on the liquidation preference at a rate of 5% per annum for the first five years and at a rate of 9% per annum thereafter. The Company also amended the Certification of Designation for its Series B Preferred Stock to suspend, absent receipt of the U. S. Treasury’s consent, the redemption rights of the Series B Preferred Stock holders until such time as the U. S. Treasury (or its assignees) ceases to own any of the Company’s Series C Preferred Stock.

The securities purchase agreement, dated January 9, 2009 (the “Purchase Agreement”), between the Company and the U. S. Treasury, pursuant to which the Series C Preferred Shares and the Warrant were sold, limits the payment of dividends on the Common Stock to the current quarterly cash dividend of $0.14 per share, limits the Company’s ability to repurchase its Common Stock, and subjects the Company to certain of the executive compensation limitations included in the EESA.

52.

Centrue Financial Corporation

Management’s Discussion And Analysis Of Financial Condition And Results Of Operations

(In Thousands, Except Share Data)

As a condition to the closing of the transaction, each of the Company’s Senior Executive Officers (as defined in the Purchase Agreement) executed a waiver voluntarily waiving any claim against the Treasury or the Company for any changes to their compensation or benefits, as required to comply with the regulation issued by the U. S. Treasury under the TARP Capital Purchase Program. The Senior Executive Officers also acknowledged that the regulation may require modification of the compensation, bonus, incentive and other benefit plans, arrangements and policies and agreements (including so-called “golden parachute” agreements) as they relate to the period the U. S. Treasury holds any equity or debt securities of the Company acquired through the Capital Purchase Program.

In addition to EESA, on February 13, 2009, the American Recovery and Reinvestment Act of 2009 (“ARRA”) was enacted. The ARRA contains numerous provisions which modify EESA and which require additional rule making by various regulatory bodies. The precise impact of ARRA and the rules promulgated under it will become known in the coming months.

53.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The discussion under the caption “Interest Rate Sensitivity Management” contained in Item 7 of this Form 10-K is incorporated herein by this reference.

Item 8. Financial Statements and Supplementary Data

Index to Financial Statements

Report of Independent Registered Public Accounting Firm	55
Consolidated Balance Sheets (December 31, 2008 and 2007)	57
Consolidated Statements of Income (For the years ended December 31, 2008, 2007 and 2006)	58
Consolidated Statements of Stockholders’ Equity (For the years ended December 31, 2008, 2007 and 2006)	60
Consolidated Statements of Cash Flows (For the years ended December 31, 2008, 2007 and 2006)	62
Notes	64

Supplementary Data

The Supplementary Financial Information required to be included in this Item 8 is hereby incorporated by reference by Note 24 to the Notes to Consolidated Financial Statements contained herein.

54.

Report of Independent Registered Public Accounting Firm

Audit Committee
Board of Directors and Stockholders
Centrue Financial Corporation
St. Louis, Missouri

We have audited the accompanying consolidated balance sheets of Centrue Financial Corporation (“the Company”) as of December 31, 2008 and 2007, and the related consolidated statements of income, stockholders’ equity and cash flows for each of the years in the three-year period ended December 31, 2008. We also have audited Centrue Financial Corporation’s internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report On Internal Control Over Financial Reporting as disclosed in Item 9A of Form 10-K. Our responsibility is to express an opinion on these financial statements and an opinion on the company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

55.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Centrue Financial Corporation as of December 31, 2008 and 2007, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2008 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, Centrue Financial Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

	/s/ Crowe Horwath LLP
Oak Brook, Illinois
March 12, 2009

56.

Centrue Financial Corporation
Consolidated Balance Sheets
December 31, 2008 and 2007 (In Thousands, Except Share and Per Share Data)

	2008			2007
ASSETS
Cash and cash equivalents	$	35,014		$	51,628
Securities available-for-sale		241,851			238,661
Restricted securities		10,711			10,670
Loans		1,004,390			957,285
Allowance for loan losses		(15,018	)		(10,755	)
Net loans		989,372			946,530
Cash value of life insurance		27,917			26,895
Mortgage servicing rights		2,890			3,161
Premises and equipment, net		32,376			35,615
Goodwill		24,494			25,498
Intangible assets, net		9,088			11,007
Other real estate		12,723			2,937
Other assets		15,445			12,397
Total assets	$	1,401,881		$	1,364,999
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Deposits
Non-interest-bearing	$	118,745		$	114,360
Interest-bearing		930,475			918,662
Total deposits		1,049,220			1,033,022
Federal funds purchased and securities sold under agreements to repurchase		46,306			44,937
Federal Home Loan Bank advances		140,285			121,615
Notes payable		19,826			13,802
Series B mandatory redeemable preferred stock		268			831
Subordinated debentures		20,620			20,620
Other liabilities		9,448			11,296
Total liabilities		1,285,973			1,246,123
Commitments and contingent liabilities		—			—
Stockholders’ equity
Series A Convertible Preferred Stock (aggregate liquidation preference of $2,762)		500			500
Common stock, $1 par value, 15,000,000 shares authorized;
7,453,555 and 7,438,110 shares issued in 2008 and 2007		7,454			7,438
Surplus		71,488			70,901
Retained earnings		62,476			60,344
Accumulated other comprehensive income (loss)		(3,590	)		939
		138,328			140,122
Treasury stock, at cost, 1,425,064 shares - 2008 and 1,366,564 – 2007		(22,420	)		(21,246	)
Total stockholders’ equity		115,908			118,876
Total liabilities and stockholders’ equity	$	1,401,881		$	1,364,999

See Accompanying Notes to Consolidated Financial Statements.

57.

Centrue Financial Corporation
Consolidated Statements Of Income
Years Ended December 31, 2008, 2007, And 2006 (In Thousands, Except Per Share Data)

	2008			2007			2006
Interest income
Loans	$	62,975		$	69,060		$	33,717
Securities
Taxable		9,032			12,419			8,785
Exempt from federal income taxes		1,405			1,520			976
Federal funds sold and other		106			577			380
Total interest income		73,518			83,576			43,858
Interest expense
Deposits		27,555			37,560			18,204
Federal funds purchased and securities sold under agreements to repurchase		760			1,881			407
Advances from the Federal Home Loan Bank		3,279			2,834			1,824
Series B Mandatory Redeemable		50			50			50
Subordinated debentures		1,272			1,688			242
Notes payable		1,028			722			624
Total interest expense		33,944			44,735			21,351
Net interest income		39,574			38,841			22,507
Provision (credit) for loan losses		8,082			675			(1,275	)
Net interest income after provision for loan losses		31,492			38,166			23,782
Noninterest income
Service charges		7,303			6,789			2,473
Trust income		750			942			858
Mortgage banking income		1,525			1,743			1,113
Brokerage commissions and fees		254			795			326
Bank owned life insurance		1,022			991			628
Gains (losses) on sales of securities		848			(29	)		(104	)
Other than temporary impairment on securities		(2,735	)		—			—
Gain on sale of OREO		379			1,107			—
Gain on sale of other assets		1,309			—			—
Other income		2,754			3,327			1,394
		13,409			15,665			6,688
Noninterest expenses
Salaries and employee benefits		16,283			17,635			12,181
Occupancy, net		3,598			4,043			1,714
Furniture and equipment		2,673			2,621			2,276
Marketing		1,228			1,035			697
Supplies and printing		470			653			421
Telephone		772			834			490
Data processing		1,309			1,650			788
Amortization of intangible assets		2,607			2,307			416
Other expenses		6,805			6,555			3,740
		35,745			37,333			22,723
Income from continuing operations before income taxes		9,156			16,498			7,747
Income taxes		2,766			5,175			2,145
Income from continuing operations	$	6,390		$	11,323		$	5,602

(Continued)

58.

Centrue Financial Corporation
Consolidated Statements Of Income (Continued)
Years Ended December 31, 2008, 2007, And 2006 (In Thousands, Except Per Share Data)

	2008		2007		2006
Discontinued operations:
Loss from operations of discontinued insurance unit (including loss on disposal of $452 in 2006)		—		—		(677	)
Income tax benefit		—		—		(262	)
Loss on discontinued operations		—		—		(415	)
Net income		6,390		11,323		5,187
Preferred stock dividends		207		207		207
Net income for common stockholders	$	6,183	$	11,116	$	4,980
Basic earnings per common share from continuing operations for common stockholders	$	1.02	$	1.75	$	1.31
Basic earnings per common share from discontinued operations for common stockholders		—		—		(0.10	)
Basic earnings per common share for common stockholders	$	1.02	$	1.75	$	1.21
Diluted earnings per common share from continuing operations for common stockholders	$	1.02	$	1.74	$	1.30
Diluted earnings per common share from discontinued operations for common stockholders		—		—		(0.10	)
Diluted earnings per common share for common stockholders	$	1.02	$	1.74	$	1.20
Dividends per common share for common stockholders	$	0.55	$	0.51	$	0.48

See Accompanying Notes to Consolidated Financial Statements.

59.

Centrue Financial Corporation

Consolidated Statements Of Stockholders’ Equity

Years Ended December 31, 2008, 2007, And 2006 (In Thousands, Except Share Data)

	Series A Convertible Preferred Stock		Common Stock		Surplus			Retained Earnings			Accumulated Other Comprehensive Income		Treasury Stock			Total
Balance,
January 1, 2006	$	500	$	4,684	$	23,167		$	48,837		$	95	$	(11,208	)	$	66,075
Common stock dividends		—		—		—			(1,348	)		—		—			(1,348	)
Preferred stock dividends		—		—		—			(207	)		—		—			(207	)
Exercise of stock options (27,300 shares)		—		27		329			—			—		—			356
Issuance of 2,700,517 shares of common stock related to merger		—		2,701		46,611			—			—		—			49,312
Stock-based compensation		—		—		353			—			—		—			353
Purchase of 79,625 shares of treasury stock		—		—		—			—			—		(1,677	)		(1,677	)
Comprehensive income
Net income		—		—		—			5,187			—		—			5,187
Net change in fair value of securities classified as available-for-sale, net of income taxes and reclassification adjustments		—		—		—			—			140		—			140
Total comprehensive income																	5,327
Balance,
December 31, 2006	$	500	$	7,412	$	70,460		$	52,469		$	235	$	(12,885	)	$	118,191
Common stock dividends		—		—		—			(3,241	)		—		—			(3,241	)
Preferred stock dividends		—		—		—			(207	)		—		—			(207	)
Exercise of stock options (25,900 shares)		—		26		360			—			—		—			386
Restricted stock awards granted		—		—		(90	)		—			—		90			—
Share-based compensation		—		—		171			—			—		—			171
Purchase of 409,422 shares of treasury stock		—		—		—			—			—		(8,451	)		(8,451	)
Comprehensive income
Net income		—		—		—			11,323			—		—			11,323
Net change in fair value of securities classified as available-for-sale, net of income taxes and reclassification adjustments		—		—		—			—			704		—			704
Total comprehensive income		—		—		—			—			—		—			12,027
Balance,
December 31, 2007	$	500	$	7,438	$	70,901		$	60,344		$	939	$	(21,246	)	$	118,876

(Continued)

60.

Centrue Financial Corporation

Consolidated Statements Of Stockholders’ Equity (Continued)

Years Ended December 31, 2008, 2007, And 2006 (In Thousands, Except Share Data)

	Series A Convertible Preferred Stock		Common Stock		Surplus		Retained Earnings			Accumulated Other Comprehensive Income			Treasury Stock			Total
Balance,
December 31, 2007	$	500	$	7,438	$	70,901	$	60,344		$	939		$	(21,246	)	$	118,876
Common stock dividends		—		—		—		(3,321	)		—			—			(3,321	)
Preferred stock dividends		—		—		—		(207	)		—			—			(207	)
Exercise of stock options (15,445 shares)		—		16		217		—			—			—			233
Share-based compensation		—		—		370		—			—			—			370
Purchase of 58,500 shares of treasury stock		—		—		—		—			—			(1,174	)		(1,174	)
Cumulative effect of BOLI post-retirement liability		—		—		—		(730	)		—			—			(730	)
Comprehensive income
Net income		—		—		—		6,390			—			—			6,390
Net change in fair value of securities classified as available-for-sale, net of income taxes and reclassification adjustments		—		—		—		—			(4,529	)		—			(4,529	)
Total comprehensive income		—		—		—		—			—			—			1,861
Balance,
December 31, 2008	$	500	$	7,454	$	71,488	$	62,476		$	(3,590	)	$	(22,420	)	$	115,908

See Accompanying Notes to Consolidated Financial Statements.

61.

Centrue Financial Corporation
Consolidated Statements Of Cash Flows
Years Ended December 31, 2008, 2007, And 2006 (In Thousands)

	2008			2007			2006
Cash flows from operating activities
Net Income	$	6,390		$	11,323		$	5,187
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		2,841			2,366			2,149
Amortization of intangible assets		2,607			2,307			457
Amortization of mortgage servicing rights, net		482			525			473
Amortization of bond premiums, net		534			178			165
Share based compensation		370			171			353
Gain on sale of branches		(1,107	)		—			—
Loss related to sale of Wealth Management		340			—			—
Provision for loan losses		8,082			675			(1,275	)
Provision for deferred income taxes		1,776			533			2,460
Earnings on bank-owned life insurance		(1,022	)		(991	)		(628	)
Other than temporary impairment, securities		2,735			—			—
Securities losses/(gains), net		(848	)		29			104
Gain on sale of assets, net		—			—			(14	)
Gain on sale of real estate acquired in settlement of loans		(379	)		(1,107	)		—
Gain on sale of loans		(1,116	)		(1,262	)		(762	)
Proceeds from sale of loans held for sale		72,101			82,810			49,039
Origination of loans held for sale		(70,947	)		(78,296	)		(47,855	)
Change in assets and liabilities
(Increase) decrease in other assets		(4,457	)		1,371			(5,442	)
Increase (decrease) in other liabilities		(160	)		384			2,963
Net cash provided by operating activities		18,222			21,016			7,374
Cash flows from investing activities
Proceeds from maturities and paydowns of securities available for sale		34,018			60,616			39,380
Proceeds from calls of securities available for sale		86,930			—			—
Proceeds from sales of securities available for sale		—			2,548			19,377
Purchases of securities available for sale		(133,684	)		(9,838	)		(38,908	)
Purchase (redemption) of restricted securities		—			(2,202	)		1,730
Purchase of loans		—			—			(19,513	)
Net decrease (increase) in loans		(103,287	)		(133,124	)		32,371
Purchase of premises and equipment		(375	)		(2,578	)		(2,761	)
Proceeds from sale of OREO		10,486			8,804			979
Cash acquired, net of cash (paid) for acquisitions		—			—			26,506
Purchase of Missouri Bank Charter		—			(581	)		—
Sale of insurance unit		—			—			856
Sale of branches, net of premium received		(19,498	)		—			(6,054	)
Net cash provided by (used in) investing activities		(125,410	)		(76,355	)		53,963

(Continued)

62.

Centrue Financial Corporation
Consolidated Statements Of Cash Flows (Continued)
Years Ended December 31, 2008, 2007, And 2006 (In Thousands)

	2008			2007			2006
Cash flows from financing activities
Net increase (decrease) in deposits	$	68,419		$	6,412		$	(34,853	)
Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase		1,369			8,618			7,202
Repayment of advances from the Federal Home Loan Bank		(719,332	)		(58,656	)		(13,514	)
Proceeds from advances from the Federal Home Loan Bank		738,000			117,124			10
Payments on notes payable		(4,226	)		(463	)		(2,869	)
Proceeds from notes payable		10,250			5,250			1,400
Redemption of subordinated debentures		—			(10,310	)		—
Issuance of subordinated debentures		—			10,310			—
Dividends on common stock		(3,321	)		(3,241	)		(1,348	)
Dividends on preferred stock		(207	)		(207	)		(207	)
Redemption of preferred stock		563			—			—
Proceeds from exercise of stock options		233			386			356
Purchase of treasury stock		(1,174	)		(8,451	)		(1,677	)
Net cash provided by (used in) financing activities		90,574			66,772			(45,500	)
Net increase (decrease) in cash and cash equivalents		(16,614	)		11,433			15,837
Cash and cash equivalents
Beginning of year		51,628			40,195			24,358
End of year	$	35,014		$	51,628		$	40,195
Supplemental disclosures of cash flow information
Cash payments for
Interest	$	35,927		$	44,417		$	21,932
Income taxes		5,629			3,292			1,386
Transfers from loans to other real estate owned		20,075			8,776			2,743
Business Combination in 2006 (see Note 23)

See Accompanying Notes to Consolidated Financial Statements.

63.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 1. Nature of Operations and Summary of Significant Accounting Policies

Centrue Financial Corporation (the “Company”) is a bank holding company organized under the laws of the State of Delaware. On November 13, 2006, the Company (formerly known as UnionBancorp, Inc. and now known as Centrue Financial Corporation) merged with Centrue Financial Corporation (former Centrue), parent of Centrue Bank with the Company being the surviving entity in the merger. Operating results of former Centrue are included in the consolidated financial statements since the date of the acquisition. The Company provides a full range of banking services to individual and corporate customers located in markets extending from the far western and southern suburbs of the Chicago metropolitan area across Central Illinois down to the metropolitan St. Louis area. These services include demand, time, and savings deposits; business and consumer lending; and mortgage banking. Additionally, brokerage; asset management; and trust services will be provided to our customers after the sale of these product lines on a referral basis to the third party providers. The Company is subject to competition from other financial institutions and nonfinancial institutions providing financial services. Additionally, the Company and its subsidiary Centrue Bank (the “Bank”) are subject to regulations of certain regulatory agencies and undergo periodic examinations by those regulatory agencies.

Basis of presentation

The consolidated financial statements include the accounts of the Company and Centrue Bank. Intercompany balances and transactions have been eliminated in consolidation.

The accompanying financial statements have been prepared in conformity with U. S. generally accepted accounting principles and with general practice in the banking industry. In preparing the financial statements, management makes estimates and assumptions based on available information that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period, and actual results could differ. The allowance for loan losses, carrying value of goodwill, value of mortgage servicing rights, deferred taxes, and fair values of financial instruments are particularly subject to change.

Assets held in an agency or fiduciary capacity, other than trust cash on deposit with Centrue Bank, are not assets of the Company and, accordingly, are not included in the accompanying consolidated financial statements.

Cash flows

Cash and cash equivalents includes cash, deposits with other financial institutions with maturities under 90 days, and federal funds sold. Net cash flows are reported for customer loan and deposit transactions, repurchase agreements, and federal funds purchased.

64.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 1. Nature of Operations and Summary of Significant Accounting Policies (Continued)

Securities

Available-for-sale. Securities classified as available-for-sale are those securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity. Any decision to sell a security classified as available-for-sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. Securities available-for-sale are carried at fair value with unrealized gains or losses, net of the related income tax effect, reported in other comprehensive income. Declines in the fair value of securities below their cost that are other than temporary are reflected as realized losses. In estimating other-than-temporary losses, management considers: the length of time and extent that fair value has been less than cost; the financial condition and near term prospects of the issuer; and the Company’s ability and intent to hold the security for a period sufficient to allow for any anticipated recovery in fair value. Securities are written down to fair value when a decline in fair value is not temporary.

For collateralized debt obligations, the issuer’s financial condition, payment history, and ability to pay interest and repay principal according to the terms of the financial instrument, are analyzed. For multi-issuer securities, the analysis is conducted for each issuer. In analyzing an issuer’s financial condition, the Company reviews relevant balance sheet, income statement and ratio information. Industry and market information are also considered. The Company considers whether the securities were issued by or have prinicipal and interest payments guaranteed by the federal government or its agencies. The Company conducts regular reviews of the bond agency ratings of securities.

Interest income is reported net of amortization of premiums and accretion of discounts. Amortization of purchase premium or discount is included in interest income. Premiums and discounts on securities are amortized over the level-field method without anticipating prepayments except for mortgage backed securities where prepayments are anticipated. Gains or losses from the sale of securities are determined using the specific identification method.

Restricted Securities. The Company owns investments in the stock of the Federal Reserve Bank, the Federal Home Loan Banks of Chicago and Des Moines (FHLB). No ready market exists for these stocks and they have no quoted market values. Federal Reserve Bank stock is redeemable at par. The Bank, as a member of the FHLB, is required to maintain an investment in the capital stock of the FHLB. The stock is redeemable at par by the FHLB and periodically evaluated for impairment. The Company’s ability to redeem the shares owned is dependent on the redemption practices of the FHLB.

Loan commitments and related financial instruments

Financial instruments include off-balance-sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

65.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 1. Nature of Operations and Summary of Significant Accounting Policies (Continued)

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of purchase premiums and discounts, deferred loan fees and costs, and an allowance for loan losses. Interest income is accrued on the unpaid principal balance.

Interest income on mortgage and commercial loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in the process of collection. Consumer loans are typically charged off no later than 120 days past due. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not received for loans placed on nonaccrual are reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or market, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings.

Mortgage loans held for sale are sold with either servicing rights retained or servicing rights released. When retaining the servicing rights, the carrying value of mortgage loans sold is reduced by the cost allocated to the servicing right. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold. When selling service released, the gain or loss is determined by comparing the selling price to the value of the mortgage sold.

The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes and confirms the loan balance to be uncollectible. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired or loans otherwise classified as substandard or doubtful. The general component covers non-classified loans and is based on historical loss experience adjusted for current factors.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of delay, the reasons for the delay, the

66.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 1. Nature of Operations and Summary of Significant Accounting Policies (Continued)

borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for commercial and commercial real estate loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment disclosures.

Concentration of Credit Risk

Most of the Company’s growth and business activity with large dollar credit facilities is with customers located in St. Louis County, Missouri. Therefore, the Company’s exposure to credit risk is significantly affected by changes in the economy in the St. Louis County area. Additionally, the Company has a high concentration of real estate development loans.

Mortgage servicing rights

Servicing rights are recognized separately when they are acquired through sales of loans. For sales of mortgage loans prior to January 1, 2007, a portion of the cost of the loan was allocated to the servicing right based on relative fair values. The Company adopted SFAS No. 156 on January 1, 2007, and for sales of mortgage loans beginning in 2007, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses. The Company compares the valuation model inputs and results to published industry data in order to validate the model results and assumptions.

All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.

Servicing assets are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance for an individual grouping, to the extent that fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income. Changes in valuation allowances are reported with noninterest expense in the other expense line on the income statement. The fair values of servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses.

Servicing fee income which is reported on the income statement as mortgage banking income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal; or a fixed amount per loan and are recorded as income when earned. The amortization of mortgage servicing rights is netted against loan servicing fee income. Servicing fees totaled $442, $478 and $743 for the years ended December 31, 2008, 2007 and 2006. Late fees and ancillary fees related to loan servicing are not material.

67.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 1. Nature of Operations and Summary of Significant Accounting Policies (Continued)

Premises and equipment

Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Building and related components are depreciated using the straight-line method with useful lives ranging from 15 to 39 years. Furniture, fixtures, and equipment are depreciated using the straight-line (or accelerated) method with useful lives ranging from 3 to 10 years. The cost of maintenance and repairs is charged to income as incurred; significant improvements are capitalized.

Other Real Estate Owned

Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. If fair value declines, a valuation allowance is recorded through expense. Costs after acquisition are expensed.

Bank-owned life insurance

The Company has invested in bank-owned life insurance policies on key executives, for which the Company is also the beneficiary. Bank-owned life insurance is recorded at its cash surrender value or the amount that can be realized. These policies have an approximate cash surrender value of $27,917 and $26,895 at December 31, 2008 and 2007, respectively.

In accordance with EITF 06-5, Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Management performs a monthly analysis to determine the current cash surrender value and adjusts the value accordingly.

In September 2006, the FASB Emerging Issues Task Force finalized Issue No. 06-4, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements. This issue requires that a liability be recorded during the service period when a split-dollar life insurance agreement continues after participants’ employment or retirement. The required accrued liability will be based on either the post-employment benefit cost for the continuing life insurance or based on the future death benefit depending on contractual terms of the underlying agreement. This issue was effective for fiscal years beginning after December 15, 2007. Due to the adoption of this item, the Company recorded an entry of $730 to reduce the beginning balance for retained earnings as of January 1, 2008.

Goodwill and other intangible assets

Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment will be recognized in the period identified. During 2008, impairment charges of $724 were taken in regards to the sale of the wealth management segment. See Note 2. for further details.

Other intangible assets consist of core deposit and acquired customer relationship intangible assets arising from whole bank, and branch company acquisitions. They are initially measured at fair value and then are amortized over their estimated useful lives, which is ten years.

68.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 1. Nature of Operations and Summary of Significant Accounting Policies (Continued)

Long-term assets

Premises and equipment, core deposit, and other intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Repurchase agreements

Substantially all repurchase agreement liabilities represent amounts advanced by various customers. Securities are pledged to cover these liabilities, which are not covered by federal deposit insurance.

Income taxes

Income tax expense is the total of the current year income tax due or refundable and the change in deferred taxes and liabilities. Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax laws. Changes in enacted tax rates and laws are reflected in the financial statements in the periods they occur.

The Company adopted FASB Interpretation 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), as of January 1, 2007. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s financial statements.

The Company recognizes interest related to income tax matters as interest expense and penalties related to income tax matters as other expense. The Company is no longer subject to examination by federal taxing authorities for the tax year 2004 and the years prior.

Earnings per share

Basic earnings per common share is net income for common stockholders divided by the weighted-average common shares outstanding during the period. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock options and Series A convertible preferred shares using the treasury stock method.

Stock-Based Compensation

Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of the stock options, while the market price of the Corporation’s common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

69.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 1. Nature of Operations and Summary of Significant Accounting Policies (Continued)

Stockholders’ Equity:

Preferred stock

The Company’s Certificate of Incorporation authorizes its Board of Directors to fix or alter the rights, preferences, privileges, and restrictions of 200,000 shares of preferred stock.

The Company has the following classes of preferred stock issued or authorized:

Series A Convertible Preferred Stock: The Company has authorized 2,765 shares of Series A Convertible Preferred Stock. There were 2,762.24 shares of Series A Convertible Preferred Stock issued at December 31, 2008 and 2007. Preferential cumulative cash dividends are payable quarterly at an annual rate of $75.00 per share. Dividends accrue on each share of Series A Preferred Stock from the date of issuance and from day to day thereafter, whether or not earned or declared. The shares of Series A Preferred Stock are convertible into 172,042 common shares. Series A Preferred Stock is not redeemable for cash. Upon dissolution, winding up, or liquidation of the Company, voluntary or otherwise, holders of Series A Preferred Stock will be entitled to receive, out of the assets of the Company available for distribution to stockholders, the amount of $1,000 per share, plus any accrued but unpaid dividends, before any payment or distribution may be made on shares of common stock or any other securities issued by the Company that rank junior to the Series A Preferred Stock.

Series B Mandatory Redeemable Preferred Stock: The Company has authorized 1,092 shares of Series B Mandatory Redeemable Preferred Stock. There were 268 and 831 shares of Series B Mandatory Redeemable Preferred Stock issued at December 31, 2008 and 2007 respectively, which are shown in other liabilities in accordance with FASB 150. In December, 2008, 563 shares were redeemed at the shareholder’s request. Preferential cumulative cash dividends are payable quarterly at an annual rate of $60.00 per share. Dividends accrue on each share of Series B Preferred Stock from the date of issuance and from day to day, thereafter, whether or not earned or declared.

Each original holder of Series B Preferred Stock (or upon such holder’s death, their executor or personal representatives) will have the option, exercisable at their sole discretion, to sell, and the Company became obligated to redeem such holder’s shares of Series B Preferred Stock upon the earlier to occur of the death of the respective original holder of Series B Preferred Stock or August 6, 2006. The per share price payable by the Company for such shares of Series B Preferred Stock will be equal to $1,000 per share, plus any accrued but unpaid dividends. Upon dissolution, wind up, or liquidation of the Company, voluntary or otherwise, holders of Series B Preferred Stock will be entitled to receive, out of the assets of the Company available for distribution to stockholders, the amount of $1,000 per share, plus any accrued but unpaid dividends, before any payment or distribution may be made on shares of common stock or any other securities issued by the Company that rank junior to the Series B Preferred Stock.

Dividend restriction

Banking regulations require the maintenance of certain capital levels and may limit the amount of dividends that may be paid by the subsidiary bank to the holding company or by the holding company to stockholders.

70.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 1. Nature of Operations and Summary of Significant Accounting Policies (Continued)

Fair value of financial instruments

Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates.

Loss contingencies

Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

Comprehensive income

Comprehensive income consists of net income and other comprehensive income elements, including the change in unrealized gains and losses on securities available-for-sale, net of tax.

Operating segments

Internal financial information is primarily reported and aggregated in the following lines of business: retail, commercial, treasury and other.

Reclassifications

Some items in the prior year financial statements were reclassified to conform to the current presentation.

Adoption of new accounting standards

In September 2006, the FASB issued Statement No. 157, Fair Value Measurements (FAS 157). This Statement defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This Statement establishes a fair value hierarchy about the assumptions used to measure fair value and clarifies assumptions about risk and the effect of a restriction on the sale or use of an asset. The standard was effective for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued Staff Position (FSP) 157-2, Effective Date of FASB Statement No. 157. This FSP delays the effective date of FAS 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. The impact of adoption was not material. In October 2008, the FASB issued Staff Position (FSP) 157-3, Determining the Fair Value of a Financial Asset when the Market for That Asset Is Not Active. This FSP clarifies the application of FAS 157 in a market that is not active. The impact of adoption was not material.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective of SFAS 159 is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting principles. The new standard was effective for the Company on January 1, 2008. The Company did not elect the fair value option for any financial assets or financial liabilities as of January 1, 2008.

71.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 1. Nature of Operations and Summary of Significant Accounting Policies (Continued)

In January 2009, the FASB Emerging Issues Task Force finalized Issue No. 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20. This issue amends the impairment guidance in EITF Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests that Continue to be Held by a Transferor in Securitized Financial Assets, to achieve more consistent determination of whether an other-than-temporary impairment assessment and the related disclosure requirements in FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities, and other related guidance. If the fair value of an available-for-sale or held-to-maturity debt security is less than its cost basis at the measurement date, generally accepted accounting principles require that the reporting entity assess the impaired security to determine whether the impairment is other than temporary. Other-than-temporary impairments are recognized through earnings. This amendment allows for changes which include using reasonable judgment of the probability that the holder be unable to collect amounts due rather than using the EITF 99-20’s previous requirement to estimate a “market participant’s” view of cash flows. At December 31, 2008, the Company has applied this FSP in determining whether there is any other-than-temporary impairment in the securities portfolio.

Effect of newly issued but not yet effective accounting standards

In December 2007, the FASB issued FAS No. 141 (revised 2007), Business Combinations (“FAS 141 (R)”), which establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in an acquire, including the recognition and measurement of goodwill acquired in a business combination. FAS No. 141 (R) is effective for fiscal years beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this standard is not expected to have a material effect on the Corporation’s results of operations or financial position.

Note 2. Business Acquisitions and Divestitures

Acquisition

On November 13, 2006, the Company merged with the Centrue Financial Corporation. UnionBancorp, Inc. was the acquirer and adopted the Centrue Financial Corporation name. See Note 23 for further information.

Divestitures

On March 31, 2006, the Company completed its sale of the Mendota sales and service center to First State Bank in Mendota. At the date of the sale, the branch had approximately $6,066 in deposits.

On September 30, 2006, the Company completed its sale of its Insurance Product line to the Phoenix Group. The sale price was $1,100. The Company recorded a net loss of $452. See Note 22 for further information.

On March 28, 2008 the Company completed the sale of its Hanover and Elizabeth branches to Apple River State Bank headquartered in Apple River, Illinois. Apple River assumed approximately $22,700 in deposits and acquired $14,700 in loans, and $401 in premises and equipment. The net gain on the sale was $482.

72.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 2. Business Acquisitions and Divestitures (Continued)

On June 6, 2008 the Company completed the sale of its Manlius and Tampico branches to Peoples National Bank headquartered in Kewanee, Illinois. Peoples National assumed approximately $29,500 in deposits and acquired $17,600 in loans and $214 in premises and equipment. The net gain on the sale was $629.

On August 29, 2008 the Company completed the sale of its Asset Management product line to Vezzetti Capital Management. There was no gain or loss recorded on this transaction.

On September 18, 2008 the Company completed the sale of its brokerage product line. The net loss on sale was $29.

On September 15, 2008 the Company entered into an agreement to sell its Trust unit of their Wealth Management division to Hometown National Bank headquartered in LaSalle, Illinois. The Definitive Purchase and Assumption Agreement entered into calls for Hometown to purchase the customers associated with this product line. The transaction was completed on January 23, 2009. There was no gain or loss recorded related with this sale.

Management has analyzed on a overall basis the impact of the above divestitures on an individual and aggregate basis and determined that per FAS 144, Accounting for the Impairment or Disposal of Long-lived Assets, that the results for the asset divestitures is immaterial to the Company as a whole and does not require them to be reported as discontinued operations on the financial statements.

Note 3. Securities

The fair value of securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:

	December 31, 2008
	Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
U.S. government agencies	$	16,995	$	482	$	—
States and political subdivisions		38,202		530		(194	)
U.S. government agency mortgage-back securities		143,378		1,148		(887	)
Collateralized mortgage obligations		20,004		53		(1,453	)
Equity securities		1,496		—		(75	)
Collateralized debt obligations		19,848		—		(5,400	)
Corporate		1,928		7		(70	)
	$	241,851	$	2,220	$	(8,079	)

73.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 3. Securities (Continued)

	December 31, 2007
	Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
U.S. government agencies	$	103,624	$	1,415	$	(14	)
States and political subdivisions		41,561		501		(13	)
U.S. government agency mortgage-back securities		47,784		287		(106	)
Collateralized mortgage obligations		24,077		68		(100	)
Equity securities		1,601		105		—
Collateralized debt obligations		17,273		—		(609	)
Corporate		2,741		9		(10	)
	$	238,661	$	2,385	$	(852	)

Sales and calls of securities available-for-sale were as follows:

	Years Ended December 31,
	2008			2007			2006
Proceeds from calls	$	86,930		$	—		$	—
Proceeds from sales		—			2,548			19,377
Realized gains		848			11			19
Realized losses		—			(40	)		(123	)
OTTI impairment		(2,735	)		—			—

The tax benefit (provision) related to these net realized gains and losses were $329, $(11), and $40, respectively.

The fair values of securities classified as available-for-sale at December 31, 2008, by contractual maturity, are shown below. Securities not due at a single maturity date, including mortgage-backed securities, collateralized mortgage obligations, and equity securities are shown separately.

Fair Value

Due in one year or less	$	3,845
Due after one year through five years		39,362
Due after five years through ten years		7,230
Due after ten years		24,608
U.S. government agency mortgage-backed securities		143,378
Collateralized mortgage obligations		20,004
Equity and corporate securities		3,424
	$	241,851

The Company held callable securities with carrying value of $43,839 and an amortized cost basis of $55,179 as of December 31, 2008 and with a carrying value of $129,870 and an amortized cost basis of $128,803 at December 31, 2007.

Securities with carrying values of approximately $193,038 and $182,415 at December 31, 2008 and 2007, respectively, were pledged to secure public deposits and securities sold under agreements to repurchase and for other purposes as required or permitted by law. At year end 2008 and 2007, there were no holdings of securities of any one issuer, other than the U.S. Government agencies in an amount greater than 10% of stockholders’ equity.

74.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 3. Securities (Continued)

The Company does not have any securities classified as trading or held-to-maturity.

Securities with unrealized losses not recognized in income are as follows presented by length of time individual securities have been in a continuous unrealized loss position:

December 31, 2008	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government agencies	$	—	$	—		$	—	$	—		$	—	$	—
State and political subdivisions		7,284		(194	)		—		—			7,284		(194	)
U.S. government agency mortgage-backed securities		59,742		(796	)		3,245		(91	)		62,987		(887	)
Collateralized mortgage obligations		16,385		(1,453	)		—		—			16,385		(1,453	)
Equities		—		—			1,496		(75	)		1,496		(75	)
Collateralized debt obligations		7,579		(2,524	)		12,269		(2,876	)		19,848		(5,400	)
Corporate		1,423		(70	)		—		—			1,423		(70	)
Total temporarily impaired	$	92,413	$	(5,037	)	$	17,010	$	(3,042	)	$	109,423	$	(8,079	)

December 31, 2007	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
U.S. government agencies	$	—	$	—		$	8,015	$	(14	)	$	8,015	$	(14	)
State and political subdivisions		1,385		(9	)		549		(4	)		1,934		(13	)
U.S. government agency mortgage-backed securities		15,096		(72	)		5,890		(34	)		20,986		(106	)
Collateralized mortgage obligations		4,657		(100	)		—		—			4,657		(100	)
Equities		—		—			—		—			—		—
Collateralized debt obligations		17,273		(609	)		—		—			17,273		(609	)
Corporate		976		(9	)		765		(1	)		1,741		(10	)
Total temporarily impaired	$	39,387	$	(799	)	$	15,219	$	(53	)	$	54,606	$	(852	)

The Company evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic and market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuer’s financial condition, the Company may consider whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition.

75.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 4. Loans

The major classifications of loans follow:

	December 31,
	2008		2007
Commercial	$	169,721	$	191,748
Commercial real estate		633,773		509,162
Real estate		192,829		205,940
Real estate loans held for sale related to secondary mortgage market activities		2,143		2,181
Loans held for sale related to pending branch sales		—		38,600
Installment		5,267		8,106
Other		657		1,548
	$	1,004,390	$	957,285

As discussed in Note 2, the Company sold four branches during 2008. For 2007, a total of $38,600 of loans, as indicated in the above table, were included in the sale.

An analysis of activity in the allowance for loan losses follows:

	Years Ended December 31,
	2008			2007			2006
Balance at beginning of year	$	10,755		$	10,835		$	8,362
Acquired in merger		—			—			4,767
Provision (credit) for loan losses		8,082			675			(1,275	)
Recoveries		287			812			665
Loans charged off		(4,106	)		(1,567	)		(1,684	)
Balance at end of year	$	15,018		$	10,755		$	10,835

The following table presents data on impaired loans:

	December 31,
	2008		2007		2006
Year-end impaired loans for which an allowance has been provided	$	36,754	$	5,502	$	4,915
Year-end impaired loans for which no allowance has been provided		1,880		5,923		16,450
Total impaired loans	$	38,634	$	11,425	$	21,365
Allowance for loan loss allocated to impaired loans	$	8,357	$	2,350	$	1,562
Average recorded investment in impaired loans		19,156		14,246		14,514
Interest income recognized from impaired loans		1,760		1,047		620
Cash basis interest income recognized from impaired loans		1,803		1,052		730

Due to the economic conditions facing many of its customers, the Company determined that there were $24,800 of loans that were classified as impaired but were considered to be performing loans at December 31, 2008. This resulted in the increase in impaired loans as of December 31, 2008.

In November 2006, the Company completed its merger with the former Centrue Financial Corporation. As part of this merger, the Company’s loan portfolio increased by $436,460 and the allowance for loan losses increased $4,767. Within the loans acquired were nonaccrual loans of $10,230. The increase in impaired loans with no allocated allowance in the prior year is a direct result of the loans acquired in the merger being recorded upon acquisition at their fair value.

76.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 4. Loans (Continued)

Nonperforming loans were as follows:

	December 31,
	2008		2007
Loans past due over 90 days still on accrual	$	—	$	—
Nonaccrual loans		10,318		4,090

Nonperforming loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

Loans made to executive officers, directors, and their affiliates during 2008 were as follows:

Balance at December 31, 2007	$	15,979
New loans, extensions, and modification		10,250
Repayments		(15,080	)
Effect of changes in composition of related parties		92
Balance at December 31, 2008	$	11,241

Note 5. Fair Value

Statement 157 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices (unadjusted) or identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs to reflect a reporting entity’s own assumptions about the assumptions that market participants would use to price and asset or liability.

The fair values of securities available for sale is determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). If the securities could not be priced using quoted market prices, observable market activity or comparable trades, the financial market was considered not active and the assets were classified as Level 3. The assets included in Level 3 are trust preferred CDO’s. These securities were historically priced using Level 2 inputs. In 2008, the decline in the level of observable inputs and market activity for trust preferred CDOs by the measurement date was significant and resulted in unreliable external pricing. As such, these investments are now considered Level 3 inputs and are priced using an internal model. Information such as historical and current performance of the underlying collateral, deferral/default rates, collateral coverage ratios, break in yield calculations, cash flow projections, liquidity and credit premiums required, and financial trend analysis with respect to the individual issuing financial institutions and insurance companies are utilized in determining individual security valuations. Due to market conditions as well as the limited trading activity of these securities, the market value of the securities is highly sensitive to assumption changes and market volatility.

77.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 5. Fair Value (continued)

At year-end 2008, seven collateralized debt obligations have unrealized losses with aggregate depreciation of 29% from the Company’s cost basis. These unrealized losses have existed for less than three months and relate principally to the banking sector. Although three of the instruments have shown stress as a result of the weakened economy, the rating agencies still have them rated at investment grade. However for four of the instruments, the rating agencies have downgraded them below investment grade. In analyzing the issuer’s financial condition, management considers industry analysts’ reports, financial performance and projected target prices of investment analysts within a specified time frame. Based on the Company’s FAS115 analysis at December 31, 2008, the Company determined that one instrument had a break in yield such that not all of the contractual principal and interest payments would be received. Thus, the Company recognized a pre-tax impairment charge of $2,735 for the other-than-temporary decline in value.

Assets and liabilities measured at fair value are summarized below:

			Fair Value measurements at December 31 Using
	December 31, 2008		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets and Liabilities on a recurring basis
Assets:
Available-for-sale securities	$	241,851	$	—	$	222,003	$	19,848

The table below presents a reconciliation of income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for year ended December 31, 2008.

	Securities Available for Sale
Beginning balance, January 1, 2008	$	—
Transfers into Level 3 as of September 30, 2008		21,910
Total gains or losses (realized/unrealized) included in earnings
Interest income on securities		—
Security impairment		(2,735	)
Other changes in fair value
Gains (losses) on sales of securities		—
Included in other comprehensive income		673
Ending Balance, December 31, 2008	$	19,848

78.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 5. Fair Value (continued)

			Fair Value measurements at December 31 Using
	December 31, 2008		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets and Liabilities on a nonrecurring basis
Assets:
Impaired loans	$	28,397	$	—	$	28,397	$	—

Impaired loans, which are measured for impairment using the fair value of the collateral for collateral dependent loans, had a carrying amount of $36,754 with a valuation allowance of $8,357, resulting in an additional provision for loan losses of $5,351 for the period.

The majority of our impaired loans are collateralized by real estate. The carrying values for these real estate secured impaired loans was based upon information in independent appraisals obtained on the underlying collateral.

The methods and assumptions used to estimate fair value are described as follows:

The carrying amount is the estimated fair value for cash and due from banks, federal funds sold, short-term borrowings, accrued interest receivable and payable, demand deposits, short-term debt, and variable rate loans or deposits that reprice frequently and fully. Security fair values are based on the methods described above. The carrying value and fair value of the subordinated debentures issued to capital trusts are estimated using market data for similarly risk weighted items to value them. For fixed rate loans or deposits and for variable rate loans or deposits with infrequent repricing or repricing limits, the fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. Fair values for impaired loans are estimated using discounted cash flow analysis or underlying collateral values. The fair value of loans held for sale is based on market quotes. The fair value of debt and redeemable stock is based on current rates for similar financing. It was not practicable to determine the fair value of the restricted securities due to restrictions placed on its transferability. The fair value of off-balance-sheet items is based on the current fees or cost that would be charged to enter into or terminate such arrangements.

79.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 5. Fair Value (continued)

The estimated fair values of the Company’s financial instruments were as follows:

	December 31,
	2008				2007
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets
Cash and cash equivalents	$	35,014	$	35,014	$	51,628	$	51,628
Securities		241,851		241,851		238,661		238,661
Restricted Securities		10,711		N/A		10,670		N/A
Net Loans		989,372		994,010		946,530		952,096
Accrued interest receivable		5,547		5,547		7,517		7,517
Financial liabilities
Deposits		1,049,220		1,050,795		1,033,022		1,037,151
Federal funds purchased and securities sold under agreements to repurchase		46,306		46,306		44,937		44,937
Federal Home Loan Bank Advances		140,285		141,430		121,615		121,667
Notes payable		19,826		18,921		13,802		13,802
Subordinated debentures		20,620		18,031		20,620		20,468
Series B mandatory redeemable preferred stock		268		268		831		831
Accrued interest payable		4,230		4,230		6,213		6,213

In addition, other assets and liabilities of the Company that are not defined as financial instruments are not included in the above disclosures, such as property and equipment. Also, nonfinancial instruments typically not recognized in financial statements nevertheless may have value but are not included in the above disclosures. These include, among other items, the estimated earnings power of core deposit accounts, the earnings potential of loan servicing rights, the earnings potential of the trust operations, the trained work force, customer goodwill, and similar items.

Note 6. Loan Sales and Servicing

Loans held for sale at year end related to our secondary mortgage market activities are as follows:

	December 31,
	2008		2007
Loans held for sale	$	2,143	$	2,181
Less: Allowance to adjust to lower of cost or market		—		—
Loans held for sale, net	$	2,143	$	2,181

The following summarizes the secondary mortgage market activities:

	Years Ended December 31,
	2008		2007		2006
Proceeds from sales of mortgage loans	$	72,101	$	82,810	$	49,039
Gain on sales of mortgage loans	$	1,116	$	1,262	$	762

80.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 6. Loan Sales and Servicing (continued)

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheet. The unpaid principal balances of these loans are summarized as follows:

	December 31,
	2008		2007
Federal Home Loan Mortgage Corporation	$	104,115	$	120,359
Federal National Mortgage Association		226,193		239,031
IHDA		1,738		1,731
	$	332,046	$	361,121

Custodial escrow balances maintained in connection with the foregoing loan servicing were approximately $2,240 and $2,397 at December 31, 2008 and 2007, respectively.

Following is an analysis of the changes in originated mortgage servicing rights:

	Years Ended December 31,
	2008			2007			2006
Balance at beginning of year	$	3,161		$	3,510		$	2,533
Acquired in merger		—			—			1,300
Originated mortgage servicing rights		211			176			150
Amortization		(482	)		(525	)		(473	)
Balance at end of year	$	2,890		$	3,161		$	3,510

In November, 2006, the Company merged with the former Centrue Financial Corporation. As part of this merger, the Company recorded $1,300 of mortgage servicing rights at the fair market value on the date of the merger and added $139,167 of loan balances to its servicing portfolio.

Management periodically evaluates assets for impairment. For purposes of measuring impairment, servicing assets are stratified by loan type. Impairment is recognized if the carrying value of servicing assets exceeds the fair value of the stratum. The fair value of capitalized mortgage servicing rights was $3,000 and $3,400 at December 31, 2008 and 2007, respectively. Fair value was determined using discount rates ranging from 9.5% to 17.0% and prepayment speeds ranging from 14.7% to 17.1% depending on the stratification of the specific right.

Estimated amortization expense for each of the next five years is as follows:

2009	$	505
2010		485
2011		465
2012		450
2013		425

81.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 7. Premises and Equipment

Premises and equipment consisted of:

	December 31,
	2008		2007
Land	$	9,878	$	10,261
Buildings		23,183		24,573
Furniture and equipment		22,113		24,049
Construction in process		193		114
		55,367		58,997
Less accumulated depreciation		22,991		23,382
	$	32,376	$	35,615

As discussed in Note 2, the Company completed the sale of four branches during 2008. A total of $615 of Premises and Equipment was included with those sales.

During 2008, the Company disposed of three buildings and abandoned leasehold improvements related to an exited lease contract. These actions resulted in a $492 decrease of Premises and Equipment during the period.

Note 8. Goodwill and Intangible Assets

Goodwill

Goodwill initially recorded is subject to the completion of the valuation of assets acquired and liabilities assumed. Purchase accounting adjustments are the adjustments to the initial goodwill recorded at the time an acquisition is completed. Such adjustments generally consist of adjustments to the assigned fair value of assets acquired and liabilities assumed resulting from the completion of appraisals or other valuations and adjustments to initial estimates recorded for transaction costs or exit liabilities. Goodwill is not amortized but is subject to impairment tests on at least an annual basis. The Company’s annual goodwill impairment test showed no impairment existed at December 31, 2008. However, if the economy remains stressed and bank stocks remain out of favor, goodwill impairment might occur in the future.

The change in balance of goodwill during the year is as follows:

	December 31,
	2008			2007
Beginning of year	$	25,498		$	25,396
Goodwill impairment due to sale of Wealth Management		(724	)		—
Goodwill allocated to Brokerage & Asset Management sale		(280	)		—
Merger related adjustments		—			102
End of year	$	24,494		$	25,498

82.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 8. Goodwill and Intangible Assets (Continued)

Acquired Intangible Assets

Acquired intangible assets were as follows as of year end:

	2008				2007
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Core deposit intangibles	$	14,124	$	5,617	$	14,124	$	3,735
Other customer relationship intangibles		—		—		60		23
Missouri charter		581		—		581		—
Total	$	14,705	$	5,617	$	14,765	$	3,758

The core deposit intangible asset recorded in the 2006 merger with Centrue Financial Corporation was $13,035. Aggregate amortization expense was $1,883, $2,307, and $457 for 2008, 2007, and 2006.

Estimated amortization expense for subsequent years is as follows:

2009	$	1,538
2010		1,257
2011		1,029
2012		951
2013		951
Thereafter		2,781

Note 9. Deposits

Deposit account balances by type are summarized as follows:

	December 31,
	2008		2007
Non-interest-bearing demand deposit	$	118,745	$	114,360
Savings, NOW, and money market accounts		336,466		350,023
Time deposits of $100 or more		261,192		201,318
Other time deposits		332,817		367,321
	$	1,049,220	$	1,033,022

As discussed in Note 2, the Company sold four branches during 2008. A total of $52,200 of deposits were sold in conjunction with these sales.

At December 31, 2008, the scheduled maturities of time deposits are as follows:

Year	Amount
2009	$	434,730
2010		141,685
2011		9,127
2012		3,819
2013		4,503
Thereafter		145
	$	594,009

83.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 9. Deposits (Continued)

Time certificates of deposit in denominations of $100 or more mature as follows:

	December 31,
	2008		2007
3 months or less	$	150,091	$	90,329
Over 3 months through 6 months		31,078		33,475
Over 6 months through 12 months		26,202		50,022
Over 12 months		53,821		27,492
	$	261,192	$	201,318

Deposits from principal officers, directors and their affiliates at year end 2008 and 2007 were $1,587 and $1,412.

Note 10. Securities Sold Under Agreements to Repurchase

Securities sold under agreements to repurchase are financing arrangements that mature within two years. At maturity, the securities underlying the agreements are returned to the Company. Securities sold under agreements to repurchase are secured by mortgage-backed securities with a carrying value of $27,106 and $44,937 at year-end 2008 and 2007. Information concerning securities sold under agreements to repurchase is summarized as follows:

	2008			2007
Average daily balance during the year	$	33,157		$	39,447
Average interest rate during the year		1.60	%		4.21	%
Maximum month-end balance during the year		42,581			46,958
Weighted average interest rate at year-end		0.51	%		3.52	%

Note 11. Subordinated Debentures

The Company has two $10,000 trust preferred issuances that were issued in April 2004 and April 2007 in cumulative trust preferred securities through special-purpose trusts Centrue Statutory Trust II (Trust II) and Centrue Statutory Trust III (Trust III). The proceeds of the offerings were invested by the trusts in junior subordinated deferrable interest debentures of Trust II and Trust III totaling $20,620. Trust II and Trust III are wholly-owned subsidiaries of the Company, and their sole assets are the junior subordinated deferrable interest debentures.

Distributions are cumulative and are payable quarterly at a variable rate of 2.65% over the LIBOR rate of 1.87% for Trust II and a 6.67% fixed rate for Trust III, respectively, (at a rate of 4.52% and 6.67% at December 31, 2008) per annum of the stated liquidation amount of $1,000 per preferred security. The interest rate for the Trust III debentures is fixed for five years and then transitions to a variable rate that is 1.65% over the LIBOR rate. Interest expense on the trust preferred securities was $1,272 and $1,688 for the years ended December 31, 2008 and 2007. The interest can be deferred at the option of the Company. The obligations of the trust are fully and unconditionally guaranteed, on a subordinated basis, by the Company.

The trust preferred securities for the Trust II are redeemable upon the maturity of the debentures on April 22, 2034, or to the extent of any earlier redemption of any debentures by the Company, and are callable beginning April 22, 2009. The trust preferred securities for Trust III are redeemable upon the maturity of the debentures on April 19, 2037, or to the extent of any earlier redemption of any debentures by the Company,

84.

Centrue Financial Corporation

Notes To Consolidated Financial Statements

(In Thousands, Except Share Data)

Note 11. Subordinated Debentures (Continued)

and are callable beginning April 19, 2012. Holders of the capital securities have no voting rights, are unsecured, and rank junior in priority of payment to all of the Company’s indebtedness and senior to the Company’s capital stock. For regulatory purposes, the trust preferred securities qualify as Tier 1 capital subject to certain provisions.

In accordance with FASB interpretation 46R, the trusts are not consolidated with the Company’s consolidated financial statements, but rather the subordinated debentures are shown as a liability and the Company’s investment in the common stock for the trusts of $620 is included in other assets.

Note 12. Borrowed Funds

At December 31, 2008 and 2007, $75,000 and $8,000 of Federal Home Loan Bank advances have various call provisions. The Company maintains a collateral pledge agreement covering secured advances whereby the Company had specifically pledged $165,077 of first mortgage loans on improved residential and mixed use farm property free of all other pledges, liens, and encumbrances (not more than 90 days delinquent). The Company has four variable rate advances, two at 0.45% and two at 0.55% at year-end 2008 and no advances at year-end 2007. The remaining advances are at fixed rates ranging from 0.50% to 4.90%. The scheduled maturities of advances from the Federal Home Loan Bank at December 31, 2008 and 2007 are as follows:

	2008					2007
Year	Average Interest Rate			Amount		Average Interest Rate			Amount
2008		—	%		—		4.30			103,344
2009		0.61			82,023		3.78			5,002
2010		4.50			5,200		4.50			5,202
2011		2.78			48,000		4.90			3,001
2012		—			—		—			—
2013		4.61			62		—			—
Thereafter		4.37			5,000		4.37			5,066
		1.63	%	$	140,285		4.30	%	$	121,615

85.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 12. Borrowed Funds (Continued)

Notes payable consisted of the following at December 31, 2008 and 2007:

	2008		2007
Revolving credit loan ($25,000) from Bank of America; interest due quarterly at the higher of 90-day LIBOR plus 2.50% or a floor of 5.00%. The balance is due on March 31, 2009; secured by 100% of the stock of Centrue Bank.	$	8,865	$	12,864
Term note ($250) from Bank of America; interest due quarterly at the 90-day LIBOR plus 2.95%. The balance is due at maturity of March 31, 2015; secured by 100% of the stock of Centrue Bank.		250		—
Subordinated debt note ($10,000) from Bank of America; interest due quarterly at the 90-day LIBOR plus 2.95%. The balance is due at maturity of March 31, 2015; the debt is unsecured and intended to qualify as tier II capital for regulatory purposes.		10,000		—
A promissory note to an individual related to the purchase of the Howard Marshall Agency. The original amount of the note was $376. The note was entered into on November 1, 2003 and carries an interest rate of 5%. The note requires monthly installment payments of principal and interest and matured on November 1, 2008.		—		70
A note to an individual related to a prior acquisition. The original amount was $2,000. The note was entered into on October 23, 2002 and carries as imputed interest of 5.25%. The note matures on October 24, 2012.		711		868
	$	19,826	$	13,802

On March 31, 2008, the Company entered into a new loan agreement with Bank of America which provides for up to an aggregate principal amount of $35,250 in borrowings. The loan agreement consists of three credit facilities. The first credit facility consists of a $25,000 secured revolving line of credit which matures on March 31, 2009. The second credit facility consists of a $250 secured term facility, which will mature in March 31, 2015. The third credit facility consists of $10,000 in subordinated debt, which also matures in March 31, 2015. The interest rate on the term and subordinated debt credit facilities is three month LIBOR plus 295 basis points. The interest rate on the revolving credit facility is three month LIBOR plus 250 basis points. Repayment of each of the three credit facilities is interest only on a quarterly basis, with the principal amount of the loan due at maturity. The revolving and term credit facilities are secured by a pledge of the stock of Centrue Bank. The subordinated debt credit facility is unsecured and is intended to qualify as Tier II capital for regulatory purposes. The loan agreement contains customary covenants, including but not limited to, Centrue Bank’s maintenance of its status as well-capitalized, Centrue Bank’s minimum return on average assets on an annual basis of 0.50%, Centrue Bank’s maximum nonperforming assets to primary capital below 20%, and Centrue Bank’s minimum loan loss reserves to total loans of 1.00%. The Company is using these credit facilities for general working capital purposes. The loan agreement contains no penalty for early repayment of either the revolving credit facility or the subordinated debt credit facility. As of December 31, 2008, the outstanding balance on these lines is $19,115 and the Company was in compliance with all covenants.

86.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 12. Borrowed Funds (Continued)

Information concerning borrowed funds is as follows:

	Years Ended December 31,
	2008			2007			2006
Federal Funds Purchased
Year-end balance	$	19,200		$	—		$	—
Maximum month-end balance during the year		35,700			15,100			12,000
Average balance during the year		8,991			1,282			1,884
Weighted average interest rate for the year		2.54	%		5.83	%		5.25	%
Weighted average interest rate at year end		0.45	%		N/A			N/A
Advances from the Federal Home Loan Bank
Maximum month-end balance during the year	$	140,285		$	121,615		$	63,165
Average balance during the year		119,800			69,202			46,487
Weighted average interest rate for the year		2.74	%		4.41	%		3.92	%
Weighted average interest rate at year end		1.69	%		4.30	%		4.25	%
Notes Payable
Maximum month-end balance during the year	$	24,016		$	13,802		$	10,846
Average balance during the year		19,628			11,107			9,081
Weighted average interest rate for the year		5.24	%		6.68	%		6.93	%
Weighted average interest rate at year end		5.77	%		6.65	%		6.36	%

Note 13. Income Taxes

Income taxes consisted of:

	Years Ended December 31,
	2008			2007		2006
Federal
Current	$	4,182		$	4,264	$	(690	)
Deferred		(1,911	)		225		2,322
		2,271			4,489		1,632
State
Current		661			378		113
Deferred		(166	)		308		138
		495			686		251
	$	2,766		$	5,175	$	1,883

The Company’s income tax expense differed from the statutory federal rate of 34% as follows:

	Years Ended December 31,
	2008			2007			2006
Expected income taxes	$	3,113		$	5,609		$	2,404
Income tax effect of
Interest earned on tax-free investments and loans		(646	)		(736	)		(394	)
Nondeductible interest expense incurred to carry tax-free investments and loans		82			112			50
Nondeductible amortization		40			—			—
State income taxes, net of federal tax benefit		327			453			166
State income tax refund		—			—			(18	)
Earnings on Bank owned life insurance		(329	)		(337	)		(214	)
Deductible merger expenses		—			—			(98	)
Stock option expense		53			29			105
Nondeductible meals and health club dues		45			—			—
Other		81			45			(118	)
	$	2,766		$	5,175		$	1,883

87.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 13. Income Taxes (Continued)

The significant components of deferred income tax assets and liabilities consisted of:

	December 31,
	2008			2007
Deferred tax assets
Allowance for loan losses	$	5,830		$	4,175
Other than temporary impairment on securities		1,061			—
Deferred compensation, other		459			208
Stock based expense		154			91
Net operating loss carryforwards		1,233			1,456
Securities available for sale		2,269			—
Deferred tax asset arising from merger		—			87
Total deferred tax assets		11,006			6,017
Deferred tax liabilities
Depreciation	$	(662	)	$	(545	)
Adjustments arising from acquisitions		(1,701	)		(1,110	)
Mortgage servicing rights		(1,122	)		(1,227	)
Securities available-for-sale		—			(594	)
Federal Home Loan Bank dividend received in stock		(787	)		(787	)
Deferred loan fees & costs		(573	)		(642	)
Other		(373	)		(265	)
Total deferred tax liabilities		(5,218	)		(5,170	)
Valuation allowance on NOL carryforwards		(370	)		(370	)
Net deferred tax assets	$	5,418		$	477

The Federal net operating loss is related to the acquisition of the Illinois Community Bancorp, Inc. transaction. The NOL expires in 2021 thru 2024. The NOL can be used at a rate of $159 per year. Due to Section 382 limitations, any unused amounts that cannot be used will expire. Thus, the valuation allowance was established. See Note 23 for further information related to the merger.

Note 14. Benefit Plans

The Company’s Employee Stock Ownership Plan (“the Plan”) covered all full-time employees who had completed six months of service and have attained the minimum age of twenty and one-half years. As of October 1, 2006, the Company terminated this plan and began the process of distributing the assets of the plan to participants. All of the Plan assets had been distributed to the participants as of March 31, 2007. The Plan no longer owns shares of the Company’s common stock. The Company expensed all cash contributions made to the Plan. Contributions were $1 and $165, for the years ended December 31, 2007 and 2006.

The Company has a 401(k) salary reduction plan (the 401(k) plan) covering substantially all employees. Eligible employees may elect to make tax deferred contributions up to annual IRS contribution limits under the company safe harbor plan status. In 2008, the Company contributed 3% of employee wages to all eligible participants regardless of whether and to what extent the employee elected a salary deferral.

Contributions to the 401(k) plan are expensed currently and approximated $439, $456 and $427 for the years ended December 31, 2008, 2007, and 2006.

88.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 14. Benefit Plans (Continued)

During 2008, the Company has entered into certain non-qualified deferred compensation agreements with members of the senior management team and other select individuals deemed to meet the criteria of “top hat” plan participants. The Company may make discretionary matching contributions with a respect to a portion of the participant’s deferral. Additionally, the Company continues its non-qualified deferred compensation plan for the directors. These agreements, which are subject to the rules of 409(a), relate to the voluntary deferral of compensation received. The accrued liability as of December 31, 2008 and 2007 is $703 and $90. For 2008, the company match for the employees deferred compensation plan was $89. A portion of the benefit is subject to forfeiture if the employee willfully leaves employment or employment is terminated for cause as defined in these agreements.

Note 15. Share Based Compensation

In 1999, the Company adopted the 1999 Option Plan. Under the 1999 Option Plan, nonqualified options may be granted to employees and eligible directors of the Company and its subsidiaries to common stock at 100% of the fair market value on the date the option is granted. The Company has authorized 50,000 shares for issuance under the 1999 Option Plan. During 1999, 40,750 of these shares were granted and are 100% fully vested. The options have an exercise period of ten years from the date of grant.There are 9,250 shares available to grant under this plan.

In April 2003, the Company adopted the 2003 Option Plan. Under the 2003 Option Plan, as amended on April 24, 2007, nonqualified options, incentive stock options, and/or stock appreciation rights may be granted to employees and outside directors of the Company and its subsidiaries to purchase the Company’s common stock at an exercise price to be determined by the executive and compensation committee. Pursuant to the 2003 Option Plan, 570,000 shares of the Company’s unissued common stock have been reserved and are available for issuance upon the exercise of options and rights granted under the 2003 Option Plan. The options have an exercise period of ten years from the date of grant. There are 209,000 shares available to grant under this plan.

In addition to the Company plans described above, in conjunction with the merger with Centrue Financial Corporation, all outstanding options at Centrue Financial were converted into options to acquire Company common stock, as adjusted for the exchange ratio. Following the merger, no additional options are issuable under any of the former Centrue plans.

The Company awarded 5,000 restricted common stock awards in November, 2006 that were available under the restricted stock portion of the plan. The restricted shares were issued out of treasury shares with an aggregate grant date fair value of $90. The awards were granted using the fair value as the last sale price as quoted on the NASDAQ Stock Market on the date of grant of $18.03. The awarded shares vest at a rate of 20% of the initially awarded amount per year, beginning on the first anniversary date of the award, and are contingent upon continuous service by the recipient through the vesting date.

The compensation cost that has been charged against income for the stock options portion of the Equity Incentive Plan was $352, $151 and $353 for 2008, 2007 and 2006. The compensation cost that has been charged against income for the restricted stock portion of the Equity Incentive Plan was $18 and $20 for 2008 and 2007.

89.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 15. Share Based Compensation (Continued)

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company’s common stock. The Company uses historical data to estimate option exercise and post-vesting termination behavior. (Employee and management options are tracked separately.) The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The fair value of options granted was determined using the following weighted-average assumptions as of grant date:

	2008			2007			2006
Fair value	$	3.36 - 3.69		$	4.41 - 4.65		$	4.89
Risk-free interest rate		2.75 - 2.95	%		4.06 - 4.95	%		5.14	%
Expected option life (years)		6			6			6
Expected stock price volatility		23.91 - 24.07	%		23.33 - 23.67	%		23.45	%
Dividend yield		2.79 - 2.95	%		2.57 - 2.64	%		2.47	%

During 2008, options were granted on two separate dates (February 7 and April 23). Therefore a range of values have been shown. During 2007, options were granted at three separate dates (January 31, April 24, and October 30). Therefore a range of values have been shown in the table above.

A summary of the status of the option plan for 2008 is presented below:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at beginning of year		574,024		$	18.71
Granted		138,000			17.96
Exercised		(15,445	)		16.17
Forfeited		(61,060	)		20.25
Outstanding at end of year		635,519		$	18.68		4.6 years	$	—
Vested or expected to vest		627,419			18.69		4.5 years	$	—
Exercisable at year end		455,519		$	18.72		4.2 years	$	—

Options outstanding at year-end 2008 were as follows:

		Outstanding				Exercisable
Range of Exercise Prices		Number		Weighted Average Remaining Contractual Life		Number		Weighted Average Exercise Price
$	11.25 - 11.75		46,381		1.6 years		46,381	$	11.60
	14.25 - 18.63		249,338		4.6 years		161,338		16.43
	19.03 - 23.31		339,800		5.1 years		247,800		21.55
			635,519		4.6 years		455,519	$	18.72

90.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 15. Share Based Compensation (Continued)

Information related to the stock option plan during each year follows:

	2008		2007		2006
Intrinsic value of options exercised	$	—	$	184	$	250
Cash received from option exercises		233		337		281
Tax benefit realized from option exercises		—		49		75
Weighted average of fair value of options granted		3.47		4.53		4.89

As of December 31, 2008, there was $613 of total unrecognized compensation cost related to non-vested stock options granted under the Plan. The cost is expected to be recognized over a weighted-average period of 3.56 years. As of December 31, 2008, there was $52 of total unrecognized compensation cost related to non-vested shares awarded under the restricted stock plan. The cost is expected to be recognized over a weighted-average period of 2.89 years.

Note 16. Earnings Per Share

A reconciliation of the numerators and denominators for earnings per common share computations for the years ended December 31 is presented below (shares in thousands). The Convertible Preferred Stock is antidilutive for all years presented and has not been included in the diluted earnings per share calculation. In addition, options to purchase 555,877 shares, 294,200 shares and 244,200 shares of common stock were outstanding for 2008, 2007 and 2006, respectively, but were not included in the computation of diluted earnings per share because the exercise price was greater than the average market price and, therefore, were antidilutive.

	2008		2007		2006
Basic earnings per share
Income from continuing operations available to common stockholders	$	6,183	$	11,116	$	5,395
Net loss from discontinued operations available to common stockholders		—		—		(415	)
Net income available to common stockholders	$	6,183	$	11,116	$	4,980
Weighted average common shares outstanding		6,034		6,342		4,119
Basic earnings per common share from continuing operations	$	1.02	$	1.75	$	1.31
Basic earnings per common share from discontinued operations		—		—		(0.10	)
Basic earnings per common share	$	1.02	$	1.75	$	1.21

91.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 16. Earnings Per Share (Continued)

	2008		2007		2006
Diluted earnings per share
Weighted average common shares outstanding		6,034		6,342		4,119
Add dilutive effect of assumed exercised stock options		8		38		45
Weighted average common and dilutive potential shares outstanding		6,042		6,380		4,164
Diluted earnings per common share from continuing operations	$	1.02	$	1.74	$	1.30
Diluted earnings per common share from discontinued operations		—		—		(0.10	)
Diluted earnings per common share	$	1.02	$	1.74	$	1.20

Note 17. Regulatory Matters

The Company and Centrue Bank are subject to regulatory capital requirements administered by the federal banking agencies. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Centrue Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Centrue Bank to maintain minimum amounts and ratios of total and Tier I capital to risk-weighted assets and of Tier I capital to average assets. Management believes, as of December 31, 2008 and 2007, that the Company and Centrue Bank meet all of the capital adequacy requirements to which they were subject.

As of December 31, 2008, the most recent notification from the corresponding regulatory agency categorized Centrue Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, Centrue Bank must maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the following table. There are no conditions or events since that notification that management believes have changed Centrue Bank’s categories.

92.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 17. Regulatory Matters (Continued)

	Actual					To Be Adequately Capitalized					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2008
Total capital (to risk-weighted assets)
Centrue Financial	$	128,818		12.2	%	$	84,575		8.0	%		N/A		N/A
Centrue Bank		135,297		12.8			84,880		8.0			106,100		10.0
Tier I capital (to risk-weighted assets)
Centrue Financial	$	105,581		10.0			42,288		4.0			N/A		N/A
Centrue Bank		122,013		11.5			42,440		4.0			63,660		6.0
Tier I leverage ratio (to average assets)
Centrue Financial	$	105,581		8.1			52,120		4.0			N/A		N/A
Centrue Bank		122,013		9.4			51,998		4.0			64,997		5.0
As of December 31, 2007
Total capital (to risk-weighted assets)
Centrue Financial	$	112,586		10.2	%	$	88,208		8.0	%		N/A		N/A
Centrue Bank		120,489		11.0			87,633		8.0			109,541		10.0
Tier I capital (to risk-weighted assets)
Centrue Financial	$	101,831		9.2			44,104		4.0			N/A		N/A
Centrue Bank		109,734		10.0			43,816		4.0			65,725		6.0
Tier I leverage ratio (to average assets)
Centrue Financial	$	101,831		7.7			52,983		4.0			N/A		N/A
Centrue Bank		109,734		8.3			52,983		4.0			66,229		5.0

The Company’s ability to pay dividends is dependent on the subsidiary bank, which is restricted by various laws and regulations. Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year’s net profits, combined with the retained net profits of the preceding two years subject to the capital requirements described above. During 2009, the Bank could, without prior approval, declare dividends of approximately $3,490 plus any 2009 net profits retained to the date of the dividend declaration.

Note 18. Commitments, Contingencies, and Credit Risk

In the normal course of business, there are various contingent liabilities outstanding, such as claims and legal actions, which are not reflected in the consolidated financial statements. In the opinion of management, no material losses are anticipated as a result of these actions or claim.

93.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 18. Commitments, Contingencies, and Credit Risk (Continued)

Centrue Bank is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet.

The contractual amounts of these instruments reflect the extent of involvement in particular classes of financial instruments.

Centrue Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit written is represented by the contractual amount of those instruments. Centrue Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. Financial instruments whose contract amounts represent credit risk are as follows:

	Standby Letters of Credit		Variable Rate Commitments		Fixed Rate Commitments		Total Commitments		Range of Rates On Fixed Rate Commitments
Commitments
December 31, 2008	$	12,693	$	197,104	$	48,674	$	258,471		3.25% - 18.00%
December 31, 2007	$	9,568	$	236,215	$	26,073	$	271,856		2.25% - 18.00%

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. For commitments to extend credit, Centrue Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained is based on management’s credit evaluation of the customer. Collateral held varies, but may include accounts receivable; inventory; property, plant, and equipment; and income producing commercial properties.

Standby letters of credit are conditional commitments issued by Centrue Bank to guarantee the performance of a customer to a third party. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loan commitments to customers. The standby letters of credit are unsecured.

The Company has employment agreements with certain executive officers and certain other management personnel. These agreements generally continue until terminated by the executive or the Company and provide for continued salary and benefits to the executive under certain circumstances. The agreements provide the employees with additional rights if there is a change of control of the Company.

The Company leases certain branch properties under operating leases. Rent expense was $326, $333, and $148 for 2008, 2007 and 2006. Rent commitments, before considering renewal options that generally are present, were as follows:

2009	$	289
2010		302
2011		306
2012		306
2013		306
Thereafter		306
Total	$	1,815

94.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 19. Condensed Financial Information - Parent Company Only

Condensed financial information for Centrue Financial Corporation follows:

Balance Sheets (Parent Company Only)

	December 31,
ASSETS	2008		2007
Cash and cash equivalents	$	991	$	1,779
Securities available for sale		2,332		2,711
Investment in subsidiary		153,362		148,182
Other assets		841		2,214
	$	157,526	$	154,886

LIABILITIES AND STOCKHOLDERS’ EQUITY

	December 31,
LIABILITIES	2008		2007
Notes payable	$	19,826	$	13,732
Mandatory redeemable preferred stock		268		831
Subordinated debentures		20,620		20,620
Other liabilities		904		827
		41,618		36,010
Stockholders’ equity		115,908		118,876
	$	157,526	$	154,886

Income Statements (Parent Company Only)

	Years Ended December 31,
	2008			2007			2006
Dividends from subsidiary	$	8,528		$	7,661		$	6,813
Interest income		202			334			44
Other income		10			(122	)		8
Interest expense		2,348			2,454			910
Other expense		1,567			912			1,066
Income tax benefit		(1,365	)		(1,189	)		(900	)
Equity in undistributed earnings of subsidiary (dividends in excess of earnings)		200			5,627			(602	)
Net income		6,390			11,323			5,187
Less dividends on preferred stock		207			207			207
Net income on common stock	$	6,183		$	11,116		$	4,980

95.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 19. Condensed Financial Information - Parent Company Only (Continued)

Statements of Cash Flows (Parent Company Only)

	Years Ended December 31,
	2008			2007			2006
Cash flows from operating activities
Net income	$	6,390		$	11,323		$	5,187
Adjustments to reconcile net income to net cash provided by operating activities
Undistributed earnings of subsidiary		(200	)		(5,627	)		602
Decrease (increase) in other assets		(468	)		159			(309	)
Increase (decrease) in other liabilities		2,076			12			692
Net cash provided by operating activities		7,798			5,867			6,172
Cash flows from investing activities
Purchases of premises and equipment		—			—			—
Capital infusion to subsidiary		(10,000	)		—			—
Sales and maturities		—			1,018			—
Investment in subsidiary		—			—			—
Net cash provided by (used in) investing activities		(10,000	)		1,018			—
Cash flows from financing activities
Net increase (decrease) in notes payable	$	(3,906	)	$	4,866		$	(1,550	)
Issuance of subordinated debt		10,000
Dividend paid on common stock		(3,321	)		(3,241	)		(1,347	)
Dividend paid on preferred stock		(207	)		(207	)		(207	)
Proceeds from exercise of stock options		233			386			357
Stock option expense		352			(61	)		(352	)
Purchase of preferred stock		(563	)		—			—
Purchase of treasury stock		(1,174	)		(8,361	)		(1,677	)
Net cash provided by (used in) financing activities		1,414			(6,618	)		(4,776	)
Net increase (decrease) in cash and cash equivalents		(788	)		267			1,396
Cash and cash equivalents
Beginning of year		1,779			1,512			116
End of year	$	991		$	1,779		$	1,512

Note 20. Other Comprehensive Income

Changes in other comprehensive income components and related taxes are as follows:

	Years Ended December 31,
	2008			2007		2006
Change in unrealized gains on securities available-for-sale	$	(9,279	)	$	1,120	$	125
Other than temporary impairment on securities		2,735			—		—
Reclassification adjustment for losses (gains) recognized in income		(848	)		29		104
Net unrealized gains		(7,392	)		1,149		229
Tax expense		(2,863	)		445		89
Other comprehensive income (loss)	$	(4,529	)	$	704	$	140

96.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 21. Segment Information

The Company utilizes an internal reporting and planning process that focuses on lines of business (LOB). The reportable segments were determined by the products and services offered, primarily distinguished between retail, commercial, treasury, wealth management, and other operations. Loans and deposits generate the revenues in the commercial segments; deposits, loans, secondary mortgage sales and servicing generates the revenue in the retail segment; investment income generates the revenue in the treasury segment; brokerage and trust services generate the revenue in the wealth management segment; and holding company services and discontinued operations associated with the sale of the insurance segment generate the revenue in the operations & other segment. The “net allocations” line represents the allocation of the costs that are overhead being spread to the specific segments. With the sale of the Insurance unit, the results for Insurance were reclassified into the Operations & Other segment from the Wealth Management segment.

The accounting policies used with respect to segment reporting are the same as those described in the summary of significant accounting policies set forth in Note 1. Segment performance is evaluated using net income.

Information reported internally for performance assessment follows:

	Retail		Commercial		Treasury			Wealth			Other			Continuing
	Segment		Segment		Segment			Management			Operations			Operations
2008
Net interest income (loss)	$	13,232	$	26,679	$	2,985		$	(35	)	$	(3,287	)	$	39,574
Other revenue		11,796		1,316		(1,886	)		999			1,184			13,409
Other expense		11,911		2,746		195			991			14,303			30,146
Noncash items
Depreciation		1,749		7		—			21			1,215			2,992
Provision for loan losses		—		8,082		—			—			—			8,082
Other intangibles		1,882		—		—			725			—			2,607
Net allocations		1,731		11,478		1,533			777			(15,519	)		—
Income tax expense		2,559		1,875		(208	)		(511	)		(949	)		2,766
Segment profit (loss)		5,196		3,807		(421	)		(1,039	)		(1,153	)		6,390
Goodwill		11,927		12,404		—			163			—			24,494
Segment assets		255,028		803,069		277,597			162			66,025			1,401,881

	Retail		Commercial		Treasury			Wealth			Other			Continuing
	Segment		Segment		Segment			Management			Operations			Operations
2007
Net interest income (loss)	$	12,971	$	26,826	$	1,446		$	72		$	(2,474	)	$	38,841
Other revenue		8,938		1,832		(22	)		1,892			3,025			15,665
Other expense		11,429		3,214		218			1,654			15,321			31,836
Noncash items
Depreciation		1,769		16		—			16			1,389			3,190
Provision for loan losses		43		632		—			—			—			675
Other intangibles		2,303		—		—			4			—			2,307
Net allocations		2,645		11,579		1,651			835			(16,710	)		—
Income tax expense		1,228		4,362		(147	)		(180	)		(88	)		5,175
Segment profit (loss)		2,492		8,855		(298	)		(365	)		639			11,323
Goodwill		11,910		12,421		—			1,167			—			25,498
Segment assets		306,156		741,861		268,484			1,289			47,209			1,364,999

97.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 21. Segment Information (Continued)

	Retail		Commercial			Treasury			Wealth			Other			Continuing
	Segment		Segment			Segment			Management			Operations			Operations
2006
Net interest income (loss)	$	8,464	$	14,476		$	537		$	260		$	(1,230	)	$	22,507
Other revenue		3,999		571			(105	)		1,295			928			6,688
Other expense		6,349		2,550			267			1,483			9,118			19,767
Noncash items
Depreciation		1,049		12			—			8			1,476			2,545
Provision for loan losses		325		(1,600	)		—			—			—			(1,275	)
Other intangibles		343		—			—			1			67			411
Net allocations		2,198		6,819			1,047			530			(10,594	)		—
Income tax expense		726		2,398			(291	)		(154	)		(534	)		2,145
Segment profit (loss)		1,473		4,868			(591	)		(313	)		165			5,602
Goodwill		11,834		12,395			—			1,167			—			25,396
Segment assets		240,872		686,495			328,481			1,330			25,847			1,283,025

Note 22. Discontinued Operations

On September 30, 2006, the Company sold its Insurance business unit of its Wealth Management segment to the Phoenix Group for $1,200. In accordance with FASB Statement No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets” (“FAS 144”) the results of operations of the insurance division are reflected in the Company’s statements of income for 2006 as “discontinued operations.” The loss on sale of the insurance unit of $452 and related tax benefit of $175 are included in discontinued operations as of December 31, 2006. Additionally, approximately $1,030 of goodwill and intangibles attributed to the Insurance unit on the Company’s balance sheet were written off as a result of this transaction and factored into the loss on the sale of the discontinued operations.

	(Unaudited)
	December 31,
	2006
Net interest income	$	(5	)
Noninterest income		976
Noninterest expense		1,196
Loss from discontinued operations before income taxes		(225	)
Loss on disposal		(452	)
Benefit for taxes		(262	)
Net income (loss) from discontinued operations	$	(415	)

Note 23. Business Combination

On November 13, 2006, the Company (formerly known as UnionBancorp, Inc. now known as Centrue Financial Corporation) merged with Centrue Financial Corporation (former Centrue), parent of Centrue Bank with the Company being the surviving entity in the merger. Operating results of former Centrue are included in the consolidated financial statements since the date of the acquisition. As a result of this merger, the Company increased its market share in the northern and central Illinois markets, expanded its customer base to enhance deposit fee income, marketed additional products and services to new customers and reduced operating costs through economies of scale.

98.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 23. Business Combination (Continued)

The aggregate purchase price was $49,316, $4 in cash and $49,312 in common stock. The value of the 2,701 common shares issued was determined using the market price multiplied by the exchange rate of 1.2. The purchase price resulted in approximately $19,086 of goodwill, and $13,035 in core deposit and customer relationship intangible. The intangible asset(s) will be amortized over 10 years, using an accelerated method. Goodwill will not be amortized but instead it will be evaluated periodically each year for impairment.

The following table summarizes the estimated fair value of assets acquired and liabilities assumed at the date of acquisition:

Cash and cash equivalents	$	26,506
Securities available-for-sale		125,756
Loans		431,692
Goodwill		19,086
Premises and equipment, net		20,701
Core deposit and other intangibles		13,035
Other assets		14,795
Total assets acquired		651,571
Deposits		(523,630	)
Other liabilities		(78,625	)
Total liabilities assumed		(602,255	)
Net assets acquired	$	49,316

The following table presents pro forma information as if the acquisition had occurred at the beginning of 2006. The pro forma information includes adjustments for interest income on loans and securities acquired, amortization of intangibles arising from the transaction, depreciation expense on property acquired, interest expense on deposits acquired, and the related tax effects. The pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transaction been effected on the assumed dates.

	(Unaudited)
	December 31,
	2006
Net interest income	$	39,127
Net income	$	4,228
Basic earnings per share	$	0.98
Diluted earnings per share	$	0.97

99.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 24. Quarterly Results of Operations (Unaudited)

	Year Ended December 31, 2008 Three Months Ended									Year Ended December 31, 2007 Three Months Ended
	Dec. 31			Sep. 30		June 30		March 31		Dec. 31		Sep. 30		June 30		March 31
Total interest income	$	17,045		$	17,831	$	18,460	$	20,182	$	21,549	$	21,561	$	20,653	$	19,813
Total interest expense		7,160			7,849		8,456		10,479		11,606		11,477		11,162		10,490
Net interest income		9,885			9,982		10,004		9,703		9,943		10,084		9,491		9,323
Provision for loan losses		5,225	*		1,225		866		766		449		—		226		—
Noninterest income		585			3,594		4,292		4,938		3,850		4,367		4,194		3,254
Noninterest expense		8,086			8,122		9,221		10,316		8,908		8,631		9,846		9,948
Income (loss) before income taxes		(2,841	)		4,229		4,209		3,559		4,436		5,820		3,613		2,629
Income tax expense (benefit)		(1,282	)		1,430		1,504		1,114		1,356		1,982		1,107		730
Net income		(1,559	)		2,799		2,705		2,445		3,080		3,838		2,506		1,899
Preferred stock dividend		51			52		52		52		51		52		52		52
Net income (loss) for common stockholders	$	(1,610	) *	$	2,747	$	2,653	$	2,393	$	3,029	$	3,786	$	2,454	$	1,847
Basic earnings (loss) per share	$	(0.27	)	$	0.46	$	0.44	$	0.40	$	0.49	$	0.60	$	0.38	$	0.29
Diluted earnings (loss) per share	$	(0.27	)	$	0.46	$	0.44	$	0.39	$	0.49	$	0.60	$	0.38	$	0.28

(*) For the fourth quarter 2008, the Company reported a net loss of $1,600 or $0.27 per diluted share compared to net income of $3,100 or $0.49 per diluted share earned in the fourth quarter 2007. The Company’s fourth quarter performance reflects significantly higher provision for loan losses and non-cash impairment charges related to trust preferred securities. These results are largely reflective of continued deterioration of general economic conditions and the extraordinary volatility in the securities markets experienced in the fourth quarter 2008.

Note 25. Subsequent Event (Unaudited)

In response to the financial crises affecting the financial markets and the banking system, on October 3, 2008, the President signed into law the Emergency Economic Stabilization Act of 2008 (“EESA”). Among other things, the EESA establishes a $700 billion Troubled Asset Relief Program (“TARP”). Under the TARP, the United States Department of the Treasury (“Treasury”) has authority, among other things, to purchase mortgages, mortgage-backed securities, capital stock, and other financial instruments from financial institutions for the purpose of stabilizing and providing liquidity to the U.S. financial markets.

On October 14, 2008, the Treasury announced several initiatives under the TARP intended to help stabilize the banking industry, including a voluntary Capital Purchase Program (“CPP”) designed to encourage qualifying financial institutions to build capital. Under the CPP, the Treasury may purchase up to $250 billion of senior preferred shares from eligible financial institutions on standardized terms with attached warrants to purchase common stock.

On December 4, 2008, the Treasury notified the Company that it had received preliminary approval to participate in the CPP. Pursuant to the receipt of preliminary approval and execution of the related agreements, on January 9, 2009, the Company received $32,668 from the sale of preferred shares to the Treasury as part of the CPP.

100.

Centrue Financial Corporation
Notes To Consolidated Financial Statements
(In Thousands, Except Share Data)

Note 25. Subsequent Event (Unaudited) (Continued)

In exchange for the $32,668, the Company issued to the Treasury a total of 32,668 shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series C, at an initial fixed dividend rate of 5% with a $1,000 per share liquidation preference and a warrant to purchase up to 508,320 shares of the Company’s common stock at an exercise price of $9.64 per share. Both the preferred shares and the warrants are accounted for as components of the Company’s regulatory Tier 1 capital.

The net proceeds were temporarily invested in government sponsored mortgage-backed securities pending future deployment.

Responsive to the environment at the time, on February 24, 2009, the Company’s Board of Directors announced a reduction in its quarterly common stock dividend from $0.14 per share to $0.7 per share. Since the Company elected to participate in the CPP, its ability to increase quarterly common stock dividends above $0.14 per share will be subject to the applicable restrictions of this program for three years following the sale of the preferred stock.

101.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures. An evaluation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Act”)) was carried out as of December 31, 2008, under the supervision and with the participation of our Chief Executive Officer, Chief Financial Officer and several other members of our senior management. Our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2008, our disclosure controls and procedures were effective in ensuring that the information we are required to disclose in the reports we file or submit under the Act is (i) accumulated and communicated to our management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Internal Control Over Financial Reporting. Management of Centrue Financial Corporation (“the Company”) is responsible for establishing and maintaining an effective system of internal control over financial reporting. The Company’s system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. There are inherent limitations in the effectiveness of any system of internal control over financial reporting, including the possibility of human error and circumvention or overriding of controls. Accordingly, even an effective system of internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the Company’s systems of internal control over financial reporting as of December 31, 2008. This assessment was based on criteria for effective internal control over financial reporting described in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management believes that, as of December 31, 2008, the Company maintained effective internal control over financial reporting based on those criteria.

The Company’s independent registered public accounting firm that audited the financial statements that included in this annual report on Form 10-K, has issued an audit report on the Company’s internal control over financial reporting. The attestation report of Crowe Horwath, LLP appears on page 55.

Changes in Internal Control Over Financial Reporting. During the quarter ended December 31, 2008, no change occurred in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

102.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information beginning on page 2 of the Company’s 2009 Proxy Statement under the caption “Election of Directors”, on page 10 of the 2009 Proxy Statement under the caption “Section 16(a) Beneficial Ownership Compliance,” on page 27 under the caption “Audit Committee Financial Expert” and on page 6 under the caption “Code of Ethics” is incorporated herein by reference. The Company’s executive officers are identified under the caption “Executive Officers” contained in Part I of this report.

The Audit Committee of the Company’s Board of Directors is an “audit committee” for purposes of section 3(a)(58)(A) of the Securities Exchange Act of 1934. The members of the Audit Committee are Messrs. Mark L. Smith, Chair, Walter E. Breipohl, Randall E. Ganim and Scott C. Sullivan.

Item 11. Executive Compensation

The information beginning on page 6 under the caption “Compensation of Directors”, pages 11 through 25 of the 2009 Proxy Statement under the caption “Compensation Discussion and Analysis,” page 11 under the caption “Executive & Compensation Committee Interlocks,” and “Report of Executive & Compensation Committee” is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The information on pages 8 through 10 of the 2009 Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management”.

The following table summarizes information about our equity compensations plans by type as of December 31, 2008.

Equity Compensation Plan Information

	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities in column (a))
Plan category	(a)	(b)		(c)
Equity compensation plans approved by stockholders (1)	630,369	$	18.7060	209,000
Equity compensation plan not approved by stockholders (2)	5,150	$	16.0625	—
Total	635,519	$	18.6845	209,000

(1) Includes shares issuable under the 1993 Stock Option Plan and shares issuable under the 2003 Stock Option Plan. The 1993 Stock Option Plan terminated April 12, 2003; therefore, no further stock options will be issued under this Plan. Also includes shares issuable under the pre-merger Centrue Equity Compensation plans. These plans were terminated as a result of the merger; therefore, no further stock options will be issued under these plans.

103.

(2) Includes shares issued under the 1999 Non-qualified Stock Option Plan, The Company authorized 50,000 shares for issuance under the 1999 Option Plan. During 1999, 40,750 of these shares were granted and vested in three years. The options have an exercise period of ten years from the date of grant.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information on page 25 of the 2009 Proxy Statement under the caption “Transactions with Management” and on page 2 under the caption “Election of Directors” is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

The information on page 25 of the 2009 Proxy Statement under the caption “Accountant Fees” is incorporated herein by reference.

Item 15. Exhibits and Financial Statement Schedules

(a)(1)	Index to Financial Statements
	The index to Financial Statements is contained in Item 8, appearing on page 49 of this Form 10-K.
(a)(2)	Financial Statement Schedules
	All schedules are omitted because they are not required or applicable, or the required information is shown in the Consolidated Financial Statements or the notes thereto.
(a)(3)	Schedule of Exhibits
	The Exhibit Index which immediately follows the signature pages to this Form 10-K is incorporated herein by reference.
(b)	Exhibits
	The exhibits required to be filed with this Form 10-K are included with this Form 10-K and are located immediately following the Exhibit Index to this Form 10-K.
(c)	Financial Statement Schedules
	The response to this portion of Item 15 is submitted as a separate section of this report.

104.

SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March 13, 2009.

CENTRUE FINANCIAL CORPORATION
By:	/s/ Thomas A. Daiber
	Thomas A. Daiber
	President and Principal Executive Officer
By:	/s/ Kurt R. Stevenson
	Kurt R. Stevenson
	Senior Executive Vice President and Principal Financial and Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March 13, 2009

/s/ Richard J. Berry	/s/ Michael J. Hejna
Richard J. Berry	Michael J. Hejna
Director	Director
/s/ Walter E. Breipohl	/s/ Dennis J. McDonnell
Walter E. Breipohl	Dennis J. McDonnell
Director	Director
/s/ Thomas A. Daiber	/s/ John A. Shinkle
Thomas A. Daiber	John A. Shinkle
Director	Director
/s/ Randall E. Ganim	/s/ Mark L. Smith
Randall E. Ganim	Mark L. Smith
Director	Director
/s/ Michael A. Griffith	/s/ Scott C. Sullivan
Michael A. Griffith	Scott C. Sullivan
Director	Director

Centrue Financial Corporation

EXHIBIT INDEX
TO
ANNUAL REPORT ON FORM 10-K

Exhibits

3.1(i)	Restated Certificate of Incorporation of the Company [incorporated by reference from Exhibit 3.1 to Current Report on Form 8-K filed on November 17, 2006].
3.1 (2)	Certificate of Amendment to Amended and Restated Certificate of Incorporation [incorporated by reference from Exhibit 3.1 to Current Report on Form 8-K filed on January 14, 2009].
3.2	Bylaws of the Company [incorporated by reference from Exhibit 3.1 to Quarterly Report on Form 10-Q for the quarter ended September 30, 2007].
4.1	Certificate of Designation, Preferences and Rights of Series A Convertible Preferred Stock of the Company [incorporated by reference from Exhibit 3.1 to Current Report on Form 8-K filed on November 17, 2006].
4.2	Certificate of Designation, Preferences and Rights of Series B Preferred Stock of the Company [incorporated by reference from Exhibit 3.1 to Current Report on Form 8-K filed on November 17, 2006].
4.3	Certificate of Designation, Preferences and Rights of Series C Preferred Stock of the Company [incorporated by reference from Exhibit 3.2 to Current Report on Form 8-K filed on January 14, 2009].
4.4	Specimen Common Stock Certificate [incorporated by reference from Exhibit 4.3 to Annual Report on Form 10-K for this year ended December 31, 2006].
4.5	Warrant for 508,320 shares of Common Stock issued to U. S. Treasury [incorporated by reference from Exhibit 4.1 to Current Report on Form 8-K filed on January 14, 2009].
10.1	Registration Agreement dated August 6, 1996, between the Company and each of Wayne W. Whalen and Dennis J. McDonnell [incorporated by reference from Exhibit 10.10 to the Registration Statement on Form S-1 filed by the Company on August 19, 1996 (File No. 33-9891)].
10.2	Loan Agreement between the Company and Bank of America dated March 31, 2008 [incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K filed on April 3, 2008].
10. 3	Centrue Financial Corporation 1999 Nonqualified Stock Option Plan [incorporated by reference from Exhibit 10.1 to the registration statement on Form S-8 filed by the Company on December 10, 1999 (File No. 333-92549)].
10.4	Centrue Financial Corporation 2000 Incentive Compensation Plan [incorporated by reference from Exhibit 10.1 to Centrue’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 as filed with the SEC on November 13, 2001].
10.5	Centrue Financial Corporation Amended and Restated 2003 Stock Option Plan [incorporated by reference from Centrue’s 2007 Proxy Statement].

10.6	Form of Stock Option Agreements [incorporated by reference from Exhibit 10.2 and 10.3 to Form 10-Q for the Quarter Ended March 31, 2007]
10.7	Thomas A. Daiber Employment Agreement [incorporated by reference from Current Report on Form 8-K filed on July 7, 2006 (appears as Exhibit F-1 to Exhibit 2.1)].
10.8	Kurt R. Stevenson Employment Agreement [incorporated by reference from Current Report on Form 8-K filed on July 7, 2006 (appears as Exhibit F-3 to Exhibit 2.1)]
10.9	Amendment to Kurt R. Stevenson Employment Agreement [incorporated by reference from Exhibit 2.2 to Current Report on Form 8-K filed on November 17, 2006].
10.10	Donald M. Davis Employment Agreement [incorporated by reference from Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarter ended September 30, 2007].
10.11	Roger D. Dotson Employment Agreement [incorporated by reference from Exhibit 10.11 to Annual Report on Form 10-K for the year ended December 31, 2007].
10.12	Steven E. Flahaven Employment Agreement [incorporated by reference from Exhibit 10.12 to Annual Report on Form 10-K for the year ended December 31, 2007].
10.13	Heather M. Hammitt Employment Agreement [incorporated by reference from Exhibit 10.13 to Annual Report on Form 10-K for the year ended December 31, 2007].
10.14	Kenneth A. Jones Employment Agreement [incorporated by reference from Exhibit 10.14 to Annual Report on Form 10-K for the year ended December 31, 2007].
10.15	Diane F. Leto Employment Agreement [incorporated by reference from Exhibit 10.15 to Annual Report on Form 10-K for the year ended December 31, 2007].
10.16	Michael A. O’Gorman Employment Agreement [incorporated by reference from Exhibit 10.16 to Annual Report on Form 10-K for the year ended December 31, 2007].
10.17	Ricky R. Parks Employment Agreement [incorporated by reference from Exhibit 10.17 to Annual Report on Form 10-K for the year ended December 31, 2007].
10.18	Everett J. Solon Employment Agreement [incorporated by reference from Exhibit 10.18 to Annual Report on Form 10-K for the year ended December 31, 2007].
10.19	Non-employee Directors’ Deferred Compensation Plan [filed herewith].
10.20	Kankakee Bancorp, Inc. 1992 Stock Option Plan [incorporated by reference from Schedule 14A for the 1993 Annual Meeting of Stockholders of former Centrue Financial Corporation (Filer No. 001-15025)].
10.21	Kankakee Bancorp, Inc. 2003 Director Short Term Incentive Plan [incorporated by reference from Exhibit 10.1 to Form S-8 (Registration No. 333-104913) of former Centrue Financial Corporation (Filer No. 001-15025) filed on May 1, 2003].
10.22	Kankakee Bancorp, Inc. 2003 Stock Incentive Plan [incorporated by reference from Appendix B to Schedule 14A filed on March 14, 2003 of former Centrue Financial Corporation (Filer No. 001-15025)].

10.23	Indenture dated April 22, 2004 between the Company and U.S. Bank, N.A. [incorporated by reference from Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2004 of former Centrue Financial Corporation (Filer No. 001-150250].
10.24	Indenture dated April 19, 2007 between the Company and Wilmington Trust Company [filed herewith].
10.25	Executive Deferred Compensation Plan [filed herewith].
10.26	Amendment #1 to Thomas A. Daiber Employment Agreement [incorporated by reference from Exhibit 10.1 to Current Report on 8-K filed on January 5, 2009].
10.27	Amendment #1 to Kurt R. Stevenson Employment Agreement [incorporated by reference from Exhibit 10.2 to Current Report on 8-K filed on January 5, 2009].
10.28	Amendment #1 to Donald M. Davis Employment Agreement [incorporated by reference from Exhibit 10.3 to Current Report on 8-K filed on January 5, 2009].
10.29	2008 Amendment to Employment Agreement (Steven E. Flahaven) [incorporated by reference from Exhibit 10.4 to Current Report on 8-K filed on January 5, 2009].
10.30	2008 Amendment to Employment Agreement (Heather H. Hammitt) [incorporated by reference from Exhibit 10.5 to Current Report on 8-K filed on January 5, 2009].
10.31	2008 Amendment to Employment Agreement (Kenneth A. Jones) [incorporated by reference from Exhibit 10.6 to Current Report on 8-K filed on January 5, 2009].
10.32	2008 Amendment to Employment Agreement (Diane F. Leto) [incorporated by reference from Exhibit 10.7 to Current Report on 8-K filed on January 5, 2009].
10.33	2008 Amendment to Employment Agreement (Roger D. Dotson) [incorporated by reference from Exhibit 10.8 to Current Report on 8-K filed on January 5, 2009].
10.34	2008 Amendment to Employment Agreement (Everett J. Solon) [incorporated by reference from Exhibit 10.9 to Current Report on 8-K filed on January 5, 2009].
10.35	2008 Amendment to Employment Agreement (Ricky R. Parks) [incorporated by reference from Exhibit 10.10 to Current Report on 8-K filed on January 5, 2009].
14.1	Code of Ethics [filed herewith].
21.1	Subsidiaries of Centrue Financial Corporation.
23.1	Consent of Independent Registered Public Accounting Firm.
31.1.	Certification of Thomas A. Daiber, the Company’s Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of Kurt R. Stevenson, the Company’s Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, from the Company’s President and Principal Executive Officer.
32.2*	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, from the Company’s Senior Executive Vice President and Principal Financial and Accounting Officer.
*	This certification is not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

EX-10.19

EXHIBIT 10.19

CENTRUE FINANCIAL CORPORATION.
NON-EMPLOYEE DIRECTORS’ DEFERRED COMPENSATION PLAN

          Centrue Financial Corporation (the “Company”), hereby adopts the Centrue Financial Corporation Non-Employee Directors’ Deferred Compensation Plan (the “Plan”), for the benefit of its non-employee Directors and the non-employee Directors of its subsidiaries. The Plan is an unfunded arrangement for the benefit of non-employee Directors and is intended to be exempt from the requirements of the Employee Retirement Income Security Act of 1974, as amended. The Plan is effective as of January 1, 2007.

ARTICLE 1.
DEFINITIONS

1.01	Account. The bookkeeping account established for each Participant as provided in Section 5.01 hereof.
1.02	Administrator. Such person or entity as determined by the Board, and in the absence of such determination, the Company.
1.03	Bank. Centrue Bank.
1.04	Board. The Board of Directors of the Company.
1.05	Change of Control. Any one of:
	(a)	The consummation of the acquisition by any person (as such terms is defined in Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of thirty-five percent (35%) or more of the combined voting power of the then outstanding voting securities of the Company;
	(b)	Within any twelve (12) month period, a majority of the members of the Board is replaced by individuals whose appointment or election is not endorsed by a majority of the Board prior to the date of the appointment or election; or
	(c)	Consummation of: (1) a merger or consolidation to which the Company is a party if the stockholders of the Company immediately before such merger or consolidation do not, as a result of such merger or consolidation, own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the entity resulting from such merger or consolidation in substantially the same proportion as their ownership of the combined voting power of the Company’s voting securities outstanding immediately before such merger or consolidation; or (2) a complete liquidation or dissolution or sale or other disposition of all or substantially all of the assets of the Company or the Bank.

		Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because thirty-five percent (35) or more of the combined voting power of the Company’s then outstanding voting securities is acquired by: (1) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained for employees of the entity; or (2) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the stockholders in the same proportion as their ownership of stock immediately prior to such acquisition.
		Notwithstanding the foregoing, no event described in this Section 1.05 shall be considered a Change of Control, unless the event also constitutes a change in the ownership or effective control pursuant to Code Section 409A(a)(2)(A)(v) and the regulatory guidance promulgated thereunder.
1.06	Code. The Internal Revenue Code of 1986, as amended.
1.07	Deferrals. The portion of the Fees that a Participant elects to defer in accordance with Section 3.01 hereof.
1.08	Deferral Date. The date of the Deferrals will be credited to the Director’s Account, which date shall be the date it would otherwise have been payable to the Director.
1.09	Deferral Election. The separate written agreement, submitted to the Administrator, by which a Director elects to participate in the Plan and to make Deferrals.
1.10	Director. Any person serving on the Board of the Company or the Bank and who is not an employee of the Company or the Bank in any capacity.
1.11	Disability. A Participant shall be considered disabled if the participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the participant’s employer.
1.12	Effective Date. January 1, 2007.
1.13	Fees. The participant’s earned director fee remuneration for serving as a Director of the Company or the Bank, including any fees for committee participation.

2.

1.14	Participant. A Director who is a Participant as provided in ARTICLE 2.
1.15	Payment Date. For purposes of this Plan the term “Payment Date” shall mean the date as of which the event (e.g., Retirement, Change of Control, or Death, the attainment of age 65 or the date of a scheduled installment payment). If a Payment Date is not a trading day, then the Payment Date shall be the immediately preceding trading day.
1.16	Plan Year. January 1 to December 31.
1.17	Retirement. Retirement shall occur upon the termination of a Participant’s service, voluntary or involuntary, as a Director, provided that such termination of service qualifies as separation from service, as defined in Code Section 409A(a)(2)(A)(i) and the regulatory guidance promulgated thereunder.

ARTICLE 2.
PARTICIPATION

2.01	Commencement of Participation. Each Director shall become a Participant of the Plan on the date the Director’s Deferral Election first becomes effective.
	(a)	A Participant who is no longer a Director or who also becomes an employee of the Company or the Bank shall not be permitted to submit a Deferral Election and all Deferrals for such Participant shall cease as of the end of the Plan Year in which such Participant is determined to no longer be a Director or becomes an employee of the Company or the Bank.
	(b)	Amounts credited to the Participant’s Account described in subsection (a) shall continue to be held, pursuant to the terms of the Plan and shall be distributed as provided in ARTICLE 6.
2.02	Deferral Continuance Retirement. On or after the first day of any Plan Year, a Participant’s Deferral Election with respect to that Plan Year shall be irrevocable. A Participant may change a Deferral Election by delivering to the Administrator a written revocation or modification of such election with respect to Fees that relate to services yet to be performed. The revocation or modification of the Deferral Election shall be effective as of the first day of the Plan Year following the date the Participant delivers the revocation or modification to the Administrator.

3.

ARTICLE 3.
CONTRIBUTION

3.01	Deferrals.
	(a)	The Company shall credit to the Participant’s Account an amount equal to the amount designated in the Participant’s Deferral Election for that Plan Year. Such amounts shall not be made available to such Participant, except as provided in ARTICLE 6, and shall reduce such Participant’s Fees from the Company or the Bank in accordance with the provisions of the applicable Deferral Election; provided, however, that all such amounts shall be subject to the rights of the general creditors of the Company and the Bank as provided in ARTICLE 8.
	(b)	Each Director shall deliver a Deferral Election to the Administrator before any Deferrals may become effective. Such Deferral Election shall be void with respect to any Deferral unless submitted before the beginning of the calendar year during which the amount to be deferred will be earned; provided, however, that in the year in which a Director is first eligible to participate, such Deferral Election shall be filed within thirty (30) days of the date on which a Director is first eligible to participate, respectively, with respect to Fees earned during the remainder of the calendar year.
	(c)	Subject to the limitation set forth in Section 3.01, the Deferral Election shall remain effective until modified or revoked and will contain the following:
		(i)	the Participant’s designation as to the amount of Fees to be deferred;
		(ii)	the beneficiary or beneficiaries of the Participant; and
		(iii)	such other information as the Administrator may require.
	(d)	The maximum amount that may be deferred each Plan Year is one hundred percent (100%) of the Participant’s Fees.
3.02	Time of Contributions. Deferrals shall be credited to the Account of the appropriate Participant as of the Deferral Date.
ARTICLE 4. VESTNG
4.01	Vesting of Deferrals. A Participant shall have a vested right to his Account attributable to Deferrals and any earnings on the investment of such Deferrals.

4.

ARTICLE 5.
ACCOUNTS

5.01	Accounts. The Administrator shall establish and maintain a bookkeeping account in the name of each Participant. The Participant’s Account shall be credited with Units, as defined in Section 5.02(a). Each Participant’s Account shall be debited by any distributions made plus any federal, state and/or local tax withholding as may be required by applicable law. Distributions under ARTICLE 6 shall be equal to the Participant’s Account balance as of the date of the applicable distribution thereunder.
5.02	Investments, Gains and Losses.
	(a)	The Participant’s Account will be credited with the hypothetical number of stock units (“Units”), calculated to the nearest thousandths of a Unit, determined by dividing the amount of the Deferrals on the Deferral Date by the average of the closing market price of the Company’s common stock as reported on the NASDAQ for such date or if that date is not a trading day, for the trading day immediately preceding such date. The Participant’s Account will also be credited with the number of Units determined by multiplying the number of Unites in the Participant’s Account by any cash dividends declared by the Company on its common stock and dividing the product by the closing market price of the Company’s common stock as reported on the NASDAQ on the related dividend record date, and also by multiplying the number of Units in the Participant’s Account by any stock dividends declared by the Company on its common stock.
	(b)	The Administrator shall adjust the amounts credited to each Participant’s Account to reflect Deferrals, distributions and any other appropriate adjustments. Such adjustments shall be made as frequently as is administratively feasible.
	(c)	The Participant’s Account, established pursuant to Section 5.01, will be valued by the Administrator on a yearly basis.
	(d)	Any amounts contributed to a “Rabbi Trust” as provided in Section 8.02 shall be invested by the trustee of the Rabbi Trust in accordance with written directions from the Company. Such directions shall provide the trustee with the investment discretion to invest the above-referenced amounts within broad guidelines established by Administrator and Company as set forth therein.
ARTICLE 6. DISTRIBUTIONS
6.01	Payment. Payment of a Participant’s Account shall commence as soon as administratively feasible immediately following the Participant’s Retirement, provided, however, that if a Participant, prior to commencing participation in the Plan and prior to any Deferrals being made, executes an irrevocable election to commence payments upon attainment of age sixty-five (65), payments shall commence as soon as administratively feasible immediately following the Participant’s attainment of age sixty-five (65). The Participant may elect, in writing, any one of the following forms of payment, provided that such election is delivered to the Administrator and is made at the time of the Deferral Election.

5.

	(a)	single lump-sum payment of the value of the Participant’s Account; or
	(b)	substantially equal annual installments over a period of either five (5) years or ten (10) years.
6.02	Commencement of Payment upon Death or Change of Control.
	(a)	Upon the death of a Participant, all amounts credited to his Account shall be paid in a single lump sum, as soon as administratively feasible, to his beneficiary or beneficiaries, as determined under ARTICLE 7.
	(b)	Upon a Change of Control, all amounts credited to a Participant’s Account shall be paid in a single lump sum as of the date of the Change of Control, unless the Participant elects in Participant’s Deferral Election to receive payment in accordance with the Participant’s election described in Section 6.1 regardless of the occurrence of a Change of Control. In the case of such election, a Participant’s Retirement shall not be considered to have occurred for purposes of this Plan until the Participant’s Retirement from the Board of the board of the successor in interest to the Company or the Bank.
6.03	Form of Payment.
	(a)	A Participant, former Participant, or deceased Participant’s beneficiary or legal representative may elect at any time to have any or all payouts, or remaining payouts, of the Participant’s Account paid out in cash or in shares of Company common stock. At any time before the end of the calendar year prior to termination of Board service, a Director may revise and supersede any or all of his or her previous elections with respect to the form of payment (cash or shares of common stock). In the case of a lump sum payment to be made in cash, the amount of such payment shall be based on the number of Units in the Participant’s Account on the Payment Date multiplied by the closing market price of the Company’s common stock as reported on the NASDAQ for such date or, if that date is not a trading day, then for the trading day immediately preceding such date.
	(b)	If a Participant’s Account is payable in cash and in installments, the amount of the first cash installment payment shall be a fraction of the Units in the Participant’s Account on the date of the initial installment payment, the numerator of which is one and the denominator of which is the total number of installments elected. Each subsequent installment shall be calculated in the same manner as of each subsequent annual payment except that the denominator shall be reduced by the number of installments which have been previously paid. The amount of cash payable for Deferrals accounted for as Unites based on Company common stock value will be paid, as described above, based on the number of Units in the Participant’s Account on the Payment Date multiplied by the average of the closing market price of the Company’s common stock as reported on the NASDAQ for such date or if that date is not a trading day, for the trading day immediately preceding such date.

6.

	(c)	If a Participant’s Account is payable in Company common stock and in installments, the amount of the first installment payment shall be a fraction of the value of the Units in the Participant’s Account on the Payment Date for the initial installment, the nominator of which is one (1) and the denominator of which is the total number of installments elected. Each subsequent annual payment shall be calculated in the same manner except that the denominator shall be reduced by the number of installments which have been previously paid. Except for the final installment payment, only whole shares shall be payable, and the value of any fractional share payable shall be retained in the Participant’s Account until the final installment payment, at which time the value of any fractional share payable shall be paid in cash, based on the fractional share multiplied by the average of the closing market price of the Company’s common stock as reported on the NASDAQ for such Payment Date or if that date is not a trading day, for the trading day immediately preceding such date.
ARTICLE 7. BENEFICIARIES
7.01	Beneficiaries. Each Participant may from time to time designate one or more persons (who may be any one or more members of such person’s family or other persons, administrators, trusts, foundations or other entities) as his beneficiary under the Plan. Such designation shall be made on a form prescribed by the Administrator. Each Participant may at any time and from time to time, change any previous beneficiary designation, without notice to or comment of any previously designated beneficiary, by amending his previous designation on a form prescribed by the Administrator. If the beneficiary does not survive the Participant (or is otherwise unavailable to receive payment) or if no beneficiary is validly designated, then the amounts payable under this Plan shall be paid to the Participant’s surviving spouse, if any, and, if none, to his estate. If more than one person is the beneficiary of a deceased Participant, each such person shall receive a pro rata share of any death benefit payable unless otherwise designated on the applicable form. If a beneficiary who is receiving benefits dies, all benefits that were payable to such beneficiary shall then be payable to the estate of that beneficiary.
7.02	Lost Beneficiary.

7.

	(a)	All Participants and beneficiaries shall have to obligation to keep the Administrator informed of their current address until such time as all benefits due have been paid.
	(b)	If a Participant or beneficiary cannot be located by the Administrator exercising due diligence, then, in its sole discretion, the Administrator may presume that the Participant or beneficiary is deceased for purposes of the Plan and all unpaid amounts (net of due diligence expenses) owed to the Participant or beneficiary shall be paid to the co-beneficiary or secondary beneficiary designated by the Participant, or in the absence of a co-beneficiary or secondary beneficiary, to the Participant’s estate.
ARTICLE 8. FUNDING
8.01	Prohibition Against Funding. Should any investment be acquired in connection with the liabilities assumed under this Plan, it is expressly understood and agreed that the Participants and beneficiaries shall not have any right with respect to, or claim against, such assets nor shall any such purchase be construed to create a trust of any kind or a fiduciary relationship between the Company and the Participants, their beneficiaries or any other person. Any such assets shall be and remain a part of the general, unpledged, unrestricted assets of the Company, subject to the claims of its general creditors. It is the express intention of the parties hereto that this arrangement shall be unfunded for tax purposes. Each Participant and beneficiary shall be required to look to the provisions of this Plan and to the Company itself for enforcement of any and all benefits due under this Plan, and to the extent any such person acquires a right to receive payment under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company. The Company shall be designated the owner and beneficiary of any investment acquired in connection with its obligation under this Plan.
8.02	Deposits. Notwithstanding paragraph 8.01, or any other provision of this Plan to the contrary, the Company may deposit any amounts it deems appropriate to pay the benefits under this Plan to a “Rabbi Trust” as established pursuant to Treasury Department Revenue Procedures 92-64 and 92-65.
8.03	Withholding of Director Deferrals. The Administrator is authorized to make any and all necessary arrangements with the Company in order to withhold the Participant’s Deferrals under Section 3.01 hereof from the Participant’s Fees. The Administrator shall determine the amount and timing of such withholding.

8.

ARTICLE 9.
CLAIMS ADMINISTRATION

9.01	General. In the event that a Participant or his beneficiary does not receive any Plan benefit that is claimed, such Participant or beneficiary shall be entitled to consideration and review as provided in this ARTICLE 9.
9.02	Claim Review. Upon receipt of any written claim for benefits, the Administrator shall be notified and shall give due consideration to the claim presented. If the claim is denied to any extent by the Administrator, the Administrator shall furnish the claimant with a written notice setting forth (in a manner calculated to be understood by the claimant):
	(a)	The specific reason or reasons for denial of the claim;
	(b)	A specific reference to the Plan provisions on which the denial is based;
	(c)	A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and
	(d)	An explanation of the provisions of this Article.
9.03	Right of Appeal. A claimant who has a claim denied under Section 9.02 may appeal to the Administrator for reconsideration of that claim. A request for reconsideration under this Section 9.03 must be filed by written notice within sixty (60) days after receipt by the claimant of the notice of denial under Section 9.02.
9.04	Review of Appeal. Upon receipt of an appeal the Administrator shall promptly take action to give due consideration to the appeal. Such consideration may include a hearing of the parties involved, if the Administrator feels such a hearing is necessary. In preparing for this appeal the claimant shall be given the right to review pertinent documents and the right to submit in writing a statement of issues and comments. After consideration of the merits of the appeal the Administrator shall issue a written decision, which shall be binding on all parties subject to Section 9.06 below. The decision shall be written in a manner calculated to be understood by the claimant and shall specifically state its reasons and pertinent Plan provisions on which it relies. The Administrator’s decision shall be issued within sixty (60) days after the appeal is filed, except that if a hearing is held the decision may be issued within one hundred twenty (12) days after the appeal is filed.
9.05	Designation. The Administrator may designate any other person of its choosing to make any determination otherwise required under this Article.
9.06	Arbitration. Each and every dispute or controversy arising pursuant to the Plan or a Deferral Election shall, after exhaustion of the review procedure set forth in Section 9.04, be settled exclusively by arbitration, conducted before a single arbitrator sitting in Chicago, Illinois in accordance with the rules of JAMS then in effect. The costs and expenses of arbitration, including the fees of the arbitrators, shall recover as expenses all reasonable attorneys’ fees incurred by it in connection with the arbitration proceeding or any appeals therefrom.

9.

ARTICLE 10.
GENERAL PROVISIONS

10.01	Administrator: The Administrator:
	(a)	Is expressly empowered to limit the amount of Fees that may be deferred; to deposit amounts in accordance with Section 8.02 hereof; to interpret the Plan, and to determine all questions arising in the administration, interpretation and application of the Plan; to employ actuaries, accountants, counsel, and other persons it deems necessary in connection with the administration of the Plan; to request any information from the Company it deems necessary to determine whether the Company would be considered insolvent or subject to a proceeding in bankruptcy; and to take all other necessary and proper actions to fulfill its duties as Administrator.
	(b)	Shall not be liable for any actions by it hereunder, unless due to its own negligence, willful misconduct or lack of good faith.
	(c)	Shall be indemnified and saved harmless by the Company, if the Administrator is not the Company, from and against all personal liability to which it may be subject by reason of any act done or omitted to be done in its official capacity as Administrator in good faith in the administration of the Plan, including all expenses reasonably incurred in its defense in the event the Company fails to provide such defense upon the request of the Administrator. The Administrator is relieved of all responsibility in connection with its duties hereunder to the fullest extent permitted by law, short of breach of duty to the beneficiaries.
10.02	No Assignment. Benefits or payments under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or the Participant’s beneficiary, whether voluntary or involuntary, and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber, attach or garnish the same shall not be valid, nor shall any such benefit or payment be in any way liable for or subject to the debts contracts, liabilities, engagement or torts of any Participant or beneficiary, or any other person entitled to such benefit or payment pursuant to the terms of this Plan, except to such extent as may be required by law. If any Participant or beneficiary or any other person entitled to a benefit or payment pursuant to the terms of this Plan becomes bankrupt or attempts to alienate, sell, transfer, assign, pledge, encumber, attach or garnish any benefit or payment under this Plan, in whole or in part, or if any attempt is made to subject any such benefit or payment, in whole or in part, to the debts, contracts, liabilities, engagements or torts of the Participant or beneficiary or any other person entitled to any such benefit or payment pursuant to the terms of this Plan, then such benefit or payment, in the discretion of the Administrator, shall cease and terminate with respect to such Participant or beneficiary, or any other such person.

10.

10.03	No Rights to Remain a Director. Participation in this Plan shall not be construed to confer upon any Participant the legal right to be retained as a Director, or give a Participant or beneficiary, or any other person, any right to any payment whatsoever, except to the extent of the benefits provided for hereunder. Each Participant shall remain subject to removal as a Director to the same extent as if this Plan had never been adopted.
10.04	Incompetence. If the administrator determines that any person to whom a benefit is payable under this Plan is incompetent by reason of physical or mental Disability, the administrator shall have the power to cause the payments becoming due to such person to be made to another for his benefit without responsibility of the Administrator to see to the application of such payments. Any payment made pursuant to such power shall, as to such payment, operate as a complete discharge of the Company and the Administrator, if the Administrator is not the Company.
10.05	Identify. If, at any time, any doubt exists as to the identity of any person entitled to any payment hereunder or the amount or time of such payment, the Administrator shall be entitled to hold such sum until such identity or amount or time is determined or until an order of a court of competent jurisdiction is obtained. The Administrator shall also be entitled to pay such sum into court in accordance with the appropriate rules of law. Any expenses incurred by the company or the Administrator incident to such proceeding or litigation shall be charged against the Account of the affected Participant.
10.06	No Liability. No liability shall attach to or be incurred by any manager of the Company, or any Administrator under or by reason of the terms, conditions and provisions contained in this Plan, or for the acts or decisions taken or made thereunder or in connection therewith; and as a condition precedent to the establishment of this Plan or the receipt of benefits thereunder, or both, such liability, if any, is expressly waived and released by each Participant and by any and all persons claiming under or through any Participant or any other person. Such waiver and release shall be conclusively evidenced by any act or participation in or the acceptance of benefits or the making of any election under this Plan.
10.07	Expenses. All expenses incurred in the administration of the Plan, whether incurred by the Company or the Plan, shall be paid by the Company.
10.08	Insolvency. Should the Company be considered insolvent, the Company, through its Board and chief executive officer, shall give immediate written notice of such to the Administrator of the Plan, if the Company is not the Administrator. Upon receipt of such notice, the Administrator shall cease to make any payments to Participants who were directors or their beneficiaries and shall hold any and all assets attributable to the Company for the benefit of the general creditors of the Company.

11.

10.09	Amendment and Termination.
	(a)	Except as otherwise provided in this Section 10.09, the Board shall have the sole authority to modify, amend or terminate this Plan; provided, however, that any modification or termination of this Plan shall not reduce, without the consent of a Participant, a Participant’s right to any amounts already credited to his Account, or lengthen the time period for a payout from an established Account, on the day before the effective date of such modification or termination. Following such termination, payment of such credited amounts may be in a single sum payment if the Company so designates. Any such decision to pay in a single sum shall apply to all Participants.
	(b)	Any funds remaining after the termination of the Plan, and satisfaction of all liabilities to Participants and others, shall be returned to the Company.
10.10	Company Determinations. Any determinations, actions or decisions of the Company (including but not limited to, Plan amendments and Plan termination) shall be made by the Board or a properly delegated committee thereof in accordance with its established procedures.
10.11	Construction. All questions of interpretation, construction or application arising under or concerning the terms of this Plan shall be decided by the Administrator, in its sole and final discretion, whose decision shall be final, binding and conclusive upon all persons.
10.12	Governing Law. This Plan shall be governed by, construed and administered in accordance with the laws of the State of Illinois, other than its laws respecting choice of law.
10.13	Headings. The Article headings contained herein are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge or describe the scope or intent of this Plan, nor in any way shall they affect this Plan or the construction of any provision thereof.
10.14	Terms. Capitalized terms shall have meanings as defined herein. Singular nouns shall be read as plural, masculine pronouns shall be read as feminine, and vice versa, as appropriate.

12.

EX-10.24

EXHIBIT 10.24

CENTRUE FINANCIAL CORPORATION

as Issuer

INDENTURE

Dated as of April 19, 2007

WILMINGTON TRUST COMPANY

as Trustee

FIXED/FLOATING RATE JUNIOR SUBORDINATED DEBT SECURITIES DUE 2037

TABLE OF CONTENTS

ARTICLE I DEFINITIONS		1
Section 1.01	Definitions.	1
ARTICLE II DEBT SECURITIES		9
Section 2.01	Authentication and Dating.	9
Section 2.02	Form of Trustee’s Certificate of Authentication.	10
Section 2.03	Form and Denomination of Debt Securities.	10
Section 2.04	Execution of Debt Securities.	10
Section 2.05	Exchange and Registration of Transfer of Debt Securities.	11
Section 2.06	Mutilated, Destroyed, Lost or Stolen Debt Securities.	14
Section 2.07	Temporary Debt Securities.	15
Section 2.08	Payment of Interest.	15
Section 2.09	Cancellation of Debt Securities Paid, etc.	17
Section 2.10	Computation of Interest.	17
Section 2.11	Extension of Interest Payment Period.	18
Section 2.12	CUSIP Numbers.	19
Section 2.13	Global Debentures.	19
ARTICLE III PARTICULAR COVENANTS OF THE COMPANY		22
Section 3.01	Payment of Principal, Premium and Interest; Agreed Treatment of the Debt Securities.	22
Section 3.02	Offices for Notices and Payments, etc.	23
Section 3.03	Appointments to Fill Vacancies in Trustee’s Office.	23
Section 3.04	Provision as to Paying Agent.	23
Section 3.05	Certificate to Trustee.	24
Section 3.06	Additional Amounts.	25
Section 3.07	Compliance with Consolidation Provisions.	25
Section 3.08	Limitation on Dividends.	25
Section 3.09	Covenants as to the Trust.	26
ARTICLE IV LISTS		26
Section 4.01	Securityholders’ Lists.	26
Section 4.02	Preservation and Disclosure of Lists.	26
Section 4.03	Financial and Other Information.	28
ARTICLE V REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS		29
Section 5.01	Events of Default.	29
Section 5.02	Payment of Debt Securities on Default; Suit Therefor.	31
Section 5.03	Application of Moneys Collected by Trustee.	32

i

Section 5.04	Proceedings by Securityholders.	33
Section 5.05	Proceedings by Trustee.	33
Section 5.06	Remedies Cumulative and Continuing.	33
Section 5.07	Direction of Proceedings and Waiver of Defaults by Majority of Securityholders.	34
Section 5.08	Notice of Defaults.	34
Section 5.09	Undertaking to Pay Costs.	35
ARTICLE VI CONCERNING THE TRUSTEE		35
Section 6.01	Duties and Responsibilities of Trustee.	35
Section 6.02	Reliance on Documents, Opinions, etc.	36
Section 6.03	No Responsibility for Recitals, etc.	37
Section 6.04	Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own Debt Securities.	38
Section 6.05	Moneys to be Held in Trust.	38
Section 6.06	Compensation and Expenses of Trustee.	38
Section 6.07	Officers’ Certificate as Evidence.	39
Section 6.08	Eligibility of Trustee.	39
Section 6.09	Resignation or Removal of Trustee.	40
Section 6.10	Acceptance by Successor Trustee.	41
Section 6.11	Succession by Merger, etc.	42
Section 6.12	Authenticating Agents.	42
ARTICLE VII CONCERNING THE SECURITYHOLDERS		43
Section 7.01	Action by Securityholders.	43
Section 7.02	Proof of Execution by Securityholders.	44
Section 7.03	Who Are Deemed Absolute Owners.	44
Section 7.04	Debt Securities Owned by Company Deemed Not Outstanding.	45
Section 7.05	Revocation of Consents; Future Holders Bound.	45
ARTICLE VIII SECURITYHOLDERS’ MEETINGS		45
Section 8.01	Purposes of Meetings.	45
Section 8.02	Call of Meetings by Trustee.	46
Section 8.03	Call of Meetings by Company or Securityholders.	46
Section 8.04	Qualifications for Voting.	46
Section 8.05	Regulations.	46
Section 8.06	Voting.	47
Section 8.07	Quorum; Actions.	48
ARTICLE IX SUPPLEMENTAL INDENTURES		48
Section 9.01	Supplemental Indentures without Consent of Securityholders.	48
Section 9.02	Supplemental Indentures with Consent of Securityholders.	50

ii

Section 9.03	Effect of Supplemental Indentures.	51
Section 9.04	Notation on Debt Securities.	51
Section 9.05	Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee.	51
ARTICLE X REDEMPTION OF SECURITIES		52
Section 10.01	Optional Redemption.	52
Section 10.02	Special Event Redemption.	52
Section 10.03	Notice of Redemption; Selection of Debt Securities.	52
Section 10.04	Payment of Debt Securities Called for Redemption.	53
ARTICLE XI CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE		53
Section 11.01	Company May Consolidate, etc., on Certain Terms.	53
Section 11.02	Successor Entity to be Substituted.	54
Section 11.03	Opinion of Counsel to be Given to Trustee.	55
ARTICLE XII SATISFACTION AND DISCHARGE OF INDENTURE		55
Section 12.01	Discharge of Indenture.	55
Section 12.02	Deposited Moneys to be Held in Trust by Trustee.	56
Section 12.03	Paying Agent to Repay Moneys Held.	56
Section 12.04	Return of Unclaimed Moneys.	56
ARTICLE XIII IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS.		56
Section 13.01	Indenture and Debt Securities Solely Corporate Obligations.	56
ARTICLE XIV MISCELLANEOUS PROVISIONS		57
Section 14.01	Successors.	57
Section 14.02	Official Acts by Successor Entity.	57
Section 14.03	Surrender of Company Powers.	57
Section 14.04	Addresses for Notices, etc.	57
Section 14.05	Governing Law.	57
Section 14.06	Evidence of Compliance with Conditions Precedent.	57
Section 14.07	Business Day Convention.	58
Section 14.08	Table of Contents, Headings, etc.	58
Section 14.09	Execution in Counterparts.	58
Section 14.10	Separability.	58
Section 14.11	Assignment.	59
Section 14.12	Acknowledgment of Rights.	59
ARTICLE XV SUBORDINATION OF DEBT SECURITIES		59

iii

Section 15.01	Agreement to Subordinate.	59
Section 15.02	Default on Senior Indebtedness.	60
Section 15.03	Liquidation; Dissolution; Bankruptcy.	60
Section 15.04	Subrogation.	61
Section 15.05	Trustee to Effectuate Subordination.	62
Section 15.06	Notice by the Company.	62
Section 15.07	Rights of the Trustee; Holders of Senior Indebtedness.	63
Section 15.08	Subordination May Not Be Impaired.	64

EXHIBITS
EXHIBIT A	Form of Debt Security
EXHIBIT B	Form of Certificate of Officer of the Company

iv

          THIS INDENTURE, dated as of April 19, 2007, between Centrue Financial Corporation, a bank holding company incorporated in the State of Delaware (hereinafter sometimes called the “Company”), and Wilmington Trust Company, a Delaware banking corporation, as trustee (hereinafter sometimes called the “Trustee”).

W I T N E S S E T H :

          WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issuance of its Fixed/Floating Rate Junior Subordinated Debt Securities due 2037 (the “Debt Securities”) under this Indenture and to provide, among other things, for the execution and authentication, delivery and administration thereof, the Company has duly authorized the execution of this Indenture.

          NOW, THEREFORE, in consideration of the premises, and the purchase of the Debt Securities by the holders thereof, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective holders from time to time of the Debt Securities as follows:

ARTICLE I
DEFINITIONS

          Section 1.01     Definitions.

          The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. All accounting terms used herein and not expressly defined shall have the meanings assigned to such terms in accordance with generally accepted accounting principles and the term “generally accepted accounting principles” means such accounting principles as are generally accepted in the United States at the time of any computation. The words “herein,” “hereof and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

          “Additional Amounts” has the meaning set forth in Section 3.06.

          “Additional Provisions” has the meaning set forth in Section 15.01.

          “Administrative Action” has the meaning specified within the definition of “Tax Event” in this Section 1.01.

          “Applicable Depositary Procedures” means, with respect to any transfer or transaction involving a Book-Entry Capital Security or a Debt Security represented by a Global Debenture, the rules and procedures of the Depositary for such Book-Entry Capital Security or Debt Security represented by a Global Debenture, in each case to the extent applicable to such transaction and as in effect from time to time.

          “Authenticating Agent” means any agent or agents of the Trustee which at the time shall be appointed and acting pursuant to Section 6.12.

          “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

          “Board of Directors” means the board of directors or the executive committee or any other duly authorized designated officers of the Company.

          “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification and delivered to the Trustee.

          “Book-Entry Capital Security” means a Capital Security the ownership and transfers of which shall be reflected and made, as applicable, through book entries by the Depositary.

          “Business Day” means any day other than a Saturday, Sunday or any other day on which banking institutions in Wilmington, Delaware, The City of New York or Springfield, Illinois are permitted or required by law or executive order to close.

          “Calculation Agent” means the Person identified as “Trustee” in the first paragraph hereof with respect to the Debt Securities and the Institutional Trustee with respect to the Trust Securities.

          “Capital Securities” means undivided beneficial interests in the assets of the Trust which are designated as “MMCapS^SM” and rank pari passu with Common Securities issued by the Trust; provided, however, that if an Event of Default (as defined in the Declaration) has occurred and is continuing, the rights of holders of such Common Securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise are subordinated to the rights of holders of such Capital Securities.

          “Capital Securities Guarantee” means the guarantee agreement that the Company will enter into with Wilmington Trust Company or other Persons that operates directly or indirectly for the benefit of holders of Capital Securities of the Trust.

          “Capital Treatment Event” means, if the Company is organized and existing under the laws of the United States or any state thereof or the District of Columbia, the receipt by the Company and the Trust of an Opinion of Counsel experienced in such matters to the effect that, as a result of any amendment to, or change in, the laws, rules or regulations of the United States or any political subdivision thereof or therein, or as the result of any official or administrative pronouncement or action or decision interpreting or applying such laws, rules or regulations, which amendment or change is effective or which pronouncement, action or decision is announced on or after the date of original issuance of the Debt Securities, there is more than an insubstantial risk that the Company will not, within 90 days of the date of such opinion, be entitled to treat Capital Securities as “Tier 1 Capital” (or the then equivalent thereof) for purposes of the capital adequacy guidelines of the Federal Reserve (or any successor regulatory authority with jurisdiction over bank holding companies), as then in effect and applicable to the Company; provided, however, that the inability of the Company to treat all or any portion of the aggregate Liquidation Amount of the Capital Securities as “Tier 1 Capital” shall not constitute the basis for a Capital Treatment Event if such inability results from the Company having

2.

preferred stock, minority interests in consolidated subsidiaries and any other class of security or interest which the Federal Reserve (or any successor regulatory authority with jurisdiction over bank holding companies) may now or hereafter accord “Tier 1 Capital” treatment that, in the aggregate, exceed the amount which may now or hereafter qualify for treatment as “Tier 1 Capital” under applicable capital adequacy guidelines of the Federal Reserve (or any successor regulatory authority with jurisdiction over bank holding companies); provided, further, however, that the distribution of the Debt Securities in connection with the liquidation of the Trust by the Company shall not in and of itself constitute a Capital Treatment Event unless such liquidation shall have occurred in connection with a Tax Event or an Investment Company Event. For the avoidance of doubt, the inability of the Company to treat all or any portion of the aggregate Liquidation Amount of the Capital Securities as “Tier 1 Capital” as a result of the changes effected by the final rule adopted by the Federal Reserve on March 1, 2005 shall not constitute the basis for a Capital Treatment Event.

          “Certificate” means a certificate signed by any one of the principal executive officer, the principal financial officer or the principal accounting officer of the Company.

          “Code” means the Internal Revenue Code of 1986, as amended.

          “Common Securities” means undivided beneficial interests in the assets of the Trust which are designated as “Common Securities” and rank pari passu with Capital Securities issued by the Trust; provided, however, that if an Event of Default (as defined in the Declaration) has occurred and is continuing, the rights of holders of such Common Securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise are subordinated to the rights of holders of such Capital Securities.

          “Company” means Centrue Financial Corporation, a bank holding company incorporated in the State of Delaware, and, subject to the provisions of Article XI, shall include its successors and assigns.

          “Debt Security” or “Debt Securities” has the meaning stated in the first recital of this Indenture.

          “Debt Security Register” has the meaning specified in Section 2.05.

          “Declaration” means the Amended and Restated Declaration of Trust of the Trust, dated as of April 19, 2007, as amended or supplemented from time to time.

          “Default” means any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default.

          “Defaulted Interest” has the meaning set forth in Section 2.08.

          “Deferred Interest” has the meaning set forth in Section 2.11.

          “Depositary” means an organization registered as a clearing agency under the Exchange Act that is designated as Depositary by the Company. DTC will be the initial Depositary.

3.

          “Depositary Participant” means a broker, dealer, bank, other financial institution or other Person for whom from time to time the Depositary effects book-entry transfers and pledges of securities deposited with or on behalf of the Depositary.

          “DTC” means The Depository Trust Company, a New York corporation.

          “Event of Default” means any event specified in Section 5.01, which has continued for the period of time, if any, and after the giving of the notice, if any, therein designated.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          “Extension Period” has the meaning set forth in Section 2.11.

          “Federal Reserve” means the Board of Governors of the Federal Reserve System.

          “Global Debenture” means a global certificate that evidences all or part of the Debt Securities the ownership and transfers of which shall be reflected and made, as applicable, through book entries by the Depositary and the Depositary Participants.

          “Indenture” means this Indenture as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented, or both.

          “Institutional Trustee” has the meaning set forth in the Declaration.

          “Interest Payment Date” means January 1, April 1, July 1 and October 1 of each year, commencing on July 1, 2007, subject to Section 14.07.

          “Interest Period” has the meaning set forth in Section 2.08.

          “Interest Rate” means, a per annum rate of interest equal to (1) with respect to any Interest Period prior to the Interest Period commencing on the Interest Payment Date in July, 2012, 6.67% and (2) with respect to any Interest Period commencing on or after the Interest Payment Date in July, 2012, LIBOR, as determined on the LIBOR Determination Date for such Interest Period plus, 1.65%; provided, however, that the Interest Rate for any Interest Period commencing on or after the Interest Payment Date in July, 2012 may not exceed the highest rate permitted by New York law, as the same may be modified by United States law of general application.

          “Investment Company Event” means the receipt by the Company and the Trust of an Opinion of Counsel experienced in such matters to the effect that, as a result of a change in law or regulation or written change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that the Trust is or, within 90 days of the date of such opinion will be, considered an “investment company” that is required to be registered under the Investment Company Act of 1940, as amended, which change becomes effective on or after the date of the original issuance of the Debt Securities.

4.

          “LIBOR” means the London Interbank Offered Rate for three-month U.S. Dollar deposits in Europe as determined by the Calculation Agent according to Section 2.10(b).

          “LIBOR Banking Day” has the meaning set forth in Section 2.10(b)(i).

          “LIBOR Business Day” has the meaning set forth in Section 2.10(b)(i).

          “LIBOR Determination Date” has the meaning set forth in Section 2.10(b)(i).

          “Liquidation Amount” means the liquidation amount of $1,000 per Trust Security.

          “Major Depository Institution Subsidiary” means any subsidiary of the Company that (i) is a depository institution and (ii) meets the definition of “significant subsidiary” within the meaning of Rule 405 under the Securities Act.

          “Maturity Date” means July 1, 2037, subject to Section 14.07.

          “Officers’ Certificate” means a certificate signed by the Chairman of the Board, the Vice Chairman, the President or any Vice President, and by the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Comptroller, an Assistant Comptroller, the Secretary or an Assistant Secretary of the Company, and delivered to the Trustee. Each such certificate shall include the statements provided for in Section 14.06 if and to the extent required by the provisions of such Section.

          “Opinion of Counsel” means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company or may be other counsel reasonably satisfactory to the Trustee. Each such opinion shall include the statements provided for in Section 14.06 if and to the extent required by the provisions of such Section.

          The term “outstanding,” when used with reference to Debt Securities, subject to the provisions of Section 7.04, means, as of any particular time, all Debt Securities authenticated and delivered by the Trustee or the Authenticating Agent under this Indenture, except

          (a) Debt Securities theretofore canceled by the Trustee or the Authenticating Agent or delivered to the Trustee for cancellation;

          (b) Debt Securities, or portions thereof, for the payment or redemption of which moneys in the necessary amount shall have been deposited in trust with the Trustee or with any Paying Agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent); provided, that, if such Debt Securities, or portions thereof, are to be redeemed prior to maturity thereof, notice of such redemption shall have been given as provided in Articles X and XIV or provision satisfactory to the Trustee shall have been made for giving such notice; and

          (c) Debt Securities paid pursuant to Section 2.06 or in lieu of or in substitution for which other Debt Securities shall have been authenticated and delivered pursuant to the terms of Section 2.06 unless proof satisfactory to the Company and the Trustee is presented that any such Debt Securities are held by bona fide holders in due course.

5.

          “Optional Redemption Date” has the meaning set forth in Section 10.01.

          “Optional Redemption Price” means an amount in cash equal to 100% of the principal amount of the Debt Securities being redeemed plus unpaid interest accrued on such Debt Securities to the related Optional Redemption Date.

          “Paying Agent” has the meaning set forth in Section 3.04(e).

          “Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature.

          “Predecessor Security” of any particular Debt Security means every previous Debt Security evidencing all or a portion of the same debt as that evidenced by such particular Debt Security; and, for the purposes of this definition, any Debt Security authenticated and delivered under Section 2.06 in lieu of a lost, destroyed or stolen Debt Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Debt Security.

          “Principal Office of the Trustee” means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which at all times shall be located within the United States and at the time of the execution of this Indenture shall be Rodney Square North, 1100 North Market Street, Wilmington, DE 19890-0001.

          “Reference Banks” has the meaning set forth in Section 2.10(b)(ii).

          “Resale Restriction Termination Date” means, with respect to any Debt Security, the date which is the later of (i) two years (or such shorter period of time as permitted by Rule 144(k) under the Securities Act) after the later of (y) the date of original issuance of such Debt Security and (z) the last date on which the Company or any Affiliate (as defined in Rule 405 under the Securities Act) of the Company was the holder of such Debt Security (or any predecessor thereto) and (ii) such later date, if any, as may be required by any subsequent change in applicable law.

          “Responsible Officer” means, with respect to the Trustee, any officer within the Principal Office of the Trustee with direct responsibility for the administration of the Indenture, including any vice-president, any assistant vice-president, any secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer or other officer of the Principal Office of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer’s knowledge of and familiarity with the particular subject.

          “Securities Act” means the Securities Act of 1933, as amended.

          “Securityholder,” “holder of Debt Securities” or other similar terms, means any Person in whose name at the time a particular Debt Security is registered on the Debt Security Register.

6.

          “Senior Indebtedness” means, with respect to the Company, (i) the principal, premium, if any, and interest in respect of (A) indebtedness of the Company for money borrowed, as well as similar obligations arising from off-balance sheet guarantees and direct credit substitutes and (B) indebtedness evidenced by securities, debentures, notes, bonds or other similar instruments issued by the Company, (ii) all capital lease obligations of the Company, (iii) all obligations of the Company issued or assumed as the deferred purchase price of property, all conditional sale obligations of the Company and all obligations of the Company under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business), (iv) all obligations of the Company for the reimbursement of any letter of credit, any banker’s acceptance, any security purchase facility, any repurchase agreement or similar arrangement, all obligations associated with derivative products such as interest rate and foreign exchange contracts and commodity contracts, any interest rate swap, any other hedging arrangement, any obligation under options or any similar credit or other transaction, (v) all obligations of the type referred to in clauses (i) through (iv) above of other Persons for the payment of which the Company is responsible or liable as obligor, guarantor or otherwise and (vi) all obligations of the type referred to in clauses (i) through (v) above of other Persons secured by any lien on any property or asset of the Company (whether or not such obligation is assumed by the Company), whether the obligations of the type referred to in clauses (i) through (vi) above were incurred on or prior to the date of this Indenture or thereafter incurred, unless, with the prior approval of the Federal Reserve if not otherwise generally approved, it is provided in the instrument creating or evidencing the same or pursuant to which the same is outstanding that such obligations are not superior or are pari passu in right of payment to the Debt Securities; provided, however, that Senior Indebtedness shall not include (A) any debt securities issued to any trust other than the Trust (or a trustee of such trust) that is a financing vehicle of the Company (a “financing entity”) in connection with the issuance by such financing entity of equity or other securities in transactions substantially similar in structure to the transactions contemplated hereunder and in the Declaration or (B) any guarantees of the Company in respect of the equity or other securities of any financing entity referred to in clause (A) above.

          “Special Event” means any of a Tax Event, an Investment Company Event or a Capital Treatment Event.

          “Special Redemption Date” has the meaning set forth in Section 10.02.

          “Special Redemption Price” means, with respect to the redemption of any Debt Security following a Special Event, an amount in cash equal to 103.30% of the principal amount of Debt Securities to be redeemed prior to July 1, 2008 and thereafter equal to the percentage of the principal amount of the Debt Securities that is specified below for the Special Redemption Date plus, in each case, unpaid interest accrued thereon to the Special Redemption Date:

7.

Special Redemption During the 12-Month Period Beginning July 1,	Percentage of Principal Amount
2008	102.64%
2009	101.98%
2010	101.32%
2011	100.66%
2012 and thereafter	100.00%

          “Subsidiary” means, with respect to any Person, (i) any corporation, at least a majority of the outstanding voting stock of which is owned, directly or indirectly, by such Person or one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any general partnership, joint venture or similar entity, at least a majority of the outstanding partnership or similar interests of which shall at the time be owned by such Person or one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, and (iii) any limited partnership of which such Person or any of its Subsidiaries is a general partner. For the purposes of this definition, “voting stock” means shares, interests, participations or other equivalents in the equity interest (however designated) in such Person having ordinary voting power for the election of a majority of the directors (or the equivalent) of such Person, other than shares, interests, participations or other equivalents having such power only by reason of the occurrence of a contingency.

          “Tax Event” means the receipt by the Company and the Trust of an Opinion of Counsel experienced in such matters to the effect that, as a result of any amendment to or change (including any announced prospective change) in the laws or any regulations thereunder of the United States or any political subdivision or taxing authority thereof or therein, or as a result of any official administrative pronouncement (including any private letter ruling, technical advice memorandum, regulatory procedure, notice or announcement (an “Administrative Action”)) or judicial decision interpreting or applying such laws or regulations, regardless of whether such Administrative Action or judicial decision is issued to or in connection with a proceeding involving the Company or the Trust and whether or not subject to review or appeal, which amendment, clarification, change, Administrative Action or decision is enacted, promulgated or announced, in each case on or after the date of original issuance of the Debt Securities, there is more than an insubstantial risk that: (i) the Trust is, or will be within 90 days of the date of such opinion, subject to United States federal income tax with respect to income received or accrued on the Debt Securities; (ii) if the Company is organized and existing under the laws of the United States or any state thereof or the District of Columbia, interest payable by the Company on the Debt Securities is not, or within 90 days of the date of such opinion, will not be, deductible by the Company, in whole or in part, for United States federal income tax purposes; or (iii) the Trust is, or will be within 90 days of the date of such opinion, subject to or otherwise required to pay, or required to withhold from distributions to holders of Trust Securities, more than a de minimis amount of other taxes (including withholding taxes), duties, assessments or other governmental charges.

8.

          “Trust” means Centrue Statutory Trust #3, the Delaware statutory trust, or any other similar trust created for the purpose of issuing Capital Securities in connection with the issuance of Debt Securities under this Indenture, of which the Company is the sponsor.

          “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended from time to time, or any successor legislation.

          “Trust Securities” means Common Securities and Capital Securities of the Trust.

          “Trustee” means the Person identified as “Trustee” in the first paragraph hereof, and, subject to the provisions of Article VI hereof, shall also include its successors and assigns as Trustee hereunder.

          “United States” means the United States of America and the District of Columbia.

          “U.S. Person” has the meaning given to United States Person as set forth in Section 7701(a)(30) of the Code.

ARTICLE II
DEBT SECURITIES

          Section 2.01 Authentication and Dating.

          Upon the execution and delivery of this Indenture, or from time to time thereafter, Debt Securities in an aggregate principal amount not in excess of $10,310,000 may be executed and delivered by the Company to the Trustee for authentication, and the Trustee shall thereupon authenticate and make available for delivery said Debt Securities to or upon the written order of the Company, signed by its Chairman of the Board of Directors, Vice Chairman, President or Chief Financial Officer or one of its Vice Presidents, without any further action by the Company hereunder. In authenticating such Debt Securities, and accepting the additional responsibilities under this Indenture in relation to such Debt Securities, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon a copy of any Board Resolution or Board Resolutions relating thereto and, if applicable, an appropriate record of any action taken pursuant to such resolution, in each case certified by the Secretary or an Assistant Secretary or other officers with appropriate delegated authority of the Company as the case may be.

          The Trustee shall have the right to decline to authenticate and deliver any Debt Securities under this Section if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or if a Responsible Officer of the Trustee in good faith shall determine that such action would expose the Trustee to personal liability to existing Securityholders.

          The definitive Debt Securities shall be typed, printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Debt Securities, as evidenced by their execution of such Debt Securities.

9.

          Section 2.02 Form of Trustee’s Certificate of Authentication.

          The Trustee’s certificate of authentication on all Debt Securities shall be in substantially the following form:

          This certificate represents Debt Securities referred to in the within-mentioned Indenture.

Wilmington Trust Company,     not in its individual capacity     but solely as trustee
By:
	Authorized Officer

          Section 2.03 Form and Denomination of Debt Securities.

         The Debt Securities shall be substantially in the form of Exhibit A hereto. The Debt Securities shall be in registered form without coupons and in minimum denominations of $100,000 and any multiple of $1,000 in excess thereof. The Debt Securities shall be numbered, lettered, or otherwise distinguished in such manner or in accordance with such plans as the officers executing the same may determine with the approval of the Trustee as evidenced by the execution and authentication thereof.

          Section 2.04 Execution of Debt Securities.

          The Debt Securities shall be signed in the name and on behalf of the Company by the manual or facsimile signature of its Chairman of the Board of Directors, Vice Chairman, President or Chief Financial Officer or one of its Executive Vice Presidents, Senior Vice Presidents or Vice Presidents, under its corporate seal (if legally required) which may be affixed thereto or printed, engraved or otherwise reproduced thereon, by facsimile or otherwise, and which need not be attested. Only such Debt Securities as shall bear thereon a certificate of authentication substantially in the form herein before recited, executed by the Trustee or the Authenticating Agent by the manual or facsimile signature of an authorized officer, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee or the Authenticating Agent upon any Debt Security executed by the Company shall be conclusive evidence that the Debt Security so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture.

          In case any officer of the Company who shall have signed any of the Debt Securities shall cease to be such officer before the Debt Securities so signed shall have been authenticated and delivered by the Trustee or the Authenticating Agent, or disposed of by the Company, such Debt Securities nevertheless may be authenticated and delivered or disposed of as though the Person who signed such Debt Securities had not ceased to be such officer of the Company; and any Debt Security may be signed on behalf of the Company by such Persons as, at the actual date of the execution of such Debt Security, shall be the proper officers of the Company, although at the date of the execution of this Indenture any such person was not such an officer.

10.

          Every Debt Security shall be dated the date of its authentication.

          Section 2.05 Exchange and Registration of Transfer of Debt Securities.

          The Company shall cause to be kept, at the office or agency maintained for the purpose of registration of transfer and for exchange as provided in Section 3.02, a register (the “Debt Security Register”) for the Debt Securities issued hereunder in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration and transfer of all Debt Securities as provided in this Article II. Such register shall be in written form or in any other form capable of being converted into written form within a reasonable time.

          Debt Securities to be exchanged may be surrendered at the Principal Office of the Trustee or at any office or agency to be maintained by the Company for such purpose as provided in Section 3.02, and the Company shall execute, the Company or the Trustee shall register and the Trustee or the Authenticating Agent shall authenticate and make available for delivery in exchange therefor, the Debt Security or Debt Securities which the Securityholder making the exchange shall be entitled to receive. Upon due presentment for registration of transfer of any Debt Security at the Principal Office of the Trustee or at any office or agency of the Company maintained for such purpose as provided in Section 3.02, the Company shall execute, the Company or the Trustee shall register and the Trustee or the Authenticating Agent shall authenticate and make available for delivery in the name of the transferee or transferees, a new Debt Security for a like aggregate principal amount. Registration or registration of transfer of any Debt Security by the Trustee or by any agent of the Company appointed pursuant to Section 3.02, and delivery of such Debt Security, shall be deemed to complete the registration or registration of transfer of such Debt Security.

          All Debt Securities presented for registration of transfer or for exchange or payment shall (if so required by the Company or the Trustee or the Authenticating Agent) be duly endorsed by, or be accompanied by, a written instrument or instruments of transfer in form satisfactory to the Company and either the Trustee or the Authenticating Agent duly executed by, the holder or such holder’s attorney duly authorized in writing.

          No service charge shall be made for any exchange or registration of transfer of Debt Securities, but the Company or the Trustee may require payment of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in connection therewith other than exchanges pursuant to Section 2.07, Section 9.04 or Section 10.04 not involving any transfer.

          The Company or the Trustee shall not be required to exchange or register a transfer of any Debt Security for a period of 15 days immediately preceding the date of selection of Debt Securities for redemption.

          Notwithstanding the foregoing, Debt Securities may not be transferred prior to the Resale Restriction Termination Date except in compliance with the legend set forth below, unless otherwise determined by the Company in accordance with applicable law, which legend shall be placed on each Debt Security:

11.

          THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER”, AS DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a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’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

12.

          THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

          IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

          THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

13.

          THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE “FDIC”). THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF THE DEPOSITORS AND THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE COMPANY, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANY OR ANY OF ITS SUBSIDIARIES AND IS NOT SECURED.

          Section 2.06 Mutilated, Destroyed, Lost or Stolen Debt Securities.

          In case any Debt Security shall become mutilated or be destroyed, lost or stolen, the Company shall execute, and upon its written request the Trustee shall authenticate and deliver, a new Debt Security bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Debt Security, or in lieu of and in substitution for the Debt Security so destroyed, lost or stolen. In every case the applicant for a substituted Debt Security shall furnish to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of such Debt Security and of the ownership thereof.

          The Trustee may authenticate any such substituted Debt Security and deliver the same upon the written request or authorization of any officer of the Company. Upon the issuance of any substituted Debt Security, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. In case any Debt Security which has matured or is about to mature or has been called for redemption in full shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Debt Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Debt Security) if the applicant for such payment shall furnish to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless and, in case of destruction, loss or theft, evidence satisfactory to the Company and to the Trustee of the destruction, loss or theft of such Security and of the ownership thereof.

          Every substituted Debt Security issued pursuant to the provisions of this Section 2.06 by virtue of the fact that any such Debt Security is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Debt Security shall be found at any time, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Debt Securities duly issued hereunder. All Debt Securities shall be held and owned upon the express condition that, to the extent permitted by applicable law, the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Debt Securities and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

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          Section 2.07 Temporary Debt Securities.

          Pending the preparation of definitive Debt Securities, the Company may execute and the Trustee shall authenticate and make available for delivery temporary Debt Securities that are typed, printed or lithographed. Temporary Debt Securities shall be issuable in any authorized denomination, and substantially in the form of the definitive Debt Securities but with such omissions, insertions and variations as may be appropriate for temporary Debt Securities, all as may be determined by the Company. Every such temporary Debt Security shall be executed by the Company and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with the same effect, as the definitive Debt Securities. Without unreasonable delay, the Company will execute and deliver to the Trustee or the Authenticating Agent definitive Debt Securities and thereupon any or all temporary Debt Securities may be surrendered in exchange therefor, at the Principal Office of the Trustee or at any office or agency maintained by the Company for such purpose as provided in Section 3.02, and the Trustee or the Authenticating Agent shall authenticate and make available for delivery in exchange for such temporary Debt Securities a like aggregate principal amount of such definitive Debt Securities. Such exchange shall be made by the Company at its own expense and without any charge therefor except that in case of any such exchange involving a registration of transfer the Company may require payment of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto. Until so exchanged, the temporary Debt Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Debt Securities authenticated and delivered hereunder.

          Section 2.08 Payment of Interest.

          Each Debt Security will bear interest at the then applicable Interest Rate (i) in the case of the initial Interest Period, for the period from, and including, the date of original issuance of such Debt Security to, but excluding, the initial Interest Payment Date and (ii) thereafter, for the period from, and including, the first day following the end of the preceding Interest Period to, but excluding, the applicable Interest Payment Date or, in the case of the last Interest Period, the related Optional Redemption Date, Special Redemption Date or Maturity Date, as applicable (each such period, an “Interest Period”), on the principal thereof, on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on Deferred Interest and on any overdue installment of interest (including Defaulted Interest), payable (subject to the provisions of Article XV) on each Interest Payment Date and on the Maturity Date, any Optional Redemption Date or the Special Redemption Date, as the case may be. Interest and any Deferred Interest on any Debt Security that is payable, and is punctually paid or duly provided for by the Company, on any Interest Payment Date shall be paid to the Person in whose name such Debt Security (or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest installment, except that interest and any Deferred Interest payable on the Maturity Date, any Optional Redemption Date or the Special Redemption Date, as the case may be, other than any Interest Payment Date shall be paid to the Person to whom principal is paid. In case (i) the Maturity Date of any Debt Security or (ii) any Debt Security or portion thereof is called for redemption and the related Optional Redemption Date or the Special Redemption Date, as the case may be, is subsequent to the regular record date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on such Debt Security will be paid upon presentation and surrender of such Debt Security.

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          Any interest on any Debt Security, other than Deferred Interest, that is payable, but is not punctually paid or duly provided for by the Company, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the holder on the relevant regular record date by virtue of having been such holder, and such Defaulted Interest shall be paid by the Company to the Persons in whose names such Debt Securities (or their respective Predecessor Securities) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner: the Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each such Debt Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements reasonably satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as provided in this paragraph. Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest, which shall not be more than fifteen nor less than ten days prior to the date of the proposed payment and not less than ten days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such special record date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first class postage prepaid, to each Securityholder at his or her address as it appears in the Debt Security Register, not less than ten days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Debt Securities (or their respective Predecessor Securities) are registered on such special record date and thereafter the Company shall have no further payment obligation in respect of the Defaulted Interest.

          Any interest scheduled to become payable on an Interest Payment Date occurring during an Extension Period shall not be Defaulted Interest and shall be payable on such other date as may be specified in the terms of such Debt Securities.

          The term “regular record date”, as used in this Section, shall mean the fifteenth day prior to the applicable Interest Payment Date, whether or not such day is a Business Day.

          Subject to the foregoing provisions of this Section, each Debt Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Debt Security shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such other Debt Security.

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          Section 2.09 Cancellation of Debt Securities Paid, etc.

          All Debt Securities surrendered for the purpose of payment, redemption, exchange or registration of transfer, shall, if surrendered to the Company or any Paying Agent, be surrendered to the Trustee and promptly canceled by it, or, if surrendered to the Trustee or any Authenticating Agent, shall be promptly canceled by it, and no Debt Securities shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. All Debt Securities canceled by any Authenticating Agent shall be delivered to the Trustee. The Trustee shall destroy all canceled Debt Securities unless the Company otherwise directs the Trustee in writing, in which case the Trustee shall dispose of such Debt Securities as directed by the Company. If the Company shall acquire any of the Debt Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Debt Securities unless and until the same are surrendered to the Trustee for cancellation.

          Section 2.10 Computation of Interest.

          (a) The amount of interest payable on the Debt Securities will be computed (i) with respect to any Interest Period prior to the Interest Period commencing on the Interest Payment Date in July, 2012, on the basis of a 360-day year consisting of twelve 30-day months and (ii) with respect to any Interest Period commencing on or after the Interest Payment Date in July, 2012, on the basis of a 360-day year and the actual number of days elapsed in such Interest Period.

          (b) LIBOR shall be determined by the Calculation Agent for each Interest Period commencing on or after the Interest Payment Date in July, 2012 in accordance with the following provisions:

          (i) On the second LIBOR Business Day (provided, that on such day commercial banks are open for business (including dealings in foreign currency deposits) in London (a “LIBOR Banking Day”), and otherwise the next preceding LIBOR Business Day that is also a LIBOR Banking Day) prior to the Interest Payment Date that commences such Interest Period (each such day, a “LIBOR Determination Date”), LIBOR shall equal the rate, as obtained by the Calculation Agent, for three-month U.S. Dollar deposits in Europe, which appears on Telerate (as defined in the International Swaps and Derivatives Association, Inc. 2000 Interest Rate and Currency Exchange Definitions) page 3750 or such other page as may replace such page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination Date, as reported by Bloomberg Financial Markets Commodities News or any successor service (“Telerate Page 3750”). “LIBOR Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banking institutions in The City of New York or Wilmington, Delaware are authorized or obligated by law or executive order to be closed. If such rate is superseded on Telerate Page 3750 by a corrected rate before 12:00 noon (London time) on such LIBOR Determination Date, the corrected rate as so substituted will be LIBOR for such LIBOR Determination Date.

          (ii) If, on such LIBOR Determination Date, such rate does not appear on Telerate Page 3750, the Calculation Agent shall determine the arithmetic mean of the offered quotations of the Reference Banks to leading banks in the London interbank market for three-month U.S. Dollar deposits in Europe (in an amount determined by the Calculation Agent) by reference to requests for quotations as of approximately 11:00 a.m. (London time) on such LIBOR Determination Date made by the Calculation Agent to the

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Reference Banks. If, on such LIBOR Determination Date, at least two of the Reference Banks provide such quotations, LIBOR shall equal the arithmetic mean of such quotations. If, on such LIBOR Determination Date, only one or none of the Reference Banks provide such a quotation, LIBOR shall be deemed to be the arithmetic mean of the offered quotations that at least two leading banks in The City of New York (as selected by the Calculation Agent) are quoting on such LIBOR Determination Date for three-month U.S. Dollar deposits in Europe at approximately 11:00 a.m. (London time) (in an amount determined by the Calculation Agent). As used herein, “Reference Banks” means four major banks in the London interbank market selected by the Calculation Agent.

          (iii) If the Calculation Agent is required but is unable to determine a rate in accordance with at least one of the procedures provided above, LIBOR for such Interest Period shall be LIBOR in effect for the immediately preceding Interest Period.

          (c) All percentages resulting from any calculations on the Debt Securities will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or ..0987655)), and all dollar amounts used in or resulting from such calculation will be rounded to the nearest cent (with one-half cent being rounded upward).

          (d) On each LIBOR Determination Date, the Calculation Agent shall notify, in writing, the Company and the Paying Agent of the applicable Interest Rate that applies to the related Interest Period. The Calculation Agent shall, upon the request of a holder of any Debt Securities, inform such holder of the Interest Rate that applies to the related Interest Period. All calculations made by the Calculation Agent in the absence of manifest error shall be conclusive for all purposes and binding on the Company and the holders of the Debt Securities. The Paying Agent shall be entitled to rely on information received from the Calculation Agent or the Company as to the applicable Interest Rate. The Company shall, from time to time, provide any necessary information to the Paving Agent relating to any original issue discount and interest on the Debt Securities that is included in any payment and reportable for taxable income calculation purposes.

          Section 2.11 Extension of Interest Payment Period.

So long as no Event of Default pursuant to Sections 5.01(b), (e), (f), (g), (h) or (i) of this Indenture has occurred and is continuing, the Company shall have the right, from time to time and without causing an Event of Default, to defer payments of interest on the Debt Securities by extending the interest payment period on the Debt Securities at any time and from time to time during the term of the Debt Securities, for up to 20 consecutive quarterly periods (each such extended interest payment period, together with all previous and further consecutive extensions thereof, is referred to herein as an “Extension Period”). No Extension Period may end on a date other than an Interest Payment Date or extend beyond the Maturity Date, any Optional Redemption Date or the Special Redemption Date, as the case may be. During any Extension Period, interest will continue to accrue on the Debt Securities, and interest on such accrued interest (such accrued interest and interest thereon referred to herein as “Deferred Interest”) will accrue at an annual rate equal to the Interest Rate applicable during such Extension Period, compounded quarterly from the date such Deferred Interest would have been payable were it not

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for the Extension Period, to the extent permitted by applicable law. No interest or Deferred Interest (except any Additional Amounts that may be due and payable) shall be due and payable during an Extension Period, except at the end thereof. At the end of any Extension Period, the Company shall pay all Deferred Interest then accrued and unpaid on the Debt Securities; provided, however, that during any Extension Period, the Company shall be subject to the restrictions set forth in Section 3.08. Prior to the termination of any Extension Period, the Company may further extend such Extension Period, provided, that no Extension Period (including all previous and further consecutive extensions that are part of such Extension Period) shall exceed 20 consecutive quarterly periods. Upon the termination of any Extension Period and upon the payment of all Deferred Interest, the Company may commence a new Extension Period, subject to the foregoing requirements. The Company must give the Trustee notice of its election to begin or extend an Extension Period no later than the close of business on the fifteenth Business Day prior to the applicable Interest Payment Date. The Trustee shall give notice of the Company’s election to begin or extend an Extension Period to the Securityholders, promptly after receipt of notice from the Company of its election to begin or extend an Extension Period.

          Section 2.12 CUSIP Numbers.

          The Company in issuing the Debt Securities may use a “CUSIP” number (if then generally in use), and, if so, the Trustee shall use a “CUSIP” number in notices of redemption as a convenience to Securityholders; provided, that any such notice may state that no representation is made as to the correctness of such number either as printed on the Debt Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Debt Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee in writing of any change in the CUSIP number.

          Section 2.13 Global Debentures.

          (a) Upon the election of an owner of beneficial interests in outstanding Debt Securities, the Debt Securities owned by such beneficial owner shall be issued in the form of one or more Global Debentures. Each Global Debenture issued under this Indenture shall be registered in the name of the Depositary designated by the Company for such Global Debenture or a nominee of such Depositary and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Debenture shall constitute a single Debt Security for all purposes of this Indenture.

          (b) Notwithstanding any other provision in this Indenture, no Global Debenture may be exchanged in whole or in part for Debt Securities in certificated form, and no transfer of a Global Debenture in whole or in part may be, registered in the name of any Person other than the Depositary for such Global Debenture or a nominee thereof unless (i) such Depositary advises the Trustee and the Company in writing that such Depositary is no longer willing or able to properly discharge its responsibilities as Depositary with respect to such Global Debenture, and no qualified successor is appointed by the Company within ninety (90) days of receipt by the Company of such notice, (ii) such Depositary ceases to be a clearing agency registered under the Exchange Act and no successor is appointed by the Company within ninety

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(90) days after obtaining knowledge of such event or (iii) an Event of Default shall have occurred and be continuing. Upon obtaining knowledge of the occurrence of any event specified in clause (i), (ii) or (iii) above, the Trustee shall notify the Depositary and instruct the Depositary to notify all owners of beneficial interests in such Global Debenture of the occurrence of such event and of the availability of Debt Securities in certificated form to such beneficial owners requesting the same. Upon the issuance of such Debt Securities in certificated form and the registration in the Debt Security Register of such Debt Securities in the names of the holders thereof, the Trustee shall recognize such holders as holders of Debt Securities for all purposes of this Indenture and the Debt Securities.

          (c) If any Global Debenture is to be exchanged for Debt Securities in certificated form or canceled in part, or if a Debt Security in certificated form is to be exchanged in whole or in part for a beneficial interest in any Global Debenture, then either (i) such Global Debenture shall be so surrendered for exchange or cancellation as provided herein or (ii) the principal amount thereof shall be reduced or increased, subject to Section 2.03, by an amount equal to the portion thereof to be so exchanged or canceled, or equal to the principal amount of such Debt Security to be so exchanged for a beneficial interest therein, as the case may be, by means of an appropriate adjustment made on the records of the Debt Security registrar, whereupon the Trustee, in accordance with the Applicable Depositary Procedures, shall instruct the Depositary or its authorized representative to make a corresponding adjustment to its records. Upon any such surrender or adjustment of a Global Debenture by the Depositary, accompanied by registration instructions, the Company shall execute and the Trustee shall authenticate and deliver Debt Securities issuable in exchange for such Global Debenture (or any portion thereof) in accordance with the instructions of the Depositary. The Trustee may conclusively rely on, and shall be fully protected in relying on, such instructions.

          (d) Every Debt Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Debenture or any portion thereof shall be authenticated and delivered in the form of, and shall be, a Global Debenture, unless such Debt Security is registered in the name of a Person other than the Depositary for such Global Debenture or a nominee thereof.

          (e) Debt Securities distributed to holders of Book-Entry Capital Securities (as defined in the Declaration) upon the dissolution of the Trust shall be distributed in the form of one or more Global Debentures registered in the name of the Depositary or its nominee, and deposited with the Debt Securities registrar, as custodian for such Depositary, or with such Depositary, for credit by the Depositary to the owners of beneficial interests in such Book-Entry Capital Securities. Debt Securities distributed to holders of Capital Securities in certificated form upon the dissolution of the Trust shall be issued in certificated form.

          (f) The Depositary or its nominee, as the registered owner of a Global Debenture, shall be the holder of such Global Debenture for all purposes under this Indenture and the Debt Securities, and owners of beneficial interests in a Global Debenture shall hold such interests pursuant to the Applicable Depositary Procedures. Accordingly, any such owner’s beneficial interest in a Global Debenture shall be shown only on, and the transfer of such interest shall be effected only through, records maintained by the Depositary or its nominee or its Depositary Participants. The Debt Securities registrar and the Trustee shall be entitled to deal with the Depositary for all purposes of this Indenture relating to a Global Debenture as the sole holder of the Debt Security and shall have no obligation to any beneficial owner of a Global Debenture. Neither the Trustee nor the Debt Securities registrar shall have any liability in respect of any transfers effected by the Depositary or its Depositary Participants.

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          (g) The rights of owners of beneficial interests in a Global Debenture shall be exercised only through the Depositary and shall be limited to those established by law and agreements between such owners and the Depositary and/or its Depositary Participants.

          (h) No owner of any beneficial interest in any Global Debenture shall have any rights under this Indenture with respect to such Global Debenture, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the owner and holder of such Global Debenture for all purposes under the Indenture. None of the Company, the Trustee nor any agent of the Company or the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Debenture or maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and such beneficial owners, the operation of customary practices governing the exercise of the rights of the Depositary or its nominee as holder of any Debt Security.

          (i) Global Debentures shall bear the following legend on the face thereof:

THIS SECURITY IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

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ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY

          Section 3.01 Payment of Principal, Premium and Interest; Agreed Treatment of the Debt Securities.

          (a) The Company covenants and agrees that it will duly and punctually pay or cause to be paid all payments due in respect of the Debt Securities at the place, at the respective times and in the manner provided in this Indenture and the Debt Securities. Payment of the principal of and premium, if any, and interest on the Debt Securities due on the Maturity Date, any Optional Redemption Date or the Special Redemption Date, as the case may be, will be made by the Company in immediately available funds against presentation and surrender of such Debt Securities. At the option of the Company, each installment of interest on the Debt Securities due on an Interest Payment Date other than the Maturity Date, any Optional Redemption Date or the Special Redemption Date, as the case may be, may be paid (i) by mailing checks for such interest payable to the order of the holders of Debt Securities entitled thereto as they appear on the Debt Security Register or (ii) by wire transfer of immediately available funds to any account with a banking institution located in the United States designated by such holders to the Paying Agent no later than the related record date. Notwithstanding anything to the contrary contained in this Indenture or any Debt Security, if the Trust or the trustee of the Trust is the holder of any Debt Security, then all payments in respect of such Debt Security shall be made by the Company in immediately available funds when due.

          (b) The Company will treat the Debt Securities as indebtedness, and the interest payable in respect of such Debt Securities (including any Additional Amounts) as interest, for all U.S. federal income tax purposes. All payments in respect of such Debt Securities will be made free and clear of U.S. withholding tax provided, that (i) any beneficial owner thereof that is a “United States person” within the meaning of Section 7701(a)(30) of the Code (A) has provided an Internal Revenue Service Form W-9 (or any substitute or successor form) in the manner required establishing its status as a “United States person” for U.S. federal income tax purposes, and (B) the Internal Revenue Service has neither notified the Issuer that the taxpayer identification number furnished by such beneficial owner is incorrect nor notified the Issuer that there is underreporting by such beneficial owner, and (ii) any beneficial owner thereof that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code has provided an Internal Revenue Service Form W-8 BEN, Internal Revenue Service Form W-8ECI, or Internal Revenue Service Form W-8EXP, as applicable (or any substitute or successor form) in the manner required establishing its non-U.S. status for U.S. federal income tax purposes.

          (c) As of the date of this Indenture, the Company represents that it has no intention to exercise its right under Section 2.11 to defer payments of interest on the Debt Securities by commencing an Extension Period.

          (d) As of the date of this Indenture, the Company represents that the likelihood that it would exercise its right under Section 2.11 to defer payments of interest on the Debt Securities by commencing an Extension Period at any time during which the Debt Securities are outstanding is remote because of the restrictions that would be imposed on the Company’s ability to declare or pay dividends or distributions on, or to redeem, purchase or make a liquidation payment with respect to, any of its outstanding equity and on the Company’s ability to make any payments of principal of or premium, if any, or interest on, or repurchase or redeem, any of its debt securities that rank pari passu in all respects with or junior in interest to the Debt Securities.

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          Section 3.02 Offices for Notices and Payments, etc.

          So long as any of the Debt Securities remain outstanding, the Company will maintain in Wilmington, Delaware or in Springfield, Illinois an office or agency where the Debt Securities may be presented for payment, an office or agency where the Debt Securities may be presented for registration of transfer and for exchange as provided in this Indenture and an office or agency where notices and demands to or upon the Company in respect of the Debt Securities or of this Indenture may be served. The Company will give to the Trustee written notice of the location of any such office or agency and of any change of location thereof. Until otherwise designated from time to time by the Company in a notice to the Trustee, or specified as contemplated by Section 2.05, such office or agency for all of the above purposes shall be the Principal Office of the Trustee. In case the Company shall fail to maintain any such office or agency in Wilmington, Delaware or in Springfield, Illinois, or shall fail to give such notice of the location or of any change in the location thereof, presentations and demands may be made and notices may be served at the Principal Office of the Trustee.

          In addition to any such office or agency, the Company may from time to time designate one or more offices or agencies outside Wilmington, Delaware or Springfield, Illinois where the Debt Securities may be presented for registration of transfer and for exchange in the manner provided in this Indenture, and the Company may from time to time rescind such designation, as the Company may deem desirable or expedient; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain any such office or agency in Wilmington, Delaware or in Springfield, Illinois for the purposes above mentioned. The Company will give to the Trustee prompt written notice of any such designation or rescission thereof.

          Section 3.03 Appointments to Fill Vacancies in Trustee’s Office.

          The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 6.09, a Trustee, so that there shall at all times be a Trustee hereunder.

          Section 3.04 Provision as to Paving Agent.

          (a) If the Company shall appoint a Paying Agent other than the Trustee, it will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provision of this Section 3.04,

          (i) that it will hold all sums held by it as such agent for the payment of all payments due on the Debt Securities (whether such sums have been paid to it by the Company or by any other obligor on the Debt Securities) in trust for the benefit of the holders of the Debt Securities;

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          (ii) that it will give the Trustee prompt written notice of any failure by the Company (or by any other obligor on the Debt Securities) to make any payment on the Debt Securities when the same shall be due and payable; and

          (iii) that it will, at any time during the continuance of any Event of Default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

          (b) If the Company shall act as its own Paying Agent, it will, on or before each due date of the payments due on the Debt Securities, set aside, segregate and hold in trust for the benefit of the holders of the Debt Securities a sum sufficient to make such payments so becoming due and will notify the Trustee in writing of any failure to take such action and of any failure by the Company (or by any other obligor under the Debt Securities) to make any payment on the Debt Securities when the same shall become due and payable.

          Whenever the Company shall have one or more Paying Agents for the Debt Securities, it will, on or prior to each due date of the payments on the Debt Securities, deposit with a Paying Agent a sum sufficient to pay all payments so becoming due, such sum to be held in trust for the benefit of the Persons entitled thereto and (unless such Paying Agent is the Trustee) the Company shall promptly notify the Trustee in writing of its action or failure to act.

          (c) Anything in this Section 3.04 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge with respect to the Debt Securities, or for any other reason, pay, or direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or any such Paying Agent, such sums to be held by the Trustee upon the same terms and conditions herein contained.

          (d) Anything in this Section 3.04 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 3.04 is subject to Sections 12.03 and 12.04.

          (e) The Company hereby initially appoints the Trustee to act as paying agent for the Debt Securities (the “Paying Agent”).

          Section 3.05 Certificate to Trustee.

          The Company will deliver to the Trustee on or before 120 days after the end of each fiscal year, so long as Debt Securities are outstanding hereunder, a Certificate, substantially in the form of Exhibit B attached hereto, stating that in the course of the performance by the signers of their duties as officers of the Company they would normally have knowledge of any default by the Company in the performance of any covenants of the Company contained herein, stating whether or not they have knowledge of any such default and, if so, specifying each such default of which the signers have knowledge and the nature thereof.

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          Section 3.06 Additional Amounts.

          If and for so long as the Trust is the holder of all Debt Securities and is subject to or otherwise required to pay (or is required to withhold from distributions to holders of Trust Securities) any additional taxes (including withholding taxes), duties, assessments or other governmental charges as a result of a Tax Event, the Company will pay such additional amounts (the “Additional Amounts”) on the Debt Securities or the Trust Securities, as the case may be, as shall be required so that the net amounts received and retained by the holders of Debt Securities or Trust Securities, as the case may be, after payment of all taxes (including withholding taxes), duties, assessments or other governmental charges, will be equal to the amounts that such holders would have received and retained had no such taxes (including withholding taxes), duties, assessments or other governmental charges been imposed.

          Whenever in this Indenture or the Debt Securities there is a reference in any context to the payment of principal of or premium, if any, or interest on the Debt Securities, such mention shall be deemed to include mention of payments of the Additional Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and express mention of the payment of Additional Amounts (if applicable) in any provisions hereof shall not be construed as excluding Additional Amounts in those provisions hereof where such express mention is not made, provided, however, that, notwithstanding anything to the contrary contained in this Indenture or any Debt Security, the deferral of the payment of interest during an Extension Period pursuant to Section 2.11 shall not defer the payment of any Additional Amounts that may be due and payable.

          Section 3.07 Compliance with Consolidation Provisions.

          The Company will not, while any of the Debt Securities remain outstanding, consolidate with, or merge into, any other Person, or merge into itself, or sell, convey, transfer or otherwise dispose of all or substantially all of its property or capital stock to any other Person unless the provisions of Article XI hereof are complied with.

          Section 3.08 Limitation on Dividends.

          If (i) there shall have occurred and be continuing a Default or an Event of Default, (ii) the Company shall be in default with respect to its payment of any obligations under the Capital Securities Guarantee or (iii) the Company shall have given notice of its election to defer payments of interest on the Debt Securities by extending the interest payment period as provided herein and such period, or any extension thereof, shall have commenced and be continuing, then the Company may not (A) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Company’s capital stock, (B) make any payment of principal of or premium, if any, or interest on or repay, repurchase or redeem any debt securities of the Company that rank pari passu in all respects with or junior in interest to the Debt Securities or (C) make any payment under any guarantees of the Company that rank pari passu in all respects with or junior in interest to the Capital Securities Guarantee (other than (a) repurchases, redemptions or other acquisitions of shares of capital stock of the Company (I) in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors or consultants, (II) in connection with a dividend reinvestment or stockholder stock purchase plan or (III) in connection with the issuance of capital stock of the Company (or securities convertible into or exercisable for such capital stock) as consideration in an acquisition transaction entered into

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prior to the occurrence of (i), (ii) or (iii) above, (b) as a result of any exchange or conversion of any class or series of the Company’s capital stock (or any capital stock of a subsidiary of the Company) for any class or series of the Company’s capital stock or of any class or series of the Company’s indebtedness for any class or series of the Company’s capital stock, (c) the purchase of fractional interests in shares of the Company’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (d) any declaration of a dividend in connection with any stockholder’s rights plan, or the issuance of rights, stock or other property under any stockholder’s rights plan, or the redemption or repurchase of rights pursuant thereto or (e) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior in interest to such stock).

          Section 3.09 Covenants as to the Trust.

          For so long as such Trust Securities remain outstanding, the Company shall maintain 100% ownership of the Common Securities; provided, however, that any permitted successor of the Company under this Indenture may succeed to the Company’s ownership of such Common Securities. The Company, as owner of the Common Securities, shall use commercially reasonable efforts to cause the Trust (a) to remain a statutory trust, except in connection with a distribution of Debt Securities to the holders of Trust Securities in liquidation of the Trust, the redemption of all of the Trust Securities or mergers, consolidations or amalgamations, each as permitted by the Declaration, (b) to otherwise continue to be classified as a grantor trust for United States federal income tax purposes and (c) to cause each holder of Trust Securities to be treated as owning an undivided beneficial interest in the Debt Securities.

ARTICLE IV
LISTS

          Section 4.01 Securityholders’ Lists.

          The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee:

          (a) on each regular record date for an Interest Payment Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Securityholders of the Debt Securities as of such record date; and

          (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; except that no such lists need be furnished under this Section 4.01 so long as the Trustee is in possession thereof by reason of its acting as Debt Security registrar.

          Section 4.02 Preservation and Disclosure of Lists.

          (a) The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Debt Securities (1) contained in the most recent list furnished to it as provided in Section 4.01 or (2) received by it in the capacity of Debt Securities registrar (if so acting) hereunder. The Trustee may destroy any list furnished to it as provided in Section 4.01 upon receipt of a new list so furnished.

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          (b) In case three or more holders of Debt Securities (hereinafter referred to as “applicants”) apply in writing to the Trustee and furnish to the Trustee reasonable proof that each such applicant has owned a Debt Security for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other holders of Debt Securities with respect to their rights under this Indenture or under such Debt Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall within five Business Days after the receipt of such application, at its election, either:

          (i) afford such applicants access to the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 4.02, or

          (ii) inform such applicants as to the approximate number of holders of Debt Securities whose names and addresses appear in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 4.02, and as to the approximate cost of mailing to such Securityholders the form of proxy or other communication, if any, specified in such application.

          If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Securityholder of Debt Securities whose name and address appear in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 4.02 a copy of the form of proxy or other communication which is specified in such request with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender, the Trustee shall mail to such applicants and file with the Securities and Exchange Commission, if permitted or required by applicable law, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of the holders of all Debt Securities, as the case may be, or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If said Commission, as permitted or required by applicable law, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, said Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Securityholders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application.

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          (c) Each and every holder of Debt Securities, by receiving and holding the same, agrees with the Company and the Trustee that none of the Company, the Trustee or any Paying Agent shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the holders of Debt Securities in accordance with the provisions of subsection (b) of this Section 4.02, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under said subsection (b).

          Section 4.03 Financial and Other Information.

          (a) The Company shall deliver, by hardcopy or electronic transmission, to each Securityholder (i) each Report on Form 10-K and Form 10-Q, if any, prepared by the Company and filed with the Securities and Exchange Commission in accordance with the Exchange Act within 10 Business Days after the filing thereof or (ii) if the Company is (a) not then subject to Section 13 or 15(d) of the Exchange Act (a “Private Entity”) or (b) exempt from reporting pursuant to Rule 12g3-2(b) thereunder, the information required by Rule 144A(d)(4) under the Securities Act. Notwithstanding the foregoing, so long as a Holder of the Debt Securities is Citigroup Global Markets Inc. or an entity that holds a pool of trust preferred securities and/or debt securities as collateral for its securities or a trustee thereof, and the Company is (i) a Private Entity that, on the date of original issuance of the Debt Securities, is required to provide audited consolidated financial statements to its primary regulatory authority, (ii) a Private Entity that, on the date of original issuance of the Debt Securities, is not required to provide audited consolidated financial statements to its primary regulatory authority but subsequently becomes subject to the audited consolidated financial statement reporting requirements of that regulatory authority or (iii) subject to Section 13 or 15(d) of the Exchange Act on the date of original issuance of the Debt Securities or becomes so subject after the date hereof but subsequently becomes a Private Entity, then, within 90 days after the end of each fiscal year, beginning with the fiscal year in which the Debt Securities were originally issued if the Company was then subject to (x) Section 13 or 15(d) of the Exchange Act or (y) audited consolidated financial statement reporting requirements of its primary regulatory authority or, otherwise, the earliest fiscal year in which the Company becomes subject to (1) Section 13 or 15(d) of the Exchange Act or (2) the audited consolidated financial statement reporting requirements of its primary regulatory authority, the Company shall deliver, by hardcopy or electronic transmission, to each Securityholder, unless otherwise provided pursuant to the preceding sentence, (A) a copy of the Company’s audited consolidated financial statements (including balance sheet and income statement) covering the related annual period and (B) the report of the independent accountants with respect to such financial statements. In addition to the foregoing, the Company shall deliver to each Securityholder within 30 days after the end of the fiscal year of the Company, Form 1099 or such other annual U.S. federal income tax information statement required by the Code containing such information with regard to the Debt Securities held by such holder as is required by the Code and the income tax regulations of the U.S. Treasury thereunder.

          (b) If and so long as the Holder of the Debt Securities is Citigroup Global Markets Inc. or an entity that holds a pool of trust preferred securities and/or debt securities or a trustee thereof, the Company will cause copies of its reports on Form FR Y-9C to be delivered to such Holder promptly following their filing with the Federal Reserve.

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ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS

          Section 5.01 Events of Default.

          The following events shall be “Events of Default” with respect to Debt Securities:

          (a) the Company defaults in the payment of any interest upon any Debt Security when it becomes due and payable, and continuance of such default for a period of 30 days; for the avoidance of doubt, an extension of any interest payment period by the Company in accordance with Section 2.11 of this Indenture shall not constitute a default under this clause 5.01(a); or

          (b) the Company defaults in the payment of any interest upon any Debt Security, including any Additional Amounts in respect thereof, following the nonpayment of any such interest for twenty or more consecutive Interest Periods; or

          (c) the Company defaults in the payment of all or any part of the principal of (or premium, if any, on) any Debt Securities as and when the same shall become due and payable, whether at maturity, upon redemption, by acceleration of maturity pursuant to Section 5.01 of this Indenture or otherwise; or

          (d) the Company defaults in the performance of, or breaches, any of its covenants or agreements in Sections 3.06, 3.07, 3.08 or 3.09 of this Indenture (other than a covenant or agreement a default in whose performance or whose breach is elsewhere in this Section specifically dealt with), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the holders of not less than 25% in aggregate principal amount of the outstanding Debt Securities, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

          (e) a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appoints a receiver, liquidator, assignee, custodian, trustee, sequestrator or other similar official of the Company or for any substantial part of its property, or orders the winding-up or liquidation of its affairs and such decree, appointment or order shall remain unstayed and in effect for a period of 90 consecutive days; or

          (f) the Company shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Company or of any substantial part of its property, or shall make any general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or

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          (g) a court or administrative or governmental agency or body shall enter a decree or order for the appointment of a receiver of a Major Depository Institution Subsidiary or all or substantially all of its property in any liquidation, insolvency or similar proceeding with respect to such Major Depository Institution Subsidiary or all or substantially all of its property; or

          (h) a Major Depository Institution Subsidiary shall consent to the appointment of a receiver for it or all or substantially all of its property in any liquidation, insolvency or similar proceeding with respect to it or all or substantially all of its property; or

          (i) the Trust shall have voluntarily or involuntarily liquidated, dissolved, wound-up its business or otherwise terminated its existence except in connection with (1) the distribution of the Debt Securities to holders of the Trust Securities in liquidation of their interests in the Trust, (2) the redemption of all of the outstanding Trust Securities or (3) mergers, consolidations or amalgamations, each as permitted by the Declaration.

          If an Event of Default specified under clause (b) of this Section 5.01 occurs and is continuing with respect to the Debt Securities, then, in each and every such case, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Debt Securities then outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by Securityholders), may declare the entire principal of the Debt Securities and any premium and interest accrued, but unpaid, thereon to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. If an Event of Default specified under clause (e), (f), (g), (h) or (i) of this Section 5.01 occurs, then, in each and every such case, the entire principal amount of the Debt Securities and any premium and interest accrued, but unpaid, thereon shall ipso facto become immediately due and payable without further action.

          The foregoing provisions, however, are subject to the condition that if, at any time after the principal of the Debt Securities shall have become due by acceleration, and before any judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, (i) the Company shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all the Debt Securities and all payments on the Debt Securities which shall have become due otherwise than by acceleration (with interest upon all such payments and Deferred Interest, to the extent permitted by law) and such amount as shall be sufficient to cover reasonable compensation to the Trustee and each predecessor Trustee, their respective agents, attorneys and counsel, and all other amounts due to the Trustee pursuant to Section 6.06, if any, and (ii) all Events of Default under this Indenture, other than the nonpayment of the payments in respect of Debt Securities which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein, then, in each and every such case, the holders of a majority in aggregate principal amount of the Debt Securities then outstanding, by written notice to the Company and to the Trustee, may waive all defaults and rescind and annul such acceleration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impair any right consequent thereon; provided, however, that if the Debt Securities are held by the Trust or a trustee of the Trust, such waiver or rescission and annulment shall not be effective until the holders of a majority in aggregate liquidation amount of the outstanding Capital Securities of the Trust shall have consented to such waiver or rescission and annulment.

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          In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company, the Trustee and the holders of the Debt Securities shall be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Company, the Trustee and the holders of the Debt Securities shall continue as though no such proceeding had been taken.

          Section 5.02 Payment of Debt Securities on Default; Suit Therefor.

          The Company covenants that upon the occurrence of an Event of Default pursuant to clause (b) of Section 5.01 and upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Debt Securities, the whole amount that then shall have become due and payable on all Debt Securities, including Deferred Interest accrued on the Debt Securities; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including a reasonable compensation to the Trustee, its agents, attorneys and counsel, and any other amounts due to the Trustee under Section 6.06. In case the Company shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any actions or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or any other obligor on such Debt Securities and collect in the manner provided by law out of the property of the Company or any other obligor on such Debt Securities wherever situated the moneys adjudged or decreed to be payable.

          In case there shall be pending proceedings for the bankruptcy or for the reorganization of the Company or any other obligor on the Debt Securities under Bankruptcy Law, or in case a receiver or trustee shall have been appointed for the property of the Company or such other obligor, or in the case of any other similar judicial proceedings relative to the Company or other obligor upon the Debt Securities, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of the Debt Securities shall then be due and payable as therein expressed or by acceleration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 5.02, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Debt Securities and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all other amounts due to the Trustee under Section 6.06) and of the Securityholders allowed in such judicial proceedings relative to the Company or any other obligor on the Debt Securities, or to the creditors or property of the Company or such other obligor, unless prohibited by applicable law and regulations, to vote on behalf of the holders of the Debt Securities in any election of a trustee or a standby trustee in arrangement,

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reorganization, liquidation or other bankruptcy or insolvency proceedings or Person performing similar functions in comparable proceedings, and to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute the same after the deduction of its charges and expenses; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the Securityholders to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to the Securityholders, to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other amounts due to the Trustee under Section 6.06.

          Nothing herein contained shall be construed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Debt Securities or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding.

          All rights of action and of asserting claims under this Indenture, or under any of the Debt Securities, may be enforced by the Trustee without the possession of any of the Debt Securities, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be for the ratable benefit of the holders of the Debt Securities.

          In any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party), the Trustee shall be held to represent all the holders of the Debt Securities, and it shall not be necessary to make any holders of the Debt Securities parties to any such proceedings.

          Section 5.03 Application of Moneys Collected by Trustee.

          Any moneys collected by the Trustee shall be applied in the following order, at the date or dates fixed by the Trustee for the distribution of such moneys, upon presentation of the several Debt Securities in respect of which moneys have been collected, and stamping thereon the payment, if only partially paid, and upon surrender thereof if fully paid:

          First: To the payment of costs and expenses incurred by, and reasonable fees of, the Trustee, its agents, attorneys and counsel, and of all other amounts due to the Trustee under Section 6.06;

          Second: To the payment of all Senior Indebtedness of the Company if and to the extent required by Article XV;

          Third: To the payment of the amounts then due and unpaid upon Debt Securities, in respect of which or for the benefit of which money has been collected, ratably, without preference or priority of any kind, according to the amounts due upon such Debt Securities; and

          Fourth: The balance, if any, to the Company.

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          Section 5.04 Proceedings by Securityholders.

          No holder of any Debt Security shall have any right to institute any suit, action or proceeding for any remedy hereunder, unless such holder previously shall have given to the Trustee written notice of an Event of Default with respect to the Debt Securities and unless the holders of not less than 25% in aggregate principal amount of the Debt Securities then outstanding shall have given the Trustee a written request to institute such action, suit or proceeding and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred thereby, and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such action, suit or proceeding; provided, that no holder of Debt Securities shall have any right to prejudice the rights of any other holder of Debt Securities, obtain priority or preference over any other such holder or enforce any right under this Indenture except in the manner herein provided and for the equal, ratable and common benefit of all holders of Debt Securities.

          Notwithstanding any other provisions in this Indenture, the right of any holder of any Debt Security to receive payment of the principal of and premium, if any, and interest on such Debt Security when due, or to institute suit for the enforcement of any such payment, shall not be impaired or affected without the consent of such holder. For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

          Section 5.05 Proceedings by Trustee.

          In case of an Event of Default, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

          Section 5.06 Remedies Cumulative and Continuing.

          Except as otherwise provided in Section 2.06, all powers and remedies given by this Article V to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any other powers and remedies available to the Trustee or the holders of the Debt Securities, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture or otherwise established with respect to the Debt Securities, and no delay or omission of the Trustee or of any holder of any of the Debt Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject to the provisions of Section 5.04, every power and remedy given by this Article V or by law to the Trustee or to the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders.

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          Section 5.07 Direction of Proceedings and Waiver of Defaults by Majority of Securityholders.

          The holders of a majority in aggregate principal amount of the Debt Securities affected at the time outstanding and, if the Debt Securities are held by the Trust or a trustee of the Trust, the holders of a majority in aggregate liquidation amount of the outstanding Capital Securities of the Trust shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to such Debt Securities; provided, however, that if the Debt Securities are held by the Trust or a trustee of the Trust, such time, method and place or such exercise, as the case may be, may not be so directed until the holders of a majority in aggregate liquidation amount of the outstanding Capital Securities of the Trust shall have directed such time, method and place or such exercise, as the case may be; provided, further, that (subject to the provisions of Section 6.01) the Trustee shall have the right to decline to follow any such direction if the Trustee shall determine that the action so directed would be unjustly prejudicial to the holders not taking part in such direction or if the Trustee being advised by counsel determines that the action or proceeding so directed may not lawfully be taken or if a Responsible Officer of the Trustee shall determine that the action or proceedings so directed would involve the Trustee in personal liability. Prior to any declaration of acceleration, or ipso facto acceleration, of the maturity of the Debt Securities, the holders of a majority in aggregate principal amount of the Debt Securities at the time outstanding may on behalf of the holders of all of the Debt Securities waive (or modify any previously granted waiver of) any past Default or Event of Default and its consequences, except a default (a) in the payment of principal of or premium, if any, or interest on any of the Debt Securities, (b) in respect of covenants or provisions hereof which cannot be modified or amended without the consent of the holder of each Debt Security affected, or (c) in respect of the covenants contained in Section 3.09; provided, however, that if the Debt Securities are held by the Trust or a trustee of the Trust, such waiver or modification to such waiver shall not be effective until the holders of a majority in aggregate liquidation amount of the outstanding Capital Securities of the Trust shall have consented to such waiver or modification to such waiver; provided, further, that if the consent of the holder of each outstanding Debt Security is required, such waiver or modification to such waiver shall not be effective until each holder of the outstanding Capital Securities of the Trust shall have consented to such waiver or modification to such waiver. Upon any such waiver or modification to such waiver, the Default or Event of Default covered thereby shall be deemed to be cured for all purposes of this Indenture and the Company, the Trustee and the holders of the Debt Securities shall be restored to their former positions and rights hereunder, respectively; but no such waiver or modification to such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon. Whenever any Default or Event of Default hereunder shall have been waived as permitted by this Section, said Default or Event of Default shall for all purposes of the Debt Securities and this Indenture be deemed to have been cured and to be not continuing.

          Section 5.08 Notice of Defaults.

          The Trustee shall, within 90 days after a Responsible Officer of the Trustee shall have actual knowledge or received written notice of the occurrence of a default with respect to the Debt Securities, mail to all Securityholders, as the names and addresses of such holders appear upon the Debt Security Register, notice of all defaults with respect to the Debt Securities

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known to the Trustee, unless such defaults shall have been cured before the giving of such notice (the term “default” for the purpose of this Section is hereby defined to be any event specified in Section 5.01, not including periods of grace, if any, provided for therein); provided, that, except in the case of default in the payment of the principal of or premium, if any, or interest on any of the Debt Securities, the Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders.

          Section 5.09 Undertaking to Pay Costs.

          All parties to this Indenture agree, and each holder of any Debt Security by such holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding in the aggregate more than 10% in principal amount of the outstanding Debt Securities (or, if such Debt Securities are held by the Trust or a trustee of the Trust, more than 10% in liquidation amount of the outstanding Capital Securities), to any suit instituted by any Securityholder for the enforcement of the payment of the principal of or premium, if any, or interest on any Debt Security against the Company on or after the same shall have become due and payable or to any suit instituted in accordance with Section 14.12.

ARTICLE VI
CONCERNING THE TRUSTEE

          Section 6.01 Duties and Responsibilities of Trustee.

          With respect to the holders of Debt Securities issued hereunder, the Trustee, prior to the occurrence of an Event of Default with respect to the Debt Securities and after the curing or waiving of all Events of Default which may have occurred, with respect to the Debt Securities, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default with respect to the Debt Securities has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

          No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct or bad faith, except that:

          (a) prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default which may have occurred:

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(i) the duties and obligations of the Trustee with respect to the Debt Securities shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations with respect to the Debt Securities as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(ii) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform on their face to the requirements of this Indenture;

          (b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;

          (c) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith, in accordance with the direction of the Securityholders pursuant to Section 5.07, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture; and

          (d) the Trustee shall not be charged with knowledge of any Default or Event of Default with respect to the Debt Securities unless either (1) a Responsible Officer shall have actual knowledge of such Default or Event of Default or (2) written notice of such Default or Event of Default shall have been given to the Trustee by the Company or any other obligor on the Debt Securities or by any holder of the Debt Securities, except that the Trustee shall be deemed to have knowledge of any Event of Default pursuant to Sections 5.01(a), 5.01(b) or 5.01(c) hereof (other than an Event of Default resulting from the default in the payment of Additional Amounts if the Trustee does not have actual knowledge or written notice that such payment is due and payable).

          None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers.

          Section 6.02 Reliance on Documents, Opinions, etc.

          Except as otherwise provided in Section 6.01:

          (a) the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, note, debenture or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;

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          (b) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers’ Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any Board Resolution may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;

          (c) the Trustee may consult with counsel of its selection and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

          (d) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders, pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby;

          (e) the Trustee shall not be liable for any action taken or omitted by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default with respect to the Debt Securities (which has not been cured or waived) to exercise with respect to the Debt Securities such of the rights and powers vested in it by this Indenture, and to use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs;

          (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, coupon or other paper or document, unless requested in writing to do so by the holders of a majority in aggregate principal amount of the outstanding Debt Securities affected thereby; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expense or liability as a condition to so proceeding; and

          (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents (including any Authenticating Agent) or attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed by it with due care.

          Section 6.03 No Responsibility for Recitals, etc.

          The recitals contained herein and in the Debt Securities (except in the certificate of authentication of the Trustee or the Authenticating Agent) shall be taken as the statements of the Company, and the Trustee and the Authenticating Agent assume no responsibility for the correctness of the same. The Trustee and the Authenticating Agent make no representations as to the validity or sufficiency of this Indenture or of the Debt Securities. The Trustee and the Authenticating Agent shall not be accountable for the use or application by the Company of any Debt Securities or the proceeds of any Debt Securities authenticated and delivered by the Trustee or the Authenticating Agent in conformity with the provisions of this Indenture.

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          Section 6.04 Trustee, Authenticating Agent, Paving Agents, Transfer Agents or Registrar May Own Debt Securities.

          The Trustee, any Authenticating Agent, any Paying Agent, any transfer agent or any Debt Security registrar, in its individual or any other capacity, may become the owner or pledgee of Debt Securities with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, transfer agent or Debt Security registrar.

          Section 6.05 Moneys to be Held in Trust.

          Subject to the provisions of Section 12.04, all moneys received by the Trustee or any Paying Agent shall, until used or applied as herein provided, be held in trust for the purpose for which they were received, but need not be segregated from other funds except to the extent required by law. The Trustee and any Paying Agent shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company. So long as no Event of Default shall have occurred and be continuing, all interest allowed on any such moneys, if any, shall be paid from time to time to the Company upon the written order of the Company, signed by the Chairman of the Board of Directors, the President, the Chief Operating Officer, a Vice President, the Treasurer or an Assistant Treasurer of the Company.

          Section 6.06 Compensation and Expenses of Trustee.

          The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, such compensation as shall be agreed to in writing between the Company and the Trustee (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), and the Company will pay or reimburse the Trustee upon its written request for all documented reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the reasonable expenses and disbursements of its counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance that arises from its negligence, willful misconduct or bad faith. The Company also covenants to indemnify each of the Trustee (including in its individual capacity) and any predecessor Trustee (and its officers, agents, directors and employees) for, and to hold it harmless against, any and all loss, damage, claim, liability or expense including taxes (other than taxes based on the income of the Trustee), except to the extent such loss, damage, claim, liability or expense results from the negligence, willful misconduct or bad faith of such indemnitee, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim or liability in the premises. The obligations of the Company under this Section to compensate and indemnify the Trustee and to pay or reimburse the Trustee for documented expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such additional indebtedness shall be secured by a lien prior to that of the Debt Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Debt Securities.

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          Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses or renders services in connection with an Event of Default specified in clause (e), (f), (g), (h) or (i) of Section 5.01, the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable federal or state bankruptcy, insolvency or other similar law.

          The provisions of this Section shall survive the resignation or removal of the Trustee and the defeasance or other termination of this Indenture.

          Notwithstanding anything in this Indenture or any Debt Security to the contrary, the Trustee shall have no obligation whatsoever to advance funds to pay any principal of or interest on or other amounts with respect to the Debt Securities or otherwise advance funds to or on behalf of the Company.

          Section 6.07 Officers’ Certificate as Evidence.

          Except as otherwise provided in Sections 6.01 and 6.02, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence, willful misconduct or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers’ Certificate delivered to the Trustee, and such certificate, in the absence of negligence, willful misconduct or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof.

          Section 6.08 Eligibility of Trustee.

          The Trustee hereunder shall at all times be a U.S. Person that is a banking corporation or national association organized and doing business under the laws of the United States of America or any state thereof or of the District of Columbia and authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least fifty million U.S. dollars ($50,000,000) and subject to supervision or examination by federal, state, or District of Columbia authority. If such corporation or national association publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section the combined capital and surplus of such corporation or national association shall be deemed to be its combined capital and surplus as set forth in its most recent records of condition so published.

          The Company may not, nor may any Person directly or indirectly controlling, controlled by, or under common control with the Company, serve as Trustee, notwithstanding that such corporation or national association shall be otherwise eligible and qualified under this Article.

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          In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 6.09.

          If the Trustee has or shall acquire any “conflicting interest” within the meaning of §310(b) of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to, this Indenture.

          Section 6.09 Resignation or Removal of Trustee.

          (a) The Trustee, or any trustee or trustees hereafter appointed, may at any time resign by giving written notice of such resignation to the Company and by mailing notice thereof, at the Company’s expense, to the holders of the Debt Securities at their addresses as they shall appear on the Debt Security Register. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee or trustees by written instrument, in duplicate, executed by order of its Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor Trustee. If no successor Trustee shall have been so appointed and have accepted appointment within 30 days after the mailing of such notice of resignation to the affected Securityholders, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee, or any Securityholder who has been a bona fide holder of a Debt Security or Debt Securities for at least six months may, subject to the provisions of Section 5.09, on behalf of himself or herself and all others similarly situated, petition any such court for the appointment of a successor Trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor Trustee.

          (b) In case at any time any of the following shall occur:

          (i) the Trustee shall fail to comply with the provisions of the last paragraph of Section 6.08 after written request therefor by the Company or by any Securityholder who has been a bona fide holder of a Debt Security or Debt Securities for at least six months;

          (ii) the Trustee shall cease to be eligible in accordance with the provisions of Section 6.08 and shall fail to resign after written request therefor by the Company or by any such Securityholder; or

          (iii) the Trustee shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

then, in any such case, the Company may remove the Trustee and appoint a successor Trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor Trustee, or, subject to the provisions of Section 5.09, if no successor Trustee shall have been so appointed and have accepted appointment within 30 days of the occurrence of any of (i), (ii) or (iii) above, any Securityholder who has been a bona fide holder of a Debt Security or Debt Securities for at least six months may, on behalf of himself or herself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor Trustee.

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          (c) Upon prior written notice to the Company and the Trustee, the holders of a majority in aggregate principal amount of the Debt Securities at the time outstanding may at any time remove the Trustee and nominate a successor Trustee, which shall be deemed appointed as successor Trustee unless within ten Business Days after such nomination the Company objects thereto, in which case or in the case of a failure by such holders to nominate a successor Trustee, the Trustee so removed or any Securityholder, upon the terms and conditions and otherwise as in subsection (a) of this Section, may petition any court of competent jurisdiction for an appointment of a successor.

          (d) Any resignation or removal of the Trustee and appointment of a successor Trustee pursuant to any of the provisions of this Section shall become effective upon acceptance of appointment by the successor Trustee as provided in Section 6.10.

          Section 6.10 Acceptance by Successor Trustee.

          Any successor Trustee appointed as provided in Section 6.09 shall execute, acknowledge and deliver to the Company and to its predecessor Trustee an indenture supplemental hereto which shall contain such provisions as shall be deemed necessary or desirable to confirm that all of the rights, powers, trusts and duties of the retiring Trustee shall be vested in the successor Trustee, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations with respect to the Debt Securities of its predecessor hereunder, with like effect as if originally named as Trustee herein; but, nevertheless, on the written request of the Company or of the successor Trustee, the Trustee ceasing to act shall, upon payment of the amounts then due it pursuant to the provisions of Section 6.06, execute and deliver an instrument transferring to such successor Trustee all the rights and powers of the Trustee so ceasing to act and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Trustee all such rights and powers. Any Trustee ceasing to act shall, nevertheless, retain a lien upon all property or funds held or collected by such Trustee to secure any amounts then due it pursuant to the provisions of Section 6.06.

          No successor Trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor Trustee shall be eligible and qualified under the provisions of Section 6.08.

          In no event shall a retiring Trustee be liable for the acts or omissions of any successor Trustee hereunder.

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          Upon acceptance of appointment by a successor Trustee as provided in this Section, the Company shall mail notice of the succession of such Trustee hereunder to the holders of Debt Securities at their addresses as they shall appear on the Debt Security Register. If the Company fails to mail such notice within ten Business Days after the acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the Company.

          Section 6.11 Succession by Merger, etc.

          Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided, that such corporation shall be otherwise eligible and qualified under this Article.

          In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Debt Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor Trustee, and deliver such Debt Securities so authenticated; and in case at that time any of the Debt Securities shall not have been authenticated, any successor to the Trustee may authenticate such Debt Securities either in the name of any predecessor hereunder or in the name of the successor Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Debt Securities or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or authenticate Debt Securities in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation.

          Section 6.12 Authenticating Agents.

          There may be one or more Authenticating Agents appointed by the Trustee upon the request of the Company with power to act on its behalf and subject to its direction in the authentication and delivery of Debt Securities issued upon exchange or registration of transfer thereof as fully to all intents and purposes as though any such Authenticating Agent had been expressly authorized to authenticate and deliver Debt Securities; provided, however, that the Trustee shall have no liability to the Company for any acts or omissions of the Authenticating Agent with respect to the authentication and delivery of Debt Securities. Any such Authenticating Agent shall at all times be a corporation organized and doing business under the laws of the United States or of any state thereof or of the District of Columbia authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of at least $50,000,000 and being subject to supervision or examination by federal, state or District of Columbia authority. If such corporation publishes reports of condition at least annually pursuant to law or the requirements of such authority, then for the purposes of this Section the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect herein specified in this Section.

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          Any corporation into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of any Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, if such successor corporation is otherwise eligible under this Section without the execution or filing of any paper or any further act on the part of the parties hereto or such Authenticating Agent.

          Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time terminate the agency of any Authenticating Agent with respect to the Debt Securities by giving written notice of termination to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible under this Section, the Trustee may, and upon the request of the Company shall, promptly appoint a successor Authenticating Agent eligible under this Section, shall give written notice of such appointment to the Company and shall mail notice of such appointment to all holders of Debt Securities as the names and addresses of such holders appear on the Debt Security Register. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all rights, powers, duties and responsibilities of its predecessor hereunder, with like effect as if originally named as Authenticating Agent herein.

          The Company agrees to pay to any Authenticating Agent from time to time reasonable compensation for its services. Any Authenticating Agent shall have no responsibility or liability for any action taken by it as such in accordance with the directions of the Trustee.

ARTICLE VII
CONCERNING THE SECURITYHOLDERS

          Section 7.01 Action by Securityholders.

          Whenever in this Indenture it is provided that the holders of a specified percentage in aggregate principal amount of the Debt Securities or aggregate liquidation amount of the Capital Securities may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action the holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by such Securityholders or holders of Capital Securities, as the case may be, in person or by agent or proxy appointed in writing, or (b) by the record of such holders of Debt Securities voting in favor thereof at any meeting of such Securityholders duly called and held in accordance with the provisions of Article VIII or of such holders of Capital Securities duly called and held in accordance with the provisions of the Declaration, or (c) by a combination of such instrument or instruments and any such record of such a meeting of such Securityholders or holders of Capital Securities, as the case may be, or (d) by any other method the Trustee deems satisfactory.

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          If the Company shall solicit from the Securityholders any request, demand, authorization, direction, notice, consent, waiver or other action or revocation of the same, the Company may, at its option, as evidenced by an Officers’ Certificate, fix in advance a record date for such Debt Securities for the determination of Securityholders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other action or revocation of the same, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action or revocation of the same may be given before or after the record date, but only the Securityholders of record at the close of business on the record date shall be deemed to be Securityholders for the purposes of determining whether Securityholders of the requisite proportion of outstanding Debt Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action or revocation of the same, and for that purpose the outstanding Debt Securities shall be computed as of the record date; provided, however, that no such authorization, agreement or consent by such Securityholders on the record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date.

          Section 7.02 Proof of Execution by Securityholders.

          Subject to the provisions of Sections 6.01, 6.02 and 8.05, proof of the execution of any instrument by a Securityholder or such Securityholder’s agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The ownership of Debt Securities shall be proved by the Debt Security Register or by a certificate of the Debt Security registrar. The Trustee may require such additional proof of any matter referred to in this Section as it shall deem necessary.

          The record of any Securityholders’ meeting shall be proved in the manner provided in Section 8.06.

          Section 7.03 Who Are Deemed Absolute Owners.

          Prior to due presentment for registration of transfer of any Debt Security, the Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer agent and any Debt Security registrar may deem the Person in whose name such Debt Security shall be registered upon the Debt Security Register to be, and may treat such Person as, the absolute owner of such Debt Security (whether or not such Debt Security shall be overdue) for the purpose of receiving payment of or on account of the principal of and premium, if any, and interest on such Debt Security and for all other purposes; and none of the Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer agent or any Debt Security registrar shall be affected by any notice to the contrary. All such payments so made to any holder for the time being or upon such holder’s order shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any such Debt Security.

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          Section 7.04 Debt Securities Owned by Company Deemed Not Outstanding.

          In determining whether the holders of the requisite aggregate principal amount of Debt Securities have concurred in any direction, consent or waiver under this Indenture, Debt Securities which are owned by the Company or any other obligor on the Debt Securities or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company (other than the Trust) or any other obligor on the Debt Securities shall be disregarded and deemed not to be outstanding for the purpose of any such determination, provided, that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Debt Securities which a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. Debt Securities so owned which have been pledged in good faith may be regarded as outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Debt Securities and that the pledgee is not the Company or any such other obligor or Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor. In the case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

          Section 7.05 Revocation of Consents; Future Holders Bound.

          At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 7.01, of the taking of any action by the holders of the percentage in aggregate principal amount of the Debt Securities specified in this Indenture in connection with such action, any holder (in cases where no record date has been set pursuant to Section 7.01) or any holder as of an applicable record date (in cases where a record date has been set pursuant to Section 7.01) of a Debt Security (or any Debt Security issued in whole or in part in exchange or substitution therefor) the serial number of which is shown by the evidence to be included in the Debt Securities the holders of which have consented to such action may, by filing written notice with the Trustee at the Principal Office of the Trustee and upon proof of holding as provided in Section 7.02, revoke such action so far as concerns such Debt Security (or so far as concerns the principal amount represented by any exchanged or substituted Debt Security). Except as aforesaid any such action taken by the holder of any Debt Security shall be conclusive and binding upon such holder and upon all future holders and owners of such Debt Security, and of any Debt Security issued in exchange or substitution therefor or on registration of transfer thereof, irrespective of whether or not any notation in regard thereto is made upon such Debt Security or any Debt Security issued in exchange or substitution therefor.

ARTICLE VIII
SECURITYHOLDERS’ MEETINGS

          Section 8.01 Purposes of Meetings.

          A meeting of Securityholders may be called at any time and from time to time pursuant to the provisions of this Article VIII for any of the following purposes:

          (a) to give any notice to the Company or to the Trustee, or to give any directions to the Trustee, or to consent to the waiving of any default hereunder and its consequences, or to take any other action authorized to be taken by Securityholders pursuant to any of the provisions of Article V;

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          (b) to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article VI;

          (c) to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 9.02; or

          (d) to take any other action authorized to be taken by or on behalf of the holders of any specified aggregate principal amount of such Debt Securities under any other provision of this Indenture or under applicable law.

          Section 8.02 Call of Meetings by Trustee.

          The Trustee may at any time call a meeting of Securityholders to take any action specified in Section 8.01, to be held at such time and at such place in The City of New York, the Borough of Manhattan, or Wilmington, Delaware, as the Trustee shall determine. Notice of every meeting of the Securityholders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be mailed to holders of Debt Securities affected at their addresses as they shall appear on the Debt Securities Register. Such notice shall be mailed not less than 20 nor more than 180 days prior to the date fixed for the meeting.

          Section 8.03 Call of Meetings by Company or Securityholders.

          In case at any time the Company pursuant to a Board Resolution, or the holders of at least 10% in aggregate principal amount of the Debt Securities, as the case may be, then outstanding, shall have requested the Trustee to call a meeting of Securityholders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed the notice of such meeting within 20 days after receipt of such request, then the Company or such Securityholders may determine the time and the place in Springfield, Illinois for such meeting and may call such meeting to take any action authorized in Section 8.01, by mailing notice thereof as provided in Section 8.02.

          Section 8.04 Qualifications for Voting.

          To be entitled to vote at any meeting of Securityholders, a Person shall be (a) a holder of one or more Debt Securities or (b) a Person appointed by an instrument in writing as proxy by a holder of one or more Debt Securities. The only Persons who shall be entitled to be present or to speak at any meeting of Securityholders shall be the Persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.

          Section 8.05 Regulations.

          Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Securityholders, in regard to proof of the holding of Debt Securities and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate.

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          The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Securityholders as provided in Section 8.03, in which case the Company or the Securityholders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by majority vote at the meeting.

          Subject to the provisions of Section 7.04, at any meeting each holder of Debt Securities with respect to which such meeting is being held or proxy therefor shall be entitled to one vote for each $1,000 principal amount of Debt Securities held or represented by such holder; provided, however, that no vote shall be cast or counted at any meeting in respect of any Debt Security challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Debt Securities held by such chairman or instruments in writing as aforesaid duly designating such chairman as the Person to vote on behalf of other Securityholders. Any meeting of Securityholders duly called pursuant to the provisions of Section 8.02 or 8.03 may be adjourned from time to time by a majority of those present, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice.

          Section 8.06 Voting.

          The vote upon any resolution submitted to any meeting of holders of Debt Securities with respect to which such meeting is being held shall be by written ballots on which shall be subscribed the signatures of such holders or of their representatives by proxy and the serial number or numbers of the Debt Securities held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in triplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Securityholders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was mailed as provided in Section 8.02. The record shall show the serial numbers of the Debt Securities voting in favor of or against any resolution. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.

          Any record so signed and verified shall be conclusive evidence of the matters therein stated.

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          Section 8.07 Quorum; Actions.

          The Persons entitled to vote a majority in aggregate principal amount of the Debt Securities then outstanding shall constitute a quorum for a meeting of Securityholders; provided, however, that if any action is to be taken at such meeting with respect to a consent, waiver, request, demand, notice, authorization, direction or other action which may be given by the holders of not less than a specified percentage in aggregate principal amount of the Debt Securities then outstanding, the Persons holding or representing such specified percentage in aggregate principal amount of the Debt Securities then outstanding will constitute a quorum. In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the request of Securityholders, be dissolved. In any other case, the meeting may be adjourned for a period of not less than 10 days as determined by the permanent chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the permanent chairman of the meeting prior to the adjournment of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in Section 8.02, except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the aggregate principal amount of the Debt Securities then outstanding which shall constitute a quorum.

          Except as limited by the proviso in the first paragraph of Section 9.02, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted by the affirmative vote of the holders of a majority in aggregate principal amount of the Debt Securities then outstanding; provided, however, that, except as limited by the proviso in the first paragraph of Section 9.02, any resolution with respect to any consent, waiver, request, demand, notice, authorization, direction or other action that this Indenture expressly provides may be given by the holders of not less than a specified percentage in outstanding principal amount of the Debt Securities may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid only by the affirmative vote of the holders of not less than such specified percentage in aggregate principal amount of the Debt Securities then outstanding.

          Any resolution passed or decision taken at any meeting of holders of Debt Securities duly held in accordance with this Section shall be binding on all the Securityholders, whether or not present or represented at the meeting.

ARTICLE IX
SUPPLEMENTAL INDENTURES

          Section 9.01 Supplemental Indentures without Consent of Securityholders.

          The Company, when authorized by a Board Resolution, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto, without the consent of the Securityholders, for one or more of the following purposes:

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          (a) to evidence the succession of another corporation to the Company, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Company, pursuant to Article XI hereof;

          (b) to add to the covenants of the Company such further covenants, restrictions or conditions for the protection of the holders of Debt Securities as the Board of Directors shall consider to be for the protection of the holders of such Debt Securities, and to make the occurrence, or the occurrence and continuance, of a Default in any of such additional covenants, restrictions or conditions a Default or an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, however, that in respect of any such additional covenant, restriction or condition such supplemental indenture may provide for a particular period of grace after Default (which period may be shorter or longer than that allowed in the case of other Defaults) or may provide for an immediate enforcement upon such Default or may limit the remedies available to the Trustee upon such default;

          (c) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture, or to make such other provisions in regard to matters or questions arising under this Indenture, provided, that any such action shall not adversely affect the interests of the holders of the Debt Securities then outstanding;

          (d) to add to, delete from, or revise the terms of Debt Securities, including, without limitation, any terms relating to the issuance, exchange, registration or transfer of Debt Securities, including to provide for transfer procedures and restrictions substantially similar to those applicable to the Capital Securities, as required by Section 2.05 (for purposes of assuring that no registration of Debt Securities is required under the Securities Act), provided, that any such action shall not adversely affect the interests of the holders of the Debt Securities then outstanding (it being understood, for purposes of this proviso, that transfer restrictions on Debt Securities substantially similar to those applicable to Capital Securities shall not be deemed to adversely affect the holders of the Debt Securities);

          (e) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Debt Securities and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.10;

          (f) to make any change (other than as elsewhere provided in this Section) that does not adversely affect the rights of any Securityholder in any material respect; or

          (g) to provide for the issuance of and establish the form and terms and conditions of the Debt Securities, to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or the Debt Securities, or to add to the rights of the holders of Debt Securities.

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          The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer and assignment of any property thereunder, but the Trustee shall not be obligated to, but may in its discretion, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

          Any supplemental indenture authorized by the provisions of this Section may be executed by the Company and the Trustee without the consent of the holders of any of the Debt Securities at the time outstanding, notwithstanding any of the provisions of Section 9.02.

          Section 9.02 Supplemental Indentures with Consent of Securityholders.

          With the consent (evidenced as provided in Section 7.01) of the holders of a majority in aggregate principal amount of the Debt Securities at the time outstanding affected by such supplemental indenture, the Company, when authorized by a Board Resolution, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act, then in effect, applicable to indentures qualified thereunder) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the holders of the Debt Securities; provided, however, that no such supplemental indenture shall, without the consent of the holders of each Debt Security then outstanding and affected thereby, (i) change the Maturity Date of any Debt Security, or reduce the principal amount thereof or any premium thereon, or reduce the rate (or manner of calculation of the rate) or extend the time of payment of interest thereon, or reduce (other than as a result of the maturity or earlier redemption of any such Debt Security in accordance with the terms of this Indenture and such Debt Security) or increase the aggregate principal amount of Debt Securities then outstanding, or change any of the redemption provisions, or make the principal thereof or any interest or premium thereon payable in any coin or currency other than United States Dollars, or impair or affect the right of any Securityholder to institute suit for payment thereof, or (ii) reduce the aforesaid percentage of Debt Securities the holders of which are required to consent to any such supplemental indenture; and provided, further, that if the Debt Securities are held by the Trust or the trustee of the Trust, such supplemental indenture shall not be effective until the holders of a majority in aggregate liquidation amount of the outstanding Capital Securities shall have consented to such supplemental indenture; provided, further, that if the consent of the Securityholder of each outstanding Debt Security is required, such supplemental indenture shall not be effective until each holder of the outstanding Capital Securities shall have consented to such supplemental indenture.

          Upon the request of the Company accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders (and holders of Capital Securities, if required) as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

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          Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage prepaid, a notice, prepared by the Company, setting forth in general terms the substance of such supplemental indenture, to the Securityholders as their names and addresses appear upon the Debt Security Register. Any failure of the Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

          It shall not be necessary for the consent of the Securityholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.

          Section 9.03 Effect of Supplemental Indentures.

          Upon the execution of any supplemental indenture pursuant to the provisions of this Article IX, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Debt Securities shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

          Section 9.04 Notation on Debt Securities.

          Debt Securities authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article IX may bear a notation as to any matter provided for in such supplemental indenture. If the Company or the Trustee shall so determine, new Debt Securities so modified as to conform, in the opinion of the Board of Directors of the Company, to any modification of this Indenture contained in any such supplemental indenture may be prepared and executed by the Company, authenticated by the Trustee or the Authenticating Agent and delivered in exchange for the Debt Securities then outstanding.

          Section 9.05 Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee.

          The Trustee, subject to the provisions of Sections 6.01 and 6.02, shall, in addition to the documents required by Section 14.06, receive an Officers’ Certificate as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article IX. The Trustee shall also receive an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article IX is authorized or permitted by, and conforms to, the terms of this Article IX and that it is proper for the Trustee under the provisions of this Article IX to join in the execution thereof.

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ARTICLE X
REDEMPTION OF SECURITIES

          Section 10.01 Optional Redemption.

          The Company shall have the right, subject to the receipt by the Company of the prior approval from the Federal Reserve, if then required under applicable capital guidelines or policies of the Federal Reserve, to redeem the Debt Securities, in whole or (provided that all accrued and unpaid interest has been paid on all Debt Securities for all Interest Periods terminating on or prior to such date) from time to time in part, on any Interest Payment Date on or after July 1, 2012 (each, an “Optional Redemption Date”), at the Optional Redemption Price.

          Section 10.02 Special Event Redemption.

          If a Special Event shall occur and be continuing, the Company shall have the right, subject to the receipt by the Company of prior approval from the Federal Reserve, if then required under applicable capital guidelines or policies of the Federal Reserve, to redeem the Debt Securities, in whole but not in part, at any time within 90 days following the occurrence of such Special Event (the “Special Redemption Date”), at the Special Redemption Price.

          Section 10.03 Notice of Redemption; Selection of Debt Securities.

          In case the Company shall desire to exercise the right to redeem all, or, as the case may be, any part of the Debt Securities, it shall fix a date for redemption and shall mail, or cause the Trustee to mail (at the expense of the Company), a notice of such redemption at least 30 and not more than 60 days prior to the date fixed for redemption to the holders of Debt Securities so to be redeemed as a whole or in part at their last addresses as the same appear on the Debt Security Register. Such mailing shall be by first class mail. The notice if mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the holder receives such notice. In any case, failure to give such notice by mail or any defect in the notice to the holder of any Debt Security designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Debt Security.

          Each such notice of redemption shall specify the CUSIP number, if any, of the Debt Securities to be redeemed, the date fixed for redemption, the price (or manner of calculation of the price) at which Debt Securities are to be redeemed, the place or places of payment, that payment will be made upon presentation and surrender of such Debt Securities, that interest accrued to the date fixed for redemption will be paid as specified in said notice, and that on and after said date interest thereon or on the portions thereof to be redeemed will cease to accrue. If less than all the Debt Securities are to be redeemed, the notice of redemption shall specify the numbers of the Debt Securities to be redeemed. In case the Debt Securities are to be redeemed in part only, the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Debt Security, a new Debt Security or Debt Securities in principal amount equal to the unredeemed portion thereof will be issued.

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          Prior to 10:00 a.m., New York City time, on the Optional Redemption Date or the Special Redemption Date specified in the notice of redemption given as provided in this Section, the Company will deposit with the Trustee or with one or more Paying Agents an amount of money sufficient to redeem on such date all the Debt Securities so called for redemption at the applicable price therefor, together with unpaid interest accrued to such date.

          The Company will give the Trustee notice not less than 45 nor more than 75 days prior to the date fixed for redemption as to the price at which the Debt Securities are to be redeemed and the aggregate principal amount of Debt Securities to be redeemed and the Trustee shall select, in such manner as in its sole discretion it shall deem appropriate and fair, the Debt Securities or portions thereof (in integral multiples of $1,000) to be redeemed.

          Section 10.04 Payment of Debt Securities Called for Redemption.

          If notice of redemption has been given as provided in Section 10.03, the Debt Securities or portions of Debt Securities with respect to which such notice has been given shall become due and payable on the related Optional Redemption Date or Special Redemption Date (as the case may be) and at the place or places stated in such notice at the applicable price therefor, together with unpaid interest accrued thereon to said Optional Redemption Date or the Special Redemption Date (as the case may be), and on and after said Optional Redemption Date or the Special Redemption Date (as the case may be) (unless the Company shall default in the payment of such Debt Securities at the redemption price, together with unpaid interest accrued thereon to said date) interest on the Debt Securities or portions of Debt Securities so called for redemption shall cease to accrue. On presentation and surrender of such Debt Securities at a place of payment specified in said notice, such Debt Securities or the specified portions thereof shall be paid and redeemed by the Company at the applicable price therefor, together with unpaid interest, if any, accrued thereon to said Optional Redemption Date or the Special Redemption Date (as the case may be); provided, however, that interest payable on any Interest Payment Date on or prior to said Optional Redemption Date or the Special Redemption Date will be paid to the holders on the relevant regular record date.

          Upon presentation of any Debt Security redeemed in part only, the Company shall execute and the Trustee shall authenticate and make available for delivery to the holder thereof, at the expense of the Company, a new Debt Security or Debt Securities of authorized denominations in principal amount equal to the unredeemed portion of the Debt Security so presented.

ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

          Section 11.01 Company May Consolidate, etc., on Certain Terms.

          Nothing contained in this Indenture or in the Debt Securities shall prevent any consolidation or merger of the Company with or into any other corporation or corporations (whether or not affiliated with the Company) or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties, or shall prevent any sale, conveyance, transfer or other disposition of all or substantially all of the property or capital stock of the Company or its successor or successors to any other corporation (whether or not affiliated with the Company or its successor or successors) authorized to acquire and operate the same;

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provided, however, that the Company hereby covenants and agrees that (i) upon any such consolidation, merger (where the Company is not the surviving corporation), sale, conveyance, transfer or other disposition, the successor entity shall be a corporation organized and existing under the laws of the United States or any state thereof or the District of Columbia (unless such corporation has (1) agreed to make all payments due in respect of the Debt Securities or, if outstanding, the Trust Securities and the Capital Securities Guarantee without withholding or deduction for, or on account of, any taxes, duties, assessments or other governmental charges under the laws or regulations of the jurisdiction of organization or residence (for tax purposes) of such corporation or any political subdivision or taxing authority thereof or therein unless required by applicable law, in which case such corporation shall have agreed to pay such additional amounts as shall be required so that the net amounts received and retained by the holders of such Debt Securities or Trust Securities, as the case may be, after payment of all taxes (including withholding taxes), duties, assessments or other governmental charges, will be equal to the amounts that such holders would have received and retained had no such taxes (including withholding taxes), duties, assessments or other governmental charges been imposed, (2) irrevocably and unconditionally consented and submitted to the jurisdiction of any United States federal court or New York state court, in each case located in the Borough of Manhattan, The City of New York, in respect of any action, suit or proceeding against it arising out of or in connection with this Indenture, the Debt Securities, the Capital Securities Guarantee or the Declaration and irrevocably and unconditionally waived, to the fullest extent permitted by law, any objection to the laying of venue in any such court or that any such action, suit or proceeding has been brought in an inconvenient forum and (3) irrevocably appointed an agent in The City of New York for service of process in any action, suit or proceeding referred to in clause (2) above) and such corporation expressly assumes all of the obligations of the Company under the Debt Securities, this Indenture, the Capital Securities Guarantee and the Declaration and (ii) after giving effect to any such consolidation, merger, sale, conveyance, transfer or other disposition, no Default or Event of Default shall have occurred and be continuing.

          Section 11.02 Successor Entity to be Substituted.

          In case of any such consolidation, merger, sale, conveyance, transfer or other disposition contemplated in Section 11.01 and upon the assumption by the successor corporation, by supplemental indenture, executed and delivered to the Trustee and reasonably satisfactory in form to the Trustee, of the due and punctual payment of the principal of and premium, if any, and interest on all of the Debt Securities and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed or observed by the Company, such successor corporation shall succeed to and be substituted for the Company, with the same effect as if it had been named herein as the Company, and thereupon the predecessor entity shall be relieved of any further liability or obligation hereunder or upon the Debt Securities. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of the Company, any or all of the Debt Securities issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee or the Authenticating Agent; and, upon the order of such successor corporation instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee or the Authenticating Agent shall authenticate and deliver any Debt Securities which previously shall have been signed and delivered by the officers of the Company to the Trustee or the Authenticating Agent for authentication, and any Debt Securities which such successor corporation thereafter shall cause to be signed and delivered to the Trustee or the Authenticating Agent for that purpose. All the Debt Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Debt Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Debt Securities had been issued at the date of the execution hereof.

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          Section 11.03 Opinion of Counsel to be Given to Trustee.

          The Trustee, subject to the provisions of Sections 6.01 and 6.02, shall receive, in addition to the Opinion of Counsel required by Section 9.05, an Opinion of Counsel as conclusive evidence that any consolidation, merger, sale, conveyance, transfer or other disposition, and any assumption, permitted or required by the terms of this Article XI complies with the provisions of this Article XI

ARTICLE XII
SATISFACTION AND DISCHARGE OF INDENTURE

          Section 12.01 Discharge of Indenture.

          When (a) the Company shall deliver to the Trustee for cancellation all Debt Securities theretofore authenticated (other than any Debt Securities which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.06) and not theretofore canceled, or (b) all the Debt Securities not theretofore canceled or delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit with the Trustee, in trust, funds, which shall be immediately due and payable, sufficient to pay at maturity or upon redemption all of the Debt Securities (other than any Debt Securities which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.06) not theretofore canceled or delivered to the Trustee for cancellation, including principal and premium, if any, and interest due or to become due to the Maturity Date, any Optional Redemption Date or the Special Redemption Date, as the case may be, but excluding, however, the amount of any moneys for the payment of principal of and premium, if any, or interest on the Debt Securities (1) theretofore repaid to the Company in accordance with the provisions of Section 12.04, or (2) paid to any state or to the District of Columbia pursuant to its unclaimed property or similar laws, and if in the case of either clause (a) or (b) above the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect except for the provisions of Sections 2.05, 2.06, 3.01, 3.02, 3.04, 6.06, 6.09 and 12.04 hereof, which shall survive until such Debt Securities shall mature or are redeemed, as the case may be, and are paid in full. Thereafter, Sections 6.06, 6.09 and 12.04 shall survive, and the Trustee, on demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with, and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture, the Company, however, hereby agreeing to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee in connection with this Indenture or the Debt Securities.

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          Section 12.02 Deposited Moneys to be Held in Trust by Trustee.

          Subject to the provisions of Section 12.04, all moneys deposited with the Trustee pursuant to Section 12.01 shall be held in trust and applied by it to the payment, either directly or through any Paying Agent (including the Company if acting as its own Paying Agent), to the holders of the particular Debt Securities for the payment of which such moneys have been deposited with the Trustee, of all sums due and to become due thereon for principal, premium, if any, and interest.

          Section 12.03 Paying Agent to Repay Moneys Held.

          Upon the satisfaction and discharge of this Indenture, all moneys then held by any Paying Agent of the Debt Securities (other than the Trustee) shall, upon demand of the Company, be repaid to the Company or paid to the Trustee, and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.

          Section 12.04 Return of Unclaimed Moneys.

          Any moneys deposited with or paid to the Trustee or any Paying Agent for payment of the principal of and premium, if any, or interest on Debt Securities and not applied but remaining unclaimed by the holders of Debt Securities for two years after the date upon which the principal of and premium, if any, or interest on such Debt Securities, as the case may be, shall have become due and payable, shall be repaid to the Company by the Trustee or such Paying Agent on written demand; and the holder of any of the Debt Securities shall thereafter look only to the Company for any payment which such holder may be entitled to collect and all liability of the Trustee or such Paying Agent with respect to such moneys shall thereupon cease.

ARTICLE XIII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS

          Section 13.01 Indenture and Debt Securities Solely Corporate Obligations.

          No recourse for the payment of the principal of or premium, if any, or interest on any Debt Security, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture, or in any such Debt Security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer, director, employee or agent, as such, past, present or future, of the Company or of any predecessor or successor corporation of the Company, either directly or through the Company or any successor corporation of the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Debt Securities.

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ARTICLE XIV
MISCELLANEOUS PROVISIONS

          Section 14.01 Successors.

          All the covenants, stipulations, promises and agreements of the Company contained in this Indenture shall bind its successors and assigns, whether so expressed or not.

          Section 14.02 Official Acts by Successor Entity.

          Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the like board, committee, officer or other authorized Person of any entity that shall at the time be the lawful successor of the Company.

          Section 14.03 Surrender of Company Powers.

          The Company, by instrument in writing executed by authority of 2/3 (two thirds) of its Board of Directors and delivered to the Trustee, may surrender any of the powers reserved to the Company and thereupon such power so surrendered shall terminate both as to the Company and as to any permitted successor.

          Section 14.04 Addresses for Notices, etc.

          Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Securityholders on the Company may be given or served in writing by being deposited postage prepaid by registered or certified mail in a post office letter box addressed (until another address is filed by the Company with the Trustee for such purpose) to the Company at 122 W. Madison, Ottawa, Illinois 61350, Attention: Kurt R. Stevenson. Any notice, direction, request or demand by any Securityholder or the Company to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the office of Wilmington Trust Company at Rodney Square North, 1100 North Market Street, Wilmington, DE 19890-0001, Attention: Corporate Capital Markets.

          Section 14.05 Governing Law.

          This Indenture and the Debt Securities shall each be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflict of laws principles of said State other than Section 5-1401 of the New York General Obligations Law.

          Section 14.06 Evidence of Compliance with Conditions Precedent.

          Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers’ Certificate stating that in the opinion of the signers all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with (except that no such Opinion of Counsel is required to be furnished to the Trustee in connection with the authentication and issuance of Debt Securities).

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          Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture (except certificates delivered pursuant to Section 3.05) shall include (a) a statement that the person making such certificate or opinion has read such covenant or condition and the definitions relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.

          Section 14.07 Business Day Convention.

          Notwithstanding anything to the contrary contained herein, if any Interest Payment Date after the Interest Payment Date in July, 2012, other than the Maturity Date, any Optional Redemption Date or the Special Redemption Date, falls on a day that is not a Business Day, then any interest payable will be paid on, and such Interest Payment Date will be moved to, the next succeeding Business Day, and additional interest will accrue for each day that such payment is delayed as a result thereof. If any Interest Payment Date on or prior to the Interest Payment Date in July, 2012, the Maturity Date, any Optional Redemption Date or the Special Redemption Date falls on a day that is not a Business Day, then the principal, premium, if any, and/or interest payable on such date will be paid on the next succeeding Business Day, and no additional interest will accrue in respect of such payment made on such next succeeding Business Day.

          Section 14.08 Table of Contents, Headings, etc.

          The table of contents and the titles and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

          Section 14.09 Execution in Counterparts.

          This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

          Section 14.10 Separability.

          In case any one or more of the provisions contained in this Indenture or in the Debt Securities shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Debt Securities, but this Indenture and such Debt Securities shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein or therein.

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          Section 14.11 Assignment.

          Subject to Article XI, the Company will have the right at all times to assign any of its rights or obligations under this Indenture and the Debt Securities to a direct or indirect wholly owned Subsidiary of the Company; provided, however, that, in the event of any such assignment, the Company will remain liable for all such obligations. Subject to the foregoing, this Indenture is binding upon and inures to the benefit of the parties hereto and their respective successors and assigns. This Indenture may not otherwise be assigned by the parties thereto.

          Section 14.12 Acknowledgment of Rights.

          The Company acknowledges that, with respect to any Debt Securities held by the Trust or a trustee of the Trust, if such trustee of the Trust fails to enforce its rights under this Indenture as the holder of Debt Securities held as the assets of the Trust after the holders of a majority in aggregate liquidation amount of the outstanding Capital Securities of the Trust have so directed in writing such trustee, a holder of record of such Capital Securities may, to the fullest extent permitted by law, institute legal proceedings directly against the Company to enforce such trustee’s rights under this Indenture without first instituting any legal proceedings against such trustee or any other Person. Notwithstanding the foregoing, if an Event of Default has occurred and is continuing and such event is attributable to the failure of the Company to pay interest or premium, if any, on or principal of the Debt Securities on the date such interest, premium, if any, or principal is otherwise due and payable (or, in the case of redemption, on the related Optional Redemption Date or the Special Redemption Date (as the case may be)), the Company acknowledges that a holder of outstanding Capital Securities of the Trust may directly institute a proceeding against the Company for enforcement of payment to such holder directly of the principal of or premium, if any, or interest on the Debt Securities having an aggregate principal amount equal to the aggregate liquidation amount of the Capital Securities of such holder on or after the respective due date (or Optional Redemption Date or Special Redemption Date (as the case may be)) specified in the Debt Securities.

ARTICLE XV
SUBORDINATION OF DEBT SECURITIES

          Section 15.01 Agreement to Subordinate.

          The Company covenants and agrees, and each holder of Debt Securities issued hereunder and under any supplemental indenture (the “Additional Provisions”) by such holder’s acceptance thereof likewise covenants and agrees, that all Debt Securities shall be issued subject to the provisions of this Article XV; and each holder of a Debt Security, whether upon original issue or upon transfer or assignment thereof, accepts and agrees to be bound by such provisions.

          The payment by the Company of the payments due on all Debt Securities issued hereunder and under any Additional Provisions shall, to the extent and in the manner hereinafter set forth, be subordinated and junior in right of payment to the prior payment in full of all Senior Indebtedness of the Company, whether outstanding at the date of this Indenture or thereafter incurred.

59.

          No provision of this Article XV shall prevent the occurrence of any default or Event of Default hereunder.

          Section 15.02 Default on Senior Indebtedness.

          In the event and during the continuation of any default by the Company in the payment of principal, premium, interest or any other amount due on any Senior Indebtedness of the Company following any applicable grace period, or in the event that the maturity of any Senior Indebtedness of the Company has been accelerated because of a default, and such acceleration has not been rescinded or canceled and such Senior Indebtedness has not been paid in full, then, in either case, no payment shall be made by the Company with respect to the payments due on the Debt Securities.

          In the event that, notwithstanding the foregoing, any payment shall be received by the Trustee or any Securityholder when such payment is prohibited by the preceding paragraph of this Section, such payment shall, subject to Section 15.06, be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Indebtedness or their respective representatives, or to the trustee or trustees under any indenture pursuant to which any of such Senior Indebtedness may have been issued, as their respective interests may appear, but only to the extent that the holders of the Senior Indebtedness (or their representative or representatives or trustee) notify the Trustee in writing within 90 days of such payment of the amounts then due and owing on the Senior Indebtedness and only the amounts specified in such notice to the Trustee shall be paid to the holders of Senior Indebtedness.

          Section 15.03 Liquidation; Dissolution; Bankruptcy.

          Upon any payment by the Company or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution, winding-up, liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other proceedings, all amounts due upon all Senior Indebtedness of the Company shall first be paid in full, or payment thereof provided for in money in accordance with its terms, before any payment is made by the Company on the Debt Securities; and upon any such dissolution, winding-up, liquidation or reorganization, any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the Securityholders or the Trustee would be entitled to receive from the Company, except for the provisions of this Article XV, shall be paid by the Company, or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Securityholders or by the Trustee under this Indenture if received by them or it, directly to the holders of Senior Indebtedness of the Company (pro rata to such holders on the basis of the respective amounts of Senior Indebtedness held by such holders, as calculated by the Company) or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing such Senior Indebtedness may have been issued, as their respective interests may appear, to the extent necessary to pay such Senior Indebtedness in full, in money or money’s worth, after giving effect to any concurrent payment or distribution to or for the holders of such Senior Indebtedness, before any payment or distribution is made to the Securityholders or to the Trustee.

60.

          In the event that, notwithstanding the foregoing, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, prohibited by the foregoing shall be received by the Trustee or any Securityholder before all Senior Indebtedness of the Company is paid in full, or provision is made for such payment in money in accordance with its terms, such payment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of such Senior Indebtedness or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing such Senior Indebtedness may have been issued, as their respective interests may appear, as calculated by the Company, for application to the payment of all Senior Indebtedness of the Company remaining unpaid to the extent necessary to pay such Senior Indebtedness in full in money in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the benefit of the holders of such Senior Indebtedness.

          For purposes of this Article XV, the words “cash, property or securities” shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in this Article XV with respect to the Debt Securities to the payment of all Senior Indebtedness of the Company, that may at the time be outstanding, provided, that (a) such Senior Indebtedness is assumed by the new corporation, if any, resulting from any such reorganization or readjustment, and (b) the rights of the holders of such Senior Indebtedness are not, without the consent of such holders, altered by such reorganization or readjustment. The consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company following the conveyance, transfer or other disposition of its property as an entirety, or substantially as an entirety, to another corporation upon the terms and conditions provided for in Article XI of this Indenture shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article XI of this Indenture. Nothing in Section 15.02 or in this Section shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.06 of this Indenture.

          Section 15.04 Subrogation.

          Subject to the payment in full of all Senior Indebtedness of the Company, the Securityholders shall be subrogated to the rights of the holders of such Senior Indebtedness to receive payments or distributions of cash, property or securities of the Company applicable to such Senior Indebtedness until all payments due on the Debt Securities shall be paid in full; and, for the purposes of such subrogation, no payments or distributions to the holders of such Senior Indebtedness of any cash, property or securities to which the Securityholders or the Trustee would be entitled except for the provisions of this Article XV, and no payment over pursuant to the provisions of this Article XV to or for the benefit of the holders of such Senior Indebtedness by Securityholders or the Trustee, shall, as between the Company, its creditors other than holders of Senior Indebtedness of the Company, and the holders of the Debt Securities be deemed to be a payment or distribution by the Company to or on account of such Senior Indebtedness. It is understood that the provisions of this Article XV are, and are intended, solely for the purposes of defining the relative rights of the holders of the Debt Securities, on the one hand, and the holders of such Senior Indebtedness, on the other hand.

61.

          Nothing contained in this Article XV or elsewhere in this Indenture, any Additional Provisions or in the Debt Securities is intended to or shall impair, as between the Company, its creditors other than the holders of Senior Indebtedness of the Company, and the holders of the Debt Securities, the obligation of the Company, which is absolute and unconditional, to pay to the holders of the Debt Securities all payments on the Debt Securities as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the holders of the Debt Securities and creditors of the Company other than the holders of Senior Indebtedness of the Company, nor shall anything herein or therein prevent the Trustee or the holder of any Debt Security from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article XV of the holders of such Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy.

          Upon any payment or distribution of assets of the Company referred to in this Article XV, the Trustee, subject to the provisions of Article VI of this Indenture, and the Securityholders shall be entitled to conclusively rely upon any order or decree made by any court of competent jurisdiction in which such dissolution, winding-up, liquidation or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent or other Person making such payment or distribution, delivered to the Trustee or to the Securityholders, for the purposes of ascertaining the Persons entitled to participate in such distribution, the holders of Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article XV.

          Section 15.05 Trustee to Effectuate Subordination.

          Each Securityholder, by such Securityholder’s acceptance thereof, authorizes and directs the Trustee on such Securityholder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article XV and appoints the Trustee such Securityholder’s attorney-in-fact for any and all such purposes.

          Section 15.06 Notice by the Company.

          The Company shall give prompt written notice to a Responsible Officer of the Trustee at the Principal Office of the Trustee of any fact known to the Company that would prohibit the making of any payment of moneys to or by the Trustee in respect of the Debt Securities pursuant to the provisions of this Article XV. Notwithstanding the provisions of this Article XV or any other provision of this Indenture or any Additional Provisions, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of moneys to or by the Trustee in respect of the Debt Securities pursuant to the provisions of this Article XV unless and until a Responsible Officer of the Trustee at the Principal Office of the Trustee shall have received written notice thereof from the Company or a holder or holders of Senior Indebtedness or from any trustee therefor; and before the receipt of any such written notice, the Trustee, subject to the provisions of Article VI of this Indenture,

62.

shall be entitled in all respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received the notice provided for in this Section at least two Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of or premium, if any, or interest on any Debt Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purposes for which they were received, and shall not be affected by any notice to the contrary that may be received by it within two Business Days prior to such date.

          The Trustee, subject to the provisions of Article VI of this Indenture, shall be entitled to conclusively rely on the delivery to it of a written notice by a Person representing himself or herself to be a holder of Senior Indebtedness of the Company (or a trustee or representative on behalf of such holder) to establish that such notice has been given by a holder of such Senior Indebtedness or a trustee or representative on behalf of any such holder or holders. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of such Senior Indebtedness to participate in any payment or distribution pursuant to this Article XV, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article XV, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

          Section 15.07 Rights of the Trustee; Holders of Senior Indebtedness.

          The Trustee, in its individual capacity, shall be entitled to all the rights set forth in this Article XV in respect of any Senior Indebtedness at any time held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture or any Additional Provisions shall deprive the Trustee of any of its rights as such holder.

          With respect to the holders of Senior Indebtedness of the Company, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article XV, and no implied covenants or obligations with respect to the holders of such Senior Indebtedness shall be read into this Indenture or any Additional Provisions against the Trustee. The Trustee shall not owe or be deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and, subject to the provisions of Article VI of this Indenture, the Trustee shall not be liable to any holder of such Senior Indebtedness if it shall pay over or deliver to Securityholders, the Company or any other Person money or assets to which any holder of such Senior Indebtedness shall be entitled by virtue of this Article XV or otherwise.

          Nothing in this Article XV shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.06.

63.

          Section 15.08 Subordination May Not Be Impaired.

          No right of any present or future holder of any Senior Indebtedness of the Company to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company, or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company, with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof that any such holder may have or otherwise be charged with.

          Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness of the Company may, at any time and from time to time, without the consent of or notice to the Trustee or the Securityholders, without incurring responsibility to the Securityholders and without impairing or releasing the subordination provided in this Article XV or the obligations hereunder of the holders of the Debt Securities to the holders of such Senior Indebtedness, do any one or more of the following: (a) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, such Senior Indebtedness, or otherwise amend or supplement in any manner such Senior Indebtedness or any instrument evidencing the same or any agreement under which such Senior Indebtedness is outstanding; (b) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing such Senior Indebtedness; (c) release any Person liable in any manner for the collection of such Senior Indebtedness; and (d) exercise or refrain from exercising any rights against the Company or any other Person.

64.

          Wilmington Trust Company, in its capacity as Trustee, hereby accepts the trusts in this Indenture declared and provided, upon the terms and conditions herein above set forth.

          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed by their respective officers thereunto duly authorized, as of the day and year first above written.

CENTRUE FINANCIAL CORPORATION
By:
	Name:	Thomas A. Daiber
	Title:	President and Chief Executive Officer
WILMINGTON TRUST COMPANY, as Trustee
By:
	Name:
	Title:

Indenture

          Wilmington Trust Company, in its capacity as Trustee, hereby accepts the trusts in this Indenture declared and provided, upon the terms and conditions herein above set forth.

          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed by their respective officers thereunto duly authorized, as of the day and year first above written.

CENTRUE FINANCIAL CORPORATION
By:
	Name:
	Title:
WILMINGTON TRUST COMPANY, as Trustee
By:
	Name:	Geoffrey J. Lewis
	Title:	Financial Services Officer

Indenture

Exhibit A

Form of Debt Security

EXHIBIT A

FORM OF DEBT SECURITY

[FORM OF FACE OF SECURITY]

          [THIS SECURITY IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

          UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]¹

          THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS

¹ Only applicable if this Debt Security is a Global Debt Security.

A-l

SECURITY OR SUCH INTEREST OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER”, AS DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a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’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

          THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLANS INVESTMENT IN THE ENTITY AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS

A-2

SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

          IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

          THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

          THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE “FDIC”). THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF THE DEPOSITORS AND THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE COMPANY, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANY OR ANY OF ITS SUBSIDIARIES AND IS NOT SECURED.

A-3

Fixed/Floating Rate Junior Subordinated Debt Security due 2037

of
CENTRUE FINANCIAL CORPORATION

          Centrue Financial Corporation, a bank holding company incorporated in the State of Delaware (the “Company”, which term includes any successor permitted under the Indenture (as defined herein)), for value received, promises to pay to Wilmington Trust Company, not in its individual capacity but solely as Institutional Trustee for Centrue Statutory Trust #3, a Delaware statutory trust, or registered assigns, the principal amount of ________________ Dollars ($__________________) on July 1, 2037 (the “Maturity Date”) (or any Optional Redemption Date or the Special Redemption Date, each as defined herein, or any earlier date of acceleration of the maturity of this Debt Security), and to pay interest on the outstanding principal amount of this Debt Security from April 19, 2007, or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in arrears on January 1, April 1, July 1 and October 1 of each year, commencing on July 1, 2007 (each, an “Interest Payment Date”), at a per annum rate (the “Interest Rate”) equal to (i) with respect to any Interest Period (as defined in the Indenture) prior to the Interest Period commencing on the Interest Payment Date in July, 2012, 6.67% and (ii) with respect to any Interest Period commencing on or after the Interest Payment Date in July, 2012, LIBOR (as defined in the Indenture), as determined on the LIBOR Determination Date (as defined in the Indenture) for such Interest Period plus 1.65% (the “Interest Rate”) (provided that the Interest Rate for any Interest Period commencing on or after the Interest Payment Date in July, 2012 may not exceed the highest rate permitted by New York law, as the same may be modified by United States law of general application) until the principal hereof shall have been paid or duly provided for, and on any overdue principal and (without duplication and to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at an annual rate equal to the then applicable Interest Rate, compounded quarterly. The amount of interest payable shall be computed with respect to any Interest Period prior to the Interest Period commencing on the Interest Payment Date in July, 2012, on the basis of a 360-day year consisting of twelve 30-day months and (ii) with respect to any Interest Period commencing on or after the Interest Payment Date in July, 2012, on the basis of a 360-day year and the actual number of days elapsed in such Interest Period.

          The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Debt Security (or one or more Predecessor Securities, as defined in the Indenture) is registered at the close of business on the “regular record date” for such interest installment, which shall be the fifteenth day prior to such Interest Payment Date, whether or not such day is a Business Day (as defined herein). Any such interest installment (other than Deferred Interest (as defined herein)) not punctually paid or duly provided for shall forthwith cease to be payable to the holders on such regular record date and may be paid to the Person in whose name this Debt Security (or one or more Predecessor Securities) is registered at the close of business on a special record date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to the holders of the Debt Securities not less than 10 days prior to such special record date, all as more fully provided in the Indenture.

A-4

          Payment of the principal of and premium, if any, and interest on this Debt Security due on the Maturity Date, any Optional Redemption Date or the Special Redemption Date, as the case may be, shall be made in immediately available funds against presentation and surrender of this Debt Security at the office or agency of the Trustee maintained for that purpose in Wilmington, Delaware, or at the office or agency of any other Paying Agent appointed by the Company maintained for that purpose in Wilmington, Delaware or Springfield, Illinois. Payment of interest on this Debt Security due on any Interest Payment Date other than the Maturity Date, any Optional Redemption Date or the Special Redemption Date, as the case may be, shall be made at the option of the Company by check mailed to the holder thereof at such address as shall appear in the Debt Security Register or by wire transfer of immediately available funds to an account appropriately designated by the holder hereof. Notwithstanding the foregoing, so long as the holder of this Debt Security is the Institutional Trustee, payment of the principal of and premium, if any, and interest on this Debt Security shall be made in immediately available funds when due at such place and to such account as may be designated by the Institutional Trustee. All payments in respect of this Debt Security shall be payable in any coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts.

          Notwithstanding anything to the contrary contained herein, if any Interest Payment Date after the Interest Payment Date in July, 2012, other than the Maturity Date, any Optional Redemption Date or the Special Redemption Date, falls on a day that is not a Business Day, then any interest payable will be paid on, and such Interest Payment Date will be moved to, the next succeeding Business Day, and additional interest will accrue for each day that such payment is delayed as a result thereof. If any Interest Payment Date on or prior to the Interest Payment Date in July, 2012, the Maturity Date, any Optional Redemption Date or the Special Redemption Date falls on a day that is not a Business Day, then the principal, premium, if any, and/or interest payable on such date will be paid on the next succeeding Business Day, and no additional interest will accrue in respect of such payment made on such next succeeding Business Day.

          So long as no Event of Default pursuant to Sections 5.01(b), (e), (f), (g), (h) or (i) of the Indenture has occurred and is continuing, the Company shall have the right, from time to time and without causing an Event of Default, to defer payments of interest on the Debt Securities by extending the interest payment period on the Debt Securities at any time and from time to time during the term of the Debt Securities, for up to 20 consecutive quarterly periods (each such extended interest payment period, together with all previous and further consecutive extensions thereof, is referred to herein as an “Extension Period”). No Extension Period may end on a date other than an Interest Payment Date or extend beyond the Maturity Date, any Optional Redemption Date or the Special Redemption Date, as the case may be. During any Extension Period, interest will continue to accrue on the Debt Securities, and interest on such accrued interest (such accrued interest and interest thereon referred to herein as “Deferred Interest”) will accrue at an annual rate equal to the Interest Rate applicable during such Extension Period, compounded quarterly from the date such Deferred Interest would have been payable were it not for the Extension Period, to the extent permitted by applicable law. No interest or Deferred Interest (except any Additional Amounts (as defined in the Indenture) that may be due and payable) shall be due and payable during an Extension Period, except at the end thereof. At the end of any Extension Period, the Company shall pay all Deferred Interest then

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accrued and unpaid on the Debt Securities; provided, however, that during any Extension Period, the Company may not (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Company’s capital stock, (ii) make any payment of principal of or premium, if any, or interest on or repay, repurchase or redeem any debt securities of the Company that rank pari passu in all respects with or junior in interest to the Debt Securities or (iii) make any payment under any guarantees of the Company that rank in all respects pari passu with or junior in respect to the Capital Securities Guarantee (other than (a) repurchases, redemptions or other acquisitions of shares of capital stock of the Company (A) in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors or consultants, (B) in connection with a dividend reinvestment or stockholder stock purchase plan or (C) in connection with the issuance of capital stock of the Company (or securities convertible into or exercisable for such capital stock), as consideration in an acquisition transaction entered into prior to such Extension Period, (b) as a result of any exchange or conversion of any class or series of the Company’s capital stock (or any capital stock of a subsidiary of the Company) for any class or series of the Company’s capital stock or of any class or series of the Company’s indebtedness for any class or series of the Company’s capital stock, (c) the purchase of fractional interests in shares of the Company’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (d) any declaration of a dividend in connection with any stockholder’s rights plan, or the issuance of rights, stock or other property under any stockholder’s rights plan, or the redemption or repurchase of rights pursuant thereto or (e) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock). Prior to the termination of any Extension Period, the Company may further extend such Extension Period, provided, that no Extension Period (including all previous and further consecutive extensions that are part of such Extension Period) shall exceed 20 consecutive quarterly periods. Upon the termination of any Extension Period and upon the payment of all Deferred Interest, the Company may commence a new Extension Period, subject to the foregoing requirements. The Company must give the Trustee notice of its election to begin or extend an Extension Period no later than the close of business on the fifteenth Business Day prior to the applicable Interest Payment Date.

          The indebtedness evidenced by this Debt Security is, to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Indebtedness (as defined in the Indenture), and this Debt Security is issued subject to the provisions of the Indenture with respect thereto. Each holder of this Debt Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on such holder’s behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination so provided and (c) appoints the Trustee such holder’s attorney-in-fact for any and all such purposes. Each holder hereof, by such holder’s acceptance hereof, hereby waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions.

          The Company waives diligence, presentment, demand for payment, notice of nonpayment, notice of protest, and all other demands and notices.

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          This Debt Security shall not be entitled to any benefit under the Indenture hereinafter referred to and shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by or on behalf of the Trustee.

          The provisions of this Debt Security are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place.

          This Debt Security may contain more than one counterpart of the signature page and this Debt Security may be executed and authenticated by the affixing of the signature of a proper officer of the Company, and the signature of the Trustee providing authentication, to any of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though the Company had executed, and the Trustee had authenticated, a single signature page.

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          IN WITNESS WHEREOF, the Company has duly executed this certificate.

CENTRUE FINANCIAL CORPORATION
By:
	Name:
	Title:

Dated: __________, _____

CERTIFICATE OF AUTHENTICATION

          This certificate represents Debt Securities referred to in the within-mentioned Indenture.

WILMINGTON TRUST COMPANY, not in its individual capacity but solely as the Trustee
By:
	Authorized Officer

Dated: __________, _____

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[FORM OF REVERSE OF SECURITY]

          This Debt Security is one of a duly authorized series of debt securities of the Company (collectively, the “Debt Securities”), all issued or to be issued pursuant to an Indenture (the “Indenture”), dated as of April 19, 2007, duly executed and delivered between the Company and Wilmington Trust Company, as Trustee (the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Debt Securities of which this Debt Security is a part.

          Upon the occurrence and continuation of a Tax Event, an Investment Company Event or a Capital Treatment Event (each, a “Special Event”), the Company shall have the right to redeem this Debt Security, at its option, in whole with all other Debt Securities but not in part, at any time, within 90 days following the occurrence of such Special Event (the “Special Redemption Date”), at the Special Redemption Price (as defined herein).

          The Company shall also have the right to redeem this Debt Security at its option, in whole or (provided that all accrued and unpaid interest has been paid on all Debt Securities for all Interest Periods terminating on or prior to such date) from time to time in part, on any Interest Payment Date on or after July 1, 2012 (each, an “Optional Redemption Date”), at the Optional Redemption Price (as defined herein).

          Any redemption pursuant to the preceding two paragraphs will be made, subject to receipt by the Company of prior approval from the Board of Governors of the Federal Reserve System (the “Federal Reserve”) if then required under applicable capital guidelines or policies of the Federal Reserve, upon not less than 30 days’ nor more than 60 days’ prior written notice. If the Debt Securities are only partially redeemed by the Company, the Debt Securities will be redeemed pro rata or by any other method utilized by the Trustee. In the event of redemption of this Debt Security in part only, a new Debt Security or Debt Securities for the unredeemed portion hereof will be issued in the name of the holder hereof upon the cancellation hereof.

          “Optional Redemption Price” means an amount in cash equal to 100% of the principal amount of this Debt Security being redeemed plus unpaid interest accrued thereon to the related Optional Redemption Date.

          “Special Redemption Price” means, with respect to the redemption of this Debt Security following a Special Event, an amount in cash equal to 103.30% of the principal amount of this Debt Security to be redeemed prior to July 1, 2008 and thereafter equal to the percentage of the principal amount of this Debt Security that is specified below for the Special Redemption Date plus, in each case, unpaid interest accrued thereon to the Special Redemption Date:

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Special Redemption During the 12-Month Period Beginning July 1,	Percentage of Principal Amount
2008	102.64%
2009	101.98%
2010	101.32%
2011	100.66%
2012 and thereafter	100.00%

          In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Debt Securities may be declared, and, in certain cases, shall ipso facto become, due and payable, and upon any such declaration of acceleration shall become due and payable, in each case, in the manner, with the effect and subject to the conditions provided in the Indenture.

          The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of a majority in aggregate principal amount of the Debt Securities at the time outstanding affected thereby, as specified in the Indenture, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the holders of the Debt Securities; provided, however, that no such supplemental indenture shall, among other things, without the consent of the holders of each Debt Security then outstanding and affected thereby (i) change the Maturity Date of any Debt Security, or reduce the principal amount thereof or any premium thereon, or reduce the rate (or manner of calculation of the rate) or extend the time of payment of interest thereon, or reduce (other than as a result of the maturity or earlier redemption of any such Debt Security in accordance with the terms of the Indenture and such Debt Security) or increase the aggregate principal amount of Debt Securities then outstanding, or change any of the redemption provisions, or make the principal thereof or any interest or premium thereon payable in any coin or currency other than United States Dollars, or impair or affect the right of any holder to institute suit for payment thereof, or (ii) reduce the aforesaid percentage of Debt Securities the holders of which are required to consent to any such supplemental indenture. The Indenture also contains provisions permitting the holders of a majority in aggregate principal amount of the Debt Securities at the time outstanding, on behalf of the holders of all the Debt Securities, to waive any past default in the performance of any of the covenants contained in the Indenture, or established pursuant to the Indenture, and its consequences, except (a) a default in payments due in respect of any of the Debt Securities, (b) in respect of covenants or provisions of the Indenture which cannot be modified or amended without the consent of the holder of each Debt Security affected, or (c) in respect of the covenants of the Company relating to its ownership of Common Securities of the Trust. Any such consent or waiver by the holder of this Debt Security (unless revoked as provided in the Indenture) shall be conclusive and binding upon such holder and upon all future holders and owners of this Debt Security and of any Debt Security issued in exchange herefor or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Debt Security.

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          No reference herein to the Indenture and no provision of this Debt Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to make all payments due on this Debt Security at the time and place and at the rate and in the money herein prescribed.

          As provided in the Indenture and subject to certain limitations herein and therein set forth, this Debt Security is transferable by the holder hereof on the Debt Security Register (as defined in the Indenture) of the Company, upon surrender of this Debt Security for registration of transfer at the office or agency of the Trustee in Wilmington, Delaware, or at any other office or agency of the Company in Wilmington, Delaware or Springfield, Illinois, accompanied by a written instrument or instruments of transfer in form satisfactory to the Company or the Trustee duly executed by the holder hereof or such holder’s attorney duly authorized in writing, and thereupon one or more new Debt Securities of authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be made for any such registration of transfer, but the Company or the Trustee may require payment of a sum sufficient to cover any tax, fee or other governmental charge payable in relation thereto as specified in the Indenture.

          Prior to due presentment for registration of transfer of this Debt Security, the Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer agent and the Debt Security registrar may deem and treat the holder hereof as the absolute owner hereof (whether or not this Debt Security shall be overdue and notwithstanding any notice of ownership or writing hereon) for the purpose of receiving payment of the principal of and premium, if any, and interest on this Debt Security and for all other purposes, and none of the Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer agent or any Debt Security registrar shall be affected by any notice to the contrary.

          As provided in the Indenture and subject to certain limitations herein and therein set forth, Debt Securities are exchangeable for a like aggregate principal amount of Debt Securities of different authorized denominations, as requested by the holder surrendering the same.

          The Debt Securities are issuable only in registered certificated form without coupons.

          No recourse shall be had for the payment of the principal of or premium, if any, or interest on this Debt Security, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer, director, employee or agent, past, present or future, as such, of the Company or of any predecessor or successor corporation of the Company, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released.

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          All terms used but not defined in this Debt Security shall have the meanings assigned to them in the Indenture.

          THIS DEBT SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OF SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

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Exhibit B

Form of Certificate of Officer of the Company

EXHIBIT B

FORM OF CERTIFICATE OF OFFICER OF THE COMPANY

          Pursuant to Section 3.05 of the Indenture, dated as of April 19, 2007 (as amended or supplemented from time to time, the “Indenture”), between Centrue Financial Corporation, as issuer (the “Company”), and Wilmington Trust Company, as trustee, the undersigned certifies that he/she is a [principal executive officer, principal financial officer or principal accounting officer] of the Company and in the course of the performance by the undersigned of his/her duties as an officer of the Company, the undersigned would normally have knowledge of any default by the Company in the performance of any covenants contained in the Indenture, and the undersigned hereby further certifies that he/she has no knowledge of any default for the fiscal year ending on _____________, 20_____ [, except as follows: specify each such default and the nature thereof].

          Capitalized terms used herein, and not otherwise defined herein, have the respective meanings assigned thereto in the Indenture.

          IN WITNESS WHEREOF, the undersigned has executed this Certificate as of ___________, 20_____.

Name:

Title:

B-1

EX-10.25

EXHIBIT 10.25

CENTRUE FINANCIAL CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN

          Centrue Financial Corporation (the “Company”), hereby adopts the Centrue Financial Corporation Executive Deferred Compensation Plan (the “Plan”), for the benefit of a select group of executives of the Company and its affiliated companies. The Plan is an unfunded arrangement for the benefit of executives. The Plan is effective as of January 1, 2008.

ARTICLE 1.
DEFINITIONS

1.01	Account. The bookkeeping accounts established for each Participant as provided in Section 5.01 hereof. As provided in Section 5.01, separate bookkeeping accounts shall be established for the Participant’s Deferrals, the “Deferral Account, and the Company Contributions made on behalf of a Participant, the Company Contributions Account.
1.02	Administrator. Such person or entity as determined by the Board, and in the absence of such determination, the Company.
1.03	Affiliate. A business entity that is either a wholly owned subsidiary of the Company, including not by way of limitation, the Bank, or considered to be under common control with the Company pursuant to the provisions of Code Sections 414(b), (c), (m) or (o) of the Code.
1.04	Bank. Centrue Bank.
1.05	Board. The Board of Directors of the Company.
1.06	Cause. An Executive’s termination of employment with the Company shall be considered to occur for Cause upon any of the following events:
	(a)	the willful and continued failure by the Executive to perform substantially the Executive’s duties (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness or any such failure subsequent to the delivery to the Executive of a notice of intent to terminate the Executive’s employment without Cause or subsequent to the Executive’s delivery of a notice of the Executive’s intent to terminate employment for Constructive Discharge), and such willful and continued failure continues after a demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Executive has not substantially performed the Executive’s duties
	(b)	the Executive is removed or suspended from banking pursuant to Section 8(e) of the Federal Deposit Insurance Act, as amended (“FDIA”), or any other applicable state or federal law; or

	(c)	the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the business or reputation of the Company.
	For purposes of determining whether “Cause” exists, no act or failure to act on the Executive’s part shall be considered “willful” unless done, or omitted to be done, by the Executive in bad faith and without reasonable belief that the action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board, based upon the advice of counsel for the Employer or upon the instructions to the Executive by a more senior officer shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. The Company must notify the Executive of any event constituting Cause within ninety (90) days following its knowledge of its existence or such event shall not constitute Cause under this Agreement.
1.07	Change of Control. Any one of:
	(a)	The consummation of the acquisition by any person (as such terms is defined in Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of fifty percent (50%) or more of the combined voting power of the then outstanding voting securities of the Company;
	(b)	Within any twelve (12) month period, a majority of the members of the Board is replaced by individuals whose appointment or election is not endorsed by a majority of the Board prior to the date of the appointment or election; or
	(c)	Consummation of: (1) a merger or consolidation to which the Company is a party if the stockholders of the Company immediately before such merger or consolidation do not, as a result of such merger or consolidation, own, directly or indirectly, more than sixty seven (67%) of the combined voting power of the then outstanding voting securities of the entity resulting from such merger or consolidation in substantially the same proportion as their ownership of the combined voting power of the Company’s voting securities outstanding immediately before such merger or consolidation; or (2) a complete liquidation or dissolution or sale or other disposition of all or substantially all of the assets of the Company or the Bank.
	Notwithstanding the foregoing, a Change of Control shall not be deemed to occur solely because fifty percent (50) or more of the combined voting power of the Company’s then outstanding voting securities is acquired by: (1) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained for employees of the entity; or (2) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the stockholders in the same proportion as their ownership of stock immediately prior to such acquisition.

	Notwithstanding the foregoing, no event described in this Section 1.05 shall be considered a Change of Control, unless the event also constitutes a change in the ownership or effective control pursuant to Code Section 409A(a)(2)(A)(v) and the regulatory guidance promulgated thereunder.
1.08	Code. The Internal Revenue Code of 1986, as amended.
1.09	Company Contributions. The contributions to be credited to an Executive’s Plan accounts as described in Section 3.02 hereof.
1.10	Company Contribution Date. The last day of the Plan Year for which the Company Contribution is being made.
1.11	Compensation. The Executives annual base salary and annual incentive bonus.
1.12	Deferrals. The portion of the Compensation that a Participant elects to defer in accordance with Section 3.01 hereof.
1.13	Deferral Date. The date the Deferrals will be credited to the Executive’s Account, which date shall be the date it would otherwise have been payable to the Executive.
1.14	Deferral Election. The separate written agreement, submitted to the Administrator, by which an Executive elects to participate in the Plan and to make Deferrals.
1.15	Disability. A Participant shall be considered disabled if the participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s employer.
1.16	Effective Date. January 1, 2008.
1.17	Executive. An executive of the Company or an Affiliate selected by the Board to participate in the Plan.

1.18	Normal Retirement Date. The date on which the Executive attains age sixty-five (65) with five (5) or more years of service, as measured under the Company’s 401(k) plan, provided that the Executive has not incurred a Separation from Service prior to that date. For purposes of this Plan, years of service shall be measured in the same manner as they are measured under the Centrue Financial Corporation 401(k) and Profit Sharing Plan.
1.19	Payment Date. For purposes of this Plan the term “Payment Date” shall mean the date as of which the event (e.g., Separation from Service, the six-month anniversary of the Participant’s Separation from Service in the case of a Participant who is a Specified Employee and whose payment is delayed pursuant to Section 6.01 of the Plan, Change of Control, Death, the attainment of age 65, the date of a scheduled installment payment). If a Payment Date is not a trading day, then the Payment Date shall be the immediately preceding trading day.
1.20	Participant. An Executive who is a Participant as provided in ARTICLE 2.
1.21	Plan Year. January 1 to December 31.
1.22	Separation from Service. The termination of the Executive’s employment with the Company and each of its Affiliates for reasons other than death. Whether a Separation from Service takes place is determined by the Company based on the facts and circumstances surrounding the termination of the Executive’s employment and whether the Company and the Executive intended for the Executive to provide significant services for the Company following such termination.
	(a)	A termination of employment will be presumed to constitute a Separation from Service if the Executive continues to provide services as an employee of the Bank in an annualized amount that is less than 20% of the services rendered, on average, during the immediately preceding three years of employment (or, if employed less than three years, such lesser period).
	(b)	The Executive will be presumed to have not incurred a Separation from Service if the Executive continues to provide services to the Bank in an annualized amount that is 50% or more of the services rendered, on average, during the immediately preceding three years of employment (or if employed less than three years, such lesser period).
	(c)	A Separation from Service will not have occurred if immediately following the Executive’s termination of employment, the Executive becomes an employee of any Affiliate of the Company, unless the services to be performed would be in amount that would result in the presumption that a Separation from Service had occurred.
1.23	Specified Employee. A key employee (as defined in Section 416(i) of the Code without regard to paragraph 5 thereof) of the Company if any stock of the Company is publicly traded on an established securities market or otherwise.

ARTICLE 2.
ELIGIBILITY AND PARTICIPATION

2.01	Eligible Executives. The Board shall determine in its sole discretion which executives of the Company and its Affiliates shall be eligible for participation in the Plan. In making this determination, the Board shall only permit participation in the Plan by executives who are members of a select group of management or highly compensated employees who contribute materially to the continued growth, development, and future business success of the Company.
2.02	Commencement of Participation. Each Executive shall become a Participant in the Plan on the date the Executive’s Deferral Election first becomes effective.
	(a)	A Participant who is no longer an Executive shall not be permitted to submit a Deferral Election and all Deferrals for such Participant shall cease as of the end of the Plan Year in which such Participant is determined to no longer be an Executive.
	(b)	Amounts credited to the Participant’s Account described in subsection (a) shall continue to be held, pursuant to the terms of the Plan and shall be distributed as provided in ARTICLE 6.
2.03	Deferral Continuance upon Separation from Service. On or after the first day of any Plan Year, a Participant’s Deferral Election with respect to that Plan Year shall be irrevocable. A Participant may change a Deferral Election by delivering to the Administrator a written revocation or modification of such election with respect to Compensation that relates to services yet to be performed. The revocation or modification of the Deferral Election shall be effective as of the first day of the Plan Year following the date the Participant delivers the revocation or modification to the Administrator.

ARTICLE 3.
CONTRIBUTIONS

3.01	Deferrals.
	(a)	The Company shall credit to the Participant’s Account an amount equal to the amount designated in the Participant’s Deferral Election for that Plan Year. Such amounts shall not be made available to such Participant, except as provided in ARTICLE 6, and shall reduce such Participant’s Compensation from the Company or Affiliate in accordance with the provisions of the applicable Deferral Election; provided, however, that all such amounts shall be subject to the rights of the general creditors of the Company and Affiliates as provided in ARTICLE 8.

	(b)	Each Executive shall deliver a Deferral Election to the Administrator before any Deferrals may become effective. Except with respect to the deferral of all or a portion of the Executive’s annual incentive bonus, such Deferral Election shall be void with respect to any Deferral unless submitted before the beginning of the calendar year during which the amount to be deferred will be earned. An Executive’s Deferral Election with respect to all or a portion of the Executive’s annual incentive bonus shall be void with respect to any Deferral unless submitted by June 30 of the Plan Year, provided that the annual incentive bonus relates to the Executive’s performance over a period not shorter than the Plan Year and further provided that the Board has established written performance goals with respect to the annual incentive program. Notwithstanding the foregoing, in the year in which an Executive is first eligible to participate, such Deferral Election shall be filed within thirty (30) days of the date on which an Executive is first eligible to participate, respectively, with respect to Compensation earned during the remainder of the calendar year.
	(c)	Subject to the limitation set forth in Section 3.01, the Deferral Election shall remain effective until modified or revoked and will contain the following:
		(i)	the Participant’s designation as to the amount of Compensation to be deferred;
		(ii)	the beneficiary or beneficiaries of the Participant; and
		(iii)	such other information as the Administrator may require.
	(d)	The maximum amount that may be deferred each Plan Year is fifty percent (50%) of the Participant’s base salary and one hundred percent (100%) of the Participant’s annual incentive bonus.
3.02	Company Contributions. The Board may determine for any Plan Year that the Company will make matching contributions or a Company contribution on behalf of some or all Participants. The Board may make such determination at such time as during the Plan Year that it determines appropriate.
3.03	Time of Contributions. Deferrals shall be credited to the Account of the appropriate Participant as of the Deferral Date. Company Contributions shall be credited to the Account of the appropriate Participant as of Company Contribution Date.

ARTICLE 4.
VESTNG

4.01 Vesting of Deferrals. A Participant shall have a vested right to his Account attributable to Deferrals and any earnings on the investment of such Deferrals. Except as provided below, a Participant shall become one hundred percent (100%) vested in Company Contributions on the fifth (5th) anniversary of last day of the Plan Year in which the Company Contribution is credited to the Participant’s Account, provided that the Executive remains employed by the Company or an Affiliate through that date (e.g., all Company contributions credited to a Participant’s Account for the 2008 Plan Year shall become vested on December 31, 2013), provided the Executive remains employed by the Company or an Affiliate through that date. Each Company Contribution will become vested separately. Notwithstanding the foregoing, a Participant shall (i) as of the date a Participant becomes one hundred percent (100%) vested in matching contributions to the Company’s qualified 401(k) plan (the “401(k) Plan), the Participant shall be one hundred percent (100%) vested in Company Contributions that are made to the Participant’s Account to restore the matching contribution that the Participant would have been entitled to under the 401(k) Plan but for the Participant’s electing to make Deferrals to this Plan; and (ii) become one hundred percent (100%) upon a Change of Control of the Company, the Executive’s Normal Retirement Date or the Participant’s death, provided that the Participant is employed by the Company on the date of the Change of Control, Normal Retirement Date or the Participant’s death. Upon the Participant’s Separation from Service, the Participant shall forfeit all Company Contributions that have not yet become vested under this Section. Upon the Administrator’s determination that the Participant’s Separation from Service has occurred for Cause, the Participant shall forfeit the Participant’s entire Company Contributions Account, regardless of whether all or a portion of such Company Contributions had become vested under this Section. The Board may accelerate vesting in Company Contributions in its sole discretion.

ARTICLE 5.
ACCOUNTS

5.01 Accounts. The Administrator shall establish and maintain a bookkeeping account in the name of each Participant. The Participant’s Deferral Account shall be credited with Units, as defined in Section 5.02(a). To the extent that the Participant directs the investment of all or a portion of Participant’s Company Contribution Account in Units, such Company Contribution Account shall be credited with Units in the same manner as the Participant’s Deferral Account. The Company shall specify additional investment measures, which shall be credited or debited with investment gains and losses in the manner described in Section 5.02. Each Participant’s Account shall be debited by any distributions made plus any federal, state and/or local tax withholding as may be required by applicable law. Distributions under ARTICLE 6 shall be equal to the Participant’s Account balance as of the date of the applicable distribution thereunder.

5.02	Investments, Gains and Losses.
	(a)	The Participant’s Deferral Account and the portion of the Participant’s Company Contribution Account which the Participant has directed to be invested in Units will be credited with the hypothetical number of stock units (“Units”), calculated to the nearest thousandths of a Unit, determined by dividing the amount of the Deferrals on the Deferral Date or the Company Contribution Date by the closing market price of the Company’s common stock as reported on the NASDAQ for such date or if that date is not a trading day, for the trading day immediately preceding such date. The Participant’s Account will also be credited with the number of Units determined by multiplying the number of Units in the Participant’s Account by any cash dividends declared by the Company on its common stock and dividing the product by the closing market price of the Company’s common stock as reported on the NASDAQ on the related dividend payment date, and also by multiplying the number of Units in the Participant’s Account by any stock dividends declared by the Company on its common stock.

(b)	The portion of a Participant’s Company Contribution Account that is investment alternatives made available by the Company other than Units shall be credited or debited with earnings or losses that the would have been realized had the Participant actually invested that portion of Participant’s Company Contribution Account in such alternative investments, as determined by the Administrator.
(c)	The Administrator shall adjust the amounts credited to each Participant’s Account to reflect Deferrals, distributions and any other appropriate adjustments, including, not by way of limitation appropriate adjustments to reflect any change in the outstanding common shares of the Company as a result of a merger, reorganization, stock split, reverse stock split, stock dividend, recapitalization, combination, reclassification. Such adjustments shall be made as frequently as is administratively feasible.
(d)	The Participant’s Account, established pursuant to Section 5.01, will be valued by the Administrator on a yearly basis.
(e)	Any amounts contributed to a “Rabbi Trust” as provided in Section 8.02 shall be invested by the trustee of the Rabbi Trust in accordance with written directions from the Company. Such directions shall provide the trustee with the investment discretion to invest the above-referenced amounts within broad guidelines established by Administrator and Company as set forth therein. Notwithstanding the foregoing, unless required otherwise by applicable law, any purchases of Company common stock shall occur on the Deferral Date or the dividend payment date the Rabbi Trust Trustee will, unless such date is not a trading day in which case the purchase shall occur on the next trading day.
(f)	To the extent that the Company contributes amounts to a Rabbi Trust to set aside assets for the future payment of the Participant’s benefits under this Plan, the provisions of this Article 5 relating to the adjustment to the Participant’s Account to reflect investment gains or losses will not apply and instead, the Participant’s Account will be adjusted for investment gains and losses by reference to the gains in losses of the Rabbi Trust assets that are attributable to the Participant’s benefit under this Plan.

(g) The Company shall be responsible for the payment of any income taxes payable as a result of Rabbi Trust earnings and such taxes shall not be paid from the assets of the Rabbi Trust unless otherwise required by applicable law.

ARTICLE 6.
DISTRIBUTIONS

6.01	Payment. Payment of the vested portion of a Participant’s Account shall commence as soon as administratively feasible immediately following the Participant’s Separation from Service, provided, however, that if a Participant, prior to commencing participation in the Plan and prior to any Deferrals being made, executes an irrevocable election to commence payments upon attainment of age sixty-five (65), payments shall commence as soon as administratively feasible immediately following the Participant’s attainment of age sixty-five (65). The Participant may elect, in writing, any one of the following forms of payment, provided that such election is delivered to the Administrator and is made at the time of the Deferral Election. Subject to the Administrator’s approval, the Participant may specify a combination of the distribution forms described in (a) and (b), provided that the Participant designates the portions of Participant’s Account that will be so distributed in increments of ten percent (10%).
	(a)	single lump-sum payment of the value of the Participant’s Account; or
	(b)	substantially equal annual installments over a period of either five (5) years or ten (10) years.
	Notwithstanding any provision of this Plan to the contrary, if the Participant is considered a Specified Employee at Separation from Service under such procedures as established by the Company in accordance with Section 409A of the Code, benefit distributions that are made upon Separation from Service may not, to the extent required by Section 409A of the Code, commence earlier than six (6) months after the date of such Separation from Service. Any such distribution or series of distributions to be made due to a Separation from Service shall commence no earlier than the first day of the seventh month following the Separation from Service, provided that to the extent permitted by Section 409A of the Code, only payments scheduled to be paid during the first six (6) months after the date of such Separation from Service shall be delayed and such delayed payments shall be paid in a single sum on the first day of the seventh month following the date of such Separation from Service.

6.02	Commencement of Payment upon Death or Change of Control.
	(a)	Upon the death of a Participant, all amounts credited to his Account shall be paid in a single lump sum, as soon as administratively feasible, to his beneficiary or beneficiaries, as determined under ARTICLE 7.
	(b)	Upon a Change of Control, all amounts credited to a Participant’s Account shall be paid in a single lump sum as of the date of the Change of Control, unless the Participant elects in Participant’s Deferral Election to receive payment in accordance with the Participant’s election described in Section 6.1 regardless of the occurrence of a Change of Control. In the case of such election, a Participant’s Separation from Service shall not be considered to have occurred for purposes of this Plan until the Participant’s Separation from Service from the successor in interest to the Company or the Affiliate for which the Executive was employed immediately prior to the Change of Control.
6.03	Form of Payment.
	(a)	A Participant, former Participant, or deceased Participant’s beneficiary or legal representative may elect at any time to have any or all payouts, or remaining payouts, of the Participant’s Account that is invested in Units to be paid out in cash or in shares of Company common stock. At any time before the end of the calendar year prior to Separation from Service, an Executive may revise and supersede any or all of his or her previous elections with respect to the form of payment (cash or shares of common stock). The portion of a Participant’s Account that is not invested in Units shall be payable only in cash. In the case of a lump sum payment to be made in cash, the amount of such payment shall be based on the number of Units in the Participant’s Account on the Payment Date multiplied by the closing market price of the Company’s common stock as reported on the NASDAQ for such date or, if that date is not a trading day, then for the trading day immediately preceding such date.
	(b)	If a Participant’s Account is payable in cash and in installments, the amount of the first cash installment payment shall be a fraction of the Units in the Participant’s Account on the date of the initial installment payment, the numerator of which is one and the denominator of which is the total number of installments elected. Each subsequent installment shall be calculated in the same manner as of each subsequent annual payment except that the denominator shall be reduced by the number of installments which have been previously paid. The amount of cash payable for Deferrals accounted for as Units based on Company common stock value will be paid, as described above, based on the number of Units in the Participant’s Account on the Payment Date multiplied by the closing market price of the Company’s common stock as reported on the NASDAQ for such date or, if that date is not a trading day, then for the trading day immediately preceding such date.

	(c)	If a Participant’s Account is payable in Company common stock and in installments, the amount of the first installment payment shall be a fraction of the value of the Units in the Participant’s Account on the Payment Date for the initial installment, for which the numerator is one (1) and the denominator is the total number of installments elected. Each subsequent annual payment shall be calculated in the same manner except that the denominator shall be reduced by the number of installments which have been previously paid. Except for the final installment payment, only whole shares shall be payable, and the value of any fractional share payable shall be retained in the Participant’s Account until the final installment payment, at which time the value of any fractional share payable shall be paid in cash, based on the fractional share multiplied by the closing market price of the Company’s common stock as reported on the NASDAQ for such Payment Date, or if that date is not a trading day, for the trading day immediately preceding such date.
ARTICLE 7.
BENEFICIARIES
7.01	Beneficiaries. Each Participant may from time to time designate one or more persons (who may be any one or more members of such person’s family or other persons, administrators, trusts, foundations or other entities) as his beneficiary under the Plan. Such designation shall be made on a form prescribed by the Administrator. Each Participant may at any time and from time to time, change any previous beneficiary designation, without notice to or comment of any previously designated beneficiary, by amending his previous designation on a form prescribed by the Administrator. If the beneficiary does not survive the Participant (or is otherwise unavailable to receive payment) or if no beneficiary is validly designated, then the amounts payable under this Plan shall be paid to the Participant’s estate. If more than one person is the beneficiary of a deceased Participant, each such person shall receive a pro rata share of any death benefit payable unless otherwise designated on the applicable form. If a beneficiary who is receiving benefits dies, all benefits that were payable to such beneficiary shall then be payable to the estate of that beneficiary.
7.02	Lost Beneficiary.
	(a)	All Participants and beneficiaries shall have the obligation to keep the Administrator informed of their current address until such time as all benefits due have been paid.
	(b)	If a Participant or beneficiary cannot be located by the Administrator exercising due diligence, then, in its sole discretion, the Administrator may presume that the Participant or beneficiary is deceased for purposes of the Plan and all unpaid amounts (net of due diligence expenses) owed to the Participant or beneficiary shall be paid to the co-beneficiary or secondary beneficiary designated by the Participant, or in the absence of a co-beneficiary or secondary beneficiary, to the Participant’s estate.

ARTICLE 8.
FUNDING
8.01	Prohibition Against Funding. Should any investment be acquired in connection with the liabilities assumed under this Plan, it is expressly understood and agreed that the Participants and beneficiaries shall not have any right with respect to, or claim against, such assets nor shall any such purchase be construed to create a trust of any kind or a fiduciary relationship between the Company and the Participants, their beneficiaries or any other person. Any such assets shall be and remain a part of the general, unpledged, unrestricted assets of the Company, subject to the claims of its general creditors. It is the express intention of the parties hereto that this arrangement shall be unfunded for tax purposes. Each Participant and beneficiary shall be required to look to the provisions of this Plan and to the Company itself for enforcement of any and all benefits due under this Plan, and to the extent any such person acquires a right to receive payment under this Plan, such right shall be no greater than the right of any unsecured general creditor of the Company. The Company shall be designated the owner and beneficiary of any investment acquired in connection with its obligation under this Plan.
8.02	Deposits. Notwithstanding paragraph 8.01, or any other provision of this Plan to the contrary, the Company may deposit any amounts it deems appropriate to pay the benefits under this Plan to a “Rabbi Trust” as established pursuant to Treasury Department Revenue Procedures 92-64 and 92-65.
8.03	Withholding of Executive Deferrals. The Administrator is authorized to make any and all necessary arrangements with the Company in order to withhold the Participant’s Deferrals under Section 3.01 hereof from the Participant’s Compensation. The Administrator shall determine the amount and timing of such withholding.
ARTICLE 9.
CLAIMS ADMINISTRATION
9.01	General. In the event that a Participant or his beneficiary does not receive any Plan benefit that is claimed, such Participant or beneficiary shall be entitled to consideration and review as provided in this ARTICLE 9.
9.02	Claim Review. Upon receipt of any written claim for benefits, the Administrator shall be notified and shall give due consideration to the claim presented. If the claim is denied to any extent by the Administrator, the Administrator shall furnish the claimant with a written notice setting forth (in a manner calculated to be understood by the claimant):

	(a)	The specific reason or reasons for denial of the claim;
	(b)	A specific reference to the Plan provisions on which the denial is based;
	(c)	A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and
	(d)	An explanation of the provisions of this Article.
9.03	Right of Appeal. A claimant who has a claim denied under Section 9.02 may appeal to the Administrator for reconsideration of that claim. A request for reconsideration under this Section 9.03 must be filed by written notice within sixty (60) days after receipt by the claimant of the notice of denial under Section 9.02.
9.04	Review of Appeal. Upon receipt of an appeal the Administrator shall promptly take action to give due consideration to the appeal. Such consideration may include a hearing of the parties involved, if the Administrator feels such a hearing is necessary. In preparing for this appeal the claimant shall be given the right to review pertinent documents and the right to submit in writing a statement of issues and comments. After consideration of the merits of the appeal the Administrator shall issue a written decision, which shall be binding on all parties subject to Section 9.06 below. The decision shall be written in a manner calculated to be understood by the claimant and shall specifically state its reasons and pertinent Plan provisions on which it relies. The Administrator’s decision shall be issued within sixty (60) days after the appeal is filed, except that if a hearing is held the decision may be issued within one hundred twenty (120) days after the appeal is filed.
9.05	Designation. The Administrator may designate any other person of its choosing to make any determination otherwise required under this Article.
9.06	Arbitration. Each and every dispute or controversy arising pursuant to the Plan or a Deferral Election shall, after exhaustion of the review procedure set forth in Section 9.04, be settled exclusively by arbitration, conducted before a single arbitrator sitting in Chicago, Illinois in accordance with the rules of JAMS then in effect. The costs and expenses of arbitration, including the fees of the arbitrators, shall recover as expenses all reasonable attorneys’ fees incurred by it in connection with the arbitration proceeding or any appeals therefrom.
ARTICLE 10.
GENERAL PROVISIONS
10.01	Administrator: The Administrator:
	(a)	Is expressly empowered to limit the amount of Compensation that may be deferred; to deposit amounts in accordance with Section 8.02 hereof; to interpret the Plan, and to determine all questions arising in the administration, interpretation and application of the Plan; to employ actuaries, accountants, counsel, and other persons it deems necessary in connection with the administration of the Plan; to request any information from the Company it deems necessary to determine whether the Company would be considered insolvent or subject to a proceeding in bankruptcy; and to take all other necessary and proper actions to fulfill its duties as Administrator.

	(b)	Shall not be liable for any actions by it hereunder, unless due to its own negligence, willful misconduct or lack of good faith.
	(c)	Shall be indemnified and saved harmless by the Company, if the Administrator is not the Company, from and against all personal liability to which it may be subject by reason of any act done or omitted to be done in its official capacity as Administrator in good faith in the administration of the Plan, including all expenses reasonably incurred in its defense in the event the Company fails to provide such defense upon the request of the Administrator. The Administrator is relieved of all responsibility in connection with its duties hereunder to the fullest extent permitted by law, short of breach of duty to the beneficiaries.
10.02	No Assignment. Benefits or payments under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or the Participant’s beneficiary, whether voluntary or involuntary, and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber, attach or garnish the same shall not be valid, nor shall any such benefit or payment be in any way liable for or subject to the debts contracts, liabilities, engagement or torts of any Participant or beneficiary, or any other person entitled to such benefit or payment pursuant to the terms of this Plan, except to such extent as may be required by law. If any Participant or beneficiary or any other person entitled to a benefit or payment pursuant to the terms of this Plan becomes bankrupt or attempts to alienate, sell, transfer, assign, pledge, encumber, attach or garnish any benefit or payment under this Plan, in whole or in part, or if any attempt is made to subject any such benefit or payment, in whole or in part, to the debts, contracts, liabilities, engagements or torts of the Participant or beneficiary or any other person entitled to any such benefit or payment pursuant to the terms of this Plan, then such benefit or payment, in the discretion of the Administrator, shall cease and terminate with respect to such Participant or beneficiary, or any other such person.
10.03	No Rights to Remain an Employee. Participation in this Plan shall not be construed to confer upon any Participant the legal right to be retained as a employee of the Company or an Affiliate, or give a Participant or beneficiary, or any other person, any right to any payment whatsoever, except to the extent of the benefits provided for hereunder. The Company’s or an Affiliate’s right to terminate the employment of a Participant shall continue to the same extent as if this Plan had never been adopted.

10.04	Incompetence. If the Administrator determines that any person to whom a benefit is payable under this Plan is incompetent by reason of physical or mental Disability, the Administrator shall have the power to cause the payments becoming due to such person to be made to another for his benefit without responsibility of the Administrator to see to the application of such payments. Any payment made pursuant to such power shall, as to such payment, operate as a complete discharge of the Company and the Administrator, if the Administrator is not the Company.
10.05	Identity. If, at any time, any doubt exists as to the identity of any person entitled to any payment hereunder or the amount or time of such payment, the Administrator shall be entitled to hold such sum until such identity or amount or time is determined or until an order of a court of competent jurisdiction is obtained. The Administrator shall also be entitled to pay such sum into court in accordance with the appropriate rules of law. Any expenses incurred by the company or the Administrator incident to such proceeding or litigation shall be charged against the Account of the affected Participant.
10.06	No Liability. No liability shall attach to or be incurred by any manager of the Company, or any Administrator under or by reason of the terms, conditions and provisions contained in this Plan, or for the acts or decisions taken or made thereunder or in connection therewith; and as a condition precedent to the establishment of this Plan or the receipt of benefits thereunder, or both, such liability, if any, is expressly waived and released by each Participant and by any and all persons claiming under or through any Participant or any other person. Such waiver and release shall be conclusively evidenced by any act or participation in or the acceptance of benefits or the making of any election under this Plan.
10.07	Expenses. All expenses incurred in the administration of the Plan, whether incurred by the Company or the Plan, shall be paid by the Company.
10.08	Insolvency. Should the Company be considered insolvent, the Company, through its Board and chief executive officer, shall give immediate written notice of such to the Administrator of the Plan, if the Company is not the Administrator. Upon receipt of such notice, the Administrator shall cease to make any payments to Participants and their beneficiaries and shall hold any and all assets attributable to the Company for the benefit of the general creditors of the Company.
10.09	Amendment and Termination.
	(a)	The Company may unilaterally terminate this Plan at any time. Except as provided in this Section, the termination of this Plan shall not cause a distribution of benefits under this Plan. Rather, upon such termination benefit distributions will be made at the time specified in ARTICLE 6.

	(b)	If the Company terminates the Plan within thirty (30) days before, or twelve (12) months after a Change in Control, distributions may be made provided that all distributions are made no later than twelve (12) months following such termination of the Plan and further provided that all of the Company’s plans that would be aggregated with this Plan under Code Section 409A or the regulations thereunder are terminated so that all participants in the similar arrangements are required to receive all amounts of compensation deferred under the terminated Plans within twelve (12) months of the termination of the Plans.
	(c)	The Company may terminate the Plan upon the Company’s dissolution or with the approval of a bankruptcy court provided that the amounts deferred under the Plan are included in the Executive’s gross income in the latest of (i) the calendar year in which the Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution is administratively practical.
	(d)	The Company may terminate the Plan and all other Plans required to be aggregated with this Plan under Section 409A of the Code or the regulations thereunder), provided such termination does not occur proximate to a downturn in the financial health of the Company, and further provided that all distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and the Company does not adopt any new non-account balance plans for a minimum of three (3) years following the date of such termination
	(e)	Any funds remaining after the termination of the Plan, and satisfaction of all liabilities to Participants and others, shall be returned to the Company.
10.10	Company Determinations. Any determinations, actions or decisions of the Company (including but not limited to, Plan amendments and Plan termination) shall be made by the Board or a properly delegated committee thereof in accordance with its established procedures.
10.11	Construction. All questions of interpretation, construction or application arising under or concerning the terms of this Plan shall be decided by the Administrator, in its sole and final discretion, whose decision shall be final, binding and conclusive upon all persons.
10.12	Governing Law. This Plan shall be governed by, construed and administered in accordance with the laws of the State of Illinois, other than its laws respecting choice of law.

10.13	Headings. The Article headings contained herein are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge or describe the scope or intent of this Plan, nor in any way shall they affect this Plan or the construction of any provision thereof.
10.14	Terms. Capitalized terms shall have meanings as defined herein. Singular nouns shall be read as plural, masculine pronouns shall be read as feminine, and vice versa, as appropriate.
10.15	Compliance with Code Section 409A. The Company intends that this Plan comply with the applicable provisions of applicable law, including, by way of example and not limitation, Section 409A of the Code and the regulations promulgated thereunder. Any provision of this Plan which is not in compliance with such laws shall be deemed amended in such manner as is necessary to comply with applicable law and the Participant’s rights under this Plan shall be subject to the provisions of the Plan so amended.

IN WITNESS WHEREOF, the Company has adopted this Plan as of the date indicated below.

	CENTRUE FINANCIAL CORPORATION
Dated: December 12, 2007	By:	/s/Thomas Daiber
	Its:	President and CEO

EX-14.1

EXHIBIT 14.1

CENTRUE FINANCIAL
CORPORATION

CODE OF ETHICS

Board Approved: January 30, 2009

Centrue Financial Corporation
Code of Ethics

INTRODUCTION

The Code of Ethics which follows has been adopted by the Board of Directors of Centrue Financial Corporation and its subsidiary, Centrue Bank, (collectively referred to as “Centrue Financial Corporation” or the “Company”). The Code is in­tended to provide guidance to the directors, officers, and employ­ees concerning their personal and professional ethics. It is not intended to be all inclusive nor is it intended to limit personal activities.

The policy statements which follow concern adherence to applicable laws and regulations and proper individual behavior when faced with situations in which our personal interests conflict or appear to conflict with the interests of other parties involved with Centrue Financial Corporation. Among the standards to be observed are the following:

1.	We will conduct our personal and business dealings in accord with the letter, spirit, and intent of relevant laws and regulations.
2.	We will act toward others in a manner in which we desire them to act toward us. We will not engage in any illegal, dishonest, or unethical conduct. We will follow the highest ethical standards.
3.	We will accept individual responsibility for our actions without seeking refuge or anonymity behind Centrue Financial Corporation’s reputation or that of any smaller group acting on Centrue Financial Corporation’s behalf.
4.	We believe in providing fair and efficient service to our customers.
5.	We will treat our fellow employees like customers, giving them the same exceptional service that our outside customers receive.
6.	We will be completely candid with our fellow employees in all business matters so that decisions will be reasonable and based upon all relevant facts.

The Code should be read and an attempt be made to understand not only the letter but the intent of the Code. When faced with a confusing situation, guidance may be sought from your immediate supervisor or a member of the Human Resource Department.

President & CEO

Centrue Financial Corporation

2.

Centrue Financial Corporation
Code of Ethics

INDEX

Policy		Page Number
CE.000	Responsibilities of Employees	4
CE.000	General Philosophy	6
CE.001	Bank Bribery Act	8
CE.010	Compliance Certification	9
CE.020	Confidential Information	10
CE.030	Conflicts of Interest	11
CE.040	Directors’ Code of Ethics	14
CE.050	Dishonesty	15
CE.060	Gifts, Fees, Legacies, and Investments	16
CE 065	Purchasing	18
CE.070	Outside Employment & Business Interests	20
CE.080	Political Activity	21
CE.090	Recordkeeping	22
CE.100	Soft Dollar Arrangement	23
CE.110	Undue Influence	24
CE.120	Insider Trading	25
CE.130	Extensions of Credit	26
CE.140	Fair Dealing	27
CE.150	Protection and Proper Use of Centrue Financial Corporation Property	28
CE.160	Compliance With Laws, Rules, and Regulation	29
CE.170	Reporting of Illegal or Unethical Behavior	31
CE.180	Administration and Waiver of Code of Ethics	33
CE.190	Misleading Financial Information	34
CE.200	Special Rules That Apply to Investment Officers	35
CE.210	Senior Financial Officers’ Code of Ethics	36

3.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.000
Subject	Responsibilities of Employees
Effective	January 30, 2007
Revised	January 29, 2009

RESPONSIBILITIES OF EMPLOYEES

As an employee, you have a number of responsibilities with regard to Centrue Financial Corporation’s Code of Ethics. These responsibilities include the following:

1.	You must learn, understand, and comply with the various laws that are applicable to you in performing your duties on behalf of Centrue Financial Corporation. If you have doubt about what the law requires, you should ask your supervisor for an explanation.
2.	As a community bank that provides exceptional customer service, we will treat all customers and suppliers in an honest, ethical, and fair manner. Customer satisfaction is a priority.
3.	Directors/officers/employees are prohibited from exercising undue influence over subordinates in situations that would not be in the best interest of Centrue Financial Corporation. Any such situation should be reported promptly to the President and Chief Executive Officer. If you become aware of a situation where you believe that the President and CEO is exercising undue influence, you should promptly report your finding to the Chairman of the Board or the Chairman of the Audit Committee.
4.	Avoid situations where personal interests are, or appear to be, in conflict with those of Centrue Financial Corporation.
5.	Safeguard and properly use Centrue Financial Corporation’s proprietary information, assets, and resources, as well as the proprietary information, financial information, assets, and resources of customers.
6.	Maintain confidentiality of non-public information and do not act on such information for personal gain. Acting on such information is not only a violation of this code, but would also be a violation of law.
7.	Exercise good judgment in making legal political contributions or in using political influence in your personal political activities.
8.	Promptly report violations of the Code of Ethics to the President and Chief Executive Officer or if the violation involves the President and CEO then promptly report the situation to the Chairman of the Board or the Chairman of the Audit Committee. You may also report violations to the Human Resource Department or through the Company’s anonymous hotline.

4.

Centrue Financial Corporation
Code of Ethics

To Submit an Anonymous Report Online:
	•	Go to www.reportit.net.
	•	Click on Reportit.net and enter your company:
		Username: Centrue
		Password: True
	•	You will then enter your company’s web interface.
	•	Enter the report information and click SUBMIT.
	•	The latest in data encryption technology is used to protect your identity and report.
	•	Your company is alerted that a report has been made.
To Submit an Anonymous Report by Telephone:
	•	Call the toll free hotline number, 1-877-778-5463.
	•	Provide the company Username and Password (as above).
	•	A trained operator will guide you through a series of questions.

5.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.000
Subject	General Philosophy
Effective	March 31, 2003
Revised	February 8, 2008

GENERAL PHILOSOPHY

Centrue Financial Corporation strictly forbids any employee, officer, director, agent, or attorney of this Company to solicit for themselves or a third party anything of value from anyone in return for any business, service, or confidential information of the Company. Similarly, it is forbidden for a person associated with the Company to accept anything of value from anyone in connection with the business of the Company, either before or after a transaction is discussed or consummated. Furthermore, if any individual is offered something of value from a customer beyond what is expressly authorized in this policy statement, that individual must disclose the facts of the offer to the Human Resource Department immediately.

Title 18 U.S. Code, Section 215, makes it a criminal offense for any Centrue Financial Corporation employee to corruptly:

	•	Solicit for himself or herself or for a third party anything of value from anyone in return for any business, service, or confidential information of Centrue Financial Corporation; or
	•	Accept anything of value (other than normal authorized compensation) from anyone in connection with the business of Centrue Financial Corporation, either before or after a transaction is discussed or consummated.
Employees, officers, and directors are prohibited from:
	•	Personally benefiting from opportunities that are discovered through the use of Centrue Financial Corporation property, contacts, information, or position.
	•	Accepting employment or engaging in a business (including consulting or similar arrangements) that may conflict with the performance of your duties or Centrue Financial Corporation’s interest.
	•	Soliciting, demanding, accepting, or agreeing to accept anything of value from any person in conjunction with the performance of your employment or duties at Centrue Financial Corporation.
	•	Acting on behalf of Centrue Financial Corporation in any transaction in which you or your immediate family has a significant direct or indirect financial interest.

6.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.000
Subject	General Philosophy
Page	2

There are certain situations in which you may accept a personal benefit from someone with whom you transact business such as:

	•	Accepting a gift in recognition of a commonly recognized event or occasion (such as a promotion, new job, wedding, retirement, or holiday). An award in recognition of service and accomplishment may also be accepted without violating these guidelines so long as the gift does not exceed $100 from any one individual in any calendar year.
	•	Accepting something of value if the benefit is available to the general public under the same conditions on which it is available to you.
	•	Accepting meals, refreshments, travel arrangements and accommodations, and entertainment of reasonable value in the course of a meeting or other occasion to conduct business.
	•	Fostering business relations if the expense would be reimbursed by Centrue Financial Corporation as a business expense if the other party did not pay for it.
This Code of Ethics:
	•	Requires the highest standards for honest and ethical conduct, including proper and ethical procedures for dealing with actual or apparent conflicts of interest between personal and professional relationships.
	•	Requires full, fair, accurate, timely, and understandable disclosure in the periodic reports required to be filed by Centrue Financial Corporation with governmental and regulatory agencies.
	•	Requires compliance with applicable laws, rules, and regulations.
	•	Addresses potential or apparent conflicts of interest and provides guidance for employees, officers, and directors to communicate those conflicts to Centrue Financial Corporation.
	•	Addresses misuse or misapplication of Centrue Financial Corporation property and corporate opportunities.
	•	Requires the highest level of confidentiality and fair dealing within and outside the Centrue Financial Corporation environment.
	•	Requires reporting of any illegal behavior.

If anything prescribed herein will cause you difficulty, you should discuss the problem with the Human Resource Department. Until a written waiver has been granted by the Human Resource Department, we expect each of our directors, officers, and employees to comply with this statement of Company policy.

7.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.001
Subject	Bank Bribery Act
Effective	January 20, 1997
Revised	January 29, 2009

BANK BRIBERY ACT

The Bank Bribery Act provides in part that:

1.	Whoever corruptly gives, offers, or promises anything of value to any person, with intent to influence or reward an officer, director, employee, agent, or attorney of a financial institution in connection with any business or transaction of such institution; or
2.	An officer, director, employee, agent, or attorney of a financial institution, corruptly solicits or demands for the benefit of any person, or corruptly accepts or agrees to accept anything of value from any person, intending to be influenced or rewarded in connection with any business or transaction of such institution shall be guilty of an offense.

Whomever commits the violation will be fined not more than the greater of $1,000,000 or three times the value of the item received, offered, etc., and/or imprisoned for not more than 30 years. If the value of the item received, offered, etc., does not exceed $100, the fine will be not more than $1,000 and/or imprisonment for not more than 1 year.

8.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.010
Subject	Compliance Certification
Effective	January 20, 1997
Revised	January 30, 2007

COMPLIANCE CERTIFICATION

Centrue Financial Corporation asks that all directors and employees annually sign a certificate attesting to compliance with this policy statement. The blank form used for this purpose appears on the last page of this Code of Ethics.

9.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.020
Subject	Confidential Information
Effective	January 20, 1997
Revised	February 8, 2008

CONFIDENTIAL INFORMATION

In the course of performing normal duties, Centrue Financial Corporation employees acquire confidential information (including but not limited to information about customer finances, the business strategies and/or plans of the Company, or other data acquired through affiliation with the organization) consi­dered to be extremely sensitive. This information shall not be revealed to unauthorized persons nor shall customers’ finances be discussed with others within the organization unless their duties require the information. Information about customers can be released only when authorized by the customer or subpoenaed by a court, the IRS, or appropriate authorities. The information released must be accurate and within the confines of the release-authorizing document.

Centrue Financial Corporation recognizes the importance and duty to protect the confidential and private nature of customers’ financial and personal information. However, when customers use the Bank as a credit reference, they are giving the Bank the authority to release credit information. Banks also share credit information with each other. This sharing is done only to:

1.	Support credit decisions; and
2.	Give assurances that source confidentiality will be protected and that the information is accurate and not misleading.

The inherent conflict between the customer’s right to confidence and privacy and the need for creditors to share credit experience should be recognized. This conflict cannot be entirely resolved, but its consequences can be mitigated by exercising extreme care when exchanging credit information.

10.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.030
Subject	Conflicts of Interest
Effective	January 20, 1997
Revised	February 8, 2008

CONFLICTS OF INTEREST

Confidential information about Centrue Financial Corporation’s customers that reflects favorably or adversely on the investment value of any business enterprise is “insider” information. It may not be used for personal investment advantage or provided to others for their investment advantage. A Centrue Financial Corporation employee may not represent Centrue Financial Corporation in any transaction where he or she has a material connection or a financial interest. Examples of material connections would include rela­tives or personal friends - whether the transaction involves them as individuals or as principals in a firm doing business with Centrue. An example of a financial interest would be an employee’s involvement as a proprietor, partner, or joint venturer in a firm doing business with Centrue Financial Corporation.

Centrue Financial Corporation employees should avoid taking part in transactions involving any of the above circumstances. By “transactions” it means not only making loans, but also approval of overdrafts, accepting checks on uncollected funds, waiving of NSF fees, overdraft or late charges, and waiving the requirement for financial statements or collateral documents. When there is a potential conflict of interest, the transaction should be referred to someone of equal or higher authority.

It is impossible to list every situation where such conflict could occur, but the following guidelines may help you determine whether or not your actions are a conflict of interest violation. These represent some of the kinds of business dealings where conflicts of interest could occur:

1.	The confidential nature of account relationships has been breached.
2.	Fiduciary responsibilities are handled in a less than prudent manner; business is done with Centrue Financial Corporation on the basis of friendship, family ties, the giving and receiving of gifts or vendor sponsored incentive contests, or to curry favor with some special interest group.
3.	Centrue Financial Corporation’s name is used to enhance opportunities for others in their political, investment, or retail purchasing activities.

11.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.030
Subject	Conflicts of Interest
Page	2

For example, when Centrue Financial Corporation employees are asked to be directors of outside corporations, the relationship generally involves the use of Centrue Financial Corporation’s name, which can create the impression of an endorsement of financial responsibility and business practices. Since such duties also involve time, it is Centrue Financial Corporation’s policy for officers and employees ordinarily not to serve in such capacities with for-profit corporations; and, when compelling business or personal reasons are present, such service may be authorized on a case-by-case basis but only with approval of the President and Chief Executive Officer. Special consideration is usually made for boards of small family corporations and cooperative and condominium apartments where no public aspects are involved.

The following policies with respect to these relationships should be kept in mind:

1.	It should be understood that an officer or employee will withdraw from the directorship at such time as the Board feels it to be appropriate.
2.	The amount of time devoted to the activity shall not interfere with normal duties.
3.	The officer or employee involved will abstain from approving Centrue Financial Corporation extensions of credit to the organization.
4.	Because of the conflict of interest, inside information, and possible trading problems, it is not appropriate for investment and fiduciary unit personnel and committee members to serve as directors of publicly owned companies. Any exception to this policy must receive the approval of the Board.

The policy described above is applicable to service with for-profit corporations and is to be contrasted with service with not-for-profit civic, charitable, or religious organizations. Service with the latter organizations generally does not carry the same risks of implied endorsement by Centrue Financial Corporation and can provide valuable opportunities for employees, officers, and our communities. Service with these organizations can also assist the Bank in maintaining familiarity with the credit and other financial needs of residents of our communities. Centrue Financial Corporation therefore strongly encourages involvement by its employees, officers, and directors in not-for-profit civic, charitable, and community groups.

All officers must refrain from participating in the approval of an extension of credit (or any modification of credit terms) to a business of which they are an officer, owner, or director.

12.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.030
Subject	Conflicts of Interest
Page	3

When a Centrue Financial Corporation officer or other employee, as a director or officer of another corporation, is granted any signing authority over any of the other corporation’s accounts with Centrue Financial Corporation, approval of the Chief Executive Officer must be obtained before exercising the signing authority. In this regard, the best practice is for the Centrue Financial Corporation employee to decline the opportunity to have signing authority over any Centrue Financial Corporation account which the corporation maintains.

13.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.040
Subject	Directors’ Code of Ethics
Effective	January 20, 1997
Revised	January 29, 2009

DIRECTORS’ CODE OF ETHICS

The directors of Centrue Financial Corporation and its subsidiary, Centrue Bank, were elected to serve the needs of the stockholders, the communities, and the employees - not to serve the financial needs of directors. Legal, regulatory, and ethical considerations make it mandatory that directors avoid most of the conflicts of interest situations outlined in CE.030 for employees. In addition, directors must:

1.	Conflicts of Interest. Disclose to the Chairman of the Board of Centrue Financial Corporation any actual or potential conflicts of interest as soon as the situation arises. (This includes disclosure of any material interest in the business of a borrower, an applicant, or other customer. It also includes any gift or monetary offers made for the purpose of influ­encing a Centrue Financial Corporation decision.) Directors are specifically required to divulge all conflict of interest situations to the Chairman and to thereafter abstain from voting (or influencing other votes) regarding the conflict. In addition, directors are not to use pressure or undue influence when discussing pending Company business with officers. Specifically, using undue influence on behalf of family, business associates, or close friends is prohibited.
2.	Arm’s Length Transaction. Use only arm’s length transactions when buying, selling, or leasing assets or services to Centrue Financial Corporation. (It is Centrue Financial Corporation’s policy to contract for assets and services using only arm’s length transactions that are in the best interest of Centrue Financial Corporation. Directors are asked to honor this policy and to refrain from asking for special consideration as Centrue Financial Corporation contracts for assets or services.)
3.	Independence. Centrue Financial Corporation and its subsidiary’s boards of directors consist of inside directors (directors who are also officers) and outside directors (directors who are not officers). Some of our directors have close associations with owners of large blocks of Company stock and others have no such association. Regardless of whether a director is an inside director or an outside director, and regardless of whether a director is associated with blocks of ownership stock or not, once elected to serve on the board of directors each director has a duty of independence. This means that each director, regardless of affiliations, has a legal and ethical duty of speaking, acting, and voting in accordance with the dictates of his or her conscience. Not only is this an ethical duty, it is a regulatory requirement, it is the conduct expected of each director, and it is the conduct that is in the best interests of the Company and its stakeholders.

14.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.050
Subject	Dishonesty
Effective	January 20, 1997
Revised	February 8, 2008

DISHONESTY

Because trust is the cornerstone of Centrue Financial Corporation’s relationships with its customers, employees must refrain from conduct which might give even the slightest appearance of dishonesty. Therefore, Centrue Financial Corporation employees must not among others:

1.	Transfer amounts to or from their personal accounts from or to customers’ accounts;
2.	Sign customers’ names to customer withdrawal slips, documents, drafts, checks, or money orders;
3.	Be an attorney in fact (Power of Attorney) for a customer who is not a close relative.

Any theft or embezzlement of Centrue Financial Corporation customer funds or falsification of records by any employee will subject the employee to disciplinary action including termination of employment. Any employee who has knowledge of any such theft, embezzlement, or falsification and fails to report such information to their immediate supervisor or senior management will be subject to disciplinary action including termination of employment.

Written notification of any defalcations will be reported to the appropriate regulators and law enforcement agencies as prescribed by Federal and State regulations.

15.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.060
Subject	Gifts, Fees, Legacies, and Investments
Effective	January 20, 1997
Revised	February 8, 2008

GIFTS, FEES, LEGACIES, AND INVESTMENTS

1.	Employees should not accept a loan from a customer or supplier. This prohibition does not apply to loans from banks or other financial institutions on customary terms to finance proper credit needs. Upon request, key employees may be asked to report all their bor­rowings from other financial institutions to their respective Board of Directors.
2.	Employees should not accept a fee for per­forming any act that Centrue Financial Corporation could have performed.
3.	It is improper for employees to accept a gift from a customer or from any other person seeking a relationship with Centrue Financial Corporation. This rule does not apply to: (a) food, refreshments, or entertainment at luncheon or business meetings; (b) advertising or promotional material of nominal value; (c) awards from charitable organizations; or (d) gifts of nominal value given on special occasions such as Christmas. (Nominal value is a value that would be within the employee’s ability to reciprocate on a personal basis or with a legitimate claim for reimburse­ment under similar circumstances.)
4.	Officers and employees, in their personal capacities, may give gifts at their expense to whomever they choose. However, all personnel are expected to consider the appearance of such action if the recipient is a customer, supplier, or government official, in addition to being a personal friend or acquaintance. The context of such action is important, and if the officer or employee believes his personal gift might be interpreted as consideration for an official or business favor, then something should be done to rebut this presumption and reinforce the personal nature of the gift.
5.	Each director, officer and employee of Centrue Financial Corporation and any of its affiliates, must report any stock owned in another financial institution that operates in the same market area (as later defined) as Centrue Financial Corporation and any of its affiliates. The ownership of stock in another financial institution is not prohibited unless the Board of Directors determines that the individual’s ownership of the stock conflicts with the individual’s performance of service to Centrue Financial Corporation.

16.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.060
Subject	Gifts, Fees, Legacies, and Investments
Page	2

	Centrue Financial Corporation’s market area is considered to be northwest Illinois, central Illinois, southern Illinois, metropolitan Chicago, western Indiana, and metropolitan St. Louis, Missouri.
	Ownership of stock in publicly traded banks, bank holding companies, or financial institutions is expressly permitted unless the individual owns more than ten percent of the stock or has influence over the management of the company.
	Exceptions to this policy include stock acquired through inheritance, or gift. In addition, if an individual owns stock in a bank or bank holding company that has a branch in a county in which Centrue Financial Corporation or any of its affiliates opens a branch subsequent to the stock purchase, the individual would not be required to dispose of the subject stock. Bank or bank holding company stock owned or acquired in any of these ways would require disclosure to the Board.
6.	Employees should not sell or lease anything to a customer at a value in excess of its market value nor should he or she purchase or lease anything from a customer at a price below its market value. (Acceptance of discounts or rebates on merchandise is permitted if they are also available to other routine customers of the firm.)
7.	An employee should refuse any legacy or be­quest from a customer. He or she should also refuse to serve personally as executor, trustee, or guardian of a customer’s estate or trust unless the customer is a close relative (i.e., a parent/guardian, child, spouse, sibling, aunt, uncle, in-law, or cousin).
8.	Employees should not indirectly perform any act that these rules prohibit directly. For example, it is just as wrong to arrange for a member of the family to re­ceive a gift as it is for the employee to accept the gift directly.
9.	Speculative investing such as playing the commodities market, margin buying, short accounts, puts, calls, or combinations are not prudent for employees.

17.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE. 065
Subject	Purchasing
Effective	January 30, 2007
Revised	February 8, 2008

PURCHASING

The overall guideline for personnel engaged in purchasing equipment, supplies, and services is that all employees will remove themselves from situations which may or appear to influence unduly their relationships with vendors in a position to transact business with any of our companies or other employees. The disclosure procedures described below are designed for personnel employed in the purchasing department, as well as other personnel making purchases, and personnel in Centrue Financial Corporation engaged in hiring employees.

All individuals performing purchasing and human resources duties may be required (as a condition of employment, and from time to time) to sign a memorandum affirming their knowledge of and intention to adhere to these policies and procedures. Persons found in violation of these policies and procedures will be subject to disciplinary action, including termination of employment.

Any special situations in which preferential treatment is extended to an officer or employee by a vendor in a non-Centrue Financial Corporation related transaction because of that vendor’s association or dealings with Centrue Financial Corporation, must be brought to the attention of and approved by the Chief Executive Officer. An individual’s purchase of goods for personal use from a vendor at a price lower than that offered to the general public will not be approved. Under no circumstances should a Centrue Financial Corporation employee actively seek or accept a discount from a Centrue Financial Corporation supplier or bidder on an item for his personal use. If Centrue Financial Corporation has arranged in writing for discounts to be offered to other employees, then personnel involved in purchasing may obtain these benefits without prior clearance.

It is Centrue Financial Corporation’s policy that all items purchased, and specifically items from or arranged by any other Centrue Financial Corporation employee or director, or their related interests, must be purchased though the Head of Operations of Centrue Financial Corporation. Any deviations from this policy are to be reported to the Board.

Reciprocity

It is the policy of Centrue Financial Corporation to purchase all equipment, supplies, and services needed by it on the basis of quality, utility, and the price offered by the vendor. Only in circumstances where customers demonstrate the best quality, utility, and price, will customers of Centrue Financial Corporation be given orders involving Centrue Financial Corporation purchases. In this connection, information concerning products or services supplied by us to any

18.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.065
Subject	Purchasing
Page	2

customer should not be made available to or obtained by personnel concerned with purchasing. Similarly, information as to vendor relationships should not be furnished to lending personnel in Centrue Financial Corporation. It must be kept in mind that not only will customers of Centrue Financial Corporation not be given preferential treatment on purchases, but care must also be taken to ensure that no vendors are left with the impression, however erroneous, that it is necessary for him/her or helpful, to purchase products or services which are offered by Centrue Financial Corporation.

19.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.070
Subject	Outside Employment & Business Interests
Effective	January 20, 1997
Revised	January 29, 2009

OUTSIDE EMPLOYMENT & BUSINESS INTERESTS

Outside employment and business interests of Centrue Financial Corporation employees must be carefully monitored to avoid even the appearance of impropriety. For that reason, outside employment and business interests must be reported to the Human Resource Department immediately. For purposes of this policy, outside employment means any employment (even if no compensation or remuneration of any sort is received), including self employment, of a Centrue Financial Corporation employee other than by the corporation. Outside business interest shall be construed as broadly as possible to include, but not be limited to, any ownership or other financial interest in, or management, direction, or control of, any business other than Centrue Financial Corporation. Any potential conflict of interest identified by the Human Resource Department regarding outside employment and/or business interests will be reported to the Board of Directors.

The following are examples of the types of outside employment and business interests, which may create potential conflicts of interest and therefore be inappropriate:

• Securities/commodities brokerage

• Insurance

• Practice of law

• Accounting/bookkeeping

• Financial, estate, or business planning

• Investment or debt counseling

• Any employment or activity in which confidential information is received or a fiduciary relationship is otherwise created

• Any entity which provides goods or services to Centrue Financial Corporation

• Any entity which provides the same or similar services or products as those provided by Centrue Financial Corporation

• Any other financial institution

This list is not meant to be exhaustive, and other types of outside employment and business interests may be deemed inappropriate.

In any event, outside employment, including self-employment (other than as required or authorized by law (i.e., military service)), while on a leave of absence, must be approved in writing by the Human Resource Department.

20.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.080
Subject	Political Activity
Effective	January 20, 1997
Revised	February 8, 2007

POLITICAL ACTIVITY

Centrue Financial Corporation supports the democratic political system as a critical part of its environment. However, written approval must be obtained from the Human Resource Department before accepting nomination or appointment to public office. Additionally, all employees shall annually report all public offices held.

Centrue Financial Corporation prohibits the following activities:

1.	Any contribution or expenditure of its funds either directly or indirectly to or for the benefit of, use of, in support or in opposition to, any political party, candidate, or political committee.
2.	The use of its premises, equipment, or supplies by any political party candidate.
3.	The “loaning”, temporary assigning, or otherwise making available of any of its employees to, or for the use of, any political party, candidate, or political committee.

21.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.090
Subject	Recordkeeping
Effective	January 20, 1997
Revised	February 8, 2008

RECORDKEEPING

Attempted bribes will be reported immediately to Centrue Financial Corporation’s President and Chief Executive Officer who will inform the holding company Board of Directors. The President and Chief Executive Officer then take appropriate action and will keep contemporaneous written records of each case.

Written records will also be kept in the President and Chief Executive Officer’s office of all waivers granted to any portion of this Code of Ethics. The Human Resource Department will keep all compliance certificates on file for a period not less than three years.

22.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.100
Subject	“Soft Dollar” Arrangement
Effective	January 20, 1997
Revised	February 8, 2008

“SOFT DOLLAR” ARRANGEMENT

It is the policy of Centrue Financial Corporation to discourage all forms of “soft dollar” remuneration. Centrue Financial Corporation officers and employees are to avoid the acceptance of “soft dollar” remuneration wherever possible and shall not under any circumstances accept any form of “soft dollar” remuneration having a fair cash value of greater than $100.

For purposes of this policy, “soft dollar” remuneration includes, but is not limited to, gifts of property, meals, trips, entertainment, and other non-cash compensation received by a Centrue Financial Corporation officer or employee, directly or indirectly, from a securities firm or broker, vendor, or other person, firm, or entity with whom Centrue Financial Corporation contracts for goods or services.

Procedures

1.	Quarterly Report. All Centrue Financial Corporation officers and employees shall, within ten (10) days after the end of each calendar quarter, report any “soft dollar” remuneration received by them during the preceding quarter. Such report shall identify the party providing the “soft dollar” remuneration, a description thereof, the date provided, and its value.
2.	Review by Board of Directors. Such report shall be submitted to and reviewed by the respective Board of Directors.

23.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.110
Subject	Undue Influence
Effective	January 20, 1997
Revised	February 8, 2008

UNDUE INFLUENCE

Generally speaking, “undue influence” is any conduct by a person which, considering all of the relevant facts and circumstances, influences, dominates, or controls the will of another person (the transferor) and causes him or her to make a disposition of his or her property which he or she otherwise would not have made. Undue influence may take many forms. Most undue influence cases will involve transferors who are elderly or infirm or who have limited mental capabilities. In many cases, the transferee or donee (often a family member or close friend) will be a person who stands in a confidential or fiduciary relationship to the transferor. In such cases, a presumption of undue influence arises.

It is the policy of Centrue Financial Corporation that all of its officers and employees shall be especially watchful for situations and transac­tions in which undue influence may be present.

Procedures

1.

Where Undue Influence Is Suspected. In situations where undue influence is suspected, the officer or employee handling the transaction should (a) attempt to independently ascertain whether the transferor understands the nature of the transaction and its consequences; (b) before executing or completing the transaction, consult with his or her immediate supervisor; and (c) consult with legal counsel.

2.

Report. In all cases in which undue influence is sus­pected, the officer or employee involved shall promptly prepare a report detailing the relevant facts and circumstances and the action taken. This report shall be transmitted to the security officer.

24.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.120
Subject	Insider Trading
Effective	March 31, 2003
Revised	February 8, 2008

INSIDER TRADING

It is both unethical and illegal to buy, sell, trade, or otherwise participate in transactions involving Centrue Financial Corporation common stock or other security while in possession of material information concerning Centrue Financial Corporation that has not been released to the general public, but which when released may have an impact on the market price of the Centrue Financial Corporation common stock or other equity security. It is also unethical and illegal to buy, sell, trade, or otherwise participate in transactions involving the common stock or other security of any other company while in possession of similar non-public material information concerning such company. Any questions concerning the propriety of participating in a Centrue Financial Corporation or other company stock or other security transaction should be directed to the Centrue Financial Corporation Chief Executive Officer or Chief Financial Officer.

25.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.130
Subject	Extension of Credit
Effective	March 31, 2003
Revised	February 8, 2008

EXTENSIONS OF CREDIT

Centrue Financial Corporation’s affiliate bank, Centrue Bank, may extend credit to any executive officer, director, or principal shareholder of Centrue Financial Corporation only on substantially the same terms as those prevailing for comparable transactions with other persons or that may be available to employees generally as permitted by and in accordance with Regulation O of the Board of Governors of the Federal Reserve System.

26.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.140
Subject	Fair Dealing
Effective	March 31, 2003
Revised	February 8, 2008

FAIR DEALING

Each employee, officer, and director should undertake to deal fairly with Centrue Financial Corporation’s customers, suppliers, competitors, and employees. Additionally, no one should take advantage of another through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practices.

Employees must disclose prior to or at their time of hire the existence of any employment agreement, non-compete or non-solicitation agreement, confidentiality agreement, or similar agreement with a former employer that in any way restricts or prohibits the performance of any duties or responsibilities of their positions with Centrue Financial Corporation. Copies of such agreements should be provided to the Human Resource Department to permit evaluation of the agreement in light of the employee’s position. In no event shall an employee use any trade secrets, proprietary information, or other similar property, acquired in the course of his or her employment with another employer, in the performance of his or her duties for or on behalf of Centrue Financial Corporation.

Centrue Financial Corporation’s affiliates are engaged in the business of serving as executor, trustee, and guardian of estates of individuals. Employees are encouraged to recommend these services to qualified individuals. Employees may serve as fiduciaries for members of their own families (i.e., a parent/guardian, child, spouse, sibling, aunt, uncle, in-law or cousin). With respect to any other person, employees should not seek nor accept appointment to any fiduciary or co-fiduciary position without the written approval of the officer in charge of the member trust organization assigned to their geographic areas. Due to the danger of customer misunderstandings, potential liability to Centrue Financial Corporation or its employees, and inherent conflicts of interest, such approval will not normally be given. Employees should not directly or indirectly accept bequests under a will or trust if such bequests have been made to them because of their employment with Centrue Financial Corporation.

Employees are sometimes asked to advise customers with respect to services and goods other than services and goods available from Centrue Financial Corporation as to attorneys, accountants, insurance brokers, or real estate agents with whom they might do business. This type of advice must be avoided.

Centrue Financial Corporation and its employees do not render advice other than with respect to goods and services that can be made through or relate to those that can be made through Centrue Financial Corporation.

27.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.150
Subject	Protection and Proper Use of Centrue Financial Corporation Property
Effective	March 31, 2003
Revised	February 8, 2008

PROTECTION AND PROPER USE OF
CENTRUE FINANCIAL CORPORATION PROPERTY

All employees, officers, and directors should protect Centrue Financial Corporation’s property and assets and ensure their efficient and proper use. Theft, carelessness, and waste can directly impact Centrue Financial Corporation’s profitability, reputation, and success. Permitting Centrue Financial Corporation property (including data transmitted or stored electronically and computer resources) to be damaged, lost, or used in an unauthorized manner is strictly prohibited. Employees, officers, and directors may not use corporate, bank, or other official stationery for personal purposes.

The proper handling of business expenses incurred while away from the office is imperative if Centrue Financial Corporation officers and employees are to avoid the appearance of a conflict of interest or a reputation for self-enrichment at the expense of Centrue Financial Corporation, its stockholders, and their fellow employees. The tax rules on deductibility offer sound guidelines which must be followed for internal reporting purposes, and therefore must also be adhered to in the course of external contacts. The U.S. Internal Revenue Service standards are applied by Centrue Financial Corporation for the purpose of determining the appropriateness of a business expense. Any submitted expenses not complying with IRS requirements and Centrue Financial Corporation policy will not be reimbursed. The reimbursed travel expenses (if any) of a spouse, or other individual, accompanying a Centrue Financial Corporation representative on a business trip, will be taxable to the employee unless it can be demonstrated to Centrue Financial Corporation’s satisfaction that their presence served a bona fide business purpose.

28.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.160
Subject	Compliance With Laws, Rules, and Regulation
Effective	March 31, 2003
Revised	February 8, 2008

COMPLIANCE WITH LAWS, RULES, AND REGULATIONS

This Code of Ethics is based on Centrue Financial Corporation’s policy that all employees, officers, and directors comply with the law. While the law prescribes a minimum standard of conduct, this Code of Ethics requires conduct that often exceeds the legal standard.

Centrue Financial Corporation specifically forbids the following conduct:

1.	Theft, fraud, embezzlement, misappropriation, or any form of wrongful conversion of property belonging to Centrue Financial Corporation, an employee, or any Centrue Financial Corporation customer or client. This applies whether or not the conduct is a criminal act subject to prosecution.
2.	Any act of fraud or deception involving Centrue Financial Corporation, a customer, a supplier, a government official, or any other party.
3.	Any act of bribery, including a promise, offer, or gift of money or anything of value, made or offered to a government official or someone acting for the government or a person employed by, or acting on behalf of, a customer, supplier, or other organization with which Centrue Financial Corporation does business or has prospective business.
4.	Any dishonest or unethical act against Centrue Financial Corporation or any regulatory official.
5.	Political contributions of money, services, or other property of Centrue Financial Corporation that are in violation of applicable law.
6.	Any act of discrimination based on a person’s race, color, gender, creed, sexual orientation, marital status, age, religion, national origin, ancestry, place of birth, disability, veteran status, or any other category protected by law.
7.	Any act of harassment, which includes but is not limited to, slurs, jokes, and other verbal, graphic, or physical conduct that relates to an individual’s race, color, gender, creed, sexual orientation, marital status, age, religion, national origin, ancestry, place of birth, disability, veteran status, or any other category protected by law.

Certain other statutory and regulatory provisions are applicable to officers, directors, and employees of banks and bank holding companies. The following list is not exhaustive, but highlights a number of areas Centrue deems particularly significant:

29.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.160
Subject	Compliance with Laws, Rules, and Regulations
Page	2

1.	Interlocks between management officials (officers, directors, employees) of non-affiliated financial institutions and holding companies of financial institutions are generally prohibited.
2.	Bank employees’ receipt of compensation for acting as a co-fiduciary (co-trustee) with Centrue Financial Corporation is restricted.
3.	Receipt of commission or gift for procuring a loan from Centrue Financial Corporation, or extension, renewal, or substitution of security, etc., is prohibited.
4.	Offer of a loan or gratuity to a bank examiner is prohibited.
5.	Certification of checks without adequate customer funds on deposit is prohibited.
6.	Lending and borrowing of trust funds is restricted and in some case prohibited.
7.	Embezzlement, theft, and misapplication of funds are illegal.
8.	Unauthorized issuance of Centrue Financial Corporation obligations and intentional false entries are prohibited.
9.	Relationships with dealers in securities by Centrue Financial Corporation employees and directors are restricted.
10.	Stock-secured loans to purchase or carry margin stocks are regulated and impose scrutiny responsibilities on Centrue Financial Corporation lending officers.
11.	Convictions of criminal offenses preclude serving as an officer, director, or employee.
12.	Requiring a borrower to purchase or obtain other Centrue Financial Corporation products other than certain direct deposit account relationships is prohibited.

Certain Centrue Financial Corporation business units have policies and procedures governing topics covered by this Code of Ethics. These policies and procedures reflect the special requirements of these business units.

30.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.170
Subject	Reporting of Illegal or Unethical Behavior
Effective	March 31, 2003
Revised	January 29, 2009

REPORTING OF ILLEGAL OR UNETHICAL BEHAVIOR

All employees, officers and directors are expected to demonstrate the ability to properly manage their personal finances, particularly the prudent use of credit. Centrue Financial Corporation recognizes that its customers must have faith and confidence in the honesty and character of its employees, officers, and directors. In addition to the importance of maintaining customer confidence, there are specific laws that outline the actions Centrue Financial Corporation must take regarding any known, or suspected, crime involving the affairs of Centrue Financial Corporation. With regard to financial affairs, the Company must make a criminal referral in the case of any known, or suspected, theft, embezzlement, check/debit card kiting, misapplication, or other defalcation involving Company funds or personnel in any amount.

Fraud is an element of business that can significantly affect the reputation and success of Centrue Financial Corporation. Centrue Financial Corporation requires its employees, officers, and directors to talk to supervisors, managers, or other appropriate personnel to report and discuss any known or suspected criminal activity involving Centrue Financial Corporation or its employees. If, during the course of employment, you become aware of any suspicious activity or behavior including concerns regarding questionable accounting or auditing matters, you must promptly report violations of laws, rules, regulations, or this Code of Ethics to the Human Resource Department, the President and Chief Executive officer, the Chairman of the Board, the Chairman of the Board Audit Committee, or through the Company’s anonymous hotline.

Centrue Financial Corporation has contracted with an outside vendor to receive the Company’s Sarbanes-Oxley related complaints. This vendor may also receive the Company’s Human Resources related complaints. Listed below are the procedures for this process:

1.	An employee can initiate an anonymous complaint via e-mail or by phone to the vendor. The vendor will track and retain all complaints. The contact information for the vendor can be found on the Company’s website and in the CO.000 Responsibilities of Employees section of this document.
2.	The vendor then contacts the designated Centrue Financial Corporation recipients via e-mail; the Risk Management Officer and Chairman of the Audit Committee for Sarbanes-Oxley related issues and the Risk Management Officer and the Head of Human Resources for Human Resource-related issues.

31.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.170
Subject	Reporting of Illegal or Unethical Behavior
Page	2

3.	The designated recipients will take the appropriate action necessary to handle the complaint. This may include contacting legal counsel.
4.	Follow-up will be conducted by the designated recipients on the complaints received.

No retaliation will be allowed to occur against an employee who reports potential fraud or other suspected illegal or unethical behavior.

32.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.180
Subject	Administration and Waiver of Code of Ethics
Effective	March 31, 2003
Revised	February 8, 2008

ADMINISTRATION AND WAIVER OF CODE OF ETHICS

This Code of Ethics shall be administered and monitored by the Centrue Financial Corporation Human Resource Department. Any questions and further information on this Code of Ethics should be directed to this department.

All managers and direct supervisors are responsible for reviewing this Code of Ethics with their subordinates each time a new edition of the Code of Ethics is published.

It is also the responsibility of the Human Resource Department to reaffirm compliance with this Code of Ethics by all employees and officers, and to obtain a signed certificate that each employee and officer has read and understands the guidelines and will comply with them. The provisions of the Code of Ethics Policy will be included in the Centrue Financial Corporation Employee Handbook. The Employee Handbook will be issued to all new employees and officers at the time of employment and reissued to existing employees and officers from time to time. Employees will be required to sign a receipt form for the Employee Handbook indicating they have read this Code of Ethics and comply with its provisions.

Employees, officers, and directors of Centrue Financial Corporation are expected to follow this Code of Ethics at all times. Generally, there should be no waivers to this Code of Ethics. However, in rare circumstances, conflicts may arise that necessitate waivers. Waivers will be determined on a case-by-case basis by the Centrue Financial Corporation Human Resource Department with the advice of legal counsel.

However, waivers for directors and executive officers must be determined by the board of directors. For members of the board of directors and executive officers, the board of directors shall have the sole and absolute discretionary authority to approve any deviation or waiver from this Code of Ethics. Any waiver and the grounds for such waiver by directors or executive officers may need to be disclosed to stockholders in the Centrue Financial Corporation Annual Proxy Statement.

Known or suspected violations of this Code of Ethics will be investigated and may result in disciplinary action up to and including immediate termination of employment.

33.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.190
Subject	Misleading Financial Information
Effective	March 31, 2003
Revised	February 24, 2009

MISLEADING FINANCIAL INFORMATION

Centrue Financial Corporation will be honest and forthright in all of its financial reporting. We will use generally accepted accounting procedures (GAAP) to account for all transactions. We will then use the resulting accounting data to prepare financial reports that are as accurate as we can make them. No one associated with this company is authorized to slant this financial data in ways that might mislead a third party into believing the Company’s financial situation is better than it actually is. For any current or former employee who received incentive compensation, the Company may seek restitution to the extent it is determined that incentive compensation paid was based on materially inaccurate information.

34.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.200
Subject	Special Rules That Apply to Investment Officers
Effective	March 31, 2003
Revised	February 8, 2008

SPECIAL RULES THAT APPLY TO INVESTMENT OFFICERS

Anyone making investments on behalf of the Company is prohibited from taking advantage of the special circumstances associated with this duty. Specifically, an investment officer is prohibited from buying securities for his or her own account through dealers from which he or she buys securities for the Company’s account. The investment officer is also prohibited from accepting gifts, entertainment, free travel, and so forth from a securities dealer or from employees who work for a securities firm. If the investment officer is ever approached with a deal that would benefit him or her personally, he or she must immediately report the circumstances to the president and the chairperson of the board and stop placing investment orders through that firm. (Exhibit 2A.2 following this policy contains a statement that the Company requires its investment officers to sign.)

35.

Centrue Financial Corporation
Code of Ethics

Policy No.	CE.210
Subject	Senior Financial Officers Code of Ethics
Effective	March 31, 2003
Revised	February 8, 2008

SENIOR FINANCIAL OFFICERS
CODE OF ETHICS

GENERAL PHILOSOPHY

Honesty, integrity, and sound judgment of senior financial officers are fundamental to the reputation and success of Centrue Financial Corporation. While all employees, officers, and directors are required to adhere to the Centrue Financial Corporation Code of Ethics, the professional and ethical conduct of senior financial officers (Chief Financial Officer, Controller and Chief Investment Officer) is essential to the proper function and success of Centrue Financial Corporation as a leading financial services provider.

SENIOR FINANCIAL OFFICERS CODE OF ETHICS

To the best of their knowledge and ability, senior financial officers of Centrue Financial Corporation performing accounting, auditing, financial management, or similar functions must:

• Act with honesty and integrity; avoid actual or apparent conflicts of interest in personal and professional relationships.

• Provide colleagues with information that is accurate, complete, objective, relevant, timely, and understandable.

• Comply with applicable laws, rules, and regulations of federal, state, and local governments (both United States and foreign) and other appropriate private and public regulatory agencies.

• Act in good faith, with due care, competence and diligence, without misrepresenting material facts or allowing independent judgment to be subordinated.

• Respect the confidentiality of information acquired in the course of employment.

• Share knowledge and maintain skills necessary and relevant to Centrue Financial Corporation’s needs.

• Proactively promote ethical and honest behavior within the Centrue Financial Corporation environment.

• Assure responsible use and control of all assets, resources, and information of Centrue Financial Corporation.

All senior financial officers are expected to adhere to both the Centrue Financial Corporation Code of Ethics and the Code of Ethics for Senior Financial Officers at all times. The board of directors shall have the sole and absolute discretionary authority to approve any deviation or waiver from the Code of Ethics for Senior Financial Officers. Any waiver and the grounds for such waiver for a senior financial officer shall be promptly disclosed through a filing with the Securities and Exchange Commission on Form 8-K. Additionally, any change of this Code of Ethics for senior financial officers shall be promptly disclosed to stockholders.

36.

Centrue Financial Corporation
Code of Ethics

Employee/Director Acknowledgement Form

I have received a copy of the Centrue Financial Corporation Code of Ethics. After having read the Code, I certify that:

1.	I have not directly, or indirectly through my family: (a) made any personal investment based on insider information; (b) otherwise acted on insider information contrary to the Centrue Financial Corporation policy statement; (c) accepted any gifts or enter­tainment; (d) accepted any fees or other remune­ration; (e) borrowed from a Centrue Financial Corporation customer or supplies; (f) sold or leased assets to or purchased or leased assets from a customer other than an arm’s length transaction; or (g) accepted any bequest, legacy, or fiduciary appointment, except as follows: If none, please indicate “none.”
2.	I do not hold a position as director, officer, partner, or any other official position in any business or professional enterprise, except as follows: If none, please indicate “none.”
3.	I am not engaged in any outside employment, including self-employment, except as follows: If none, please indicate “none.”
4.	Neither I, nor any member of my immediate family, is engaged in any activity, which may reasonably be deemed in conflict with this Code of Ethics except as follows: If none, please indicate “none.”

Employee/Director Signature	Date
Employee/Director Name (Typed or Printed)

This form (last updated 7/08) must be signed and returned to the Human Resource Department.

37.

Centrue Financial Corporation
Code of Ethics

Conflicts of Interest:
Investment Officer Code of Conduct Statement

Based on instructions I have received from the board of directors, I understand that I am prohibited from buying securities for my own account using dealers through which I buy securities for the Company’s account.

I also understand that I may not accept gifts, entertainment, free travel, etc., from a securities dealer or employees of a securities firm, directly or indirectly. If I am ever offered a bribe or approached with a deal that would benefit me personally, I will immediately report the circumstances of the offer to the President and Chief Executive Officer and the chairperson of the board, and I will immediately stop placing investment orders through that firm.

A signed copy of this statement will be forwarded to each of the securities firms with which the Company deals so that the salespeople of the firm will be explicitly on notice that I am not to be approached with gifts, gratuities, or unethical deals.

Investment Officer Signature	Date
Investment Officer Name (Typed or Printed)

This form must be signed and returned to the Human Resource Department.

38.

EX-21.1

EXHIBIT 21.1

SUBSIDIARIES OF THE REGISTRANT

Centrue Bank, an Illinois state bank with its main office located in Streator, Illinois.

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements on Form S-8 (File Numbers 333-16359, 333-92549, 333-119394, 333-139026, 333-133831, 333-148127, 333-145790, 333-157178, and 333-157566) of Centrue Financial Corporation of our report dated March 12, 2009 with respect to the consolidated financial statements of Centrue Financial Corporation and the effectiveness of internal control over financial reporting, which report appears in this Annual Report on Form 10-K of Centrue Financial Corporation for the year ended December 31, 2008.

	Crowe Horwath LLP
Oak Brook, Illinois
March 12, 2009

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas A. Daiber, President and Principal Executive Officer, certify that:

1.	I have reviewed this annual report on Form 10-K of Centrue Financial Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 13, 2009

/s/ Thomas A. Daiber

Thomas A. Daiber

President and Principal Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kurt R. Stevenson, Senior Executive Vice President and Principal Financial and Accounting Officer, certify that:

1.	I have reviewed this annual report on Form 10-K of Centrue Financial Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 13, 2009

/s/ Kurt R. Stevenson

Kurt R. Stevenson

Senior Executive Vice President and Principal Financial and Accounting Officer

EX-32.1

EXHIBIT 32.1

The following certification is provided by the undersigned President and Principal Executive Officer of Centrue Financial Corporation on the basis of such officer’s knowledge and belief for the sole purpose of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

CERTIFICATION

In connection with the Annual Report of Centrue Financial Corporation (the “Company”) on Form 10-K for the period ended December 31, 2008 as filed with the Securities and Exchange Commission on March 13, 2009 (the “Report”), I, Thomas A. Daiber, President and Principal Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Thomas A. Daiber

Name: Thomas A. Daiber

Title: President and

Principal Executive Officer

Date: March 13, 2009

EX-32.2

EXHIBIT 32.2

The following certification is provided by the undersigned Senior Executive Vice President and Principal Financial and Accounting Officer of Centrue Financial Corporation on the basis of such officer’s knowledge and belief for the sole purpose of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

CERTIFICATION

In connection with the Annual Report of Centrue Financial Corporation (the “Company”) on Form 10-K for the period ended December 31, 2008 as filed with the Securities and Exchange Commission on March 13, 2009 (the “Report”), I, Kurt R. Stevenson, Senior Executive Vice President and Principal Financial and Accounting Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Kurt R. Stevenson

Name: Kurt R. Stevenson

Title: Senior Executive Vice President and

Principal Financial and Accounting Officer

Date: March 13, 2009