November 09, 2009

Gateway Bank of St. Louis acquired by Central Bank of Kansas City

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Jefferson City, Mo. - The Missouri Division of Finance today accepted possession of Gateway Bank of St. Louis. The Federal Deposit Insurance Corporation (FDIC) was immediately appointed receiver of the bank, which was then sold in its entirety to Central Bank of Kansas City.

Lobby and drive-up services at the bank's sole location, 3412 N. Union Blvd. in St. Louis, will resume on Saturday, Nov. 7, at 9:00 a.m. Depositors of Gateway Bank of St. Louis will automatically become depositors of Central Bank of Kansas City and continue to have full access to their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed, and loan customers should continue to make their payments as usual. Depositors will continue to be insured by the FDIC and there will be no interruption of service to customers of the former Gateway Bank of St. Louis.

Commissioner of Finance Richard J. Weaver said the demise of the bank was due to aggressive risk selection by management. "This bank has operated under close regulatory scrutiny since 2006, when concerns with credit risk and lending practices became evident," said Weaver. "Many of these loans proved uncollectible and the losses were more than the bank could support."

Weaver said despite several attempts by ownership and management to sell the bank or procure additional capital, efforts proved unsuccessful. As a result, the bank's board of directors voted to turn the bank over to the Missouri Division of Finance as allowed by state law. Assets of the bank totaled $27 million as of Oct. 31, 2009.

The acquiring institution, Central Bank of Kansas City, is a $177 million institution that for more than a decade has been certified by the United States Treasury Department as a Community Development Financial Institution (CDFI) lender. As an accredited CDFI lender, Central Bank of Kansas City is able to access federal funds in order to make loans to individuals and businesses in financially distressed and underserved communities. 

Customers who have questions about today's transaction can call the FDIC toll free at 1‑800‑405‑8124. The phone number will be operational this evening until 9 p.m., Central Standard Time (CST); on Saturday from 9:00 a.m. to 6:00 p.m., CST; on Sunday from noon to 6:00 p.m., CST;  and thereafter from 8:00 a.m. to 8:00 p.m.,  CST. 

About the Missouri Department of Insurance, Financial Institutions & Professional Registration

The Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) is responsible for consumer protection through the regulation of financial industries and professionals.  The department's seven divisions work to maintain consumer confidence by examining and monitoring industries and professions and by establishing coherent and evolving policies.  DIFP works to enforce state regulations both efficiently and effectively while encouraging a competitive environment for industries and professions to ensure consumers have access to quality products.