October 15, 2010 – WestBridge Bank and Trust Company, Chesterfield, Missouri, was closed today by the Missouri Division of Finance. The FDIC was appointed as receiver and sold the bank to Midland States Bank, Effingham, Illinois, which will assume all deposits and purchase essentially all assets of the failed bank.
WestBridge Bank was a small, one branch bank, owned by bank holding company Boulevard Bancshares, Inc. Boulevard Bancshares was privately owned by approximately 225 private individual shareholders who are local businesspeople. Despite its precarious financial condition, WestBridge Bank recently opened a newly constructed 25,000 square foot headquarters building in Chesterfield, MO.
WestBridge Bank’s website cited its local roots in the community and the benefits of dealing with a locally owned bank.
Our team of experienced St. Louis bankers average 20 years of service to the St. Louis area while our Board of Directors and Advisory Board are comprised of successful St. Louis businesspeople. Most importantly, our capital is dedicated to the St. Louis community. As a locally owned bank, one of WestBridge Bank & Trust’s greatest values is our ability to respond to your needs in a timely manner that extends beyond personal and business loans and depository investment accounts.
Our bankers each own a stake in the Bank, and this pride of ownership is evident in the way we provide our services.
WestBridge Bank will reopen on Monday as a branch of Midland States Bank. All depositors of WestBridge will automatically become Midland depositors and FDIC insurance coverage will continue uninterrupted.
WestBridge Bank, at June 30, 2010, had total assets of $91.5 million and total deposits of $72.5 million. Midland States did not pay the FDIC a premium for WestBridge’s deposits.
The FDIC and Midland Bank entered into a loss-share transaction covering $72.6 million or 80% of failed WestBridge assets, which will protect Midland Bank from losses on the asset pool acquired. According to the FDIC, the loss-share agreement “covers credit losses as well as certain types of expenses associated with troubled assets (such as advances for taxes and insurance, sales expenses, and foreclosure costs).” If credit losses are more than originally expected, the FDIC will lose more than anticipated.
Midland States Bank is owned by privately held holding bank holding company, Midland States Bancorp. Midland States Bancorp had received $10.2 million from the US Treasury in January 2009 under the TARP bailout program but repaid the entire amount in December 2009, resulting in a substantial 10% profit to the US Treasury of $1.0 million. Midland States is a $1.1 billion asset bank with 15 branches.
The loss on the failure of WestBridge Bank will cost the FDIC Deposit Insurance Fund approximately $18.7 million or 20% of total assets. WestBridge is the 131st banking failure of the year and the fifth in Missouri.