This article first appeared in the St. Louis Beacon, Nov. 9, 2009 - Pearlie Evans remembers how proud she was back in 1965 when she plunked down $25 to deposit in the new, black-owned Gateway Bank in north St. Louis.
"It meant a great deal," she said Monday, the first day that the bank was being operated by Central Bank of Kansas City after being seized by the FDIC on Friday and sold.
"It meant a place where we had pride of ownership, and we didn't have to be insulted like we were by some of the other banks."
Evans and her longtime boss, former U.S. Rep. William L. Clay Sr., were among those remembering the bank that brought hope and a sense of accomplishment for blacks in St. Louis at a time when civil rights struggles were being fought on a number of fronts.
"There was a lot of pride for everything that happened back then," Clay said in a telephone interview from Maryland. "Any strike against American apartheid was a proud, proud moment for black people.
"St. Louis was no different from Birmingham, Atlanta, Houston or any other city. Every little measure was a proud day for us."
As a city alderman, Clay had been a central figure in protests in the summer of 1963 at the Jefferson Bank & Trust Co. over its refusal to hire blacks for professional jobs. Demonstrations outside the bank went on for weeks, complete with rallies, vigils, marches and sit-ins.
Bank officials stood their ground, saying they did not want to be pressured by the protests into changing their hiring practices. Eventually the barriers were lifted, at least in part, but at the same time a group of young blacks decided they needed their own bank in St. Louis to service black clientele.
Real estate man George Montgomery was one of the founders of what was to become Gateway Bank. He recalled on Monday how he talked with a man named James Brown, who had founded the black-owned Douglas State Bank in Kansas City, Kan. Montgomery traveled to see how the bank operated -- "It was amazing to see an actual black-owned bank in operation," he said -- then worked to put together an application to the comptroller of the currency for a national bank charter in St. Louis.
Eventually the group managed to meet all the qualifications and won the charter. With the help of black professionals who helped with the finances, Gateway opened in north St. Louis.
"It was a milestone," Montgomery said. "Younger fellows like myself, we didn't have any money, but we did all the legwork and put the thing together."
Montgomery and others present at the creation of Gateway were saddened at the loss of the bank; for some of them, being asked by a reporter for recollections of its founding was the first they had heard of the FDIC's actions. "This is going to be a big revelation in this town," Montgomery said.
For Norman Seay, a veteran of the local civil rights struggles, the news brought to mind the late Clifton W. Gates, who headed Gateway in its early years.
"I'm glad that he's dead so that he didn't have to see the closing of the bank," Seay said. "I'm sad. Now it's just another bank."
Seay recalled the reaction when Gateway opened its doors.
"People were overjoyed," he said. "We were jubilant over the fact that we had a bank. Many of the organizations I belonged to and others began going to the bank. It was important to us because it indicated progress. It indicated movement toward equality."
Clay's recollections are a little more mixed.
"The community was very proud of the fact that there was a black-owned bank," he said. "How it came into being and who took charge of it, some of us were not so proud of. It was seven young people who pushed it through, went to Texas and got the charter for it, then came back to meet in my home and get my advice.
"They thought it was necessary to get big shots in the black community to be at the helm of the bank. I told them that the big shots in the black community are just as poor as you. They're going to go downtown and get the money they needed. That's exactly what they did; they went down to First National Bank to get what they needed to run the bank. I had told them they could do it themselves."
While Central Bank in Kansas City is also designated as a minority-owned bank, its minority isn't African-American - it is women. William M. Dana Jr., president and CEO of Central Bank, said the bank, which began in 1951, is owned by the Tutera family, and the majority of the owners are female. He was busily working on the transition Monday at the bank's building at 3412 Union Boulevard.
He said that Central Bank is one of 65 banks nationwide designated as a Community Development Financial Institution, meaning it is oriented toward providing products and services to low- and moderate-income clientele. He said the niche is similar to what Gateway had filled, so the takeover was a natural fit.
The FDIC said Friday in a news release that as of Sept. 25, Gateway had total assets of $27.7 million and total deposits of approximately $27.9 million. It said Central Bank of Kansas City agreed to purchase essentially all of the assets and it did not pay the FDIC a premium for the deposits.
Gateway Bank is the 119th FDIC-insured institution to fail in the nation this year, and the third in Missouri. The last FDIC-insured institution closed in the state was First Bank of Kansas City on Sept. 4.
Richard J. Weaver, Missouri's commissioner of finance, attributed Gateway's failure to what a statement called "aggressive risk selection by management." He said several attempts by its owners and management to sell the bank or obtain additional capital did not succeed.
“This bank has operated under close regulatory scrutiny since 2006," he said in a statement, "when concerns with credit risk and lending practices became evident. Many of these loans proved uncollectible and the losses were more than the bank could support.”
Dana said customers will be notified soon of the change in ownership and that the transition should be smooth, with familiar features ranging from account numbers to the workers in the teller windows remaining the same. He said Central Bank is committed to being a player in the community, and they plan to be in north St. Louis long after the 12 months required by the FDIC.
"We're big in providing services to this type of community," Dana said. "We hope to have a long and prosperous life here."