20 October 2008

Bank takeover going well, new president says

TheTelegraph
Meridian Bank began when a group of investors purchased the State Bank of Eldred in 2003, after it lost $52,000 in 2002 and also had been under a cease-and-desist order at the time. The State Bank of Eldred, chartered in 1910, was purchased by Dr. Timothy Kaiser, an Alton ear, nose and throat doctor; his father, Noel E. Kaiser; Lisa Maag and Edwardsville developer Clay Winfield.

Meridian Bank was a primary lender to Wood River travel firm YTB International Inc. Kaiser and Winfield, Meridian's principal owners, both sit on the board of YTB, and Meridian made loans to YTB and its associates. In 2006, Meridian Bank lent YTB $2.5 million for its new headquarters facility in Wood River. The loan called for YTB to pay interest only, at a rate of 1 percent below the prime rate, for the first two years of the loan, then the full balance was due.

In January, three weeks before state regulators finished their report on Meridian, YTB paid back $500,000 of that loan.

In July, after the FDIC's cease-and-desist order was issued, YTB refinanced the remaining $2 million balance at a higher interest rate and began making regular payments. The full balance is due in July 2009.

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