Unsuccessful in its efforts to raise fresh capital and already operating under multiple enforcement orders, embattled Mercantile Bancorp Inc. of Quincy, Ill., could be on the verge of failure, according to its auditors.

In an opinion dated April 15 and made public in a Securities and Exchange Commission filing late last week, the accounting firm BKD LLP said that Mercantile’s recurring losses and ongoing struggle to find new sources of capital "raise substantial doubt about the company's ability to continue as a going concern."

The multi-bank holding company has lost more than $110 million over the last three years and at Dec. 31 more than 11% of its assets were considered nonperforming and nearly 13% of its loans were classified as substandard. Though the company has sold three of its banks over the last 17 months to help cover its losses, two of its three remaining banks — Royal Palm Bank in Naples, Fla., and Heartland Bank in Leawood, Kan. — remain undercapitalized.

In its annual report filed last week, the company said that it continues to evaluate all capital-raising options and that it would not inject any more capital into its subsidiary banks until a plan is in place. It also said that if a liquidity crisis develops it would consider selling or closing branches and subsidiary banks and selling off high-quality loans.

Mercantile's shares fell sharply on news of the auditor's opinion. Late Monday, its shares were trading at 82 cents, down 12% from Thursday’s closing price.

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