Two banks owned by Mercantile Bancorp in Quincy, Ill., were among five failures on Friday, one of the busiest nights for closures in recent weeks.

The failures brought the total tally of shuttered banks this year to 38 and were estimated to cost the Deposit Insurance Fund more than $150 million.

The Florida Office of Financial Regulation closed the $87 million-asset Royal Palm Bank of Florida in Naples. Later in the evening, the Kansas Office of the State Bank Commissioner closed the $110 million-asset Heartland Bank in Leawood.

The two banks were owned by Mercantile, a $700 million-asset bank company that has spent the last several years trying to recapitalize the two banks and keep its flagship Mercantile Bank, which is well-capitalized, out of harm's way. In May, Mercantile announced sales of both banks, but those deals never closed.

Through a cross-guarantee liability, the Federal Deposit Insurance Corp. is able to assess the cost of failure of failed banks on its related survivors. Royal Palm is expected to cost the DIF $13.5 million, while Heartland is expected to cost $3.1 million. The FDIC has several years to assess the fee, should it choose to do so.

In Florida, the FDIC entered into an agreement with First National Bank of the Gulf Coast in Naples to buy Royal Palm's assets and assume its $85.1 million deposits. In Kansas, the FDIC entered in an agreement with Metcalf Bank in Lee's Summit, Mo., to buy Heartland Bank's assets, with $54.3 million of assets covered by a loss-share agreement. Metcalf also agreed to pay a 1.11% premium to assume the bank's $102.6 million in deposits.

Three other banks failed in separate transactions.

The Georgia Department of Banking and Finance closed the $222.7 million-asset First Cherokee State Bank in Woodstock and the $119.8 million-asset Georgia Trust Bank in Buford.

The FDIC entered in an agreement with Community & Southern Bank to buy the assets of both Georgia banks, with loss-sharing arrangements on $141.8 million of First Cherokee's assets and $65.9 million of Georgia Trust's assets. The buyer also agreed to pay a 0.50% premium to assume First Cherokee's $193.3 million in deposits and Georgia Trust's $117.4 million in deposits. First Cherokee's failure is expected to cost $36.9 million, while Georgia Trust's failure is expect to cost $20.9 million.

Lastly, the Office of the Comptroller of the Currency closed the $199.1 million-asset Second Federal Savings Bank in Chicago. Hinsdale Bank & Trust, a unit of Wintrust Financial, agreed to pay a $100,000 premium to assume Second Federal's $175.9 million in deposits. Hinsdale also agreed to buy $14.2 million of the thrift's assets, consisting mainly of cash. All loans will be held by the FDIC for later disposition. The failure is expected to cost $76.9 million.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.