Ovation Holdings Inc. has agreed to buy most of Royal Palm Bank in Florida from Mercantile Bancorp.
Ovation, the parent company of Encore National Bank, said in a press release late Tuesday that it would buy Royal Palm's branches in Naples, Ft. Myers and Marco Island, along with $75 million in deposits, for an undisclosed amount. Ovation also plans to buy $28 million in loans in the deal, which it expects to complete in the third quarter.
"The purchase … is expected to be accretive to earnings, is directly in line with our long term goals and follows our plan to build the leading southwest Florida community bank," Mal Mixon, Ovation’s lead director, said in the release.
Ovation Holdings became a bank holding company last year, buying the $1.6 billion-asset Encore Bank.
Royal Palm has been significantly undercapitalized. The $839 million-asset Mercantile has sold off a number of its banks in recent years in an effort to bolster the Quincy, Ill., company's capital levels.