Regulators closed two Midwestern banks late Friday, the $98 million-asset Main Street Bank in Northville, Mich. and $39 million-asset Meridian Bank in Eldred, Ill.

They are the 14th and 15th banks to fail this year.

Main Street's $86 million of deposits will be acquired by Monroe Bank & Trust in Monroe, Mich., for a 1% premium. The $1.5 billion-asset Monroe Bank will also buy $16.9 million of Main Street's assets and retains an option to acquire some of its fixed assets.

Meridian's $37 million of deposits and roughly $7.6 million of its assets will be acquired National Bank in Hillsboro, Ill. National Bank has $212 million of assets.

In news releases, the FDIC said that depositors of both banks, including any with deposits in excess of the FDIC's insurance limits, "will continue to have uninterrupted access to their money."

The total cost of the failures to the FDIC's insurance fund is estimated to be between $40 million and $47.5 million.

Jason Moon, a spokesman for the Michigan Office of Financial and Insurance Regulation, blamed Main Street's demise on the weak economy.

"The dramatic downturn in the real estate market unfortunately knocked the wind out of this institution, despite the efforts of a creative management team," he said late Friday. "Rising delinquencies in the bank's rehabilitation, residential development, home equity, and vacant land loan portfolios, coupled with declining real estate values, were primary factors in its high level of loan losses."

Through the first half of the year, the four-year-old Main Street had lost more than $6.5 million, according to FDIC data. It charged off more than 10% of its loans in the first and second quarters, up from 0.38% in the same period a year earlier.

Like many recently failed banks, it relied heavily on brokered deposits to fund its loans. At June 30, 42% of its deposits were brokered.

The 98-year Meridian had been known as State Bank of Eldred until early 2005, when it had just about $10 million of assets.

Since then, it had been ramping up its construction and development and commercial real estate lending, and by the end of 2007 it had more than $55 million of assets, according to the FDIC.

As real estate conditions started to weaken last year, though, its asset quality deteriorated. By June 30 of this year, more than 6.4% of its loans were nonperforming.

In April, the banking division of the Illinois Department of Financial Professional Regulation ordered Meridian to increase its common stock.

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