Mercantile Bancorp to acquire Royal Palm

Population and construction growth in Naples and Marco Island have made Southwest Florida attractive to yet another Midwest banking group: Mercantile Bancorp Inc. bought Royal Palm Bancorp on Wednesday for $44.4 million in an all-cash transaction.

“Royal Palm Bancorp meets our criteria. It operates in one of Florida’s fastest growing markets,” said Dan S. Dugan, Mercantile’s chairman, president and chief executive officer.

Mercantile directors previously had limited expansion to traditional markets in Illinois and Missouri. But Naples and Marco Island grew by nearly 27 percent in population from 2000 to 2005 and Collier County is home to about 320,000 year-round residents, Dugan said in a prepared statement.

“One of the core driving forces behind the company’s growth is due to the influx of retirees and pre-retirees to Southwest Florida. Further, average household income is currently about $91,000, a level at which many residents require more than just basic banking services,” Dugan added.

Mercantile, based in Quincy, Ill., is traded on the American Stock Exchange as MBR. Royal Palm is traded over the counter as RYPL.

Arnold J. Haake, Royal Palm Bancorp president and chief executive officer, said he expects benefits of joining the Mercantile family will extend to customers, to whom Royal Palm could offer larger loans.

Royal Palm Bancorp had assets of $147.4 million as of Dec. 31. 2005, compared to about $95 million in 2004. Royal Palm was founded in 2002.

Royal Palm has three branches: one each in Naples, Marco Island and south Fort Myers. The latter opened in February.

Mercantile Bancorp Inc. was created in 1983 and has seven wholly-owned affiliate bank groups.

As of Sept. 30, 2005, the company managed total assets in excess of $1.112 billion with total deposits exceeding $931 million.

The acquisition is subject to approval by Royal Palm Bancorp’s shareholders, federal and state regulatory approvals and other customary conditions of closing. The deal is expected to close later this year.