The Illinois Department of Financial and Professional Regulation - Division of Banking closed Saint Elmo, Ill.-based Fayette County Bank, a unit of Fayette County Bancshares Inc.

In its role as receiver, the Federal Deposit Insurance Corp. entered into a purchase and assumption agreement with Evansville, Ind.-based United Fidelity Bank FSB, which will assume all the deposits and purchase approximately $28.9 million in assets of the failed institution. The FDIC will retain the remaining assets for later disposition.

As of March 31, Fayette County Bank had approximately $34.4 million in total assets and $34.0 million in total deposits.

The failure — the sixth FDIC-insured institution this year and the second in Illinois — is estimated to cost the FDIC's Deposit Insurance Fund $10 million.

Fayette County Bank's sole office will reopen as a branch of United Fidelity during its normal business hours, with Fayette County Bank depositors automatically becoming depositors of United Fidelity.