The Office of the State Bank Commissioner of Kansas on Oct. 13 shuttered Argonia, Kan.-based Farmers and Merchants State Bank of Argonia and appointed the Federal Deposit Insurance Corp. as receiver in a failure estimated to cost the deposit insurance fund $2.6 million.

The FDIC, in turn, entered into a purchase and assumption agreement with Conway Springs, Kan.-based Conway Bank to assume all the deposits of the failed bank.

Farmers and Merchants State Bank of Argonia had total assets of about $34.2 million and total deposits of $29.6 million as of June 30, according to the press release. Conway Bank, a unit of Norcon Financial Corp., will pay the FDIC a premium of 2.5% to assume all the deposits of Farmers and Merchants State Bank of Argonia. Conway Bank agreed to purchase essentially all the assets of the failed bank, in addition to assuming all of its deposits.

Farmers and Merchants State Bank of Argonia's two branches will reopen as Conway Bank branches during their normal business hours.

Farmers and Merchants State Bank of Argonia is the seventh FDIC-insured institution to fail in the U.S. in 2017, and the first in Kansas. The last FDIC-insured institution closed in the state was Leawood-based Heartland Bank, on July 20, 2012.