Late last week, the Kansas Office of the State Bank Commissioner shut down Heartland Tri-State Bank of Elkhart, Kan., prompting the Fede...
Late last week, the Kansas Office of the State Bank Commissioner shut down Heartland Tri-State Bank of Elkhart, Kan., prompting the Federal Deposit Insurance Corporation (FDIC) to enter into a purchase and assumption agreement with Dream First Bank, National Association, of Syracuse, Kan.
The FDIC and Dream First Bank, National Association have since assumed all the deposits of Heartland Tri-State Bank, and all four of the bank's branches reopened as branches of Dream First Bank, National Association on Monday, July 31, resuming their normal business hours.
All of this happened late in the day last Friday, July 28, when almost nobody noticed, and the switch occurred quietly and seamlessly over the weekend with the new bank taking over as of Monday.
The depositors of Heartland Tri-State Bank can now access their money by wiring checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed as normal, and loan customers are expected to continue making their payments as usual.
"Depositors of Heartland Tri-State Bank will become depositors of Dream First Bank, National Association, so customers do not need to change their banking relationship in order to retain their deposit insurance coverage," the FDIC announced.
"Customers of Heartland Tri-State Bank should continue to use their existing branch until they receive notice from Dream First Bank, National Association, that it has completed systems changes to allow its branch offices to process their accounts as well."
Dream First Bank, National Association agrees to purchase all of failed Heartland Tri-State Bank's assets
As of March 31, 2023, Heartland Tri-State Bank had about $139 million in total assets and $130 million in total deposits. Dream First Bank, National Association has assumed all associated deposits and has also agreed to purchase all of the failed bank's assets.
The FDIC and Dream First Bank are also entering into a commercial shared-loss agreement on the loans it purchased from the former Heartland Tri-State Bank. The FDIC as receiver along with Dream First Bank, National Association will share in the losses on loans covered by the shared-loss agreement while also sharing in potential recoveries.
This setup is projected to maximize recoveries on the assets by keeping them in the private sector while also minimizing disruptions for loan customers.
Any customers who have questions about the transaction, or about the collapse of Heartland Tri-State Bank in general, can contact the FDIC toll-free at 1-866-431-1725, or by visiting the FDIC's website.
The FDIC estimates that the total cost to cover the Deposit Insurance Fund (DIF) will be around $54.2 million. Compared to other alternatives, Dream First Bank, National Association's acquisition was the least costly resolution for the DIF, which is an insurance fund created by Congress in 1933 and managed by the FDIC to protect deposits at U.S. banks.
The corporate-controlled media is claiming that the failure of Heartland Tri-State Bank "is not believed to be a sign of broader problems within the state's banking industry."
According to the Office of the State Bank Commissioner, Heartland Tri-State Bank in Elkhart was deemed to be insolvent "due to an isolated event," even though the details of what this entails have not been disclosed.
The official claim is that the Kansas state banking industry is doing just fine and Heartland Tri-State Bank had a much smaller amount of assets than Silicon Valley Bank (SVB), which collapsed earlier this year along with several other larger banks.
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