Heartland Tri-State Bank of Elkhart, Kansas, has failed, with the Federal Deposit Insurance Corporation (FDIC) taking control to protect customers. The FDIC has entered into a purchase and assumption agreement with Dream First Bank of Syracuse, Kansas, to assume all the deposits of Heartland Tri-State Bank. As a result, the four branches of Heartland Tri-State Bank will reopen as branches of Dream First Bank on Monday.
This bank failure comes on the heels of other recent closures, including First Republic, Silicon Valley Bank, and Signature Bank, prompting lawmakers to introduce new legislation to protect customer deposits and stabilize the financial system. Heartland Tri-State Bank is the first bank to fall since First Republic, the nation’s second-largest bank failure ever, in early May.
Customers of Heartland Tri-State Bank can access their money through checks, ATM, or debit cards, without having to change their banking, as they will automatically become customers of Dream First Bank. Heartland Tri-State Bank had approximately $139 million in total assets and $130 million in total deposits, according to the FDIC.
Loan customers of Heartland Tri-State Bank should also be largely unaffected, as the FDIC and Dream First Bank have entered into an agreement to share in the losses and potential recoveries on the loans. The FDIC assures customers that they should continue to make loan payments as usual, as the terms of their loans will not change.
This bank failure highlights the importance of legislation to protect customer deposits and prevent further instability in the banking industry. The FDIC’s swift action in finding a suitable bank to assume the deposits and assets of Heartland Tri-State Bank demonstrates their commitment to ensuring the safety and security of customers’ funds.