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Aug. 14, 2023 by Sam Bailey, Kansas Reflector TOPEKA -- Heartland Tri-State Bank of Elkhart on July 28 became the fourth U.S. bank to fail in 2023 and the second Kansas bank to fail in three years. David Herndon, Kansas banking commissioner, closed the southwest Kansas bank after it became insolvent because it was "apparently the victim of a huge scam," he said. Herndon said he doesn't know what the scam was, but he said other banks in the state were not affected. "Kansas banks are strong and healthy," he said. "They are well-capitalized, have strong reserves, are profitable and maintain record levels of loan reserves." Herndon named the Federal Deposit Insurance Corporation as receiver, allowing the FDIC to take control of the bank's affairs. The FDIC then brokered a deal for Dream First Bank, National Association of Syracuse, Kansas to take over customers of Heartland Tri-State Bank. On July 31, all four branches of Heartland Tri-State Bank were reopened as branches of Dream First Bank. Herndon said the transfer didn't result in any disruptions to customers, who were protected from risk of loss. "It was a terribly unfortunate event, but the system did work, and people had no interruption in accessing their accounts," he said. "Sometimes businesses fail. This time it was a bank. But the depositors were protected." As of March 31, Heartland Tri-State Bank had $139 million in total assets and $130 million in total deposits, according to a FDIC news release. Dream First Bank assumed all deposits and agreed to purchase "essentially all of the failed bank's assets," the FDIC said. The regulator and Dream First Bank entered a shared-loss agreement on the loans purchased from Heartland Tri-State Bank to share the losses and potentially recover assets. To read the entire article click here. Tweet |
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