- Customers of the collapsed bank will be transferred to Dream First Bank.
- The Kansas Office of the State Bank Commissioner closed Heartland Tri-State Bank.
The Kansas Office of the State Bank Commissioner closed Heartland Tri-State Bank of Elkhart on July 29; the FDIC thereafter assumed management. The FDIC announced on July 31 that the four former Heartland Tri-State Bank locations will reopen as branches of Dream First Bank the following day.
Customers of the collapsed bank will be transferred to Dream First Bank and all future deposits, withdrawals, and loan activities will be handled by Dream First Bank. Until the changeover is complete, Heartland Tri-State Bank customers should continue to visit their regular branches.
Trouble Continues for Banking Sector
Since the failing First Republic Bank was purchased by J.P. Morgan, Heartland Tri-State Bank is the first bank to fail. It followed the March collapse of Silicon Valley Bank, which sent the US financial sector into pandemonium for days.
The failure of Heartland Tri-State Bank is the second financial institution to fail this week. During the upheaval in the banking sector, on July 25 PacWest merged with Banc of California.
Rising interest rates in the United States and insufficient risk management by banks are blamed for the failures. In an attempt to slow inflation, the Federal Reserve raised its benchmark rate to more than 5.25% in July, the highest level since 2007. The U.S. annual inflation rate was 4.1% in June.
In March, Heartland Tri-State Bank reported a total asset value of $139 million and a deposit base of $130 million. Dream First Bank also acquired all of the assets of the collapsed bank, along with the deposits.
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