The federal agency that insures bank deposits on Friday entered into a purchase-and-assumption (P&A) agreement with Dream First Bank, National Association, of Syracuse, Kan., to assume all deposits of the failed Heartland Tri-State Bank of Elkhart, Kan., which was state-chartered and federally insured.
Dream First Bank also agreed to purchase essentially all of the failed bank’s assets, the Federal Deposit Insurance Corp. (FDIC) said. Under a shared-loss agreement, the FDIC and Dream First will share in the losses and potential recoveries on the loans covered in the agreement, the agency said. According to the FDIC, this arrangement is projected to maximize recoveries on the assets by keeping them in the private sector and is also expected to minimize disruptions for loan customers.
The Kansas state financial institutions supervisor closed Heartland Tri-State Bank on Friday and named the FDIC receiver. Heartland Tri-State Bank had about $139 million in total assets and $130 million in total deposits as of March 31, the FDIC said. Its failed bank’s four branches were slated to reopen Monday as branches of Dream First Bank under normal business hours.
After the three mid-size banks (Silicon Valley Bank, Signature Bank, and First Republic Bank) that failed this spring, Heartland Tri-State Bank is the fourth federally insured bank to fail in 2023, according to FDIC data.