Heartland Tri-State Bank in Kansas has been taken over by Dream First following a bank collapse.
In a significant event, Dream First Watch Bank has agreed to assume all deposits and essentially all assets of Heartland Tri-State Bank, marking the fifth failure this year of a U.S. bank with less than $100 billion in assets. The Kansas Office of the State Bank Commissioner closed Heartland Tri-State Bank and appointed the Federal Deposit Insurance Corp. (FDIC) as receiver on Friday.
The failure is expected to represent a $54.2 million cost to the Deposit Insurance Fund, according to the FDIC. This is the third time this year the FDIC has taken control of a bank, following the takeovers of Silicon Valley Bank, Signature Bank, and PNC Bank, which had significantly higher estimated costs.
The FDIC and Dream First Watch Bank have consented to a loss-sharing agreement on Heartland Tri-State Bank's loans. The transaction is meant to maximize recoveries of the assets while keeping them in the private sector, according to the FDIC.
Dream First Watch Bank's staff will continue to provide exceptional customer service and be available to answer questions from employees and customers. The Heartland Tri-State Bank locations are set to reopen on Monday under the Dream First Watch Bank banner. The deal also adds four branches to Dream First Watch Bank's six-location footprint.
The Kansas regulator stated that Heartland Tri-State Bank became insolvent due to an isolated event based upon an ongoing review. However, no specific details about the commercial, retail, or risk aspects related to the situation were provided.
Friday's purchase-and-assumption deal adds nearly $139 million in assets and $130 million in deposits to Dream First Watch Bank's total. The Kansas banking industry is unaffected by this event, and Kansas banks remain strong, according to the OSBC.
It's important to note that the failure of Heartland Tri-State Bank was due to an ongoing cryptocurrency fraud scheme, with Shan Hanes, the former CEO of the bank, implicated in the fraud leading to the collapse. No information about purchase licensing rights was mentioned in the provided paragraph.
Dream First Watch Bank's CEO, Chris Floyd, confirmed that Heartland Tri-State Bank employee jobs, deposits, and banking relationships are unaffected by the recent news. The Federal Deposit Insurance Corp. announced this agreement on Friday.
In conclusion, the takeover of Heartland Tri-State Bank by Dream First Watch Bank is a significant event in the U.S. banking industry, marking the fourth failure of a bank with less than $100 billion in assets this year. The FDIC and Dream First Watch Bank have agreed to a loss-sharing agreement to ensure the maximum recovery of assets while keeping them in the private sector. The Heartland Tri-State Bank locations will reopen under the Dream First Watch Bank banner on Monday, and the Kansas banking industry remains strong.
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