Kansas Heartland Bank Taken Over by FDIC

Yield Curve is could be the indicator to more small bank failures

The Consolidation of the Banking System

Heartland Tri-State Bank, a small community bank in Kansas with $139 million in assets, has failed. This is the fourth bank to be seized by regulators this year and the fifth to fold altogether. The other banks that failed thus far all had assets of more than $100 billion. The reason for Heartland's failure is not yet known, but the Kansas Office of the State Banking Commissioner said it was due to an "isolated event." Another community bank in Kansas, Dream First Bank, has agreed to assume all of Heartland Tri-State's deposits and purchase "essentially all" of the failed bank's assets. The FDIC estimates this failure will cost the FDIC's Deposit Insurance Fund $54.2 million. Heartland Tri-State Bank is headquartered in Elkhart, Kansas, a town with a population of less than 2,000 people. Dream First Bank is based in Syracuse, Kansas, and had $480 million in assets as of March 31, 2023. The FDIC's Deposit Insurance Fund is a government-backed insurance program that protects depositors up to $250,000 per account.

The bank failures are not over. I see a continuation of a consolidation in small to mid size banks and we continue to see a rise in Treasury Yield.

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