Matt,
I have the same question you do! I'm assuming we will get more information because the loss to the FDIC -- proportionally to the size of the bank -- is so large. My first job at the Banker was covering the FDIC so I had to handle a lot of late night Friday failures. I can remember quite a few whoppers that brought down the bank. In 1999, the First National Bank of Keystone springs to mind. In that case, several bank executives had engaged in massive fraud to sink a $1 billion bank. That included burying documents with a backhoe in a nearby farm. Eventually they got caught, the bank failed, and the entire town became a ghost town (this continues to this day, sadly. I've checked in on it from time to time.) There was another bank failure in 2002 that I remember was the bank CEO taking deposits and putting them in riverboat casinos. He had two sets of books to keep it all straight.
I'm assuming we will find out more here, because the FDIC IG would normally investigate a failure where the cost to the DIF is this size. I'd really like more information.
------------------------------
Rob Blackwell
Chief Content Officer and Head of External Affairs
IntraFi
Arlington, VA
------------------------------
-------------------------------------------
Original Message:
Sent: 08-07-2023 09:14
From: Matt Johnson
Subject: Heartland Tri-State Bank Failure Due to a Scam??
Does anyone have insights or ideas of why a $140 MM community bank in Kansas would have failed due to a scam? Citing an "ongoing investigation," they are not providing information on the scam leading the bank's demise. However, they did cite it had nothing to do with interest rate increases, asset quality, or the Fed. That must have been one heck of a scam to sink a community bank.
Don't worry, it was just a "scam" | Financial Times (ft.com)
------------------------------
Matt Johnson
CFO
Premier Bank
Omaha, NE
Posts reflect my personal opinion and do not represent any organization in which I am affiliated.
------------------------------