In what is already a record year for US bank failures, the total assets of failed banks continued to climb with the fall of Elkhart, Kan.-based Heartland Tri-State Bank.

The total assets of failed banks now sits at $552.47 billion for the year, well above 2008, the year in second place, which had $364.72 billion in failed bank assets. However, the failure of the Kansas-based community bank, which had $139.4 million in assets at March 31, contributed marginally to this year's total due to the sheer size of the other banks that have failed.

As such, Heartland Tri-State is the smallest US bank to fail in 2023 and the smallest bank failure since that of Almena State Bank in October 2020.

Heartland Tri-State's fall marks the fourth US bank failure this year, tied with 2019 and 2020 for the most failures since 2017, which saw eight. The spurt of failure activity in 2023 comes off a quiet period in which both 2021 and 2022 saw zero failures.

Heartland Tri-State's demise also marks the first US bank failure since the industry upheaval in spring that claimed three regional banks, but it is unrelated to those three failures. According to a press release from the Kansas Office of the State Bank Commissioner, the company became insolvent due to an "isolated event."

It is unknown what the event was. At the time of its failure, the company appeared to have strong capital ratios. Its tangible equity was 5.56% of its tangible assets and its leverage ratio was 9.08%, compared to respective group medians of 3.69% and 2.61% among the 15 most recently failed banks. Its common equity Tier 1 ratio was 17.66% at March 31.

The Kansas Office of the State Bank Commissioner closed the bank July 28 and appointed the Federal Deposit Insurance Corp. as receiver. Dream First Bank NA purchased all of the bank's assets and deposits in accordance with a purchase and assumption agreement with the FDIC.

Heartland Tri-State had $130.1 million in total deposits at March 31.

The company's loans totaled $49.3 million at March 31, with agriculture production loans making up nearly half, or 43.26%, of total loans. Real estate loans made up another 39.35% of total loans.

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Heartland Tri-State's failure continues what was already the biggest year for US bank failures ever with the falls of Silicon Valley Bank and Signature Bank in March and First Republic Bank in April, which marked the third-, fourth- and second-largest bank failures ever, respectively.