Dream First Bank Assumes All of the Deposits of Heartland Tri-State Bank (opens in new tab)

That’s literally the opposite of the truth.

Look at the failed bank list: https://www.fdic.gov/resources/resolutions/bank-failures/fai...

Small banks fail. Big banks don’t. If anything this year is abnormal in that big banks have failed.

Small banks are less regulated than large ones, as a result of lobby from them to loosen the rules so that they can eek out some profits using less-conservative strategies. They also tend to serve localized and correlated customers, so local events can have an outsized impact on them, versus big banks that are widely diversified.

The buyer gets to sniff around and accept the offer for the accounts and balance sheet. The insurer, FDIC or sometimes NCUA, takes the difference.

Right, but that is only needed if the assets don't cover the liabilities. Numbers given were covered.

Naive reading of that is that they were not liquid?

Rural people, whatever that means, can be smart and crafty. And there should be a risk management committee and there are services to help provide insights. I was on a rural BoD and don't recall ever seeing a crop loan.

Another problem is the cash flow that can be generated from farmland varies wildly. You might lease it out for $100 an acre, On the other hand you might be making $5,000 an acre if you're farming something specialized.

Crop loans that went bad due to storm damage? Seems possible in that part of the country. Though I'd presume those are insured?

I think the most obvious explanation is that this bank may be another victim of the "sudden" rise in interest rates we're seeing in the last couple of years. This time it was 300 million in assets plus deposits, and the FDIC allegedly will lose 50 million on the rescue operation. The US have thousands of banks of similar size to this one. May be down the road the number of 50 million losses will become unbearable, who knows.