Big Banks Lose Billions in Deposits as JPMorgan Profits Soar

• Heartland Tri-State Bank of Elkhart, Kansas closed on July 28th, with its assets transferred to Dream First Bank, National Association (N.A.).
• JPMorgan Chase, Bank of America, Citigroup and Wells Fargo have lost $262 billion in deposits due to customers withdrawing funds compared to the same period last year.
• JPMorgan’s Q2 report still recorded a 67% rise in profits despite the large drop in deposits.

Heartland Tri-State Bank Closes

The Federal Deposit Insurance Corporation (FDIC) says Heartland Tri-State Bank of Elkhart, Kansas, failed on July 28th. All customer deposits have been transferred to Dream First Bank, National Association (N.A.), also based in Kansas. The FDIC and Dream First Bank agreed to purchase essentially all of the failed bank’s assets and entered into a commercial shared-loss agreement on the loans it purchased from Heartland Tri-State Bank.

Big Banks Lose Deposits

A new report reveals that JPMorgan Chase, Bank of America, Citigroup and Wells Fargo have lost $262 billion due to deposit flight compared to the same period last year. CFRA equity analyst Alexander Yokum says that smaller banks are winning the deposit battle because they’re willing to pay more for their customers. Despite this large drop in deposits however, JPMorgan’s Q2 presentation still recorded a 67% rise in profits in the quarter ended June 30th.

FDIC Agrees To Transfer Assets

The FDIC says that transferring over the bank’s assets to a new institution was more cost efficient than using the FDIC’s insurance fund to compensate customers. They also entered into a commercial shared-loss agreement on the loans it purchased from Heartland Tri-State Bank which is projected to maximize recoveries on the assets by keeping them in private sector while minimizing disruptions for loan customers.

JPMorgan Profits Rise Despite Drop In Deposits

JPMorgan Chase’s impressive Q2 presentation recorded a 67% rise in quarterly profits despite experiencing large drops in customer deposits during this time as well as other big banks such as BofA and Wells Fargo losing billions of dollars worth of deposits too. This shows how powerful these larger institutions can be even when facing difficulties such as this one experienced by their smaller counterparts such as Heartland Tri-State Bank’s closure being forced upon them by government regulations..

Conclusion

The collapse of Heartland Tri-State has highlighted how vulnerable smaller regional banks are against larger financial institutions even when they are offering higher rates for their customer deposits and how quickly those funds can be withdrawn if people feel insecure about their money being held by an institution who may not be insured or protected adequately enough by any government safety net schemes or similar instruments designed for protecting individual investors’ hard earned cash should something go wrong or an unexpected event occur which could put those funds at risk suddenly without any warning signs beforehand..

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