It appears that we are not yet in the clear when it comes to bank closures. Citizens Bank, Sac City, Iowa, on Friday was the latest to be shut down by regulators, which follows a number of high profile banks that were shut down in the first half of this year, including Silicon Valley Bank, First Republic Bank, and Signature Bank.
Citizens Bank, Sac City, was shuttered by the Iowa Division of Banking, while appointing the Federal Deposit Insurance Corporation as receiver. The regional bank, which had two locations, will open on Monday as branches of Iowa Trust & Savings Bank, following the FDIC assuming the deposits of Citizens Bank under a purchase and assumption agreement.
It should be noted that this is not in fact Citizens Financial Group (NYSE: CFG), which many social media commentators have erroneously claimed.
In a release issued by the Iowa Division of Banking, it is said that the Superintendent of Bank of the State of Iowa, Jeff Plagge, closed the bank and tendered its receivership following examiners identifying significant loan losses that had not previously been identified by the bank, with the bank then being declared insolvent. Particularly, the bank is said to have a concentration of out-of-territory and out-of-state loans to one undisclosed industry, which incurred heavy losses.
As of September 30, 2023, the bank is said to have had $66 million in total assets and $59 million in deposits. The total cost to the deposit insurance fund as a result of the failure is estimated at $14.8 million, as per the FDIC.
The failure of Citizens Bank is the fifth such bank failure in 2023 in the US.
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