Another painful bank failure is now declared in Iowa after regulators discovered significant loan losses on its balance sheet.
The Federal Insurance Corporation (FDIC) is adding Citizens Bank in Sac City to its list of failed banks, and says Iowa Trust & Savings Bank has assumed all deposits in order to protect depositors.
The bank’s pair of physical locations will reopen as Iowa Trust & Savings Bank on Monday, reports DailyHodl.
Citizens Bank was established in 1929 and is the first bank closure in Iowa since 2011.
Its closure represents the fifth bank failure in the US this year, following the collapse of Heartland Tri-State Bank, First Republic Bank, Signature Bank and Silicon Valley Bank.
According to the Iowa Division of Banking, the bank had about $66 million in total assets and $59 million in total deposits as of September of this year.
“During a joint and ongoing examination of the bank, examiners identified significant loan losses that had not previously been identified by the bank.
The bank was declared insolvent.
The bank had a concentration of out-of-territory and out-of-state loans to one industry and incurred heavy losses on some of those loans.”
As a whole, the banking industry has been plagued by underwater bond portfolios throughout 2023, triggered by a series of aggressive rate hikes from the Federal Reserve, reports DH.
“The pitfalls of these so-called unrealized losses came into focus early this year amid the collapse of Silicon Valley Bank.
An abrupt run on the bank back in March was sparked by an announcement that the bank had booked a $1.8 billion loss from selling a portion of its underwater bond portfolio.
According to a recent report from Moody’s, the industry is facing approximately $650 billion in unrealized losses that don’t have to be marked at market value.”
Other Banking News Today
A massive bank now closes 12 new branches in Ohio intensifying the state’s already growing closures.
Today, Park National Bank joined the growing list of bank closures after announcing 12 branches will be shuttering in Ohio.
The bank is also headquartered in Ohio.
Earlier this year, it was reported that Ohio outpaces the national average for bank branch closures.
In Ohio, 4.8% of branches were closed between 2020 and 2021, while 4.3% shuttered between 2021 and 2022.
This compares with the national average of 3.2%.
“If the trend of current bank branch closings continues, there may be no bank branches left in 10 years,” reports TheStreet.
“As banks continue to close, there is a fear that this could lead to banking deserts in some communities.”
The following Park National Bank branches are expected to close down in Ohio:
- 758 Wheeling Ave, Cambridge
- 898 East St, Athens
- 2810 Maysville Pike, Zanesville
- 220 E. State St, Newcomerstown
- 1274 Hills Rd, N. Pickerington
- 205 North Seltzer St, Crestline
- 2148-G Eagle Pass, Wooster
- 800 North Main St, Celina
- 8 West Maple St, North Lewisburg
- 2035 Dayton Lakeview Rd, New Carlisle
- 1176 West Main St, Tipp City E
- 5100 ST. RT. 132, Owensville
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