The Federal Deposit Insurance Corporation (FDIC) took control of Citizens Bank in Sac City, Iowa on Thursday due to a severe financial crisis resulting from substantial losses from out-of-state and out-of-territory loans focused on one industry. The bank, which held $65,558,000 in assets and $58,930,000 in deposits at the time of closure, is set to reopen as a branch of Iowa Trust & Savings Bank on Monday.
The FDIC stepped in after Citizens Bank ceased operations on November 3, 2023, due to previously unidentified loan losses. The bank's third-quarter report indicating assets of $65,558,000 and total deposits of $58,930,000 triggered the FDIC's immediate intervention without advance notice.
Iowa Trust & Savings Bank has bought all deposits and available loans from Citizens Bank. This transition is designed to prevent depositor losses. The FDIC, which ensures each deposit up to $250,000, has made a toll-free number available for further customer inquiries.
This incident marks the first bank closure in Iowa since 2011. It highlights the risks associated with heavy loan concentrations in a single industry. The reopening of Citizens Bank under Iowa Trust & Savings Bank is expected to restore stability and trust among its customers.
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