© Reuters.
Citizens Bank, based in Sac City, Iowa, has been shuttered due to financial instability, marking the fifth US bank failure in 2023. The Iowa Division of Banking sanctioned the Federal Deposit Insurance Corporation’s (FDIC) takeover on Friday, November 3, with the FDIC subsequently appointed as receiver.
A Purchase and Assumption Agreement was made with Iowa Trust & Savings Bank to assume all deposits and assets from Citizens Bank. The assets are valued at $66 million while deposits amount to $59 million. The branches of Citizens Bank will reopen under the new bank during normal business hours on Monday.
Customers can access funds via checks or ATM/debit cards over the weekend and loan payments should continue as usual. Despite the systems changes, deposit insurance for Citizens’ customers remains unaffected.
The transition incurs a $14.8 million cost to the Deposit Insurance Fund (DIF), a fund established by Congress in 1933 for deposit protection. This acquisition marks the first since Polk County Bank’s failure, the last in Iowa in 2011. It is considered the least costly resolution.
This bank closure follows a trend that started with First Citizens Bank on March 10, making it the fifth banking failure in 2023 within the US.
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