11/04/2023

Another Bank Bites the Dust 2023







Another bank bites the dust. This is bad news.

The fifth bank to be shut down in 2023. 

A Siouxland bank has closed after suffering heavy losses on loans not previously identified, according to Iowa banking officials.

Banks are required to file financial regulatory reports with the OCC. These reports must include: 

  • The bank's financial condition
  • The results of its operations
  • Risk exposure

Banks are also required to file Consolidated Reports of Condition and Income also known as a Call Report. 

This report includes: 

  • A balance sheet
  • An income statement
  • Supporting schedules
  • Details on assets, liabilities, and capital accounts
  • Details on income and expenses

Banks must file the Call Report as of the close of business on the last day of each calendar quarter

Trucking and some farm equipment loans went non paying when interest rates rose this year. The bank was ordered to hire a Special Loan Consultant in thirty days to manage the workouts on these bad loans. The bank failed to correct it's problem and the hammer came down.

 

Citizens Bank in Sac City was legally shut down Friday November 3rd, 2023 at 4:00 by the Iowa Division of Banking (IDOB).

 As part of the closure by IDOB Superintendent Jeff Plagge, the bank was placed into the receivership of the Federal Deposit Insurance Corporation (FDIC).

The release states that bank examiners “identified significant loan losses that had not previously been identified by the bank” while conducting an examination of the bank. Call reports were not accurate. Officials said Citizens Bank had a “concentration of out-of-territory and out-of-state loans to one industry” and then suffered heavy losses from some of those loans. The bank has since been declared insolvent.

All deposit accounts have been purchased and transferred to Iowa Trust & Savings Bank, Emmetsburg. At the time of shuddering Citizens Bank had one main office and drive-up facility.  

Iowa Trust & Savings Bank now holds the deposits.

As of its third quarter call report, 

Citizens Bank reported

 $65,558,000 in total assets 

and $58,930,000 in total deposits. 

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. 

Bad loans on Auto Loans, Recreational Vehicle Loans, HELOC s, Home Improvement Loans, Personal Loans, Mortgage Loans to Investors, Agriculture loans to farmers for equipment and livestock, and Commercial loans.

 

FDIC insures qualified deposits to $250,000.