Friday bank failures are back! Citizens Bank in Sac City, Iowa, has been shuttered due to hidden loan losses.
The Federal Deposit Insurance Corporation (FDIC) announced on Friday that Citizens Bank, a state-chartered bank, had been closed due to undisclosed loan losses. The FDIC was appointed as the receiver of the bank and has taken over its operations.
The FDIC has also entered into a purchase and assumption agreement with United Bank of Iowa, located in Sioux City, Iowa, to assume all of the deposits of Citizens Bank. All of the deposits of Citizens Bank will be transferred to United Bank of Iowa and customers of Citizens Bank will be able to access their funds through United Bank of Iowa.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be approximately $2.3 million. Citizens Bank had approximately $50.2 million in total assets and $48.3 million in total deposits as of June 30, 2020.
The FDIC is encouraging customers of Citizens Bank to contact United Bank of Iowa for more information about their accounts. Customers of Citizens Bank will continue to be insured by the FDIC, up to the applicable limits, for at least six months after the bank’s closure.
The closure of Citizens Bank is a reminder that banks can fail, even in times of economic prosperity. It is important for customers to be aware of the risks associated with banking and to make sure that their deposits are insured by the FDIC.
NEW: 🚨 Bank failure Fridays are back! 😮
Citizens Bank in Sac City, Iowa, was shuttered yesterday due to substantial hidden loan losses, forcing FDIC receivership.
