Citizens Bank of Sac City Closes After 94 Years
In a recent development that has sent shockwaves through the community, Citizens Bank, a longstanding institution in Sac City, Iowa, has ceased operations after 94 years. The closure, confirmed by the Federal Deposit Insurance Corp (FDIC), was primarily attributed to significant non-local loan losses, which went unnoticed by the bank's management.
The Unfortunate Closure
At the end of the third quarter, Citizens Bank reported $65,558,000 in assets against $58,930,000 in total deposits. These financial numbers prompted the FDIC to take action, resulting in the bank's closure on November 3. It's worth noting that in such cases, there is no mandated warning period for the closing of a bank.
However, there is a silver lining for depositors. The main office of Citizens Bank, along with its drive-up service, will continue to operate under the stewardship of Iowa Trust & Savings Bank, based in Emmetsburg. This transition became possible as Iowa Trust & Savings Bank acquired all deposits, including personal, commercial, and government, ensuring that depositors would not face any monetary losses. The acquisition also includes the assumption of performing loans.
Root Cause: Significant Loan Losses
Upon investigation, it was discovered that Citizens Bank had incurred "significant loan losses" that had previously gone unnoticed. The bank's loan portfolio was notably concentrated in "out-of-territory and out-of-state loans" linked to a specific sector that experienced pronounced defaults. The FDIC's report did not disclose the specific industry related to these loans.
This bank failure is the first in Iowa since 2011, and the FDIC has stepped in to take over the deposits and most of the assets. The closure of Citizens Bank raises concerns among the public regarding their money's safety and the subsequent processes.
Customer Deposits Remain Secure
The FDIC has assured customers that no funds were lost due to the bank's closure. All deposits have been safely transferred to Iowa Trust & Savings Bank.
Accessing Funds
Account holders can continue to use their existing checks, which will be honoured up to the available account balance. ATM and debit card services will also remain uninterrupted. Funds in various account types, including checking, savings, money market accounts, certificates of deposit, and retirement accounts, have been transferred to Iowa Trust & Savings Bank and are available for use.
Direct Deposits and Bill Payments Unaffected
Direct deposit transactions will continue without disruption, covering social security, payroll, veterans' benefits, and other electronic transfers. Scheduled bill payments and online banking services will operate as usual, and existing routing and account numbers will remain valid until Iowa Trust & Savings Bank issues any necessary changes.
Customer Support
For those seeking additional information and support, a dedicated helpline for Citizens Bank is available at (866) 314-1744. The FDIC's official website provides further details and resources for affected customers.
In conclusion, while the closure of Citizens Bank is undoubtedly a significant event, depositors can take solace in the fact that their funds remain secure, thanks to the FDIC's involvement. Iowa Trust & Savings Bank's acquisition of Citizens Bank's operations ensures the continuation of banking services for the community. This serves as a reminder of the importance of prudent banking practices and the crucial role of regulatory bodies in safeguarding the financial interests of the public.