The FDIC has included Citizens Bank in Sac City in its roster of failed banks, with Iowa Trust & Savings Bank taking over all deposits to safeguard depositors.
Established in 1929, Citizens Bank's closure marks Iowa's 1st bank shutdown since 2011. This constitutes the 5th U.S. bank failure in 2023, following Heartland Tri-State Bank, First Republic Bank, Signature Bank, and Silicon Valley Bank.
As of September this year, the Iowa Division of Banking reported that the bank held approximately $66 million in total assets and $59 million in total deposits.
In 2023, the banking sector has faced challenges due to bond portfolios in the red, primarily caused by the Federal Reserve's successive interest rate increases.
The challenges of unrealized losses were highlighted when Silicon Valley Bank collapsed earlier this year. In March, a bank run was triggered by a $1.8 billion loss from selling underwater bonds.
Moody's recent report states the industry is grappling with around $650 billion in unrealized losses that aren't required to be valued at market prices.