KBRA Financial Intelligence

Iowa Bank Shuttered, Becoming Fifth Failure This Year

A small community lender in Iowa was shuttered by regulators on November 3, marking the fifth bank failure this year.

Citizens Bank in Sac City, Iowa, (KFI Score: D) was closed by the Iowa Division of Banking (IDOB) after bank examiners identified "significant loan losses" that were not previously identified by the lender, according to a press release. The bank, which was established in 1929, incurred heavy losses on certain loans tied to one industry, according to the statement.

Iowa Trust & Savings Bank in Emmetsburg, Iowa, (KFI Score: B) has entered a purchase and assumption agreement to assume all deposits and virtually all the bank’s failed assets. The Federal Deposit Insurance Corporation (FDIC) estimates that the cost to the Deposit Insurance Fund (DIF) will be $14.8 million.

The FDIC and IDOB entered a consent order with Citizens Bank in August 2023, requiring the lender to hire a third-party loan consultant to service its consumer trucking loan portfolio. The bank had almost 37% of its lending in commercial and industrial loans in 3Q, according to data compiled by KBRA Financial Intelligence (KFI).

Citizens Bank had approximately $66 million in total assets and $59 million in total deposits as of September 30.

Citizens Bank is the fifth bank to fail this year, which is the most since eight banks shuttered in 2017, according to FDIC data. The last failure in Iowa was in 2011.

KBRA Financial Intelligence (KFI) Scores measure the financial health of all U.S. banks and credit unions on an A to E scaling, using a proprietary quantitative model. Citizens Bank’s D KFI Score was based on 2Q Call Report data. The lender would have received an E KFI Score based on its recently filed 3Q Call Report data, according to KFI.