List of Failed Banks in the United States 2023 [Recent] (2024)

In this blog post, we will be reviewing the list of failed banks in the United States.It's never good news when we hear about a bank failure, and unfortunately, there have been quite a few in the United States over the years. From Washington Mutual and IndyMac in 2008 to Guaranty Bank and First NBC Bank in 2017, these failures can have a big impact on customers, employees, and the economy as a whole. While there are often warning signs leading up to a bank failure, it can still be a shock and a disappointment to those affected.2

It's important to remember, though, that the government has systems in place to help protect customers' deposits and ensure that the banking industry remains stable overall. Banks are an important part of our financial system, but unfortunately, they can fail from time to time. There are a few reasons why this might happen. One common cause is undercapitalization, which means that the bank doesn't have enough money to cover its obligations.

Another factor is loan quality – if a bank makes too many bad loans, it can end up losing a lot of money. Additionally, losses on investment securities can also contribute to a bank's failure. When a bank fails, it can have a ripple effect on the economy and on the people who have accounts with that bank. That's why it's important for regulators to keep a close eye on banks and step in when necessary to prevent failures from happening.

ALSO READ: Which Banks Are in Danger of Failing or Collapse?

Bank Failures This Week – The Citizens Bank, Sac City, Iowa

The latest bank that collapsed was The Citizens Bank, Sac City, Iowa. Citizens Bank's closure marks the fifth bank failure in the nation in 2023. The last bank failure in Iowa was Polk County Bank in Johnston, which occurred on November 18, 2011, highlighting the rarity of such events in the state.

It faced closure as the Iowa Division of Banking took action. The Federal Deposit Insurance Corporation (FDIC) was appointed as the receiver to safeguard the interests of depositors. In a move to ensure depositors' safety, the FDIC forged a Purchase and Assumption Agreement with Iowa Trust & Savings Bank, Emmetsburg, Iowa. Iowa Trust & Savings Bank would take on the responsibility of securing all the deposits of Citizens Bank.

The transition for customers of Citizens Bank would be smooth and efficient. The two branches of Citizens Bank will reopen as branches of Iowa Trust & Savings Bank during normal business hours, starting on Monday. Depositors can access their funds through check writing or ATM and debit card usage throughout the weekend. Checks drawn on the bank will continue to be processed, and loan customers should make their payments as usual.

Depositors of Citizens Bank need not worry about changing their banking relationship to maintain their deposit insurance coverage. They will automatically become depositors of Iowa Trust & Savings Bank, ensuring continuity in their financial security.

As of September 30, 2023, Citizens Bank held approximately $66 million in total assets and $59 million in total deposits. Iowa Trust & Savings Bank has also agreed to purchase most of the failed bank's assets, securing the financial well-being of its customers.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $14.8 million. This resolution by Iowa Trust & Savings Bank is considered the least costly option compared to other alternatives, emphasizing the importance of the DIF in protecting the nation's bank deposits.

To prevent bank failures, regulators closely monitor banks and enforce regulations to ensure that they are adequately capitalized and managing risk appropriately. In addition, deposit insurance programs such as the Federal Deposit Insurance Corporation (FDIC) in the United States help protect customers' deposits in the event of a bank failure.

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List of Banks Examined for CRA Compliance – November 2023

The Federal Deposit Insurance Corporation (FDIC) recently released its list of state nonmember banks that were evaluated for compliance with the Community Reinvestment Act (CRA). This list, which covers evaluation ratings assigned by the FDIC in August 2023, plays a crucial role in promoting responsible banking practices and community development.

Understanding the Community Reinvestment Act (CRA)

The CRA, enacted in 1977, serves as a cornerstone of ensuring that insured banks and thrifts contribute to the betterment of their communities. This law encourages financial institutions to meet the credit needs of local communities, particularly those in low- and moderate-income neighborhoods, all while maintaining safe and sound operations.

Mandatory Public Disclosure

In 1989, as part of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), the Congress mandated the public disclosure of evaluation and rating reports for each bank or thrift that undergoes a CRA examination on or after July 1, 1990. This transparency ensures that banks are held accountable for their community reinvestment efforts.

Accessing the Evaluation Results

If you're interested in obtaining information about state nonmember banks' CRA evaluations, the FDIC provides a consolidated list that has been publicly available since July 1, 1990. This list includes the rating for each bank. You can access this information online or obtain a hard copy from the FDIC's Public Information Center at 3501 Fairfax Drive, Room E-1002, Arlington, VA 22226. For inquiries, you can contact them at 877-275-3342 or 703-562-2200.

Requesting Individual Bank Evaluations

If you need the CRA evaluation for a specific bank, it's good to know that these reports are available directly from the bank itself. The law requires banks to make this information available upon request. You can also request these evaluations from the FDIC's Public Information Center, ensuring transparency and accessibility for the public.

The release of the FDIC's list of banks evaluated for CRA compliance underscores the importance of transparency and accountability in the banking industry. The Community Reinvestment Act continues to be a vital tool in promoting responsible banking practices and ensuring that financial institutions are actively contributing to the well-being of their local communities.

With public access to these evaluation reports, consumers and communities can make informed decisions about their banking relationships and hold banks accountable for their community reinvestment efforts. It's a step towards a more equitable and responsible banking sector.

List of Recent Failed Banks [2021 – 2023]

List of Recent Failed Banks [2015 – 2020]

List of Failed Banks [2013 – 2014]

List of Failed Banks [2011 – 2012]

Sources:

• https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/
• https://www.fdic.gov/news/press-releases/2023/pr23015.html
• https://www.fdic.gov/news/press-releases/2023/pr23034.html