Banking Industry

JOHNSTON, IOWA (March 13, 2023) — Iowa banks continue to be a source of strength and stability, and their asset quality measures remain favorable following the bank closures of Silicon Valley Bank in California and Signature Bank in New York.

“These two banks utilized a very different business model than that of a typical Iowa bank,” said IBA President and CEO John Sorensen. “A concentration in funding from volatile tech startups and crypto-related firms is not common in our industry. Iowa banks are principally relationship-based lenders that gather deposits and lend locally. This business model has stood the test of time. It is why our banks continue to best national measures for capital, liquidity and credit quality. The events of this past week do not change those facts.”

In a joint statement, the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. stated that overall, the “U.S. banking system remains resilient and on solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.”

FDIC INSURANCE PROTECTS BANK CUSTOMERS

In addition to a bank’s capital, Iowans’ deposits are protected by federal deposit insurance.

• In the 88-year history of the FDIC, no one has ever lost a penny of an insured deposit.
• The FDIC insures up to $250,000 in eight separate account categories per depositor per bank. The FDIC is completely funded by the banking industry.
  • Every bank pays risk-based premiums every quarter to support the fund.
  • The FDIC insurance fund and all of the agency’s costs come entirely from premiums paid by banks.
  • The industry knows that a strong FDIC and deposit insurance fund are essential to the banking system. Banks stand ready to do whatever it takes to ensure the health of the fund and strength of the FDIC.
  • The FDIC insurance fund stood at an all-time high of $124.5 billion as of June 2022.
  • The FDIC has a $100 billion line of credit with the U.S. Treasury, which would, by law, have to be repaid by the banking industry if ever used. The banking industry is well capitalized.
  • In total, more than 99% of banks are “highly capitalized” and far above the most stringent regulatory standards.

Reprinted with permission from Iowa Bankers Association.

Citizens Savings Bank is a locally owned community bank that is regulated by the Federal Deposit Insurance Corporation (FDIC) and the Iowa Division of Banking (IDOB). To ensure compliance, safety and soundness, the bank is examined every 18 months between the two regulators. Because Citizens Savings Bank is regulated and insured by the FDIC, customers are insured up to $250,000 per depositor per account ownership category. So you can rest assured that the money you keep at Citizens Savings Bank is protected.

If you have questions about your FDIC insurance coverage, you can utilize the Coverage Calculator on the FDIC website. Feel free to contact any of our branch locations if you need additional assistance.