• On November 3, The FDIC announced that Citizens Bank of Sac City, Iowa was closed making it the fifth bank to fail in 2023. As of September 30, 2023, Citizens Bank had approximately $66 million in total assets and $59 million in total deposits. Iowa Trust and Savings Bank of Emmetsburg, Iowa assumed all the deposits of Citizens Bank. Examiners cited significant losses from a concentration of out-of-state loans to the commercial trucking industry as a factor in the bank’s collapse.
  • On November 9, The Fed announced the release of the Federal Reserve Supervision and Regulatory Report which provides overviews of the financial conditions and regulatory and supervisory developments for large financial institutions (LFIs- total assets of $100 billion or more), community banking organizations (CBOs- less than $10 billion in total assets), and regional banking organizations (RBOs- between $10 billion and $100 billion in total assets). Highlights of the report included:
    • Outstanding supervisory findings at LFIs has increased over the last year, with governance and control findings accounting for two-thirds of the issues, and matters requiring attention (MRAs) related to liquidity and interest rate risk management increasing recently.
    • Supervisory priorities relative to LFIs for the coming months include capital adequacy, liquidity, governance and controls, and recovery and resolution planning.
    • The vast majority of CAMELS ratings for CBOs and RBOs remained satisfactory, but there was an increase in the number of ratings downgrades (see our series of articles on CAMELS ratings starting here).
    • Both the number of supervisory findings and number of findings per examination increased in 2023 for CBOs and RBOs, with information technology weaknesses and operational risk being the most cited supervisory issues in the first half of 2023. The number of market risk, liquidity risk, and BSA/AML issues represented an increasing share of issues compared to previous years.
    • Supervisory priorities for CBOs and RBOs for the coming months include credit risk, liquidity risk, operational risk, and other financial risks (including interest rate risk and capital adequacy).
  • On November 9, The SEC announced that Fifth Third Bank of Cincinnati, Ohio agreed to pay an $8 million dollar penalty to settle the regulator’s investigation into bank employees’ use of unapproved channels for business communications, including WhatsApp and other messaging platforms. Regulators have assessed more than $2 billion in record-keeping-related penalties since 2021. Our experience has been that many firms struggle to control employees using social media for business communications and that trend is likely to continue.

Contact us to learn how a strategic partnership with Doran Jones can provide you with cost-effective solutions by leveraging our expertise with these and other critical risk and compliance functions.