DES MOINES – Polk County Bank, of Johnston, Iowa, was closed on Friday, November 18th by the Iowa Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Grinnell State Bank, Grinnell, Iowa, to assume all of the deposits of Polk County Bank.
The three branches of Polk County Bank will reopen on Saturday as branches of Grinnell State Bank. Depositors of Polk County Bank will automatically become depositors of Grinnell State Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Polk County Bank should continue to use their existing branch until they receive notice from Grinnell State Bank that it has completed systems changes to allow other Grinnell State Bank branches to process their accounts as well.
As of September 30, 2011, Polk County Bank had approximately $91.6 million in total assets and $82.0 million in total deposits. In addition to assuming all of the deposits of the failed bank, Grinnell State Bank agreed to purchase essentially all of the assets.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $12.0 million. Compared to other alternatives, Grinnell State Bank’s acquisition was the least costly resolution for the FDIC’s DIF. Polk County Bank is the 89th FDIC-insured institution to fail in the nation this year, and the first in Iowa. The last FDIC-insured institution closed in the state was Vantus Bank, Sioux City, on September 4, 2009.
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Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s 7,513 banks and savings associations, and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its operations.