"I'm more excited about the supply chain enabler side of it, that's actually building some of that tech to help brokers get more efficient, help shippers get more efficient, and help carriers get more efficient."
Iowa Bank Collapses Under Trucking Debt
Citizens Bank of Sac City falls victim to the trucking industry's economic downturn, highlighting the risks of concentrated lending.
The trucking industry's recent hardships have claimed an unexpected victim - Citizens Bank of Sac City, Iowa. The bank's collapse is primarily attributed to its significant involvement in commercial trucking loans, a sector that has witnessed widespread company closures and layoffs.
- Bank Breakdown: Citizens Bank's failure was announced on Nov. 3, with the FDIC stating its assets were taken over due to substantial unrecognized loan losses.
- Loan Losses: An FDIC review revealed a high concentration of troubled out-of-state trucking loans.
This fallout mirrors the broader industry's downturn, marked by reduced rates and an excess of vehicles. The bank's estimated losses of $14.8 million now fall to the Iowa Department of Insurance and Financial Services, as the bank was state-chartered and not FDIC-insured. Despite the bank's small size, with a $66 million asset base in a town of 2,000, the risky loans raise questions about its lending practices.
The trucking industry faces a bumpy road ahead, with new Class 8 trucks ranging from $150,000 to over $220,000. As the community of Sac City and the state of Iowa grapple with the bank's failure, the incident serves as a reminder of the risks in sector-focused lending.