The Federal Deposit Insurance Corp. (FDIC) announced the first bank failure of 2025 as Chicago-based Pulaski Savings Bank shut its doors this week, with the Illinois Department of Financial and Professional Regulation named as the receiver.
To protect depositors, the FDIC entered into a purchase and assumption agreement with Millennium Bank of Des Plaines, Ill., to assume all deposits of Pulaski, according to an FDIC press release.
The sole office of Pulaski has been reopened as a branch of Millennium Bank. Pulaski depositors were automatically made depositors of Millennium Bank and their deposits will continue to be insured by the FDIC, meaning there is no need for customers to change their banking relationship.
As of Sept. 30, 2024, Pulaski reported total assets of $49.5 million and total deposits of $42.7 million. Millennium Bank agreed to assume all deposits at the time of closing for a 4.61 percent premium. It will also purchase approximately $45 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition, according to the release.
The FDIC preliminarily estimates the failure will cost its Deposit Insurance Fund (DIF) about $28.5 million. The estimate will change over time as assets are sold. Suspected fraud caused the higher estimated cost to the DIF.
The bank’s customers will have immediate access to their deposits and the ability to access their deposits by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed, and loan customers will be able to continue to make payments as usual, according to the agency.
Pulaski’s failure is the first among all federally insured financial institutions in the U.S. since National Bank of Linday in Oklahoma collapsed in October of last year. It is the first bank failure in Illinois since Washington Federal Bank for Savings in Chicago shuttered in December 2017.