The US banking sector has witnessed the first bank failure in 2026. Regulators have closed Metropolitan Capital Bank & Trust in Chicago. The government acted swiftly, transferring most of the bank’s assets to another bank.
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New Delhi. The US banking sector has witnessed the first major incident of 2026. Regulators have closed Chicago-based Metropolitan Capital Bank & Trust. This is believed to be the first bank failure of the year. The Federal Deposit Insurance Corporation (FDIC) acted quickly and transferred most of the bank’s assets to Detroit-based First Independence Bank to minimize the impact on depositors and the market.
FDIC’s Swift Action and Asset Transfer
According to the FDIC, the Illinois Department of Financial and Professional Regulation closed Metropolitan Bank and placed it into FDIC receivership. The bank had total assets of $261.1 million. Under the agreement, First Independence Bank will assume approximately $251 million in assets and all of Metropolitan’s $212.1 million in deposits. The FDIC will later proceed to sell the remaining assets.
What has changed for depositors?
The FDIC has clarified that all Metropolitan Bank depositors will now automatically become First Independence Bank customers. Customers will not need to go through any additional procedures to maintain access to their accounts. They will be able to use checks, ATMs, and debit cards as before. This quick resolution is intended to maintain depositor confidence and prevent any panic in the banking system.
How much will the FDIC fund be affected?
The FDIC estimates that the failure of this bank could result in a loss of approximately $19.7 million to its Deposit Insurance Fund. However, the agency has also stated that the exact final cost will be revealed when the remaining assets are sold in the market. This amount typically varies over time in bank failures.
What does the bank’s financial situation indicate?
According to third-quarter 2025 data available on the FDIC website, Metropolitan Bank had liabilities of $257 million against assets of $261 million. Its net equity capital ratio was approximately 1.62 percent, which is considered very weak. Additionally, the bank reported liabilities of approximately $43 million in advances from the Federal Home Loan Bank System. The bank also had one of the largest commercial and industrial loan portfolios, further increasing its risk.
A Bigger Case Than 2025
2025 was a relatively quiet year for bank failures in the United States, with only two failing. In January 2025, Pulaski Savings Bank, also in Chicago, closed with assets of $49.5 million, while in June 2025, Santa Anna National Bank in Texas failed with assets of $63.8 million. The Pulaski Bank case proved particularly costly, costing the Deposit Insurance Fund approximately $28.5 million.
FDIC Emphasizes Quick Deals
The same-day sale of Metropolitan Bank is consistent with FDIC Chair Travis Hill’s strategy of quickly selling failing banks. Hill believes that the longer a sale takes, the faster the value of a bank’s assets erode. He has previously stated that the delay in finding a buyer after the failure of Silicon Valley Bank in 2023 sent a negative message to the market. Metropolitan Bank was led by President and CEO Frank Nowell, a veteran of the banking sector. This incident once again demonstrates that regulators are now taking a more swift and decisive approach to dealing with banking crises, in order to maintain confidence in the system and limit losses.
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