Pulaski Becomes First US Bank to Fail in 2025

Even as the consolidation of banks in the US is taking place at a rapid pace, Pulaski Savings Bank of Chicago, became the first American bank to close down its operations in 2025. Pulaski Savings Bank was one of the oldest bank in the US and launched its operations in 1890.

The last bank failure was The First National Bank of Lindsay, in Lindsay, Oklahoma on 18 October 2024 and the last failure in Illinois was Washington Federal Bank for Savings in Chicago, Ill. on 15 December 2017.

The Illinois Department of Financial and Professional Regulation (DFPR) asked the Pulaski Savings bank to wind up its operations and appointed the Federal Deposit Insurance Corporation (FDIC) as 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 Savings Bank.

The sole office of Pulaski Savings Bank reopened as a branch of Millennium Bank during its normal business hours on 18 January 2025. Depositors of the failed bank will automatically become depositors of Millennium Bank and the deposits assumed by Millennium Bank will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship.

According to the Illinois Department of Financial Professional Regulation, the customers of Pulaski Savings Bank will have immediate access to their deposits. Over the weekend, they can access their deposits by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

DFPR allays Fears

Susana Soriano, acting director of the DFPR’s division of banking, said that they did not want to stress even one customer with deposits at Pulaski Bank and they will lose a penny as a result of the steps taken.

“Our role as a bank regulator is to ensure the safety and soundness of Illinois-chartered banks, and today’s action means Millennium Bank is well-positioned to provide banking services to the customers of Pulaski Savings Bank,” Soriano added.

As of 30 September 2024, Pulaski Savings Bank 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% premium. It will also purchase approximately $45 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.

The FDIC preliminarily estimates that 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.