Fifth bank fails in 2026 as drip of small-bank closures continues

• Key insight: Tioga-Franklin Savings Bank became the fifth U.S. bank to fail in 2026.
• Supporting data: The $68 million-asset bank's failure is expected to cost the DIF about $5.5 million.
• Forward look: Five failures this year mark a modest uptick from the two failures recorded in both 2024 and 2025.

A $68 million-asset Philadelphia-based savings and loan association became the fifth bank to fail this year, according to a Friday release from the Federal Deposit Insurance Corp.

Tioga-Franklin Savings Bank was closed Friday by the Pennsylvania Department of Banking and Securities, with the FDIC appointed as receiver. The FDIC also announced an agreement with Second Federal Savings and Loan Association of Philadelphia to transfer all of Tioga-Franklin's deposits and the vast majority of its assets. The FDIC estimated the failure will cause a Deposit Insurance Fund hit of around $5.5 million.

"Tioga-Franklin Savings Bank's sole branch will reopen as a branch of Second Federal Savings and Loan Association of Philadelphia during its normal business hours on Monday, August 24, 2026. Depositors of Tioga-Franklin Savings Bank will automatically become depositors of Second Federal Savings and Loan Association of Philadelphia," the agency announced. "The deposits assumed by Second Federal Savings and Loan Association of Philadelphia will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship."

Tioga-Franklin had reported total assets of $68 million and total deposits of $67 million as of June 30.

This year has seen a steady drip of failures of small community banks, making 2026 a slight uptick in bank failures. The year's first failure was Chicago-based Metropolitan Capital Bank & Trust, which was estimated to have cost the DIF about $19.7 million. Community Bank and Trust - West Georgia, a community bank based in LaGrange, Georgia, was the second U.S. bank to fail in 2026 and cost the FDIC's Deposit Insurance Fund roughly $97 million, subject to adjustments.

 In early July, regulators announced that the Office of the Comptroller of the Currency had closed the sole branch of Kentland Federal Savings and Loan Association and appointed the FDIC the receiver, marking the demise of what was previously the nation's smallest standalone bank. An unaffiliated Kentland Bank, also based in Kentland, Indiana, agreed to purchase substantially all of the failed institution's assets and assume all of its deposits. The FDIC estimated that failure cost the Deposit Insurance Fund $1.2 million. A week after Kentland's failure, $73 million in assets Small Business Bank of Lenexa, Kansas failed, marking the fourth failure this year.

Bank failures have become more rare in recent years. Only two banks failed in both 2025 and 2024. And no banks failed in either 2021 or 2022. But five banks failed in 2023, including the high-profile collapses of Silicon Valley Bank, First Republic Bank and Signature Bank.

Since 2014, when 18 banks failed, no more than eight banks have failed in any year, according to FDIC records. That happened twice, in 2015 and 2017. Between 2008 and 2013, during and in the wake of the financial crisis, 489 banks failed, with the worst year being 2010, when 157 failed.

The FDIC recently proposed lowering deposit insurance assessments for small banks, which could see their assessment rates decrease by two basis points under a June proposed rule; large and highly complex institutions would enjoy a one-basis-point reduction.