Failures

Acting Chair Travis Hill's push for quick weekend bank sales signals a break from past crisis strategies — but some experts warn of higher costs and increased consolidation risks

President Trump's tariff regime and resulting price shocks may put additional pressure on small banks, requiring an already undermanned Federal Deposit Insurance Corp. to turn to assisted M&A deals to resolve failed banks, accelerating consolidation in the industry.

The Chicago-based bank, which failed Friday in the first bank failure of 2025, caused a $28.5 million hit to the Deposit Insurance Fund. The FDIC was appointed receiver and Millennium Bank will assume all deposits.

The agency had been on the verge of downgrading Philadelphia-based Republic First Bancorp's CAMELS rating to the lowest level but opted for a less severe remedy after a November 2020 visit.

The Office of the Comptroller of the Currency is referring the issue to the Department of Justice. The failure of the $107.8 million bank will also cost the Deposit Insurance Fund an estimated $43 million.

Shan Hanes, who led Heartland Tri-State Bank in Kansas until it failed last year, pleaded guilty to one count of embezzlement by a bank officer. He now faces up to 30 years in prison. He is scheduled to be sentenced on Aug. 8.

New York Community Bank's acquisition of the failed Signature Bank helped with its liquidity. But there were other considerations that decisionmakers overlooked in allowing the transaction to take place.

There were significant red flags that regulators overlooked when allowing New York Community Bank to acquire Signature Bank. Those include the fact that the company was still integrating the Flagstar Bank transaction.

Investors are facing recent pressure after Republic First's collapse, allegations of criminal activity by an executive at Old National and a pending CFPB rule affecting credit card fees.

The first bank failure of 2024 will result in the Lancaster, Pennsylvania-based Fulton nearly doubling deposits in Philadelphia, a market it has viewed as strategically important for several years.