Chicago Bank Becomes First U.S. Bank Failure of 2026

Metropolitan Capital Bank & Trust, a Chicago-based lender, has become the first U.S. bank to fail in 2026 after regulators determined the institution was operating under unsafe and unsound conditions.

On Friday, the Illinois Department of Financial and Professional Regulation (IDFPR) closed the single-branch bank and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The FDIC subsequently reached an agreement with Detroit-based First Independence Bank to assume substantially all of Metropolitan Capital’s deposits and assets.

Under the transaction, First Independence Bank acquired approximately $212.1 million in deposits and $251 million of the failed bank’s $261.1 million in total assets. Regulators emphasized that all depositors are fully protected and will experience no disruption in access to their funds. “No depositor will lose any money as a result of this action,” said Susana Soriano, Acting Director of IDFPR’s Division of Banking, in a prepared statement.

According to regulators, Metropolitan Capital was closed due to an impaired capital position. First Independence Bank, which reopened the branch under its own name the following Monday, was described as well-positioned to continue providing essential banking services to customers. The failure is expected to cost the FDIC’s Deposit Insurance Fund approximately $19.7 million, though the final amount may change as remaining assets are liquidated.

Founded in 2005, Metropolitan Capital Bank & Trust offered commercial banking, investment banking, private banking, and wealth advisory services to small and mid-sized businesses across 46 U.S. states and 10 countries. Leadership changes occurred in 2025, when then-CEO Michael Rose departed to establish advisory firm Affinitas Capital.

Its acquirer, First Independence Bank, is among the largest Black-owned banks in the United States and has expanded rapidly in recent years. The bank reported assets exceeding $500 million in 2025, up from just over $200 million in 2020. CEO Kenneth Kelly was named Chair of the American Bankers Association in October 2025.

Metropolitan Capital’s collapse follows a period of heightened scrutiny in the U.S. banking sector. Two banks failed in 2025, following two failures in 2024 and five in 2023, including Silicon Valley Bank, Signature Bank, and First Republic Bank — among the largest bank failures in U.S. history.

Source: Banking Dive