Bank Failure Alert - Kentland Federal Savings and Loan Association

The third bank failure of 2026...

On 7/10/26, the Office of the Comptroller of the Currency (OCC) closed Kentland Federal Savings and Loan Association of Kentland, IN (FDIC 28722; total assets $3.8M; total deposits $3.7M as of the 3/31/26 call report) and appointed the FDIC as receiver. Kentland Bank of Kentland, In (FDIC 13843; total assets $402M - no affiliation with Kentland Federal Savings and Loan Association) to purchase substantially all assets and assume all deposits of Kentland Federal Savings and Loan Association. 
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• The FDIC preliminarily estimates that the failure will cost the Deposit Insurance Fund approximately $1.2 million.
• With total assets of $3.73M and total deposits of $3.65M, Kentland FSLA was the smallest standalone bank in the U.S.
• Sources: Kentland Bank Assumes All Deposits of Kentland Federal Savings and Loan Association | FDIC.gov and OCC Appoints Receiver for Kentland Federal Savings and Loan Association, Kentland, Indiana | OCC

 
 
Additional FedFis insights as of the 3/31/26 call report:

• Kentland Federal Savings and Loan Association had a FedFis Rating© of 4.58 as of March 2026 placing them in the lowest possible percentile of all US banks.  Even at only $3.8M in total assets (as the smallest standalone bank in the U.S.), the bank has struggled to grow assets and income as a mortgage lender sufficient enough to cover operating expenses; and had incurred continued losses for many years resulting in a critically undercapitalized position.
  • 95% of the bank loan portfolio is in home mortgages. Efficiency Ratio of 305%.  Negative ROAA of (4.81%) and negative ROAE of (105.57%). 
  • Total bank equity position remaining of only $148K and a quarterly loss rate of ($45K - $50K) left no capital buffer; and the OCC deemed no reasonable prospect that the bank will become adequately capitalized.

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Sean Mayo
Sr. VP, US Financial Institutions Group
[email protected]