Bank Failure Alert (suspected fraud) - Pulaski Savings Bank

​1/17/25 - Pulaski Savings Bank of Chicago, IL (FDIC 28611; total assets $49.5M; total deposits $42.7M; equity capital $5M as of the 9/30/24 call report) was closed by the Illinois Department of Financial and Professional Regulation due to “suspected fraud.”

• Millennium Bank of Des Plaines, IL (FDIC 58348; total assets $597M as of 9/30/24 call report) to assume all deposits at the time of closing for a 4.61% premium; and will purchase approximately $45M of the bank’s assets (slightly less than the bank’s $49.5M in total tangible assets).
• The FDIC preliminarily estimates that the failure will cost its Deposit Insurance Fund (DIF) about $28.5 million.
• Source - FDIC: Millennium Bank assumes all deposits of Pulaski Savings Bank

Additional FedFis insights:

• Pulaski Savings Bank had a FedFis Rating© of 2.74 (on a 1.00 to 5.00 scale) placing them in the bottom 27% of all banks as of 3Q2024.  Not a terrible rating, but this is suspected fraud so not relevant at all.  The FDIC estimated cost to the DIF of $28.5M is HUGE considering only $42.7M in deposits (meaning this fraud was likely substantial in nature).
• Keep in mind that very small banks (Pulaski was in the bottom 4.5% of all banks with only $49.5M total assets) can fail quickly, so ratings may not always be an effective predictive measure of failure for those extremely small institutions.  And again, since this was suspected fraud, the rating is not relevant (FedFis Rating is not designed to predict fraud).
• Certainly worth noting that on 1/7/25 (just 10 days prior to the failure of Pulaski Savings Bank), the existing merger agreement between Mutual Federal Bancorp, Inc. (OTC: MFDB) and Pulaski Savings Bank was abruptly terminated with no notice as to why.  Certainly leads me to believe that something material showed up in the due diligence.
• Pulaski Savings Bank is the first bank failure of 2025.

 
For more information on FedFis Bank Ratings and market insights, contact the FedFis Sales Team at 512-960-0911 | [email protected].
 
Sean Mayo
Sr. VP, US Financial Institutions Group