Metropolitan Capital Bank & Trust Becomes First US Bank to Collapse in 2026

The U.S. banking sector recorded its first failure of 2026 as the Federal Deposit Insurance Corporation (FDIC) announced the closure of Metropolitan Capital Bank & Trust in Illinois. 

The move highlights ongoing pressures on smaller banks despite tighter regulatory oversight.

The FDIC said the closure was directed by Illinois’ Department of Financial and Professional Regulation after evaluating the bank’s operations, which were deemed unsafe and unsound. The bank had also suffered a severe deterioration in its capital position, necessitating immediate intervention to protect depositors.

As a precaution to ensure continued banking services, the bank will reopen on Monday as a branch of First Independence Bank, headquartered in Detroit. Under an agreement with the FDIC, First Independence Bank will assume the majority of the former bank’s customer deposits.

Regulators emphasized that the transition ensures full protection of all customer deposits without any additional action required by account holders, aiming to prevent any potential panic.

At the time of closure, Metropolitan Capital Bank & Trust had assets totaling $261.1 million, operating through a single branch in Chicago, which made it more vulnerable to financial shocks compared with larger institutions.

The FDIC estimated that the bank’s failure would initially cost the deposit insurance fund approximately $19.7 million, a sum designed to cover depositor losses in such cases.