• Pulaski Savings Bank was closed by Illinois regulators due to an unsafe and unsound condition, including an impaired capital position.

• Millennium Bank acquired Pulaski’s deposits and most assets in a deal facilitated by the FDIC, which will retain and sell remaining assets.

• The closure follows fraud allegations, though details remain unclear, and is expected to cost the Deposit Insurance Fund $28.5 million.

• Despite the failure, regulators assured customers that all deposits, including uninsured ones, are fully protected and accessible.

Pulaski Savings Bank, a Chicago-based institution with roots dating back to 1890, was shut down on Friday by the Illinois Department of Financial and Professional Regulation (DFPR), which claims the bank was in an “unsafe and unsound condition” and an “impaired capital position.”

The closure marked the first U.S. bank failure of 2025 and was accompanied by allegations of suspected fraud, according to the Federal Deposit Insurance Corporation (FDIC). #

The collapse is projected to cost the Deposit Insurance Fund (DIF) approximately $28.5 million, though the FDIC noted that this estimate may change as the bank’s remaining assets are sold.

Des Plaines-based Millennium Bank stepped in to acquire Pulaski’s deposits and most of its assets in a deal facilitated by the DFPR and the FDIC, which was appointed as receiver. Millennium reopened Pulaski’s sole branch on Saturday under its own name.

As of September 30, Pulaski Savings Bank reported $49.5 million in total assets and $42.7 million in deposits. Millennium purchased the deposits for a 4.61% premium and assumed $45 million of Pulaski’s assets. The FDIC retained $4.5 million in remaining assets, which it plans to sell at a later date.

Details surrounding Pulaski’s failure remain sparse, with neither the DFPR nor the FDIC providing specifics about the alleged fraud. Millennium Bank declined to comment on the acquisition or the circumstances leading to the collapse.

Pulaski’s failure follows the October 2024 closure of Oklahoma’s First National Bank of Lindsay. Despite assurances from regulators, the collapse has drawn scrutiny, especially given the bank’s long-standing claims of conservative practices.

A still-active page on Pulaski’s website describes the institution as one committed to “conservative, no-nonsense practices” aimed at ensuring a “bright future.” That future, however, was abruptly cut short last week, ending the bank’s 135-year history.

Acting director of the DFPR’s Division of Banking, Susana Soriano, sought to reassure customers, emphasizing the safety of insured deposits. “We want to stress that not one customer with deposits at Pulaski Bank will lose a penny as a result of the steps taken today,” Soriano said in a statement. “Our role as a bank regulator is to ensure the safety and soundness of Illinois-chartered banks, and today’s action means Millennium Bank is well-positioned to provide banking services to the customers of Pulaski Savings Bank.”

The FDIC confirmed that all Pulaski depositors, including those with uninsured deposits, will have full access to their accounts. The agency also reiterated its commitment to selling the remaining assets in a way that minimizes costs to the DIF.

Pulaski Savings Bank’s closure underscores the fragility of some smaller financial institutions, as regulators continue to grapple with maintaining stability in the banking sector. Millennium Bank’s acquisition of Pulaski’s deposits and assets represents a new chapter for former Pulaski customers, though questions about the fraud allegations and the broader implications for Illinois banking remain unanswered.