State regulators have officially closed Metropolitan Capital Bank & Trust, marking the first bank failure in the United States for 2026 and the second in Chicago within a two-year period. The Illinois Department of Financial and Professional Regulation (IDFPR) made the decision to shut down the River North-based bank due to growing concerns regarding its financial stability.
The Federal Deposit Insurance Corporation (FDIC) has been appointed as the receiver and has taken steps to facilitate the sale of most of the bank’s $261 million in assets to First Independence Bank located in Detroit. This transaction includes all customer deposits, ensuring that clients retain immediate access to their funds. Loan customers, however, are still required to fulfill their payment obligations.
Susana Soriano, acting director of IDFPR’s Division of Banking, clarified in a statement, “We want to be clear that no depositor will lose any money as a result of this action.” She cited issues such as “unsafe and unsound conditions” and an “impaired capital position” as reasons behind the closure. Soriano expressed confidence that First Independence Bank is “well-positioned to continue essential banking services” for the affected customers.
Established in 2005, Metropolitan Capital Bank developed a clientele spanning 46 states and 10 countries, operating out of its office at 9 E. Ontario St. and another location in New York, as highlighted on the bank’s website. Attempts to reach co-founder and president Frank Novel for comment were unsuccessful.
According to FDIC reports, as of September 30, the bank reported total assets of $261.1 million and $212.1 million in deposits. The failure is projected to cost the Deposit Insurance Fund approximately $19.7 million. This incident marks the first bank failure in the nation this year, following a year in which only two banks collapsed across the country, including Chicago’s Pulaski Savings Bank.
Historically, Illinois has seen a significant number of bank failures, with 71 institutions failing since 2000, including 22 in the Chicago area. Notably, the region previously experienced one of its most infamous bank collapses in 2017 when Washington Federal Bank for Savings failed amid a massive $140 million embezzlement scheme that resulted in numerous federal indictments and a short prison sentence for then-11th Ward Alderman Patrick Daley Thompson.
Looking ahead, Metropolitan Capital’s River North office is scheduled to reopen as a branch of First Independence Bank during its standard business hours on February 2. Customers seeking more information can contact the bank at (866) 314-1744 or visit the FDIC’s official website for further assistance.
