FDIC OIG Review Details Pulaski Savings Bank Failure
FDIC OIG says Pulaski Savings Bank failed primarily due to impaired capital tied to at least $20.7 million in previously unrecognized deposit liabilities.
March 3, 2026 — The Office of Inspector General (OIG) of the Federal Deposit Insurance Corporation (FDIC) issued an in-depth review examining the failure of Pulaski Savings Bank and the resulting loss to the Deposit Insurance Fund (DIF).
The review had two core objectives: first, to determine the causes of the bank’s failure and resulting DIF loss; second, to evaluate the FDIC’s supervision of the institution, including implementation of Prompt Corrective Action (PCA) requirements under Section 38 of the Federal Deposit Insurance (FDI) Act.
According to the report, the failure occurred primarily because of impaired capital. Investigators found at least $20.7 million in deposit liabilities that were not accounted for in the bank’s core financial system. Once those previously unrecognized deposits were recorded, the bank’s liabilities exceeded available equity capital, leaving the institution critically undercapitalized.
Consistent with PCA requirements, the FDIC notified Pulaski Savings Bank of its critically undercapitalized status and directed corrective capital actions. The Illinois Department of Financial and Professional Regulation ultimately determined the bank was impaired, took possession, and appointed the FDIC as receiver.
The OIG also stated that FDIC examinations were conducted in a timely manner and had identified management weaknesses dating back to 2017. While the FDIC did not formally designate a dominant official at Pulaski, supervisory actions did attempt to address management weaknesses and key-person risk in recent exam cycles. The report did not issue a formal recommendation, but encouraged FDIC Risk Management Supervision to consistently assess and, when appropriate, formally designate dominant officials under existing procedures and guidance.
The FDIC had no comments on the report.
