Banking

Six Early-Warning Signals That Showed Up Before the Last Three Bank Failures

By Deep Digital Ventures Editorial Team ·

Deep Digital Ventures publishes product education, research explainers, and data-driven articles related to its software tools. This article was prepared by our editorial team using the sources listed below and reviewed for factual accuracy before publication.

Published: April 24, 2026. Data snapshot: FDIC failed-bank list reviewed April 23, 2026.

Bank failures are rare, but they are almost never random. Long before a bank closes, the public record often starts to show a pattern: losses deepen, capital thins, funding gets less stable, or growth outruns internal controls. The value of an early-warning framework is not that it predicts every failure perfectly. It is that it helps you identify which institutions deserve closer attention before an event forces the market to react.

The current FDIC failure chronology reviewed for this article shows Metropolitan Capital Bank & Trust, closed on January 30, 2026; The Santa Anna National Bank, closed on June 27, 2025; and Pulaski Savings Bank, closed on January 17, 2025.[1][2][3][4] This article combines that official chronology with the early-warning framework used in Banking Intelligence Early Warnings to show which signals mattered most, and where public data was less conclusive.

The evergreen lesson is simple: a single ratio rarely tells the whole story, but a cluster of deteriorating signals often does. The strongest workflow starts with a systematic screen, then moves into failed-bank history, institution-level filings, and quarter-by-quarter balance-sheet detail.

Key Takeaways

  • The three failures in the April 23, 2026 data snapshot were Metropolitan Capital Bank & Trust, The Santa Anna National Bank, and Pulaski Savings Bank, based on FDIC records.
  • The clearest public red flags before failure were sustained losses, capital erosion, problem-asset pressure, unstable funding, deposit shrinkage, and balance-sheet stretch.
  • Metropolitan showed the strongest public warning pattern because several measures deteriorated at once: CET1 fell sharply, total equity turned negative, brokered funding was elevated, and deposits declined.
  • Pulaski showed a narrower warning pattern, especially recurring negative ROA and a loan-to-deposit ratio near or above 100% before failure.
  • Santa Anna is the reminder case: some failures show fewer obvious public warning signs, which is why an early-warning system should guide follow-up work, not replace it.

The Last Three U.S. Bank Failures, Verified

BankCityStateFDIC-Verified Closing DateAcquiring InstitutionLast Public Quarter Before Failure
Metropolitan Capital Bank & TrustChicagoIllinoisJanuary 30, 2026First Independence BankDecember 31, 2025
The Santa Anna National BankSanta AnnaTexasJune 27, 2025Coleman County State BankMarch 31, 2025
Pulaski Savings BankChicagoIllinoisJanuary 17, 2025Millennium BankSeptember 30, 2024

The Six Early-Warning Signals

1. Problem Assets Start to Overwhelm the Buffer

Metric: problem assets compared with the cushion available to absorb them, usually measured as noncurrent loans and other problem assets divided by equity plus loan-loss reserves. In a screen, a rising ratio deserves review; a ratio approaching or exceeding 100% means the visible problem-asset load is pressing hard against the reported buffer.

Who triggered it: Metropolitan was the clearest case. By mid-2025, noncurrent loans were high relative to a shrinking balance-sheet buffer, and by the December 31, 2025 call report the capital cushion had become extremely thin because reported total equity was negative.[5][6] The evidence is not simply that one credit ratio looked weak. It is that problem-asset pressure appeared alongside losses, deposit shrinkage, and capital erosion.

Who did not: Pulaski and Santa Anna did not show the same dramatic public problem-asset spike in their final available call reports.[7][8] That difference matters. It shows that failure pathways are not identical, and that problem-asset screens catch some cases much earlier than others.

2. Earnings Deterioration Stops Capital From Rebuilding

Metric: return on assets, with special attention to repeated negative quarters. One negative quarter can be noise. Two or more consecutive negative quarters, or a sharply negative final quarter, means earnings are no longer helping the bank rebuild capital.

Who triggered it: Metropolitan showed persistent and worsening losses before failure. Public call-report data showed ROA negative across multiple quarters, deteriorating to roughly -6.9% in the last public quarter before failure.[5] Pulaski showed a weaker version of the same pattern, with negative ROA in multiple consecutive quarters before its January 17, 2025 closing.[7] When earnings turn persistently negative, the bank loses one of its few organic ways to rebuild confidence and capital.

Who did not: Santa Anna did not fit that pattern in the same way. Its final public quarter still showed positive profitability.[8] That does not invalidate the signal. It reinforces the more important point: early-warning systems work best when they look for clusters, not when they rely on a single trigger.

3. Capital Adequacy Erodes Faster Than the Market Expects

Metric: equity-to-assets, CET1, Tier 1 risk-based capital, total risk-based capital, and leverage capital. The PCA grid is the hard reference point: under current FDIC capital-category definitions, CET1 below 4.5% is undercapitalized, and CET1 below 3.0% is significantly undercapitalized; other capital ratios can also trigger a lower category.[10]

Who triggered it: Metropolitan is the clearest recent capital case. Its public CET1 ratio fell from double digits in 2024 to about 7.06% in the September 30, 2025 quarter and then to roughly 3.02% by December 31, 2025.[5] That final CET1 figure was below the adequately capitalized CET1 threshold and only slightly above the significantly undercapitalized CET1 threshold. Its reported total equity also turned negative in the final public quarter. The evidence supports a severe capital-warning conclusion; the public data should not be stretched into a claim about confidential supervisory decisions.

How PCA fits: PCA is not a seventh analytical signal here. It is the statutory overlay on the capital signal. The analytical warning is capital erosion; the legal question is whether any reported capital measure crosses a PCA threshold under 12 USC 1831o and the implementing capital-category rules.[10] For public-data monitoring, the useful discipline is to map every quarterly filing against the PCA grid and flag any threshold crossing immediately.

Who looked different: Pulaski reported stronger capital even while profitability weakened. That tells analysts something important: strong reported capital can coexist with franchise stress or supervisory issues that are not fully visible in headline ratios. Capital screens are essential, but they are not enough on their own.

4. Non-Core Funding Becomes More Important

Metric: brokered deposits and other rate-sensitive funding as a share of total deposits. There is no single universal cutoff, but a practical screen should notice brokered deposits above 10% of deposits and treat levels above 20% as elevated, especially when earnings or capital are already weakening.

Who triggered it: Metropolitan again showed the most visible public signal. In the final public quarter before failure, brokered deposits were roughly 22% of total deposits.[5] The FDIC failed-bank information page also noted that certain brokered or Cede & Co. deposits were handled differently from the transferred deposit base.[2] Together, the call-report data and resolution detail point to a funding base that was less simple than total deposits alone suggested.

Who did not: Santa Anna and Pulaski did not show the same brokered-deposit dependence in their final public reports.[7][8] That does not make them immune to funding pressure. It simply means the visible funding fragility was less concentrated in brokered balances.

5. Deposits Stop Growing or Start Leaving

Metric: quarter-to-quarter and multi-quarter deposit change. A decline of more than 5% in a quarter, or more than 10% across a few quarters, deserves closer review when it arrives on top of weak earnings, thin capital, or non-core funding reliance.

Who triggered it: Metropolitan showed the clearest signal. From the March 31, 2025 public quarter to the December 31, 2025 public quarter, deposits fell from about $235.3 million to $202.1 million, a decline of roughly 14%.[5][6] That shrinkage made every other weakness harder to manage. Pulaski showed a milder version in 2024, with deposits drifting lower from mid-year into its last public quarter.[7]

Who did not: Santa Anna did not show visible deposit flight before failure. Its reported deposits were still growing in the last public quarter.[8] That is another useful reminder that not every failure is preceded by an obvious run in quarterly public data.

6. Growth or Balance-Sheet Stretch Starts to Look Hard to Finance Safely

Metric: unusually fast asset or deposit growth, and loan-to-deposit ratios near or above 100%. Rapid growth above 20% year over year is not proof of distress, but it can strain underwriting, operations, and liquidity. A loan-to-deposit ratio around 100% leaves less room for funding mistakes.

Who triggered it: Santa Anna illustrates the growth version of this signal. From March 31, 2024 to March 31, 2025, assets grew by roughly 26% and deposits by more than 33%.[8][9] Rapid growth is not a failure prediction by itself, but it is a reason to pay closer attention because operational, underwriting, and liquidity risks can surface after the growth phase looks strongest.

Who else triggered it: Pulaski illustrates the balance-sheet-stretch version. Its loan-to-deposit ratio stayed close to or above 100% across several quarters before failure, leaving less room for funding mistakes even though reported credit metrics were not flashing red.[7] In Banking Intelligence Early Warnings, that kind of funding strain is worth monitoring even when it does not yet coincide with a credit blowup.

How the Three Cases Compare

FailureFirst Visible WarningStrongest WarningMissing or Weaker Warnings
Metropolitan Capital Bank & TrustRecurring losses and rising problem-asset pressure through 2025Capital erosion: CET1 fell to roughly 3.02%, total equity turned negative, deposits declined about 14%, and brokered deposits reached roughly 22% of depositsPublic data was unusually complete as a warning case; the main limit is that confidential supervisory findings are still not visible
The Santa Anna National BankRapid year-over-year asset and deposit growthGrowth risk: assets rose roughly 26% and deposits more than 33% from March 31, 2024 to March 31, 2025No obvious public deposit flight, recurring loss pattern, or brokered-funding dependence in the final public quarter
Pulaski Savings BankNegative ROA across multiple quartersFunding stretch: loan-to-deposit ratio near or above 100%, paired with weaker earningsReported capital remained comparatively strong, and public credit metrics were not as visibly stressed as Metropolitan’s

Why This Matters for an Evergreen Early-Warning Process

The point of studying these failures is not to memorize three names. It is to understand the recurring categories of weakness that tend to show up before a bank closes. Across these cases, the market-visible warning signs were:

  • problem assets overwhelming buffers,
  • earnings deterioration,
  • capital erosion and PCA threshold risk,
  • non-core funding reliance,
  • deposit instability, and
  • growth or funding stretch.

That is why the practical workflow should be systematic. Start with a broad screen in Early Warnings. Then move into failed-bank history through Failures. Then drill into institution-level trend work through Banks and Data. A single page rarely answers the whole question, but the combination usually does.

Methodology and Limits

  • The failure chronology was verified against official FDIC failed-bank records using the FDIC failed-bank list and the individual FDIC failed-bank information pages reviewed for the April 23, 2026 data snapshot.
  • The three failures referenced are Metropolitan Capital Bank & Trust on January 30, 2026, The Santa Anna National Bank on June 27, 2025, and Pulaski Savings Bank on January 17, 2025.
  • Signal illustrations are based on the last publicly available pre-failure quarterly call-report data for each institution and selected prior quarters from FFIEC call-report records.
  • For Metropolitan, the last public quarter was December 31, 2025. For Santa Anna, it was March 31, 2025. For Pulaski, it was September 30, 2024.
  • Some smaller-bank failures will not show a full public-warning pattern in quarterly data. Supervisory findings, concentration details, or event-specific issues may not be fully visible in headline public ratios.
  • This article is an analytical framework, not investment advice and not a regulatory finding.

The three failures did not all look the same in public data, but they still reinforce the same evergreen lesson: bank failure risk usually becomes more visible when you look at signals together rather than one at a time. Metropolitan showed the most obvious multi-signal deterioration. Pulaski showed a weaker but still noticeable pattern through earnings and funding strain. Santa Anna showed that some failures remain harder to diagnose from public quarter-end numbers alone.

That is why early-warning work should be disciplined, repeatable, and humble. Screens should tell you where to look harder, not where to stop thinking. Used that way, a platform such as Banking Intelligence can turn failure history into a practical monitoring process instead of a retrospective case study.

Sources

  1. [1] FDIC Failed Bank List – official failed-bank chronology and acquiring-institution table. URL: https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/
  2. [2] FDIC Failed Bank Information for Metropolitan Capital Bank & Trust, Chicago, IL – closing details, acquirer, and brokered-deposit transfer note. URL: https://www.fdic.gov/bank-failures/failed-bank-list/metropolitan-capital-bank-trust
  3. [3] FDIC Failed Bank Information for The Santa Anna National Bank, Santa Anna, TX – closing details and acquirer. URL: https://www.fdic.gov/bank-failures/failed-bank-list/santa-anna-national-bank
  4. [4] FDIC Failed Bank Information for Pulaski Savings Bank, Chicago, IL – closing details and acquirer. URL: https://www.fdic.gov/bank-failures/failed-bank-list/pulaski-savings-bank
  5. [5] FFIEC CDR Call Report for Metropolitan Capital Bank & Trust, FDIC Cert 57488, December 31, 2025 – CET1, deposits, brokered deposits, equity, ROA, and balance-sheet figures. URL: https://cdr.ffiec.gov/Public/ViewFacsimileDirect.aspx?ds=call&idType=fdiccert&id=57488&date=12312025
  6. [6] FFIEC CDR Call Report for Metropolitan Capital Bank & Trust, FDIC Cert 57488, March 31, 2025 – beginning deposit comparison for 2025 decline. URL: https://cdr.ffiec.gov/Public/ViewFacsimileDirect.aspx?ds=call&idType=fdiccert&id=57488&date=03312025
  7. [7] FFIEC CDR Call Report for Pulaski Savings Bank, FDIC Cert 28611, September 30, 2024 – final pre-failure public call report and funding/earnings measures. URL: https://cdr.ffiec.gov/Public/ViewFacsimileDirect.aspx?ds=call&idType=fdiccert&id=28611&date=09302024
  8. [8] FFIEC CDR Call Report for The Santa Anna National Bank, FDIC Cert 5520, March 31, 2025 – final pre-failure public call report and growth/profitability measures. URL: https://cdr.ffiec.gov/Public/ViewFacsimileDirect.aspx?ds=call&idType=fdiccert&id=5520&date=03312025
  9. [9] FFIEC CDR Call Report for The Santa Anna National Bank, FDIC Cert 5520, March 31, 2024 – year-over-year asset and deposit growth comparison. URL: https://cdr.ffiec.gov/Public/ViewFacsimileDirect.aspx?ds=call&idType=fdiccert&id=5520&date=03312024
  10. [10] eCFR, 12 CFR 324.403 – FDIC prompt corrective action capital measures and capital-category definitions. URL: https://www.ecfr.gov/current/title-12/chapter-III/subchapter-B/part-324/subpart-H/section-324.403