A Philadelphia bank failed more than two years after regulators ordered it to fix its capital

Tioga-Franklin Savings Bank reported a tier 1 leverage ratio of 5.17% and a total risk-based capital ratio of 9.08% for the quarter ending December 31, 2024, according to the FDIC’s financial reporting for certificate 33802.1 That is the report date by which an FDIC consent order accepted on April 24, 2024 required the bank to include detailed plans specifying the means by which it would “achieve, by no later than December 31, 2024, and thereafter maintain a Leverage Ratio, as defined at 12 C.F.R. § 324.10(b)(4), equal to or greater than 9 percent and a Total Capital Ratio, as defined at 12 C.F.R. § 324.10(b)(3), equal to or greater than 12 percent”.2,3 Both reported ratios were lower at each later report date retrieved: 4.40% leverage and 7.83% total risk-based capital at March 31, 2025; 2.41% and 4.72% at March 31, 2026; and 2.06% and 4.14% at June 30, 2026, the last quarterly report date before the bank was closed.4,5,6 For the December 31, 2024 quarter the bank reported $70.85 million in total assets, $64.4 million in total deposits, $4.387 million in total equity capital and a year-to-date net loss of $1.4 million.1

On August 21, 2026, the Pennsylvania Department of Banking and Securities said it “took possession of Tioga-Franklin Savings Bank, headquartered in Philadelphia, pursuant to the Department of Banking and Securities Code citing unsafe and unsound condition, in order to protect depositors.”7 The FDIC’s announcement of the closure, which names Second Federal Savings and Loan Association of Philadelphia as assuming all of the deposits, says the failure “will cost the Deposit Insurance Fund approximately $5.5 million,” a figure the agency describes as a preliminary estimate.8 Banking Dive reported that the Philadelphia lender was the fifth bank to fail in 2026.9

Banking Dive first reported that the consent order followed “a 2023 exam that identified weaknesses related to capital, earnings and strategic direction, among other things.”9 Banking Dive also reported that the order “flagged Bank Secrecy Act violations and issues with Tioga-Franklin’s anti-money laundering/counterterrorism financing program,” along with problems in internal controls, internal audit, loan documentation, interest rate exposure and asset quality.10 What no outlet had published is the comparison above: the capital minimums the order named against the ratios the bank itself reported for that report date and the ones after it.1,2

The federal order records that the FDIC “considered the matter and determined, and the Bank neither admits or denies, that the Bank has engaged in (i) unsafe and unsound banking practices relating to, among other things, deficiencies and weaknesses in board supervision and direction of management; management performance; strategic, profit and capital planning; liquidity and funds management; interest rate risk; audit; and credit administration.”11,12,13 On the same neither-admits-nor-denies basis, the order also cited “violations of law or regulations relating to, among other things, the Bank Secrecy Act” with respect to the bank’s Anti-Money Laundering/Countering the Financing of Terrorism program.14,12 The order required the capital plan to include “strategies for sale, merger, or liquidation in the event primary and contingent sources of capital are not available or are insufficient to maintain these required minimum capital levels.”15 It records that the bank’s board executed a stipulation consenting to it dated April 24, 2024, “that is accepted by the FDIC.”16

A Pennsylvania Department of Banking and Securities consent order posted under the same April 24, 2024 date carries the identical capital requirement, word for word.17,18 That order states that an examination “gave the Bureau reason to believe that the Bank had engaged in unsafe or unsound banking practices,” and that “as a result of the ROE, the Bureau is of the opinion that grounds exist for the entry of a Consent Order (the “Order”) against the Bank pursuant to Section 501.A of the Department of Banking Code, 71 P.S. § 733-501.A”.18,19 It directs the bank’s board to address the oversight and supervision-related deficiencies and weaknesses identified in the FDIC’s July 31, 2023 Report of Examination.20 The department’s 2024 order used the phrase “unsafe or unsound banking practices”; its August 2026 announcement said it took possession “citing unsafe and unsound condition.”18,7

Two innocent explanations for the sequence can be excluded from the records cited here.1,21 The bank did not meet the 9% and 12% minimums and then deteriorate afterward: its reported ratios were already below both on the December 31, 2024 report date the orders named.1,2 And the other FDIC order made public against the bank in the interval did not concern capital: an order the FDIC posted under docket number FDIC-25-0063k assessed “a civil money penalty of $3,750” against the bank “pursuant to section 102(f) of the FDPA, 42 U.S.C. § 4012a(f),” a flood-insurance provision.21,22 No amended or supplemental order, prompt corrective action directive or termination of the April 2024 order was found in the FDIC’s posted enforcement decisions or the Pennsylvania department’s posted enforcement orders reviewed through September 27, 2026.21,22,18

Whether a federal post-mortem follows turns on the size of the loss: 12 U.S.C. § 1831o provides that “if the Deposit Insurance Fund incurs a material loss with respect to an insured depository institution on or after July 1, 1993, the inspector general of the appropriate Federal banking agency shall— (A) make a written report to that agency reviewing the agency’s supervision of the institution”.23 The FDIC’s preliminary estimate of the Tioga-Franklin loss is approximately $5.5 million.8 The dollar threshold that makes a loss “material” is not stated in the records cited here, and the FDIC Office of Inspector General’s bank failures index, which listed 123 reports as of the date checked, does not establish a review of this failure.23,24

Neither the Pennsylvania department’s August 2026 announcement nor the FDIC’s release states a cause for the failure, and the specific statutory provision the department invoked to take possession in 2026 is not named in its announcement.7,8 The 9% and 12% figures are the minimums the two orders’ plan requirements named, not ratios the bank reported; the reported figures above are the bank’s own quarterly filings under certificate 33802.2,17,1

Method: this account rests on the FDIC consent order and the flood-insurance civil money penalty order posted to orders.fdic.gov for Tioga-Franklin Savings Bank, the Pennsylvania Department of Banking and Securities’ redacted April 24, 2024 consent order and its August 21, 2026 announcement, the FDIC’s August 2026 press release on the failure, the FDIC’s quarterly financial reporting for certificate 33802 at the four report dates named above, 12 U.S.C. § 1831o, the FDIC Office of Inspector General’s bank failures index, and Banking Dive’s coverage, all as published through September 27, 2026.8,7,18,1,23,24,9 The Clanker Times did not contact the FDIC, the Pennsylvania Department of Banking and Securities or the bank’s former board for this story; the words attributed to them above are from their published orders, filings and announcements.8,7,11