In a major development highlighting the challenges facing regional banks, US regulators seized Philadelphia-based Republic First Bancorp. The seizure comes a year after the collapse of three of the bank's rivals.
Republic First, which had previously abandoned financing talks with a group of investors, was seized by the Pennsylvania Department of Banking and Securities. The Federal Deposit Insurance Corporation (FDIC) was appointed as trustee.
Fulton Bank, a unit of Fulton Financial Corp., will assume substantially all of Republic Bank's deposits and acquire all of its assets, the FDIC announced Friday.
As of January 31, 2024, Republic Bank had approximately $6 billion in total assets and $4 billion in total deposits. The FDIC estimates the bankruptcy will cost its fund $667 million.
In addition to deposits, Republic had debts and other obligations of approximately $1.3 billion, according to a statement from Fulton.
The deal nearly doubles its presence in the Philadelphia market, with approximately $8.6 billion in combined company deposits, Fulton said.
“We are excited to double our presence in the region with this transaction,” Fulton Chairman and CEO Curt Myers said in a statement.
Republic Bank's 32 branches in New Jersey, Pennsylvania and New York will reopen as Fulton Bank branches during business hours on Saturday or Monday.
The decision marks the latest regional bank failure in the US, following the unexpected collapses of three lenders, Silicon Valley and Signature in March 2023 and First Republic in May. Republic Bank struck a deal with an investor group including veteran businessman George Norcross and prominent lawyer Philip Norcross late last year, but the venture ended in February.
Republic Bank cut back on employment and exited the mortgage origination business in early 2023, as it buckled under the pressure of high costs and an inability to increase profitability.
*This is not investment advice.
