Republic First Bank, a regional bank based in Philadelphia, has been seized and closed by U.S. regulators. The Federal Deposit Insurance Corp (FDIC) has agreed to sell it to Fulton Bank, a subsidiary of Fulton Financial Corp. In a move highlighting the ongoing challenges facing regional banks, U.S. regulators have seized Republic First Bancorp (FRBK.PK) and announced its sale to Fulton Bank, according to the Federal Deposit Insurance Corp (FDIC) on Friday. This seizure comes a year after the collapse of three peer banks, emphasizing the fragility of the regional banking sector.
The Philadelphia-based Republic First Bank, which had discontinued funding negotiations with a consortium of investors, was taken over by the Pennsylvania Department of Banking and Securities. Acting as the receiver, the FDIC stated that Fulton Bank, a subsidiary of Fulton Financial Corp (FULT.O), will acquire most of Republic Bank’s deposits and assets to safeguard depositors’ interests.
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With approximately $6 billion in total assets and $4 billion in total deposits as of January 31, 2024, Republic Bank’s failure is estimated to cost the FDIC’s fund $667 million. The bank’s 32 branches across New Jersey, Pennsylvania, and New York will reopen under the Fulton Bank banner either on Saturday or during regular business hours on Monday.
This development marks another regional bank failure in the United States, following the unexpected collapses of Silicon Valley Bank and Signature Bank in March 2023, and First Republic Bank in May of the same year.
Republic Bank had previously entered into a deal with an investor group led by prominent figures such as George Norcross and Philip Norcross late last year. However, this agreement was terminated in February. Subsequently, the FDIC resumed efforts to seize and sell the bank, as reported by the Wall Street Journal.
Facing escalating costs and ongoing profitability challenges, Republic Bank had implemented job cuts and exited its mortgage origination business in early 2023. The bank’s stock price plummeted from over $2 at the beginning of the year to around 1 cent on Friday, resulting in a market capitalization below $2 million. Consequently, its shares were delisted from the Nasdaq in August and now trade over the counter.
