Regulators have closed Republic First Bank, a regional lender operating in Pennsylvania, New Jersey and New York. The Federal Deposit Insurance Corp. said Friday it had seized the Philadelphia-based bank, which did business as Republic Bank and had roughly $6 billion in assets and $4 billion in deposits as of Jan. 31.
Quick Read
- Republic First Bank Closure: Regulators have shut down Republic First Bank, a regional bank with operations in Pennsylvania, New Jersey, and New York. The bank, which had assets of about $6 billion and deposits totaling approximately $4 billion as of January 31, was seized by the Federal Deposit Insurance Corp. (FDIC) on Friday.
- Acquisition by Fulton Bank: Lancaster, Pennsylvania-based Fulton Bank will assume almost all the deposits and purchase virtually all the assets of the failed bank. Republic Bank’s 32 branches will reopen under the Fulton Bank name, starting as early as Saturday.
- Customer Access and FDIC Coverage: Depositors of Republic First Bank will have access to their funds via checks or ATMs starting Friday night. The closure is projected to cost the deposit insurance fund $667 million.
- Banking Industry Context: This marks the first FDIC-insured bank failure in the U.S. this year, with the last occurring in November. Typically, in a robust economy, only four to five banks close annually. However, challenges such as rising interest rates and the decline in commercial real estate values, particularly post-pandemic, are exacerbating financial risks for regional and community banks.
The Associated Press has the story:
Regulators close Philadelphia-based Republic First Bank, 1st US bank failure this year
Newslooks- WASHINGTON (AP) —
Regulators have closed Republic First Bank, a regional lender operating in Pennsylvania, New Jersey and New York. The Federal Deposit Insurance Corp. said Friday it had seized the Philadelphia-based bank, which did business as Republic Bank and had roughly $6 billion in assets and $4 billion in deposits as of Jan. 31.
Fulton Bank, which is based in Lancaster, Pennsylvania, agreed to assume substantially all of the failed bank’s deposits and buy essentially all of its assets, the agency said.
Republic Bank’s 32 branches will reopen as branches of Fulton Bank as early as Saturday. Republic First Bank depositors can access their funds via checks or ATMs as early as Friday night, the FDIC said.
The bank’s failure is expected to cost the deposit insurance fund $667 million.
The lender is the first FDIC-insured institution to fail in the U.S. this year. The last bank failure — Citizens Bank, based in Sac City, Iowa — was in November.
In a strong economy an average of only four or five banks close each year.
Rising interest rates and falling commercial real estate values, especially for office buildings grappling with surging vacancy rates following the pandemic, have heightened the financial risks for many regional and community banks. Outstanding loans backed by properties that have lost value make them a challenge to refinance.
Last month, an investor group including Steven Mnuchin, who served as U.S. Treasury secretary during the Trump administration, agreed to pump more than $1 billion to rescue New York Community Bancorp, which has been hammered by weakness in commercial real estate and growing pains resulting from its buyout of a distressed bank.
