US regulators recently intervened in Republic First Bancorp‘s operations, the parent entity of the now-defunct Republic First Bank, overseeing its sale to Fulton Bank, a subsidiary of Fulton Financial Corp.
The acquisition, finalized last week, was coordinated by the Pennsylvania Department of Banking and Securities and the Federal Deposit Insurance Corp (FDIC).
It spotlights the persistent hurdles regional banks encounter following recent notable bank closures.
Republic First Bank, headquartered in Philadelphia, had been wrestling with financial challenges, terminating funding negotiations with a consortium of investors.
The bank’s tribulations reached a climax when the Pennsylvania Department of Banking and Securities assumed control, designating the FDIC as receiver.
The shutdown of Republic First Bank signifies the latest in a string of regional bank collapses since the abrupt failures of Silicon Valley Bank and Signature Bank in 2023.
These incidents underscore the difficulties confronting smaller regional banks in an increasingly cutthroat and unpredictable financial environment.
“Through this transaction, we are eager to expand our footprint across the region,” remarked Curt Myers, Chairman and CEO of Fulton Financial Corp, to Reuters.
It’s essential to distinguish between Republic First and First Republic; they aren’t synonymous. Republic First served commercial and retail clients, while First Republic specialized in private banking for affluent individuals.
Nonetheless, First Republic also filed for bankruptcy last year, with its assets liquidated by the FDIC. Shortly after, in May 2023, JPMorgan Chase acquired the bank.
Concurrently, executives of First Republic faced an SEC probe into insider trading, leading the new owner to terminate over 1,000 employees from the recently acquired bankrupt bank.
To safeguard depositors and ensure a seamless transition, the FDIC collaborated with Fulton Bank to absorb nearly all of Republic First Bank’s deposits and acquire a substantial portion of its assets.
As of January 2024, Republic First Bank possessed approximately $6 billion in assets and $4 billion in deposits. The FDIC anticipates the failure’s cost to its Deposit Insurance Fund (DIF) to be $667 million.
Fulton Bank’s acquisition of Republic First Bank is projected to nearly double its presence in the Philadelphia market, boasting combined deposits of around $8.6 billion.
To facilitate Republic First Bank’s customers, all 32 branches in New Jersey, Pennsylvania, and New York will reopen under Fulton Bank’s banner on Monday during regular business hours.
Customers will seamlessly transition to Fulton Bank, retaining their existing deposit insurance coverage without altering their banking relationship.