U.S. regulators have seized Republic First Bancorp and agreed to sell it to Fulton Bank, the Federal Deposit Insurance Corp said on Friday, underscoring the challenges facing regional banks a year after the collapse of three peers.
The Philadelphia-based bank, which had abandoned funding talks with a group of investors, was seized by the Pennsylvania Department of Banking and Securities.
The FDIC, appointed as a receiver, said Fulton Bank, a unit of Fulton Financial Corp, will assume substantially all deposits and purchase all the assets of Republic Bank to “protect depositors”.
Republic Bank had about $6 billion in total assets and $4 billion in total deposits, as of Jan. 31, 2024. The FDIC estimated the cost of the failure to its fund will be $667 million.
The bank’s 32 branches in New Jersey, Pennsylvania and New York will reopen as branches of Fulton Bank on Saturday or on Monday during business hours.
The decision marks the latest U.S. regional bank failure following the unexpected collapses of three lenders – Silicon Valley and Signature in March 2023 and First Republic in May.
Republic Bank had struck a deal with an investor group that included veteran businessman George Norcross, high-profile attorney Philip Norcross late last year, but the effort was terminated in February.
After that deal collapsed, the FDIC resumed efforts to seize and sell the bank, according to the Wall Street Journal, which first reported the news.
Republic Bank cut jobs and exited its mortgage origination business in early 2023 as it reeled under pressure from higher costs and inability to improve profitability
The bank’s stock price has tumbled from just over $2 at the start of the year to about 1 cent on Friday, leaving it with a market capitalization below $2 million.
Its shares were delisted from the Nasdaq in August and now trade over the counter.
