On 26 April, US regulators took control of Republic First Bancorp and arranged its sale to Fulton Bank, as reported by Reuters. This development highlights the ongoing difficulties faced by regional banks, particularly in the wake of the collapse of three similar institutions last year.
Based in Philadelphia, Republic Bank had ceased discussions with a group of investors before being seized by the Pennsylvania Department of Banking and Securities. Acting as a receiver, the FDIC announced that Fulton Bank, a subsidiary of Fulton Financial Corp, would absorb most of Republic Bank's deposits and acquire its assets in order to safeguard depositors.
As of 31 January 2024, Republic Bank possessed approximately USD 6 billion in total assets and USD 4 billion in total deposits. The FDIC projected that the failure would cost its fund around USD 667 million. The bank's 32 branches across New Jersey, Pennsylvania, and New York will reopen under Fulton Bank's name during regular business hours on Saturday or Monday.
This incident adds to a series of regional bank failures, including the sudden collapses of Silicon Valley and Signature in March 2023 and First Republic in May of the same year. Despite an attempted deal with an investor group led by George Norcross and Philip Norcross late last year, Republic Bank's fortunes took a downturn when the agreement fell through in February.
Following the failed deal, the FDIC resumed its efforts to seize and offload the troubled bank, as reported by the Wall Street Journal. Republic Bank had previously downsized its workforce and exited the mortgage origination sector in early 2023 due to mounting expenses and stagnant profitability.
The bank's stock value plummeted from slightly above USD 2 at the beginning of the year to approximately 1 cent on 26 April, resulting in a market capitalisation of less than USD 2 million. Its shares were delisted from the Nasdaq in August and now trade over the counter.
