July 13, 2024

Breaking News: Republic First Bank Seized by Regulators

Troubled Waters: Republic First's Collapse
The Federal Deposit Insurance Corporation said in a statement that Republic First Bancorp, known as Republic Bank, had about $4 billion in deposits and assets worth $6 billion at the end of January.
Image Credits: Richard Levine/Alamy Stock Photo

Regulators late Friday seized Republic First Bancorp, a troubled Philadelphia lender, in the first U.S. bank failure this year.

Troubled Waters: Republic First’s Collapse

The Federal Deposit Insurance Corporation said in a statement that Republic First Bancorp, known as Republic Bank, had about $4 billion in deposits and assets worth $6 billion at the end of January.

Fulton Bank Steps In

“Substantially all” of its deposits will be assumed by Fulton Bank of Lancaster, Pa., the F.D.I.C. said, with Republic First’s 32 branches in Pennsylvania, New Jersey, and New York reopening as soon as Saturday as Fulton Bank branches.

A Look Back: Republic First’s Journey

Founded in 1988, Republic First was smaller than the midsize banks that collapsed last year — including First Republic Bank and Silicon Valley Bank, whose assets each topped $200 billion. The F.D.I.C. expects the cost to the Deposit Insurance Fund to be $667 million.

Causes and Concerns: What Led to Republic First’s Downfall?

The failure comes amid continuing concern about the health of regional banks. In a presentation for investors in July, Republic First said that deposits were declining and that the bank’s mortgage lending business had become less valuable as interest rates increased.

Bright Spots: Stability in the Banking Sector

Feddie Strickland, a bank analyst at Janney Montgomery Scott, said Republic First’s failure was likely an isolated incident and that the banking sector is stable.

The Future with Fulton Bank

Mr. Strickland called Fulton, which is taking over Republic First’s First, “a boring” bank in the best way. He called the commercial bank “careful” and “good operators.” “Depositors should feel safe with Fulton,” he added.

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