Pennsylvania banking regulators seized the troubled lender Republic First Bancorp on Friday, marking the first regional banking failure since last year’s crisis. The Federal Deposit Insurance Corporation (FDIC) stepped in as receiver, announcing an agreement for Fulton Bank to assume Republic First’s deposits and purchase substantially all of its assets.
The move comes after Republic First, based in Philadelphia, had abandoned efforts to secure new funding from investors. The bank had roughly $6 billion in assets and $4 billion in deposits as of January 31st. Its stock price had plummeted to just 1 cent by Friday, down from over $2 at the start of 2024.
Under the deal, Fulton Bank, a subsidiary of Fulton Financial Corp (Nasdaq: FULT), will take on Republic First’s 32 branches across Pennsylvania, New Jersey, and New York. The branches are set to reopen as Fulton Bank locations this weekend or on Monday. Fulton stated the acquisition will nearly double its presence in the Philadelphia market, with combined deposits of around $8.6 billion.
For the FDIC’s deposit insurance fund, the failure of Republic First is estimated to cost $667 million. The agency guarantees up to $250,000 per depositor at insured banks.
Republic First’s demise continues the upheaval in the regional banking sector that began last March with the collapse of Silicon Valley Bank. That was quickly followed by the failures of Signature Bank and First Republic Bank in the following months.
While far smaller than those three lenders, Republic First had struggled with profitability issues. It exited the mortgage business last year and saw a deal for a $35 million cash infusion from investors led by businessman George Norcross fall apart in February.
The seizure indicates lingering strains for midsize banks a year after the crisis raised concerns over their stability and access to funding. Regulators have had to intervene repeatedly to protect depositors and the wider system.
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