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Republic First Bancorp (OTC:FRBK) has been seized by U.S. regulators and sold to Fulton Bank, a unit of Fulton Financial Corp (NASDAQ:FULT). This comes a year after the collapse of three of its peers amid a regional bank crisis.
What Happened: The Philadelphia-based Republic First, which had previously halted funding negotiations with a group of investors, was taken over by the Pennsylvania Department of Banking and Securities, reported the Federal Deposit Insurance Corp. (FDIC) on Friday.
Fulton Bank will acquire almost all of Republic Bank’s assets and deposits to safeguard the depositors.
Republic Bank had approximately $6 billion in total assets and $4 billion in total deposits as of Jan. 31, 2024. The FDIC estimates the cost of the failure to its fund to be $667 million.
Apart from deposits, Republic First also had borrowings and other liabilities of about $1.3 billion, as per a statement by Fulton.
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The acquisition will nearly double Fulton’s presence in the Philadelphia market, with combined company deposits of approximately $8.6 billion. Republic Bank’s 32 branches in New Jersey, Pennsylvania, and New York will reopen as branches of Fulton Bank on Saturday or Monday during business hours.
Why It Matters: This development is the latest in the crisis brewing in the regional banking sector, which has been facing challenges since the collapse of three lenders – Silicon Valley Bank and Signature Bank in March 2023 and First Republic in May.
Republic Bank’s struggles began when it abandoned funding talks with a group of investors and were further exacerbated by the collapse of a deal with an investor group that included veteran businessman George Norcross and high-profile attorney Philip Norcross in February.
The bank’s stock price has plummeted from over $2 at the start of the year to about 1 cent on Friday, leading to its delisting from the Nasdaq in August.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Image created using Midjourney
