Regulators have shut down Republic First Bank, a regional lender operating in Pennsylvania, New Jersey and New York.
WASHINGTON – Regulators have shut down Republic First Bank, a regional lender operating in Pennsylvania, New Jersey and New York.
The Federal Deposit Insurance Corporation said Friday it had seized the Philadelphia-based bank, which did business as Republic Bank and had about $6 billion in assets and $4 billion in deposits as of Jan. 31.
Fulton Bank, based in Lancaster, Pennsylvania, has agreed to take over substantially all of the failed bank’s deposits and buy essentially all of its assets, the agency said.
32 Republic Bank branches will reopen Saturday as Fulton Bank branches. The FDIC said Republic First Bank depositors could access their funds via check or ATM as soon as Friday night.
The bank’s failure is expected to cause a loss of $667 million to the Deposit Insurance Fund.
The lender is the first FDIC-insured institution to fail in the US this year. The last bank failure – Citizens Bank, based in Sac City, Iowa – occurred in November.
In a strong economy, an average of only four or five banks close each year.
Rising interest rates and declining commercial real estate values, especially for office buildings struggling with rising vacancy rates following the pandemic, have increased financial risks for many regional and community banks. Outstanding loans backed by properties that have lost value make them a challenge to refinance.
Last month, an investor group including Steven Mnuchin, who served as U.S. Treasury secretary during the Trump administration, agreed to invest more than $1 billion to rescue New York Community Bancorp, which specializes in commercial real estate. Is affected by weakness and resulting increasing pain. This is the purchase of a distressed bank.
