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Federal Deposit Insurance Corp. (FDIC) headquarters in Washington, DC, US, Wednesday, August 23, 2023. US banking watchdogs will next week propose requiring banks with as little as $100 billion in assets to issue enough long-term debt to cover losses if they ever failed.
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The Federal Deposit Insurance Corporation said Friday that Republic First Bank has been shut down by state regulators in Pennsylvania, in what the FDIC said was the first U.S. bank failure this year.
“Philadelphia-based Republic First Bank (doing business as Republic Bank) was closed today by the Pennsylvania Department of Banking and Securities, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect depositors, the FDIC entered into an agreement with Fulton Bank , National Association of Lancaster, Pennsylvania to assume substantially all of the deposits and purchase substantially all of the assets of Republic Bank,” the FDIC said in a statement.
The bank had about $6 billion in total assets and $4 billion in total deposits at the end of January, the FDIC said in its release.
That makes Republic Bank (FRBK) far less than the regional bank failures that rocked the financial world last year. Silicon Valley Bank, for example, had about $209 billion at the end of 2022; it collapsed in March 2023.
The FDIC said the former bank’s “32 branches in New Jersey, Pennsylvania and New York will reopen as branches of Fulton Bank on Saturday (for branches with normal Saturday hours) or on Monday during normal business hours.”
Those who have deposits at Republic Bank will become depositors at Fulton Bank, the FDIC said. The agency’s deposit insurance covers up to $250,000 per deposits.
Bloomberg News reported earlier this week that the FDIC had approached buyers for the regional lender.
The FDIC said Republic Bank was the first bank to fail in the United States since Citizens Bank in Sac City, Iowa, in November 2023.
Republic First Bank is a separate entity from First Republic Bank, a San Francisco-based commercial bank that closed in May 2023. The majority of the bank’s assets were sold to JPMorgan Chase.
The failure of the Philadelphia-based bank comes at a tumultuous time for regional banks, as rising interest rates have hurt the credit-dependent industry.
The collapse of Silicon Valley Bank triggered a wider crisis last year. Signature Bank’s failure followed days later, and First Republic Bank failed a few weeks after that. In total, there were five bank failures in 2023, according to the FDIC.
Recently, New York Community Bank saw wild swings in its share price as customers began pulling their cash from the regional lender after it said it had identified “material weaknesses” in the company’s controls. The bank received a lifeline of $1 billion in equity investment from investors including former Treasury Secretary Steven Mnuchin’s firm, Liberty Strategic Capital, in March.
This story has been updated.
