U.S. regulators have taken control of Republic First Bancorp (FRBK.PK) and arranged for its acquisition by Fulton Bank, highlighting ongoing difficulties in the regional banking sector one year after the downfall of three similar institutions. The Pennsylvania Department of Banking and Securities intervened when Philadelphia-based Republic First terminated funding discussions with investors.
The Federal Deposit Insurance Corp (FDIC), serving as the receiver, announced that Fulton Bank, part of Fulton Financial Corp (FULT.O), will take over nearly all deposits and assets of Republic Bank, the trade name for Republic First, to safeguard depositors. As of January 31, 2024, Republic Bank reported around $6 billion in assets and $4 billion in deposits. The FDIC estimates the cost of this bank failure to be $667 million.
In addition to deposits, Republic had around $1.3 billion in borrowings and other obligations. According to Fulton, the acquisition substantially boosts its market footprint in Philadelphia, raising total deposits to about $8.6 billion.
“We are thrilled to double our regional footprint with this acquisition,” Fulton Chairman and CEO Curt Myers stated.
Republic Bank’s 32 branches across New Jersey, Pennsylvania, and New York will transition to Fulton Bank branches and resume operations either on the following Saturday or Monday during regular business hours.
This event follows the recent failures of three U.S. regional banks—Silicon Valley Bank and Signature Bank in March 2023, and First Republic Bank in May. Republic Bank had previously negotiated a deal with a group of investors, including seasoned businessman George Norcross and prominent lawyer Philip Norcross, but this agreement fell through in February, prompting renewed FDIC intervention to facilitate the bank’s sale, as initially reported by the Wall Street Journal.
The bank’s stock plummeted from over $2 at the beginning of the year to roughly 1 cent by Friday, significantly diminishing its market value to under $2 million. Following delisting from Nasdaq in August, its shares are now traded over the counter.
Fulton was advised financially by Piper Sandler & Co and BofA Securities, and legally by Sullivan & Cromwell LLP. Republic Bank had previously reduced its workforce and exited its mortgage origination business early in 2023 amid rising costs and profitability challenges.
