US regulators seize, sell Philadelphia-based bank; first US bank failure of this year

US regulators have seized Republic First Bancorp and agreed to sell it to Fulton Bank, the Federal Deposit Insurance Corp (FDIC) said on April 26, according to a Reuters report. The development underscores the challenges facing regional banks a year after the collapse of three peers.

The Philadelphia-based bank, which had abandoned funding talks with a group of investors, was seized by the Pennsylvania Department of Banking and Securities.

The FDIC, appointed as a receiver, said Fulton Bank, a unit of Fulton Financial Corp, will assume substantially all deposits and purchase all the assets of Republic Bank to "protect depositors", the Reuters report said.

Republic Bank had about $6 billion in total assets and $4 billion in total deposits, as of January 31, 2024. The FDIC estimated the cost of the failure to its fund would be $667 million.

The 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.

The decision marks the latest US regional bank failure following the unexpected collapses of three lenders - Silicon Valley and Signature in March 2023 and First Republic in May last year.

Republic Bank had struck a deal with an investor group that included veteran businessman George Norcross, and high-profile attorney Philip Norcross late last year, but the effort was terminated in February.

After that deal collapsed, the FDIC resumed efforts to seize and sell the bank, according to the Wall Street Journal, which first reported the news.

Republic Bank cut jobs and exited its mortgage origination business in early 2023 as it reeled under pressure from higher costs and an inability to improve profitability.

The bank's stock price has tumbled from just over $2 at the start of the year to about 1 cent on April 26, leaving it with a market capitalisation below $2 million. Its shares were delisted from the Nasdaq in August and now trade over the counter.