Regulators shut down Republic First Bank, a regional lender operating in Pennsylvania, New Jersey and New York.
The Federal Deposit Insurance Corp. announced Friday that 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, Pa., agreed to take over substantially all of the bankrupt bank’s deposits and purchase substantially all of its assets, the agency said.
All 32 Republic Bank branches will reopen as Fulton Bank branches starting Saturday. Republic First Bank depositors can access their funds by check or ATMs as early as Friday evening, the FDIC said.
The bank’s failure is expected to cost the deposit insurance fund $667 million.
The lender is the first FDIC-insured institution to fail in the United States this year. The last bank failure – Citizens Bank, based in Sac City, Iowa – was in November.
In a strong economy, on average only four or five banks close each year.
Rising interest rates and falling commercial real estate values, particularly for office buildings struggling with rising vacancy rates following the pandemic, have increased financial risks for many banks regional and community. Outstanding loans secured by properties that have lost value make them a challenge to refinance.
Last month, a group of investors including Steven Mnuchin, who served as U.S. Treasury secretary under the Trump administration, agreed to inject more than $1 billion to save the New York community. Bancorpwhich was hammered by the weakness of commercial real estate and the growing difficulties resulting from the takeover of a bank in difficulty.
