The Philadelphia bank Republic First Bancorp has gone bankrupt, according to the Pennsylvania Department of Banking and Securities. This marks the fourth bankruptcy of a large regional bank after Silicon Valley, Signature and First Republic.
The bank, which operated in New York and New Jersey as well as Pennsylvania, operated under the name Republic Bank and had around $6 billion in assets and $4 billion in total deposits as of the end of 2023.
The aforementioned government entity appointed the Federal Deposit Insurance Corporation (FDIC) as receiver of the bank, which in turn reached an agreement with Fulton Bank to assume all deposits and purchase Republic Bank’s remaining assets.
BREAKING: Philadelphia-based Republic First Bank collapses, goes into receivership with all assets transferred to Fulton Bank via the FDIC 👀😮 pic.twitter.com/gbVzhIkfZ4
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Therefore, the now-defunct bank’s 32 branches will reopen as Fulton Bank branches on Saturday or later on Monday, depending on each location’s business hours. Current depositors should not make any changes unless notified. They will be able to access their money by writing checks and using ATMs or debit cards as usual. The same applies to checks already issued with Republic Bank and loans approved to date.
“Republic First faced some of the same problems as the three regional banks that failed last year: paper losses on bonds that lost value as interest rates rose and high proportions of uninsured deposits that can quickly flee,” The Wall Street Journal reported.
In proportion, this bank is smaller than Silicon Valley Bank, Signature Bank and First Republic, which had higher assets, between $100,000 and $200,000 million. Meanwhile, compared to the sudden collapses of 2023, the fact that the bankruptcy has simmered for almost a year gave depositors more time to prepare.
“The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) related to the failure of Republic Bank will be $667 million. The FDIC determined that compared to other alternatives, Fulton Bank’s acquisition of Republic Bank is the least costly resolution for the DIF, an insurance fund created by Congress in 1933 and managed by the FDIC to protect the deposits at the nation’s banks. Republic Bank is the first U.S. bank failure this year; the last failure was Citizens Bank, Sac City, Iowa on November 3, 2023,” the FDIC said in a statement released minutes after the bankruptcy was made official.
