The Philadelphia-based Republic First Bank was closed by state regulators, and its assets were given to the Federal Deposit Insurance Corp. (FDIC). The Lancaster, Pennsylvania-based Fulton Bank is taking over Republic Bank’s assets and deposits, effective immediately. Republic First Bank operated in Pennsylvania, New Jersey, and New York, doing business as Republic Bank with approximately $6 billion in assets and $4 billion in deposits as of January 31st. The FDIC announced that Republic Bank’s 32 branches will reopen as Fulton Bank branches as early as Saturday, allowing depositors to access their funds via checks or ATMs.
Customers of Republic Bank will become depositors of Fulton Bank, maintaining their deposit insurance coverage without needing to change their banking relationship. The bank’s failure is expected to cost the deposit insurance fund $667 million, but the FDIC stated that Fulton Bank acquiring Republic First Bank was the most cost-effective resolution. In a strong economy, the closure of an average of four to five banks per year is typical, but financial risks have increased for many regional and community banks due to rising interest rates and falling commercial real estate values, especially for office buildings post-pandemic.
The last FDIC-insured institution to fail in the U.S. was Citizens Bank in November 2023, making Republic First Bank the first failure of 2024. Investor groups, including former U.S. Treasury secretary Steven Mnuchin, have stepped in to rescue struggling banks, such as New York Community Bancorp, that are facing challenges in commercial real estate and financial difficulties. Customers with questions regarding the acquisition can contact the FDIC at 1-877-467-0178 during specified hours, and they are advised to continue using Republic Bank’s branches until they receive notice from Fulton Bank about system changes.
