Regulators in Pennsylvania have reportedly closed Republic First Bank, in the first notable bank failure of 2024. The Federal Deposit Insurance Corporation (FDIC) made the announcement in a press release Friday. According to that release, The Pennsylvania Department of Banking and Securities ordered the bank closure. The FDIC was designated as the bank’s receiver.
Behind the Republic First Bank closure
Republic First has reportedly experienced more than two years of challenges. Like many regional banks, Republic First’s troubles have been compounded by higher interest rates in recent years. Last year, the company attempted to reduce costs by cutting its workforce. In addition, the bank ended its mortgage origination operations. And earlier this week, reports indicated that the FDIC was seeking potential buyers for the troubled company.
Some experts have noted that this bank closure has little in common with last year’s short-lived financial crisis. Indeed, Republic First held assets of roughly $6 billion, and just $4 billion in deposits. That’s a much smaller failure than Silicon Valley Bank, for example. Months prior to its collapse, SVB was holding more than $200 billion in assets.
Fulton Bank takes the reins
In its press release, the FDIC confirmed that Fulton Bank, National Association of Lancaster, Pennsylvania is purchasing Republic First’s assets and assuming its deposits. According to regulators, all 32 branches of Republic First plan to reopen as Fulton Bank branches on Saturday or Monday. Depositors can continue to access their funds through debit cards and checks. Meanwhile, borrowers should continue their regular payment schedules.
In addition:
“Depositors of Republic Bank will become depositors of Fulton Bank so customers do not need to change their banking relationship in order to retain their deposit insurance coverage. Customers of Republic Bank should continue to use their existing branches until they receive notice from Fulton Bank that it has completed systems changes that will allow its branch offices to process their accounts as well.”
At this point, regulators appear to have executed a smooth transition for the takeover. That should help to ensure that the Republic First Bank closure has few ripple effects throughout the broader financial ecosystem.
