(Reuters) – U.S. regulators have agreed to seize Republic First Bancorp and sell it to Fulton Bank, underscoring the challenges facing regional banks a year after the collapse of three of its peers.
Philadelphia-based Republic First abandoned financing talks with a group of investors but was seized by the Pennsylvania Department of Banking and Securities.
The Federal Deposit Insurance Corporation (FDIC), which was appointed as receiver, announced on Friday that Fulton Bank, a division of Fulton Financial Corp., will assume substantially all deposits and that Republic Bank, the trading name for Republic First, will take over substantially all deposits. announced that it would purchase all of its assets. To “protect depositors”.
As of January 31, 2024, Republic Bank had total assets of approximately $6 billion and total deposits of $4 billion. The FDIC estimates that the fund's loss from the bankruptcy would be $667 million.
In addition to deposits, Republic also had approximately $1.3 billion in borrowings and other debt, Fulton said in a statement.
Fulton said the deal brings the companies' total deposits to approximately $8.6 billion and nearly doubles their presence in the Philadelphia market.
“We are excited to double our presence across the region with this transaction,” said Chairman Fulton.
CEO Kurt Myers said in a statement.
Thirty-two Republic Bank branches in New Jersey, Pennsylvania and New York will reopen as Fulton Bank branches during business hours on Saturday or Monday.
The decision marks the latest U.S. regional bank failure, following the unexpected failures of three financial institutions: Silicon Valley and Signature in March 2023 and First Republic in May.
Republic Bank had struck a deal late last year with a group of investors, including veteran businessman George Norcross and prominent lawyer Philip Norcross, but the effort was called off in February.
After the 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, reeling from pressure from high costs and an inability to improve profitability, cut jobs and exited mortgage origination business in early 2023.
The bank's stock price has fallen from just over $2 at the start of the year to about 1 cent on Friday, leaving its market capitalization below $2 million.
The company's stock was delisted from the Nasdaq in August and is currently traded over the counter.
Piper Sandler & Company and BofA Securities served as Mr. Fulton's financial advisors, and Sullivan & Cromwell LLP served as legal advisor.
(Reporting by Manas Mishra, Pritam Biswas and Nathan Gomez in Bengaluru; Additional reporting by Syed Azhar in New York; Editing by Shilpi Majumdar, Sriraj Kaluvila and Muralikumar Anantharaman)
