Republic First Bank Seized By Regulators—First Bank Collapse Of 2024

 

Philadelphia-based Republic First Bancorp was seized by Pennsylvania regulators, the FDIC announced on Friday.

Troubled Philadelphia-based regional bank Republic First Bancorp was seized by Pennsylvania regulators Friday, marking the first regional banking failure this year following a series of high-profile collapses in 2023—though the bank is far smaller than those that collapsed last year and its nearly three dozen branches are set to reopen under a new name.

The Pennsylvania Department of Banking and Securities seized Republic First on Friday, amid speculation of a potential seizure and after the bank had looked for a potential buyer, the Federal Deposit Insurance Corp. announced.

Republic First had roughly $6 billion in assets and another $4 billion in deposits in January, according to the FDIC.

Fulton Bank reached an agreement with regulators to take over Republic First’s 32 branches in Pennsylvania, New York and New Jersey, which will reopen under the Fulton Bank name, with the Pennsylvania-based bank assuming “substantially all of [Republic First’s] deposits and purchase substantially all of the assets,” the FDIC said in a statement.

Shares of Republic First Bancorp plummeted Friday as investors moved away from the faltering bank, sinking 60% on the day to just over 1 cent—a drop in the bucket of its July 2006 peak at nearly $12.50.

KEY BACKGROUND

Republic First’s seizure makes it the fourth in just over a year to be seized by state and federal regulators, following the abrupt failure of Silicon Valley Bank last March, sparking fears about the stability of regional banks amid a series of bank runs depleting multiple banks’ assets. Just two days after SVB’s failure, New York-based Signature Bank, a leader in crypto lending, also shuttered, with New York regulators seizing the 23-year-old regional bank, along with its $110 billion in assets and $88 billion in deposits. San Francisco’s First Republic Bank became the next bank to fail last May, when federal regulators oversaw the offload of its assets to banking giant JPMorgan Chase. Sources told Bloomberg this week the FDIC was seeking bids for the Republic First, a move that comes less than six months after the agency suspended an auction for Republic First just one week after it reached a $35 million deal with the Norcross-Braca Group in a last-ditch effort to stave off a potential seizure and raise capital from investors. Norcross-Braca backed out of that deal last month.

BIG NUMBER

$250,000. That’s the amount of individual customer deposits the FDIC guarantees it will protect, meaning that customers can expect up to a quarter million dollars to be safe even if their bank collapses.