(Reuters) – U.S. regulators confiscated Republic first Bancorp (OTC:) and agreed to sell it to Fulton Bank, highlighting the challenges facing regional banks a year after the collapse of three similar companies.
Philadelphia-based Republic First, which refused to negotiate financing with a group of investors, was seized by the Pennsylvania Department of Banking and Securities.
The Federal Deposit Insurance Corporation (FDIC), which has been appointed receiver, said Friday Fulton Bank, a division Fulton Financial (NASDAQ:) Corp will take over substantially all of the deposits and buy all of the assets of Republic Bank, which is the working name of Republic First, to “protect depositors.”
As of January 31, 2024, Republic Bank had approximately $6 billion in total assets and $4 billion in total deposits. The FDIC estimates that the cost of his fund’s failure would be $667 million.
In addition to deposits, Republic also had loans and other liabilities of about $1.3 billion, Fulton said in a statement.
Fulton said the deal will nearly double its presence in the Philadelphia market, bringing the companies’ combined deposits to about $8.6 billion.
“With this transaction, we are pleased to double our presence in the region,” said Fulton Chairman and
Statement from CEO Kurt Myers.
Republic Bank’s 32 branches in New Jersey, Pennsylvania and New York will reopen as Fulton Bank branches on Saturday or Monday during business hours.
The decision marks the latest bankruptcy for a U.S. regional bank following the surprise collapse of three lenders — Silicon Valley and Signature in March 2023 and First Republic in May.
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Late last year, Republic Bank struck a deal with a group of investors that included veteran businessman George Norcross and prominent lawyer Philip Norcross, but the deal was dropped in February.
After that deal fell through, the FDIC renewed efforts to seize and sell the bank, according to the Wall Street Journal, which first reported the news.
Republic Bank cut jobs and exited its mortgage lending business in early 2023 as it came under pressure from higher costs and an inability to improve profitability.
The bank’s share price fell from just over $2 at the start of the year to about 1 cent on Friday, causing the bank’s market capitalization to fall below $2 million.
Its shares were delisted from Nasdaq in August and are now traded on the over-the-counter market.
Piper Sandler & Co and BofA Securities served as financial advisors to Fulton, and Sullivan & Cromwell LLP served as legal advisors.