PHILADELPHIA (CBS/AP) -- Philadelphia-based Republic First Bank was closed by state regulators Friday night and its assets were given to the Federal Deposit Insurance Corp., FDIC announced in a news release.
Republic Bank's assets are now being taken over by Lancaster, Pennsylvania-based Fulton Bank effective immediately. Fulton is also assuming all deposits.
Republic First Bank is a regional lender operating in Pennsylvania, New Jersey and New York. The company did business as Republic Bank and had roughly $6 billion in assets and $4 billion in deposits as of Jan. 31.
Republic Bank's 32 branches will reopen as branches of Fulton Bank as early as Saturday. Republic First Bank depositors can access their funds via checks or ATMs as early as Friday night, the FDIC said.
If you have a Republic Bank ATM or debit card, or a check, you can still use them. If you have a loan with Republic, you should still make payments as normal.
"Republic Bank customers will now be depositors of Fulton Bank without needing to change their banking relationship to maintain deposit insurance coverage," announced the FDIC. "Customers should continue using Republic Bank branches until notified by Fulton Bank of completed systems changes to process their accounts."
The FDIC estimates that the failure of Republic Bank will cost the deposit insurance fund $667 million, but acquiring Republic Bank was deemed the most cost-effective solution for Fulton Bank.
Deposits of up to $250,000 in FDIC-insured bank accounts are protected, even in the event of bank failure.
What led to the failure of Republic Bank?
Republic Bank is the first FDIC-insured institution to fail in 2024. The previous bank failure was Citizens Bank in Sac City, Iowa, back in November 2023.
In a robust economy, only around four or five banks typically close each year.
The combination of rising interest rates and declining commercial real estate values, particularly in office buildings dealing with high vacancy rates post-pandemic, has increased financial risks for numerous regional and community banks. Loans tied to devalued properties present challenges for refinancing.
Recently, an investor group led by Steven Mnuchin, former U.S. Treasury secretary under the Trump administration, committed over $1 billion to rescue New York Community Bancorp from struggles related to commercial real estate weakness and integration issues stemming from a distressed bank acquisition.
How to contact the FDIC and Fulton Bank
If you have any questions about the acquisition, you can contact the FDIC at 1-877-467-0178.
The call center operates during the following hours:
- Saturday: 9 a.m. to 6 p.m. ET
- Sunday: 12 p.m. to 6 p.m. ET
- Monday: 8 a.m. to 8 p.m. ET
- Days afterward: 9 a.m. to 5 p.m. ET
