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Wednesday, August 23, 2023, at Federal Deposit Insurance Corporation (FDIC) headquarters in Washington, DC, USA. The U.S. banking watchdog next week will propose requiring banks with around $100 billion in assets to issue enough long-term debt. To cover capital loss in case of failure.
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The Federal Deposit Insurance Corporation announced Friday that Republic First Bank was shut down by Pennsylvania regulators, and the FDIC announced it was the first U.S. bank failure this year.
“Philadelphia-based Republic First Bank (operating as Republic Bank) was shut down today by the Pennsylvania Department of Banking and Securities, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. Protecting Depositors FDIC entered into an agreement with Fulton Bank, a Lancaster National Association of Pennsylvania, to assume substantially all deposits and purchase substantially all of Republic Bank's assets,'' the FDIC said in a statement. .
The bank had total assets of about $6 billion and total deposits of about $4 billion at the end of January, according to a statement from the FDIC.
This makes Republic Bank (FRBK) much smaller than the regional bank failure that shook the financial world last year. For example, Silicon Valley Bank held about $209 billion at the end of 2022. It collapsed in March 2023.
The FDIC said the former bank's “32 branches in New Jersey, Pennsylvania, and New York will reopen as Fulton Bank branches on Saturday (for branches with regular Saturday business hours) or Monday during regular business hours.” Ta.
According to the FDIC, people who have deposits at Republic Bank become depositors at Fulton Bank. The agency's deposit insurance covers up to $250,000 per depositor.
Bloomberg News reported earlier this week that the FDIC approached regional financial institution buyers.
Republic Bank became the first bank in the United States to fail since Citizens Bank in Sac City, Iowa, in November 2023, according to the FDIC.
Republic First Bank is a separate entity from First Republic Bank, a San Francisco-based commercial bank that closed in May 2023. Most of the bank's assets were sold to JPMorgan Chase.
The Philadelphia-based bank's failure comes at a turbulent time for local banks, as rising interest rates hurt industries that rely on credit.
The failure of Silicon Valley Bank sparked a broader crisis last year. Signature Bank failed a few days later, followed by First Republic Bank a few weeks later. According to the FDIC, there were a total of five bank failures in 2023.
New York Community Bank recently saw its stock price fluctuate as customers began withdrawing cash from the community financial institution after the bank disclosed “material weaknesses” in its management. The bank received a $1 billion equity lifeline in March from investors including former Treasury Secretary Steven Mnuchin's firm Liberty Strategic Capital.
This story has been updated.
