U.S. regulators have taken control of Republic First Bancorp (FRBK.PK) and have arranged its sale to another financial institution, as confirmed by the Federal Deposit Insurance Corp on Friday. The FDIC, serving as the receiver, has struck a deal with Fulton Bank, National Association based in Lancaster, Pennsylvania, to assume the majority of Republic Bank’s deposits and acquire most of its assets.
This development represents the latest in a string of regional bank failures, following the unexpected collapses of Silicon Valley and Signature in March 2023 and First Republic in May of the same year. Despite earlier attempts by Republic Bank to secure a deal with an investor group led by George Norcross and Philip Norcross, that agreement fell through in February.
Following the termination of the deal, the FDIC resumed its efforts to intervene and sell the bank, as reported by the Wall Street Journal. Republic Bank, which boasted approximately $6 billion in assets and $4 billion in deposits as of January 31, 2024, faced mounting challenges including escalating costs and stagnant profitability. These issues prompted the bank to implement job cuts and exit its mortgage origination business in early 2023.
The failure of Republic Bank is estimated to cost the Deposit Insurance Fund around $667 million, according to the FDIC. The bank’s financial woes have been reflected in its stock performance, with its share price plummeting from over $2 at the beginning of the year to approximately 1 cent by Friday. Consequently, its market capitalization has dwindled to less than $2 million, leading to the delisting of its shares from the Nasdaq in August, now trading over the counter.