EGN NEWS DESK
Regulators late Friday seized Republic First Bancorp, a troubled Philadelphia lender, within the first U.S. financial institution failure this yr.
Republic First Bancorp, often known as Republic Bank, had about $4 billion in deposits on the finish of January and property value $6 billion, the Federal Deposit Insurance Corporation stated in an announcement.
“Substantially all” of its deposits shall be assumed by Fulton Bank of Lancaster, Pa., the F.D.I.C. stated, with Republic First’s 32 branches in Pennsylvania, New Jersey and New York reopening as quickly as Saturday as Fulton Bank branches.
Founded in 1988, Republic First was smaller than the midsize banks that collapsed final yr — together with First Republic Bank and Silicon Valley Bank, whose property every topped $200 billion. The F.D.I.C. expects the fee to the Deposit Insurance Fund to be $667 million.
The failure comes amid persevering with concern concerning the well being of regional banks. In a presentation for traders in July, Republic First stated that deposits have been declining and that the financial institution’s mortgage lending enterprise had turn out to be much less helpful as rates of interest elevated.
It had deliberate to exit the mortgage enterprise and refocus on client deposits. It was delisted by Nasdaq in August, after it did not file its annual report with the Securities and Exchange Commission, and an anticipated $35 million funding within the financial institution was scuttled this yr, as reported by Banking Dive.
Feddie Strickland, a financial institution analyst at Janney Montgomery Scott, stated that Republic First’s failure was more likely to be an remoted incident and that the general banking sector is steady.
“I believe small banks are in good condition,” Mr. Strickland stated. “Some of the failures we noticed final yr have been actually banks with a sure specialization. I believe there’s an significance of being diversified.”
Mr. Strickland referred to as Fulton, which is taking on Republic First’s deposits, “a boring financial institution in one of the simplest ways,” calling the business financial institution “cautious” and “good operators.”
“Depositors ought to really feel secure with Fulton,” he added.
Maureen Farrell contributed reporting.
