The first bank failure of 2024 has taken place.
Republic First Bank, which operated in Pennsylvania, New Jersey and New York, was seized Friday by the Federal Deposit Insurance Corp., according to The Associated Press.
The Philadelphia-based bank, which did business as Republic Bank, was sold to competitor Fulton Bank, based in Lancaster, Pennsylvania.
Republic Bank’s 32 branches were scheduled to open Saturday as Fulton Bank branches.
The deposit insurance fund will be out $667 million due to the bank’s failure.
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The most recent bank failure came in November when Citizens Bank of Sac City, Iowa, went under.
“Depositors of Republic Bank will become depositors of Fulton Bank, so customers do not need to change their banking relationship in order to retain their deposit insurance coverage,” the FDIC said, according to CBS.
Will bank closures continue?
“Customers of Republic Bank should continue to use their existing branches until they receive notice from Fulton Bank that it has completed systems changes that will allow its branch offices to process their accounts as well.”
First major bank failure of 2024: Philly’s Republic First with $4 billion in deposits.
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According to The Wall Street Journal, Fulton Bank has approximately $28 billion in assets and about 200 branches in Pennsylvania, Delaware, Maryland, New Jersey and Virginia.
Republic Bank had long been on shaky ground, with a stock value Friday of about a penny.
Republic was delisted by Nasdaq in August.
The bank was not on the scale of three major failures from 2023: Silicon Valley Bank, Signature Bank, and the similarly named First Republic, the Journal reported. Those banks had assets valued between $100 billion and $200 billion.
The Journal report said regional banks are on “shaky ground.”
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“Two years of higher rates have forced them to pay more interest on deposits, which has increasingly eaten into profits,” the Journal noted.
Required technology upgrades will be a major cost item at a time when many regional banks have loans on commercial buildings that are in trouble, the Journal reported.
The New York Post noted that Republic Bank had been struggling for more than a year, and that cutting jobs and quitting the mortgage business were tried in an attempt to bolster the bank’s bottom line.
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