The move highlights the difficulties confronting regional banks, particularly in the aftermath of the collapse of three similar institutions in 2023. Republic First, headquartered in Philadelphia, had halted negotiations with a consortium of investors before being seized by the Pennsylvania Department of Banking and Securities. The Federal Deposit Insurance Corp (FDIC), acting as the receiver, announced that Fulton Bank, a subsidiary of Fulton Financial Corp (FULT.O), would assume most of Republic Bank's deposits and acquire all its assets to safeguard depositors.
According to Reuters, as of 31 January 2024, Republic Bank reported total assets of approximately USD 6 billion and total deposits of USD 4 billion. The FDIC projected a cost of USD 667 million to its fund due to the bank's failure. Additionally, Republic Bank had borrowings and other liabilities totalling around USD 1.3 billion, according to Fulton's statement cited by Reuters.
Fulton Bank stated that the acquisition nearly doubled its presence in the Philadelphia market, with combined company deposits reaching about USD 8.6 billion. Republic Bank's 32 branches in New Jersey, Pennsylvania, and New York will reopen as Fulton Bank branches.
This development follows the trend of recent regional bank failures, such as Silicon Valley and Signature in March 2023 and First Republic in May 2023. Republic Bank had previously entered into an agreement with an investor group led by George Norcross and Philip Norcross, but the deal fell through in February.
Following the termination of the deal, the FDIC resumed efforts to seize and sell the bank. Republic Bank had undergone workforce reductions and exited its mortgage origination business in early 2023 due to financial pressures. Its stock price plummeted from over USD 2 at the beginning of the year to approximately 1 cent, resulting in a market capitalisation below USD 2 million. The bank's shares were delisted from the Nasdaq in August and are traded over the counter at the time of writing according to Reuters.
Fulton received financial advice from Piper Sandler & Co and BofA Securities, while Sullivan & Cromwell LLP served as its legal adviser.
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