politicsUSA

Republic First Bank closes, first FDIC-insured bank to fail in 2024

Republic Bank closed by FDIC, branches to be taken over by Fulton Bank


Republic Bank closed by FDIC, branches to be taken over by Fulton Bank

00:35

PHILADELPHIA (CBS/AP) — Philadelphia-based Republic First Bank was shut down Friday evening by state regulators and its assets transferred to the Federal Deposit Insurance Corp., the FDIC said in a news release. press.

The assets of Republic Bank are now being taken over by Fulton Bank, based in Lancaster, Pennsylvania, effective immediately. Fulton also assumes all deposits.

download-8.png

Republic First Bank is a regional lender operating in Pennsylvania, New Jersey and New York. The company did business as Republic Bank and had approximately $6 billion in assets and $4 billion in deposits as of Jan. 31.

All 32 Republic Bank branches will reopen as Fulton Bank branches starting Saturday. Republic First Bank depositors can access their funds by check or ATMs as early as Friday evening, the FDIC said.

If you have a Republic Bank ATM or debit card, or check, you can still use them. If you have a loan with Republic, you should still make your payments as normal.

“Republic Bank depositors will become Fulton Bank depositors, so customers will not need to change their banking relationship to maintain their deposit insurance coverage,” the FDIC said. “Republic Bank customers should continue to use their existing branches until they receive notice from Fulton Bank that it has finalized changes to its systems that will allow its branches to also process their accounts.”

The bank’s failure is expected to cost the deposit insurance fund $667 million, but the FDIC said Fulton Bank’s acquisition of Republic First Bank was the least expensive solution.

Anyone with less than $250,000 in an FDIC-insured bank account is protected even if their bank fails.

Why did Republic First Bank go bankrupt?

The lender is the first FDIC-insured institution to fail in the United States in 2024. The last bank failure – Citizens Bank, based in Sac City, Iowa – was in November 2023.

In a strong economy, on average only four or five banks close each year.

Rising interest rates and falling commercial real estate values, particularly for office buildings struggling with rising vacancy rates following the pandemic, have increased financial risks for many banks regional and community. Outstanding loans secured by properties that have lost value make them a challenge to refinance.

Last month, a group of investors including Steven Mnuchin, who served as US Treasury secretary under the Trump administration, agreed to inject more than $1 billion to save the country. New York Community Bancorp, hit by weakness in commercial real estate and the growing difficulties resulting from the takeover of a bank in difficulty.

How to contact the FDIC and Fulton Bank

The FDIC says customers with questions about the acquisition can contact the FDIC at 1-877-467-0178.

The call center is open 9 a.m. to 6 p.m. ET on Saturday and 12 p.m. to 6 p.m. Sunday, 8 a.m. to 8 p.m. Monday, and 9 a.m. to 5 p.m. on subsequent days.

Grub5

Back to top button