Troubled lender Republic First seized by US regulators, sold to Fulton Bank

US regulators have taken control of Republic First Bancorp and facilitated its acquisition by Fulton Bank. The seizure comes a year after the collapse of three similar institutions, reflecting the ongoing volatility in the banking sector.

Republic First, headquartered in Philadelphia, found itself in dire straits after funding talks with investors fell through. Consequently, the Pennsylvania Department of Banking and Securities intervened, leading to the takeover of Republic First by the Federal Deposit Insurance Corp (FDIC), acting as a receiver.

Fulton Bank, a subsidiary of Fulton Financial Corp, has been selected to assume Republic Bank's deposits and acquire its assets, a move aimed at safeguarding the interests of depositors. Republic Bank, operating under Republic First, boasted approximately $6 billion in total assets and $4 billion in total deposits as of January 31, 2024. The FDIC estimates the cost of the bank's failure to be $667 million.

In addition to assuming deposits, Fulton Bank disclosed that the transaction will significantly bolster its presence in the Philadelphia market, with combined company deposits reaching approximately $8.6 billion. Fulton's Chairman and CEO, Curt Myers, expressed enthusiasm about the expanded regional footprint resulting from the acquisition.

The transition will see Republic Bank's 32 branches across New Jersey, Pennsylvania, and New York reopening as Fulton Bank branches, effective either Saturday or the upcoming Monday during regular business hours.

Republic Bank's struggles were compounded by the termination of a deal with an investor group, including prominent figures such as George Norcross and Philip Norcross, late last year. Following the collapse of this agreement, efforts to salvage the bank faltered, leading to the regulatory intervention.

Amid mounting challenges, Republic Bank resorted to cost-cutting measures, including job reductions and the cessation of its mortgage origination business in early 2023. Despite these efforts, the bank's stock price plummeted from over $2 at the beginning of the year to a mere 1 cent on Friday, resulting in a market capitalization below $2 million. The delisting of its shares from the Nasdaq further exacerbated its financial woes.

Financial advisory services for Fulton Bank were provided by Piper Sandler & Co and BofA Securities, with legal counsel offered by Sullivan & Cromwell LLP.

(With Reuters inputs)