The regional American bank Republic First Bank has been closed down by the regulator. The government agency that guarantees bank deposits closed the bank, after which sector and regional peer Fulton Bank bought up most of the deposits and assets.
With Republic First Bank, which operated under the banner Republic Bank, another smaller banking player in the US has collapsed due to high interest rates. The Federal Deposit Insurance Corporation (FDIC) announced Friday evening that its 32 offices in New Jersey, Pennsylvania and New York will reopen as branches of Fulton Bank today/Saturday.
Republic First Bank had about $6 billion in assets and $4 billion in deposits at the end of January. The bank, based in Philadelphia (Pennsylvania), collapsed because sharply increased interest rates led to losses on loans and financial products. Last year, Silicon Valley Bank, Signature Bank and First Republic – not to be confused with Republic First Bank – collapsed as a result.
The FDIC had already sought a buyer for Republic First Bank last year, but suspended that process after a bank reached an agreement with investors for a $35 million cash injection. But that deal, which should allay shareholder concerns about the bank’s stability, fell apart earlier this year. FDIC then restarted the sales process.
