Republic First Bank Taken Over By Federal Regulators in US
(24 April 2024 – United States) Philadelphia based Republic First Bank was shut down by state regulators over the weekend and its assets were handed over to the Federal Deposit Insurance Corporation.
The failure of the regional lender marks the first FDIC insured bank failure of 2024, albeit relatively small compared to the rest of the US banking market. Republic First Bank had US$6 billion in assets, and $4 billion of assets as of 31 January 2024.
The bank’s assets have been taken over by Pennsylvania based lender Fulton Bank effective immediately, alongside all depositor funds. All 32 branches of Republic First Bank are expected to re-open as early as Monday in the US, with the cost of the seizure expected to be US$667 million against the FDIC insurance fund.
Regional banks in the US have been facing headwinds stemming from rising interest rates and falling commercial real estate values, particularly with office buildings suffering from sky high vacancy rates which hurt the cashflow of their owners and has made it difficult for owners to refinance with reduced equity and income, leaving banks with distressed loans causing losses on their balance sheets.
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