Regulators have shuttered Republic First Bank, a regional lender operating in Pennsylvania, New Jersey and New York.
The Federal Deposit Insurance Corp. said Friday it has seized the Philadelphia-based bank, which did business as Republic Bank and had about $6 billion in assets and $4 billion in deposits as of Jan. 31.
Fulton Bank, based in Lancaster, Pennsylvania, has agreed to take over substantially all of the failed bank’s deposits and buy substantially all of its assets, the agency said.
32 Republic Bank branches will reopen as Fulton Bank branches as early as Saturday. Republic First Bank depositors will be able to access their funds through checks or ATMs as early as Friday evening, the FDIC said.
The bank’s failure is expected to cost the Deposit Insurance Fund $667 million.
The lender is the first FDIC-insured institution to fail in the U.S. this year. The most recent collapse of Sac City, Iowa-based Citizens Bank occurred in November.
In countries with strong economies, on average, only four or five banks close each year.
Rising interest rates and falling commercial real estate values, especially office buildings facing rising vacancy rates in the wake of the pandemic, have heightened financial risks for many regional and community banks. Outstanding loans secured by depreciated properties make them difficult to refinance.
Last month, a group of investors, including Steven Mnuchin, who served as US Treasury secretary under the Trump administration, agreed to provide more than $1 billion to rescue New York Community Bancorp, which was packed due to weakness in commercial real estate and growth problems caused by the buyout of a troubled bank.