US regulators have seized control of Republic First Bancorp, the parent company of now-defunct Republic First Bank, and facilitated its sale to Fulton Bank, a subsidiary of Fulton Financial Corp.

The acquisition, which took place last week, was orchestrated by the Pennsylvania Department of Banking and Securities and the Federal Deposit Insurance Corp (FDIC). It highlights the ongoing challenges regional banks face in the wake of recent high-profile bank failures.

Fulton Bank Acquires Republic First Bank in FDIC-Assisted Deal

Republic First Bank, headquartered in Philadelphia, had been grappling with financial difficulties and had recently abandoned funding talks with a group of investors. The bank's struggles came to a head when the Pennsylvania Department of Banking and Securities seized control of the institution and appointed the FDIC as receiver.

The closure of Republic First Bank marks the latest in a series of regional bank failures since the unexpected collapses of Silicon Valley Bank and Signature Bank in 2023. These events have underscored the challenges faced by smaller regional banks in an increasingly competitive and volatile financial landscape.

"With this transaction, we are excited to double our presence across the region,” Curt Myers, the Chairman and CEO of Fulton Financial Corp, said to Reuters.

It's important to note that Republic First and First Republic are not the same institutions. Republic First was a regional bank that catered to commercial and retail customers. Conversely, First Republic specialized in private banking services for wealthy clients.

However, First Republic also declared bankruptcy last year, and its assets were sold by the FDIC. A buyer was quickly found, and in May 2023, JPMorgan Chase acquired the bank. That same month, executives from First Republic faced an SEC insider trading probe, and the new owner decided to lay off over 1,000 employees from the recently acquired, bankrupt bank.

FDIC-Assisted Acquisition

To protect depositors and ensure a smooth transition, the FDIC agreed with Fulton Bank to assume substantially all of Republic First Bank's deposits and purchase most of its assets. As of January 2024, Republic First Bank had approximately $6 billion in total assets and $4 billion in total deposits. The FDIC estimates that the cost of the failure to its Deposit Insurance Fund (DIF) will be $667 million.

Fulton Bank's acquisition of Republic First Bank is expected to nearly double its presence in the Philadelphia market, with combined company deposits of approximately $8.6 billion.

To ensure a seamless transition for Republic First Bank's customers, all 32 branches in New Jersey, Pennsylvania, and New York will reopen as branches of Fulton Bank on Monday during normal business hours.

Customers of Republic First Bank will automatically become depositors of Fulton Bank, maintaining their existing deposit insurance coverage without the need to change their banking relationship.