Latest News by Industry
Fulton Financial Corp's (FULT) acquisition of troubled lender Republic First Bancorp (FRBK) follows this year's first US bank failure. Although Republic First is a relatively small bank, its distress gained importance because of a series of failures of several large banks in the latter half of last year.
Fulton's subsidiary Fulton Bank acquired "substantially all of the assets” and “substantially all of the deposits” of Philadelphia-based Republic First. The floundering bank runs 32 bank branches in Pennsylvania, New Jersey, and New York under the name, Republic Bank.
Fulton bought Republic First through an auction run by the Federal Deposit Insurance Corp. after Pennsylvania state authorities seized the troubled lender, a report in the Wall Street Journal said.
The FDIC stated on Friday that after the state regulators appointed it as Republic First’s receiver it “entered into an agreement” with Fulton Bank “to protect depositors.” The FDIC described Republic First as “the first U.S. bank failure this year.”
The Journal said higher interest rates have hit the value of some banks’ bonds — including those at Republic First — while the "ailing market for commercial real estate, especially in the office sector, has hurt others, raising concerns that depositors might flee those financial institutions."
Lancaster, PA-based Fulton, which has about $27 billion in assets, said it had purchased assets worth approximately $6 billion in the transaction — including Republic First’s $2 billion investment portfolio and $2.9 billion in loans. The company said the liabilities it took over amounted to $5.3 billion, including deposits of some $4 billion and other borrowings and liabilities of roughly $1.3 billion.
Fulton promises Republic Bank depositors would still have access to their accounts through online banking or by writing checks and using ATMs and debit cards. Those customers would become part of Fulton’s depositors and would not have to make changes to retain federally insured deposit-insurance coverage, the company said.
As per the arrangement, Republic Bank locations would reopen as Fulton Bank branches by Saturday.
The move is expected to increase Fulton’s presence along the East Coast. Fulton Bank operates at more than 200 locations across Pennsylvania, New Jersey, Maryland, Delaware and Virginia. In a statement, Fulton Chief Executive Curt Myers said the deal would “double our presence across the region.”
The rescue of Republic First brought back memories of last year’s series of failures by much larger regional banks, including Silicon Valley Bank (SVB) and Signature Bank. A struggling First Republic Bank (FRCB) was acquired by JPMorgan Chase & Co. (JPM) last year.
Related News:
Fulton Bank Launches Diverse Business Banking Program