Apr 26, 2024 - Economy

Republic First Bank seized by regulators, sold to Fulton Bank

Illustration of a small cracked bank surrounded by traffic cones

Illustration: Sarah Grillo/Axios

Republic First, a small Pennsylvania lender doing business as Republic Bank, was seized Friday by regulators who sold most of its assets and liabilities to rival Fulton Bank.

Why it matters: The Fed's rate hikes have slashed the value of many banks' assets. When those banks are losing money, as Republic was, they're likely to fail.

The big picture: Republic was much smaller than banks that failed last year, like Silicon Valley Bank, First Republic, and Signature Bank. It had only about $6 billion in assets across 32 branches in Pennsylvania, New York and New Jersey.

  • Its equity value — the value of its assets minus the value of its liabilities — was $96 million at the end of 2023, but that number didn't take into account $262 million in mark-to-market losses on its bond portfolio.
  • An attempted $35 million rescue fell apart in March.
  • The FDIC said its insurance fund is set to take a loss of $667 million on the deal.

The bottom line: Republic is small enough to fail, and none of its depositors are going to lose money, not even the ones with more than $250,000 in the bank. But its failure shows that the Fed's rate hikes continue to hurt bank asset values.

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