① On Friday, the US Federal Deposit Insurance Corporation said that regulators had taken over the regional bank Republic First and sold it to Fulton Bank; ② This was the first regional bank in the US to go out of business this year, but Republic First is much smaller than the bank that went out of business last year.
Financial Services Association, April 27 (Editor: Malan) The Bank of America experienced a bankruptcy crisis that attracted global attention last year, and a year later, a new sequel to this storm appeared.
The US Federal Deposit Insurance Corporation (FDIC) said on Friday that US regulators have taken over Republic First Bank and agreed to sell it to Fulton Bank. This is also the first regional bank in the US to go out of business this year.
The FDIC notes that the Pennsylvania Banking and Securities Division today closed Philadelphia-based Republic First Bank and appointed the FDIC as the receiver. To protect savers, the FDIC reached an agreement with Fulton Bank to assume almost all of Republic Bank's deposits and buy almost all assets.
The FDIC wrote in a statement that by the end of January, Republic First Bank's total assets were about $6 billion and total deposits were about $4 billion. This scale is much smaller than the size of banks that went bankrupt during the collapse of regional banks last year. Take Silicon Valley Bank as an example. By the end of 2020, its assets were about 209 billion US dollars.
According to the statement, 32 Republic First branches in New Jersey, Pennsylvania, and New York will reopen as Fulton Bank branches during normal business hours on Saturday or next Monday.
Regional banking turmoil resurfaces
In March of last year, the three major banks, Silicon Valley Bank, Signature, and First Republic, went out of business one after another, triggering great panic in the financial market.
Recently, however, this storm has begun brewing again. Previously, New York Community Bank claimed that its bank risk control had major flaws, which caused customers to withdraw large amounts of cash and caused its stock price to fluctuate greatly. Fortunately, the bank then received cash supplements from investors, stabilizing market sentiment.
Republic First, on the other hand, is one of the latest bad signs in the industry. However, as early as the beginning of last year, the bank made layoffs due to rising costs and inability to increase profits, and announced that it would withdraw from the mortgage lending business.
About half a year ago, Republic First reached a $35 million deal with Norcross-Braca Group to raise funds to avoid being blocked. Unfortunately, Norcross-Braca announced its withdrawal from the deal last month.
Republic First Bank's stock price also fell from more than $2 at the beginning of the year to around 1 cent on Friday, and its market capitalization is already less than $2 million. Its shares were delisted from NASDAQ in August of last year and are now traded off the market.
Notably, Republic First and First Republic Bank are two separate entities, and most of their assets were acquired by J.P. Morgan Chase after the latter went bankrupt last year. According to Republic First's previous statement, the business of the two banks is not the same. Republic First's customers are mainly corporate and retail customers, while First Republic mainly provides loans to wealthy people.