The Pennsylvania Department of Banking and Securities shut down Philadelphia-based Republic Bank on Friday, officials confirmed in an evening statement.
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The state has appointed the Federal Deposit Insurance Corporation (FDIC) as receiver for Republic Bank.
On Friday, the bank saw its assets and deposits substantially taken over by Fulton Bank of Lancaster County, according to an FDIC announcement.
In a short statement, the Pennsylvania Department of Banking and Securities said they “took possession” of the bank due to an “unsafe and unsound condition.”
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Republic Bank’s 32 branches across New Jersey, Pennsylvania, and New York will reopen as Fulton Bank branches.
The bank operates a location at the corner of South Oxford Valley Road and South Queen Anne Drive in the Fairless Hills section of Bristol Township. Republic Bank has other nearby branches in Bensalem Township and Lower Southampton Township.
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The closure of Republic Bank marks the first U.S. bank failure of the year following last November’s closure of Citizens Bank in Sac City, Iowa.
As reported by the Wall Street Journal last September, Republic Bank had been grappling with financial issues.
Republic Bank branches with weekend hours will resume operations on Saturday, with others following on Monday during regular business hours.
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Depositors of the failed bank will automatically become depositors of Fulton Bank and will have their existing deposit insurance without needing to alter their banking arrangements. Until further notice from Fulton Bank, customers are advised to continue using their current branches, officials said.
For immediate access to their funds, customers can continue to use checks, ATMs, and debit cards starting Friday evening. Loan repayment schedules remain unchanged, the FDIC said.
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The FDIC has established a call center to handle customer inquiries regarding the transition at 1-877-467-0178. The FDIC’s call center will be open Friday evening until 9 p.m.; on Saturday from 9 a.m. to 6 p.m.; on Sunday from noon to 6 p.m.; on Monday from 8 a.m. to 8 p.m.; and thereafter from 9 a.m. to 5 p.m. Customers may also visit the FDIC’s website.
With approximately $6 billion in total assets and $4 billion in deposits as of January 31, the cost of Republic Bank’s failure to the Deposit Insurance Fund is estimated at $667 million.
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The sale of the assets to Fulton Bank was deemed the least costly option by the FDIC, officials said. They added that the deal ensured protection of depositor funds and minimizing the impact on the federal Deposit Insurance Fund.
The failure of Republic Bank was significantly smaller than the major regional bank failures that destabilized the financial sector last year. Silicon Valley Bank had approximately $209 billion in assets by the end of 2022 before it collapsed in March 2023, according to CNN.
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Fulton Bank has grown in recent years and has more than 200 locations across Pennsylvania, New Jersey, Maryland, Delaware, and Virginia. Fulton Bank already operates locations in Bensalem Township, Lower Makefield Township, and Upper Southampton Township.
“With this transaction, we are excited to double our presence across the region,” said Fulton Chairman and CEO Curt Myers. “We look forward to welcoming Republic Bank’s team members and customers to Fulton and providing our comprehensive set of consumer, commercial and wealth advisory products and services to even more customers.”
Republic Bank was founded in 1988 and was previously noted for its similar operational style to the former Commerce Bank, which was acquired by TD Bank over a decade ago.
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