First US bank to fail in 2024

The Federal Deposit Insurance Corporation (FDIC) recently announced that Republic First Bank has been closed by Pennsylvania state regulators. This is the first US bank failure this year.

The FDIC’s statement, quoted by the Vietnam News Agency in the US, stated: “The Philadelphia-based Republic First Bank (doing business as Republic Bank) was closed by the Pennsylvania Department of Banking and Securities on April 26, and the FDIC was appointed as receiver. To protect depositors, the FDIC entered into an agreement with Fulton Bank, National Association of Lancaster County, Pennsylvania, to assume substantially all of the deposits and purchase substantially all of the assets of Republic Bank.”

According to the FDIC, Republic First Bank had total assets of approximately $6 billion and total deposits of $4 billion at the end of January 2024.

That makes Republic Bank much smaller than the collapses that rocked the financial world last year, such as Silicon Valley Bank, which had about $209 billion at the end of 2022 and collapsed in March 2023.

“Republic Bank’s 32 branches in New Jersey, Pennsylvania and New York will reopen as Fulton Bank branches on April 27 (with branches operating regular business hours on Saturday) or on Monday (April 29) during regular business hours,” the FDIC said.

People with deposits at Republic Bank will become depositors at Fulton Bank. FDIC insurance covers up to $250,000 per depositor.

Republic First Bank, headquartered in Philadelphia, is a separate entity from First Republic Bank, the San Francisco-based commercial bank that closed in May 2023, with most of its assets sold to JPMorgan Chase.

Republic Bank's bankruptcy comes at a time of turmoil for banks across the region, with rising interest rates hurting the credit-dependent sector.

The collapse of Silicon Valley Bank sparked a broader crisis last year, followed by Signature Bank a few days later, followed by First Republic Bank a few weeks after that.

According to the FDIC, a total of five banks in the US will fail in 2023. Accordingly, Republic Bank is the first bank to fail in the US since Citizens Bank collapsed in Sac City, Iowa in November 2023.

Bloomberg reported earlier this week that the FDIC has sought to contact companies about acquiring Republic Bank.

New York Community Bank recently saw its stock price fluctuate wildly as customers began withdrawing their money from the bank after they identified a “material weakness” in the company’s controls.

New York Community Bank received a $1 billion equity investment from investors including former Treasury Secretary Steven Mnuchin's Liberty Strategic Capital in March.