Republic First Bank Seized By Regulators

Republic First Bank Seized By Regulators

Republic First, a 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 is this important? Rate hikes have slashed the value of many banks' assets. When those banks are losing money, they're likely to fail. An attempted $35 million rescue fell apart in March.

Republic Bank had about $6 billion in total assets and $4 billion in total deposits, as of Jan. 31, 2024. The FDIC estimated the cost of the failure to its fund would be $667 million. Apart from deposits, Republic also had borrowings and other liabilities of approximately $1.3 billion, Fulton said in a statement.

2 weeks ago FDIC Chairman Martin Gruenberg laid out a blueprint for how regulators would deal with bank failures and how they would minimize costs. He discussed preparations for hypothetical scenarios.

Banks carry unrealized assets on balance sheets. Due to inflation, the Fed had to raise interest rates, which causes asset and securities, paper losses. Where such unrealized losses sit within the banking system, whether among large regional banks or more broadly among smaller, community banks, remains unclear.

#underwriting #finance #quants #brokers #loans #business #entreprenurs #entreprenurship #rates #mortgages #fdic #fed #hedgefunds #sales #leadership #money #investing #cashflow #banks #foreclosures