Pennsylvania-based Fulton Bank, National Association of Lancaster, has agreed to assume most of the deposits and assets of Republic First Bank, which state regulators seized on Friday to “protect depositors.”
Republic collapsed after it failed to raise $75 million in capital from investors and exited the mortgage lending space. It also comes after last year’s failures of First Republic Bank, Silicon Valley Bank and Signature Bank.
According to bank regulators, Republic’s 32 branches in New Jersey, Pennsylvania and New York are now operating under the Fulton Bank brand, with depositors transitioning from the failed bank to the acquirer.
“Customers of Republic Bank should continue to use their existing branches until they receive notice from Fulton Bank that it has completed system changes that will allow its branch offices to process their accounts as well,” the Federal Deposit Insurance Corp. (FDIC), the appointed receiver, explained in a statement.
The FDIC estimates that the cost related to the failure will be $667 million.
Fulton is purchasing $6 billion in assets from Republic, including its $2 billion investment portfolio and $2.9 billion in loans.
Republic had an active business that specialized in jumbo mortgage products. In a presentation last year, the bank said it “had aggressive rates, higher risk, and lower risk-adjusted rates of return than other asset classes.”
In July 2023, the bank said that to enhance efficiency and streamline operations, it reduced its presence in New York and exited the mortgage banking business. Ultimately, it originated about $50 million in mortgages in 2023, per mortgage tech platform Modex.
Meanwhile, Modex shows that Fulton’s mortgage production was about $1.2 billion in 2023, with most of it being conventional (74%) and purchase (65%) loans. The bank had 766 loan officers as of Monday, according to the Nationwide Multistate Licensing System (NMLS).
Republic Bank is adding $5.3 billion in liabilities to Fulton, which includes $4 billion in deposits. The volume almost doubles the acquirer’s presence in the Philadelphia market, with combined deposits of nearly $8.6 billion.
Fulton claims that the transaction also reduces its loan-to-deposit ratio from 99% to 92%, improving its liquidity.
“With this transaction, we are excited to double our presence across the region,” Curt Myers, Fulton chairman and CEO, said in a statement.
All regulatory approvals have been obtained, including from the Office of the Comptroller of the Currency.
