Bank Failure
Republic First Bank; Philadelphia, PA; FDIC 2733
Republic First Bank; Philadelphia, PA; FDIC 2733
On 4/26/2024, the Pennsylvania Department of Banking and Securities closed Republic First Bank (dba Republic Bank), Philadelphia, PA, and named FDIC as receiver. Fulton Bank, National Association of Lancaster, Pennsylvania assumed substantially all of the deposits and purchased substantially all of the assets of Republic Bank. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) related to the failure of Republic Bank will be $667M.
The FedFis Rating for Republic First Bank was 3.88 as of 12/31/23, placing it in the bottom 1% of all US banks.
At 12/31/23, Republic Bank had $5.9B in assets and $4.4B in deposits, including $1M in brokered deposits. Regulatory capital ratios were: Leverage—4.43%; Tier 1 RBC—8.83%; and Total RBC—9.59%. Republic Bank had $101M in tangible equity capital as of12/31/23.
Summary Narrative based on Call Report (12/31/23):
Republic Bank had significant operational performance issues involving duration risk, liquidity, and unrealized losses in the securities portfolio.
Call Report Data as of 12/31/23:
The bank had significant portions of its $3B loan portfolio concentrated in Commercial Real Estate (42.7% of total loans) and 1-4 Residential (38.4% of total loans). However, there are no real asset quality concerns represented in the call report data.
Additional Information:
Fulton Bank did not enter into a loss sharing arrangement or equity appreciation instrument with the FDIC in connection with the Republic Bank transaction. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) related to the failure of Republic Bank will be $667M.
Per a subsequent prospectus filing on 4/29/24 by Fulton Financial Corporation (the publicly traded BHC for Fulton Bank, N.A.):
Republic First Bank was owned by Republic First Bancorp, Inc., a publicly traded bank holding company (OTC: FRBK) that was delisted from Nasdaq in August 2023 due to failure to file 2022 financial statements.
Sean Mayo
Sr. Vice President, US Financial Institutions Group
214-604-6961 | [email protected]
Visit us at FedFis
The FedFis Rating for Republic First Bank was 3.88 as of 12/31/23, placing it in the bottom 1% of all US banks.
At 12/31/23, Republic Bank had $5.9B in assets and $4.4B in deposits, including $1M in brokered deposits. Regulatory capital ratios were: Leverage—4.43%; Tier 1 RBC—8.83%; and Total RBC—9.59%. Republic Bank had $101M in tangible equity capital as of12/31/23.
Summary Narrative based on Call Report (12/31/23):
Republic Bank had significant operational performance issues involving duration risk, liquidity, and unrealized losses in the securities portfolio.
- Unrealized Losses on Securities equaled $425M (comprised of $262M HTM plus $163M AFS). Essentially all securities were Pledged ($2B pledged versus $2.1B fair value) with $1.4B having remaining maturities at over 15 years.
- Total tangible equity of $101M renders them insolvent when adjusting for HTM Securities at FV.
- The bank reported a Net Loss of $43M for 2023 as Cost of Funds increased to 3.17% (versus 0.78% for 2022) and Other Borrowed Money jumped to $1.3B.
- Net Interest Income fell to 31.1% in 2023 – down from 82.3% in 2022.
- Estimated amount of uninsured deposits was $2.3B (51.5% of total deposits).
Call Report Data as of 12/31/23:
The bank had significant portions of its $3B loan portfolio concentrated in Commercial Real Estate (42.7% of total loans) and 1-4 Residential (38.4% of total loans). However, there are no real asset quality concerns represented in the call report data.
- The bank had adjusted nonperforming assets equal to 0.36% of total assets. Past due loans to total loans were only 1.09%. Nonperforming loans were only $20.3M (about 0.67%). Loans 30-89 days delinquent and still accruing totaled $13M. Real estate owned totaled $794K.
- Provision expense for loan & lease losses went down by $1.5M in 2023 while maintaining an allowance of $24M or 0.8% of total loans (120% of nonperforming).
- Adjusted Texas Ratio of 16.82%.
Additional Information:
Fulton Bank did not enter into a loss sharing arrangement or equity appreciation instrument with the FDIC in connection with the Republic Bank transaction. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) related to the failure of Republic Bank will be $667M.
Per a subsequent prospectus filing on 4/29/24 by Fulton Financial Corporation (the publicly traded BHC for Fulton Bank, N.A.):
- https://www.sec.gov/Archives/edgar/data/700564/000119312524119650/d817955d424b5.htm - page S-7
- “The Corporation also expects to receive approximately $0.8 billion of cash from the FDIC in connection with the Republic First Transaction. This amount consists of an estimated $0.4 billion of settlement amount due to negative asset value of balance sheet and approximately $0.4 billion asset discount. The acquired loan portfolio is expected to consist of 45% commercial real estate loans, 33% residential loans, 19% commercial loans and 3% consumer and home equity loans. Fulton Bank acquired the assets at a $374 million discount.”
- “…the Corporation anticipates assuming $5.6 billion of total liabilities of Republic First, including approximately $4.2 billion of deposits, approximately $1.3 billion of borrowings and approximately $0.1 billion of other liabilities. The $4.2 billion of assumed deposits is expected to consist of 50% interest-bearing demand deposits, 16% money market deposits accounts and savings accounts, 18% noninterest bearing demand deposits and 16% brokered and time deposits. The $1.3 billion of borrowings includes Federal Home Loan Bank advances and bank term funding program advances.”
Republic First Bank was owned by Republic First Bancorp, Inc., a publicly traded bank holding company (OTC: FRBK) that was delisted from Nasdaq in August 2023 due to failure to file 2022 financial statements.
Sean Mayo
Sr. Vice President, US Financial Institutions Group
214-604-6961 | [email protected]
Visit us at FedFis
Source: FI FinTech Newsroom