Republic First Bank Closure: First U.S. Bank to Fail in 2024
The closure of Republic First Bank, a regional lender with operations in Pennsylvania, New Jersey, and New York states, was a major event involving regulators. Its closure in 2024 marks the first collapse of an American financial institution. As of January 31, the bank, which operated under the name Republic Bank, had total assets of approximately $6 billion and total deposits of $4 billion (2).
Closure Details
The entity that led the closure of Republic First Bank was the Pennsylvania Department of Banking and Securities, and the Federal Deposit Insurance Corporation (FDIC) was designated as the bank’s administrator.
Fulton Bank, headquartered in Lancaster, Pennsylvania, agreed to purchase substantially all of the assets of the failed bank and assume a significant portion of the institution’s deposits.
Republic Bank’s 32 branches are expected to reopen as Fulton Bank branches as early as Saturday, allowing customers to continue receiving financial services.
Depositors at Republic Bank will transfer to Fulton Bank and will not need to change their banking relationship to maintain deposit insurance coverage.
Depositors at Republic First Bank can collect their cash via check or automated teller machine starting Friday night.
The Deposit Insurance Fund is expected to suffer a loss of $667 million due to the insolvency of the First Bank of the Republic.
Impact on Cryptocurrency Market
The prices of both Bitcoin and Ethereum fell due to the fall of Republic First Bank, causing controversy and anxiety within the cryptocurrency community. The liquidation of traditional banks is likely to lead to a surge in interest in decentralized finance and cryptocurrencies as promising alternatives to traditional financial institutions.
Causes of Bank Insolvency
Rising interest rates and falling commercial real estate prices have increased the financial risks facing many regional and community banks. This is especially true for office buildings that have been impacted by pandemic-related spikes in vacancy rates.
As loans secured by assets that have lost value go unpaid, it has become difficult for financial institutions to refinance and manage their loan portfolios.
Image source: Shutterstock
. . .
tag
