WSJ: Regulators Seize Another Bank
The Wall Street Journal writes, "Regulators Seize Troubled Philadelphia Bank, Republic First." The piece states, "Regulators seized the troubled Philadelphia bank Republic First Bancorp and sold it to fellow regional lender Fulton Financial, the fourth high-profile bank failure since last spring. The bank was closed by the Pennsylvania state regulator on Friday and sold after an auction run by the Federal Deposit Insurance Corp.... Republic First faced some of the same problems as the three regional banks that failed last year: paper losses on bonds that lost value as interest rates rose, and high proportions of uninsured deposits that can quickly flee." It tells us, "Republic First is much smaller than Silicon Valley Bank, Signature Bank and the similarly named First Republic, which each had between roughly $100 billion and $200 billion in assets. Since there is a buyer, the government won't be left with the decision over whether to backstop deposits over the FDIC limit of $250,000, as it did with SVB and Signature. The long, drawn-out failure also gave depositors more time to prepare, as compared with the rapid collapses of last year. The FDIC said it expected the failure, even with the deal, to cost its insurance fund about $667 million. The nation's biggest banks had taken billions of dollars in charges to rebuild the insurance fund for last year’s failures." The Journal adds, "A relatively orderly deal should prevent the failure from sparking a wider crisis in confidence. But regional banks are still on shaky ground. Two years of higher rates have forced them to pay more interest on deposits, which has increasingly eaten into profits.... A larger regional bank, New York Community Bancorp, fanned concerns about commercial real estate earlier this year after it revealed problems in its multifamily loan book.... NYCB got a rescue infusion from investors in March. Republic First had for months struggled to stay afloat. Around half of its deposits were uninsured at the end of 2023, according to FDIC data."
