Republic First Bank in Philadelphia was closed by regulators, ending a lengthy saga that included an ousted CEO, shareholder fights and a failed attempt to raise capital.
Fulton Bank in Lancaster, Pa., agreed to assume substantially all of Republic First’s $6 billion of assets and $4 billion of deposits, the Federal Deposit Insurance Corp., said in a press release.
Republic First’s 32 branches in Pennsylvania, New Jersey and New York, will reopen as Fulton locations.
Fulton said in a press release that the deal should be 20% accretive to its 2024 earnings per share. It should take 15 months for Fulton to earn back an estimated 4% dilution to its tangible book value.
The company expects to incur $30 million of pretax merger-related charges. Fulton plans to cut about 40% of Republic First’s annual noninterest expenses, or roughly $60 million.
Republic First Bancshares had struggled with infighting since 2021. Vernon Hill was eventually ousted as CEO. Then an investor group attempted to take over the company. A protracted battle took months; and efforts to raise money fell through when the parties couldn’t reach an accord.
The FDIC estimated that the failure will cost the Deposit Insurance Fund (DIF) about $667 million.