Blockchain
The Republic’s first bank closure: The first U.S. bank failure of 2024
The closure of Republic First Bank, a regional lender that operated in the states of Pennsylvania, New Jersey, and New York, was a major event involving regulators. In 2024, its closure represents the first collapse of a financial institution in the United States. As of Jan. 31, the bank, which operated under the name Republic Bank, had about $6 billion in total assets and $4 billion in total deposits. [2].
Closure details
The Pennsylvania Department of Banking and Securities was the one who initiated the closure of Republic First Bank, and the Federal Deposit Insurance Corporation (FDIC) was appointed as the bank’s receiver.
Fulton Bank, based in Lancaster, Pennsylvania, has reached a deal to buy nearly all of the failing bank’s assets and to take over a significant portion of the financial institution’s deposits.
Republic Bank’s 32 branches are expected to reopen as Fulton Bank branches as early as Saturday, which would ensure customers continue to receive financial services.
Republic Bank depositors will be transferred to Fulton Bank and will not be required to make any changes to their banking relationship to maintain deposit insurance coverage.
Republic First Bank depositors have the option to get their cash back via checks or ATMs as early as Friday evening.
The deposit insurance fund is expected to suffer a loss of $667 million following the collapse of Republic First Bank.
Influence on the cryptocurrency market
Bitcoin and Ether have both seen a drop in price following the collapse of Republic First Bank, which has caused controversy and anxiety within the cryptocurrency community. It is possible that the liquidation of a conventional bank could lead to increased interest in decentralized finance and cryptocurrencies as potential alternatives to established financial institutions.
Reasons for bank failure
There has been an increase in financial risks facing many regional and community banks due to rising interest rates and declining commercial real estate prices. This is especially true for office buildings that have been affected by the increased vacancy rate associated with the outbreak.
It has become difficult for financial institutions to refinance their loan portfolios and manage their loan portfolios due to outstanding loans secured by assets that have lost value.
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