Last night, authorities of Pennsylvania seized Philadelphia-based Republic First Bank. The Pennsylvania Department of Banking and Securities took the bank under control and appointed the Federal Deposit Insurance Corporation, FDIC, as a receiver. FDIC then entered into a purchase and assumption agreement with Fulton Bank to take over the assets of Republic First. According to the agreement reached, Fulton Bank will take over the 32 branches of Republic First Bank.
Republic First Bank topped our list of banks to avoid, published on March 5. The bank had a very heavy commercial real estate exposure, which made it to perform the worst in our loan loss stress tests (to note, our loan loss stress tests indicated the Fulton Bank to be one of the safest banks in the U.S.).
We urge you to check the list of banks from our stress tests, which includes 83 other U.S. banks in the risk of failing. We also have a deposit withdrawal warning in place, concerning four U.S. banks.
To note, the current rate of bank failures (Republic First Bank was the first failure this year) is nothing exceptional. Yet, the risk of another wave of bank failures continues to be high, like we have warned.
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