Republic First Bank, a regional lender based out of Philadelphia, became the first bank failure of 2024 on Friday when it was shut down by Pennsylvania’s bank regulator and the Federal Deposit Insurance Corp. (FDIC) seized control of the operation.

The FDIC quickly made a deal for Fulton Bank to buy Republic First’s assets, but one expert on financial regulatory reform and bank failures says the collapse could be a harbinger of things to come.

FDIC Banking Regulation

“This bank failure indicates that additional failures will occur and will range between smaller community banks and larger banks,” said Joseph Lynyak, a banking attorney at Dorsey & Whitney, regarding the seizure of Republic First by U.S. regulators.

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FULT FULTON FINANCIAL CORP. 17.23 +0.17 +1.03%

Fulton Financial Corp.

“The cause is twofold: higher-cost deposits exceeding the yield on low-yield treasury securities and similar investments held by banks, and the deteriorating commercial real estate market and commercial real estate loans,” said Lynyak, who specializes in bank receiverships and failures.


Regional banks have been struggling to retain deposits as customers seek the safety of larger “too-big-to-fail” rivals, and higher interest rates have diminished the value of their loan books due to increased unrealized losses and lower commercial real estate values.

Customers line up outside SVB

A worker tells people that Silicon Valley Bank’s headquarters in Santa Clara, California, is closed on March 10, 2023. The bank was shut down by California regulators and put in control of the Federal Deposit Insurance Corp. (Justin Sullivan / Getty Images)

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