Fulton Financial Corp shares staged an 8.5% rally on Monday after taking control of deposits and assets formerly belonging to regional bank Republic First.
US regulators on Friday seized Republic First’s $10 billion worth of deposits and assets and FDIC was appointed as its receiver following a prolonged liquidity crunch.
It marked the first major lending collapse of 2024 following the mini-crisis that swept the regional banking sector last year, claiming Signature Bank, Silicon Valley Bank and First Republic as victims.
Smaller lenders have been out of favour as customers move to the perceivably safer arms of the ‘too-big-to-fail' lenders like JPMorgan and Bank of America.
"There is always the danger that some bank somewhere unwittingly – or wittingly – takes too much of what turns out to be the wrong risk at the wrong time, while the rise of internet banking does make it so much easier for deposits, and any bad news, to move so much more quickly," said Russ Mould, investment director at AJ Bell, of Republic First’s collapse.
Pennsylvania-based Fulton Financial’s share price was last seen as $16.96.
Fulton said the takeover nearly doubled its presence in the Philadelphia market.