PHILADELPHIA, Pennsylvania: The Federal Deposit Insurance Corporation (FDIC) has closed Philadelphia-based Republic First Bank, a regional lender operating in Pennsylvania, New Jersey, and New York.

On April 26, the FDIC confirmed that it had seized the failed bank, which operated as Republic Bank and had some US$6 billion in assets and $4 billion in deposits as of January 31.

The agency said that Fulton Bank, based in Lancaster, Pennsylvania, agreed to assume all of Republic First Bank's deposits and buy its assets.

The next day, Republic Bank's 32 branches reopened as branches of Fulton Bank, and its depositors could access their funds via checks or ATMs a day earlier, the FDIC added.

The bank's failure, the first FDIC-insured institution to fail in the U.S. this year, will cost the deposit insurance fund $667 million.

Rising interest rates and falling commercial real estate values have increased financial risks for many regional and community banks, and outstanding loans backed by properties that have lost value make them challenging to refinance.

In March, an investor group agreed to provide more than $1 billion to rescue New York Community Bancorp, which has been hit by weakness in the commercial real estate sector and issues resulting from its buyout of a struggling bank.