- Republic First Bank will be delisted by Nasdaq as of Wednesday after the Philadelphia-based lender failed to timely file its annual report for fiscal 2022 with the Securities and Exchange Commission, the bank said in a release Tuesday.
- Nasdaq had notified Republic First earlier this month that it was late in filing a separate form — 10-Q — for 2023’s second quarter, and that a hearings panel would deliberate on the bank’s deficiencies and potential consequence related to continued listing.
- The bank blamed its “former executive team’s failure to maintain adequate internal controls,” as well as a June 2022 systems conversion, for delays to its financial filings and audit, according to Tuesday’s release.
To say Republic First has had a rough couple of years would be putting it mildly. A rift formed within the bank’s board in October 2021, when activist investor Abbott Cooper of New York City-based hedge fund Driver Management groused about Republic First’s earnings per share and stock price, which he saw as low, relative to the bank’s peers.
At the time, Republic First’s then-CEO, Vernon Hill, had launched an effort to raise capital and grow the bank’s footprint beyond its 36 branches.
After the capital raise was delayed indefinitely, New Jersey power broker George Norcross and former TD Bank U.S. CEO Greg Braca offered to buy a majority stake in the bank and back a slate of candidates that Cooper had proposed for Republic First’s board.
The balance of power shifted further when Republic First chose not to renew the contract of its founder and board chairman, Harry Madonna. Madonna threw his support to Norcross and Braca, and the eight-member board was deadlocked until Ted Flocco, an ally of Hill’s, died in May 2022. That prompted the Madonna faction to try to oust Hill, who resigned two months later.
The bank named a new CEO, Thomas X. Geisel. But three months into his tenure, a crisis of confidence spread across regional banks, Signature and Silicon Valley Bank failed, and the most imperiled bank left standing bore a name uncomfortably close to Republic First: First Republic.
“Republic Bank is very different [from First Republic and SVB]; we DO NOT lend to start-ups and are not involved in Crypto. We lend primarily to established businesses,” Geisel wrote in a letter to customers in March (since removed from Republic First’s website). “We lend against collateral and cash flow, we lend to profitable companies that can service the debt, and we typically have personal guarantees. Our portfolio is not overly concentrated in any one specific class or industry.”
Trading of the bank’s stock spiked — then spiked again little more than a month later, when JPMorgan Chase bought First Republic.
Activity settled — until Tuesday’s de-listing news returned trading volume to levels last seen on those days. Republic First’s stock lost roughly 47% of its value by noon Tuesday, according to Bloomberg.
The bank said Tuesday it expects its stock to promptly begin trading on the over-the-counter marketplace, and added that its board and C-suite “have been working with the Company’s auditor and outside advisors to complete and file all delayed reports as soon as practicable.”
Republic First may apply to list on a major exchange after it files those delayed reports and meets other listing requirements, the bank said.