Fight for control of Republic Bank may be nearing an end
PHILADELPHIA – A fierce fight for control of Republic First Bank has reached an apparent cease-fire with a tentative agreement between the company’s management and dissident stockholders led by George E. Norcross III.
Both sides announced the signing of a non-binding letter of intent that calls for the Norcross group to invest at least $35 million in the struggling bank firm in exchange for two seats on a revamped board of directors.
The deal also calls for the departure of a majority of “legacy directors” at Republic First Bancorp.
As a condition of the Norcross group’s investment, Republic First will “will raise at least $40 million of additional capital from third-party investors,” according to a statement released Wednesday night.
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The so-called capital raise is expected to bolster Republic’s now-shaky financial position.
The two sides also predict the cash infusion will improve operations for the firm, which has 33 offices in the South Jersey-Philadelphia area and in New York City.
The company’s board would grow to nine directors, including two each designated by the Norcross group and the third-party investors, the statement said.
Two independent directors also would join the board.
The remaining directors would be Republic’s chief executive officer and two current members.
The board currently has seven directors.
The Norcross group would have the right to appoint two non-voting observers on an interim basis, pending a definitive agreement for the capital raise, the statement said.
Similarly, the shareholder group would dismiss all litigation against the company and would stop seeking board control through a proxy fight.
How did fight over Republic Bank begin?
The battle began early last year, when the Norcross group began buying large amounts of Republic stock and demanding changes that it said would make the firm more profitable.
Republic's finances faltered as the company reported a quarterly loss of $9.7 million in May 2023, an amount greater than its earnings for all of 2022.
The dispute led to the departure in June of former CEO and President Vernon Hill II of Moorestown, who then sued the bank over alleged improper use of "brand assets" that included the likeness of his dog.
Republic's stock plunged in value — it closed Wednesday at 17 cents per share — and the company closed offices and shed employees to cut costs.
Vows to cooperate after long fight
Thomas X. Geisel, the firm’s president and CEO, said management would work with the shareholder group “to put Republic on the best footing possible to enhance value for all shareholders.”
He also thanked the Norcross group, which has directed harsh criticism at Republic’s management, “for their constructive engagement in getting to this point.”
Norcross, a Democratic power broker in South Jersey, is a Camden businessman and chairman of Cooper University Healthcare.
He said the shareholders in his group “are excited about being part of (Republic’s) next chapter.”
The members are Philip Norcross, a Mount Laurel attorney; a trust for Norcross' descendants; and Greg Braca, a former TD Bank president and CEO.
As part of its proxy fight, the Norcross group had asked all Republic stockholders to elect Braca to its board. The group's nominees also included Dan Hilferty, chairman and CEO of Comcast Spectacor; and Mary Pat Christie, a former First Lady of New Jersey.
The group described Christie as a "respected leader in the high yield and distressed debt capital markets industry."
The proposed deal is subject to a definitive agreement that would require shareholder and regulatory approvals.
Jim Walsh is a senior reporter with the Courier-Post, Burlington County Times and The Daily Journal. Email: Jwalsh@cpsj.com.
This article originally appeared on Cherry Hill Courier-Post: George Norcross III and allies expected to invest in Republic Bank
