Investor presses Republic First in Philadelphia to find buyer
Activist investor Driver Management conducted proxy contests at two community banks this year in an attempt to force the banks to sell. Now Driver has set his sights on a third: Republic First Bancorp in Philadelphia.
Citing concerns about Republic First’s business model, as well as plans for a stock offering that he said would dilute the value of existing shares, New York-based Driver said he plans to nominate three candidates. to serve on the board of directors of the Bank of Philadelphia.
Under the leadership of Chief Executive Officer Vernon Hill, Republic First and its banking subsidiary, Republic Bank, have proven to be exceptional in collecting deposits. At the same time, the company with $ 5.4 billion in assets struggled to generate loans.
Hill, who came to prominence for turning Commerce Bancorp, a Cherry Hill, New Jersey-based company, into a retail powerhouse prior to its sale to TD Bank in 2008, “did a good job in creating a deposit-taking mechanism, but if you’re not going to do something on the asset side, what’s the point? The driver said Thursday.
Republic First reported total deposits of $ 5 billion on September 30. Excluding the paycheck protection program, loans totaled just under $ 2.3 billion, corresponding to a loan-to-deposit ratio of 45.2%. According to data from the Federal Deposit Insurance Corp., the industry average for banks with between $ 1 billion and $ 10 billion in assets is 73.44%.
Abbott Cooper, founder and managing member of Driver, said his immediate goal was to block Republic First’s plans to undertake what Hill described as a “small” capital increase. Hill announced plans to continue a stock sell-off on Oct. 28, during a conference call with analysts to discuss third-quarter results. First Republic has not provided new details since then, but Cooper said any sale of shares should be out of the question given that the company’s shares are currently trading at around 65% of their tangible book value.
Longer term, Republic First’s âbest resultâ is a sale, Cooper said. âThere are some very good asset-generating companies. You sort of assemble them with [Republic First] and it could be a home run.
Cooper said Driver plans to appoint Peter Barthalow, former CFO of Dallas-based Texas Capital Bancshares, Pamela Bundy, a prominent Washington-area developer, and Richard Sinkfield, a lawyer who serves as chief legal officer and chief legal officer. compliance at Laureate. Education in Baltimore.
A Republic First spokesperson did not immediately respond to a reporter’s call. In a press release Thursday, Republic First said it had “attempted to engage with Driver”, seeking to set up talks with its three candidates for the board of directors, but added that it had hesitated on the terms. set by Driver for a meeting, including removing Hill as chairman and reimbursement of âdirect expensesâ related to his investment in Republic First.
Driver’s pending proxy contest with Republic First follows similar efforts to force $ 2.3 billion in assets Codorus Valley Bancorp in York, Pa., and assets of $ 1.7 billion First united society. in Oakland, Maryland, to sell.
Longtime Codorus Valley President and CEO Larry Miller announced his intention to retire shortly after Driver said in August that he planned to nominate a nominee to his board. While Driver had urged Codorus to replace Miller, Cooper said he would still like to see the company sold, so he expects to continue the battle by proxy. âWe are moving forward,â Cooper said.
Driver has failed in his offer to orchestrate the sale of First United. The bank agreed in April to buy Driver’s stake for $ 6.5 million.