Republic First Bancorp in Philadelphia has scaled back commercial lending in New York and plans to exit the mortgage origination business to cut costs and refocus resources on core markets and business lines.
“While these were difficult decisions, especially because of the inherent reduction in force required, we strongly believe they are in the best interests of the company and will allow us to build a strong foundation for the future,” Geisel said Friday in a press release.
The $6.2 billion-asset Republic First did not say how many jobs it is eliminating, noting only that it has made reductions in force in its New York lending and credit teams.
Republic First focused its mortgage lending on long-term jumbo loans. Those no longer align with shorter-duration assets with a better risk-adjusted return, according to the company. As of March 31, residential mortgages were the single biggest component of Republic First’s $3.1 billion loan portfolio, totaling $1 billion.
Republic First’s commercial-and-industrial loans totaled $289 million.
The company indicated it planned “meaningful business realignment and efficiency initiatives,” as part of the release of its first-quarter financial results Monday. Republic First reported a $9.7 million quarterly loss driven in part by the $3.1 million write-down of an investment in Signature Bank preferred securities. New York-based Signature failed March 12.
Republic First also reported $5.5 million of quarterly expenses in legal, professional and audit fees, resulting primarily from an ongoing conflict with an investor group led by New Jersey insurance executive George Norcross, as well as former TD Bank CEO Greg Braca.
A spokesman for the Norcross-Braca group, which controls a 9.9% stake in Republic First, declined comment Friday.
Another prominent shareholder, Driver Management managing member Abbott Cooper, said he “fully supports” the course Geisel has set. “They’re taking steps that will translate into shareholder value down the road,” Cooper said Friday.
“I am excited about our opportunities that lay ahead to build an even stronger Republic Bank,” Geisel said in the press release.
Monday’s report marked the first time Republic First had released quarterly results since January 2022, when it reported earnings for the three months ending December 31, 2021. Republic First has yet to file an annual report for 2022, but it disclosed Tuesday that the Nasdaq stock market has extended the filing deadline to May 31.
In March, a group of investors led by the San Diego-based Castle Creek Partners announced plans to inject $125 million of fresh capital in Republic First. That deal has yet to close.