Wednesday, April 17, 2024
India News

Republic First’s $35 Million Cash-Injection Deal Is Terminated

(Bloomberg) — Republic First Bancorp’s planned $35 million cash injection by a group of investors — a transaction intended to reassure shareholders about the bank’s financial stability — has collapsed.

Investors George E. Norcross III, Gregory B. Braca, Philip A. Norcross, Alessandra T. Norcross and Alexander S. Norcross decided on Wednesday to terminate the agreement announced in October, Philadelphia-based Republic First said in a regulatory filing.

“Our strategic plan has been designed to be executed even without the investment announced last fall,” the bank said in the filing. “We have continued to maintain the bank’s adequately capitalized position, and believe we have a strong deposit base and ample liquidity.”

The bank’s shares slumped 34% at 1:13 p.m. in New York. They’ve declined 99% in the past year, leaving the company’s market capitalization at $1.4 million.

With about $6 billion in assets, Republic First has been struggling with similar issues as other regional banks: high interest rates that have translated into unrealized losses on loans and securities.

Before the agreement was reached with the Norcross-Braca investor group, the Federal Deposit Insurance Corp. had been seeking buyers for Republic First. The FDIC suspended an auction process for the bank once the deal was struck, telling potential buyers that the bank’s capital-raising effort was the avenue it was focused on pursuing, people familiar with the matter said at the time.

Read More: FDIC Is Said to Suspend Sales Process for Republic First Bancorp

Last week, the audit committee of Republic First’s board approved the dismissal of Crowe LLP as the company’s independent accounting firm, according to a separate regulatory filing. Crowe advised Republic First of “material weaknesses in internal control over financial reporting” as of the end of 2022, the company said. Company management concurred with the findings, Republic First said.

Crowe provided a report for the bank’s consolidated financial statements for only 2021, won’t complete its audit for 2022 and wasn’t hired to audit last year’s financial statements, Republic First said. Wolf & Co. was hired to succeed Crowe as the bank’s auditor, according to the filing.

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Published: 01 Mar 2024, 12:45 AM IST

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