In the latest twist of the Republic First Bank saga, Nasdaq Stock Market has notified the financial institution that it will be delisted from the exchange Aug. 23 because of a failure to file its annual report on Form 10-K with the Securities and Exchange Commission (SEC).

NJBIZ has extensively reported on the turmoil at Republic, which has featured a highly publicized proxy fight with activist investor groups, including one spearheaded by South Jersey powerbroker George Norcross III; a notable audit that left things in limbo; and a long-delayed shareholder meeting that is finally set for Oct. 5.

Republic says its board of directors and new executive team have been working with the company’s auditor and outside advisors to complete and file all delayed reports as soon as practicable.

“Republic’s audit and financial filings have been delayed, in part, by the former executive team’s failure to maintain adequate internal controls related to a systems conversion implemented in June 2022,” the company said in an Aug. 22 press release announcing the delisting. “Consequently, the audit process that new management and the company’s external advisors had to undertake has been extensive and time-consuming.”

The company expects its common stock to begin trading on the over-the-counter marketplace under the same ticker – FRBK – stressing that more than 100 banks trade there.

Republic does not expect the change in listing status to impact its balance sheet or the capital position of the company. The bank stressed that the change has no impact on its deposit base, Federal Deposit Insurance Corp. insurance for deposits, or financial position. And, after it files all delayed reports and meets other listing requirements, Republic says it may apply to list on a major exchange.

A blocking-and-tackling biz

In a recent interview with NJBIZ, Republic First Bank President and CEO Thomas Geisel, who took the helm last December, acknowledged the challenges the bank has faced, but remained steadfast in his leadership team’s approach to tackling those hurdles head-on and transparently.

“This is a blocking-and-tackling business right now for us at Republic First,” Geisel told NJBIZ. “It’s everyday executing. Right now, it’s not so much the strategy. I think we have the right strategy in place. There’s always tweaks to strategy. But now the focus is on execution. So, we will be relentlessly focused on the execution of our strategy.”

Republic says its new management team remains focused on implementing its strategic plan, which includes a renewed emphasis on core banking services, strengthening franchise value in the metro-Philadelphia and South Jersey markets, as well as improving operational efficiencies.

Of course, all of this is taking place against the backdrop of that aforementioned proxy fight.

When Republic’s long-delayed shareholder meeting does take place there will elections for three board seats, with the Norcross Braca Group nominating Greg Braca, Daniel Hilferty and Mary Pat Christie to replace two current directors – Peter Bartholow and Benjamin Duster – in addition to filling a newly created seat.

The Norcross Braca Group has been consistently critical of the direction of the company and its leadership, pointing to mismanagement, dysfunction, cutbacks and a share price that has dropped to all-time lows in recent months. FRBK shares opened at $0.70 on Tuesday and were falling as of the writing of this story on the Nasdaq news.

“We look forward to presenting to shareholders our case for desperately needed change at the Oct. 5 Annual Meeting. We are confident that shareholders will agree that the company’s poor performance over an extended period of time necessitates an immediate reevaluation of strategy,” the Norcross Braca Group said Aug. 10 as it filed a preliminary proxy statement nominating its slate of directors. “Shareholders have lost confidence in this board’s ability to right the ship and its willingness to take actions necessary to unlock value for shareholders, in our view.”

The Norcross Braca Group had no immediate comment in response to the news of the Nasdaq delisting.

Last month, Geisel and board Chairman Andrew Cohen wrote a letter to shareholders outlining challenges and steps being taken by the new management team to overcome them.

“As noted, Republic has been through some difficult times. These include former leadership’s ill-advised expansion of the bank’s physical footprint and building of long-term fixed-rate residential loan and bond portfolios during a period of historically low interest rates. The former executive team also failed to maintain appropriate internal controls related to a system’s conversion in June 2022, leading to delays with our audits and financial reports,” Geisel and Cohen wrote to shareholders. “Unfortunately, these delays have prevented us from holding a 2022 Annual Meeting of Shareholders, which is now scheduled for October of this year. We have also faced distracting public campaigns from two different activist investors, a management transition and incessant litigation. At the same time, the credit markets tightened, interest rates rose rapidly, and depositors became worried about the safety of regional and community banks across the country. This has resulted in a once-in-a-generation dislocation in the sector.”

Make no mistake, we are neither discouraged nor overwhelmed by these challenges. We have been tackling them head-on.
— Republic First Bank President and CEO Thomas Geisel and board Chairman Andrew Cohen

“By detailing these headwinds, we are being transparent with you about the challenges that exist,” the statement added. “Make no mistake, we are neither discouraged nor overwhelmed by these challenges. We have been tackling them head-on.”

In conversation with NJBIZ, Geisel stressed that he will always be transparent with shareholders — both about challenges and plans for the future.

“My philosophy is – treat your shareholders and your clients just like you would expect to be treated,” Geisel explained. “And create an environment that you’re trying to create within the organization. So, that’s the culture that we’re trying to create in this organization.”

He also stressed the importance of holding the long-delayed shareholder meeting as well as the filing of financial statements.

“And we would not have been in a position to be able to file the financial statements we’ve had, if we didn’t have the financial leadership of Mike Harrington (who joined Republic First as chief financial officer in December when Geisel came on board) and the team that we’ve been able to build,” said Geisel. “Once we file a 10-K, that means we will be through a very tumultuous period of an audit with the company. And I think that’s very important.”

Following the Nasdaq delisting, Republic has set up a Q&A on its website for investors.