Coming out of the holiday weekend, Republic First Bank announced the election of Andrew Cohen as chairman of the board of directors, effective June 1.
Cohen, a long-time shareholder who joined the board in 2017, is the chief investment officer and co-founder of Cohen Private Ventures LLC.
In accordance with Cohen’s election to this role, Harry Madonna, the bank’s founder and former CEO, will step down as chairman but continue to serve as a board director. Republic First Bank thanked Madonna for his years of leadership and ongoing service to its customers, employees, community partners and shareholders.
The board says that Cohen was the right independent director to assume the chairmanship at this critical juncture in the company’s history, bringing strong capital markets acumen, corporate governance experience, and institutional knowledge of Republic and the broader banking sector. Additionally, the group said that he also brings the perspective of a sizable shareholder to this role.
The announcement comes amid a continued proxy fight between the bank’s board and an activist investor group headed by George Norcross III, Philip Norcross and Gregory Braca that, as reported by NJBIZ, has re-intensified in recent weeks.
See below for an index of NJBIZ’s complete coverage of this ongoing story.
Earlier this month, that contest flared up when Republic announced it would pause a planned $125 million capital raise being led by Castle Creek Capital and an affiliate of Cohen Private Ventures while waiting for market conditions to stabilize.
“The actions we have taken – and will continue to take – are laying the foundation for a more efficient, profitable business that can create enhanced value for all shareholders and stakeholders,” Thomas Geisel, president and CEO of Republic First Bank, said at the time.
The Norcross Braca Group immediately responded, questioning the pause, declaring the resumption of the proxy fight, and calling for the removal of several board directors, including Madonna and Cohen.
“We believe is clear that Harry Madonna, Andrew Cohen, Lisa Jacobs, and Harris Wildstein mismanaged Republic First for years and shareholders are now paying the price for their recklessness and unwillingness to simply do what is right: give up control and get out of the way,” said Braca. “Recent inaction and failure to raise badly needed capital only proves to us that these four legacy directors care more about their personal interests than they do about Republic First and its future. If they won’t do anything to protect shareholders, we will continue our efforts to do so.”
Republic First responded to that rebuttal, saying the bank had engaged in good faith with the activist investor group to pursue a compromise that balances the interests of all stakeholders.
“In addition to heeding the group’s requests for a strategic review, we have repeatedly offered it board representation and substantial expense reimbursement while also objectively considering its investment proposals. The group’s latest round of false and misleading statements is old news, repetitive and is particularly unproductive given our most recent offer to add its only identified director candidate – Mr. Braca – to Republic’s Board, provide seven-figure expense reimbursement and allow them to nominate an independent director,” the bank told NJBIZ in a statement earlier this month. “We have taken these steps to best serve all of Republic’s stakeholders and avoid the expense and distraction of a proxy fight and the litigation initiated by the group. With respect to the group’s investment proposals, Republic’s Board concluded that the bank has adequate capital at this time and does not need to enter into the sort of materially dilutive transaction the group has proposed.”
Last week – and before the Cohen announcement – the Norcross Braca Group wrote to Republic First again questioning its suspended capital raise, calling the decision confusing since the company had just cited the need to preserve capital as reasoning to discontinue payments to holders of its subordinated debt and preferred securities.
“As we see it, the constantly evolving and inconsistent positions tell a story of a company out of control and directors not putting the interests of the shareholders first,” the group said in a statement. “Disappointing but, unfortunately, not a surprise given the directors’ past actions.”
The Norcross Braca Group had no comment about Cohen’s election as board chairman.
In recent weeks and months, the group has pointed to this abrupt capital raise pause, questions about company finances, a plummeting stock price and more as it pushes for a change to board leadership.
A long-deferred shareholder meeting may finally take place in the coming weeks. But, for the time being, it remains, well, delayed.
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