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