George Norcross ends deal with Republic, the largest Philly-based bank

After battling for years to take over Republic First Bancorp, George Norcross III says he doesn’t want it after all.

South Jersey business and political power broker Norcross, his brother Philip, and former TD Bank executive Gregory Braca are “terminating” last year’s agreement to invest new capital in the money-losing bank, they said in a brief statement Wednesday after security markets closed. That deal, if completed, would have effectively given the Norcross group control of Republic.

With $6.3 billion in assets, Republic is the largest bank still based in Philadelphia, where most larger lenders have been sold to out-of-town banks.

The Norcross group blamed Republic’s failure to file financial reports from as far back as 2022, or schedule a promised shareholder meeting.

Republic fired its auditor, Crowe LLC, on Feb. 21 and replaced the firm with Wolfe & Co. P.C. Crowe had been reviewing Republic’s previously disclosed accounting issues from 2022 and prior years, before current management took over. Crowe had also identified but did not investigate “going concern” issues related to financial and capital positions and company liquidity, as well as the bank’s accounting for securities and losses, Republic told the SEC in a filing earlier this week. (Added March 1)

Republic, which operates around 30 branches, mostly in the city’s South Jersey and Pennsylvania suburbs, has enough capital and deposits to continue under its current strategic plan and is preparing the delayed financial statements, the company said in a statement.

The company’s main subsidiary, Republic Bank, lost $30 million in the first nine months of 2023, according to the Federal Deposit Insurance Corp. records. It made money the two previous years, reporting around $11 million in net income for 2022, and $28 million in 2021.

Republic’s managers canceled some expansion plans and cut costs after ousting the bank’s president, Vernon Hill, in 2022. The bank’s employment had dropped to 444 employees as of Sept. 30, down from 522 a year earlier.

Shares of the bank’s holding company, which were delisted in 2022, have been trading off-market for around 3 cents a share, leaving the company’s market capitalization around $2 million.

The Norcross group owns around 10% of the company and had agreed to purchase more.

When banks lose money for a prolonged period of time, the regulator eventually obliges them to raise more money from investors. In some cases, it takes over stricken institutions and sells loans and deposits to other banks.