An investor group’s $35 million infusion into Philadelphia-based Republic First Bank has been called off following the bank’s failure to meet the terms of the agreement, the investors said Wednesday.
The Norcross-Braca Group signed a letter of intent in September to invest $35 million into Republic First, which had just been delisted by Nasdaq after failing to file its 2022 10-K, or annual report, with the Securities and Exchange Commission.
The entities struck an official agreement in October, with Nov. 30 set as the initial deadline of completion. That deadline was extended to Feb. 29 in November.
George Norcross, one of three investors leading the Norcross-Braca Group, said at the time that the $35 million was fully funded into an escrow account.
“[W]e will be able to move forward quickly when all requirements have been met and closing conditions have been satisfied.” he said in November.
Those closing conditions, however — which included Republic First filing its 2022 10-K and scheduling a required shareholder meeting — were not met, leading the investors to call it off.
The bank previously scheduled a shareholder meeting for Dec. 19. That meeting was postponed in November “to better align with the timing of the transaction close.”
Republic First had previously blamed “former executive team’s failure to maintain adequate internal controls,” as well as a June 2022 systems conversion, for delays to its financial filings and audit.
A spokesperson for the Norcross-Braca Group had no further comment Friday.
In its 8-K filing Thursday and in an email from a spokesperson Friday, the bank said its strategic plan was designed to work even without the $35 million Norcross-Braca infusion.
“We have continued to maintain the bank’s adequately capitalized position, and believe we have a strong deposit base and ample liquidity,” the bank said. “We also believe we have the resources to allow our talented employees to continue to deliver extraordinary service to our loyal customers.”
The bank is seeking to raise between $75 million and $100 million in capital.
According to a filing this week, the bank dismissed its auditor, Crowe, on Feb. 21. Crowe informed the bank of “material weaknesses in internal control over financial reporting” in December 2022, the filing said. The bank hired Wolf & Company as its new auditor for 2022, 2023 and 2024.
“[Wolf & Co. will] support us in getting current with our annual and periodic financial reporting obligations and believe this is key for us and investors in considering opportunities for growth capital in the future,” a Republic First spokesperson said Friday.
The Norcross-Braca Group is led by New Jersey power broker George Norcross, Parker McKay law firm CEO Philip Norcross and former TD U.S. CEO Greg Braca. The investors have engaged in a proxy fight with Republic First dating back to spring 2022.
