A bitter, long-running proxy fight between two separate activist investor groups and the management of Republic First Bancorp may be nearing a climax.
Driver Management, one of two activist groups challenging longtime banker Vernon Hill’s stewardship of the $5.7 billion-asset Republic First, filed suit on Monday seeking a court order compelling the company to hold its 2022 annual meeting. Paul Diamond, the District Court judge who is hearing the case, has given the Philadelphia-based bank until noon Monday to explain why the annual meeting — which Driver claims was scheduled for May 10 — shouldn’t be held.
Republic First, where Hill is chairman and CEO, had announced plans to
Republic First apparently reiterated its delay plans earlier this week in communications with Broadridge Financial Solutions, the firm coordinating the annual meeting and shareholder vote. In court documents, Driver argued that the board set a May 10 date for its annual meeting, and that only the board — and not Hill or any other member of the bank's management — has the authority to change that date.
“The Board has set the annual meeting of shareholders for May 10, 2022. … Management has no role to play in that decision, but to implement it,” Driver’s attorney, Thomas Ayala, wrote Wednesday in a letter to Diamond.
Republic First had not responded to a request for comment by the time of this story's publication.
Driver and managing partner Abbott Cooper have nominated three director candidates: Peter Bartholow, Pamela Bundy and Richard Sinkerfield. The trio’s election could lead to Hill’s ouster, since four of the eight current directors have
Designating themselves as concerned directors, the four (none of whom are up for re-election in 2022), pointed to the alleged related-party transactions, now the subject of an internal investigation. They also chided Hill for proposing modifications to the compensation plans of the company’s senior executives that would trigger costly payouts if Hill were voted off the board or removed as CEO.
On Tuesday, the second activist group, led by veteran insurance executive George Norcross and Greg Braca, the former president and CEO of TD Bank, pledged to vote its 9.3% stake in favor of Driver’s three director nominees. TD is a Cherry Hill, New Jersey-based unit of Toronto-Dominion Bank Group.
Driver controls about 1.2% of Republic First’s shares.
The Norcross-Braca group has been soliciting proxies for the election of Bartholow, Bundy and Sinkerfield independently of Driver since February. Cooper, who has been involved in several other activist campaigns, called the situation “totally unheard of … it shows how people feel” about ousting Hill, he said in an interview.
While Republic First has delayed filing an annual report for 2021, it has filed a call report with the Federal Deposit Insurance Corp. reporting its first-quarter earnings. The company reported net income totaling $6.2 million, up 1.3% on a linked-quarter basis, but down about 13% year over year.
Cooper characterized the results as disappointing.
“As far as I can tell, Republic First generated a 0.43% return on average assets for the first quarter, and tangible common equity declined 13% quarter over quarter, so that seems more evidence for the need for a change in the boardroom,” Cooper said.
“I don’t know what [Hill] is offering anyone,” Cooper added.
