Harry Madonna, the founder of Republic First Bancorp in Philadelphia, is once again steering the company after a messy power struggle between multiple factions of investors and board members.
At least for now.
The 79-year-old Madonna was named the $5.7 billion-asset company's interim CEO and the executive chairman of its board (he had been named interim chairman in July). Madonna, who founded Republic First in 1988, was its chairman until 2016 and CEO until February 2021.
"I am honored to be entrusted to the task of moving forward in this new and changing environment," Madonna said Tuesday in a press release. "We are entering a critical phase in the evolution of the institution. I and the board are eager to return to our primary tasks of optimizing the company's and the bank's performance and providing stability and value to all our stakeholders."
Republic First did not give any indication of how the search for a permanent CEO would proceed. A spokesman did not immediately respond to a request for comment.
News of Madonna's dual appointments punctuates more than seven months of bitter wrangling over the company's future direction. The conflict pitted Madonna, his allies on the board and two activist investor groups against a faction of board members aligned with former Chairman and CEO Vernon Hill.
Hill, who turns 77 next week, resigned from Republic First's board Tuesday — less than a month after stepping down as CEO. In a statement Wednesday, Hill indicated his departure from the board was involuntary.
"I was constructively forced to resign my board positions with Republic … the improper and self-serving actions of a group of self-interested board members, and their efforts to cut me out of meaningful participation in board deliberations, as well as continued actions that I firmly believe are not in the best interest of Republic or its shareholders, left me no choice but to resign," Hill said in the statement.
Last month, after a
Abbott Cooper, who leads one of the activist groups, said Republic First shareholders are "much better off without Vernon Hill around," but added that the jury remains out on Madonna.
"It isn't clear whether [the CEO appointment] is an emergency measure to fill a void, or if it is the first step to removing the 'interim' " tag, Cooper wrote Thursday in an email. "Based on Madonna's track record as CEO — which included welcoming Vernon Hill [in 2008] — I think investors will really want a much better sense of what the plan is and how long Madonna is going to continue in his interim role."
The activist group, led by New Jersey insurance executive George Norcross and former TD Bank CEO Greg Braca, had advocated replacing Hill as CEO with Braca. A spokesman for the Norcross-Braca group had not responded to a request for comment at deadline.
Hill began a tumultuous 14-year association with the company in June 2008, when he led an investor group that purchased $10.8 million of convertible trust-preferred securities. Hill's growing influence led him to take over as chairman in 2016 and CEO in February 2021, succeeding Madonna in each instance.
Hill had won renown in the banking world, founding Commerce Bancorp in Cherry Hill, New Jersey, in 1973, then building it into a $43.6 billion regional powerhouse before he was forced to resign in June 2007. Hill's resignation from Commerce came after banking regulators zeroed in on purported conflicts of interest involving companies owned by Hill and his family that provided services to Commerce.
At Republic First, under the slogan "The Power of Red is Back," Hill aimed to revitalize the retail-oriented strategy that succeeded at Commerce. Hill expanded Republic First's branch network, extended operating hours and focused on collecting deposits.
It worked to an extent. Deposits, which totaled $1.74 billion at the end of 2016, grew to $5.3 billion on March 31. At the same time, noninterest expenses increased as Republic First, which does business as Republic Bank, expanded the number of offices from 19 to 36, even as most banks were
Republic First made money in 2021, reporting net income of $27.8 million, but its profit wasn't enough to keep pace with the asset and deposit growth spurred by the new branches. As a result, the bank's leverage capital ratio, which stood at 7.54% at the end of 2019, fell to 5.90% on March 31. The average for the industry is 8.67%, according to the Federal Deposit Insurance Corp.
It was Republic's capital situation, and Hill's plans to seek additional funding, which helped trigger Driver to challenge his leadership. Hill "was planning on a capital raise that would have significantly diluted, and injured, existing shareholders to support continued growth, despite the fact that his strategy was destroying shareholder returns and value," Cooper wrote in the email.
Instead of seeking more cash from investors, Cooper argued that consideration should be given to
