Metro Bancorp Inc. in Harrisburg, Pa., has called off plans to buy Republic First Bancorp Inc. in Philadelphia.
The companies announced late Monday that after nearly a year and a half of trying to complete the deal, they were unable to gain regulatory approval.
Both companies have ties to longtime banker Vernon W. Hill 2nd and the combination was widely believed to be his attempt to replicate Commerce Bancorp Inc., a company he founded in Cherry Hill, N.J. He resigned from that institution under regulatory pressure in July 2007, and it was sold to Toronto-Dominion Bank's TD Banknorth Inc. of Portland, Maine, in March 2008.
Analysts have speculated that Hill's complicated relationship with regulators hamstrung the Metro-Republic deal. Others said the rising pool of problem loans at the $1 billion-asset Republic also gave regulators pause. At the end of the fourth quarter, Republic's nonperforming assets totaled $39.6 million, or 3.93% of total assets, up 52% from a year earlier.