Conflicts over how to expand Philadelphia's First Republic Bank have apparently cost president Rolf A. Stensrud his job.
The bank's parent, Republic First Bancorp, announced this week that it will not renew Mr. Stensrud's contract when it expires Dec. 31. Jere A. Young, president and chief executive officer of $450 million-asset Republic First, said Mr. Stensrud and Republic First's board could not agree on ways to increase the bank's income.
"There was a difference in philosophy between Rolf and the board concerning what actions the bank should take," said Mr. Young, who took over as president and CEO of the holding company in June. He added that Republic First's board is searching for an experienced president and chief executive officer to concentrate on the "core banking business."
Mr. Stensrud, the only president in First Republic's 10-year history, helped guide the bank through its 1996 merger with onetime rival First Executive Bank. He did not return two calls seeking comment.
Mr. Stensrud will remain president through yearend and continue as a bank director until his term expires in the spring.
"He helped build a profitable bank and a strong management team, which will remain in place," said Harry D. Madonna, chairman of the bank and its holding company. "The entire board wishes him the best and thanks him for his service over the past 10 years."
Cassandra Toroian, research analyst at Ryan, Beck & Co., Livingston, N.J., said First Republic needs to find new revenue streams to replace the anticipated loss of its tax-refund business.
For eight years First Republic has had an agreement with tax preparer Jackson-Hewitt Inc. to give its customers short-term loans to be repaid with tax refunds. But this agreement, which has generated strong first- quarter income for First Republic over the years, expires in 2000 and will not be renewed.
First Republic will take a one-time charge of $220,000-or 4 cents per share-this quarter to meet its severance obligations to Mr. Stensrud. The company also said it is reducing earnings estimates by 2 cents per share for the third and fourth quarters.
In heavy trading Wednesday, Republic First's stock fell 88 cents, to $9.25 a share. The stock was trading at $9.