Republic First Bancorp (FRBK) in Philadelphia has settled a lawsuit for $2 million, which may delay its ability to claim a large deferred-tax allowance.
The $916 million-asset company provided few details on the lawsuit or the settlement, which was agreed to on Aug. 26 and disclosed in a regulatory filing last week. The suit, which the bank did not previously disclose in its annual reports, related to alleged actions prior to 2008 by a former officer of the bank; Republic first provided no further details, and a bank spokeswoman did not immediately respond to calls seeking further details.
Republic First expects to record the $2 million charge in the third quarter, it said.
The charge could push back the date when Republic First can reclaim its $13.3 million deferred-tax asset, according to a report released Tuesday by Sandler O'Neill. It is "highly likely" that the charge will cause the bank to slip to a loss in the third quarter, following six consecutive profitable quarters, the report says.
Sandler O'Neill expects Republic First to recapture its deferred-tax asset in mid-2014; previously, it had expected the bank to be able to claim at least part of the asset this year. Banks have generally been able to recapture their deferred tax assets after five to six profitable quarters, the report said.
Republic First joined the Allpoint automated teller machine network last month. It announced plans in May to open its third New Jersey branch.