Vernon Hill forced out as Republic First chairman under activist pressure

Under pressure from activist investors, Vernon Hill has lost control of Republic First Bancorp’s board.

After the death last week of Theodore Flocco Jr., a key ally of Hill on the $5.6 billion-asset company’s divided board, the investors gained a majority and ousted Hill as chairman. He was replaced by his predecessor Harry Madonna, the company said in a press release.

Republic First is the parent of Republic Bank, which operates 34 branches in Pennsylvania, New York and New Jersey.

Hill, who remains a director and CEO of the Philadelphia company, faces mounting criticism from two investor groups. Some of Hill’s detractors have called for him to step down as chief executive as well, citing subpar profitability and poor stock performance. They have faulted Hill for lofty expense levels as the company expands in Philadelphia and New York. Republic First opened new branches as part of the growth forays, an expensive endeavor at a time when most banks are pruning branch networks and investing more in digital banking instead.

One investor group has offered to buy the company with the condition that it cut all ties with Hill. That group includes Gregory Braca, the former president and CEO of TD Bank’s U.S. unit, along with New Jersey insurance executive George Norcross and his brother, Philip Norcross, the managing shareholder and CEO of the Parker McCay law firm in Mount Laurel, New Jersey. 

The other critical investor group, Driver Management, wants to replace a total of three Republic First board members, notably including Hill.

Hill was not immediately available to comment.

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In a prepared statement, Madonna said, “I look forward to continuing to work with the board and our employees and creating value for our constituents.”

Madonna founded Republic Bank in 1988 and served as its chairman until March 2021. He also served as CEO of the bank from 2000 to 2021. Additionally, he served as chairman of the parent company from its formation in 1996 until 2016 and CEO from 2000 until March 2021.