Republic First to probe related-party transactions

Republic First Bancorp in Philadelphia is planning to delay its 2022 annual meeting while it conducts an investigation into certain related-party transactions. 

The $5.4 billion-asset company disclosed in a regulatory filing Friday that its auditors, as part of a review of its 2021 financial statements, advised management and the chairman of the audit committee that it thought an independent investigation should be conducted. 

The filing said the related-party transactions are the subject of pending litigation against Republic First.

Republic First said its audit committee plans to hire independent legal counsel to handle the investigation, which will involve related-party transactions are the subject of pending litigation against the bank.

"The investigation has not yet begun, no conclusions have been reached, and the company cannot presently predict the duration or outcome of the investigation,” the filing said. 

Republic First, however, said it does not believe the situation will have a material adverse impact on its financial condition or operations. 

The company said it does not plan to file its annual report for 2021 until the investigation is completed. It said in a separate filing that it plans to delay its annual meeting until the probe is over and the annual report is filed.

The delayed meeting comes at a time when the company is grappling with two activist investor groups. 

One group, which includes George Norcross III and Gregory Braca, wants to oust Chairman and CEO Vernon Hill. The group recently sent a nonbinding proposal to Republic First’s investment bank offering to buy the company. 

Driver Management, meanwhile, is looking to replace three directors with its own nominees.

Driver, in a separate filing, noted that two members of the company's audit committee are up for reelection at this year's annual meeting. Driver pressed Republic First to share any communication between its auditor and the audit committee tied to the probe, along with the minutes from the meeting where the investigation was approved.