Banking

Vernon Hill to step down as Republic First CEO

Two days after an appeals court ruled that a hostile faction of Republic First Bancorp directors had authority to fill an uninhabited board seat and break a long-running deadlock, CEO Vernon Hill revealed his resignation.

Hill’s resignation, reliable Aug. 8, came simply hours after the faction led by Chairman Harry Madonna selected financier Benjamin Duster to the uninhabited function. The board is  assessing prospects for an interim CEO, Harris Wildstein, a Republic First director who chairs the board’s nominating and governance committee, stated Friday in a news release. 

Hill’s impending departure marks completion of a months-long fight for control of the Philadelphia-based Republic First that deadlocked its board, generated a bunch of suits and saw the business quickly positioned under the instructions of a court-appointed custodian. 

A choice Wednesday by a three-judge panel on the U.S. Court of Appeals for the Third Circuit in Philadelphia reversed a district court judge’s choice to select  the custodian, returning power to Republic First’s board. 

“I made this decision reluctantly, as the actions of this faction of the board show they are serving their own narrow interests instead of those of shareholders,” Vernon Hill stated of his resignation as CEO of Republic First.

Simon Dawson/Bloomberg

Hill signed up with the board of the $5.7 billion-asset Republic First as chairman in 2016 and ended up being CEO in February 2021 when he changed Madonna, who continued to work as president and chairman emeritus at the time. Hill was important of Madonna and his conference room allies as he divulged his strategies to step down. 

“I made this decision reluctantly, as the actions of this faction of the board show they are serving their own narrow interests instead of those of shareholders,” Hill stated in an emailed declaration. 

When Hill pertained to Republic First, “Harry Madonna declared my arrival, stating my record of development, customer support, brand name structure and investor worth production would lead to Republic ending up being a significant local industrial and retail bank with a unique brand name,” Hill wrote.

The Madonna faction, as well as two separate activist investor groups, said Hill failed to deliver on that promise and have been advocating his ouster for months. In May, the death of director Theodore Flocco — a Hill supporter — broke a 4-4 deadlock on Republic First’s eight-member board. Days later, the Madonna faction voted to remove Hill from his chairman role, replacing him with Madonna. They were prevented from going further when Hill filed suit in federal district court.

Judge Paul Diamond ruled that despite Flocco’s death resulting in a 4-3 majority for the Madonna faction, the board needed to reach the regular quorum of five directors to dismiss Hill. Diamond declared Republic First’s board hopelessly deadlocked and appointed a custodian, Philadelphia attorney Alfred Putnam, to oversee a special election to the board seat left vacant by Flocco’s death. 

It was that ruling that a three-judge panel reversed Wednesday. The Madonna faction wasted little time filling the company’s vacant board seat with Duster. 

“We are pleased that the Third Circuit recognizes the role of the current board in overseeing the affairs of Republic First, and that four directors acting together can fill the vacant board seat. That is what we did last night,” Wildstein said in the release. 

Hill and his allies, directors Barry Spevak and Brian Tierney, said in their statement that they were not given an opportunity “to meet with or even speak to” Duster prior to his appointment and that the Madonna faction “abandoned all norms of good corporate governance and the Company’s own past practice of vetting proposed candidates for the board.”

For his part, Duster stated in journalism release Friday that he “eagerly anticipates working collaboratively with the incumbent directors to place the bank for long-lasting success.”

Hill acquired popularity in banking circles after starting Commerce Bancorp in 1973 and handling the Cherry Hill, New Jersey-based business up until he resigned in 2007. Under Hill’s management Commerce turned into a $44 billion-asset local powerhouse by embracing retail methods such as nighttime and weekend hours, coin-counting makers and a comprehensive network of branches. 

In big part, Hill looked for to reproduce that technique at Republic First. The business increased its branch count from 12 in 2011 to 33 today. It’s grown possessions at a 17% substance yearly development rate because Hill ended up being chairman in 2016, however critics — consisting of the activist financiers challenging Hill’s management — stated success hasn’t kept up. Republic First’s return on possessions amounted to 0.44% for the very first quarter of 2022 and 0.51% for all of 2021. Industrywide returns on possessions were 1% for the quarter that ended March 31 and 1.21% for 2021, according to Federal Deposit Insurance Corp. stats.

Gabriel

A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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