Vernon Hill ousted as chairman of Republic bank after key board ally dies
A boardroom coup following the death of a key ally on the divided Republic First Bancorp Inc. board has forced veteran Moorestown banker Vernon Hill from his post.
A boardroom coup following the death of a key ally on the divided Republic First Bancorp Inc. board has forced veteran Moorestown banker Vernon Hill from his post as the chairman of the board of the Philadelphia company, which operates Republic Bank and its 33 branches in New Jersey, Pennsylvania, and New York.
Hill was replaced by Harry Madonna, stepping back into a role he held before he and Hill became adversaries in a fight for control. Madonna said in a statement Friday he looks forward “to work with the Board and our employees” at “creating value for our constituents.”
But the combative Hill remains chief executive of Republic, with allies considering a legal counteroffensive. Hill also retains a board seat. Hill said Saturday that he would have no immediate comment.
Hill’s removal from the board’s top job by members who support dissident investors was made possible by the death Tuesday of Hill supporter Theodore J. Flocco, a retired accountant, who lived in Mount Laurel.
In a statement to bank workers Thursday, Hill eulogized Flocco as “loyal” and a supporter of Hill’s efforts to grow the bank in metro Philadelphia and New York.
Flocco and Hill formed part of a four-member faction on the Republic board that had locked horns with Hill’s critics and prevented moves against him and his policies.
The dissidents — who gained a one-vote majority with Flocco’s passing — are Andrew B. Cohen, a longtime investment manager for Wall Street billionaire and New York Mets owner Steven A. Cohen; lawyer Lisa Jacobs, partner at Stradley Ronon Stevens & Young in Philadelphia; Madonna; and Harvey Wildstein, who runs LifeLine Funding LLC.
They are siding with longtime South Jersey insurance broker, hospital executive, and Democratic Party kingmaker George Norcross.
The group didn’t wait for Flocco’s funeral Mass, scheduled for Wednesday at St. Joan of Arc Catholic Church in Marlton, to exploit his death by using their new majority to call for a board vote they expected Hill would lose.
Norcross is supporting efforts by activist investors seeking to oust Hill in favor of their own candidates in the bank’s as-yet unscheduled 2022 board elections. Hill’s remaining allies include accountant Barry Spevak and Brian Tierney, founder of Brian Communications, whose clients include First Republic. (Norcross and Tierney were each leaders of investor groups that formerly owned The Inquirer.)
Norcross’ allies include former TD Bank executive Gregory Braca — the two head an investor group that has been buying up Republic shares —- as well as Driver Management Co., a hedge fund that has put together a list of insurgent candidates to replace Hill and his board allies.
These dissidents blame Hill for driving down profits at Republic. They say Hill has been spending too much money on building new bank branches, at a time when more Americans bank online and most banks are shutting, not adding, branches. They have also accused the Hill administration of delaying financial reports and favoring firms controlled by family and friends for bank contracts. They say the bank needs to cut costs so there is more money for shareholders.
Hill has defended his strategies as proven ways to build value over time, as well as pledging to increase spending on technology. But Republic’s critics multiplied as shares lost value, compared with other banks, in recent years. The stock revived during the winter as the Norcross and Driver factions joined forces and publicly called on other shareholders to back them, but dropped again as the bank delayed financial reports and board elections, and in the general stock-market retreat as the Federal Reserve raised interest rates.
Hill previously had stepped down from the top jobs at two banks he founded.
In 2007, boardroom fights led to his leaving the former Commerce Bancorp, which was based in Marlton and was more than 10 times larger than Republic, with branches from Connecticut to the Washington, D.C. area. When Hill left, Norcross stayed with the bank and helped arrange its sale to TD Bank.
In 2019 he departed Metro Bank (UK), founded with backing from trans-Atlantic real estate investors and with a promise to shake up England’s staid retail-banking culture, after the company was found to have wrongly minimized its likely losses from bad loans.