Philadelphia-based Republic First Bancorp Inc., the holding company for Republic First Bank, on Friday announced plans to stop originating mortgages.
The holding company said the bank, which does business as Republic Bank, said in a filing with the Securities and Exchange Commission that the bank “will exit its legacy mortgage origination business.”
“The bank will continue to support local communities through various Community Reinvestment Act initiatives driven through its core business lines,” the document states.
The bank said that, historically, its primary offering was “a long-term jumbo mortgage product, priced at aggressive rates,” which it said now no longer aligns with its preference for “shorter-duration and better risk-adjusted return asset classes.”
It added that, “the high-cost nature of a jumbo mortgage origination platform is no longer consistent with the company’s strategy for enhancing profitability and dedicating more resources to core business lines.”
The bank said it will also streamline its commercial lending business in New York City, and that it has made “commensurate reductions in force” in its New York lending and credit teams. It did not say how many positions were cut.
“This action will allow Republic Bank to focus on its strong commercial relationships in and around the bank’s core Philadelphia metropolitan area market, serving clients domiciled here who have businesses inside and outside the region,” the bank said in the document.
According to Modex, Republic First originated $276.3 million in loans in the 12 months ended in April 2023, including $245.6 million in conventional loans. Of that, $207.8 million were purchase mortgage loans.
Thomas X. Geisel, who became president and CEO of Republic First Bancorp in December, said the changes are in line with the “clear strategy” he articulated at that time to focus on core business lines in core markets.
“In our recent first quarter 2023 earnings report, we noted that we would be executing meaningful business realignment and efficiency initiatives to grow profitability, allow us to better serve our customers and create value for shareholders and all stakeholders,” he said, adding that the changes “represent important steps in that direction.”
He continued, “While these were difficult decisions — especially because of the inherent reduction in force required — we strongly believe they are in the best interests of the company and will allow us to build a strong foundation for the future.”
He added, “I would like to extend a sincere word of gratitude to our dedicated employees who will continue to drive our success. I am excited about our opportunities that lay ahead to build an even stronger Republic Bank. We are committed to updating the market and our shareholders on an ongoing basis on business developments as we take decisive actions to execute our strategy.”
