Republic Bank Plans $75 Million Capital Raise, Norcross Braca Group to Invest

Republic Bank and Norcross Braca Group announced today the signing of a letter of intent (LOI) that details Norcross Braca Group’s plan to invest a minimum of $35 million in Republic Bank as part of a larger capital raise of $75 million. The remaining $40 million will be sourced from additional third-party investors.

This capital injection is anticipated to strengthen Republic Bank’s financial standing and improve its operations, with the ultimate goal of enhancing shareholder value. Following the capital raise, the bank’s board will be restructured to include nine members: two directors from Norcross Braca Group, two candidates nominated by the additional investors, two new independent directors, the bank’s CEO, and two legacy independent directors.

Moreover, Norcross Braca Group will have the right to appoint two non-voting observers to the board upon the execution of a definitive agreement regarding the capital raise. This agreement will also lead to the resolution of all litigation against Republic Bank from Norcross Braca Group and will halt its proxy solicitation efforts.

Once the capital raise is finalized, Republic Bank will cover certain fees and expenses for Norcross Braca Group, including some investment banking and legal costs.

Thomas X. Geisel, President and CEO of Republic Bank, expressed his positive outlook on the agreement. He stated, “In addition to strengthening our balance sheet, we believe this extra capital will provide us with greater flexibility to invest in the business and deliver exceptional service to our loyal customers and depositors.” He also thanked Norcross Braca Group for their collaborative approach in reaching this agreement.

George E. Norcross, III echoed these sentiments, saying, “As significant shareholders of Republic, we have faith in the company’s potential and are excited to be involved in its next chapter.”

Currently, Republic Bank holds a market capitalization of $15.78 billion, a P/E ratio of 18.63, and a dividend yield of 1.25%. The bank has consistently increased its dividend for 11 consecutive years, reflecting its commitment to returning value to shareholders. However, it has been noted that the bank’s stock experiences high price volatility, and analysts anticipate a sales decline for the current year.

The proposed transaction is contingent on negotiating definitive agreements, as well as receiving shareholder and regulatory approvals. Legal counsel for Republic Bank includes Squire Patton Boggs and Vinson & Elkins, while Norcross Braca Group is represented by Sullivan & Cromwell and Ballard Spahr.