Investors have been mistakenly dumping their stakes in Republic First Bancorp this month – all because they confused it with the troubled lender First Republic.
Shares of Pennsylvania-based Republic First have plunged more than 30% since the start of the month as fears of a systemic meltdown engulfed San Francisco-based First Republic and other overextended regional banks, Bloomberg was first to report Friday.
The mix-up has caused such an issue that Republic Bank CEO and President Thomas Geisel penned a public plea earlier this month outlining the differences between the two lenders and their business models – starting with the obvious.
Republic First Bancorp’s retail locations operate under the name “Republic Bank.”
“Amid everything going on, Republic Bank would like to make very clear: we are Republic Bank, Inc. (FRBK-Red/Blue Logo); we are NOT First Republic Bank (FRC-Green Logo),” Geisel says in the letter.
“Republic Bank is very different; we DO NOT lend to start-ups and are not involved in Crypto,” Geisel added. “We lend primarily to established businesses. We lend against collateral and cash flow, we lend to profitable companies that can service the debt, and we typically have personal guarantees.”
First Republic received a $30 billion lifeline this month.Christopher Sadowski
Republic First has no ties to First Republic, which received a $30 billion rescue lifeline from the nation’s largest banks after a massive outflow of deposits placed it in danger of collapse, and does not appear to be experiencing the same challenges to its business.
Nevertheless, Republic First’s stock plunged by as much as 28% on March 17, the day First Republic’s rescue was announced.
It was Republic First’s largest intraday decline in nearly three decades.
Republic First Bancorp. is headquartered in Pennsylvania. AP
Republic First’s client base consists primarily of businesses and retail customers, while First Republic built its troubled business on lending to wealthy individuals.
Republic First’s stock was trading more than 13% higher on Friday, perhaps as investors began to realize the difference.
Bloomberg noted that Republic First initially tried to call itself “First Republic” after a 1996 merger, but backed off and switched the words after facing pushback from the original.
Republic First shares have plunged this month.Google Finance
This isn’t the first time that two similarly named entities have found themselves at odds.
As The Post reported last July, Facebook parent Meta faced a lawsuit last year after another company, virtual reality firm Meta.is, accused it of violating “fundamental intellectual property rights.”
Source link: https://nypost.com/2023/03/31/republic-first-bancorp-confused-for-first-republic-bank/