will incorporate an arbitrary figure for a “force reduction” within its credit and lending departments.
The parent firm of Republic First Bank, Philadelphia-based Republic First Bancorp Inc., declared on Friday that it would no longer be initiating mortgages.
The bank, operating under the name Republic Bank, stated in a filing with the Securities and Exchange Commission that it “will exit its legacy mortgage origination business,” according to the parent company.
In keeping with its basic business lines, the bank would “continue to support local communities through various Community Reinvestment Act initiatives,” according to the paper.
When the bank first started out, its main product was “a long-term jumbo mortgage product, priced at aggressive rates.” However, the bank said that this was no longer in line with its choice for asset classes with “shorter-duration and better risk-adjusted return.”
“The company’s strategy for enhancing profitability and dedicating more resources to core business lines is no longer consistent with the high-cost nature of a jumbo mortgage origination platform,” the statement continued.
The bank announced that it has made “commensurate reductions in force” in its lending and credit teams in New York City and that it would also be streamlining its commercial lending operations there. The number of axed positions was not specified.
Republic Bank stated in the paper that by taking this step, it will be able to concentrate on its solid business ties in and around its primary Philadelphia metropolitan area market, serving local clients with both domestic and foreign firms.
In the 12 months that concluded in April 2023, Republic First originated $276.3 million in loans, of which $245.6 million were conventional loans, according to Modex. $207.8 million of those loans were for the acquisition of mortgages.
The modifications, according to Republic First Bancorp president and CEO Thomas X. Geisel, are consistent with the “clear strategy” he announced at the time, which centered on concentrating on core business lines in core areas.
He continued, saying that the adjustments “represent important steps in that direction.” “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.
He went on, “We firmly believe these decisions are in the best interests of the company and will allow us to build a strong foundation for the future, even though they were difficult decisions due to the inherent reduction in force required.”
He went on, “I want to express my heartfelt appreciation to our hardworking staff members who will always be the foundation of our success. The prospects we have ahead of us to forge an even stronger Republic Bank thrill me. As we make swift decisions to carry out our plan, we are dedicated to providing regular updates on business developments to the market and our shareholders.