Republic First Bancorp (FRBKQ) Risk Analysis
Risk Overview Q3, 2022
Source: the company's latest filing for the period ended Sep 30, 2022, filed Mar 15, 2023
Risk Change Over Time
- Share Price & Shareholder Rights - Risk 1Continued delays in the filing of our periodic reports with the SEC and our failure to hold an annual meeting no later than one year after the end of the Company's fiscal year-end could impact our listing on Nasdaq, which would materially and adversely affect our stock price, financial condition and/or results of operations.
Due to the Company needing additional time to assess the disclosure controls and procedures of the Company's internal controls and evaluate the appropriateness of the methodology and assumptions contained in, the model established by the Company's prior management in connection with the required adoption of FASB's Topic 326 – Current Expected Credit Losses ("CECL") accounting standard, effective January 1, 2022, we were unable to file this Quarterly Report on Form 10-Q on a timely basis. We were also previously unable to our Annual Report on Form 10-K for the year ended December 31, 2021 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022 on a timely basis. Nasdaq Listing Rule 5250(c)(1) requires listed companies to timely file all required periodic financial reports with the SEC. If we are not able to timely file our required periodic financial reports with the SEC, our common stock may be subject to delisting by Nasdaq. Additionally, the Company is not in compliance with Listing Rule 5620(a), which requires the Company to hold an annual meeting of shareholders no later than one year after the end of the Company's fiscal year-end for continued listing on The Nasdaq Global Market. On January 19, 2023, the Nasdaq Hearings Panel granted the Company's request for an extension through June 30, 2023 to hold its 2022 annual meeting of shareholders. If the Company is unable to comply with Listing Rule 5620(a) by June 30, 2023, our common stock may be subject to delisting by Nasdaq. If our common stock is delisted by Nasdaq, it would materially and adversely affect our stock price, financial condition and/or results of operations.
Risk Highlights Q3, 2022
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 33
- Share Price & Shareholder Rights - Risk 1ChangedContinued delays in the filing of our periodic reports with the SEC and our failure to hold an annual meeting no later than one year after the end of the Company's fiscal year-end could impact our listing on Nasdaq, which would materially and adversely affect our stock price, financial condition and/or results of operations.
Due to the Company needing additional time to assess the disclosure controls and procedures of the Company's internal controls and evaluate the appropriateness of the methodology and assumptions contained in, the model established by the Company's prior management in connection with the required adoption of FASB's Topic 326 – Current Expected Credit Losses ("CECL") accounting standard, effective January 1, 2022, we were unable to file this Quarterly Report on Form 10-Q on a timely basis. We were also previously unable to our Annual Report on Form 10-K for the year ended December 31, 2021 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022 on a timely basis. Nasdaq Listing Rule 5250(c)(1) requires listed companies to timely file all required periodic financial reports with the SEC. If we are not able to timely file our required periodic financial reports with the SEC, our common stock may be subject to delisting by Nasdaq. Additionally, the Company is not in compliance with Listing Rule 5620(a), which requires the Company to hold an annual meeting of shareholders no later than one year after the end of the Company's fiscal year-end for continued listing on The Nasdaq Global Market. On January 19, 2023, the Nasdaq Hearings Panel granted the Company's request for an extension through June 30, 2023 to hold its 2022 annual meeting of shareholders. If the Company is unable to comply with Listing Rule 5620(a) by June 30, 2023, our common stock may be subject to delisting by Nasdaq. If our common stock is delisted by Nasdaq, it would materially and adversely affect our stock price, financial condition and/or results of operations.
- Share Price & Shareholder Rights - Risk 2Our business could be impacted by a potential proxy contest for the election of directors at our 2022 Annual Meeting of Shareholders.
In December 2021, Driver Management Company LLC (together with its affiliates, the "Activist Investor"), announced the nomination of three candidates for election to our Board of Directors at our 2022 Annual Meeting of Shareholders. A proxy contest with the Activist Investor for the election of directors could result in us incurring substantial costs, including proxy solicitation, public relations, and legal fees. Further, such a proxy contest could divert the attention of our Board of Directors, management, and employees, and may disrupt the momentum in our business and operations, as well as our ability to execute our strategic plan. The actions of the Activist Investor may also create perceived uncertainties as to the future direction of our business or strategy, which may be exploited by our competitors and may make it more difficult to attract and retain qualified personnel, and may impact our relationship with investors, vendors, and other third parties. A proxy contest could also impact the market price and the volatility of our common stock.
- Share Price & Shareholder Rights - Risk 3Our governing documents, Pennsylvania law, and current policies of our Board of Directors contain provisions, which may reduce the likelihood of a change in control transaction, which may otherwise be available and attractive to shareholders.
Our articles of incorporation and bylaws contain certain anti-takeover provisions that may make it more difficult or expensive or may discourage a tender offer, change in control or takeover attempt that is opposed by our Board of Directors. In particular, the articles of incorporation and bylaws: classify our Board of Directors into three groups, so that shareholders elect only approximately one-third of the Board each year; permit shareholders to remove directors only for cause and only upon the vote of the holders of at least 75% of the voting shares; require our shareholders to give us advance notice to nominate candidates for election to the Board of Directors or to make shareholder proposals at a shareholders' meeting; require the vote of the holders of at least 75% of our voting shares for shareholder amendments to our bylaws; require the vote of the holders of at least 75% of our voting shares to approve certain business combinations; and restrict the holdings and voting rights of shareholders who would acquire more than 10% of our outstanding common stock without the approval of two-thirds of our Board of Directors. These provisions of our articles of incorporation and bylaws could discourage potential acquisition proposals and could delay or prevent a change in control, even though a majority of our shareholders may consider such proposals desirable. Such provisions could also make it more difficult for third parties to remove and replace the members of our Board of Directors. Moreover, these provisions could diminish the opportunities for shareholders to participate in certain tender offers, including tender offers at prices above the then-current market value of our common stock, and may also prevent increases in the trading price of our common stock that could result from takeover attempts or speculation. In addition, anti-takeover provisions in Pennsylvania and federal law could make it more difficult for a third party to acquire control of us. These provisions could adversely affect the market price of our common stock and could reduce the amount that shareholders might receive if we are sold. For example, Pennsylvania and federal law may restrict a third party's ability to obtain control of us and may prevent shareholders from receiving a premium for their shares of our common stock.
- Share Price & Shareholder Rights - Risk 4There may be future sales of our common stock, which may materially and adversely affect the market price of our common stock.
We are not restricted from issuing additional shares of our common or preferred stock, including securities that are convertible into or exchangeable or exercisable for shares of our common stock. Our issuance of shares of common stock, preferred stock or securities convertible into or exchangeable or exercisable for our common stock in the future will dilute the ownership interests of our existing shareholders. Additionally, the sale of substantial amounts of our common stock, whether directly by us or by existing common shareholders in the secondary market, the perception that such sales could occur or the availability for future sale of shares of our common stock or securities convertible into or exchangeable or exercisable for our common stock could, in turn, materially and adversely affect the market price of our common stock.
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