General Atlantic and Colony Capital will buy First Republic Bank, a San Francisco-headquartered retail bank, from Bank of America Merrill Lynch. Financial details were not disclosed, but various media reports pegged the deal value at around $1 billion, citing sources familiar with the situation.
General Atlantic, a growth capital-focused firm with $14 billion under management, and private equity real estate group Colony Capital have partnered with the bank’s existing management team to execute the buy out.
First Republic: spun off
Jim Herbert, chairman and founding chief executive officer, and Katherine August-deWilde, president and chief operating officer, will continue in their current positions along with the rest of the management team.
First Republic was originally part of Merrill Lynch when the banking group was acquired by Bank of America in January for $1.7 billion.
Unlike private equity firms’ previous acquisitions in the US banking sector this year, such as Floridian banks BankUnited and First Southern Bank, the First Republic deal is not being acquired from the Federal Deposit Insurance Corp, the the body that guarantees the safety of US savers’ bank deposits.
As of September 2009, First Republic had $19 billion in total assets, $16 billion in deposits, and $15 billion in wealth management assets under management. The deal is expected to close in the second quarter of 2010.
Earlier this month a consortium containing private real estate-focused investment firm Starwood Capital and private equity giant TPG agreed to acquire $4.5 billion portfolio of construction loans and real estate formerly owned by Chicago-based Corus Bank, in a deal worth about $2.77 billion.