Merrill Lynch beefs up in private banking with $1.8bn First Republic

Merrill Lynch will buy First Republic Bank, a private banking and wealth management firm, for $1.8bn in cash and stock, according to a statement issued by the bank on Monday.

The world’s largest brokerage is offering $55 per First Republic Share, in a deal which expected to be completed in the third quarter of this year.

First Republic will operate as a stand-alone brand within Merrill Lynch and will retain its name, current management structure, its San Francisco headquarters and its client and community focus. The bank will continue to operate its business separately as a new division of Merrill Lynch Bank & Trust.

First Republic chairman and chief executive Jim Herbert and president and chief operating officer Katherine August-deWilde will continue their roles.

The business has some $16.4bn under management and/or administration and total assets of $10.7bn. It considers itself to have particular expertise in “luxury home lending” — mortgages on top-of-the-range houses. Aside from a well-developed online presence, it has 12 offices, from Newport Beach to New York City and other markets “with large concentrations of high net worth individuals.”