One of San Francisco's largest independent thrifts has hired a prominent investment bank to look at whether it should be sold.

First Republic Bancorp, a $2.2 billion-asset thrift that specializes in financing luxury homes, has retained Montgomery Securities, San Francisco, to "assist in identifying, reviewing, and assessing various strategic alternatives," officials announced in a press release.

Although president and chief executive officer James H. Herbert 2d stated in a press release that the thrift is looking at all options to boost shareholder value, he noted that "it includes the possibility of First Republic's being acquired or merging with a strategic partner."

The announcement by First Republic comes just as California's largest thrift, Irwindale-based H.F. Ahmanson & Co., launched a hostile takeover bid for the state's second-largest thrift, Chatsworth-based Great Western Financial Corp.

And it follows recent acquisitions of California Federal Bancorp and American Savings Bank by out-of-state giants U.S. Bancorp and Washington Mutual.

The move by 12-year-old First Republic reflects the heightened merger activity that has suddenly swept the nation's largest thrifts. With numerous deals taking place or being discussed, many thrifts don't want to be left behind when the window of opportunity to get a good price closes.

Officials at First Republic "must think the time is right," said Campbell K. Chaney, a bank analyst at Sandler O'Neill in New York. "If you're going to choose a time, now would be a very good time because of all the consolidation activity and the prices being paid."

Analysts and investment bankers said they weren't surprised by the announcement. Possible buyers include major thrifts such as Washington Mutual or First Nationwide, banks such as Norwest that are active in mortgage lending, and some nonbanks, observers said.

First Republic has improved asset quality and earnings significantly after suffering losses from the 1995 Northridge earthquake. Even so, "there's not much more the company can really do," said Deborah R. Beylus, an analyst at JW Charles Securities in Boca Raton, Fla.

The thrift is competing against much larger players in a market that is consolidating, Ms. Beylus said. She said the thrift will have a hard time increasing earnings after it finishes cutting costs because it doesn't have a large enough asset base.

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