First Republic Bank unveiled plans for an initial public offering, nearly five months after completing a management-led buyout of the one-time Merrill Lynch operation.
The giant investment bank acquired First Republic, which is geared toward the wealthy, in September 2007 in a deal initially valued at $1.8 billion. Merrill was acquired at the end of 2008 by Bank of America Corp. amid the turmoil of the financial crisis. First Republic management and an investor group that includes Colony Capital LLC and General Atlantic LLC paid $1.86 billion for the company.
The potential size of the IPO wasn't disclosed Wednesday. The California-based bank had assets of $21.95 billion, including wealth-management assets of $17.17 billion, as well as deposits of $19 billion as of Sept. 30, First Republic said.
The company said because it is a recently established institution "we are subject to heightened capital requirements and many other business limitations imposed by the" Federal Depository Insurance Corp. and the California Department of Financial Institutions "as part of their respective approvals for us to operate a commercial banking and trust business."
The company plans to use proceeds for purposes that may include funding loans or purchasing securities for its portfolio.
The company's operations are located primarily in California, New York and Boston.
As of Sept. 30, two-thirds of First Republic's loans outstanding were secured by real estate located in California, which has been particularly hard hit by the housing slump. The majority of its loans are for residential real estate.
The company reported that earnings fell 18% to $66.4 million in the latest quarter ended Sept. 30. Net interest income was down 2% in the period.
The commercial bank and trust company has applied to list on the New York Stock Exchange under the symbol FRC.
