First Republic Bank Declares Independence from Bank of America Corp (NYSE: BAC)

First Republic Bank has completed a management-led buyout as Bank of America Corp (NYSE: BAC) in an effort to return to its roots as an independent San Francisco-based banks.

The banks managers announced in October that they planned to purchase the company from Bank of America Corp (NYSE: BAC) with financing from provide equity firms Colonial Capital and General Atlantic. Bank of America Corp (NYSE: BAC) first inherited the bank when it took over Merrill Lynch in 2009. Merrill had purchased First Republic from its public shareholders for $1.8 billion in September 2007 just one month before the stock market peaked. The management-led group raised $1.862 billion from investors which included the two private equity firms, family partnerships, clients and about 120 employees.

“Some of that went to Bank of America, some is for First Republic to have a very strong capital base on which to grow,” said Katherine August-deWilde, First Republic’s president and chief operating officer.

August-deWilde did not disclose the purchase price or the new ownership structure, except that both General Atlantic and Colony would each own less than 25% of the new company. Other institutions which invested in the deal included Wellington Management and Sequioa Capital. Bank of America will retain about $2 billion worth of assets from First Republic. No debt was used to complete the deal.

While under the helm of Bank of America Corp (NYSE: BAC), First Republic operated as a separate company with its own pricing, lending policies and brand. The bank continues to give out fresh-baked cookies in its branches as well as free umbrellas. The bank also nearly doubled in assets and deposits during its stay with Bank of America and increased its employee base by about 25% to 1,400. The bank also increased from 30 to 62 offices.

August-deWilde said that Bank of America Corp (NYSE: BAC) and Merrill Lynch were good parent companies, the bank’s management is happy to become independent again. “The nice thing is, decisions are now local again. Management can decide what products we will offer, what we want to do in the community.” The collapse of Merrill and its takeover by Bank of America Corp (NYSE: BAC) caused “a lot of uncertainty,” she added. “Employees are happy all the uncertainty is gone.”