Colony Capital, General Atlantic complete First Republic acquisition from Bank of America

First Republic Bank completes separation from BofA

LOS ANGELES — An investor group led by Colony Capital LLC and General Atlantic LLC have completed the acquisition of San Francisco-based private bank First Republic from Bank of America with $1.86 billion in new equity capital.

Last October, Bank of America Corp. agreed to sell First Republic, which it had inherited through the January 2009 takeover of Merrill Lynch & Co. Colony Financial, the publicly traded real estate finance arm of Colony Capital, said it contributed $24 million to the transaction.

The sale re-establishes First Republic as an independent financial institution with 62 offices, roughly $20 billion in assets, $18 billion in deposits and $15 billion of wealth management assets. The bank’s top management, including founder and Chairman James Herbert II and President and Chief Operating Officer Katherine August-deWilde, will stay on board.

First Republic’s board consists of nine members, including two of the bank’s senior executives; Colony Capital Chairman and CEO Tom Barrack and General Atlantic CEO Bill Ford; and five independent directors who have been affiliated with the bank consistently for six to 25 years.

First Republic was purchased by Merrill Lynch for $1.8 billion in September 2007. The New York-based brokerage firm ran First Republic as a separate unit. When Bank of America took ownership of Merrill Lynch, the Charlotte, N.C., bank was seen as likely to sell First Republic because it already had acquired a wealth-management business, U.S. Trust, from Charles Schwab.

Colony Financial also said Thursday that it took part in three other transactions in June totaling $18 million. It did not elaborate on the deals, but said they bring its total invested and committed capital to $256 million, or 93 percent of the net proceeds of its September 2009 initial public offering.

Shares in Colony Financial rose 15 cents to $17.05 in afternoon trading.