There are more questions than answers regarding the boutique private bank. As Bank of America and Merrill Lynch work through the details of their impending merger, the fate of First Republic Bank, a prestigious private-banking firm focused on high-net-worth individuals and their businesses, has come into question. Is there a management or third-party buyout in the works? Is it slated to become part of Bank of America's U.S. Trust business? Or will a combined Bank of America-Merrill leave it pretty much alone?

Nothing firm

So far Bank of America and Merrill are holding their cards close in. The companies haven't mentioned First Republic in their public statements concerning their merger. They declined, separately, to comment on the San Francisco-based private bank's role in their combined wealth-management business -- as did First Republic.

Talk of a management buyout gained credence a few weeks ago when First Republic's president and COO Katherine August-DeWilde told Reuters that "people" had asked the bank's management about such an outcome since the merger between Merrill and Bank of America was announced in mid September, but "that hasn't been anything we have pursued." She declined to say whether outside investors had approached First Republic about an acquisition.

August-DeWilde also indicated that Bank of America hadn't been in touch with First Republic.

Loyalists

First Republic, founded by CEO James Herbert in 1985, has a coterie of loyal clients -- including, as of last year anyway, TV host Larry King and actor Rob Lowe. And it seems that some of them are worried about the effects of a merger with Bank of America.

"If they merge First Republic into Bank of America, I would absolutely transfer my accounts," First Republic client Patricia Harden, owner of the Oakland, Calif.-based public-relations firm, Harden Communications Partners," told the San Francisco Business Times. "The reason I've been with First Republic for the last eight years is their high level of service to small-business owners. Unlike the big banks, they don't put holds on my checks based on a computer program."

Merrill completed its $1.8-billion cash-and-stock acquisition of First Republic about 13 months ago. Its stated aim in buying the bank was to increase its high-net-worth wallet share and to enhance its existing private-banking capabilities.

Maybe

As a deal aimed at boosting a facet of the buyer's wealth-management business, Merrill's purchase of First Republic looked rather like Bank of America's $3.3-billion acquisition of U.S. Trust from Schwab, completed in July 2007. For Merrill, a big retail broker, it was a matter of bolstering its high-touch banking capabilities, principally for successful entrepreneurs; Bank of America's move on U.S. Trust was its entrée to the ultra-high-net-worth space.

Though Bank of America has lately relaxed a long-standing policy of stripping acquisitions of their brands -- most notably with U.S. Trust -- the degree to which First Republic makes sense to it as an own-brand and more or less autonomous subsidiary of Bank of America-Merrill is anyone's guess right now. It's just as likely that it gets absorbed, piecemeal, by U.S. Trust, Merrill's retail brokerage and Bank of America's retail-oriented Premier Banking group.

And it may be that the integration planners at Bank of America and Merrill, working toward an early-2009 combination of the two financial-service giants, simply haven't decided what to do with First Republic yet -- just as they don't seem to have come to a decision about Merrill's Private Banking and Investment Group.

First Republic has branches in and around San Francisco and in the Pacific Northwest, southern California, Nevada, New York, Connecticut and Massachusetts. -FWR

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