Magazine article American Banker

Branch Need Motivates 1st Republic Acquisition

Magazine article American Banker

Branch Need Motivates 1st Republic Acquisition

Article excerpt

First Republic Bank in San Francisco has plenty of borrowers and private banking clients in the fast-growing markets east of the city -- but no branches to attract deposits.

That would change when it buys the $564 million-asset BWC Financial Corp. in Walnut Creek, Calif.

The $9.3 billion-asset First Republic, which has never made a whole-bank acquisition, said Monday that it would buy BWC, which owns Bank of Walnut Creek, for $177 million in stock, or $41.95 per share.

Bank of Walnut Creek has seven branches in the East Bay area. "Our clients there were really eager for us to open branches there," said chief operating officer Katherine August-deWilde. "Plus, we'll be also able to bring our whole portfolio of services, including our wealth management services, to Bank of Walnut Creek's existing customers."

First Republic has bought the charters of financial services companies in the past but then liquidated their assets and used the charters to open offices in such cities as New York and Boston. It has also entered other markets, such as San Diego and Las Vegas, by first opening private banking office or loan production offices or both and then branches.

Ms. August-deWilde said that though buying BWC is a departure, "it was an opportunity far too good to overlook."

Rumors that BWC would soon be sold had been circulating in local business papers for weeks. Most its seven directors, including chairman and chief executive James L. Ryan, 72, been there since 1980, when the company was founded.

BWC's thinly traded stock closed at a 52-week high Friday of $38, up 9% since May 1. It rose another 6.2% Monday on news of the deal, to close at $40.35.

Mr. Ryan said the board decided to put the company up for sale because he and two other senior executives were ready to retire. "But it's so much more than that," he said. …

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