Magazine article American Banker

Calif. Jumbo Specialist Takes Itself off Market

Magazine article American Banker

Calif. Jumbo Specialist Takes Itself off Market

Article excerpt

Just a few months after hiring an investment banker to explore a sale, San Francisco's First Republic Bancorp has called off the search.

The $2.2 billion-asset thrift on Tuesday told its investment banker, Montgomery Securities, that it has decided to remain independent. First Republic, which specializes in jumbo mortgages, will also consider other strategic moves, including buying or investing in other financial services companies, a spokesman said.

The move surprised observers. "It's rare that a bank reverses course at that stage," said Tom Rudkin, managing director at Advest Inc. in New York. He said a company might scrap a sale because it got unacceptably low offers or because it couldn't overcome "social" issues involved in a merger, such as job security for senior management and other employees.

First Republic's spokesman, Owen Blicksilver, wouldn't comment on whether it or Montgomery had received any offer.

"When they looked at the opportunities involving a change of control, they decided it made more sense to remain independent," Mr. Blicksilver said. "If you look at this company and its strengths in the high-end mortgage business and you look at the potential it has going forward, you have a fundamentally strong company."

Mr. Blicksilver said First Republic would still consider offers from other companies but "they're not out actively seeking a buyer."

Investors reacted sharply to the news; First Republic's stock fell $2.25 a share in trading Thursday, to $20. And the stock was trading at $20 Friday afternoon. …

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