BofA Seeks to Sell First Republic Bank: Report

Bank of America is looking to sell First Republic Bank, a private bank it inherited from Merrill Lynch, according to a report by the Wall Street Journal.

The move would help Charlotte, N.C.-based Bank of America preserve capital and possibly shed noncore assets, according to the Journal report Thursday, which cited anonymous sources.

A Bank of America spokesman declined to comment on the report.

First Republic was purchased by Merrill Lynch for $1.8 billion in September 2007. The New York-based firm ran First Republic as a separate unit, maintaining its name and management. Bank of America bought Merrill Lynch on Jan. 1.

Bank of America
Bank of America

Questions about First Republic's future have swirled ever since Bank of America agreed in September to buy Merrill Lynch, the Journal reported. Bank of America already has a wealth-management business, U.S. Trust, which was acquired from Charles Schwab.

Potential buyers of First Republic include Goldman Sachs Group Inc. and Morgan Stanley, according to the Journal. Spokesmen for Goldman Sachs and Morgan Stanley each declined to comment Thursday on the report.

Shares of Bank of America rose 54 cents, or 10.5 percent to $5.70 in morning trading.

BofA's stock has been hit particularly hard as investors fear the bank may be unstable following its acquisition of Merrill Lynch, which has proved more costly than originally expected. The bank reported a $2.39 billion fourth-quarter loss, hours after ironing out a deal for a fresh multibillion-dollar lifeline needed to digest the troubled Merrill Lynch. Bank of America has received $45 billion from the government in bailout money.

In recent weeks, Bank of America's stock price has plummeted even further as rumors of nationalization circulated in Washington. It's shares tumbled to a 26-year low of $2.53 last week.

Chairman and chief executive Ken Lewis has repeatedly said the company can ride out the financial crisis and doesn't need additional government aid.