Moving from one end of the credit spectrum to the other, Merrill Lynch, New York, has agreed to acquire luxury home lender First Republic Bank, San Francisco, in a deal valued at $1.8 billion.First Republic specializes in working with high-net-worth individuals and has expertise in luxury home lending. Merrill Lynch's most recent acquisition was nonprime mortgage company First Franklin, and it was also an investor in the now-defunct OwnIt Mortgage Solutions. The 12th edition of the Mortgage Industry Directory lists First Republic as the 126th-largest lender for 2005, with total production of $2.4 billion (all through the retail channel). As of Dec. 31, 2005, it had a servicing portfolio of $7.8 billion, the MID said. In 2005, First Republic did $71 million in commercial loans (including multifamily, office, hotel, and retail properties). After the deal closes, First Republic will be operated separately as a division of Merrill Lynch Bank & Trust Co. FSB, and its current management team of Jim Herbert, president and chief executive, and Katherine August-deWilde, chief operating officer, will retain their positions. The companies can be found online at http://www.merrilllynch.com and http://www.firstrepublic.com.

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