First Republic Bank in San Francisco is planning to open as many as seven new offices on the East Coast this year and another three on West Coast as it looks to boost its market share among affluent households in the California, New York and Boston markets.
One of its chief competitors, City National Corp. in Los Angeles, also intends to grow organically, though it is also eyeing "strategic" acquisitions of banks and wealth management firms.
Both companies outlined their growth plans to investors and analysts at a conference in San Francisco Tuesday hosted by Sandler O'Neill & Partners LP.
For the $28 billion-asset First Republic, the new offices would represent its most ambitious expansion since it was spun off from Bank of America Corp. in July 2010.
Though the company, founded in 1985, retained a fair amount of autonomy when it was owned by Merrill Lynch and then B of A from 2007 to 2010, it had little authority to sign office leases until it regained its independence, James Herbert, the company's chairman and chief executive said Tuesday.
President and Chief Operating Officer Katherine August-deWilde added that First Republic has built up enough "critical mass" though hires over the last couple of years to justify opening more branches, particularly in New York and Boston, where it has just a small fraction of high-net-worth households.
Asked about acquisitions, August-deWilde said that First Republic is primarily interested growing by adding teams of wealth managers and bankers that have existing books of business rather than buying whole companies that might not fit into First Republic's culture.
The $23 billion-asset City National has acquired four failed banks in California and Nevada over the last couple of years, and its Chief Financial Officer Christopher Carey told the audience Tuesday that it remains on the lookout for acquisitions of commercial banks and wealth management firms that could accelerate its growth in its four key markets of Los Angeles, San Diego, Silicon Valley and San Francisco.
But, he added, "if we can't get acquisitions in places where we need to build our franchise, then we need to build" offices, he said.
City National, which also caters to the entertainment industry, opened six offices last year, including new locations in musical hotbeds of Nashville and Atlanta. Carey said the two new offices combined have so far attracted $50 million of deposits and $30 million of loans.
