OTS Delays Decision Due Date For First Republic Bank/ Merrill Lynch Merger

The OTS has moved its decision due date for the First Republic Bank (FRC) / Merrill Lynch (MER) merger an additional six weeks, from August 20, 2007 to October 4, 2007. This latest development indicates the companies submitted additional information on or before June 22, but the OTS determined that further information is required in the review process. The current decision due date anticipates the companies submitting the next round of information during the first week of August.

Obviously, the OTS must now be considered a significant timing consideration for this transaction. The second information request seriously compromises the Q3 closing projection, even if there is not further information required after early August. In general, the actual review period after the OTS receives all required information tends to shorten with each successive cycle. In other words, if the companies can supply the necessary documentation within the next month or so, the subsequent review period should be relatively short -- often less than four weeks.

However, this assumes that the OTS will not request more information from the companies in early August, which must be considered a distinct possibility given the pace of the review to this point.

In short, this deal now looks like it will slip into September, and perhaps October of this year due to the pending OTS review.

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