Bank of America to Become the Largest Manager of Private Wealth in the US
When Bank of America purchases U.S. Trust for $3.3 billion (in cash!), they will move from the second largest management firm of private wealth to the single largest in the United States, based on financial reports from private US banks on September 30, 2006. Once the banks are combined under Bank of America in March 2007, they'll be managing a total of $261 billion in assets.
U.S. Trust Corporation, a firm that has been in existence for over 153 years, has focused primarily in serving individuals and families by managing the wealth of those with extremely high net worth. They target households that have more than $2 million available to invest, and is estimated to handle about 13,600 accounts. Founded in 1853, U.S. Trust's ultimate mission was to serve as management, executor and trustee of both corporate and personal money. Currently, the firm has over 2,000 employees among 33 different locations, and about $94 billion under their management.
When The Private Bank of Bank of America purchases U.S. Trust Corporation, The Chief Executive Office of U.S. Trust, Peter K. Scaturro, will then report to the President, Bank of America Global Wealth & Investment Management, Brian Moynihan.
This is the second time U.S. Trust has been bought out. In the year 2000, Charles Schwab purchased the bank for $2.8 billion but struggled to make the business work for the firm according to an analyst from Goldman Sachs. In fact, out of each of the three business segments Schwab maintains, U.S. Trust had the worst pretax margins. Schwab is looking at an estimated pre-tax gain of $1.9 billion for the sale of U.S. Trust, and $2.5 billion in after-tax proceeds.
The sale of U.S Trust to Bank of America is seen positively, although an Equity Research analyst from Standard & Poor predicts there will be some difficulties for a short-term while the Bank of America integrates their culture with that of U.S. Trust's culture.
The Bank of America employs over 2,000 associates in 150 locations within the United States and targets households having more than $3 million available to invest. They currently have $167 billion under their management as of September 30, 2006 reports. The Foundation Center in New York indicates that The Bank of America manages more private foundations and foundation assets than any of the other banks- as well as being the nation's leading manager for the finances of farms and ranches. The Bank of America is also the largest corporate fiduciary manager of gas and oil properties.
The President of Bank of America Global Wealth and Investment Management, Brian Moynihan, discussed the acquisition of U.S. Trust and how the two firms will merge in a quote provided for the Bank of America Press Release, "With this move, we bring together two wealth management organizations with highly complementary strengths, similar business models, and a shared passion for serving the unique needs of wealthy and ultra wealthy individuals and families nationwide." He also stated, "Bank of America's wealthy clients will benefit from expanded distribution, additional wealth management instruments, increased presence in key markets, and the able and passionate leadership of Peter Scaturro."
U.S. Trust Corporation, a firm that has been in existence for over 153 years, has focused primarily in serving individuals and families by managing the wealth of those with extremely high net worth. They target households that have more than $2 million available to invest, and is estimated to handle about 13,600 accounts. Founded in 1853, U.S. Trust's ultimate mission was to serve as management, executor and trustee of both corporate and personal money. Currently, the firm has over 2,000 employees among 33 different locations, and about $94 billion under their management.
When The Private Bank of Bank of America purchases U.S. Trust Corporation, The Chief Executive Office of U.S. Trust, Peter K. Scaturro, will then report to the President, Bank of America Global Wealth & Investment Management, Brian Moynihan.
This is the second time U.S. Trust has been bought out. In the year 2000, Charles Schwab purchased the bank for $2.8 billion but struggled to make the business work for the firm according to an analyst from Goldman Sachs. In fact, out of each of the three business segments Schwab maintains, U.S. Trust had the worst pretax margins. Schwab is looking at an estimated pre-tax gain of $1.9 billion for the sale of U.S. Trust, and $2.5 billion in after-tax proceeds.
The sale of U.S Trust to Bank of America is seen positively, although an Equity Research analyst from Standard & Poor predicts there will be some difficulties for a short-term while the Bank of America integrates their culture with that of U.S. Trust's culture.
The Bank of America employs over 2,000 associates in 150 locations within the United States and targets households having more than $3 million available to invest. They currently have $167 billion under their management as of September 30, 2006 reports. The Foundation Center in New York indicates that The Bank of America manages more private foundations and foundation assets than any of the other banks- as well as being the nation's leading manager for the finances of farms and ranches. The Bank of America is also the largest corporate fiduciary manager of gas and oil properties.
The President of Bank of America Global Wealth and Investment Management, Brian Moynihan, discussed the acquisition of U.S. Trust and how the two firms will merge in a quote provided for the Bank of America Press Release, "With this move, we bring together two wealth management organizations with highly complementary strengths, similar business models, and a shared passion for serving the unique needs of wealthy and ultra wealthy individuals and families nationwide." He also stated, "Bank of America's wealthy clients will benefit from expanded distribution, additional wealth management instruments, increased presence in key markets, and the able and passionate leadership of Peter Scaturro."
