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 Although their first go-around with investing in banks didn't work out very well, it looks like private equity firms are finally going to fully jump into the sector. Over the past four weeks, there's been more dealmaking between distressed banks and LBO shops than in the prior six months. Florida's BankUnited Financial Corp. sold its assets to a consortium that included Blackstone Group LP (NYSE:BX) and the Carlyle Group and former North Fork Bancorp chief executive John Kanas on May 21. (The Deal Pipeline subscribers see read more here.)And on May 29, First Southern Bancorp of Boca Raton, Fla., received an investment of up to $450 million from buyout shops Fortress Investment Group LLC (NYSE:FIG), Crestview Partners LP and Lightyear Capital LLC. (The Deal Pipeline subscribers read more here.) Now Carlyle and Blackstone are reportedly allied again to lead a consortium in talks to buy Bank of America Corp.'s (NYSE:BAC) First Republic Bank, according to multiple media reports. James H. Herbert II, the chairman of First Republic, may partner with the buyout shops on the deal. The San Francisco bank could command a price of $700 million, David Hendler, an analyst with Creditsights Inc., said in a June 8 report, according to Bloomberg. The target is a lender catering to wealthy individuals that BofA gained as part of its acquisition of Merrill Lynch & Co. last year. A sale price of in the $700 million range would be a steep discount to the $1.8 billion Merrill paid for the San Francisco bank in 2007. BofA, however, can use the money as it works on repaying the $45 billion in bailout money it's received. And although BofA is selling assets to raise capital, it's not a sure bet that it will part with First Republic at a fire-sale price either. Just two weeks ago, the Federal Deposit Insurance Corp. shut down Silverton Bank instead of selling it to a private equity consortium of Carlyle, Lightyear Capital, Harvest Partners and Colony Capital, likely because of risk and valuation issues. - George White See The Deal Pipeline story on BankUnited (subscription required) See The Deal Pipeline story on First Southern (subscription required) See Bloomberg story See Dealscape post on Silverton
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