Bank of America Closes Acquisition of Chicago-Based LaSalle Bank Corp.

CHICAGO — Charlotte, N.C.-based Bank of America Corp. yesterday closed on its $21 billion acquisition of Chicago-based LaSalle Bank Corp. although the bulk of 4,000 layoffs are not expected to begin until early next year. The purchase of LaSalle from ABN Amro Holding NV significantly expands Bank of America’s presence in the Chicago area and Michigan. “LaSalle customers and commercial clients can now enjoy the benefits of the largest retail bank in the nation,” Kenneth D. Lewis, Bank of America’s chief executive officer, said in a statement.The bank also announced yesterday a $70 billion funding goal for community development in Illinois and a $25 billion goal in Michigan in addition to $17 million in philanthropic giving in both states. Community groups and elected officials had expressed concerns over whether Bank of America would maintain LaSalle’s generous charitable and community lending practices once the merger was completed.LaSalle’s chairman Norman Bobins will become chairman emeritus and assist in the blending of the two firms until his planned retirement at the end of the year. LaSalle president Robert Moore will work on the transition and then leave the company. Bank of America previously announced it expects to layoff about 2,500 employees in Illinois and 1,500 in Michigan, beginning early next year. The fate of LaSalle’s small municipal team of about 30 bankers, sales, trading, underwriting, and analyst professionals remains uncertain. Several market participants said yesterday that employees received little information regarding their fate from Bank of America senior public finance officials who were in Chicago yesterday.Many market participants have speculated that Bank of America would seek to fold some LaSalle Financial Service Inc. bankers into its public finance business at Banc of America Securities LLC while they believe Bank of America would likely shut down LaSalle’s trading desk. Bank of America officials have said no such business decisions have been made.LaSalle has about six bankers in Chicago led by Steven Eaddy. The municipal group’s longtime manager is Mike Smale. Banc of America has a similar number of bankers here. LaSalle had two bankers in Michigan, Catherine Vaughan and Glenn Watson, although Vaughan last week joined Stifel, Nicolaus & Co. Banc of America does not have public finance bankers in Michigan. LaSalle’s municipal bond practice was ranked 23d last year among underwriters nationally, while Banc of America was ranked ninth, according to Thomson Financial.Vaughan, a managing director, is a 23-year veteran of public finance and Stifel’s first public finance banker in the Detroit area. She joined LaSalle in late 2004 after working as a private consultant. She previously worked for McDonald Investments Inc.ABN announced the LaSalle transaction in April as part of a larger $85 billion transaction that called for ABN to be acquired by British-based Barclays PLC. A consortium led by the Royal Bank of Scotland has since emerged as a suitor for ABN. A legal battle ensued over the LaSalle side transaction as ABN shareholders challenged the legality of the transaction without their approval, but the Dutch courts cleared the transaction.