The most pressing concern is the jobs of 100 employees working for Merrill Lynch Bank USA, Utah's largest state-chartered bank with assets of $58 billion. The institution is known as an industrial bank, most of which operates within narrowly defined business niches.
The fate of the bank, headquartered in Salt Lake County, is in the hands of the Charlotte, N.C.-based Bank of America, which bought out Merrill Lynch for $50 billion in stock. Local bank officials refused comment but the new owner may opt to keep the Utah bank, which provides loans and other banking services to Merrill Lynch customers, or close it and fold operations into its own organization.
Bank of America has no branches in Utah.
The takeover also could affect the 4,502 Merrill Lynch agents licensed to do business with Utah clients. About 136 of the agents live in Utah.
"It's too early to tell if Bank of America will pick up the licensees or consolidate operations and lay off some people here," said Keith Woodwell, director of Utah Division of Securities. "It's certain, however, that part of strategy will be to consolidate some of their operations."
Utah Bankers Association President Howard Headlee said if the Merrill Lynch Bank USA is forced to close, "it would be a big impact on charitable and community organizations in our state. We're hopeful that Bank of America will see the value of retaining an industrial bank here in Utah."
Lehman Brothers also operates an industrial bank in Utah, Lehman Brothers Commercial Bank in Millcreek with assets of $6.4 billion.
"We are not included in the bankruptcy action and so far, we are not in the thick of it," said bank President Julie Boyle. "We are considered well capitalized by regulators and all of our deposits are FDIC insured."
The 158-year-old Lehman is seeking a quick sale of its broker-dealer as it disposes of assets as part of the largest bankruptcy on record. About 535 Lehman Brothers agents are licensed to do business with Utah clients. None of the agents live in Utah.
The federal Community Reinvestment Act requires banks to help meet the credit needs in communities where they operate. This includes making commercial loans to small businesses and home loans to low-and moderate-income families.
The Utah Community Reinvestment Corp., a nonprofit organization that operates a loan fund for multifamily rental properties, depends on industrial banks such as Merrill Lynch for its $86 million revolving credit line. About 75 percent of the funds are provided by industrial and limited charter banks.
"Merrill Lynch Bank USA is a significant contributor to providing access to credit to low- and moderate-income communities," said Community Reinvestment Corp. President Steve Graham. "They are the largest individual participant in our program."
Merrill Lynch has earmarked "a considerable amount of resources" for affordable housing, small-business development and venture capital funding in the Salt Lake and Ogden area, according to an audit by the Federal Deposit Insurance Corp.
The bank provided community development loans in its Utah service area totaling $80 million from 2003 to 2005 - an increase of 105 percent from a prior three-year evaluation, federal auditors said. Merrill Lynch also made community development investments not routinely provided by private investors for the same period, totaling $78 million.
Auditors gave Merrill Lynch an "outstanding" rating, citing affordable housing, small-business financing, job creation, financial literacy and other services targeting low- and moderate-income individuals.
"We have a long history of industrial banks supporting United Way," said Bryson Despain of United Way of Salt Lake, serving Salt Lake, Davis, Tooele and Summit counties. "And this certainly includes Merrill Lynch."
* Location: Salt Lake City
* Year started: 1987
* Assets: $58 billion
* Employees: 100
* Address: 1201 S. Main St., No. 200
* Parent company: Merrill Lynch & Co.
* Services: Provides loans to Merrill Lynch customers
The world's largest brokerage firm has 136 licensed agents living in Utah and another 4,366 out-of-state agents licensed to do business with Utah clients. The five state brokerage offices are located in:
* Salt Lake City, 60 E. South Temple St.
* Murray, 1100 E. 6600 South, Suite 140
* Provo, 5152 Edgewood Drive, No. 300
* Ogden, 2380 Washington Blvd., No. 110
* St. George, 720 S. River Road, No. E200
Lehman Brothers Commercial Bank
* Location: Millcreek
* Year started: 2005
* Assets: $6.4 billion
* Employees: 25
* Address: 4001 S. 700 East, Suite 410
* Parent company: Lehman Brothers Bancorp
* Services: Loans to small- and medium-sized businesses
