First Security Corp. has applied to the Federal Reserve Board for limited underwriting powers.
The Salt Lake City-based bank is seeking so-called Tier 1 powers to let it underwrite and distribute municipal bonds as well as underwrite securities backed by consumer receivables and mortgage. It has established a section 20 unit, First Security Capital Markets Inc., to manage these activities.
First Security Corp., with $16.4 billion of assets, is the 45th bank holding company to establish such a division.
David Wilson, a First Security executive vice president, has been appointed president and chief executive officer of the new unit, the bank announced Monday. Mr. Wilson oversaw the bank's capital markets and treasury activities.
First Security has been providing merger and acquisition advice, private placements, bank debt, and financial advisory services to local companies since 1992.
Its core customer base is middle-market corporations with revenues from $10 million to $50 million a year.
There are many synergies, said Scott Ulberich, executive vice president and chief financial officer. "This rounds out the array of products and services for our customers."
Mr. Ulberich said he expects the capital markets unit to be up and running in the first quarter of next year. Shortly thereafter, the bank will consider applying for Tier 2 powers to underwrite corporate stocks and bonds.
The bank will also look to form partnerships with other investment banks to provide equity and debt underwriting.
"The relaxation of the firewalls was very important in giving us the opportunity to better serve our customers' financial needs," Mr. Ulberich said. "It makes much more sense for us to look at this" now.
This year the Federal Reserve relaxed some regulations governing the activities of section 20 units.
