Seeking to join a group dominated by money-center, foreign, and superregional banks, a $5 billion-asset Oklahoma bank has applied to the Federal Reserve for section 20 powers.
Approval would make Tulsa-based BOK Financial Corp. the smallest bank holding company with a securities underwriting and dealing unit. The smallest now is $5.3 billion-asset Dauphin Deposit Corp. of Lancaster, Pa.
BOK Financial is the parent of Bank of Oklahoma, one of the largest independent banks in the state. The bank provides financial services, including depository lending, real estate and commercial loans, to commercial and industrial customers in Oklahoma, Texas, and Arkansas.
The Fed could vote on the application as early as this month, said a spokesman for the agency.
By applying for securities underwriting and dealing powers, BOK seeks to join such heavy-hitters as Chase Manhattan Corp., Citicorp, BankAmerica Corp., and J.P. Morgan & Co.
The move was likely prompted by recent revisions in the Fed's section 20 rules that removed some of the firewalls separating the subsidiaries from their bank affiliates.
Other regional and midsize banks seeking to generate fee-based income or expand their commercial and corporate banking offerings may follow BOK Financial's lead.
Dauphin's section 20 unit, Hopper Soliday & Co., has focused its efforts on regional middle-market clients and its affiliate's commercial and retail banking customers. Dauphin is currently being acquired by Allied Irish Banks PLC, which is expected to significantly increase the size of the section 20,
BOK Financial has applied for Tier I powers-authority to underwrite and deal in certain municipal revenue bonds, mortgage-related securities, commercial paper, and consumer-receivable related securities. Half of the 40 bank holding companies with section 20s also have Tier II powers, enabling them to underwrite and deal in corporate debt and equity securities.
The company has also been expanding its commercial banking activities through acquisition. Since February it has bought two small Dallas banks- $226 million-asset First National Bank of Park Cities and $142 million- asset First Texas Bank. It also owns Fayetteville-based Citizens Bank of Northwest Arkansas.
North Carolina-based Wachovia Corp. is also seen as a likely candidate to apply for section 20 powers. "That is a consideration," said a spokesman for the $47 billion-asset Winston-Salem bank.
