Though the new "financial holding company" structure is widely thought of as something for the Goliaths of the financial world, a surprising number of Davids are signing up.

And though many of these small banking companies may have concrete ideas about getting into new kinds of businesses, most seem to have converted basically because the Fed made it so easy.

"We wanted to keep our options open, and this seemed like a pretty painless way to do it," said Robert Yeager, chief executive officer of $125 million-asset Honor Bancorp in the Michigan town of that name. "All we did was send a one-page letter asking for the charter and telling them we were well capitalized and well managed."

Of the 144 financial holding companies approved by the Federal Reserve Board, more than two-thirds are banking companies with less than $1 billion of assets.

In a series of interviews, executives at many of these companies gave reasons similar to Mr. Yeager's.

To become a financial holding company, a banking company must merely be well capitalized under federal standards, well managed, and have "satisfactory" or better ratings under the Community Reinvestment Act.

The structure was created by the Gramm-Leach-Bliley Act as the vehicle for banks, brokers, and insurers to own one another. Financial holding companies will also be able to offer new products and services as they are developed and approved by regulators.

Though most of the small players approved have adopted a go-slow strategy, some plan to hit the ground running.

Raymond P. Davis, president and CEO Umpqua Holdings Corp. in Roseburg, Ore., said his $387 million-asset company will move quickly with acquisitions. "We're looking at everything from technology companies to real estate firms," he said.

Umpqua bought a 70-year-old local brokerage firm, Strand, Atkinson, Williams & York, in November. But Mr. Davis said he is less interested in insurance than in other areas. "I just don't know how people make money in that business," he said.

However, insurance is exactly the product that swayed other community bankers to convert.

Robert Fix, CEO of $474 million-asset First Bank Richmond in Richmond, Ind., said he is already scouting potential acquisition targets. "We're looking at a lot of little insurance companies," he said, pointing out that though First Bank is already selling insurance, the new law will allow it to underwrite policies as well.

Also looking to get into the act is John Russell Thomas, CEO of $596 million-asset Aliant Financial in Alexander City, Ala. Aliant, which already has a partnership with a local securities firm, is looking at the insurance business.

"We've been very successful with that partnership" with the securities firm, he said, "and we're looking forward to offering insurance in the near future."

Edwin Clift, president and CEO of Merrill Merchants Bank in Bangor, Maine, said his $208 million-asset bank converted to a financial holding company now just in case the easy approval process doesn't last.

"We didn't want to go through a difficult approval process, and you never know when these things might change," he said. "It was just easier to do it now than down the road. Really, there was no downside."

Kenneth H. Thomas, a Miami-based consultant, said community banks choosing financial holding company charters are sending a signal that they plan to stay independent. "If they were going to sell out, they wouldn't be doing this," he said.

First Bank's Mr. Fix agreed, saying the new law opens the door for smaller banks to become more competitive. However, banks that do not offer a wide variety of services could easily be left behind. "Eventually, we'll need to do all this stuff," he said. "The handwriting is on the wall."

Alan Kline contributed to this article.

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