Raymond James Financial Inc. is closing in on approval of a charter switch that it hopes will let it make more loans.

The St. Petersburg, Fla., company was lost in the shuffle last year as other applications by investment and insurance companies to become bank holding companies took priority. Many of those companies were seeking access to the Troubled Asset Relief Program and other federal assistance, but Raymond James said its application, made the previous spring, was meant to obtain more lending flexibility.

Chief Financial Officer Jeff Julien said the company wants to convert its thrift — Raymond James Bank FSB — to a national bank and shift the unit's loan mix toward commercial credits. Raymond James Financial would become a bank holding company.

As a thrift, Raymond James is limited in the amount of real estate and commercial and industrial loans it can originate. "With a bank charter we can go in any direction," he said. "There aren't those kinds of limitations."

Analysts said it is unusual to see a financial services company, especially one in Florida, talking about increased lending, but Julien said Raymond James has good national reach for lending.

"We have survived the financial crisis, and that is saying something," he said. "Right now, regulators are glad to be looking at someone that doesn't have brackets around their bottom line. We think lending is a risk that can be controlled and managed despite the fact we are dealing with some of the worst times we have ever seen. If we can get through this, we can get through anything."

The banking unit's loan-loss provision increased 33% in the third quarter, to $39.7 million, from the previous quarter. Raymond James had hoped to change charters by September 2008, Julien said, but "then the world came to an end" as the financial crisis exploded. "By the time December rolled around, a lot of people thought we were jumping on the bandwagon because everyone that was in financial straits was applying for banking holding status," he said. "Truth is, this was just supposed to be the next step in our growth."

Julien said the Office of the Comptroller of the Currency has evaluated the company and the Federal Reserve has completed its inspection. He said he expects to find out within 30 days if the conversion will be approved.

Geoffrey Bobroff of Bobroff Consulting in East Greenwich, R.I., said wealth management should remain the priority at Raymond James but, considering the number of Florida banks that have failed in the past year, it may see an opportunity "that we just aren't seeing."

Furthermore, if Congress were to reimpose limits on joint ownership of commercial and investment banking entities, "there may be some grandfathering that is honored," he said. "Some companies are going to look to get in under the wire."

Chet Helck, Raymond James' chief operating officer, said it has been developing its long-term strategy for several years. It has held a thrift charter since 1994, he said, and originally chose to become a thrift so it could sweep assets into deposit accounts for investment clients. The company remains committed to wealth management, he said, but is also interested in becoming a more well-rounded financial services company, which means enhancing its lending capabilities. "It is not our objective to become predominantly a bank," he said. "We really don't want our bank to become too much larger in proportion to the rest of our business. … We don't want banking to become too dominant a part of what we do, but we think there are good synergies."

The banking unit has grown faster than the rest of the company in the last five years, Julien said. Raymond James Bank contributes 35% of the parent company's revenues, he said, and "we don't want it to become too much bigger than that."

"We want to be viewed as a Goldman Sachs that owns a bank rather than a Bank of America that owns a securities company," he said.

Raymond James Bank CEO and President Steven Raney said during the parent company's quarterly earnings' call that, as part of the conversion process, regulators recently spent two weeks with the company but that Raymond James does not know what the team recommended. "Having a bank gives us diversification," Helck said. "It helps to offset the cyclical nature of the asset management business."

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