Magazine article American Banker

Legg Mason Buying Broker Catering to Small Banks

Magazine article American Banker

Legg Mason Buying Broker Catering to Small Banks

Article excerpt

Reaching out to banks in the Midwest, securities firm Legg Mason Inc. has signed an agreement to acquire the assets of a small company that helps community banks run their brokerages.

The Baltimore-based firm plans to buy Equity Brokerage Services, Omaha, which has 10 bank clients in 12 states. Terms of the deal, which is expected to close in October, were not disclosed.

Spurred by unsolicited calls for help from Midwestern banks, the company sought an acquisition there, said John Houston, president of BFP Financial Partners Inc., a Legg Mason subsidiary that supplies brokers to 20 banks.

Mr. Houston said the company wanted a third-party marketer that was willing to sell out to Legg Mason but remain on board to manage the banking relationships. Equity's president, Ted Lange, would join BFP as a senior vice president, overseeing the company's new Midwestern division, he said.

"What we we're looking to do was find someone highly experienced in the business," said Mr. Houston. "The best way to do that was via acquisition."

Mr. Houston acknowledged that managing bank brokerages is not a major business line for Legg Mason. But, as evidenced by the Equity Brokerage deal, the firm does plan to build a formidable effort, albeit slowly.

"Legg Mason didn't form this business to know every bank brokerage, but to have a profitable little division," he said.

The Equity Brokerage acquisition would boost BFP's client roster to 30, fanning it out to Nebraska, Iowa, and Kansas. …

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