Obituary: Public Finance Banker Dick Locke, 1937-2015.

LOS ANGELES — Dick Locke, founder of public finance divisions at two firms and "the ultimate bond guy" in the words of one colleague, has died. He was 78.

Locke, of San Francisco, died of cancer on Feb. 3.

Locke inherited his interest in public finance from his father, Homer Franklin Locke, who was a partner at Shields & Co.

After graduating from Bucknell University, he followed his father into the municipal bond business at Kidder Peabody in New York City.

He was later wooed away by Eastman Dillon, Union Securities to launch a public finance department. In 1970, when Eastman Dillon merged with Blyth & Co. forming Blyth, Eastman Dillon & Co., Locke was appointed director of the national public finance department. Under his direction, the department rose to No. 1 in the national municipal underwriting rankings.

"Throughout his career, Dick was well-liked and respected and never forgot what was most important — honesty, hard work and being able to hold your head up high at the end of the day, and to treat others as you would like to be treated," Stephen E. Heaney, director of public finance for Stifel, Nicolaus & Co., said in a write-up on Locke.

His success at Blythe, Eastman caught the eye of Bob Fomon, who was then chairman of E.F. Hutton & Co.

Fomon, who died in 2000, asked Locke if he could create a public finance division at E.F. Hutton. Locke accepted the offer, taking with him Scott Pierce, later named president of E.F. Hutton, and Jim Lopp, who went on to found the first municipal bond insurance company, Municipal Bond Insurance Association, in 1973.

The municipal bond market underwent a transformation from the early 1970s to the mid-1980s; once dominated by tax-backed general obligation bonds sold competitively, the period saw the introduction of revenue-supported bonds and the arrival of negotiated sales, said Dennis Ciocca, a former partner and manager of public finance for broker-dealer Sutter Securities in San Francisco.

Locke's team in New York was at the forefront of many of those changes, said Ciocca, who retired in 2013. The group has been credited with creating some of the municipal market's most well-known financing methods. Among those were variable rate demand bonds, pollution control bonds and single-family housing bonds.

The firm opened public finance offices throughout the country and trained bankers in specialized areas such as healthcare, transportation, housing and public power under Locke's leadership.

E.F. Hutton rose in the national municipal underwriting rankings to the No. 2 slot, and held that position for five years. The New York office came up with ideas for new financings and regional leaders like Ciocca, who was the head of E.F. Hutton's West Coast office in San Francisco, worked to change legislation in their states so the methods could be used.

"When I was at Hutton, we did a great deal of lobbying in Hawaii to permit special purpose revenue bonds," Ciocca said.

Prior to their work, the only bonds allowed in Hawaii were general obligation bonds and airport revenue bonds, he said.

Ciocca described Locke as the kind of boss who gave him the freedom to do his job, but would also fly out from New York to help usher in new business for the firm.

"Back then, it would be very rare to have the head of a department pitch a piece of business," he said.

E.F. Hutton was acquired by Shearson Lehman in 1988.

E.F. Hutton's public finance department grew to nearly 250 people under Locke's leadership. Nearly all of them attended an E.F. Hutton public finance department reunion in New York in 2006.

Locke, then 51, decided to retire from the public finance business after the merger, although Shearson Lehman wanted to keep him on, Ciocca said.

Locke and his wife, Pat, moved to San Francisco, where he accepted a position as the marketing director for American Capital Access Finance Guaranty Corp., a bond insurer. Soon after, he took a position as a senior vice president in the private client group at Hambrecht & Quist in San Francisco, which later merged with JP Morgan, where he advised high-net worth clients on investments. He retired in 2002 after having a heart transplant.

Even though Locke had been out of public finance for 30 years by the time he died, Ciocca said many of the people who had worked for him continued to call him for advice and to stay in touch up until his death.

No funeral or memorial service was held at Locke's request.

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