CHICAGO - With ambitious growth in mind, Memphis-based Duncan-WilliamsInc. has hired a team of former Popular Securities Inc. municipal professionals, led by former U.S. capital markets manager Alan Murphy and banking manager Maria Saldana,to expand its New York City office and establish a presence in Chicago.

Murphy, based in New York City, and Saldana, based in Chicago, along with a handful of other public finance professionals from Popular joined Duncan-Williams last month following Popular Inc.'s closure of its North American broker-dealer subsidiary in late December. The new hires include New York-based public finance banker Frank Vasquezandanalyst Tom Civitano and a several sales professionals.

The group joins an existing municipal staff that includes six bankers, an analyst and three municipal traders located in the Memphis headquarters, New York City and a Richland, Miss., office.

The new staffers represent one piece of firm president Duncan Williams' goal to grow revenues to $500 million over the next decade to coincide with the firm's 50th anniversary. The firm also continues to look for potential mergers, especially among firms facing financial difficulties with annual revenue between $3 million and $10 million.

"As spreads continue to go down and compliance costs, technology costs, clearing costs and general overhead continue to rise, many firms are finding it next to impossible to stay profitable," Williams said. "It is time to put a group of forward-thinking firms together and form a major player in the years to come."

Duncan-Williams ranked 78th last year as a senior manager nationally with 36 issues worth $233 million compared to 86th a year earlier, according to Thomson Financial. In the small issue market, the firm ranked 45th last year and 48th in 2006. In the Southeast, the firm ranked 32nd last year with 35 issues totaling $149 million, compared to a ranking of 28th a year earlier.

Popular shut down municipal operations in the states as part of a restructuring in which it shed its riskier businesses and is refocusing on its core commercial banking operations amid steep credit losses from exposure to the subprime mortgage market and securities. The company reported a $297.1 million loss for the fourth quarter as it struggled with bad loans in its overall $33 billion portfolio.

Several former members of the municipal group said the move late last year did not come as a total surprise as news spread of the mounting subprime losses. The bank had about a month earlier begun to pull back on its trading positions, a signal to the municipal desks that the bank had grown risk adverse, sources said.

Just a few years ago, Popular too was a growing firm seeking to establish public finance offices in tandem with the footprint of the commercial bank - Banco Popular - which is well-established in major markets like Florida, New York, California, Chicago and Texas.

The Puerto Rico-based firm set up shop stateside in 2004. Murphy helped establish the firm's presence in the states. He headed up the U.S. capital markets group and managed the sales and trading teams in New York City. He previously had worked as a senior vice president at Wachovia Securities.

Saldana joined Popular in 2005 as head of U.S. banking group from Samuel A. Ramirez & Co. She made the jump to banking in 2001 from law where she had worked at the former Chicago law firm Altheimer & Gray. She also worked in Chicago's corporation counsel's office for eight years.

The group had sought to remain together, according to one source. While Duncan-Williams is an unknown name in the Chicago market, Saldana is a veteran with strong local relationships.

Because Williams' mother is the majority owner, the firm is qualified as a woman-owned firm which will also help open doors in urban markets like Chicago where issuers seek to meet minimum thresholds for minority and women-owned participation on bond deals. Because Banco Popular pulled out of its North American business, the banking team also can immediately pursue business with existing clients, a source noted.

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