SAN FRANCISCO - JPMorgan is hiring again.
The firm added 20 people to its public finance department in the past three months - half new hires and half moved from other positions within the firm - and plans to add another half-dozen bankers in the next three months to deal with a surge in new business that has followed the municipal bond market's recovery this year.
"We are absolutely in investment mode," managing director Jeffrey Bosland, head of the muni group, said in an interview. "Our firm is in a position of strength and we're doing all we can to help issuers."
While the numbers are not huge, JPMorgan's recent hires are significant because they mark a turn in a job market that has been dominated by stories of layoffs for over a year. While smaller regional firms have been snapping up some of the talent cut loose by big national banks, JPMorgan is the first Wall Street bank to say it is actively growing its muni business again.
JPMorgan was cutting public finance staff as recently as the end of last year, when the worst effects of the financial crisis were being felt in the muni market. The firm's muni group is growing again both because the municipal market is recovering and because its parent bank, JPMorgan Chase & Co., the second-biggest U.S. bank by assets, has come through the financial crisis as the strongest of the big money-center banks.
The Treasury Department earlier this month gave JPMorgan Chase permission to repay its $25 billion of Troubled Asset Relief Program funding after seeing the results of the Federal Reserve's stress tests for the 19 biggest U.S. banks. The other three U.S. banks with more than $1 trillion in assets - Bank of America, Citigroup, and Wells Fargo & Co. - remain in the program.
Its relative strength is allowing JPMorgan, which bought Bears, Stearns & Co. when it collapsed last March, to take advantage of hiring opportunities and to grab new business.
The bank has hired four public finance employees in California over the last two months, including an investment banker, an associate, an analyst, and an administrative support staffer, said managing director Steven Dworkin, head of the bank's West Coast operation.
Andy Nakahata, formerly of Goldman, Sachs & Co., is the most senior of the California hires. The investment banker will be an executive director and will focus on higher education and general government business.
"Our market share has grown dramatically over the past nine months, and we have added staff to deal with the increased volume," said Dworkin, who came over to JPMorgan from Bear Stearns. He is seeing an increase growth in business from California and city and county governments, as well as transportation, airport, water and sewer, and public power issuers.
The firm is serving as senior manager on three big California deals that will come to market in the next few weeks from the San Diego Public Facilities Financing Authority, the Port of Los Angeles, and Sacramento International Airport.
"I think we will continue to see a large volume of issuance both in the long-term fixed-rate market as well as in the fixed-rate note market," Dworkin said. "With the credit markets beginning to open, we should see the floating-rate market coming back over the next several months."
Bosland said he is adding staff across the county, not just in California.
"We are positioning ourselves to be in the top three" among municipal bond underwriters in the U.S., up from sixth or seventh historically, he said.
The firm is in second place in the league tables for competitive deals thus far this year, and it is in third place as senior manager of negotiated offerings, according to data from Thomson Reuters.
Bosland has an offer out to an investment banker in the Southeastern U.S. and is pursuing a candidate in the Southwest region. The firm recently hired an associate in Boston.
In New York, JPMorgan hired three credit analysts, a credit originator and a high-yield sales manager. It hired Keith Almstrom, formerly at Barclays Capital, as a high-yield salesman, Ellen Gordon, formerly of Financial Guaranty Insurance Co., as a high-yield credit analyst, Elizabeth Veasey, formerly of Banc of America Securities, as higher education analyst, Mohit Ichhpuniani, formerly of Matlin Patterson Capital, as a high-yield analyst, and David Bayer, formerly of WestLB AG, as a credit originator.
The bank is also flexing its balance sheet. Last month, it loaned New Jersey $2 billion through a private placement that helped the state manage a cash-flow shortfall that hit before its usual note offering. JPMorgan has another allocated $10 billion for such loans this year.
"That's an example of us coming up with a capital markets solution and using our balance sheet simultaneously to meet the needs of the issuer," Bosland said. "To a very large extent, we feel a very real social responsibility as a firm. Our firm is in a position of strength and we're doing all we can to help issuers."