For this first time since the financial crisis, a brokerage has agreed to buy a depository.

Given the rocky results of past couplings, rival brokerages and observers will be closely watching Sterne Agee & Leach's acquisition of an unidentified bank.

"I get why they're doing it," said Dan Bass, a managing director at FBR Capital Markets & Co., citing the potential for new revenue and deposits. "But they have a ton of bank clients who may be turned off because Sterne would be not only a provider [of services to banks] but also a competitor."

The exact rationale for the transaction is unclear. When Sterne Agee, in Birmingham, Ala., announced the deal two weeks ago, all it said about the target was that it is a community bank outside Alabama. The securities firm, which has said it plans to convert to a bank holding company, did not return calls.

Combining a nonbank and a bank may prove difficult, especially in the new regulatory environment. Sterne Agee has separately pursued an acquisition of SWS Group Inc., a Dallas thrift company, which spurned the brokerage's offer — in part, SWS said, because it believes "it is highly unlikely that Sterne Agee could obtain the necessary regulatory approvals."

Brokerage firms must "venture very carefully into the banking business so as not to upset the regulators," said Jim Gardner, the chairman of Commerce Street Capital LLC. Applying for BHC status is "a difficult situation to be in. … The Federal Reserve is not easy to get along with when it comes to people trying to get into the banking business."

One benefit of taking over a bank would be a new revenue stream from earning assets.

"Brokers love to have banking in their system," said Chip MacDonald, a partner at the law firm Jones Day in Atlanta. "That way they can hold their depositors' money" — rather than have it sit in money market funds — "and, while it's floating, pay a return. But they can also use those deposits to make loans" at the bank.

Before the crisis, many brokerage firms became bank holding companies and acquired depositories so they could expand in a specific area, such as trust services.

For example, Shay Financial Services Inc. in Miami started in the early 1980s and immediately expanded its trust services in 1981 by acquiring First Financial Trust Co., now the $80 million-asset First Financial Bank and Trust Co. in Louisiana. Shay has since used First Financial to acquire the failed Texas Country Bank in Lakeway in January. Another brokerage, Raymond James & Associates Inc. has also acquired a bank to expand in trust services. Other brokerages took over banks so they could offer mortgages or Small Business Administration loans.

The most ambitious goal of these unions is to cross-sell banking products to brokerage customers and vice versa, but such efforts have had mixed results.

Many banks that bought brokerages in the 1990s often sold them back to management or failed to integrate them fully.

Most of the larger companies that started out as broker-dealers have branched out into banking. The last company with a brokerage base to buy a whole bank was TD Ameritrade Holding Corp., which bought Fiserve Trust Co. in 2007. Also that year, Merrill Lynch & Co. bought First Republic Bank in San Francisco. First Republic regained its independence last year in a management-led buyout from Bank of America Corp., which had acquired Merrill in 2009.

Aside from the $10.7 billion-asset First Republic, most of the banks that have been bought by investment-focused firms for the past decade had less than $4 billion in assets. This is likely because most brokerage firms would rather use the charter to broaden a particular service than take on a wide array of products and loans that they are unfamiliar with.

"The smaller the institution is, the better, because the brokerage firm is just trying to get a charter," Bass said. "They don't have to pay a higher price for a larger institution. They get a charter and they can expand it out" as needed, without inheriting a lot of problem loans.

Gardner said that what Sterne intends to do with its banking platform will be key to its success. Correspondent banking would be a wise choice, he said.

"It's fairly easy to integrate corespondent bank business because there is a short supply," he said. "So far, no one is really trying to do correspondent banking on a large-scale, constructive basis."

SWS Group, which owns a struggling thrift — Southwest Securities FSB — said May 3 that its board unanimously rejected Sterne Agee's latest bid because it was "highly conditional and opportunistic" as well as "speculative, illusory and subject to numerous contingencies and uncertainties."

On Thursday, SWS Group's shareholders approved a $100 million infusion that involves issuing warrants to Hilltop Holdings and Oak Capital Partners. About $80 million of the funds will recapitalize the $1.4 billion-asset Southwest, which has a cease-and-desist order from regulators.

SWS "went from the devil that they didn't know to the devil that they did know," Gardner said. "If Sterne took them over, they would be eliminating duplicate overhead and that means maybe your job."