Financial Holding Company (FHC)

When you think of companies that "do finance" for a living, you probably think of banks...companies that take in deposits and loan out money. However, a wide variety of other financial services exist, things like securities underwriting, securities dealing, and merchant banking.

Most banks...just want to be a bank. These companies organize as bank holding companies. That structure encompasses more than 80% of U.S. commercial banks.

However, some banks want to provide some of the other financial services. So they organize as financial holding companies. By doing so, they are allowed to do those other financial activities (underwriting, etc.), as well as their regular banking.