After more than six months on the auction block, Florida-based Raymond James Financial emerged as the winning bidder to acquire Morgan Keegan & Co., a Memphis-based brokerage that's a powerhouse in municipal bond underwriting.

Raymond James was competing with St. Louis-based Stifel Financial in the final days leading up to Wednesday's sale announcement, but Stifel's bid ultimately fell short.

Raymond James is paying $930 million to buy Morgan Keegan. The deal includes a $250 million dividend from Morgan Keegan to its parent company, Birmingham, Ala.-based Regions Financial, prior to the sale, resulting in proceeds totaling $1.18 billion for Regions.

The sale is expected to close within the first quarter, subject to regulatory approval, Regions said.

"We know them well and firmly believe they will be an outstanding long-term partner," Regions' president and CEO Grayson Hall said of Raymond James in an investor conference call late Wednesday afternoon. Raymond James' fixed income and public finance businesses will be based in Memphis, where Morgan Keegan currently is headquartered.

At one time, Stifel was in exclusive negotiations with Regions Financial, which put Morgan Keegan's brokerage and investment banking operations up for sale last June, according to Bloomberg News.

Regions, which bought Morgan Keegan in 2001 for $789 million, owes the U.S. Treasury $3.5 billion from participating in the Troubled Asset Relief Program, or TARP, in 2008. Regions is seeking to use the proceeds from selling Morgan Keegan to pay a portion of the TARP money it owes.

Once the exclusivity period ended with Stifel, talks between Regions and Raymond James began to intensify nearl the end of the year, Bloomberg reported.

Stifel executives have declined to comment on the firm's bid for Morgan Keegan, but Bloomberg News reported Wednesday that Stifel's most recent bid, made on Jan. 8, was $875 million in cash and stock.

Several private equity firms that also expressed interest in buying Morgan Keegan also dropped out last fall after financial conditions worsened in the wake of the European debt crisis and the collapse of the derivatives broker MF Global.

Stifel has made several sizable acquisitions in recent years to grow its geographic footprint and its adviser ranks to more than 2,000 in 318 offices, including its $300 million acquisition of Thomas Weisel Partners Group of San Francisco in 2010. Adding Morgan Keegan would have been the largest acquisition in Stifel's 122-year history.

Stifel recently acquired its headquarters building downtown St. Louis and company executives are in growth mode. In an interview in December, Ron Kruszewski, Stifel's co-chairman, chief executive and president, said Stifel remains poised for growth opportunities.

For Raymond James, which has 5,400 financial advisers located in offices around the country, the acquisition of Morgan Keegan will add 1,200 financial advisers. It also will bolster Raymond James' municipal bonds underwriting operations. This week, Thomson Reuters reported Morgan Keegan ranked ninth in the nation as leading underwriter for municipal bonds in 2011 after serving as book running manager on 488 issues with par amounts totaling $9.2 billion.

In the St. Louis area, Morgan Keegan has about 50 employees in offices located in Town and Country, East Alton and Swansea.