Raymond James Financial Inc. is climbing the ranks of municipal bond underwriters as big banks pulled out of the business.

The St. Petersburg, Florida-based company has jumped to seventh place so far this year, its highest position in at least a decade. That was while it was on a hiring spree, adding nearly 60 people to its public finance department over three years.

After the exit of Citigroup Inc. and UBS Group AG from the muni market, Raymond James, Janney Montgomery Scott and other shops have pooled talent to gain market share. Most of the hiring came as sales contracted after a period of aggressive interest rate hikes, a bet that the market would eventually rebound.

So far there is. Municipal borrowers have issued about $320 billion in long-term debt so far this year, a 37% increase from the same period a year ago, according to data compiled by Bloomberg.

“We believe it's important to have bankers on the ground in the markets you want to be in,” Gavin Murray, the company's head of public finance, said in an interview. Raymond James has staff in half of the US states.

Such an investment does not come without risk. Muni sales may ebb and flow — and an issuance boom could quickly peter out next year, leaving firms flush with bankers and little work. Fees for underwriting services have also continued to fall, making munis a less attractive business and forcing firms to consolidate or exit the market altogether.

Despite its growth, Raymond James manages $17.6 billion in long-term debt sales to states and local governments, according to data compiled by Bloomberg. That's less than half of what the biggest insurer, Bank of America Corp., does.

However, Raymond James trails only two firms in the number of transactions managed this year. It replaced Citigroup as the winner in a mega deal earlier this year from Jefferson County, Alabama — a transaction that was coveted by rivals.

After Citigroup closed its municipal division, Raymond James hired about a dozen people from the unit. Among them was Jay Wheatley, who ran the bank's national syndicate office, as well as Ben Selberg, who now leads public power, energy and renewables at Raymond James.

Selberg brought in a major client – Main Street Natural Gas Inc. – a non-profit organization in Georgia that helps facilitate agreements with utilities that purchase natural gas. In June, Raymond James served as senior manager on a $714 million bond deal by the nonprofit.

Susan Reeves, chief executive of Main Street Natural Gas, said the bank brought new investors to the bond deal. The entity, a frequent issuer in the muni market, plans to work with Raymond James on future bond offerings, she said.

“They seem like they've really made a strong commitment to public finances,” Reeves said.