Shares of Mid-State Bancshares Inc. soared 24.3% Thursday after the Dutch giant Rabobank Group said it would buy the Arroyo Grande, Calif., company for $851 million in cash.
Mid-State's 41 branches would double the Rabobank's California branch network and expand its reach there from the Mexico border to just south of the San Francisco Bay Area. Rabobank is looking to triple its U.S. assets, to $15 billion over the next three to five years. The transaction is expected to be completed in the second quarter.
Bank stocks and the broad market posted mixed results after the Labor Department issued data that caused some to question whether the Federal Reserve Board is keeping inflation in check.
The American Banker index of 225 bank stocks fell 0.66%. The thrift index gained a meager 0.06%. The Standard & Poor's 500 and the Dow Jones industrial average shed 0.03%.
The Labor Department disclosed that unemployment claims rose 6% from a week earlier, to 327,000, the highest level in more than three months. The department also reported that productivity was flat in the third quarter, while wages increased almost 4%.
Shares of Doral Financial Corp. fell 5.7% Thursday, a day after the San Juan, Puerto Rico, banking company reported that Lidio Soriano had resigned as its chief financial officer. Marangal I. Domingo, who was recently hired as the chief investment officer and treasurer, was named the interim CFO.
Doral, like many other Puerto Rican banking companies, has been dealing with accounting issues tied to interest-only securities. It was forced to change the valuation of those securities and restated its earnings back to 2000.
New Century Financial Corp. shares fell 1.8% after the Irvine, Calif., nonprime lender said third-quarter profits fell 46%, to $63.5 million, as mortgage production dropped and the discount on sales of repurchased loans increased. Originations fell 5.4% from a year earlier and 2.5% from the second quarter, to $15.8 billion.
New Century also said it had agreed to buy the servicing operations of Irwin Financial Corp. for a "minimal" price. New Century said it expects to close on the purchase of the 100-employee servicing operation in Fishers, Ind., in January.
Shares of Irwin, of Columbus, Ind., fell 0.6%.
PFF Bancorp Inc. of Rancho Cucamonga, Calif., rose 2.5% after James Abbott, an analyst at Friedman, Billings, Ramsey Group Inc., upgraded them to "outperform," from "market perform."
In a note to clients, Mr. Abbott wrote that pressure on PFF's net interest margin is only a short-term problem, and that its niche in construction lending in southern California offers potential for substantial loan growth.
Other gainers included Capital Corp. of the West of Merced, Calif., which rose 3.8%; IndyMac Bancorp Inc. of Pasadena, Calif., which rose 2.7%; and Americanwest Bancorp in Spokane, which rose 2.2%.
Decliners included the Boston student loan servicing company First Marblehead Corp., which fell 4.2%; Capitol Bancorp Ltd. in Lansing, Mich., which fell 3.5%; and Bank of Granite Corp. in Granite Falls, N.C., which fell 3%.
