Banking stocks had a mixed session as deal rumors continued to drive some shares, while credit concerns depressed others.
Credit woes took a toll Tuesday afternoon on First Mariner Bancorp of Baltimore. Shares of the $1.26 billion-asset company fell late in the day to close down 2.4%.
First Mariner reported a fourth-quarter net loss of $3.98 million, or 59 cents a share, compared with net income of $2.51 million, or 37 cents a share, a year earlier. The average estimate of analysts had called for a loss of 27 cents a share, according to Thomson Financial.
The company said its quarterly results were hurt by a balance-sheet restructuring and rising credit problems in its mortgage business.
Shares of First Horizon National Corp. jumped 9.2% after an abrupt leadership change prompted some analysts and investors to speculate the Memphis banking company might be looking to sell itself.
J. Kenneth Glass, 60, relinquished the roles of chairman and chief executive. Gerald L. Baker, 63, was named to succeed him as the CEO, and an independent director, Michael D. Rose, 64, was appointed the nonexecutive chairman.
First Horizon has had a history of spotty earnings. That record, coupled with the fact that the new CEO is only 14 months shy of the company's mandatory retirement age, caused investors and some analysts to react as if the assignment were a hint that the company was in play.
However, Mr. Glass said, "We've been growing our bank well across our footprint. Mortgage companies are certainly in a tough cycle, but we have held in there with our sales force and positioned our self for the current environment."
A monthly report released Tuesday by the Conference Board showed consumer confidence remained strong this month, boosted by confidence in the jobs market, though consumers showed signs of nervousness about prospects six months out for the job market, income, and business conditions.
The board's consumer confidence index was slightly above analyst expectations.
The report was released as the Federal Open Market Committee convened a two-day session. Most analysts say the committee will leave interest rates unchanged.
The American Banker index of 225 banking stocks gained 1.13% Tuesday. The index of top 50 banks rose 0.62%. The Standard & Poor's 500 rose 0.58%, and the Dow Jones industrial average gained 0.26%.
Independent Bank Corp. of Ionia, Mich., fell 7%. The company reported that fourth-quarter net income fell 91% from a year earlier, to $1 million. Earnings per share fell 43 cents, to 4 cents. Full-year earnings per share fell 47 cents, to $1.45. Independent said it expects to report full-year earnings of $1.70 to $1.82 a share, well below the average analyst expectation of $1.94.
People's Bank of Bridgeport, Conn., jumped more than 7% but closed up only 0.9%. The $10.7 billion-asset company said it will issue more shares to reflect a higher estimated value for the holding company it plans to create through a second-step conversion this quarter.
An independent appraiser increased by 7% the value of the planned holding company, People's said. The holding company, People's United Financial Inc., is estimated to be worth $4.79 billion to $6.47 billion and could be valued at $7.43 billion.
People's Bank plans to sell 137.1 million to 185.4 million shares, priced at $20 each, in an offering this quarter.
First Bancorp of Troy, N.C., jumped 7.8%. Eric P. Credle, First's chief financial officer, said in an interview Tuesday afternoon that there was no news, and that he could not explain the stock jump. He also said that an institutional investor may have made a large block trade. A trader confirmed that a large institution made an order during the day. The stock's trading volume Tuesday was 962% the average.
A similarly named company, First BanCorp. of San Juan, Puerto Rico, also gained ground after a report Monday that it might be about to sell itself to Bank of Nova Scotia. Its shares gained 5.1% Tuesday after rising 9.3% Monday.