Banks stocks had a quiet session Wednesday.
The American Banker index of the top 225 remained flat, while the top 50 banks rose just 0.01%.
The Dow Jones industrial index slipped 0.14%, to 11,400.28, after reaching a six-year high Tuesday. The S&P 500 fell 0.41%, to 1307.85.
MB Financial Inc. of Chicago, which fell 1.4% Tuesday, was among the top gainers after being upgraded. It shares rose 3%.
On Tuesday the $6 billion-asset MB announced it was buying First Oak Brook Bancshares Inc. of Illinois for $372 million. Shares of the $2.3 billion-asset Oak Brook rose 2.5% Wednesday after jumping 32% Tuesday.
Kevin K. Reevey, an analyst at Ryan Beck & Co., raised his rating on MB to "outperform" from "market perform" Wednesday. Brad Milsaps of Sandler O'Neill & Partners LP upgraded it to "buy" from "hold" on Wednesday. Mr. Milsaps also upgraded First Oak Brook to "buy" from "sell."
Mr. Reevey wrote in a note that Tuesday's selloff of MB Financial's stock was "overdone" and that the Oak Brook deal offers MB "many benefits," including "access to lower-cost core deposits to fund loan growth and the ability to enhance its position among the top 15 players in the attractive Chicago market."
Mr. Milsaps wrote that he was "encouraged" by the deal and that he had been "waiting for an opportunity to re-enter" shares of MB Financial. Tuesday's price weakness "provides an attractive point for value-conscious investors to begin buying the stock," his note said.
Hancock Holding Corp. of Gulfport, Miss., rose 2.3%. On Monday at the Gulf South Bank conference in Atlanta the $4.4 billion-asset company had given investors an update on its recovery from Hurricane Katrina. Gary Tenner, an analyst at SunTrust Robinson Humphrey, said Wednesday that the stock "has had a nice run the last couple of days."
Mr. Tenner said the stock moved because Hancock does not host quarterly earnings conference calls and was able to reach a wider audience by presenting at the Atlanta conference.
In its report on its first-quarter results, Hancock said deposits rose 40% between Aug. 29 – the day the hurricane hit – and March 31.
Doral Financial Corp. of San Juan, Puerto Rico, fell 1.3%. At one point Wednesday its shares were down almost 7%.
Doral finally announced some 2005 results, but only for the first three quarters. And it said in an SEC filing that its fourth-quarter earnings would be "substantially lower" than the $40.9 million it reported for the third quarter.
The $19.2 billion-asset Doral has been mired in accounting problems since changing its accounting for interest-only strips last year.
Allied Capital Corp., a Washington private equity firm, fell 2.8%. The firm reported that first-quarter earnings fell 16.7%, to $99.6 million, or 70 cents a share.
The $4.1 billion-asset Allied said it had a "net unrealized depreciation" of $374.5 million or $2.64 a share. Quarterly profits, it said, can vary substantially "due to changes in unrealized appreciation or depreciation and the recognition of realized gains or losses."
