Bank of America mixed after Fed gives nod to LaSalle purchase; Piper slips after closing Fiduciary deal

By Sheri Kasprzak

New York, Sept. 14 - Bank of America Corp. grabbed headlines Friday when it announced that the Federal Reserve System gave the thumbs up to its acquisition of LaSalle Bank.

Bank of America shares were down in early afternoon trading but turned it around later in the day.

An analyst said Friday was a positive one for Bank of America because it exposes them to a new region and new customers.

A sell-side trader agreed.

"It does seem like a good move to me," said the trader at about 1 p.m. ET, when the stock was down by about 5 cents.

"The stock isn't off that much so it's hard to tell what's pushing it off but I don't think it's this. They're moving into a new region which means more customers which means more income, ultimately. That's appealing."

In investment banking news, Piper Jaffray Cos. sealed its acquisition of Fiduciary Asset Management, LLC. Shares of Piper were down after the completion of the merger was announced Friday afternoon.

Piper bought Fiduciary Asset Management in a $51.3 million cash transaction.

In other merger news, office furniture manufacturer Steelcase Inc. bought Ultra Group Holdings Ltd. for $13.28 million in cash.

Steelcase's stock was down for most of the session but rebounded by a penny by the end of the day.

BofA merger with LaSalle approved

The Board of Governors of the Federal Reserve System Friday gave the go-ahead for Bank of America to buy LaSalle Bank.

Bank of America said in a statement released Friday that it hopes to seal the deal by October.

An analyst said Friday that the move make strategic sense for Bank of America.

"It means expanding into a region they've been absent in," he noted. "I think they've managed to get a good hold on the eastern banking market and now they're heading into the Midwest market. I think it's a smart move. They've got the name recognition to make the move into that market."

Shares of the Charlotte, N.C.-based banking giant were off in early afternoon trading, losing 5 cents by 1:14 p.m. ET. The stock ended the day down up 9 cents to close at $49.95 (NYSE: BAC). The stock gained another 11 cents after hours.

LaSalle currently has 17,000 commercial banking clients, 1.4 million retail customers, 411 banking centers and 1,500 ATMs in the Chicago area, Michigan and Indiana, according to a BofA statement.

"We see a compelling opportunity to enhance and deepen relationships with LaSalle's consumer, commercial, corporate, private banking and wealth-management customers," said Bank of America's chief executive officer Kenneth D. Lewis, in a statement.

"We look forward to delivering the power of our combined franchise to existing LaSalle commercial clients in Chicago, Michigan and throughout the country," said David Darnell, president of BofA's Global Commercial Banking, in the statement.

"We also intend to compete aggressively for new commercial business in this market."

Piper buys Fiduciary Asset

Elsewhere, Piper Jaffray settled its acquisition of Fiduciary Asset Management

By 2:23 p.m. ET, Piper Jaffray's stock was down 38 cents. The stock ended the day unchanged at $48.27 (NYSE: PJC).

Piper bought the firm, which provides managed accounts, closed-end funds and other investment products, in a $51.3 million cash transaction. Fiduciary may also receive another cash payment of up to $15.1 million contingent upon new assets under management secured through Dec. 15, according to a Piper statement released Friday afternoon.

"We are very pleased to complete the acquisition of Famco, which will significantly expand our asset-management capability," said Andrew Duff, Piper's CEO, in a news release.

"Famco represents a strong and growing foundation which we expect to further extend through additional distribution capability and product offerings, and an expanded client base."

According to the Piper statement released Friday afternoon, Famco has $8.2 billion in assets under management.

Steelcase buys Ultra Group

Moving to the Steelcase acquisition, the office furniture manufacturer agreed to buy Ultra Group in a $13.28 million cash deal. The move will increase Steelcase's reach in the Asian Pacific region, the company said. The stock was down the majority of the day but rebounded late in the session.

At the end of the day, Steelcase's stock gained a penny to close at $16.89 (NYSE: SCS).

Ultra Group makes desks, storage products and other office furniture for Chinese and other Asian consumers. The company reported $38.4 million in sales for the fiscal year ended March 31.

The merger is set to close in the third quarter.

"This acquisition will not only increase our scale of operations and market share in Greater China, but will also provide broader capabilities in distribution, product portfolio and manufacturing to support the expansion plans of our customers throughout Asia," said James Hackett, Steelcase's CEO, in a statement.

"The addition of Ultra will significantly increase our presence in China, and will enhance our position as the leading furniture supplier for innovative companies across Asia. One of our corporate growth strategies is to pursue emerging markets and this addition is calculated effort to execute against that plan."

"Combining Steelcase's worldwide industry leadership and workplace knowledge with Ultra's local capabilities and relationships will dramatically improve the competitiveness and value proposition for both brands in Greater China and the Asia Pacific region," said Wendy Cho, Ultra Group's chairman, in a statement.

"We believe this strategic combination will give Ultra the ability to maintain the strong growth level achieved in recent years."

Analysts give vote of confidence to Countrywide

Moving to the troubled mortgage-lending sector, reports from several analysts that Countrywide Financial Corp. would likely survive the mortgage crisis sent shares of Countrywide up for a second-straight session.

Countrywide's stock gained 49 cents, or 2.59%, to close at $19.42 (NYSE: CFC).

On Thursday, Countrywide's stock climbed by 13.9%, or $2.31, to end at $18.93 after the mortgage lender said it secured $12 billion in funding from new and existing credit facilities.

One analyst interviewed Friday said he agrees with the reports that analysts believe Countrywide will eventually bounce back but it's going to take a lot of time and probably more lost jobs.

"They're really going to have to work to build up liquidity and I think they're going to end up cutting more jobs in the process," said analyst.

Several analysts said Friday that they expect the nation's biggest mortgage lender to recover from the recent mortgage crunch because of recent operating changes and capital infusions.

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