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BANKING/FINANCE : Downey’s Stock Hits 12-Month High; Fourth Stock Split in 5 Years Credited

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Compiled by James S. Granelli, Times staff writer

Stock in Downey Savings & Loan is fetching its highest price of the last 12 months, and the Newport Beach thrift is hoping to generate even more interest with a 3-for-2 stock split, its fourth such split in five years.

Downey’s stock closed Thursday at $34.75 a share, 12.5 cents a share higher than Tuesday’s close on the New York Stock Exchange. The stock has been climbing steadily through much of the summer but jumped more than $4 a share since the stock split was announced last week.

Stock splits help companies generate investor interest by increasing the number of shares available for trading and lowering the stock price after the split.

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Downey’s two co-founders, Maurice L. McAlister and Gerald H. McQuarrie, control 37.8% of the S&L;’s stock and, together with remaining longtime directors, control about 45% of the stock. Once institutional investors are included, the public can dabble in only 25% to 30% of the shares, a Downey spokesman said.

The latest stock split will give shareholders of record Thursday three shares for every two they hold, increasing the total shares outstanding to more than 16.1 million. The shares will be distributed Oct. 26.

Before the first of its series of 3-for-2 splits in December, 1984, Downey had a little more than 4.7 million shares outstanding.

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