Temple-Inland to Buy California Financial

Temple-Inland Inc., a Texas-based paper manufacturer that owns Guaranty Federal Bank, agreed to buy California Financial Holding Co. for $150 million in stock and cash. Temple-Inland wanted to gain deposits and assets in California because its adjustable-rate residential mortgages are linked to the California cost of funds index, spokesman Doyle Simons said. Diboll, Texas-based Temple-Inland offered the equivalent of $30 a share in stock and cash for Stockton-based California Financial, which operates 23 branches as Stockton Savings Bank and has $1.3 billion in assets. California Financial shares fell 25 cents to close at $28.75 on Nasdaq. Temple-Inland shares rose 37.5 cents to close at $54.375 on the NYSE.