Updated from 2:20 p.m. EDT

Financial stocks generally tracked higher than the mixed broader market indices Monday, and one of the biggest winners was small-cap Lakeland Financial ( LKFN - Get Report), which reported an increase in second-quarter earnings.

The Indiana bank posted earnings of $5.3 million, or 42 cents a share, vs. $4.8 million, or 39 cents a share, in the prior-year period. The stock closed $1.42, or 7.1%, higher at $21.49.

Also tracking higher on positive earnings results was Carolina Bank Holdings ( CLBH), which reported a jump in second-quarter earnings late Friday. The North Carolina-based bank posted earnings of $837,000, or 25 cents a share, up from $678,000 or 20 cents a share, a year ago. Shares was up 25 cents, or 2%, at $12.60.

Feeling a downdraft from quarterly results, however, was another North Carolina bank -- Peoples Bancorp of North Carolina ( PEBK - Get Report), which saw a drop in earnings per share. The parent company of Peoples Bank posted earnings of $2.6 million, or 44 cents a share, as compared to $2.7 million, or 46 cents a share, in the prior-year period. The stock was 4.8% lower at $18.81.

Mercer Insurance Group , which had surged 8.6% Friday, gave backmost of that gain Monday. On Friday, Loeb Partners had filed a 13D with the Securities and Exchange Commission in which the activist investment fund disclosed it had acquired more than 5% of the small-cap New Jersey-based insurance company. In that filing, Loeb called for the sale or complete liquidation of Mercer, but Loeb filed an amended 13D, stating that inclusion of this language was "inadvertent" and was "not the intent of Loeb and its affiliates." The stock gave back $1.57, or 7.3%, to $20.02 Monday.

Analyst downgrades pushed a few sector names lower. Aetna ( AET) closed down 1.8% at $50.01 after AG Edwards lowered its rating to hold from buy. Likewise, First Cash Financial Services ( FCFS - Get Report) closed 4.2% lower at $22.29 after Roth Capital downgraded the stock to hold from buy.

Finally, Mission West Properties over the weekend announced it's in talks to go private in a $1.8 billion deal. The Silicon Valley real estate investment trust said it's negotiating with a "leading real estate private equity fund" to acquire all of Mission West's outstanding common stock for $13.55 per share in cash. The stock closed down 20 cents, or 1.5%, at $13.49.

The KBW Bank Index was down 0.09, or 0.1% at 114.96, while the NYSE Financial Sector Index was 16.23, or 0.2%, lower at 9792.90.