Trustco Bank Corp NY lost a bid Wednesday to force rival Albank Financial Corp. to put itself up for sale.
At Albank's annual meeting Wednesday, 83% of shares were voted against a sale proposal presented by Schenectady-based Trustco.
Trustco made the proposal in December, after Albank rebuffed a buyout offer it had made. The December proposal called on Albank to seek a buyer- but not necessarily Trustco.
Albank, a $3.4 billion-asset thrift based in Albany, and $2.2 billion Trustco are the largest financial institutions based in New York State's capital region.
Trustco, a 3.9% owner of Albank, submitted its proposal when Albank stock was trading at about $32. In proxy materials distributed to Albank shareholders, Trustco characterized Albank's financial performance since its 1992 conversion to stock as "lackluster." So did a Trustco executive at the meeting Wednesday.
A sharp rise in Albank's stock, however, evidently convinced the overwhelming majority of shareholders that a sale was not necessary. Albank's stock soared to $37.88 by the time shareholders saw the proposal in April and briefly topped $39 several days ago. Following the meeting, the stock closed Wednesday at $37.25, down 13 cents.
Trustco spokesman William F. Terry declined to say after the Albank meeting whether Trustco would try again to get the thrift to sell. He said it would be difficult to justify a takeover premium much higher than Albank's current price - more than 20 times 1996 earnings. Analysts have said takeover speculation accounts for part of the premium.
Trustco and Albank executives painted starkly different pictures of Albank's performance.
Robert Cushing, Trustco's chief financial officer, said Albank's low return on equity demonstrated its inability to contain expenses or derive value from acquisitions.
Herbert G. Chorbajian, Albank's chairman and chief executive officer, pointed to rising earnings and a rising stock price. "Albank, more than ever before, is poised for future growth and profitability, which will continue to enhance shareholder value," he said.
