Kemper Securities Inc. has issued "strong buy" recommendations on two Illinois thrifts following the high-premium acquisition of Chicago's Cragin Financial Corp. announced earlier this week.

In response to the recommendations, the shares of MAF Bancorp in the Chicago suburb of Clarendon Hills surged $1.75 to $29.75, while those of Chicago's St. Paul Bancorp lost 37.5 cents to $27 in late trading.

MAF shares have risen about 12% since ABN Amro Holding agreed to buy Cragin on Tuesday. St. Paul's stock is up about 6% in the period.

Sees Appetite for Thrifts

"I had planned to put "buys" on all three of them, but Cragin has already been taken," said Thomas J. Maier, who joined Kemper as an analyst two weeks ago from the Chicago Co.

Cragin, with assets of $2.8 billion, is selling out to the Dutch company for $540 million. That is about 1.6 times its book value, regarded as a healthy premium for a thrift.

Mr. Maier thinks the deal underscores a strong appetite by banks for such transactions.

|Acceleration of Activity'

"After a comparative lull in merger activity in the Midwest since the first quarter of 1992, we may be seeing another acceleration of activity," he said. "More significantly, it appears new pricing levels may be emerging in acquisitions of thrifts."

St. Paul, with assets of $3.8 billion and 48 offices around Chicago -- 14 of them in supermarkets -- is Illinois' largest independent thrift.

The thrift strengthened its position in the fast-growing western suburban area earlier this year by acquiring Elm Financial Services Inc., Elmhurst. Mr. Maier said St. Paul's branch network is "the most attractive independent retail banking franchise in the Chicago metropolitan area."

California Realty a Worry

The analyst attached a "highrisk" label to his rating, however, because of St. Paul's exposure to California real estate. Its loan portfolio includes a $1.1 billion portfolio of "nationwide" multifamily real estate loans, of which $700 million are in California. While saying that reserves are adequate, he added that he is awaiting "more life" in California's economy.

Mr. Maier set a 12-month price target of $35 for St. Paul. In an acquisition, he "would expect a takeover price in the vicinity of $40 to $44 per share."

Mortgage Banking a Strength

MAF Bancorp, he said, has an attractive 13-branch franchise centered in rapidly developing DuPage County. It has $1.5 billion of assets.

The thrift has developed a sizable mortgage banking operation. Each year, it sells half its new loans into the secondary market, receiving gains on the sales while creating a valuable loan servicing portfolio.

"Any number of larger financial institutions with an expressed desire to enter or expand their presence in the metropolitan Chicago retail market would consider MAF a very worthwhile merger partner," Mr. Maier said.

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