New York investment fund manager Harry V. Keefe said he is exploring ways to gain two seats on the 10-member board of St. Paul Bancorp in Chicago.

Mr. Keefe, who manages two hedge funds with a combined 3% of St. Paul, said he is disappointed with its earnings record and that he may take drastic action because he cannot get an appointment with its management.

"I own a million shares, and I'm not getting anywhere with these guys," said Mr. Keefe, the third-largest investor in the thrift company, which has $5.3 billion of assets.

He said St. Paul is a lackluster performer and that it should either come up with a plan to improve profitability or consider selling.

Mr. Keefe said his aim in seeking board positions is not simply to force a sale.

"I think the bank is a valuable franchise," he said. "I think it could be merged, but I think it could be making more money, too."

St. Paul earned $12.5 million in the second quarter, practically unchanged from a year earlier. Its 11.49% return on equity and 1.07% return on assets were both down from a year earlier.

St. Paul officials declined to comment.

Mr. Keefe said he hopes to meet with legal counsel this week about nominating two candidates to St. Paul's board. Two directors' slots are to come up for shareholder vote at the annual meeting in the spring.

The seats Mr. Keefe would go after are held by John W. Croghan, 67, president of the Chicago investment firm Lincoln Partners; and Kenneth J. James, 65, a Chicago real estate developer. Mr. Croghan, a St. Paul director since 1993, said he has not decided whether to run for reelection. Mr. James, a director since 1987, did not return a phone call.

Mr. Keefe said two former Midwest bankers have expressed interest in serving on the board. He declined to identify the two men-one retired and the other now an executive outside the Midwest-but he described them as "veterans of high-performing companies" and "very professional bankers."

St. Paul officials have countered criticism in the past, pointing to an average annual return to shareholders of 20% since going public 11 years ago.

Mr. Keefe said the company's share price has been inflated by takeover speculation rather than by business fundamentals.

"The stock has done well because the company has performed poorly," he said. "People bought the stock because it is a merger target."

Joseph Stieven of Stifel, Nicolaus & Co. of St. Louis said he believes Mr. Keefe is one of a number of unsatisfied investors. But the analyst said Mr. Keefe's reputation in the financial analyst and investment banking community-he is retired from Keefe, Bruyette & Woods-enhances the credibility of his arguments.

"Harry is a real heavyweight,' Mr. Stieven said.

"He might be an old bull, but our saying is, 'If you play with an old bull, you're going to catch a horn.'"

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