Advest Inc. says investors should stock up on shares of four community banks and thrifts in the Middle Atlantic region that are potential takeover targets.
The Hartford, Conn.-based regional brokerage firm has given Interchange Financial Services Corp. and Astoria Financial Corp. "buy" ratings because they have strong fundamentals and could be taken over.
The firm is also recommending that investors accumulate shares of Hubco Inc., and Poughkeepsie Savings Bank because they are also strong performers and will attract suitors.
The four institutions "continue to stand out as attractive investments," according to the report on more than 100 banks and thrifts in New Jersey, New York, and Pennsylvania.
Frank J. Barkocy, Advest's managing director of the financial institutions group, is high on Interchange when comparing it with other community banks in the region.
"Their fundamentals have been very solid," he said in an interview. "Their use of marketing techniques to really know ... the needs of their customers is probably one of the strongest among smaller financial institutions."
The Saddle Brook, N.J.-based Interchange, with $475 million in assets, is "well undervalued" at 7.6 times Advest's estimate for 1996 earnings, the firm said.
New Jersey's Hubco is another company that Advest believes is selling at a discount to its peers. The firm expects that fully diluted results for the $1.4 billion-asset bank will jump to $1.85 a share this year and could reach $2.05 a share or better in 1996.
Of the group, $739 million-asset Poughkeepsie Savings has engineered a most impressive turnaround, and Advest expects continued improvement.
Poughkeepsie earned 13 cents a share in the first quarter compared with 5 cents the prior year. Advest expects the thrift to earn 65 cents a share for 1996.
Joseph B. Tockarshewsky, Poughkeepsie's president and CEO, said the company is now on the offensive. It continues to clean up bad loans, invest in technology and plans to expand by opening supermarket branches.
"We've got the engine cranked up," Mr. Tockarshewsky said."