If there ever was a bank that didn't want to sell, it is certainly $460.6 million-asset MSB Bancorp, of Goshen, N.Y.

The latest spurned suitor is Buffalo-based First Empire State Corp., with $11.8 billion in assets and 162 offices, including 22 branches in the Hudson Valley region of New York State, where MSB does business.

Just before the New Year's weekend, First Empire sent letters to MSB's board offering to pay $26 a share in either cash or stock, or a total of $43 million, if MSB would agree to sell. In November, the 10-branch thrift holding company had rebuffed a $35 a share offer from New Jersey- based Hubco Inc. - bank stocks have generally declined since then.

Gary Paul, First Empire's chief financial officer, said his bank was trying to keep MSB from going ahead with a $32 million stock offering to finance the purchase of eight upstate New York branches at an 8% premium from First Nationwide Bank.

First Empire says the offering would dilute current MSB shareholdings by more than 50%. More to the point, "the franchise would be a good fit with our holdings in the Hudson Valley," Mr. Paul said. "We believe there is a great deal of sympathy on the part of shareholders for this offer."

But William C. Myers, MSB's chairman and chief executive, is adamant that the best road to shareholder value is independence. We're "certainly not" an entrenched management, he insisted in an interview Tuesday. "We think we can build the shareholder franchise best with the offering and the acquisition." The planned eight-branch purchase from First Nationwide, he declared, "is predicated on the rapid accretion of earnings."

The stock offering, which includes MSB common shares at $18 apiece and the thrift holding company's convertible preferred at $21.60, is scheduled to close soon. Mr. Myers said the First Nationwide acquisition will be complete "in two weeks."

While First Empire said it could save $5 million in costs from consolidations after an MSB purchase, MSB does not plan any branch closings after the First Nationwide deal.

"There's only one overlapping branch in Port Jervis, N.Y., and we haven't decided what to do with that," Mr. Myers said.

MSB does plan to sell off First Nationwide's Spring Valley branch to Provident Savings Bank for a 7.1% premium, since the thrift isn't ready to expand into Rockland County, Mr. Myers said.

For its part, First Empire said it won't be making any further moves at MSB. "We just hope they reconsider," Mr. Paul said.

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