New York Private Bank and Trust Corp., the parent company of Emigrant Savings Bank, is said to be shopping part of the thrift's branch network, 10 months after a push by Emigrant into online banking.
Observers said that in the summer an unspecified number of Emigrant's 37 branches, all of which are in the New York metropolitan area, were put up for sale, and that a fresh effort to sell the branches got under way in recent weeks.
In an interview Thursday, Howard P. Milstein, a co-chairman at the $11 billion-asset New York Private and its president and chief executive, declined to comment on the rumors but discussed at length the merits of its online bank.
The Internet "is a very cost-effective way of raising funds, but we also have our branch system," Mr. Milstein said.
EmigrantDirect, launched in January, has helped boost Emigrant's deposit inflow. Mr. Milstein said there are no plans to make Emigrant an Internet-only bank, but "We always evaluate the costs of getting deposits."
He conceded there has been some deposit runoff in Emigrant's brick-and-mortar branches. "We have been losing deposits for 20 years, but at a very slow rate," he said. Raising deposits through branches "is not a growth business for us, but it is a nice business."
The branch housed in the thrift's headquarters, in Manhattan, was the only one that had more deposits - it had a lot more, actually - on June 30 than a year earlier, according to the Federal Deposit Insurance Corp.'s latest deposit data. That's because until last month it housed deposits coming in through EmigrantDirect.
In October, however, Emigrant opened its first new branch in years, in Ossining, N.Y., specifically to house the deposits coming in through the online bank, which Mr. Milstein said has attracted nearly 160,000 customers in 50 states since its inception. He said the average account has $33,000 in deposits, compared with $13,000 for ING Bank FSB, a unit of the Dutch banking giant ING Group NV.
EmigrantDirect helped the thrift's deposit increase 52%, to $7.8 billion, at midyear compared with a year earlier. In the 12 months that ended June 30, 2004, deposits rose just 2.4%.
June 2005 data from the FDIC also showed that Emigrant's share of the New York market grew slightly, to 1%, from 0.7% a year earlier.
And the influx of deposits through EmigrantDirect has not slowed since June of this year. Mr. Milstein said Emigrant now has deposits of $9.5 billion. (He said it used the deposits to fund loans and replace slightly more expensive Federal Funds on the balance sheet.)
Observers said Emigrant has packaged the branches it wants to sell in groups, and that some of them would be especially appealing to banks that focus on the Hispanic market or want to expand into it.
The thrift has five branches in the Bronx, a predominantly Hispanic borough of New York. If branches in Hispanic neighborhoods were for sale, Popular Inc. of San Juan, Puerto Rico, would probably take a look, said Thomas J. Monaco, an analyst with Moors & Cabot Inc.
Popular opened its first mainland branch in the Bronx in 1961 and now has 32 in New York. It has expanded to other metropolitan markets but still has "a significant interest in New York," Mr. Monaco said.
On Tuesday, Popular filed an application with the Securities and Exchange Commission to offer as many as 10.5 million in new shares, and said that it plans to use the proceeds for "general corporate purposes, including the funding of future acquisitions."
Mr. Monaco said Popular could raise $210 million to $250 million with the offering. On Wednesday there were market rumors that Popular might use the proceeds to buy one of its troubled rivals in Puerto Rico. A company spokeswoman declined to discuss acquisition targets in Puerto Rico or elsewhere.
Some New York bankers said they have little interest in buying any of the Emigrant branches.
"I am not getting the sense that this is a competitive situation," one banker said. Several observers said that the price expectations are high - one investment banker said he had heard that the pricing metrics were "stratospheric."
