Long Island-derided by some as the home of Joey Buttafuoco, tacky tract housing, and big hair-has become a prime banking battleground.

Dime Bancorp, GreenPoint Financial Corp., Roslyn Bancorp, and Astoria Financial Corp. - the leading thrifts in the area-and bank holding company North Fork Bancorp are squaring off in what could shape up as a dramatic wave of consolidation.

The island's Nassau and Suffolk counties and the New York City boroughs of Brooklyn and Queens have a combined population of 6.9 million-exceeding the populations of 39 states. And they are exceedingly desirable customers.

"It's one of the largest banking markets in the United States, with a very diverse population," said James Ackor, a thrift analyst with Tucker Anthony in Portland, Maine.

Brooklyn and Queens are home to new immigrants, many of whom are starting small businesses, he said. And some of the suburban sections are among the most affluent in the country.

With all of the financial institutions' chief executive officers determined to be buyers rather than sellers, the pressure is on to perform well. "Whoever blinks first will get acquired," said Kenneth Posner of Morgan Stanley Dean Witter & Co.

Cementing a deal in Long Island has not been easy recently. On Monday, Roslyn Bancorp completed its deal with T R Financial Corp. - nearly a month behind schedule.

Shares of Roslyn fell more than 10% in May after it agreed to a stock deal worth 3.8 times the book value of T R, the Garden City, L.I.-based parent of Roosevelt Savings Bank.

T R threatened to back out of the agreement unless Roslyn boosted its bid, but the $768 million deal was finally consummated Monday at the agreed-upon exchange ratio after Roslyn agreed to give T R four additional representatives on the board of directors.

Astoria closed a $1.8 billion deal Oct. 1 for Long Island Bancorp., but first had to contend with a rival bid from North Fork. Astoria was panned by some observers for the high price it paid. But the Lake Success, N.Y., thrift is apparently ready for more.

"In the acquisition world," transactions "happen when you least expect them to," Astoria CEO George Engelke said. "If you've been talking to a company for a while and they're ready to go, it is hard to say no. You only get the chance once."

Mr. Engelke dismissed the notion that Astoria, which now has $20.6 billion in assets, is still preoccupied with absorbing Long Island Bancorp and might be a target rather than a buyer.

Astoria has "one of the best integrating groups in the world," he said. "Team Astoria is ready to rock and roll. My people are ready to do another (acquisition) right now."

Team Astoria is sure to face some stiff competition from Dime, of New York City. The over $22 billion-asset thrift is "well positioned to be a consolidator, and maybe the consolidator, in the East Coast thrift market," chief executive Lawrence J. Toal said.

Dime has successfully combined local deposit business with a national mortgage operation and is planning acquisitions in both areas, Mr. Toal said.

"There is a certain inevitability" to consolidation on the East Coast, he said. "We think we're a player."

GreenPoint Financial of New York is also relying on a two-prong strategy. The $14-billon asset thrift made two big specialty finance acquisitions last year and is now lookng to beef up its local banking business, albeit conservatively.

The thrift side of New York City consumer banking consolidation "is going at a snail's pace," said Thomas Johnson, CEO of GreenPoint. "We would love to acquire or merge in that area." Doing a deal is "just a question of when the stars get into alignment," Mr. Johnson said.

But he added that the market's unkind reaction to the Astoria and Roslyn deals was "a wake-up call. You can't keep increasing what you pay for plain-vanilla businesses. We won't do that."

Consolidation on Long Island is "an inevitability," Mr. Ackor said. But in the short run, he said, there is no "glaring incentive for any of these guys to sell."

"The fear I have," Mr. Ackor said, "is these guys may wait until it is too late," and that the region will fall into a recession.

Roslyn's falling share price after the first T R announcement was "a very clear indicator that as a buyer, you have to be careful about the price that you pay," Mr. Ackor said.

T R shares rose 87.5 cents Monday, to $37.5625. Roslyn Savings fell $2.625, to $18.625

"We have a dozen buyers in New York, but no sellers," said Thomas Theurkauf, a Keefe, Bruyette & Woods analyst.

"If we continue to have lower interest rates and a flat yield curve, it will be tough for some of these smaller thrifts to show earnings growth," he said. "We may have a number of sellers this year," he said, but those who want to sell "need to come to the altar with realistic price expectations."

Hostile takeovers seem unlikely, said Mr. Theurkauf, because "if you win the battle, you could lose the war" by losing customers and employees.

Until interest rates swing, one of the thrifts falters, or an outside commercial bank makes a generous offer, the standoff may continue.

"I think each one of us has enough pride to think that we're going to be on top," Mr. Engelke said. "May the best bank win."

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