MALCOM E. "BUD" COLLIER Jr. SAYS he's pleased with how things have gone since First Federal Savings Bank, Lakewood, Colo., converted to a mutual holding company structure and sold some of its stock to the public in July 1992.

He should be. The thrift's stock, which went out of the gate at $10 a share, is now trading around $37. The chief executive's $500,000 investment has turned into $1.85 million, or about nine times his last reported annual salary.

And the other officers, directors, employees, and investors who had the fortune to buy this stock when it came out have more than tripled their money as well.

"It's turned out much better than we'd hoped," said Mr. Collier.

Nothing, it seems, can stop First Federal's stock from skyrocketing. On Sept. 27, the board, citing a $21 run-up in the stock since going public, decided on a three-for-two stock split. Since then, the stock price has shot up another $6.

"That's a fairly unusual jump, to say the least," said Frank Barkocy, a managing director of Advest in New York.

According to Mr. Barkocy and Mr. Collier, the reasons for the price increase are threefold: The gusto with which the markets have embraced mutual conversions, First Federal's stellar performance, and takeover speculation in independent Colorado financial institutions. Alone, any one of these reasons would not be enough to send First Federal's stock price soaring almost 300% in 14 months.

First Federal, which had $1 billion of assets when it revamped its ownership structure, didn't do a full-fledged mutual-to-stock conversion. Instead, it sold about 30% of its stock, with the rest of the stock owned by a mutual holding company.

This allowed the company to raise capital (though it didn't really need to) and to establish a market for its equity, while management kept control and could easily ward off any unfriendly takeover attempts.

"We thought, because we didn't go the total conversion route, that the stock price wouldn't go up as fast," Mr. Collier said. "Since we kept the mutual holding company structure, there wasn't a takeover premium built into the market price."

Notwithstanding, investors appear to have put takeover premium into the stock, as it is trading at almost twice its book value and more than 13 times earnings.

Mr. Collier said that First Federal, with about $1.1 billion of assets and 23 branches, is one of only two decent-sized independent financial institutions left in Colorado, and investors think he'll get an offer he can't refuse.

"We are not for sale," Mr. Collier said. "It's just acquisition fever. We have no plans to convert totally to a stock organization."

However, on fundamentals alone, First Federal looks pretty good. First Federal is a bread-and-butter thrift, with almost 85% of its assets invested in mortgages for one- to four-family homes. Its loan originations have soared since going public, Mr. Collier said, as the strong Colorado economy prompted robust mortgage demand.

It earned $8.15 million in the first six months of this year, up from $6.25 million a year ago, with minimal loan losses. It has posted a 1.4% return on assets through June 30. Third-quarter figures are due out this week.First Federal SavingsAt a GlanceHeadquarters Lakewood, Colo.Assets $1.1 billionBranches 23ROA 1.4%CEO Malcolm E. "Bud" Collier Jr.Opening shareprice July '92 $10Closing priceOct. 7 $36.75

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