With 1-cent closing costs on mortgage refinancings and home equity loans, Charter One Financial Inc. has zoomed to the top of the list of residential lenders in Buffalo since acquiring RCSB Financial Inc. in Rochester, N.Y., last October.

That kind of aggressive bidding for business will make it a strong contender throughout the territory it picks up in buying Albank Financial Corp., said Joseph Ryan, a broker and adviser to community banks with Brighton Securities Corp. in Rochester.

As expected, Cleveland-based Charter One announced Monday that it would buy Albank, in Albany, N.Y., for about $1 billion in stock. The deal would give Charter One a fourth-place share of the deposit market in Albany, with about $1.1 billion of deposits, and a foothold in markets from Utica, N.Y., to the northern fringes of New York City's suburbs, Rutland, Vt., and Springfield, Mass.

The deal would add $4.1 billion of assets to Charter One's $19.8 billion-asset base. And it would add Charter One to a list of banking companies with operations across upstate New York that includes KeyCorp, Fleet Financial Corp., Marine Midland Banks Inc., and M&T Bank Corp. of Buffalo, which acquired Syracuse-based Onbancorp in March.

Charter One appears to be taking a distinctly different tack than M&T, Mr. Ryan said.

While M&T boasts of local decision-making in each of its markets, former RCSB customers in Rochester and Buffalo have seen a dramatic shift in service from their local offices to Ohio, Mr. Ryan said. Still, he said, centralizing account processing, mortgage servicing, and other aspects of retail relationships may not be any threat to business.

"I'm not as convinced today as I was six months ago" that customers value local service above price and other factors, he said. For example, he said, Charter One is approving home equity loans and mortgage applications in just two weeks.

With overhead costs totaling just 44% of revenue, the Cleveland thrift company can afford to be aggressive on closing costs and other pricing.

Charter One is paying 2.58 times Albank book value. Charter One chairman and chief executive Charles J. "Bud" Koch said in a presentation to analysts Monday that annual cost savings of between $20 million and $24 million would pay for the deal. At the same time, he said, increased retail fee revenue and redeploying excess liquidity and capital would produce $14 million to $24 million in revenue, contributing to earnings growth.

Without saying additional acquisitions were in the works, Mr. Koch said he intended to move to the sidelines by late this year to avoid complicating any mergers of operations with year-2000 issues.

Like M&T's takeover of Onbancorp, the Charter One deal will put increased pressure on Trustco Bank Corp. N Y in Schenectady, N.Y., to make a deal, said Donald J. Kauth, an analyst with BT Alex. Brown & Sons.

Trustco, which sought to buy Albank two years ago, is the largest independent bank remaining in upstate New York. But with $2.3 billion of assets, it has neither the personalized touch of a community bank nor the rich product offering of a superregional, Mr. Kauth said.

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