Its prized federal thrift charter has put Landmark Community Bank of Canajoharie, N.Y., in the middle of a bidding war between a commercial bank and a mortgage company.
Private Mortgage Services Inc.'s informal offer in November to buy the $26 million-asset thrift, a unit of Landmark Financial Corp., was refused. In February, $2.4 billion-asset Trustco Bank Corp. of Schenectady, N.Y., got an agreement to buy Landmark for $3.3 million, or $21 a share, and Private Mortgage sued to block the deal.
Private Mortgage, a Saratoga Springs, N.Y., buyer of privately held mortgages, ob-tained a temporary restraining order in April that effectively barred Landmark from discussing the Trustco deal and from calling a shareholder meeting to vote on it.
With the order in force, Private Mortgage's subsidiary, Investors and Lenders LLC, announced it had offered to buy about 65% of Landmark for $25 a share.
Landmark, which this month got the order modified, exhorted shareholders to reject Private Mortgage's bid and said the Saratoga Springs company may be unable to make good on its offer.
A statement filed by Landmark with the Securities and Exchange Commission last week said: "An acquirer such as Investors/PMSI, with no known prior experience in the areas of banking or savings and loans and which seeks to finance its acquisition of control exclusively with debt, may not receive regulatory approval in a timely manner.
The ability to obtain regulatory approval is rendered less likely given that financing is uncertain and potentially unsupportable."
Trustco, through its subsidiary Trustco Bank, has 53 branches in upstate New York. Landmark is attractive to both Trustco and Private Mortgage because of the flexibility a federal thrift charter confers, as well as the potential to expand.
Landmark is scheduled to be back in court today for a ruling on whether it may set a date for a shareholder meeting that was originally scheduled for June. Should the court rule in favor of Landmark, its shareholders could vote on Trustco's offer as early as mid-July.