Two thrifts that are viewed as takeover targets in desirable markets received "buy" recommendations from Wall Street on Thursday.
MAF Bancorp, Clarendon Hills, Ill., got the nod from Piper Jaffray Inc., Minneapolis, as "a high-quality thrift" whose franchise also makes it attractive to buyers.
Anchor Bancorp, Hewlett, N.Y., was endorsed by Salomon Brothers as a thrift in a turnaround mode. Salomon cited Anchor's recent capital-raising moves and desirable locations in New York, New Jersey, and Florida.
Banks have acquired thrifts at a record pace this summer. The banks view them as cheap alternatives to banks for either entry into or expansion in fast-growing markets.
Prices Get Boost
Speculation about which institutions may be the next targets has boosted share prices of the thrifts. MAF shares are up 48% this year, while Anchor's are ahead 63.5%.
In late trading on Thursday, MAF stock was unchanged at $32, while Anchor shares were up 62.5 cents to $15.125.
Piper Jaffrey analysts Steven R. Schroll and William H. Ryan said MAF, the parent of Mid America Federal Savings Bank, draws 46% of its deposits and even more of its mortgage originations and noninterest income from DuPage County, a suburb of Chicago.
DuPage is ranked among the fastest growing counties in the nation and also boasts among the highest per-capita incomes.
Several large thrifts in the Chicago area have been acquired in recent years. Earlier this year, ABN Amro Bank announced an agreement to buy Cragin Financial Corp., a thrift holding company.
In the quarter ended June 30, MAF reported net income before extraordinary items of 91 cents per share, a 38% increase over last year. Its nonperforming assets are a low 1.26% of assets.
The Minneapolis analysts said they did not think MAF's current price, at 8.4 times their 1994 earnings estimate of $3.60 per share, "reflects the extremely high franchise value of the company or its strategic mortgage banking operations in the DuPage area."
|Bright Future'
Anchor Bancorp has "a very bright future." said analysts Bruce Harting and Ronald Thompson of Salomon Brothers. It is well capitalized "and is among the few thrifts in the country to successfully implement an acquisition strategy."
That strategy has provided it with market shares in the suburban New Jersey market outside New York as well as in the city itself, where Anchor has big operations in Brooklyn and Queens. It focuses on serving lower-middle and middle-class customers, they noted, and in so doing faces less competition than banks serving more affluent areas.
"We believe that after 15 consecutive quarters of solid profitability, despite regulatory restraints, Anchor is well positioned to build solid earnings momentum," they said.
Moreover, Anchor is "squarely in a position to fill a vacuum" for an acquisitive bank or thrift in the Northeast. Anchor operates 43 offices in New York a 23 in New Jersey as well as several in Florida.
Regarding a positive acquisition, they noted that its current top management owns only 3% of shares outstanding "and has demonstrated it is shareholder-oriented," meaning takeover offers would get serious consideration.
Last month, Anchor raised $67.8 million in capital through a stock offering, adding enough equity to free its thrift from regulatory restraints. The new capital brought its leverage ratio above 5%, the requirement for a well-capitalized thrift.
