For now, Warwick (N.Y.) Community Bancorp's unsolicited offer to buy a nearby thrift is friendly; after July 9, it could turn hostile.

GSB Financial Corp., a $179 million-asset thrift company in Goshen, N.Y., has been protected by law from hostile takeover bids since going public in 1997. The three-year moratorium expires July 9.

"Our objective is to do an amicable deal like we've offered to do in the past," Warwick president and chief operating officer Ronald J. Gentile said. If a friendly deal cannot be reached, however, "we may have no choice but to go forward with a tender offer."

In a recent filing with the Securities and Exchange Commission, $625 million-asset Warwick said it would pay $18 per share - and maybe more - if GSB agreed to a friendly merger.

GSB was trading at $11 the day before the offer was made. Its stock price since has shot up, and was trading at $15.25 midday Tuesday.

GSB said it has hired the Boston investment banking firm Tucker Anthony Cleary Gull to evaluate Warwick's bid. GSB, which held its annual shareholder's meeting last week, said it wants to analyze its options and does not have a specified deadline to complete that research.

"We're treating this very seriously," said Stephen Dederick, GSB's chief financial officer. "We don't want to rush this."

GSB, which has rejected past overtures from Warwick, said the offer implies that the larger thrift seriously wants GSB to consider a deal - or else.

Warwick and GSB - both of which are based in Orange County, on the New Jersey border - said that since late 1998 they have held frequent merger talks. Warwick, which owns 8.4% of GSB's outstanding stock, says it could improve the smaller thrift's interest rate spread of 2.64% and lend its 15 years of experience to help GSB build its commercial lending business.

Warwick also says it could better manage GSB, which is run by Mr. Dederick and two vice presidents without a president or CEO in a day-to-day management role.

However, GSB said it broke off discussions in part because Warwick's efficiency ratio of 76.7% is too high. GSB improved its own ratio to 58.1% by December 1999, from 72.0% a year earlier.

"We've built a very capable organization that can deliver financial services at a reasonable cost, be a contributor to the community, and add a lot of value to our shareholders," said Thomas V. Guarino, GSB's chairman. "We didn't expect to have an offer come this early."

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