Trustco Bank Corp NY is signaling continued interest in a rival thrift that rejected its unsolicited takeover bid last year.
Without making a new offer, Trustco is asking shareholders of Albank Financial Corp. to approve a resolution directing the Albany-based company's board to look for a buyer. Acting as a shareholder owning 3.9% of Albank's stock, Trustco asked that its resolution be included with proxy material for Albank's May 21 annual meeting. The proxy statement was distributed Monday.
In a statement distributed to Albank shareholders, Schenectady-based Trustco said Albank's 9.78% return on equity was "lackluster." It says Albank shareholders would be better off with a sale of the company. It argued previously that combining the two banks would yield significant cost savings.
Trustco, with $2.2 billion in assets, is located entirely in the Albany- Schenectady-Troy area, while $3.4 billion Albank reaches into Vermont and Massachusetts.
Trustco spokesman William F. Terry declined to explain the bank's latest approach, but analysts said it appeared to be gauging support for another buyout offer.
Trustco's continued interest in Albank is not surprising, said Kevin Timmons, bank stock analyst with First Albany Corp. "They have been tenacious in the past," he said.
Trustco completed one in-market acquisition in 1990 and has since made repeated offers for other institutions. Its March 1996 bid for Albank was roundly rejected, with the thrift's chief executive officer suggesting that more than just price stood between the two companies. Herbert G. Chorbajian said at the time, "If Albank were for sale, it would not be to Trustco."
Trustco said in its proxy proposal, which was prepared last December, that a sale could yield $36 per share for Albank shareholders. However, with a jump of $2.13 on Monday, Albank shares were above that level, at $37.88.
Analysts said takeover speculation had a lot to do with the price reaching 20.5 times 1996 earnings. But Barry G. Blenis, executive vice president for operations and strategic planning, said the thrift's shareholders would be rewarded with steadily improving earnings, especially as several recent acquisitions begin to pay off.
"We're just getting this train going," he said.
Although Trustco would be going after a substantially larger bank if it made another offer, it would be for a less profitable company. Trustco earned $28.7 million last year, compared with $26.2 million for Albank.