New York's North Side Savings Bank is finding itself especially popular among its aggressive neighbors lately.

About four months ago, Douglaston-based New York Bancorp bought up 7.8% of North Side stock and began lobbying management of the Floral Park thrift to consider a merger.

New York Bancorp officials said they would apply for regulatory approval to buy up to 20%. They also demanded a shareholder list so they could discuss with other shareholders "the possibility of proposing resolutions for corporate actions by North Side and/or the election of directors."

New York Bancorp has just sold about 40% of its stake to Mattituck-based North Fork Bancorp, a highly aggressive Long Island bank that bought stock in several other neighboring institutions and then pressured them to sell out.

"North Side is obviously an attractive franchise for several thrifts, and something's going to happen, one way or the other," said Salvatore DiMartino, thrift analyst for Advest Group in New York. "Eventually, given both suitors' past history, one of them's going to win out."

Thomas M. O'Brien, president and chief executive of North Side, noted that the thrift normally doesn't comment on market activity. But " I regard the substantial reduction of New York Bancorp's investment as a positive development for the bank," he said.

Under the June 26 agreement with North Fork, New York Bancorp sold 145,000 shares in a private transaction for $36.25 per share - roughly $5.3 million. New York Bancorp retains a 4.8% stake, or 232,560 shares, of North Side stock.

According to a securities filing with the Federal Deposit Insurance Corp., New York Bancorp officials felt that North Side was overvalued at its current stock price, and therefore not an attractive takeover target.

Meanwhile, they heard through brokers that North Fork officials were also seeking to get into the stock. The sale of some of its stock to North Fork meant New York Bancorp could get a nice return for shareholders, while retaining a sizable stake that could be expanded later.

"It seemed like the best of both worlds," said Michael A. McManus Jr., president and chief executive of $2.8 billion-asset New York Bancorp.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.