An activist shareholder group is seeking to force the sale of Connecticut's NSS Bancorp.
In a filing with the Securities and Exchange Commission last week, Basswood Partners, Paramus, N.J., nominated a slate of three directors to the company's board and proposed selling the thrift. Shareholders will have a chance to vote on Basswood's proposals at the company's annual meeting, which has not yet been scheduled but usually is in late spring.
NSS Bancorp is the parent of Norwalk Savings Society, a $668 million- asset thrift with eight branches in the New York City suburbs of southwest Connecticut. Its president, Robert T. Judson, was out of the office and could not be reached to comment.
Basswood, which owns 9.81% of NSS Bancorp, is calling for a sale despite the company's soaring stock price in recent years. The stock is up 250% from its initial offering price in June 1994, recently hitting an all-time high of $47.75 a share. In midday trading Monday, the stock was up 50 cents, at $43.75.
In a letter accompanying its proxy, Matthew Lindenbaum, general partner of Basswood, warned shareholders that the thrift's stock is unlikely to rise much further.
"We believe that NSS shareholders are in a position to take advantage of the spectacular merger activity in the banking industry," he wrote. "This is an excellent opportunity for NSS to actively explore the possibilities of achieving the sale of the company in order to maximize shareholder value."
The thrift's performance is not in line with its high stock price, he wrote. NSS Bancorp's return on assets at Dec. 31 was 0.63%, compared to the New England thrift average of 0.94%, he wrote.
"The underlying fundamentals of the company have been unacceptable," Mr. Lindenbaum wrote.
Stanley T. Wells, the Hartford, Conn.-based vice chairman of Keefe, Bruyette & Woods Inc., said the thrift's management will face "a difficult challenge" to stay independent. He noted that NSS Bancorp's stock is up 14% this year, which he attributed to the "speculative atmosphere" Basswood has created.
Basswood has nominated some big names for the thrift's board. One is Wolfgang Schoellkopf, formerly vice chairman and chief financial officer of New Jersey's First Fidelity Bancorp. Another is George R. Zoffinger, former chairman of CoreStates New Jersey National Bank. The third is Bennett Lindenbaum, a Basswood partner.
