Advest Inc. has rated Poughkeepsie (N.Y.) Savings Bank's stock a "buy" on speculation that the thrift's performance will continue to improve and that it could be an acquisition target.

Advest said the stock price, $4.125 at Monday's close, could jump to $6 a share over the next 12 month, according to a report earlier this month.

"Shares of Poughkeepsie Savings Bank in our judgment remain an attractive investment vehicle for accounts willing to speculate on the ongoing improvement in fundamentals," the report said.

'Takeover speculation ... could increase the price beyond our indicated targets," it added.

Joseph B. Tockarshewsky, chairman and president of Poughkeepsie Savings, said the bank isn't looking to sell, but he acknowledged that it could be an attractive target as it rebuilds the franchise.

"I'm not looking for offers," he said. "I am doing what my shareholders want me to do."

Under Mr. Tockarshewsky, Poughkeepsie Savings has made impressive strides cleaning up bad loans. At one point, nonperforming assets reached $107 million. At March 31, nonperforming assets were $39 million, down 40% from the same time a year ago.

Turning It Around

Earnings have also started to pick up. the $722 million-asset thrift earned $578,000, or 5 cents a share, for the first quarter, compared with a $309,000 loss, or 3 cents a share, a year earlier. The results in last year's first quarter excluded a nonrecurring gain of $4.7 million from the restructuring of the mortgage-backed securities portfolio, Advest said.

Advest expects that Poughkeepsie Savings' net interest margin will continue to improve. The margin increased to 2.78% in the first quarter, compared with 2.44% a year ago. Advest expects the margin to reach or exceed the 3% range in the second half of the year.

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