With the T R Financial Corp. merger finally closed, the leader of New York's Roslyn Bancorp wants to focus on raising the thrift institution's stock price.
"The best way to do that is to grow earnings," chairman and chief executive Joseph L. Mancino declared Wednesday as the $750 million deal was closed. The deal makes Roslyn the state's fourth-largest thrift, with assets of $7.7 billion.
The deal, seen by some on Wall Street as too expensive, was thrown into doubt last month when the seller asked Roslyn to raise its bid because its stock price had fallen. In the end, the transaction went through, with T R given added board representation.
Roslyn's shares closed Wednesday at $16.8125, down 18.75 cents.
Now Mr. Mancino is launching an effort to raise Roslyn's visibility among Wall Street analysts and money managers, starting with his assertion that "what was a solid performing savings bank franchise is now a much more powerful regional banking franchise."
To help garner the promised $18 million of cost savings in the merger, Roslyn said Wednesday it was dismissing 161 of T R Financial's employees, or about 40% of the seller's full-time staff. The thrift saved an additional $6 million by eliminating T R's employee stock ownership plan.
"By the second quarter we should have all the cost saves in place," Mr. Mancino claimed.
Beyond achieving cost savings on schedule, the overall goal is to hit analysts' earnings projections for Roslyn this year of $1.26 to $1.35 per share.
A big part of the game plan is to generate additional fee income. To help do so, Roslyn will begin promoting sales of mutual funds, annuities, and insurance products at 15 of T R Financial's offices.
The company also plans to expand its mortgage banking activities, which cover eight states. Mortgage originations will be $1.5 to $1.8 billion this year, an increase of $300 to $500 million from 1998 levels, Mr. Mancino said.
And Roslyn will also be on the lookout for more deals.
"We're always open for opportunities," said Michael Puorro, chief financial officer. "When you have 10% to 11% in capital remaining after the merger, it gives you the horsepower to continue to expand the franchise."
But the company will tread carefully. "You don't want to stray too far from what you do," Mr. Puorro said. "We will look at deals in the financial services arena."
The assessment came as bank stocks gave back some of their gains. Many bank stocks sold off sharply toward the end of trading after a surge during the morning.
The Standard & Poor's bank index added 1.94% and the Dow Jones industrial average shed 1.09%. The Nasdaq bank index fell 0.98% and the broad-market S&P 500 stock index fell 1.44%.
Citigroup fell 37.5 cents to $53.0625, Chase Manhattan Corp., 43.75 cents to $77.25 and J.P. Morgan was flat at $110.25
Shares of Amsouth rose $3.81.25 to $48.5625 on news that its shares would be included in the S&P 500.