Shares of Miami's CSF rise after Advest gives rating of 'accumulate.'

Shares of CSF Holdings Inc. advanced Wednesday after Advest Inc. initiated coverage by advising its customers to "accumulate" shares of the large Florida thrift institution.

Wall Street had not previously warmed to CSF, the parent of Miami's Citizens Federal Bank, because substantial insider ownership limits the "float" and likely price gains of its stock.

But Advest's senior banking analyst, Frank J. Barkocy, said the "current depressed level" of CSFs share price offers some "worthwhile appreciation potential."

In late trading on Wednesday, the stock was up 50 cents to $22.25. The analyst thinks it can appreciate to "a conservative 12-month price target of $26 per share."

Southeast's Largest Thrift

CSF, will assets of $4.5 billion is the largest thrift institution in the Southeast and the second-largest financial institution based in Florida, behind Barnett Banks Inc.

The company has a record of following conservative lending policies and achieving consistent profitability. Nonresidential loans, mostly obtained in previous acquisitions, account for only 1.9% of assets.

"CSF's main business is to attract deposits, invest in mortgage loans, and participate in other real-estate oriented activities," said Mr. Barkocy.

Besides Florida, the company's franchise includes branches in California, Ohio, and Virginia. CSF sold its Illinois branches during the third quarter at an after-tax profit of $12 million.

Insiders Control 62%

Inside ownership accounts for a substantial 62% of shares outstanding. The family of CSF chairman and president Charles B. Stuzin owns 43%, management owns another 10%, and employees own 9%.

With the stock's "float" restricted to the remaining 38% of the shares, CSF has attracted relatively little attention on Wall Street despite its size, franchise, and strong fundamentals.

That is because institutional investors worry about the liquidity of stocks with limited availability.

They also worry about issues of "shareholder democracy" such as lack of influence in case a lucrative acquisition offer is received.

The consequent lack of "institutional interest" has acted to keep the stock price low in relation to other thrifts.

Trading at 90% of Book

Despite a 600% price gain over the past two years, Mr. Barkocy noted, CSF still trades at only 90% of its tangible book value and a modest 5 1/2 times his 1994 earnings estimate of $3.80 per share.

By comparison, similar institutions trade at 175% of their tangible book value and nine times earnings.

On Sept. 30, CSF had tangible book value of $23.55 per share and reported book value of $24.88 per share.

Some potential investors have probably also been discouraged by CSF's policy of paying dividends in stock rather than cash. However, the stock payouts have increased its marketplace "float" over the past few years.

Since June 1992, CSF has paid a 5-for-4 stock dividend and two 3-for-2 stock dividends.

The thrift company recently had 9.4 million shares outstanding and a market capitalization of $196.6 million.

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