Acquisition speculation has swept the stock price of a South Carolina thrift to record highs despite the company's assertion that it wants to remain independent.
The stock of Palfed Inc. closed Tuesday at $11 per share, up 38% from $8 per share in the first week of June, when the latest surge began.
The Aiken-based holding company for Palmetto Federal Savings Bank of South Carolina, which has $668 million in assets, raised $20 million in a rights offering last October at $5.50 a share.
On Saturday, The State newspaper in Columbia said Palfed's 52% gain since January 1 made it the second best performing South Carolina stock this year.
The top performer was RHNB Corp., which gained 52% on last month's news that it would sell its Rock Hill National Bank to NationsBank Corp. for $50 million.
More than 285,000 Palfed shares traded hands last Wednesday, about 10 times normal volume.
"It's pretty obvious there is a major buyer," said Atlanta-based analyst Kathryn Bissette of Sterne, Agee & Leach, the investment banking firm that handled Palfed's rights offering last fall.
John C. Troutman, Palfed's president and CEO, declined Tuesday to speculate on the reasons for the unusual activity in his company's stock. But Mr. Troutman did reaffirm Palfed's desire to remain independent.
"We're not seeking to be acquired at all," he said.
The interest in Palfed stock is understandable given the feverish pace of acquisitions in South Carolina. During the last few years, the state's major banks and thrifts have gradually been sold to out-of-state acquirers, usually for very attractive premiums.
Just last month, Rock Hill National went to North Carolina-based NationsBank for 2.4 times book value. BB&T Financial Corp., another North Carolina bank, recently completed its acquisition of Lexington-based L.S.B. Bancshares Inc. for $124 million, or 2.25 times book.
Hot in South Carolina
"In the minds of investors, acquisitions are hot in South Carolina right now," said John W. Coffey, an analyst with Robinson-Humphrey Inc. in Atlanta.,
This investor speculation can only intensify now that South Carolina has voted to open itself to reciprocal national interstate banking. Currently, bank acquirers can only come from 12 southeastern states with which South Carolina has reciprocal banking agreements, an arrangement known as the "southeast compact."
But the South Carolina legislature voted on June 2 to allow entry by out-of-region bank acquirers beginning on July 1, 1996. A national interstate banking bill, considered likely to pass Congress this summer, would advance that date by one year.