Trading in Roslyn Bancorp shares started at $15.50 Monday, enabling some local depositors to make a quick 55% profit as the thrift converted to public ownership amid heavy investor interest.

So many investors flooded Roslyn's phone lines that bankers there were unable to get an outside line.

The conversion, which raised $423.7 million, was the biggest since GreenPoint Financial Corp.'s $804 million offering in 1994. The heavy interest underscored the appetite of investors for equity in New York-area thrifts.

"The dollars that have flowed into conversions have been enormous," said Ben A. Plotkin, senior vice president of Ryan, Beck & Co. "Roslyn is one of the few very large conversions left, so it has attracted a lot of institutional interest."

Since Greenpoint went public, investors have learned that they could profit from investing in thrifts that convert. Shares in converted thrifts typically "pop" 20% to 30% above the offering price in their initial days of trading.

The Roslyn deal was a windfall for some who became depositors in the thrift before April 1995 and qualified for shares at $10. Roslyn serves a wealthy community on New York's Long Island, so the qualified depositors probably included both longtime customers and some opportunistic investors, people familiar with the deal said.

Roslyn's shares slipped to $14.625 before creeping back up in heavy trading Monday. By the end of the day, shares were selling again at $15.50, and 15.92 million shares had changed hands.

The Federal Deposit Insurance Corp. approved the heavily oversubscribed offering with a "nonobjection letter" late Friday, two days before a Jan. 12 deadline.

The $423.7 million offering was oversubscribed, to a total of $1.7 billion, raising "concerns regarding the reasonableness of the appraisal and the possibility of insider abuses," according to an FDIC statement.

The agency determined, however, that Roslyn's conversion "does not provide excessive benefits to the institution's management." The FDIC did limit insider subscriptions to 1.27% and the stock option plan to 10%. It also said the employee stock option plan must wait to buy 8% of the common stock at the market price after the conversion.

"The FDIC has done the right thing here," said Mark B. Cohen, vice president of the underwriter, Sandler O'Neill & Partners. "They needed to get comfortable with the level of receipt of money and understand where it was coming from."

The offering will bulk up the already well-capitalized thrift, challenging it to create shareholder value.

"Unless you provide the return for shareholders," said Mr. Plotkin of Ryan Beck, "you yourself become an acquisition target."

Three percent of the unissued shares, or 1.2 million shares, were authorized for allocation to the Roslyn Savings Foundation, a charitable organization

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