In an echo of the thrift consolidation storm that has hit the West Coast, shares of Long Island Bancorp remain near their historic high as money managers and analysts bet the suburban New York company will soon be bought.
The latest scuttlebutt in New York thrift circles is that Astoria Financial Corp. has backed away after its $55-a-share offer drew a counterproposal of $60, and that Dime Bancorp and Greenpoint Financial Corp., both based in New York City, are now pursuing the $5.9 billion-asset Melville, N.Y., company.
In addition, "larger national consolidators," including First Union Corp., Fleet Financial Group, and NationsBank Corp., could be enticed by "the attractive deposit franchise" that Long Island Savings Bank offers, said bond analyst Ethan M. Heisler at Salomon Smith Barney.
Long Island Bancorp holds a top-five deposit share on Long Island, through a string of 35 branches lining the railroad route that connects the suburbs to New York City.
A purchase of Long Island Savings by any of the potential suitors would, in terms of local market share, "leapfrog them into virtually a leadership position," said Kevin T. Timmons, banking analyst at First Albany Corp.
Certainly money managers are betting on the possibility of Long Island Bancorp's sale. Its shares closed on Tuesday up 25 cents, to $59.25.
The stock has hovered at about that level since last month, when word of Astoria Financial's $1.3 billion offer first emerged.
That overture followed North Fork Bank Corp.'s move to increase its ownership of Long Island Savings Bank to 9.9%. With the prospect of a run by North Fork, Long Island Savings was said to be looking for a friendlier buy, but the thrift apparently refuses to settle for the first offer.
Long Island Savings Bank told Astoria it wanted at least $60 a share, plus a premium for the anticipated favorable resolution of a goodwill case against the government, according to executives with knowledge of the discussions.
Dime and Greenpoint make no bones about being interested in acquisitions, but their executives are not giving away their hands.
"We have intentions to expand in the New York marketplace, but I cannot comment on anything specifically," said David Totaro, executive vice president at Dime.
Greenpoint chairman Thomas Johnson also has growth ideas, his lieutenants say.
"We're very interested in expanding our consumer bank in New York," said Greenpoint senior vice president Richard Humphrey.
Indeed, Greenpoint could bulk up on deposits and deposit-gathering branches to fuel its national mortgage lending programs, analysts say.
For the day, Greenpoint shares closed at $37.125, up 18.75 cents, and Dime gained $1.0625, to $31.0625. North Fork gained 18.75 cents, to $36.875, and Astoria Financial rose $1.1875, to $59.625.
Among big gainers, First Chicago NBD Corp. was up $3.1875, to $87; J.P. Morgan & Co. rose $5.125, to $135.25; and Wells Fargo & Co. climbed $7.5625, to $333.1875.
Broader bank indexes also advanced. The Standard & Poor's bank index rose 1.13% and the Dow Jones industrial average 0.36%.
The Nasdaq bank index increased 0.75% and the S&P 500 0.11%.