The merger rumor mill in the Northeast set a fire under the stock of a Queens, N.Y., thrift holding company last week.

About 803,400 shares of JSB Financial Inc. changed hands last Thursday, 19 times its average daily volume. Thursday's volume represented about 7.5% of JSB's outstanding shares.

The surge began last Wednesday, when 274,700 shares were traded. Following Thursday's peak, another 203,800 shares exchanged hands on Friday.

"All of a sudden, this thing has caught fire," said Frank J. Barkocy, senior vice president of Advest Inc. "The stock is certainly acting like something's going on."

The price of the $1.5 billion-asset company's stock rose about 15% in two days, from its close at about $27 on Tuesday, to $31.25 on Thursday. Both volume and share price have gone down this week. On Monday, trading returned to near normal levels and the price retreated to $30. The company's book value is $30.67 per share.

Chairman and chief executive Park T. Adikes declined to comment on the stock's activity.

Analysts said the trading was probably driven by merger rumors, but declined to suggest possible buyers.

JSB, the holding company for Jamaica Savings Bank, has "always been viewed as a very attractive entity in the marketplace, one that would normally be viewed as an attractive takeout candidate," Mr. Barkocy said, noting that JSB is also conservatively run, well-capitalized, and not aggressive in pursuit of loans.

Also, JSB is insured by the Bank Insurance Fund, which could make it particularly attractive to thrifts insured by the Savings Association Insurance Fund, Mr. Barkocy added. The Federal Deposit Insurance Corp. has announced plans to dramatically lower the premiums for the bank fund, while maintaining higher premiums for the thrift insurer.

Major thrift holding companies such as H.F. Ahmanson & Co. and Great Western Financial Corp. in California are seeking to escape high thrift fund premiums by chartering bank fund-insured institutions and transferring their deposits. In Pennsylvania, Sovereign Bancorp plans to move its deposits to bank fund-insured Colonial State Bank, once its acquisition of the Freehold, N.J., company is completed.

But Mr. Barkocy noted that JSB's management in the past has clearly indicated the company's intention to remain independent.

And he cautioned that "in this environment, it doesn't take more than a passing rumor to get a stock worked up for a couple of days and then, if nothing happens, have it come back to earth again."

JSB isn't the only smaller thrift with sizzling stock. Shares of 1st Bancorp jumped on news that the Vincennes, Ind., company had hired David A. Noyes & Co. to explore merger possibilities.

1st Bancorp's stock, which was trading at $25#1/8 the day before the March 7 announcement, reached $33 a share on Monday, a high for the year.

The $299 million-asset company said the reason it hired David A. Noyes was to explore its options, which include merging with another institution, making an acquisitions or maintaining its current course.

"With the SAIF versus BIF and all the other consolidation going on in the industry, we just thought for . . . our shareholders we should take a look at what's out there," said Lynn Stenftenagel, the company's treasurer. 1st Bancorp is insured by the thrift fund.

Analysts cited three Evansville, Ind., bank companies, CNB Bancshares, Old National Bancorp, and National City Bancshares, as the most likely to acquire 1st Bancorp if it ever decided to sell. All three have offices in Vincennes.

1st Bancorp, which owns First Federal Bank, First Financial Insurance Agency Inc., and First Title Co., stressed that a merger is not a sure bet.

Robert C. Ollech, an analyst with Howe Barnes Investments, Chicago, said that in similar cases, companies usually are acquired.

"It seems once somebody hires an adviser, they don't reverse their course," he said, calling 1st Bancorp "an attractive smaller-market company."

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