Investors focused on thrift stocks Tuesday, following an announcement Monday that First Union Corp. agreed to buy DFSoutheastern Corp. for a slight premium over book value.
With bank franchises sometimes commanding more than two times book value, investors are figuring that acquirers will try to buy thrifts instead, said John A. Heffern, an analyst with Alex. Brown & Sons.
One example was Loyola Capital Corital Corp., a $1.6 billion-asset thrift in Baltimore, which gained $2, to $20.50 - still a big discount to book value of $34.60.
Among better-known thrifts, Washington Mutual Savings Bank was up $2.375, to a 52-week high of $26.125, while Washington Federal Savings and Loan Association gained $1 to $27.25
Meanwhile, major bank stock were flat, along with the Dow Jones industrial average which slipped 1.34 to 3,174.64.