Magazine article American Banker

Dime in N.Y. Admits Interest in MOE as Activity Heats Up

Magazine article American Banker

Dime in N.Y. Admits Interest in MOE as Activity Heats Up

Article excerpt

Byline: Robert Barba

Intrigue grows with every deal characterized as a merger of equals.

Mergers of equals are a rarity in consolidation. The paper appeal of smashing two similarly sized institutions in the same or complementary markets is incredibly tempting. But discussions about such transactions often reveal issues in areas such as leadership and culture.

So many talks end shortly after they begin. And when they do lead to agreement, one company always ends up being a little bit more than an equal, industry observers often quip when the concept is mentioned.

Still, the latest slew of deals branded as mergers between equals have been widely praised by investors and analysts. Such enthusiasm has caught the caught the attention of other banks, including Dime Community Bancshares (DCOM) in Brooklyn, N.Y.

"It used to be everyone said there was no such thing as an MOE," says Kenneth Mahon, the $4 billion-asset company's chief financial officer.

Rockville Financial's (RCBK) planned merger with United Financial (UBNK), uniting banks in Connecticut and Massachusetts, "seems like a true MOE," Mahon says. "There are a lot of competitive pressures. So if you take the opportunity to put companies together, there are a lot of redundant costs that are scalable. That makes a merger look attractive."

Besides admitting an interest in the concept, Mahon declined to discuss Dime's specific plans. Mark Fitzgibbon, an analyst at Sandler O'Neill, noted Dime's potential interest in a merger of equals in a Monday note to clients. Fitzgibbon's note followed a recent trip with Mahon to meet with investors in the Southeast.

Flushing Financial (FFIC) in Lake Success, N.Y.; Oritani Financial (ORIT) in Township of Washington, N.J.; and Hudson Valley Holding (HVB) in Yonkers, N.Y., could be good merger partners for Dime, Fitzgibbon wrote, adding that there were "a myriad of other potential partnerships that could also work. …

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