DATE: Friday, September 26, 1997            TAG: 9709260755
SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY TOM SHEAN, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:   69 lines

RUMOR OF CENIT MERGER GROWS NORFOLK-BASED BANK'S STOCK PRICE KEEPS CLIMBING HITS 52-WEEK HIGH.

The price of CENIT Bancorp Inc.'s stock continued to climb Thursday amid speculation that the banking company might be on the verge of a merger.

Shares of the Norfolk-based banking company closed at $60, after hitting a 52-week high of $62.50 earlier in the day.

The stock's $1.75 gain in active trading Thursday came after a $4 increase Wednesday.

CENIT president and chief executive Michael S. Ives said the company wasn't aware of any developments that would have prompted the runup.

Although he has received calls about rumors on occasion, that hasn't happened this week, Ives said.

``Nobody has called me with the question, `This is what I've heard. Is it true?' '' he said.

Norfolk-based CENIT has been viewed as a takeover prospect because it has a concentration of branches in one area. CENIT and Princesss Anne subsidiaries together have 19 branches in the region and slightly more than $500 million in deposits.

Stock prices in other banks and thrifts in Virginia have increased dramatically amid the rapid consolidation of financial institutions across the country.

Since June, two large North Carolina banking companies have struck deals to acquire banks in Virginia.

Laurie H. Hunsicker, an analyst with the investment banking firm Friedman, Billings, Ramsey & Co. in Arlington, attributed the recent jump in CENIT's stock price to heightened expectations of a merger.

``There have been rumors running around the Tidewater area'' about a possible acquisition, she said.

At the Richmond-based securities firm Scott & Stringfellow Inc., banking analyst Vernon Plack said he had heard speculative rumblings but nothing that would have prompted the volume of trading in recent days.

``It seems inevitable at some point that CENIT will be sold. Is there anyone down there now? I don't know,'' he said.

Mid-Atlantic Investors, a Columbia, S.C., partnership that owns slightly more than 159,000 CENIT shares, said it hasn't increased its holdings in the banking company from the 9.7 percent stake reported earlier this year.

H. Jerry Shearer, Mid-Atlantic's managing partner, said he was curious about the activity in CENIT's shares but wasn't aware of any developments that would propel the stock's price.

In a bitter proxy battle against CENIT's directors and management last spring, Shearer advocated that the company shop for an acquirer.

CENIT shareholders voted down his proposal, but the management and board won by only 7,012 shares. That was less than 1 percent of the company's outstanding shares.

For its size, CENIT has relatively few shares outstanding: 1.65 million common shares, which trade on the Nasdaq national market system. More than 30,000 of its shares changed hands Thursday.

The activity in other thrift stocks in the region was more subdued. Virginia Beach Federal Financial Corp., parent of First Coastal Bank, edged up 12.5 cents to $16.125. Two weeks ago, it hit a 52-week high of $16.875 in active trading.

Shares of Life Bancorp Inc., parent of Norfolk-based Life Savings Bank, rose 12.5 cents to $26.375.

Another Norfolk thrift holding company, Essex Bancorp Inc., retreated 25 cents a share to $4.687. Earlier this month, it soared to a 52-week high of $10.25. Trading of Essex's shares was so hectic on Sept. 11 that it was temporarily halted by the American Stock Exchange. ILLUSTRATION: Graphic

CENIT STOCK

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