An investor group that includes Bethesda developer Albert Abramson has asked federal regulators to allow it to purchase up to 24.9 percent of CFS Financial Corp., the Fairfax holding company for Continental Federal Savings Bank.
In a filing yesterday with the Securities and Exchange Commission, the investor group said its intentions with respect to CFS stock are strictly "passive." However, industry observers said the prospective purchase could give effective control of CFS to the group, which already owns 6.5 percent of the outstanding stock.
In a letter to the Federal Home Loan Bank Board, lawyers for the group said the investors have no intention of "directly or indirectly controlling, asserting or attempting to assert a controlling influence over CFS." Representatives of the group could not be reached for comment yesterday.
Allan Plumley Jr., CFS's chief executive, acknowledged yesterday that he has met recently with Abramson, but refused to elaborate.
"He is known to the company, and his outstanding reputation is known to the company," said Plumley, who added that he believed Abramson's assurances about his intentions.
Interest in CFS stock has surged recently because investors believe it is undervalued, industry sources say. CFS, with more than $1 billion in assets, has a strong deposit base and a lower cost of funds than many of its competitors.
CFS stock rose $2.50 yesterday to close at $14.75.