UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

|(Mark One)                                  |                                                                                         
|------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                           | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934    
|For the fiscal year ended December 31, 2003
|OR                                         
|o                                           | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 001-14320

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GreenPoint Financial Corp.(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of incorporation
or organization)           |  | 06-1379001(IRS employer identification number)
|-------------------------------------------------------------------------------- |  | ----------------------------------------------
|90 Park Avenue, New York, New York 10016(Address of principal executive offices)
|Registrant's telephone number, including area code:(212) 834-1000               

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Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registeredNone

None


Securities registered pursuant to Section 12(g) of the Act:

Title of each classCommon Stock $0.01 par value


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Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. ýYesoNo

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. ý

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Act). ýYesoNo

As of June 30, 2003, the aggregate market value of the Common Stock held by non-affiliates of the registrant was $4,690,205,904.

The
number of shares of the registrant's Common Stock issued and outstanding as of February 27, 2004 was 131,720,086 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement for the Annual Meeting of Shareholders to be held on April 30, 2004 are incorporated herein by
referencePart III.



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TABLE OF CONTENTS

|                                               |  |                                                                                                                         |  | Page
No.
|---------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------- |  | --------
|Forward-Looking Statements                     |  |                                                                                                                        
|                                               |  | PART I                                                                                                                  |  |         
|ITEM 1.                                        |  | Business                                                                                                                |  | 3       
|ITEM 2.                                        |  | Properties                                                                                                              |  | 23      
|ITEM 3.                                        |  | Legal Proceedings                                                                                                       |  | 24      
|ITEM 4.                                        |  | Submission of Matters to a Vote of Security Holders                                                                     |  | 24      
|                                               |  | PART II                                                                                                                 |  |         
|ITEM 5.                                        |  | Market for Registrant's Common Equity and Related Stockholder Matters                                                   |  | 24      
|ITEM 6.                                        |  | Selected Financial Data                                                                                                 |  | 25      
|ITEM 7.                                        |  | Management's Discussion and Analysis of Financial Condition and Results of Operation                                    |  | 27      
|ITEM 7A.                                       |  | Quantitative and Qualitative Disclosures About Market Risk                                                              |  | 57      
|ITEM 8.                                        |  | Financial Statements and Supplementary Data                                                                             |  | 60      
|ITEM 9.                                        |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                                    |  | 60      
|ITEM 9A.                                       |  | Controls and Procedures                                                                                                 |  | 60      
|                                               |  | PART III                                                                                                                |  |         
|ITEM 10.                                       |  | Directors and Executive Officers of the Registrant                                                                      |  | 60      
|ITEM 11.                                       |  | Executive Compensation                                                                                                  |  | 62      
|ITEM 12.                                       |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                          |  | 62      
|ITEM 13.                                       |  | Certain Relationships and Related Transactions                                                                          |  | 63      
|ITEM 14.                                       |  | Principal Accounting Fees and Services                                                                                  |  | 63      
|                                               |  | PART IV                                                                                                                 |  |         
|ITEM 15.                                       |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                                                        |  | 64      
|Signatures                                     |  | 68                                                                                                                     
|Index to the Consolidated Financial Statements |  | 70                                                                                                                     
|Exhibit 2.4                                    |  | Agreement and Plan of Merger between North Fork Bancorporation, Inc. and GreenPoint Financial Corp.                    |  |         
|Exhibit 3.4                                    |  | Bylaws of GreenPoint Bank                                                                                              |  |         
|Exhibit 12.1                                   |  | Ratios of Earnings to Fixed ChargesContinuing Operations                                                              |  |         
|Exhibit 21.1                                   |  | Subsidiary Activities                                                                                                  |  |         
|Exhibit 23.1                                   |  | Consent of Independent Auditors                                                                                        |  |         
|Exhibit 31.1                                   |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                |  |         
|Exhibit 31.2                                   |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                |  |         
|Exhibit 32.1                                   |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  |         
|Exhibit 32.2                                   |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  |         

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains certain forward-looking statements, which are based on management's current expectations. These
forward-looking statements include information concerning possible or assumed future results of operations, trends, financial results and business plans, including those relating to earnings growth;
revenue growth; origination volume in the Company's mortgage business; interest and non-interest income levels; fees from product sales; credit performance on loans made by the Company;
tangible capital generation; margins on sales or securitizations of loans; market share; expense levels; results from new business initiatives in both the retail banking and mortgage businesses; and
other business operations and strategies. For these statements, GreenPoint claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995 to the extent provided by applicable law. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results
to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to: risks and uncertainties related to acquisitions, divestitures and terminating
business segments, including related integration and restructuring activities; prevailing economic conditions; changes in interest rates, loan demand, real estate values, and competition, which can
materially affect origination levels, interest and non-interest income levels, gain on sale results in the Company's mortgage business and other aspects of our financial performance; the
level of defaults, losses and prepayments on loans made by the Company, whether held in portfolio, sold in the whole loan secondary markets or securitized, which can materially affect
charge-off levels, required loan loss and representation and warranty reserve levels, and the Company's periodic valuation of its retained interests from securitizations; changes in
accounting principles, policies, and guidelines; adverse changes or conditions in capital or financial markets, which can adversely affect the ability of the Company to sell or securitize loan
originations on a timely basis or at prices which are acceptable to the Company, as well as other aspects of our financial performance; actions by rating agencies and the affects of these actions on
the Company's businesses, operations and funding requirements; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues, whether of general applicability or
specific to the Company and its subsidiaries; other economic, competitive, governmental, regulatory, and technological factors affecting the Company's operations, pricing, products and services; and
the risk factors or other uncertainties described from time to time in the Company's filings with the Securities and Exchange Commission, including the Risk Factors section included in this Annual
Report on Form 10-K on page 9. The forward-looking statements are made as of the date of this report, and the Company assumes no obligation to update the forward-looking statements
or to update the reasons why actual results could differ from those projected in the forward-looking statements.

The
Company regularly explores opportunities for acquisitions of and holds discussions with financial institutions and related businesses, and also regularly explores opportunities for
acquisitions of liabilities and assets of financial institutions and other financial service providers. The Company routinely
analyzes its lines of business and from time to time may increase, decrease or terminate one or more activities.

PART I

ITEM 1. BUSINESS

General

Business Activities

This business description should be read in conjunction with the Risk Factors described on page 9. GreenPoint Financial Corp. (the "Corporation", "Company" or
"GreenPoint") is a bank holding company organized under the laws of the state of Delaware and registered under the Bank Holding Company Act of 1956, as amended.

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The
Company, a $23 billion asset bank holding company, is among the most profitable of the 50 largest banking companies in the country. GreenPoint manages two primary
businessesa national mortgage business and a New York retail bank. GreenPoint Mortgage ("GPM"), headquartered in Novato, California, originates a wide variety of exclusively "A" quality
loans. This includes agency qualifying loans and Jumbo A loans, and GreenPoint's specialty Alternative A mortgages. The retail bank is a New York State chartered savings bank and is the second largest
thrift
depository in the Greater New York area with $12 billion in deposits in 90 branches serving more than 450,000 households.

Through
the Bank and GPM, the Company is primarily engaged in lending throughout the nation. GPM originates both adjustable and fixed rate mortgage loans, primarily through a network of
mortgage brokers, mortgage bankers, attorneys and other real estate professionals and, to a lesser extent, from customers and members of the local communities in GreenPoint's lending area. The Bank
continues to attract retail deposits from the general public and invests those deposits, together with funds generated from operations, in loans and marketable securities. The Bank's revenues are
derived principally from interest on its loan portfolio and investment securities, proceeds from the sales or securitizations of mortgage loans, fees from the servicing of these loans and retail
banking fees and commissions earned. The Bank's primary sources of funds are deposits, proceeds from loan sales and securitizations, and proceeds from principal and interest payments on loans,
mortgage-backed securities, other securities and debt.

In
December 2001, GreenPoint formally adopted a Plan to discontinue the manufactured housing lending business. The Plan of discontinuation included the decision to cease accepting
loan applications and to fund only loans pertaining to existing loan commitments at the time the Plan was adopted. The Company will continue to honor its contractual commitments to service its loan
portfolio. A restructuring accrual has been established to account for current and future contractual commitments outstanding, however this accrual may need to be adjusted in the future if events
change significantly.

GreenPoint
Community Development Corp. ("GPCDC") was organized in 1993 as a for-profit community development subsidiary of the Company. Complementing the Bank's leadership in
lending in low- and moderate-income areas and to minorities, GPCDC's focus is primarily on special lending programs, development opportunities and assistance, consulting and other
activities that promote the objective of greater access to affordable housing for low-and moderate-income persons residing in the areas served by the Company.

Agreement and Plan of Merger

On February 16, 2004, an Agreement and Plan of Merger dated February 15, 2004 by and between North Fork Bancorporation, Inc. ("North Fork")
and GreenPoint was announced. The agreement provides that North Fork will acquire GreenPoint in an all stock transaction. Under the terms of the agreement, in a tax-free exchange of
shares, GreenPoint shareholders will receive a fixed exchange ratio of 1.0514 shares of North Fork common stock for each GreenPoint share held upon consummation of the acquisition.

The
agreement has been approved unanimously by the Boards of Directors of both companies and is subject to all required regulatory approvals, approval by shareholders of both companies
and other customary conditions. The agreement establishes a reciprocal termination fee of $250 million and is expected to be completed in the fourth quarter of 2004.

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Mortgage Banking Activities

Products and Services

The Company, through its mortgage banking subsidiary GreenPoint Mortgage Funding, Inc. ("GPM") is in the business of originating, selling, securitizing,
and servicing mortgage loans secured primarily by onetofour family residences. Also, certain loans originated by GPM are retained in the Bank's loan portfolio. As a specialty
mortgage lender, GPM's strategy is to focus on specialized mortgage loan products for primarily high credit quality borrowers. GPM generally places an emphasis on credit scores obtained from three
major credit bureaus to evaluate the credit quality of borrowers. GPM considers "high credit quality borrowers" to be those whose credit scores equal or exceed levels required for the sale or exchange
of their mortgage loans through the Federal National Mortgage Association ("Fannie Mae") or the Federal Home Loan Mortgage Corporation ("Freddie Mac") (collectively "the Agencies"). The specialized
mortgage loans targeted by GPM provide a relatively greater "spread" (i.e., greater interest and other income to the originator relative to the cost associated with funding and selling the mortgage
loans) compared to other mortgage loans that present a similar credit risk. GPM believes that its wholesale lending channel, supported by its correspondent and retail lending channels, provides an
efficient and responsive origination system for the types of mortgage loans it seeks to originate.

GPM
presently offers a broad range of mortgage loan products in order to provide maximum flexibility to borrowers and third party mortgage brokers and other entities through which it
originates mortgage loans. These products include conforming agency mortgage loans, non-conforming mortgage loans (including AltA mortgage loans), home equity loans and
limited documentation ("No Doc") loans. Alt A loans may fail to satisfy certain elements of the agency underwriting criteria, such as those relating to documentation, employment history, income
verification, loantovalue ratios, qualifying ratios, or other compensating factors. No Doc loans serve a particular niche of borrowers willing to pay a premium in the form of
higher interest rates and provide larger down payments. In return, the borrower receives more expedient loan processing by virtue of providing less income and asset information, as compared to loans
underwritten in conformance with Agency standards.

Credit Parameters

Loan amount limits, maximum loan-to-value ratios and loan pricing are guided by an evaluation of a borrower's credit history and the loan
purpose. This evaluation results in a borrower being classified in a particular loan level category, to which lending parameters have been ascribed by GPM. In making this determination, GPM obtains
credit verification from three independent credit bureaus prior to entering into a loan commitment. Factors considered in making the commitment include the number and length of time credit lines have
been outstanding, prior mortgage loan payment histories, performance on installment loans and revolving lines of credit, collection and charge-off experience, and prior bankruptcies and
foreclosures. GPM also considers a credit score ascribed to the borrower under a credit evaluation methodology developed by Fair, Isaac and Company ("FICO"). This score indicates, based on their
statistical analysis, the percentage of borrowers that would be expected to become 90 days delinquent on an additional loan.

Mortgage Loan Servicing

GPM also engages in mortgage loan servicing, which includes the processing of mortgage loan payments and the administration of mortgage loans. GPM's primary
source of servicing rights consists of a significant portion of the Bank's loan portfolio and mortgage loans it has originated and sold, and for which it has retained the right to service. As of
December 31, 2003, GPM's mortgage loan servicing portfolio consisted of mortgage loans with an aggregate principal balance of $31.9 billion, including $12.1 billion serviced for
GreenPoint and $19.8 billion serviced for other investors. GPM can realize the

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value
embedded in its mortgage loan servicing portfolio immediately by selling its mortgage loan servicing rights or, alternatively, it can realize the value gradually over the life of the mortgage
loan servicing portfolio through the receipt of monthly mortgage loan servicing fees and imputed interest.

Retail Banking Activities

The Retail Branch Network ("Branch Network") consists of 90 full-service banking offices with 146 automated teller machines. The Branch Network
operates 34 branches in Long Island, 52 branches in New York City, and 4 branches in Westchester County in New York. In addition to its branch system, the Bank's deposit gathering network includes its
telephone banking system. The Branch Network offers a variety of financial services to meet the needs of the communities it serves. Among the services offered are traditional time, savings and
checking accounts, annuity products, mutual funds, mortgages, home equity loans, credit and debit cards, on-line banking, life insurance,
safe deposit services, student loans, installment loans and automatic payroll and Social Security deposit programs. The Bank also offers a variety of financial services to meet the needs of business
communities it serves. Services included are business checking, savings, time, escrow management, IOLA and lease security accounts, Keogh, SEP-IRA, simple IRA, 401k and 403b plans, credit
and debit cards, night deposit, on-line banking, merchant credit/debit processing and business credit products.

Manufactured Housing Loan Servicing Activities

GreenPoint Credit, LLC ("GPC") services manufactured housing loans on behalf of other entities and its own portfolio. At December 31, 2003, GPC serviced
approximately 312,600 manufactured housing loans with an outstanding principal balance of $9.7 billion.

GPC
servicing responsibilities include collecting principal and interest payments, taxes, insurance premiums and other payments from obligors and, when such loans are not owned by GPC,
remitting principal and interest payments to the owners. Collection procedures are managed in a centralized call center. GPC will enter into workout agreements with obligors under certain defaulted
loans, if deemed advisable. Although decisions as to whether to repossess any manufactured home are made on an individual basis, GPC's general policy is to institute repossession procedures promptly
after determining that it is unlikely that a defaulted loan will be brought current. Remarketing and resale functions are managed at the regional office level, where resale efforts are diligently
pursued upon repossession of manufactured homes.

Securities Investment Activities

The Board of Directors sets the securities investment policies of the Company and the Bank. These policies contain guidelines and limits regarding the credit
quality, liquidity and market risk of the securities portfolios.

The
Company's investment policy permits investments in various types of marketable investments including U.S. Treasury obligations, securities of various federal agencies,
mortgage-backed securities, asset-backed securities, corporate debt securities, money market instruments, CD's, Bank notes, preferred stock, commercial paper, municipal obligations, and equity. In
addition, the Company, as a member of the Federal Home Loan Bank of New York ("FHLB"), is required to maintain a specified investment in the capital stock of the FHLB.

The
Company's money market investments consist of interest-bearing deposits in other banks, federal funds sold and securities purchased under agreements to resell ("reverse repurchase
agreements"). The reverse repurchase agreements are collateralized by securities having market values of at least 102% of the amount of the funds advanced which are held by a third party custodian.

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The
Company designates securities as held to maturity, available for sale, or held for trading purposes. Securities held for indefinite periods of time for use in asset/liability
management are classified as available for sale and are carried at fair value with unrealized gains or losses excluded from earnings and reported in accumulated other comprehensive income as a
separate component of stockholders' equity, net of tax. Securities held for trading purposes are carried at fair value with market revaluations recognized as gains and losses included in
non-interest income.

The
Company has, through a third party agent bank/custodian, a securities lending program whereby the Company receives a fee for lending its U.S. government and federal agency securities
to securities dealers. The securities are collateralized by other U.S. government and federal agency securities having a market value of at least 102% of the loaned securities which are held by the
third party bank/custodian. Pursuant to this program, the third party agent bank indemnifies the Company for losses related to borrower defaults, market risk and delivery failures.

Sources of Funds

General.The bank's primary sources of funds are deposits, Federal Funds purchased and Overnight FHLB Advances, FHLB Term
Advances, loan sales and securitizations, payments on loans, mortgage backed and other debt securities, maturities and redemptions of investment securities, and borrowings under repurchase agreements.
Additionally, the Company has supplemented its funding sources through the prior acquisition of investment grade credit ratings from three credit rating agencies. Obtaining investment grade credit
ratings has afforded the Company the ability to access the investment grade debt markets. Refer to page 40 for additional information and discussion about the Company's Liquidity Risk Management.

Deposits.The Bank offers a variety of deposit accounts having a range of interest rates and terms. The Bank's deposits
consist of various types of savings, N.O.W., non-interest bearing checking, money market and certificates of deposit. The flow of deposits is influenced by general economic conditions,
changes in prevailing interest rates and competition. The Bank's deposits are obtained primarily from the areas served by its Branch Network. Management determines the Bank's deposit rates based upon
market conditions and local competition. The Bank relies primarily on
competitive rates of interest, offering promotional rates, marketing and long-standing relationships with customers to attract and retain deposits. The Bank does not actively solicit
certificates of deposit accounts in excess of $100,000.

Federal Funds purchased and Overnight FHLB Advances.At December 31, 2003, the outstanding balance of Federal Funds
purchased was $1.1 billion. Interest expense related to purchased Federal Funds totaled $6 million for the year ended December 2003. Federal Funds are unsecured lines of credit
from other financial institutions. At December 31, 2003, the Bank had no overnight FHLB advances. Interest expense related to these overnight FHLB borrowings totaled $12 million for the
year ended December 31, 2003. These advances are collateralized by certain one-to four-family residential mortgage loans pledged under a blanket lien to the FHLB.

FHLB Term Advances.At December 31, 2003 and 2002, the outstanding balance of FHLB term advances was
$2.8 billion and $2.9 billion respectively. Interest expense related to these borrowings totaled $115 million and $119 million for the years ended December 31, 2003
and 2002. These advances are collateralized by certain one-to four-family residential mortgage loans pledged under a blanket lien to the FHLB. At December 31, 2003,
$1.7 billion of the $2.8 billion FHLB term advances outstanding, are callable by the FHLB in 2004.

Repurchase Agreements.At December 31, 2003 and 2002, the outstanding balance of repurchase agreements was
$3.3 billion and $2.0 billion respectively. Interest expense related to these borrowings totaled $78 million and $80 million for the years ended December 31, 2003
and 2002. All of the outstanding repurchase agreements are collateralized by US Government agency securities or

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non-agency
mortgage backed securities. At December 31, 2003, $1.5 billion of the $3.3 billion outstanding repurchase agreements are callable in 2004.

Senior and Subordinated Bank Notes.In July 1997, the Company published an Offering Circular under Regulation D
authorizing it to issue up to $3 billion of Senior and Subordinated Bank Notes (the "Notes"). Of this allowable capacity, the Company has current outstandings of $350 million of 3.20%
Senior Notes maturing on June 6, 2008 and $150 million of 9.25% Subordinated Bank Notes maturing October 1, 2010. On November 13, 2003 the Company entered into a swap
transaction which effectively converted the 3.20% fixed rate coupon on the $350 million Senior Notes to a floating rate of three month libor minus 35 basis points, resetting quarterly. Interest
expense attributed to the Senior Notes, Senior Bank Notes (which matured July 2002) and Subordinated Bank Notes was $20 million, $19 million and $24 million for each of the
years ended December 31, 2003, 2002 and 2001, respectively.

Other Long Term Debt.In June 1997, the Company issued $200 million of 9.10% Junior Subordinated Debentures.
The Junior Subordinated Debentures mature on June 1, 2027. Interest expense attributable
to these Debentures was $18 million for each of the years ended December 31, 2003, 2002 and 2001. See Note 9 for a more complete discussion.

Competition

The Company faces significant competition both in making loans and in attracting deposits. The Company's competition for loans comes principally from savings
banks, commercial banks, savings and loan associations, mortgage banking companies and credit unions. Its most direct competition for deposits has historically come from savings and loan associations,
savings banks, commercial banks and credit unions. The New York City metropolitan area has a high density of financial institutions, many of which are branches of significantly larger institutions
which have greater financial resources than the Company. The Bank faces additional competition for deposits from non-depository competitors such as the mutual fund industry, securities and
brokerage firms and insurance companies. This competition could have a direct impact on the success of the Bank'sde novobranching and small business
banking initiatives.

GPM
faces intense competition, primarily from commercial banks, savings and loans and other mortgage lenders. As GPM expands into particular geographic markets, it will face competition
from mortgage lenders with established positions in such markets. Competition can take place on various levels, including convenience in obtaining a mortgage loan, service, marketing, origination
channels and pricing. Many of GPM's competitors in the financial services business are substantially larger and have more capital and other resources than GPM. Many of GPM's competitors are well
established in the specialty mortgage loan market and a number of others are recent entrants into that market seeking the relatively attractive profit margins currently associated with specialty
mortgage loan products. Fannie Mae and Freddie Mac are currently developing technologies and business practices that will expand the scope of mortgage loans eligible to be Agency mortgage loans, which
may include some Alt A mortgage loans. To the extent market pricing for GPM's mortgage loan products becomes more competitive, it may be more difficult to originate and purchase mortgage loans with
attractive yields in sufficient volume to maintain profitability.

GPM
depends primarily on independent mortgage brokers and, to a lesser extent, on correspondent lenders, for the origination and purchase of its wholesale mortgage loans, which
constitute a significant portion of GPM's mortgage loan production. These independent mortgage brokers deal with multiple lenders for each prospective borrower. GPM competes with these lenders for the
independent brokers' business on the basis of price, service, loan fees, costs and other factors. GPM's competitors also seek to establish relationships with such brokers, who are not obligated by
contract or otherwise to do business with GPM. GPM's future results of operations and financial

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condition
may be vulnerable to changes in the volume and costs of its wholesale mortgage loans resulting from, among other things, competition from other lenders and purchasers of such mortgage loans.

The
types of loans that the Company may originate are subject to federal and state laws and regulations. Interest rates charged by GreenPoint on loans are affected principally by the
demand for such loans and the supply of money available for lending purposes and the rates offered by its competitors. These factors are, in turn, affected by general and economic conditions, monetary
policies of the federal government, including the Federal Reserve Board ("FRB"), legislative tax policies and governmental budgetary matters.

Personnel

At December 31, 2003, the Company had 4,373 full-time employees and 258 part-time employees. None of its employees are represented
by a collective bargaining unit and the Company considers its relationship with its employees to be good.

Federal, State and Local Taxation

General.The Company and its subsidiaries report income on a consolidated calendar year basis using the accrual method of
accounting and are subject to federal income taxation in the same manner as other corporations with some exceptions, particularly the Bank's addition to its tax reserve for bad debts as discussed
below. The following discussion of tax matters is intended as a summary and does not purport to be a comprehensive description of the tax rules applicable to the Company and its subsidiaries.

Bad Debt Reserves.For tax years prior to 1996, the Bank was allowed under the Internal Revenue Code a special bad debt
deduction for additions to the tax bad debt reserve. Federal legislation enacted in 1996 eliminated this reserve method and required the recapture of the reserves balances added after 1987. As a
result, the Bank is only permitted to take federal deductions for bad debts on the basis of actual loan charge-off activity (specific charge-offs).

However,
provided certain definitional tests and conditions are satisfied, the Bank is still permitted to take special reserve method bad debt deductions for both New York State and
City. The deductible annual addition to these reserves may be computed using a specific formula based on either the Bank's loss history ("Experience Method") or a statutory percentage equal to 32% of
the Bank's New York State or City taxable income ("Percentage Method").

Taxable Distributions and Recapture.As part of the 1996 Federal legislation, any pre-1988 bad debt reserves are
subject to recapture if the Bank makes certain distributions or ceases to maintain
a bank charter. As of December 31, 2003, the Bank's total federal pre-1988 reserve balance was approximately $140 million. No Federal income tax provision exists for the
recapture of this reserve, since the Bank does not have any intention of recapturing any portion of this reserve.

Since
the Bank is still entitled to additions to bad debt reserves for New York State and City purposes, a separate amount also exists for the portion of each reserve in excess of the
federal reserve. As of December 31, 2003, the amounts of the Bank's state and city tax reserves in excess of the federal were approximately $482 million and $487 million,
respectively. In the event the Bank fails certain conditions or definitional tests such as allowing "qualifying assets" to fall below 60% of total assets, the Bank would no longer be allowed to
utilize either the New York State or City reserve method of computing bad debt deductions. As a result, the Bank would record a charge relating to the recapture of some or all of the state and city
tax reserves. Future bad debt deductions would be based on a "6-year experience" method, which is closely reflective of financial statement loan charge-off activity.

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Management
does not contemplate any actions that would cause recapture of some or all of the New York reserves into taxable income.

Corporate Alternative Minimum Tax.The Internal Revenue Code of 1986, as amended, imposes a tax on alternative minimum
taxable income ("AMTI") at a rate of 20%. AMTI is calculated as federal taxable income adjusted for certain items of "tax preference". The alternative minimum tax is equal to the amount the AMT
exceeds the company's regular tax. Any AMT paid is available as a credit against future income. Management does not expect to be subject to the AMT.

State and Local Taxation.The Company and its respective subsidiaries are required to file state and local tax returns in
most of the states in which they do business. Where appropriate, the Company and its subsidiaries join in the filing of a consolidated state or local tax return.

Generally,
state and local taxes in each of these jurisdictions is imposed on the higher of allocated income, capital or a nominal minimum tax. For the year ended December 31,
2003, it is expected that most of the state and local taxes paid by the Company and its subsidiaries will be based on the allocated income alternative.

Bank Regulation and Supervision

The following discussion sets forth certain of the material elements of the regulatory framework applicable to GreenPoint and its subsidiaries. This regulatory
framework is intended primarily for the protection of depositors and the federal deposit insurance funds and not for the protection of security
holders. To the extent that the following information describes statutory and regulatory provisions, it is qualified in its entirety by reference to those provisions. A change in the statutes,
regulations or regulatory policies applicable to GreenPoint or its subsidiaries may have a material effect on the business of GreenPoint.

General.As a registered bank holding company under the Bank Holding Company Act of 1956, as amended (the "BHCA"), GreenPoint
is subject to examination and supervision by the FRB. Under the BHCA, bank holding companies generally may not acquire ownership or control of more than 5% of the voting shares or substantially all of
the assets of any company, including a bank, without the FRB's prior approval. In addition, bank holding companies generally may engage, directly or indirectly, only in banking and such other
activities as are determined by the FRB to be closely related to banking.

Subsidiary
banks of a bank holding company are subject to certain quantitative and qualitative restrictions imposed by the Federal Reserve Act on any extension of credit to, or purchase
of assets from, or letter of credit issued on behalf of, the bank holding company or its non-bank subsidiaries, and on the investment in or acceptance of stocks or securities of such
holding company or its subsidiaries as collateral for loans. In addition, federal laws and regulations limit the amounts of, and establish required procedures and credit standards with respect to,
loans and other extensions of credit to certain officers, directors and principal shareholders of GreenPoint, certain of its subsidiaries and related interests of such persons.

In
addition, if GreenPoint were to acquire another bank or bank holding company, it could become subject to the bank holding company regulations promulgated under New York State Banking
Law ("State Banking Laws"). GreenPoint is not currently subject to the bank holding company regulations of State Banking Laws because a company such as GreenPoint that controls only one banking
institution is not deemed to be a bank holding company under State Banking Laws. However, the Bank is subject to other State Banking Laws and to supervision and regulation by the Banking Department,
as its chartering agency, and by the Federal Deposit Insurance Corporation (the "FDIC"), as its deposit insurer. The Bank is also subject to regulation by the FRB. GreenPoint and its

10

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subsidiaries
also are affected by the fiscal and monetary policies of the federal government and the FRB, and by various other governmental requirements and regulations.

Bank
holding companies and their subsidiary banks are also subject to the provisions of the Community Reinvestment Act of 1977 ("CRA"). Under the terms of the CRA, the FRB (or other
appropriate bank regulatory agency) is required, in connection with its examination of a bank, to assess such bank's record in meeting the credit needs of the communities served by that bank,
including low- and moderate-income neighborhoods. Furthermore, such assessment is also required of any bank that has applied, among other things, to merge or consolidate with or acquire
the assets or assume the liabilities of a federally-regulated financial institution, or to open or relocate a branch office. In the case of a bank holding company applying for approval to acquire a
bank or bank holding company, the FRB will assess the record of each subsidiary bank of the applicant bank holding
company in considering the application. State Banking Laws contain provisions similar to the CRA which are applicable to New York-chartered banks.

Liability for Bank Subsidiaries.Under current FRB policy, a bank holding company is expected to act as a source of financial
and managerial strength to each of its subsidiary banks and to maintain resources adequate to support each such subsidiary bank. This support may be required at times when the bank holding company may
not have the resources to provide it. In the event of a bank holding company's bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a
subsidiary bank would be assumed by the bankruptcy trustee and entitled to priority of payment.

Similarly,
any depository institution insured by the FDIC, including the Bank, can be held liable for any loss incurred, or reasonably expected to be incurred, by the FDIC in connection
with (i) the default of a commonly controlled FDIC-insured depository institution or (ii) any assistance provided by the FDIC to a commonly controlled
FDIC-insured depository institution in danger of default. "Default" is defined generally as the appointment of a conservator or receiver and "in danger of default" is defined generally as
the existence of certain conditions indicating that a default is likely to occur in the absence of regulatory assistance. Also, if such a default occurred with respect to a bank, any capital loans to
the bank from its parent holding company would be subordinate in right of payment to payment of the bank's depositors and certain of its other obligations.

Capital Requirements.GreenPoint is subject to risk-based capital requirements and guidelines imposed by the FRB,
which are substantially similar to the capital requirements and guidelines imposed by the FDIC, the Office of Thrift Supervision and the Office of the Comptroller of the Currency on the depository
institutions within their respective jurisdictions. For this purpose, a depository institution's or holding company's assets and certain specified off-balance sheet commitments are
assigned to four risk categories, each weighted differently based on the level of credit risk that is ascribed to such assets or commitments. A depository institution's or holding company's capital,
in turn, is divided into two tiers: core ("Tier 1") capital, which includes common equity, non-cumulative perpetual preferred stock and a limited amount of cumulative perpetual preferred
stock and related surplus (excluding auction rate issues) and a limited amount of cumulative perpetual preferred stock and minority interests in equity accounts of consolidated subsidiaries, less
goodwill, certain identifiable intangible assets and certain other assets; and supplementary ("Tier 2") capital, which includes, among other items, perpetual preferred stock not meeting the Tier 1
definition, mandatory convertible securities, subordinated debt and allowances for loan and lease losses, subject to certain limitations, less certain required deductions.

GreenPoint,
like other bank holding companies, currently is required to maintain Tier 1 and "total capital" (the sum of Tier 1 and Tier 2 capital) equal to at least 4% and 8% of its
total risk-weighted assets (including certain off-balance-sheet items, such as standby letters of credit), respectively. At December 31, 2003, GreenPoint met both
requirements, with Tier 1 and total capital equal to 11.26% and 12.81% of its total risk-weighted assets.

11

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The FRB, the FDIC and the Banking Department have adopted rules to incorporate market and interest rate risk components into their risk-based capital standards. Under these
requirements, capital will be allocated to support the amount of market risk related to a financial institution's ongoing trading activities. The FRB also requires bank holding companies to maintain a
minimum "leverage ratio" (Tier 1 capital to adjusted total assets) of 3% if the holding company has the highest regulatory rating and meets certain other requirements, or of 3% plus an additional
cushion of at least 100 to 200 basis points if the holding company does not meet these requirements. At December 31, 2003, GreenPoint's leverage ratio was 7.28%.

The
FRB may set capital requirements higher than the minimums noted above for holding companies whose circumstances warrant it. For example, holding companies experiencing or
anticipating significant growth may be expected to maintain capital positions substantially above the minimum supervisory levels without significant reliance on intangible assets. Furthermore, the FRB
has indicated that it will consider a "tangible Tier 1 capital leverage ratio" (deducting all intangibles) and other indicia of capital strength in evaluating proposals for expansion or new
activities. The Bank is subject to similar risk-based and leverage capital requirements adopted by the FDIC. The Bank was in compliance with the applicable minimum capital requirements as
of December 31, 2003. The Bank has not been advised by any federal banking agency or by the Banking Department of any specific minimum leverage ratio requirement applicable to it. Failure to
meet capital requirements could subject a bank to a variety of enforcement remedies, including the termination of deposit insurance by the FDIC, and to certain restrictions on its business, which are
described under "FDICIA."

FDICIA.FDICIA, among other things, identifies five capital categories for insured depository institutions (well capitalized,
adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized) and requires federal bank regulatory agencies to implement systems for "prompt corrective
action" for insured depository institutions that do not meet minimum capital requirements, based on these categories. FDICIA imposes progressively more restrictive constraints on operations,
management and capital distributions, depending on the category in which an institution is classified. Unless a bank is "well capitalized," it is subject to restrictions on its ability to offer
brokered deposits and on certain other aspects of its operations. An "undercapitalized" bank must develop a capital restoration plan and its parent holding company must guarantee the bank's compliance
with the plan up to the lesser of 5% of the bank's assets at the time it became undercapitalized and the amount needed to comply with the plan.

As
of December 31, 2003, GreenPoint Bank was "well capitalized," based on the guidelines implemented by the bank regulatory agencies. It should be noted, however, that the Bank's
capital category is determined solely for the purpose of applying the FDIC's "prompt corrective action" regulations and that the capital category may not constitute an accurate representation of the
Bank's overall financial condition or prospects.

Dividend Restrictions.GreenPoint's funds for cash distributions to its stockholders are derived from various sources,
including cash and investments. The principal source of those funds and funds used to pay principal and interest on GreenPoint's indebtedness is dividends received from the Bank. State Banking Laws
impose certain restrictions on the payment of dividends by the Bank to GreenPoint, including restrictions relating to a provision that, without regulatory approval, the Bank cannot declare and pay
dividends in any calendar year in excess of its net profits, as defined by the State Banking Laws, for that year combined with its retained net profits, as defined by the State Banking Laws, of the
two preceding years, less any required transfer to surplus. At December 31, 2003, $368 million of the total stockholders' equity of the Bank was available for payment of dividends to
GreenPoint pursuant to these provisions, as long as the Bank continues to be well-capitalized pursuant to FDICIA and the potential prohibitions discussed in the following paragraph do not
apply.

12

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In
addition, federal bank regulatory authorities have authority to prohibit the Bank from engaging in an unsafe or unsound practice in conducting its business. The payment of dividends,
depending upon the financial condition of the bank in question, could be deemed to constitute such an unsafe or unsound practice. The ability of the Bank to pay dividends in the future is currently,
and could be further, influenced by bank regulatory policies and capital guidelines.

Deposit Insurance Assessments.The deposits of the Bank are insured up to regulatory limits by the FDIC and, accordingly, are
subject to deposit insurance assessments to maintain the Bank Insurance Fund (the "BIF") and the Savings Association Insurance Fund ("SAIF") administered by the FDIC. The FDIC has adopted regulations
establishing a permanent risk-related deposit insurance assessment system. Under this system, the FDIC places each insured bank in one of nine risk categories based on (i) the
bank's capitalization and (ii) supervisory evaluations provided to the FDIC by the institution's primary federal regulator. Each insured bank's insurance assessment rate is then determined by
the risk category in which it is classified by the FDIC.

Due
to the Bank's current risk-based assessment, as of January 1, 2004, the annual insurance premiums on bank deposits insured by the BIF (approximately 75% of the
Bank's deposits) and the SAIF (approximately 25% of the Bank's deposits) were both zero.

The
Deposit Insurance Funds Act of 1996 provides for assessments to be imposed on insured depository institutions with respect to deposits insured by the BIF and the SAIF (in addition to
assessments currently imposed on depository institutions with respect to BIF- and SAIF-insured deposits) to pay for the cost of Financing Corporation funding. The assessment
rates as of January 1, 2004 were $0.0154 per $100 annually for BIF-assessable deposits and $0.0154 per $100 annually for SAIF-assessable deposits.

Depositor Preference Statute.Federal legislation has been enacted providing that deposits and certain claims for
administrative expenses and employee compensation against an insured depository institution would be afforded a priority over other general unsecured claims against such institution, including federal
funds and letters of credit, in the "liquidation or other resolution" of the institution by any receiver.

Brokered Deposits.Under FDIC regulations, no FDIC-insured depository institution can accept brokered deposits
unless it (i) is well capitalized, or (ii) is adequately capitalized and receives a waiver from the FDIC. In addition, these regulations prohibit any depository institution that is not
well capitalized from (a) paying an interest rate on deposits in excess of 75 basis points over certain prevailing market rates or (b) offering "pass through" deposit insurance on
certain employee benefit plan accounts subject to certain exceptions.

Interstate Banking And Branching.Under the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
("Riegle-Neal"), subject to certain concentration limits and other requirements, (i) bank holding companies such as GreenPoint are permitted to acquire banks and bank holding
companies located in any state without regard to state law; (ii) any bank that is a subsidiary of a bank holding company is permitted to receive deposits, renew time deposits, close loans,
service loans and receive loan payments as an agent for any other bank subsidiary of that holding company; and (iii) banks are permitted to acquire branch offices outside their home states by
merging with out-of-state banks, purchasing branches in other states, and establishing de novo branch offices in other states; provided that, in the case of any such purchase
or opening of individual branches, the host state has adopted legislation "opting in" to those provisions of Riegle-Neal; and provided that, in the case of a merger with a bank located in
another state, the host state has not adopted legislation "opting out" of that provision of Riegle-Neal. GreenPoint could use Riegle-Neal to acquire banks in additional states.

13

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Control Acquisitions.The Change in Bank Control Act prohibits a person or group of persons from acquiring "control" of a
bank holding company, unless the Federal Reserve Board has been notified and has not objected to the transaction. Under a rebuttable presumption established by the Federal Reserve Board, the
acquisition of 10% or more of a class of voting stock of a bank holding company with a class of securities registered under Section 12 of the Securities Exchange Act of 1934, such as the
Company, would, under the circumstances set forth in the presumption, constitute acquisition of control of the bank holding company.

In
addition, a company is required to obtain the approval of the Federal Reserve Board under the Bank Holding Company Act before acquiring 25% (5% in the case of an acquirer that is a
bank holding company) or more of any class of outstanding voting stock of a bank holding company, or otherwise obtaining control or a "controlling influence" over the bank holding company.

Future Legislation.Changes to the laws and regulations in the jurisdictions where GreenPoint and its subsidiaries do
business can affect the operating environment of bank holding companies and their subsidiaries in substantial and unpredictable ways. GreenPoint cannot accurately predict whether those changes in laws
and regulations will occur, and, if those changes occur, the ultimate effect they would have upon the financial condition or results of operations of GreenPoint.

RISK FACTORS

In addition to all of the information in this Report, and the documents incorporated herein by reference, the following Risk Factors should be considered. Many of
these Risk Factors are discussed in greater detail throughout this Report.

The Company operates in competitive markets

The Company faces significant competition both in making loans and in attracting deposits. The Company competes primarily on the basis of pricing in many of the
markets in which it conducts business. From time to time, the Company's competitors seek to compete aggressively on the basis of pricing factors and the Company may lose market share to the extent it
is unwilling to match its competitors' pricing in order to maintain its interest or sale margins. To the extent that the Company matches competitors' pricing, it may experience lower interest margins
or gain on sale results. In addition, the Company faces significant competition in several of its new growth initiatives, including the retail bank'sde
novobranching expansion plan and small business banking program. Many of the financial institutions against which the Company competes in these initiatives are much larger
than the Company, with greater financial resources and market share. These risks are further described in the Competition section of Item 1 of this Annual Report on Form 10-K.

The Company faces market risk relating to interest rates and mortgage rates

Interest rate risk arises in the ordinary course of the Company's business, as the repricing characteristics of its loans do not necessarily match those of its
deposit liabilities. Changes in interest rates can also affect the number of loans the Company originates, as well as the value of its loans and other interest-earning assets and its ability to
realize gains on the sale of those assets and liabilities. Prevailing interest rates also affect the extent to which borrowers prepay loans owned by the Company. When interest rates increase,
borrowers are less likely to prepay their loans, and when interest rates decrease, borrowers are more likely to prepay loans. The Company may then be forced to invest the funds generated by those
prepayments at less favorable interest rates. Similarly, prepayments on mortgage-backed securities can hurt the value of those securities and the interest income generated from them. In addition, an
increase in interest rates could hurt the ability of the Company's borrowers who have loans with floating interest rates to meet their increased payment obligations. If those

14

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borrowers
were not able to make their payments, then the Company would suffer losses, and its level of performing assets would decline.

Increases
in interest rates might cause depositors to shift funds from accounts that have comparatively lower cost (such as regular savings accounts) to accounts with a higher cost (such
as certificates of deposit or other high interest bearing accounts). If the cost of deposits increased at a rate greater than the yield on interest-earning assets increases, the Company's
interest-rate spread would suffer.

Market
risk also arises as the Company originates and accumulates fixed rate mortgage loans prior to their sale or securitization. As applications are approved, a commitment is made to
lend at a specified interest rate. Should rates rise, either prior to closing or after closing but prior to sale or securitization, the price at which the loan will be sold or securitized will
decline. Hedging strategies are implemented to mitigate the risk of lowered prices in rising rate environments.

The Company is exposed to credit risk

The Company assumes credit risk primarily in its held-for-investment loan portfolio, and in the recourse it provides in conjunction with
loan sales or securitizations. The majority of its loan portfolio consists of fixed and ARM loans secured by one-to-four-family residences and to a lesser extent,
multi-family residential loans, commercial real estate loans and other loans held for investment. Management believes that the allowance for loan losses is adequate. However, such determination is
susceptible to the effect of future unanticipated changes in general economic and market conditions that may affect
the financial circumstances of borrowers and/or residential real estate values within the Company's lending areas.

The
Company also securitizes or sells certain mortgage loans with recourse. The Company retains a residual interest in its securitizations. The initial value of these retained interests
is determined at the time that the securitization is closed using a net present value analysis of future cash flows. These cash flows are based on management's assumptions related to prepayments and
losses on the collateral, overcollateralization requirements, and the spread between the interest rates on the loans and on the certificates. Any difference between the actual cash flows and the
assumptions used in the initial net present value analysis could positively or negatively impact the value of the Company's retained interests. The risk to the Company is that the value of the
retained interests will be less than the initial value, resulting in a reduction of the value on the Company's books, also known as impairment. Impairment in the value of the retained interests could
reduce the Company's income in the period that it occurs.

In
the normal course of business, the company provides certain representations and waranties which permit the purchaser of a loan to return the loan to the Company if certain
deficiencies exist in the loan documentation. At the time of the sale, a gain on sale analysis is conducted and a liability is established to cover any expected future losses. The analyses is updated
on a regular basis to reflect actual losses to date and to ensure the adequacy of the liability.

Prior
to exiting the manufactured housing lending business, the Company securitized and sold with recourse most of its manufactured housing loans. The Company retains most of the credit
risk inherent in these loans. The Company's results from discontinued operations could be adversely affected if its securitizations do not perform consistent with the Company's expectations. These
risks are further described in Note 14 of the Company's 2003 Consolidated Financial Statements and are incorporated herein by reference.

15

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Expanding into new markets may result in increased losses

The Company has an historic practice of expanding its lending business into new geographic and product markets, and it may continue that practice in the future.
Although the Company believes that it has implemented appropriate underwriting and credit quality controls in these new markets, and it will seek to implement such controls in future markets, the
Company is less familiar with the real estate markets in these areas and, therefore, may experience more losses in these new markets. Also, the Company may not be as successful in originating loans in
these new markets as it has been in the markets in which it is well established.

The Company is extensively regulated

The Company's operations are subject to extensive regulation by federal, state and local authorities and are subject to various laws and judicial and
administrative decisions imposing requirements and restrictions on its operations. Policies adopted by these entities can significantly affect the Company's business operations. In addition, these
authorities periodically conduct examinations of the Company and may impose various requirements or sanctions.

Legislative and regulatory proposals may unfavorably affect the Company's businesses

Proposals to change the laws governing financial institutions are frequently raised in federal, state and local legislatures and before regulatory authorities.
Changes in applicable laws or policies could materially affect the Company's businesses, and the likelihood of any major changes in the future and their effects are impossible to determine. Moreover,
it is impossible to predict the ultimate form any proposed legislation or regulation might take or how it might affect the Company. Similarly, changes in applicable accounting principles, policies or
guidelines could impact the manner in which the Company reports the results of its operations.

The Company's ability to pay dividends is limited

The Company is a holding company and all of its operations are conducted through its subsidiaries. Therefore, the Company's ability to pay dividends is dependent
upon the earnings of its subsidiaries and their ability to pay dividends or make other payments to the Company. Certain laws and regulatory requirements limit the ability of the Company's subsidiaries
to pay dividends or make other payments to it.

The Company faces several risks relating to business combinations

The Company continually evaluates mergers, acquisitions and other business combination opportunities and it may undertake informal discussions or negotiations
that may result in formal discussions and future business combinations. Transactions of this type have risks relating to, among other things, the loss of key employees, the disruption of ongoing
businesses, the failure to integrate the combined businesses and the failure to achieve expected synergies. The Company cannot predict what the consequences would be of any such business combination.
However, an unsuccessful business combination, and other factors, could ultimately result in the Company's divestiture or termination of a
business segment. In addition, any business combination in which the Company issues common stock could dilute the ownership interest of its stockholders.

The Company's charter and by-laws contain provisions with possible anti-takeover effects

The Company's certificate of incorporation and bylaws contain provisions that might have the effect of discouraging certain transactions involving an actual or
threatened change of control of the Company, and Delaware law contains certain provisions, including those related to transactions with

16

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certain
interested stockholders, that might have the effect of discouraging certain transactions not approved by a company's board of directors.

Available Information

The Company's Internet address is "www.greenpoint.com". The Company makes available, free of charge through this website, its annual report on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after such documents are electronically filed with, or furnished to, the U.S.
Securities and Exchange Commission. Copies of these reports and other information also are available, free of charge, to any person through the website of the Securities and Exchange Commission at
http://www.sec.gov, and to any person who directs a request to GreenPoint Financial Corp., Investor Relations Department, 90 Park Avenue, New York, New York 10016, (212) 834-1202.

Corporate Governance

The Corporation's Corporate Governance Guidelines and the following corporate governance documents are available through the Corporation's website at
http://www.greenpoint.com: Audit Committee Charter, Compensation Committee Charter, Finance Committee Charter, Loan Policy Committee Charter, Nominating and Governance Committee Charter, Complaint
Procedures for Accounting and Auditing Matters, Code of Business Conduct and Ethics, and Financial Personnel Code of Ethics. Copies of such governance documents also are available, free of charge, to
any person who requests them. Such requests may be directed to GreenPoint Financial Corp., Investor Relations Department, 90 Park Avenue, New York, New York 10016, (212) 834-1202.

17

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Supplemental Data

The detailed supplemental data which follow are presented in accordance with Guide 3, as prescribed by the Securities and Exchange Commission. The data should be
read in conjunction with Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, and Item 8, Financial Statements and Supplementary Data.

Money Market and Securities Investments

The table below sets forth certain information regarding the carrying and market values of the Company's money market investments, securities available for sale
and securities held to maturity.

|                                                |                                                      | December 31,                       
|----------------------------------------------- | ---------------------------------------------------- | -----------------------------------
|
|
|Money market investments(1)                     |                                                      | $                                  
|                                                |                                                      |                                    
|Securities:                                     |                                                      |                                    
|Securities available for sale:                  |                                                      |                                    
|U.S. Government and Federal agency obligations: |                                                      |                                    
|U.S. Treasury Notes/Bills                       |                                                      | $                                  
|                                                | Agency notes/asset-backed securities                 |                                    
|                                                | Mortgage-backed securities                           |                                    
|                                                | Collateralized mortgage obligations                  |                                    
|                                                | Trust certificates collateralized by GNMA securities |                                    
|                                                | Corporate bonds                                      |                                    
|                                                | Other                                                |                                    
|                                                |                                                      |                                    
|                                                |                                                      | Total securities available for sale
|                                                |                                                      |                                    
|Securities held to maturity:                    |                                                      |                                    
|                                                | Tax-exempt municipals                                |                                    
|                                                | Other                                                |                                    
|                                                |                                                      |                                    
|                                                |                                                      | Total securities held to maturity  
|                                                |                                                      |                                    

---

Money Market and Securities InvestmentsYields and Maturities

The table below sets forth certain information regarding the amortized costs, weighted average yields and maturities of the Company's money market investments,
securities available for sale and held to maturity, and Federal Home Loan Bank of New York stock at December 31, 2003. There were no
securities (exclusive of obligations of the U.S. government and federal agencies) issued by any one entity with a total carrying value in excess of 10% of stockholders' equity at December 31,
2003.

18

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|                                       |                                                      | At December 31, 2003 |   
|-------------------------------------- | ---------------------------------------------------- | -------------------- | --
|
|
|Money market investments(1)            |                                                      | $                    | 67
|                                       |                                                      |                      |   
|Securities available for sale:         |                                                      |                      |   
|Bonds and other investment securities: |                                                      |                      |   
|U.S. Treasury Notes/Bills              |                                                      | $                    |  
|                                       | Agency notes                                         |                      |   
|                                       | Mortgage-backed securities                           |                      |   
|                                       | Collateralized mortgage obligations                  |                      |   
|                                       | Trust certificates collateralized by GNMA securities |                      |   
|Equity investments                     |                                                      |                      |  
|Municipal bonds                        |                                                      |                      |  
|Corporate bonds                        |                                                      |                      |  
|                                       |                                                      |                      |   
|Total securities available for sale    |                                                      | $                    |  
|                                       |                                                      |                      |   
|Securities held to maturity:           |                                                      |                      |   
|Tax exempt municipals                  |                                                      | $                    |  
|Mortgage-backed securities             |                                                      |                      |   
|Financial                              |                                                      |                      | 3 
|                                       |                                                      |                      |   
|Total bonds and other debt securities  |                                                      | $                    | 3 
|                                       |                                                      |                      |   

---

During the year ended December 31, 2003, the Company sold available for sale securities aggregating $2.2 billion, resulting in gross
realized gains of $18 million and gross realized losses of $15 million.

During
the year ended December 31, 2002, the Company sold available for sale securities aggregating $1.9 billion, resulting in gross realized gains of $9 million and
gross realized losses of $1 million.

During
the year ended December 31, 2001, the Company sold available for sale securities aggregating $2.6 billion, resulting in gross realized gains of $16 million
and gross realized losses of $2 million.

Mortgage-backed
securities and collateralized mortgage obligations, most of which have contractual maturities of more than 10 years, are subject to principal amortization and
estimated prepayments which shorten the average life to an estimated 3.7 years.

19

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Loans Receivable Held for Investment

The following tables set forth the composition of the loans receivable held for investment, in dollar amounts and in percentages of the respective portfolios at
the dates indicated.

|                                           |                                           | December 31, |      
|------------------------------------------ | ----------------------------------------- | ------------ | -----
|
|
|Loans receivable held for investment:      |                                           |              |      
|Mortgage loans(1):                         |                                           |              |      
|                                           | One-to four-family                        |              | $    
|                                           | Multi-family                              |              |      
|                                           | Commercial                                |              |      
|                                           | Home equity loans                         |              |      
|                                           |                                           |              |      
|Total mortgage loans held for investment   |                                           |              | 9,836
|                                           |                                           |              |      
|Other loans:                               |                                           |              |      
|                                           | Loans secured by depositors' funds        |              |      
|                                           | Manufactured housing loans                |              |      
|                                           | Small business loans                      |              |      
|                                           |                                           |              |      
|Total other loans                          |                                           |              | 80   
|                                           |                                           |              |      
|Total loans receivable held for investment |                                           |              | 9,916
|                                           |                                           |              |      
|Net deferred loan origination costs (fees) |                                           |              | 47   
|Allowance for possible loan losses         |                                           |              | (78  
|                                           |                                           |              |      
|                                           | Loans receivable held for investment, net |              | $    
|                                           |                                           |              |      

|                                           |                                           | December 31, |      
|------------------------------------------ | ----------------------------------------- | ------------ | -----
|
|
|Loans receivable held for investment:      |                                           |              |      
|Mortgage loans(1):                         |                                           |              |      
|                                           | One-to four-family                        |              | $    
|                                           | Multi-family                              |              |      
|                                           | Commercial                                |              |      
|                                           | Home equity loans                         |              |      
|                                           |                                           |              |      
|Total mortgage loans held for investment   |                                           |              | 8,116
|                                           |                                           |              |      
|Other loans:                               |                                           |              |      
|                                           | Loans secured by depositors' funds        |              |      
|                                           | Manufactured housing loans                |              |      
|                                           | Small business loans                      |              |      
|                                           |                                           |              |      
|Total other loans                          |                                           |              | 580  
|                                           |                                           |              |      
|Total loans receivable held for investment |                                           |              | 8,696
|                                           |                                           |              |      
|Net deferred loan origination costs (fees) |                                           |              | (9   
|Allowance for possible loan losses         |                                           |              | (113 
|                                           |                                           |              |      
|                                           | Loans receivable held for investment, net |              | $    
|                                           |                                           |              |      

---

20

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Loans Receivable Held for Sale

The following table sets forth the composition of the Company's loans receivable held for sale, at the dates indicated.

|                                |                                             | December 31,                        | 
|------------------------------- | ------------------------------------------- | ----------------------------------- | 
|
|
|Loans receivable held for sale: |                                             |                                     | 
|                                | Conventional first mortgage loans:          |                                     | 
|                                |                                             | Residential one-to four-family      | 
|                                |                                             | Commercial property                 | 
|                                | Second mortgage and home equity loans       |                                     | 
|                                | Other                                       |                                     | 
|                                | Manufactured housing loans                  |                                     | 
|                                | Manufactured housing land/home loans        |                                     | 
|                                | Net, deferred loan origination costs (fees) |                                     | 
|                                |                                             |                                     | 
|                                |                                             | Loans receivable held for sale, net | 
|                                |                                             |                                     | 

Loan Maturity and Repricing

The following table shows the contractual maturities of the Company's loan portfolio, including loans receivable held for sale, at December 31, 2003. The
table does not include prepayments or scheduled principal amortization. Prepayments and scheduled principal amortization on mortgage loans totaled $5.5 billion for the year ended
December 31, 2003.

|                |                   | December 31, 2003
|--------------- | ----------------- | -----------------
|
|
|Amounts due(1): |                   |                  
|                | Within one year   |                  
|                | One to five years |                  
|                | Over five years   |                  
|                |                   |                  
|                |                   | Total amounts due
|                |                   |                  

---

21

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Loan Repricing

The following table sets forth, at December 31, 2003, the dollar amount of all fixed rate loans contractually due and adjustable rate loans repricing after
December 31, 2004.

|                   |                    | Due or Repricing After
December 31, 2004
|------------------ | ------------------ | ----------------------------------------
|
|
|Mortgage loans(1): |                    |                                         
|                   | One-to four-family |                                         
|                   | Multi-family       |                                         
|                   | Commercial         |                                         
|Other loans(1)     |                    |                                         
|                   |                    |                                         
|                   |                    | Total loans receivable                  
|                   |                    |                                         

---

Deposits and Average Rates

The following table sets forth the distribution of the Company's average deposit balances at the dates indicated and the weighted average nominal interest rates
on each category of deposits presented.

|              |                                  | December 31,   |  
|------------- | -------------------------------- | -------------- | -
|
|
|Account type: |                                  |                |  
|              | Savings and club                 |                | $
|              | N.O.W. and checking              |                |  
|              | Variable rate savings            |                |  
|              | Money market                     |                |  
|              | Wholesale money market deposits  |                |  
|              | Term certificates of deposit     |                |  
|              | Brokered certificates of deposit |                |  
|              |                                  |                |  
|              |                                  | Total deposits |  
|              |                                  |                |  

|              |                                  | December 31, 2001 |  
|------------- | -------------------------------- | ----------------- | -
|
|Account type: |                                  |                   |  
|              | Savings and club                 |                   | $
|              | N.O.W. and checking              |                   |  
|              | Variable rate savings            |                   |  
|              | Wholesale money market deposits  |                   |  
|              | Money market                     |                   |  
|              | Term certificates of deposit     |                   |  
|              | Brokered certificates of deposit |                   |  
|              |                                  |                   |  
|              |                                  | Total deposits    |  
|              |                                  |                   |  

22

---

Certificates of Deposit Outstanding and Maturities

The following table presents, by various rate categories, the amount of certificates of deposit outstanding at the dates indicated.

|                                  |                | December 31, |   | Maturities at December 31, 2003
|--------------------------------- | -------------- | ------------ | - | -------------------------------
|
|Certificates of deposit accounts: |                |              |   |                                
|                                  | 3.99% or less  |              | $ | 3,450                          
|                                  | 4.00% to 4.99% |              |   | 731                            
|                                  | 5.00% to 5.99% |              |   | 53                             
|                                  | 6.00% to 6.99% |              |   | 76                             
|                                  | 7.00% to 7.99% |              |   |                               
|                                  |                |              |   |                                
|                                  |                | Total        |   | $                              
|                                  |                |              |   |                                

Certificates of Deposit $100,000 or More

At December 31, 2003, the Company had outstanding $957 million in certificates of deposit in amounts of $100,000 or more, maturing as follows:

(Dollars in millions)

Amount

Weighted
Average RateMaturity period:Three months or less

$
233

2.88
%Over three through six months


110

2.56Over six through twelve months


236

2.51Over twelve months


378

3.52Total

$
957

3.00
%


---

ITEM 2. PROPERTIES

The Company's executive office is located at 90 Park Avenue, New York, New York. This location contains approximately 41 thousand square feet of commercial
office space, located on the 4th floor, which the Company leases. The Company also has an operating center at 1981 Marcus Avenue, Lake Success, New York. This location contains
approximately 105 thousand square feet of commercial office space, which the Company leases, including 33 thousand square feet which has been subleased to others. In addition, GPM leases
an operating center in Charlotte, North Carolina at 5032 Parkway Plaza Boulevard, which contains 41 thousand square feet. GPM leases 125 thousand square feet of commercial office space
located in Novato, California and 13 thousand square feet of commercial office space in Larkspur, California. The Company maintains a servicing operations center located in Columbus, Georgia.
In Columbus, GPM owns the property at 2300 Brookstone Centre Parkway, which contains 35 thousand square feet of office space. GPM also leases and maintains servicing operations centers at 1435
N. Dutton Avenue and at 981 Airway Court in Santa Rosa, California, which have 7 and 64 thousand square feet of office space, respectively, including 5 thousand square feet of the 981
Airway Court space which has been subleased to others. Also in Santa Rosa, GPM leases 5 thousand square feet of warehouse space at 1160 N. Dutton Avenue. GPC leases 112 thousand square
feet of office space at 10089 Willow Creek Road, San Diego, California of which 14 thousand square feet of this certain space is subleased to GPM. This location is the headquarters for the
discontinued

23

---

manufactured
housing operations. Additionally, GPC leases 39 thousand square feet of office space at 1100 Circle 75 Parkway in Atlanta, Georgia. This space centralizes GPC's collection
management operations.

The
Bank operates its retail banking activities out of 90 branches located throughout the New York metropolitan area.

GPM
operates its mortgage lending activities from its Novato, California headquarters. Hub offices are located in Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois,
Massachusetts, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Texas, Virginia and Washington.

ITEM 3. LEGAL PROCEEDINGS

Pending Litigation

In the ordinary course of business, the Company and its subsidiaries are defendants in or parties to a number of pending and threatened legal actions and
proceedings, and are also involved from time to time in investigations and administrative proceedings by governmental agencies. Certain of such actions and proceedings involve alleged violations of
consumer protection laws, including claims relating to the Corporation's loan origination and collection efforts, and other federal and state banking laws. Certain of such actions and proceedings
include claims for breach of contract, restitution, compensatory damages, punitive damages and other forms of relief. Due to the difficulty of predicting the outcome of such matters, the Corporation
can give no assurance that it will prevail on all claims made against it; however, management believes, based on current knowledge and after consultation with counsel, that these legal matters and
administrative proceedings and the losses, if any, resulting from the final outcome thereof, will not have a material adverse effect on the Corporation and its subsidiaries' financial position,
results of operations or liquidity, but can give no assurance that they will not have such an effect.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to the Company's shareholders during the quarter ended December 31, 2003.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock is currently listed on the New York Stock Exchange (NYSE) under the symbol "GPT." Trading in the Company's stock commenced on
January 28, 1994. As of February 27, 2004, 131,720,086 shares of common stock were issued and outstanding, and held by approximately 3,432 holders of record. For the year ended
December 31, 2003, GreenPoint paid a cash dividend of $0.21 per share in March and June and $0.24 in September and December. In each of the years ended December 31, 2002 and 2001,
GreenPoint paid a cash dividend of $0.17 per share in March, June,
September and December. On February 10, 2004, the Company announced an increase to the quarterly dividend rate of $0.06 per share to $0.30 per share or $1.20 per share for the entire year.

On
July 8, 2003, GreenPoint approved a three-for-two stock split which was distributed on August 20, 2003 to the shareholders of record on
August 8, 2003. Accordingly, the stock split required retroactive restatement of all historical per share data.

Information
relating to the high, low and quarter-end closing sales prices of the Common Stock appears in Note 22.

24

---



ITEM 6. SELECTED FINANCIAL DATA

Selected Consolidated Financial Condition Data

|                                          |  | December 31,
|----------------------------------------- |  | ------------
|
|
|Total assets                              |  | $           
|Loans receivable held for sale            |  |             
|Loans receivable held for investment, net |  |             
|Allowance for loan losses                 |  |             
|Securities and related assets             |  |             
|Money market investments                  |  |             
|Goodwill                                  |  |             
|Deposits                                  |  |             
|Borrowings                                |  |             
|Stockholders' equity                      |  |             
|                                          |  |             

Selected Consolidated Operating Data

|                                                            |  | For the Year Ended December 31,
|----------------------------------------------------------- |  | -------------------------------
|
|
|Interest income                                             |  | $                              
|Interest expense                                            |  |                                
|(Provision) benefit for loan losses                         |  |                                
|Non-interest income                                         |  |                                
|Non-interest expense                                        |  |                                
|Income taxes related to earnings from continuing operations |  |                                
|                                                            |  |                                
|Net income from continuing operations                       |  | $                              
|                                                            |  |                                

25

---

Selected Consolidated Financial Ratios and Other Data

|                                                                                           |                                | At or For the Year December 31, |       
|------------------------------------------------------------------------------------------ | ------------------------------ | ------------------------------- | ------
|
|
|Performance RatiosContinuing Operations:                                                  |                                |                                 |       
|Return on average assets                                                                   |                                |                                 | 2.12  
|Return on average equity                                                                   |                                |                                 | 25.26 
|Average stockholders' equity to average assets                                             |                                |                                 | 8.38  
|Net interest margin                                                                        |                                |                                 | 3.18  
|Net interest spread                                                                        |                                |                                 | 3.07  
|General and administrative expense to average assets                                       |                                |                                 | 2.22  
|Total non-interest expense to operating revenue                                            |                                |                                 | 28.4  
|Efficiency ratio(1)                                                                        |                                |                                 | 39.6  
|Average interest-earning assets to average interest-bearing liabilities                    |                                |                                 | 1.05  
|Per Share Data(2):                                                                         |                                |                                 |       
|Basic earnings per share continuing operations                                             |                                | $                               | 3.86  
|Diluted earnings per share continuing operations                                           |                                |                                 | 3.78  
|Book value per common share                                                                |                                |                                 | 15.46 
|Tangible book value per common share                                                       |                                |                                 | 12.14 
|Dividends per share                                                                        |                                |                                 | 0.90  
|Dividend payout ratio                                                                      |                                |                                 | 23.75 
|Asset Quality RatiosContinuing Operations:                                                |                                |                                 |       
|Non-accruing loans held for investment to mortgage loans held for investment               |                                |                                 | 1.60  
|Non-accruing loans held for sale to mortgage loans held for sale                           |                                |                                 | 2.15  
|Non-performing assets to total assets                                                      |                                |                                 | 1.24  
|Allowance for loan losses to non-performing loans held for investment                      |                                |                                 | 47.22 
|Allowance for loan losses to mortgage loans held for investment                            |                                |                                 | 0.75  
|Net loan charge-off experience to average mortgage loans held for investment               |                                |                                 | 0.04  
|Ratio of allowance for loan losses to net charge-offs                                      |                                |                                 | 18.14x
|Capital Data:                                                                              |                                |                                 |       
|Tier I Capital (to risk weighted assets)                                                   |                                |                                 | 11.26 
|Total Risk Based Capital (to risk weighted assets)                                         |                                |                                 | 12.81 
|Tier I Capital (average assets)                                                            |                                |                                 | 7.28  
|Tangible equity to tangible managed assets                                                 |                                |                                 | 5.75  
|Tangible equity to managed receivables                                                     |                                |                                 | 8.25  
|Purchase of treasury stock                                                                 |                                | $                               | 472   
|Other Data:                                                                                |                                |                                 |       
|Mortgage loan originations                                                                 |                                | $                               | 38,867
|Total managed assets(3)                                                                    |                                |                                 | 25,982
|Total managed receivables(4)                                                               |                                |                                 | 17,846
|Earnings to combined fixed charges and preferred stock dividendscontinuing operations(5): |                                |                                 |       
|                                                                                           | Excluding interest on deposits |                                 |       
|                                                                                           | Including interest on deposits |                                 |       
|Full-service retail bank offices                                                           |                                |                                 | 90    
|Full-time equivalent employees (FTE)                                                       |                                |                                 | 4,549 
|                                                                                           |                                |                                 |       

---

26

---



ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion and analysis should be read in conjunction with the Company's Consolidated Financial Statements and Notes to the Consolidated Financial
Statements beginning on page 55 of this report.

General

GreenPoint Financial Corp. (the "Corporation", "Company" or "GreenPoint"), a $23 billion asset bank holding company, consists of two primary
businessesa New York retail bank and a national mortgage business. The retail bank is a New York State chartered savings bank and is the second largest thrift depository in the Greater
New York area with $12 billion in deposits in 90 branches serving more than 450,000 households. GreenPoint Mortgage ("GPM"), headquartered in Novato, California, originates a wide variety of
exclusively "A" quality loans. This includes agency qualifying loans and Jumbo A loans, and GreenPoint's specialty Alternative A mortgages.

Critical Accounting Policies

The Notes to the Company's Consolidated Financial Statements describe the Company's significant accounting policies. A number of these policies require management
to make estimates and assumptions which are based on difficult, complex or subjective judgments, some of which are inherently uncertain and can materially affect the valuation of revenues, expenses,
asset, liabilities and disclosures of contingent assets and liabilities. GreenPoint has established certain policies and procedures to ensure that the information used in these estimates and
assumptions are appropriate.

GreenPoint
has identified six accounting polices that are critical to the presentation of Company's financial statements and that require critical accounting estimates, involving
significant valuation adjustments, on the part of management. The following is a description of those accounting policies and where applicable a fuller explanation of the methods and assumptions
underlying their application.

Accounting for Derivatives

The accounting and reporting standards for derivative financial instruments are established in Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative and Hedging Activities" ("SFAS 133"), as amended. SFAS 133 requires an entity to recognize all derivatives as either assets or liabilities in the statement of
financial condition and measure those instruments at fair value. The accounting for changes in fair value of the derivative depends on the intended use of the derivative and the resulting designation.
An entity that elects to apply hedge accounting is required to establish at the inception of the hedge the method it will use in assessing the effectiveness of the hedging derivative and the
measurement approach for determining the ineffectiveness of the hedge. These methods must be consistent with the entity's approach to managing risk.

GreenPoint's
management has made judgments in their application of SFAS 133. These judgments include the identification and valuation of hedging instruments, hedged items, nature
of the risk being hedged, the market value of loan commitments and how the hedging instrument's effectiveness will be assessed. GreenPoint has designated interest rate swaps, futures contracts and
forward delivery commitments as hedging instruments in fair value hedges. Certain fixed mortgage loan products held for sale are designated as hedged items in fair value hedges. GreenPoint has
identified the risk of changes in fair value attributable to changes in market interest rates as the designated hedge risk. The results of previous retrospective assessments of hedge effectiveness
have established an expectation that the results of the derivative hedging instruments will substantially offset the effects of changes in the fair value of the hedged item on a prospective basis. If
a subsequent retrospective assessment determines that the hedge was not highly effective, GreenPoint will discontinue hedge accounting

27

---

prospectively.
If the SFAS 133 effectiveness assessment indicates that the hedge is not highly effective, GreenPoint will not recognize the adjustment to the carrying amount of the loans held
for sale after the last date on which compliance with the effectiveness criterion was established. Therefore, the potential loss of hedge accounting adjustments to loans held for sale may cause
GreenPoint to report materially different results under different conditions or using different assumptions.

The
Company is exposed to interest rate risk during the accumulation of interest rate lock commitments with borrowers. The Company assigns no value to its interest rate lock commitments
at the inception of the commitment. The estimated fair value is then determined by measuring the impact of the change in interest rates from the commitment date to the valuation date. If market
interest rates required by investors are higher than management's assumptions, the prices paid by investors and resultant gain on sale of loans will be lower than otherwise estimated. In order to
mitigate this interest rate risk, GreenPoint enters into forward delivery commitments and forward sales contracts. The amount and duration of these derivative instruments are selected in order to have
the changes in fair value offset closely with the changes in fair value of GreenPoint's interest rate lock commitments. The Company's interest rate lock commitments and the forward delivery
commitments and forward sales contracts, used to offset changes in the value of the interest rate lock commitments, are accounted for as derivative financial instruments and are recognized as either
assets or liabilities at fair value.

Accounting for Allowance for Loan Losses

Based on its extensive experience with large homogeneous pools of small balance loans, the Company believes that, at any point in time, the existing portfolio
contains inherent losses. These inherent losses are estimated based upon the historical performance of various loan types and their respective delinquency statuses. The Company maintains an allowance
for loan losses consistent with this estimate of inherent losses.

GreenPoint
calculates its allowance for loan losses in accordance with Statement of Financial Accounting Standards No. 5, "Accounting for Contingencies" ("SFAS 5"). This
accounting standard is used to determine the allowance associated with large groups of smaller balance homogeneous loans that are collectively evaluated for impairment. GreenPoint considers all of its
loans held for investment to be smaller-balance homogeneous loans. SFAS 5 requires the accrual of a loss when it is probable that an asset has been impaired and the amount of the loss can be
reasonably estimated. The allowance for loan losses represents management's estimate of probable but unconfirmed asset impairment in the loans held for investment portfolio as of the date of the
financial statements.

In
determining the adequacy of the allowance for loan losses for GreenPoint's mortgage loans held for investment, management completes an analysis prior to the end of each quarterly
reporting period. The analysis stratifies GreenPoint's mortgage loans held for investment into three categories: first mortgages, second mortgages and home equity loans. The first mortgage and second
mortgage categories are further stratified into one-to-four family, multi-family and commercial loan strata and then again by delinquency status.

For
each stratum, GreenPoint determines a historical loss percentage based on the percentage of loans it expects to default and the loss expected as a result of that default. For both of
these variables, a default is determined to occur when the borrower cannot pay under the terms of the loan agreement and the loan is satisfied through some other means (often the repossession and sale
of the collateral). Each variable is based on recent trends and is continuously evaluated by management. The resulting historical loss percentage is then multiplied by the principal balance and the
product becomes the allocated reserve for that stratum.

Due
to inherent limitations in using modeling techniques, uncertainties in projected losses and the macro-economic environment, GreenPoint also maintains an unallocated reserve. This
reserve also addresses short-term changes in the portfolio's historical real estate owned performance, delinquency

28

---

trends,
loan products, national real estate values and portfolio's size. At the end of each quarter, management determines the adequacy of the unallocated reserve to address these risks.

Accounting for Representation and Warranty Liabilities

In the normal course of business, GreenPoint provides certain representation and warranties which permit the purchaser of a loan to return the loan to the Company
if certain deficiencies exist in the loan documentation. GreenPoint has established a liability for the estimated losses to be incurred. Additions to the representation and warranty liability are
reported as a reduction to gain on sale of loans. Payments made to indemnify an investor for losses and credit losses that occur after GreenPoint has re-acquired the loan are deducted from
the representations and warranty liability. Loans are repurchased at their face value and are recorded at their estimated market value with the difference charged against the liability. Subsequent
losses and recoveries realized through the disposition of the loan are also charged against the liability.

GreenPoint
determines this liability by calculating the present value of expected future losses. Future losses are based on a historical repurchase/indemnification rate and the
historical loss percentage experienced on previously repurchased loans. The historical rates are then adjusted for expected future performance. These variables are continuously evaluated and updated
by management and are adjusted at the end of each quarter.

Accounting for Servicing Assets

Servicing assets are created when the company either sells or securitizes loans and retains the right to service those loans. Servicing assets are carried at the
lower of cost or fair value and are amortized in proportion to and over the estimated net servicing revenue.

In
determining fair value for purposes of impairment, GreenPoint stratifies the servicing asset based on the risk characteristics of the underlying pools. The fair value of each stratum
is based on the Company's calculation of the present value of estimated future net servicing cash flows, using assumptions of prepayments, defaults, servicing costs and discount rates that GreenPoint
believes
market participants would use for similar assets. These assumptions are reviewed on a quarterly basis and are changed based on actual and expected pool performance. The key economic assumptions
underlying the valuations of servicing assets relating to GreenPoint's Mortgage and discontinued Manufactured Housing businesses are identified in Notes 5 and 14, respectively.

If
a stratum's amortized balance exceeds the current fair value, a valuation allowance is recognized through a charge to current earnings for the amount the amortized balance exceeds the
current fair value. If the fair value of the stratum were later to increase, the reduction of the valuation allowance may be recorded as an increase to income. However, if GreenPoint determines that
an impairment for a stratum is other-than-temporary, the value of the servicing asset and any related valuation allowance is written-down.

Servicing
asset impairment can occur in a risk stratum under using different conditions or using different assumptions. As interest rates associated with the underlying loans decline,
loan prepayments tend to increase, thereby reducing the fair value of the servicing asset. In addition, a decline in the value of the servicing asset is likely to occur if either default rates or
servicing costs increase. The sensitivities to adverse changes in weighted average prepayment rates for both GreenPoint's Mortgage and discontinued Manufactured Housing businesses are also identified
in Notes 5 and 14, respectively.

Accounting for Loan Securitizations

The rules governing the accounting for loan securitizations are established in Statement of Financial Accounting Standards No. 140, "Accounting for
Transfers and Servicing of Financial Assets

29

---

and
Extinguishments of Liabilities" ("SFAS 140"). This standard establishes the conditions that must be present for creating a Qualified Special Purpose Entity ("QSPE") and treating a transfer
of financial assets as a sale.

GreenPoint's
securitizations of mortgage loans involve the sale of a pool of loans to a QSPE and securities supported by the cash flow from the transferred loans are sold by the QSPE to
third party investors. Funds received from the third-party investors are returned to GreenPoint as payment for the transferred loans. Generally, the Company may retain servicing rights and one or more
retained interests. These retained interests include interest-only strips, subordinated certificates, transferor interests, demand notes and certain other credit enhancements.

For
a securitization transaction to be treated as a sale under SFAS 140, the loans transferred by the Company must have been isolated from the seller (even in bankruptcy or
receivership), the QSPE must
meet the significant limitations on its activities and the transferor cannot maintain effective control of the transferred assets. To determine if the loans have been isolated, GreenPoint obtains an
opinion of legal counsel. The opinion must state that the transaction is a sale and that the assets transferred would not be consolidated with the transferor's other assets in the event of a
bankruptcy or receivership. A QSPE is exempt from being consolidated in the financial statements of a transferor or its affiliates under SFAS 140.

Any
interest retained by the Company, including obligations under financial guarantees, directly affects the calculation of the gain on sale of the loans and introduces risk to
GreenPoint's balance sheet and future earnings. These interests are valued on the Consolidated Statements of Financial Condition and the Consolidated Statements of Operations at their estimated fair
value per the requirements of SFAS 140. Because market quotes are generally not available for retained interests, the Company generally estimates fair value based upon the present value of
estimated future cash flows using assumptions of prepayments, defaults, loss severity rates and discount rates the Company believes market participants would use for similar assets and liabilities.
Those assumptions are reviewed on a quarterly basis and changed based on actual and expected pool performance. Changes in the assumptions can result in a significant change to the value of retained
interests. The key economic assumptions underlying the valuations of retained interests and the potential dollar impact of adverse changes in these assumptions relating to GreenPoint's Mortgage and
discontinued Manufactured Housing businesses are identified in Notes 5 and 14, respectively.

Accounting for Discontinued Operations

In the fourth quarter of 2001, GreenPoint discontinued the operations of the manufactured housing lending segment. GreenPoint accounts for this discontinued
operation under the provisions of Accounting Principles Board Statement No. 30 "Reporting the Results of OperationReporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions" ("APB 30").

For
the purposes of applying APB 30, the term segment of a business refers to a component of an entity whose activities represent a separate major line of business or class of customer.
The manufactured housing lending business was a separate major line of business with clearly separate operations and activities and a distinct customer base, and its activities can be clearly
distinguished and measured for financial reporting purposes. The manufactured housing business had been separately measured and disclosed in prior period business segment disclosures in the footnotes
of the consolidated financial statements.

The
Company's plan to discontinue the business was reviewed and approved by management and the Board of Directors in December of 2001. The Plan of discontinuation included the decision
to cease accepting loan applications and fund only new loans pertaining to existing loan commitments.

30

---

Accounting
for the orderly liquidation or run-off of the operation as a discontinued operation is consistent with APB 30 and subsequent SEC interpretations codified under Topic
5Z-3.

The
net loss reported for the year ended December 31, 2001 included the estimated performance of the discontinued operations during the phase-out period. The future
results were estimated based on the Company's best assessment of future operating performance, which included assumptions about the remaining life of the serviced loans and the operating costs
associated with servicing those loans. The future operating performance is reassessed each quarter and the underlying assumptions are amended when necessary to reflect changes in the estimated
remaining life of the serviced loans, changing market conditions, and changes in the operating environment and cost structure of the servicing operation.

As
of December 31, 2003, the Company has no outstanding commitments to lend and continues to honor its contractual commitment to service its loan portfolio.

Regarding
the retained interests associated with the previously securitized manufactured housing loans, the Company uses assumptions of prepayments, defaults, loss severity rates and
discount rates it believes market participants would use to value similar assets and liabilities in its quarterly valuations. Changes in the assumptions can result in a significant change to the value
of these interests.

Under
the guidance of APB 30, GreenPoint's current and comparative prior period Consolidated Statements of Income present the results of continuing operations and the discontinued
business separately. The Consolidated Statements of Financial Condition present the consolidation of both the continuing and discontinued operations.

On
August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets ("SFAS 144"). This Statement supersedes FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, and the accounting and reporting provisions of APB 30. The provisions of SFAS 144 are effective for GreenPoint's fiscal years beginning after
January 1, 2002. GreenPoint applies the provisions of SFAS 144 prospectively from that date. In accordance with the transition provisions of SFAS 144, disposal activities
initiated prior to the initial application of SFAS 144 shall continue to be accounted for in accordance with the applicable prior pronouncement. Hence, the provisions of APB 30 continue to be
applied to the discontinued operation.

Overview of 2003 Financial Results



31

---



Business Segment Results

The Company consists of two primary continuing businessesa banking business and a mortgage business. The banking business includes the results of the
retail banking segment and a balance sheet management segment. The Company evaluates the performance of its business segments based on income before income taxes. The accounting policies of the
segments are the same as described in Note 1 "Summary of Significant Accounting Policies". However, the preparation of business line results requires management to establish methodologies to
allocate funding costs (charges) and benefits (credits), expenses and other financial elements to each line of business as described below. These internal transfers are eliminated in the "Other"
segment as shown in the accompanying table.

The
Retail Banking unit consists of 90 full service banking offices serving the Greater New York area. The Retail Bank attracts deposits within its market area by offering a variety of
deposit instruments including demand and NOW accounts, money market and savings accounts, certificates of deposit and retirement savings plans. The Retail Bank generates banking fees such as ATM
service charges, debit card fees, NSF service charges, overdraft fees, monthly maintenance charges, safe deposit rental fees, official check fees and check replacement fees as well as income from
annuity and insurance sales commissions. The Retail Bank also generates net interest income via the internal transfer of deposits to the Balance Sheet Management unit for which the Retail Bank unit
receives credit ("interest income") based on the anticipated length of time that an average deposit is expected to remain with the bank using market rates to calculate the credits. Expenses under the
direct control of the Retail Bank and allocated expenses such as benefits, ESOP and occupancy are incurred by the unit.

The
Balance Sheet Management Segment is responsible for developing and maintaining the majority of the Company's interest earning asset portfolio. This includes the held for investment
mortgage portfolio, mortgage-backed securities and other investments. Balance Sheet Management is also responsible for the interest expense on GreenPoint's borrowings and debt, and interest expense on
intercompany borrowings. Balance Sheet Management is charged for the deposits it receives by means of a matched funds transfer pricing system. Credit losses are charged to the balance sheet management
in an amount equal to net charge-offs. Expenses under the direct control of the unit and allocated expenses such as benefits, ESOP and occupancy are incurred by the unit.

The
Mortgage Banking segment specializes in originating "A" quality loans, including agency qualifying loans and Jumbo A loans, Alternative A mortgage loans, and home equity products.
The loans are originated in the national market primarily through the Company's network of registered mortgage brokers, but also through correspondent lenders and in-house mortgage
brokers. The Mortgage Bank sells the majority of its loans to the secondary market generating gain on sale of loan income, and also transfers a portion of its loans to Balance Sheet Management
recording internal gain on sale of loan income. The Mortgage Bank also generates revenue from the servicing of loans both in externally owned portfolios as well as the Balance Sheet Management
portfolio from which it receives internal fee income. The remaining source of revenue for the Mortgage Bank is derived from interest earned on loans pending sale. To fund its balance sheet (largely
the warehouse of loans awaiting sale and secondarily the asset value of mortgage servicing rights), the Mortgage Bank is charged interest expense on intercompany borrowing by means of a matched funds
transfer pricing system.

32

---

In
the segment footnote (Note 21), the "Other" column represents the elimination of the intercompany gain on sale of mortgage loans and the servicing income derived from the
Balance Sheet Management Segment. The Company does not employ cost transfer methodology for support units. As such, "Other" includes the expenses from unallocated overhead units of the Company
including Executive, Finance, Legal, Auditing, General Services, Corporate Communications, Information Systems, Risk Management and Human Resources.

Banking Business

|                                    |                                                               | For the Year Ended December 31,
|----------------------------------- | ------------------------------------------------------------- | -------------------------------
|
|
|Net interest income                 |                                                               | $                              
|(Provision) benefit for loan losses |                                                               |                                
|                                    |                                                               |                                
|                                    | Net interest income after (provision) benefit for loan losses |                                
|                                    |                                                               |                                
|Non-interest income:                |                                                               |                                
|                                    | Banking fees and commissions                                  |                                
|                                    | Other fee income                                              |                                
|                                    | Net gain on securities                                        |                                
|                                    |                                                               |                                
|                                    |                                                               | Total non-interest income      
|                                    |                                                               |                                
|Non-interest expense                |                                                               |                                
|                                    |                                                               |                                
|Net income before income taxes      |                                                               | $                              
|                                    |                                                               |                                
|Total assets                        |                                                               | $                              
|                                    |                                                               |                                

The
Banking Business includes the results of the Retail Banking and Balance Sheet Management segments. The Banking Business operates similar to a traditional thrift with the Retail Bank
gathering low cost deposits and the Balance Sheet Management segment managing an interest earning asset portfolio that consists primarily of mortgage loans and mortgage backed securities. Revenue is
generated in the form of net interest income and Retail Banking fee income. For the year ended December 31, 2003, the Banking Business earned $420 million pretax, a decrease of 17% from
the previous year. The decrease was substantially due to a decline in net interest income in the Balance Sheet Management unit due to lower interest rates, causing a high level of prepayments and a
corresponding amortization of premiums, which required the replacement of these assets with lower yielding instruments. This decline was partially offset by higher banking fee income. The Banking
Business incurred increased non-interest expense of $18 million to $141 million in 2003. The increase was due primarily to expense relating to the Retail Banking de novo
branch expansion and normal inflationary increases in operating expense.

For
the year ended December 31, 2003, the Retail Banking segment earned $170 million pretax, a decrease of 1% from the previous year. The decrease in profitability was
primarily due to the increased expense of thede novobranch expansion. Nine branches were opened throughout 2003, compared to 7 branches opened in the
last four months of 2002. Typically the new branches operate initially at a loss until deposit volumes grow to a level that are sufficient to generate enough net interest income and fee income to
cover the expense burden of opening and operating a branch. Non-interest expense of $139 million increased $18 million from 2002, of which compensation and benefits increased
$7 million and premises and equipment increased $7 million. Net interest income for Retail Banking was $240 million in 2003, an increase of $5 million over 2002. The
average balance of core deposits increased by $1.7 billion, 30%, over 2002 with the cost decreasing by 43 basis points. The positive performance was reflective of lower interest rates along
with the success of free checking, branch

33

---

expansion
and business banking. Non-interest income in the Retail Banking segment was $69 million for the year ended 2003, an increase of 21% from the previous year.

For
the year ended December 31, 2003, the Balance Sheet Management segment earned $250 million pretax, a decrease of 25% from the previous year. Balance Sheet management
earned $232 million of net interest income in 2003 down from $315 million in 2002 a decrease of $83 million. The decrease in net interest income was reflective of the low level of
interest rates causing a high level of prepayments and the corresponding amortization of premiums and the replacement of these assets with lower yielding instruments.

The
average balance of mortgage-backed securities increased approximately $1.0 billion while the yield decreased by 166 basis points resulting from the accelerated premium
amortization totaling $42 million along with the reinvestment at lower yields. In addition, there was no dividend paid on FHLB stock in the last quarter of 2003.

As
interest rates fell to historical lows, the pace of loan refinancing and prepayments increased to historical highs causing a decrease in the balance of loans held for investment which
were partially replaced with lower yielding ARM loans. The average balance of the portfolio was $9.7 billion a decrease of $294 million over 2002 while the yield decreased by 95 basis
points to 6.39% from 7.34%.

On
the liability side, fixed-rate borrowings, locked in early in the interest rate cycle did not benefit from the continued decline in rates during 2003. The average balance
of borrowings was $7.8 billion with an average yield of 3.20%, 27 basis points less than 2002. Balance Sheet Management also recognized $24 million of non-interest income in
2003, an increase of 9% from the
previous year. The increase was primarily due to an increase of $4 million to $11 million of income from fees generated from the prepayments of loans in the mortgage portfolio.

Mortgage Banking

|                               |                                           | For the Year Ended December 31, |      
|------------------------------ | ----------------------------------------- | ------------------------------- | -----
|
|
|Net interest income            |                                           | $                               | 191  
|                               |                                           |                                 |      
|Non-interest income:           |                                           |                                 |      
|                               | Loan servicing fees                       |                                 |      
|                               | Other fee income                          |                                 |      
|                               | Net gain on sale of loans                 |                                 |      
|                               | Change in valuation of retained interests |                                 |      
|                               |                                           |                                 |      
|                               |                                           | Total non-interest income       |      
|                               |                                           |                                 |      
|Non-interest expense           |                                           |                                 | 268  
|                               |                                           |                                 |      
|Net income before income taxes |                                           | $                               | 483  
|                               |                                           |                                 |      
|Total assets                   |                                           | $                               | 5,210
|                               |                                           |                                 |      

For
the year ended December 31, 2003, the Mortgage segment earned $483 million pretax, an increase 20% from the previous year. Mortgage Banking net interest income was
$191 million in 2003 down $12 million from 2002. Although the average balance of mortgage loans was $520 million higher in 2003, the yield was 98 basis points lower reflective of
the historically low level of mortgage rates. The mortgage business originated $38.9 billion in loans in 2003 compared with $33.1 billion in 2002 and had sales of $33.7 billion
compared to $31.3 billion in the previous year. The Mortgage segment also had an increase in the sale margin to 143 bps from 134 bps in 2002. The increase in sale volume and the margin resulted
in an increase in income from the gain on sale of loans to $545 million from $427 million in 2002.

34

---

Loan
servicing fees of $26 million increased from $5 million in 2002 due to a decrease in amortization and an impairment recapture of $12 million in 2003 compared
with a $10 million impairment recognized in 2002. This recapture was a partial recovery of the internal servicing impairments taken in prior years and relates to the servicing of loans held for
investment by the Banking Business segment. The internal servicing impairment recognized in 2002 resulted from declining interest rates, which resulted in accelerated prepayment levels throughout
2002. As interest rates stabilized and increased during the second half of 2003, a portion of the prior year impairment was recovered. Both the internal impairment and subsequent recovery are
eliminated in the Company's consolidated results. Partially offsetting the higher income was an expense increase of $44 million to $268 million needed to support the higher origination
volume.

The
"Other" column in Note 21 had a pre-tax loss of $151 million for the year ended December 31, 2003, an increased loss of 26% from the previous year.
The higher loss was due to an increase of the elimination of internal gain on sale of loans of $(8) million to $(59) million due to the greater number of internally originated mortgages by the
Mortgage Bank sold to the Balance Sheet Management segment. Additionally, the elimination of internal servicing fees was higher by $20 million largely due to the internal impairment recovery in
2003 and the impairment of the internal servicing asset in 2002. The unallocated expenses of the Company's support units included in this column rose by $4 million, 5% from 2002, largely due to
normal inflationary expense increases.

35

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Comparison of Operating Results for the Years Ended December 31, 2003 and 2002Continuing Operations

Net Interest Income

Net interest income on a fully taxable-equivalent basis decreased by $91 million, or 12%, to $670 million for 2003 from $761 million for
2002. The net interest margin declined from 3.88% to 3.18%.

The
decline in net interest income resulted from the declining interest rate environment, as the decline in rates earned on interest earning assets exceeded the decline in the rates paid
on interest-bearing liabilities. Interest-earning assets re-priced more quickly than interest-bearing liabilities in the declining interest rate environment. The rapid decline in the rates
earned on interest-earning assets also resulted from the impact of a higher level of mortgage pre-payments. The higher level of mortgage prepayments led to accelerated premium amortization
that affected the yield on the held for investment mortgage portfolio and the mortgage-backed securities portfolio. The premium amortization on these two portfolios totaled $80 million,
compared with $34 million in the prior year. The combined impact of the declining interest rates and accelerated premium amortization resulted in a decline in the net interest margin from 3.88%
in 2002 to 3.18% in 2003.

The
impact of the narrowing net interest margin was partially offset by continued growth in core deposits (an increase in the average balance of $1.7 billion) and growth in the
average balance of mortgage loans held for sale (an increase in the average balance of $520 million).

Average interest-earning assets

Average earning assets increased by $1.5 billion, or 7% to $21.1 billion in 2003 from $19.7 billion in 2002. The increase reflected growth in
loans held for sale due to higher origination volume, and a higher balance of investment securities. Average mortgage loans held for sale increased $520 million from 2002,
reflecting the higher origination volume. The average balance of securities increased $1.3 billion to $5.7 billion.

A
decline in the level of market interest rates through much of the year resulted in a decline in the yield on average earning assets of 121 basis points compared to a year ago. Interest
income on mortgages held for investment and loans held for sale decreased by a combined $135 million, or 13%, to $913 million for 2003 from $1.05 billion for 2002. The decrease
reflects a decline in the average yield on the portfolios of 95 and 98 basis points, respectively.

Interest
income on securities decreased by $18 million to $224 million for 2003 from $242 million in 2002 due to a decline of 148 basis points in interest rates
during the year, partially offset by a higher average balance of investment securities in 2003.

Average interest-bearing liabilities

The cost of interest-bearing liabilities decreased by 54 basis points, to 2.40% from 2.94% in the prior year. The decline was due to a substantial increase in the
average balance of lower cost core deposits and declining market interest rates. The average balance of core deposits increased from $5.7 billion to $7.4 billion. The average balance of
savings and money market accounts increased by a combined $484 million while the average balance of demand deposit and NOW accounts increased $1.2 billion or 99%. The growth in demand
and NOW deposit balances resulted from the continued success of GreenPoint's free checking, new branching and small-business banking programs.

The
average balance of term certificates of deposit ("CD") declined $687 million. CD balances were allowed to run off, as market pricing required offering rates above those
available from alternative wholesale funding sources, in order to retain balances.

36

---

The
average balance of borrowed funds increased $148 million reflecting the funding of the growth in average earning assets. The average rate paid on borrowed funds declined from
3.16% to 2.93% reflecting the overall decline in market interest rates.

Average Consolidated Balance Sheet, Interest and RatesContinuing Operations

|                                                                 |                                          | Year Ended December 31, |      
|---------------------------------------------------------------- | ---------------------------------------- | ----------------------- | -----
|
|
|Assets:                                                          |                                          |                         |      
|Interest-earning assets:                                         |                                          |                         |      
|Mortgage loans held for investment(2)                            |                                          | $                       | 9,749
|Loans held for sale                                              |                                          |                         | 5,360
|Securities(3)                                                    |                                          |                         | 5,734
|Other interest-earning assets                                    |                                          |                         | 286  
|                                                                 |                                          |                         |      
|                                                                 | Total interest-earning assets            |                         |      
|Non-interest earning assets(4)                                   |                                          |                         | 1,143
|                                                                 |                                          |                         |      
|                                                                 |                                          | Total assets            |      
|                                                                 |                                          |                         |      
|Liabilities and Stockholders' Equity:                            |                                          |                         |      
|Interest-bearing liabilities:                                    |                                          |                         |      
|Deposits:                                                        |                                          |                         |      
|                                                                 | Savings                                  |                         | $    
|                                                                 | Demand deposits and NOW                  |                         |      
|                                                                 | Money market and Variable rate savings   |                         |      
|                                                                 |                                          |                         |      
|                                                                 |                                          | Total core deposits     |      
|Wholesale money market Deposits                                  |                                          |                         | 163  
|Term certificates of deposit                                     |                                          |                         | 4,741
|                                                                 |                                          |                         |      
|                                                                 |                                          | Total deposits          |      
|                                                                 |                                          |                         |      
|Mortgagors' escrow                                               |                                          |                         | 64   
|Borrowed funds                                                   |                                          |                         | 7,220
|Senior notes                                                     |                                          |                         | 200  
|Senior bank notes                                                |                                          |                         |     
|Subordinated bank notes                                          |                                          |                         | 150  
|Other long term debt                                             |                                          |                         | 200  
|                                                                 |                                          |                         |      
|                                                                 | Total interest-bearing liabilities       |                         |      
|Other liabilities(5)                                             |                                          |                         | 270  
|                                                                 |                                          |                         |      
|                                                                 | Total liabilities                        |                         |      
|Stockholders' equity                                             |                                          |                         | 1,866
|                                                                 |                                          |                         |      
|                                                                 | Total liabilities & stockholders' equity |                         | $    
|                                                                 |                                          |                         |      
|Net interest income/interest rate spread(6)                      |                                          |                         |      
|                                                                 |                                          |                         |      
|Net interest-earning assets/net interest margin(7)               |                                          | $                       | 993  
|                                                                 |                                          |                         |      
|Ratio of interest-earning assets to interest-bearing liabilities |                                          |                         | 1.05 
|                                                                 |                                          |                         |      

---

37

---

Rate/Volume Analysis

The following table presents the effects of changes in interest rates and changes in volume of interest-earning assets and interest-bearing liabilities on the
Company's interest income and interest expense during the years indicated. The changes attributable to the combined impact of volume and rate have been allocated proportionately to volume and rate.

|                                       |                                    | Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 Increase/(Decrease) |     | Year Ended December 31, 2002 Compared to Year Ended December 31, 2001 Increase/(Decrease) |   
|-------------------------------------- | ---------------------------------- | ----------------------------------------------------------------------------------------- | --- | ----------------------------------------------------------------------------------------- | --
|
|
|Mortgage loans held for investment(1)  |                                    | $                                                                                         | (21 | )                                                                                         | $ 
|Loans held for sale                    |                                    |                                                                                           | 31  |                                                                                           |   
|Securities                             |                                    |                                                                                           | 58  |                                                                                           |   
|Other interest-earning assets          |                                    |                                                                                           | (1  | )                                                                                         |   
|                                       |                                    |                                                                                           |     |                                                                                           |   
|                                       | Total interest earned on assets    |                                                                                           |     | 67                                                                                        |   
|                                       |                                    |                                                                                           |     |                                                                                           |   
|Savings                                |                                    |                                                                                           | 2   |                                                                                           |   
|Demand deposits and N.O.W.             |                                    |                                                                                           | 18  |                                                                                           |   
|Money market and variable rate savings |                                    |                                                                                           | 5   |                                                                                           |   
|Wholesale money market deposits        |                                    |                                                                                           | 1   |                                                                                           |   
|Term certificates of deposit           |                                    |                                                                                           | (22 | )                                                                                         |   
|Mortgagors' escrow                     |                                    |                                                                                           | (1  | )                                                                                         |   
|Borrowed funds                         |                                    |                                                                                           | 4   |                                                                                           |   
|Senior notes                           |                                    |                                                                                           | 6   |                                                                                           |   
|Senior bank notes                      |                                    |                                                                                           | (5  | )                                                                                         |   
|Subordinated bank notes                |                                    |                                                                                           |    |                                                                                           |   
|Other long term debt                   |                                    |                                                                                           |    |                                                                                           |   
|                                       |                                    |                                                                                           |     |                                                                                           |   
|                                       | Total interest paid on liabilities |                                                                                           |     | 8                                                                                         |   
|                                       |                                    |                                                                                           |     |                                                                                           |   
|                                       |                                    | Net change in net interest income                                                         |     | $                                                                                         | 59
|                                       |                                    |                                                                                           |     |                                                                                           |   

---

Provision for Loan Losses

Mortgage loan charge-offs for 2003, which equaled the provision for loan loss for the continuing operations, were $4 million, compared to
$2 million in 2002, and represented just 4 basis points of the portfolio of loans held for investment.

38

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Non-Interest Income

The following table summarizes the components of non-interest income:

|                                          |                                        | For the Year Ended December 31,
|----------------------------------------- | -------------------------------------- | -------------------------------
|
|
|Income from fees and commissions:         |                                        |                                
|Loan servicing fees                       |                                        | $                              
|Banking services fees and commissions     |                                        |                                
|Fees, commissions and other income        |                                        |                                
|                                          |                                        |                                
|                                          | Total income from fees and commissions |                                
|Net gain on sales of mortgage loans       |                                        |                                
|Change in valuation of retained interests |                                        |                                
|Net gain on securities                    |                                        |                                
|                                          |                                        |                                
|                                          | Total non-interest income              |                                
|                                          |                                        |                                

Non-interest
income was $586 million for the year, an increase of $124 million from $462 million a year ago. The increase was due to a
$110 million increase in the gain on sale of mortgage loans and a $13 million increase in banking services fees and commissions. The gain on sale of loans is described in further detail
in the following section.

For
the year ended December 31, 2003, loan servicing fees were $18 million, compared to $16 million in the previous year. The revenue was earned on a servicing
portfolio of $29.6 billion at the end of 2002 and $31.9 million at December 31, 2003. The increase reflected no net servicing impairment in 2003, compared with a $4 million
servicing impairment in 2002. The servicing impairment recognized in 2002 was due to the declining interest rate environment. During 2003 interest rates stabilized and began to increase during the
second half of the year, resulting in no net servicing valuation adjustment for the year.

As
more fully described in Note 5, GreenPoint makes certain assumptions in valuing its mortgage servicing assets. The projected average life of the servicing asset portfolio
decreased during the year ended 2003 as compared to 2002. This decline was due to higher prepayment assumptions on the existing loans as well as a change in the mix of loans that carry higher
prepayment assumptions.

Banking
services fees and commissions are the fees generated from the Retail Bank deposit accounts such as ATM service charges, debit card fees, NSF service charges, overdraft fees,
monthly maintenance charges, safe deposit rental fees, official check fees and annuity and insurance sales commissions. For the year ended December 31, 2003, banking services fees and
commissions were $69 million compared to $56 million the previous year. ATM fee income was $9 million and $8 million in 2003 and 2002, respectively. Deposit related fee
income increased to $35 million in 2003 from $26 million in 2002. Service charge income was $12 million and $10 million in 2003 and 2002, respectively. Income from
investment services was flat at $12 million in 2003 and 2002. The increases in these items is primarily attributable to the growth in the number of deposit accounts at the existing branches as
well as start-up accounts at the Company'sde novobranches.

Other
income primarily represents the income received from the prepayments of loans in the mortgage portfolio. For the year ended December 31, 2003, other income was
$14 million, equal to the previous year. Income from prepaid mortgages was $11 million and $7 million in 2003 and 2002, respectively, reflective of the significant level of
refinancing in 2003.

Gain on Sale of Loans

GreenPoint sells those loans it does not place in its portfolio through either (1) whole loan sales, which involves selling pools of loans to individual
purchasers, or (2) securitization, which involves the

39

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private
placement or public offering of pass-through asset-backed securities. This approach allows GreenPoint to capitalize on favorable conditions in either the securitization or whole
loan sale market when loans are sold.

During
each of the last three years most mortgage loans were sold as whole loan sales. These sales are completed with no direct credit enhancement from GreenPoint, but do include certain
standard representations and warranties which permit the purchaser to return the loan to the Company if certain deficiencies exist in the loan documentation. Whole loan sales may either retain, or
transfer to the buyer, the right to service the loans.

Gain
on sale and the gain on sale margins include the net impact of the valuation of mortgage loans held for sale and interest rate lock commitments, the impact of the valuation of
derivatives utilized to manage the exposure to interest rate risk associated with mortgage loan commitments and mortgage loans held for sale, and the impact of adjustments related to liabilities
established for representations and warranties made in conjunction with the loan sale. The following table summarizes loans sold and average margins earned:

|                                |                     | For the Year Ended December 31, |       
|------------------------------- | ------------------- | ------------------------------- | ------
|
|
|Whole loanMortgage:            |                     |                                 |       
|Sales                           |                     | $                               | 33,256
|                                | Gain on sale        |                                 | $     
|                                | Average margin      |                                 |       
|Average margin by product type: |                     |                                 |       
|                                | Specialty products  |                                 |       
|                                | Home equity/Seconds |                                 |       
|                                | Agency/Jumbo        |                                 |       
|                                |                     |                                 |       
|SecuritizationsMortgage:       |                     |                                 |       
|                                | Sales               |                                 | $     
|                                | Gain on sale        |                                 | $     
|                                | Average margin      |                                 |       
|                                |                     |                                 |       

Gain
on sale from whole loan sales and securitizations of mortgage loans increased $110 million for the year. The gain from whole loans sales increased $113 million due to
the higher volume of loans sold which followed the record level of mortgage loan originations in 2003. The gain from mortgage securitizations declined $3 million due to lower margins
experienced on the 2003 loan sales.

The
Company sold mortgage loans totaling $33.3 billion in 2003, an increase of $6.5 billion, or 24%, over the balance of loans sold in 2002. The higher volume of loans sold
corresponded with the higher origination volume experienced in 2003. The average margin earned on loan sales was 1.44% in 2003, an increase from the 1.37% earned in 2002. During 2003, agency and jumbo
mortgage sales totaled 65% of total mortgages sold compared with 62% in 2002, while higher spread specialty products totaled 30% of mortgages sold in 2003, compared with 33% in 2002. Specialty product
margins declined in 2003 to 2.73% from the 2.77% earned in 2002. The slightly narrower sales margins on specialty products reflect, in part, an increase in competition as more mortgage originators
compete in the specialty product market. Going forward, the gain on mortgage sales will fluctuate with the level of market interest rates and the secondary market demand for mortgage-backed
investments.

Representation and Warranty Liabilities and Valuation of Mortgage Retained Interests

The Company has established a liability to cover losses associated with repurchases and indemnifications made under representation and warranties. This liability
was determined using historical data associated with loan sales and additions are made when loans are sold. On a quarterly

40

---

basis,
management reassess the adequacy of the liability based on the most recent historic trends and future expectations.

The
liability related to representations and warranties for mortgage loans totaled $61 million and $32 million at December 31, 2003 and 2002, respectively. The
increase was the result of the increased level of whole loan sales. The activity in the liability is summarized in the table in Note 5.

Losses
charged against the representation and warranty liability totaled $26 million in 2003, compared with $19 million in 2002 and $7 million in 2001. These losses
included indemnifications of $12 million and $7 million in 2003 and 2002. The balance of the losses represented charges incurred on the repurchase, valuation and subsequent disposition
of outstanding loans. Loan repurchases totaled $170 million in 2003, compared to $122 million in 2002. The increase in the amount of repurchased loans was attributable to substantially
greater volumes of loans sold in recent years. Loans were repurchased at their face value and losses on subsequent dispositions were charged against the representation and warranty liability. If
either the historical repurchase/indemnification rate or the historical loss percentage at December 31, 2003 were to increase by ten percent, the increase in the recorded liabilty would
approximate $10 million.

As
more fully described in Note 5, GreenPoint has entered into certain off-balance sheet transactions that represent recourse obligations for the company. With respect
to the performance of the pools of mortgage loans sold or securitized with direct credit guarantees issued by GreenPoint, both delinquencies and net credit losses for the year ended 2003 have declined
from 2002. This decline occurred in tandem with the declining balances of the securitized and sold loans.

With
respect to the assumptions used in valuing the retained interests, prepayment assumptions were increased during the year ended December 2003 due to actual experience and
management's estimation of what prepayment speeds will be in the future on the securitizations. Reported weighted average discount rates on the retained interests are affected by the changing balances
of the securitizations. Also, a new securitization added into the pool in 2003 changed the mix of discount rates in the entire portfolio.

Non-Interest Expense

The following is a summary of the components of non-interest expense:

|                                              |                                                  | For the Year Ended December 31,          |   
|--------------------------------------------- | ------------------------------------------------ | ---------------------------------------- | --
|
|
|General and administrative expenses:          |                                                  |                                          |   
|                                              | Salaries and benefits                            |                                          | $ 
|                                              | Employee Stock Ownership and stock plans expense |                                          |   
|                                              | Net expense of premises and equipment            |                                          |   
|                                              | Advertising                                      |                                          |   
|                                              | Federal deposit insurance premiums               |                                          |   
|                                              | Other administrative expenses                    |                                          |   
|                                              |                                                  |                                          |   
|                                              |                                                  | Total general and administrative expense |   
|Other real estate owned operating income, net |                                                  |                                          | (2
|Goodwill amortization                         |                                                  |                                          |  
|                                              |                                                  |                                          |   
|                                              |                                                  | Total non-interest expense               |   
|                                              |                                                  |                                          |   

Total
non-interest expense was $493 million for 2003, an increase of $66 million from $427 million in 2002.

Salaries
and benefits increased $43 million from the previous year, most of which related to increased staffing levels and commissions paid in connection with record mortgage
volumes and the retail bankde novobranch expansion.

Premises
and equipment expense increased $14 million from the previous year, primarily due to the retail bankde novobranch
expansion and the installation of a new mortgage loan origination system.

41

---

Other administrative expenses were $131 million for the year ended December 31, 2003, an increase of 7% from the previous year. The increase was primarily due to a new
offshore contracting expense of $4 million in 2003 for banking and mortgage servicing call centers, increased insurance expense of $2 million, increased postage expense of
$1 million largely due to increased numbers of deposit accounts at existing branches as well as thede novobranches, and increased retail
banking fees paid (ATM network, debit card usage and online banking) of $1 million also effected by the larger number of banking accounts. The Company's efficiency ratio, which relates
operating expenses to revenues, was 39.6% in 2003, compared with 35.1% in 2002.

Income Tax Expense

Total income tax expense decreased $7 million, or 2%, to $281 million in 2003 from $288 million in 2002. The decrease in the current year,
compared to 2002, is due to lower pre-tax income partly offset by an increase in the effective tax rate from 36.7% in 2002 to 37.3% in 2003. The increase to the 2003 effective tax rate as
compared to 2002 is primarily related to increased state and local tax expense.

Loan Originations

The following table summarizes loan origination activity for each of the reported periods:

|          |                             | As of and for the Year Ended December 31,
|--------- | --------------------------- | -----------------------------------------
|
|
|Mortgage: |                             |                                          
|          | Total applications received |                                          
|          |                             |                                          
|          | Total loans originated:     |                                          
|          | Specialty products          |                                          
|          | Home equity/Seconds         |                                          
|          | Agency/Jumbo                |                                          
|          |                             |                                          
|          |                             | Total loans originated(1)                
|          |                             |                                          
|          | Pipeline(2)                 |                                          
|          |                             |                                          
|          | Loans held for sale         |                                          
|          |                             |                                          

---

Total
loan originations during the year for the mortgage business were $38.9 billion, up from $33.1 billion during 2002. The mortgage originations reflected continued
strength in specialty products originations,
along with a 23% growth in agency and jumbo originations. The strength in the agency/jumbo products was attributable to the declining interest rate environment and the strong demand for mortgage
refinancing during the first half of 2003.

Allowance for Loan Losses

The Company has set forth a policy for establishment and review of the adequacy of the allowance for loan losses. Management believes that allowance for loan
losses is adequate. However, such determination is susceptible to the effect of future unanticipated changes in general economic and market conditions that may affect the financial circumstances of
borrowers and/or residential real estate

42

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values
within the Company's lending areas. The policy is further described in Critical Accounting Policies.

The
following table sets forth the Company's allowance for loan losses at the dates and for the periods indicated.

|                                            |                                                                              | December 31,                      |   
|------------------------------------------- | ---------------------------------------------------------------------------- | --------------------------------- | --
|
|
|Balance at beginning of period              |                                                                              | $                                 | 78
|Provision (benefit) charged to income:      |                                                                              |                                   |   
|                                            | Continuing                                                                   |                                   |   
|                                            | Discontinued                                                                 |                                   |   
|                                            |                                                                              |                                   |   
|                                            |                                                                              | Total provision charged to income |   
|                                            |                                                                              |                                   |   
|Loans charged-off:                          |                                                                              |                                   |   
|                                            | Mortgage loans held for investment                                           |                                   |   
|                                            | Manufactured housing loans held for investment                               |                                   |   
|                                            | Manufactured housingtransfer to loans receivable held for sale              |                                   |   
|                                            |                                                                              |                                   |   
|                                            |                                                                              | Total charge-offs                 |   
|                                            |                                                                              |                                   |   
|Recoveries:                                 |                                                                              |                                   |   
|                                            | Mortgage loans held for investment                                           |                                   |   
|                                            | Manufactured housing loans held for investment                               |                                   |   
|                                            |                                                                              |                                   |   
|                                            |                                                                              | Total recoveries                  |   
|                                            |                                                                              |                                   |   
|Net charge-offs:                            |                                                                              |                                   |   
|                                            | Continuing                                                                   |                                   |   
|                                            | Discontinued                                                                 |                                   |   
|                                            |                                                                              |                                   |   
|                                            |                                                                              | Total net charge-offs             |   
|                                            |                                                                              |                                   |   
|Balance at end of period                    |                                                                              | $                                 | 78
|                                            |                                                                              |                                   |   
|Asset Quality RatiosContinuing Operations: |                                                                              |                                   |   
|                                            | Net loan charge-off experience to average mortgage loans held for investment |                                   |   
|                                            | Allowance for loan losses to mortgage loans held for investment              |                                   |   
|                                            | Allowance for loan losses to non-performing loans held for investment        |                                   |   

43

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The
following table sets forth information regarding the allocation of the allowance for loan losses at the dates indicated.

|                     |                    | December 31, |   
|-------------------- | ------------------ | ------------ | --
|
|
|First Mortgages:     |                    |              |   
|                     | One-to four-family |              | $ 
|                     | Multi-family       |              |   
|                     | Commercial         |              |   
|Second Mortgages:    |                    |              |   
|                     | One-to four-family |              |   
|Home equity loans    |                    |              | 5 
|Manufactured housing |                    |              | 3 
|Other loans          |                    |              | 6 
|                     |                    |              |   
|                     |                    | $            | 78
|                     |                    |              |   

In determining the adequacy of the allowance for loan losses for GreenPoint's mortgage loans held for investment, management completes an analysis
of the loan portfolio prior to the end of each quarterly reporting period. The analysis stratifies GreenPoint's mortgage loans held for investment portfolio into three categories: first mortgages,
second mortgages and home equity loans. The first mortgage and second mortgage categories are further stratified into one-to-four family, multi-family, and commercial loan
strata. The analysis calculates the expected losses as a percentage of loans outstanding in each loan stratum based upon the current delinquency status within each stratum. A more complete discussion
on the Company's estimate for the allowance for loan losses is included in the Critical Accounting Policies.

Changes
in the volume of loans in each delinquency status as well as changes in the mix of loans in the held for investment portfolio can impact the size of the allowance for loan
losses. The dollar volume of 1-4 conventional first mortgages decreased between December 31, 2002 and December 31, 2003 and the percentage declined from 87% to 83% of the
portfolio. This resulted in a reduction in the allowance for loan losses of $5 million. The dollar volume and percentages of multi-family, commercial, and second mortgages in the portfolio
increased over this same time period, resulting in an increase of $2 million in the allowance. There was an additional $1 million increase in the allowance due to an increase in the
expected losses associated with overdraft lines of credit and an increase in debit escrow volume for non-accrual loans.

Changes
in the roll rates of loans into more serious delinquency statuses can also impact the allowance. Total non-accrual loans held for investment declined by
$2 million between December 31, 2002 and December 31, 2003. A decline in the volume of non-accrual loans held for investment positively impacts GreenPoint's allowance
for loan losses because there are fewer loans that can experience losses. However, there were $7 million more of other real estate owned as of December 31, 2003 compared with
December 31, 2002, indicating that more of the non-accrual loans had defaulted resulting in the repossession of the underlying collateral. This trend of increasing repossessions is
included in the valuation of the allowance. There were $2 million more loans charged off during 2003 than during 2002. This was partially due to higher loss severity on second mortgage and home
equity loans. This higher loss severity was incorporated into the assumptions used in the allowance for loan losses. The combination of the higher second mortgage volume and higher loss severity
resulted in an increase in the allowance for loan losses of $2 million.

44

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The
combination of all of the individual positive and negative changes to the allowance for loan losses noted above resulted in no change to the total allowance for loan losses between
December 31, 2002 and December 31, 2003. The total allowance for loan losses remained at $78 million.

Due
to inherent limitations in using modeling techniques and historical loss percentages, GreenPoint also maintains an unallocated allowance for first mortgage loans. This allowance
addresses short-term changes in the first mortgage loan's historical real estate owned performance, delinquency trends, loan products, national real estate values and portfolio growth. The
analysis also encompasses an assessment of changes in the macro-economic environment. At the end of each quarter, management determines the adequacy of the unallocated reserve to address these risks.

Non-Performing Assets

Non-performing assets consist of non-accruing loans and other real estate owned. Total non-performing assets were
$285 million at December 31, 2003 compared to $243 million at December 31, 2002. The increase was entirely attributable to a $37 million increase in
non-accruing loans held for sale. These primarily represent loans which have been repurchased pursuant to representation and warranty commitments. These repurchases have increased due to
the higher level of loan sales. Estimated future losses on these loans are measured as part of the representation and warranty liability (see Note 5).

GreenPoint
attempts to convert non-performing assets to interest-earning assets as quickly as possible, while minimizing potential losses on the conversion.

The
tables in Notes 4 and 6 to the Consolidated Financial Statements present further information about GreenPoint's non-performing assets.

The
following table sets forth information regarding all non-accrual loans, including loans in forbearance, loans which are 90 days or more delinquent but on which the
Company is accruing interest and other real estate owned at the dates indicated. If all non-accrual loans had been performing in accordance with their original terms, the Company would
have recorded interest income of $28 million, as opposed to $22 million, which was included in interest income for the year ended December 31, 2003.

|                                                                             |                                             | December 31,                  |     
|---------------------------------------------------------------------------- | ------------------------------------------- | ----------------------------- | ----
|
|
|Non-accrual mortgage loans held for investment                               |                                             | $                             | 158 
|Non-accrual other loans(1)                                                   |                                             |                               |    
|                                                                             |                                             |                               |     
|                                                                             | Total non-accrual loans held for investment |                               |     
|Non-accrual loans held for sale                                              |                                             |                               | 103 
|                                                                             |                                             |                               |     
|                                                                             |                                             | Total non-performing loans(2) |     
|Other real estate owned, net(3)                                              |                                             |                               | 24  
|                                                                             |                                             |                               |     
|                                                                             |                                             | Total non-performing assets   |     
|                                                                             |                                             |                               |     
|Total non-performing assetsdiscontinued business                            |                                             | $                             | 6   
|                                                                             |                                             |                               |     
|Other loans 90 days or more delinquent and still accruing                    |                                             | $                             | 3   
|                                                                             |                                             |                               |     
|Non-accruing loans held for investment to mortgage loans held for investment |                                             |                               | 1.60
|Non-accruing loans held for sale to mortgage loans held for sale             |                                             |                               | 2.15
|Non-performing assets to total assets                                        |                                             |                               | 1.24

---

45

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on
which delinquent principal and interest may be deducted from the borrower's deposit account balances.

Loan Servicing Portfolio

The following table summarizes the dollar amount of mortgage loans serviced for GreenPoint and others:

|                                    |                                | December 31,
|----------------------------------- | ------------------------------ | ------------
|
|
|Mortgage:                           |                                |             
|Serviced for GreenPoint(1)          |                                | $           
|Serviced for others (third parties) |                                |             
|                                    |                                |             
|                                    | Total loan servicing portfolio |             
|                                    |                                |             

---

Stock Repurchase Program

In September 2003, the Company's Board of Directors authorized a new share repurchase program of up to 5%, or approximately 6.8 million, of its
outstanding shares. The repurchase will be at the Company's discretion, based on ongoing assessments of the capital needs of the business and market valuation of its stock.

The
Company's previous share repurchase program, authorized in 2002, was completed in September 2003. Under this program, the Company repurchased 7.2 million shares, at a
cost of approximately $238 million. The repurchased shares are being held in treasury.

Shares
repurchased and cost for the years ended December 31, 2003, 2002, 2001 and 2000 and 1999 are summarized as follows:

|                             |  | For the Year Ended December 31,
|---------------------------- |  | -------------------------------
|
|
|Number of shares repurchased |  |                                
|Cost of repurchases          |  | $                              
|                             |  |                                

Supplemental Performance MeasurementsTangible Earnings

Tangible earnings is a non-GAAP measurement that is defined as net income from continuing operations less charges related to goodwill and the Employee
Stock Ownership Plan ("ESOP"). The excluded expenses, unlike other expenses incurred by the Company, do not reduce GreenPoint's

46

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tangible
capital thereby enabling the Company to increase shareholder value through the growth of earning assets, increases in cash dividends and additional repurchases of the Company's stock.

|                                              |                                                  | For the Year Ended December 31, |      
|--------------------------------------------- | ------------------------------------------------ | ------------------------------- | -----
|
|
|Net income from continuing operations         |                                                  | $                               | 471  
|Add back:                                     |                                                  |                                 |      
|                                              | Goodwill amortization                            |                                 |      
|                                              | Employee Stock Ownership and stock plans expense |                                 |      
|                                              |                                                  |                                 |      
|Tangible earnings from continuing operations  |                                                  | $                               | 498  
|                                              |                                                  |                                 |      
|Tangible earnings per share(1)                |                                                  | $                               | 4.00 
|                                              |                                                  |                                 |      
|Performance ratios from continuing operations |                                                  |                                 |      
|Tangible earnings return on average assets    |                                                  |                                 | 2.24 
|Tangible earnings return on average equity    |                                                  |                                 | 26.68
|Tangible earnings return on tangible equity   |                                                  |                                 | 33.85
|                                              |                                                  |                                 |      

---

Consolidated Statement of Financial Condition

Total assets increased to $23.0 billion at year-end 2003 from $21.8 billion a year ago. The balance sheet reflects growth in the
securities portfolio of $2.0 billion. This was partially offset by a decrease in loans receivable held for sale of $831 million.

Core
deposits increased $1.6 billion since December 31, 2002, reflecting the continued success of a variety of initiatives to attract checking accounts. This growth was
offset in part by a decline of $999 million in higher-cost term certificates of deposit. Market borrowings increased $657 million since year-end 2002, reflecting
the net additional funding needed.

Comparison of Operating Results for the Years Ended December 31, 2002 and 2001Continuing Operations

General

Net income from continuing operations for 2002 was $498 million, $3.69 per diluted share, a 23% increase over 2001. The results reflected significant
strength and growth in both the retail banking and mortgage banking businesses.

Net Interest Income

Net interest income on a fully taxable-equivalent basis increased by $128 million, or 20%, to $761 million for 2002 from $633 million for
2001. The improvement versus 2001 was due to an increase in average earning assets. The net interest margin decreased from 3.94% to 3.88%.

Average
earning assets increased by $3.6 billion, or 22% to $19.7 billion in 2002 from $16.1 billion in 2001. The increase reflected growth loans held for sale and
mortgage loans held for investment due to the higher origination volume, and a higher balance of investment securities. A continued decline in the level of market interest rates resulted in a decline
in the yield on average earning assets of 120 basis points compared to a year ago.

Average
mortgage loans held for investment in 2002 increased $759 million from 2001. Average loans held for sale rose $1.9 billion reflecting increased origination volume.
The average balance of securities increased $957 million to $4.5 billion.

47

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The
cost of interest-bearing liabilities decreased by 131 basis points to 2.94% from 4.25% in the prior year. The average balance of lower cost core deposits increased
$1.2 billion, while the average rate paid on the deposits declined by 72 basis points. The average balance of money market accounts increased $459 million and the average balance of
demand deposit and NOW accounts increased $662 million. The increase in demand deposit balances was attributable to the Bank's new free checking and high interest checking programs.

Provision for Loan Losses

The provision for loan losses was $2 million for 2002, compared to a credit of $12 million in 2001. The benefit recorded in 2001 was the result of
continued strong credit performance in the Company's held for investment mortgage portfolio. Residential mortgage charge-offs were $2 million, versus $5 million a year ago.

Non-Interest Income

Non-interest income was $462 million for 2002, a decrease of $3 million from $465 million in 2001. The decrease was due to a
$20 million drop in the gain on sale of mortgage loans offset by a $31 million increase in fee and commission income. Loan servicing fees increased by $12 million due to a decline
in impairment charges which totaled $4 million in 2002, compared to $18 million in 2001.

Banking
fees and commissions increased by $12 million, or 27%. The improvement over 2001 is primarily attributable to increased number of checking accounts, resulting in
additional fees; a higher fee structure; and increased 3rd party investment fees.

Gain on Sale of Loans

Gain on sale from whole loan sales and securitizations of mortgage loans declined $20 million from 2001 to 2002. The gain from whole loans sales declined
$3 million while the gain from mortgage securitizations declined $17 million due to the decision to sell rather than securitize most of the Company's home equity and second mortgage
originations. Whole loan sale margins on specialty products averaged 277 basis points, versus 315 basis points in the prior year.

Non-Interest Expense

Total non-interest expense was $427 million for 2002, a decline of $5 million from $432 million in 2001. The decline was due to
an accounting change, which ended the amortization of goodwill, which totaled $45 million in 2001. Excluding the effect of the accounting change, non-interest expense increased 10%,
$40 million, over the level reported in 2001. Salaries and benefits increased $25 million, most of which related to increased staffing levels and commissions paid in connection with
record mortgage volumes. Premises and equipment expense declined $6 million, as the prior year included costs associated with the relocation of GPM's headquarters. Advertising costs increased
$7 million due to the increased promotion of the free checking and high interest checking products and increased advertising associated with the branch expansion program. The increase of
$13 million in other administrative costs was partially associated with increased mortgage loan processing and also reflected certain non-recurring expenses associated with
improving operating efficiencies in both businesses.

Income Tax Expense

Total income tax expense increased $29 million, or 11%, to $288 million for 2002 from $259 million for 2001. The increase in 2002 compared to
2001 is due to higher pre-tax income, partially offset by a decline in the effective tax rate from 38.9% in 2001 to 36.7% in 2002.

48

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Loan Originations

Mortgage originations during 2002 were $33.1 billion, up from $26.3 billion during 2001. The growth reflected continued strength in specialty
products originations, along with a significant 53% growth in agency and jumbo originations. The strength in the agency and jumbo products was attributable to the favorable interest rate environment
and high level of refinance activity in 2002, while the 8% decline in specialty originations reflected the increased pricing and competitive pressures in this market.

Discontinued Operations

Plan of discontinuance and balance sheet composition

In December 2001, GreenPoint formally adopted a plan to discontinue the manufactured housing lending business. The Plan as approved by GreenPoint's Board
of Director's included the following elements:



A
further description of the accounting applied to the discontinued operation is included in the Critical Accounting Policies section of MD&A. The balance sheet of the discontinued
business includes all of those assets and liabilities previously included in the manufactured housing segment results. The current balance sheet is included in Note 13. The assets include loans
receivable held for investment, servicing assets, servicer advances and deferred tax assets relating to the discontinued manufactured housing operation. The liabilities include the liability under
recourse exposure, and various accrued expenses associated with obligations to surety providers and funds to be paid to the securitization trusts.

All
of the loans receivable held-for-sale previously held by the manufactured housing segment ($705 million at December 31, 2001) were sold in early
2002 in conjunction with the decision to discontinue the business. Loans receivable remaining on the books at December 31, 2003 and 2002 ($55 million and $48 million,
respectively), primarily represented advances
made to borrowers in conjunction with insurance contracts which the Company is required to make under existing servicing obligations.

Comparison of Operating Results for the Years Ended December 31, 2003, 2002, and 2001

The net income from discontinued operations for the year ended December 31, 2003 and 2002 was $1 million and $5 million, respectively. The
2003 and 2002 results reflect performance consistent with the operating plan established when the business was discontinued in December 2001. For the year ended December 31, 2001, the
reported net loss from the discontinued operation was $704 million.

The
2003 results reflected servicing income which was $5 million lower than projections, marginally lower net interest income of $2 million, and a $10 million
favorable variance associated with projected future operating performance.

49

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The
2002 results included the impact of an agreement to restructure the credit enhancement and servicing arrangements with a surety provider as described more fully in Note 14 to
the consolidated financial statements. The 2002 results also included the following pre-tax variances from the initial estimates: a favorable variance from the sale of loans of
$22 million, a favorable variance associated with the projected future operating performance of the discontinued business of $26 million, and an unfavorable variance associated with a
change in valuation of retained interest of $33 million.

The
2001 results consisted of a net loss from disposal of the discontinued business of $440 million and a net loss from operations of the discontinued business of
$264 million. The loss from disposal of the discontinued business included the write-off of goodwill of $390 million, a $172 million charge associated with the
valuation of retained interests, a servicing asset impairment of $10 million and a $135 million charge associated with the write-down of loans to their estimated fair value.
The loss from operations of the discontinued business included a fourth quarter charge of $305 million associated with the valuation of retained interests and the recognition of a servicing
asset impairment of $56 million. The fourth quarter 2001 charges combined with the loss from disposal of the discontinued operation resulted in the net of tax charge of $663 million
recorded in conjunction with the decision to discontinue the manufactured housing lending operation.

Valuation of manufactured housing retained interests and recourse transactions

As more fully described in Note 14, GreenPoint has entered into certain off-balance sheet transactions, although encompassed in Discontinued
Operations, still represent recourse obligations of the company. With respect to performance of the pools of manufactured housing loans in those transactions, both delinquencies and net credit losses
for the year ended 2003 have declined from 2002. This decline occurred in tandem with the declining balances of the securitized and sold loans.

With
respect to the assumptions used in valuing the liability for recourse exposure and retained interest asset, prepayment speed assumptions were lowered during the year ended 2003. The
weighted average loss rate assumption did not change, but lowering the prepayment speed assumption will translate into more loans projected to default, therefore the cumulative loss rate for the year
ended 2003 was higher than for 2002. The assumptions used in these valuation are outlined in Note 14.

During
the year ended December 31, 2003 $59 million of the reserve for impairment of manufactured housing servicing assets was deemed permanent and therefore charged off.
The classification to permanent from temporary had no financial effect on the company as the reduction to discontinued operations earnings was recorded in the prior periods when the impairment was
recognized.

50

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Risk Management

The Company has a Corporate Risk Oversight Committee which monitors and supervises the wide variety of risks encountered in the course of business. The Committee
is chaired by the President and Chief Operating Officer and includes the heads of its two businesses, the Chief Financial Officer, the Head of Risk Management and the General Counsel. The Committee
meets periodically to review credit risk, including both on-balance sheet and off-balance sheet exposure, market risk and operating and business risks which include, but are
not limited to, legal and systems risks. These individual types of risks are also analyzed and monitored by separate committees comprised of experts within the business units and on the corporate
staff. Liquidity, Capital and Credit Risk Management are described fully below. The Market Risk analysis is included in Item 7A.

Liquidity Risk Management

The Bank's primary sources of funding from financing activities include deposit gathering, advances from the FHLB, short and long-term borrowings
under repurchase agreements and overnight and term Federal Funds purchases. Cash flows related to operating activities primarily consist of cash disbursed to fund loan originations and cash received
from loan sales and securitizations. Cash flows related to investing activities include purchases of securities and loans receivable held for investment, funds received from loan and securities
principal and interest payments, and sales and maturities of mortgage-backed and other investment securities. While maturities and scheduled amortization of loans and securities are a predictable
source of funds, the amount of principal prepayments on loans and mortgage-backed securities can only be estimated, as they tend to fluctuate with various exogenous factors including the general
level, and direction, of interest rates.

Funds
provided from financing activities totaled $848 million for the year ended December 31, 2003. At December 31, 2003 total borrowings were $7.9 billion,
up $657 million from $7.2 billion at December 31, 2002. Membership in the FHLB allows the Bank to secure advances in proportion to its investment in FHLB stock. At
December 31, 2002 the Bank had $2.8 billion in outstanding FHLB term advances. The Bank's ability to secure further advances from the FHLB is based on the market value of the pledged
loan portfolio. At December 31, 2003, based on the then current market value of the pledged portfolio, the Bank had additional FHLB borrowing capacity of $1.7 billion. The Bank also uses
its mortgage-backed and other investment securities as collateral under short and long-term repurchase agreements. As of December 31, 2003 the Bank had $3.3 billion in
outstanding repurchase agreements, which was an increase of $1.3 billion from the previous year. At December 31, 2003 the Company had un-pledged securities eligible as
collateral for repurchase agreements of
$2.0 billion. The Bank also secures overnight and term funding in the Federal Funds market. At December 31, 2003 the Bank had $1.1 billion of overnight purchased Federal Funds.

Deposits
continue to be the primary funding source for the Company. Deposit balances experienced a net $750 million increase in 2003. Lower-cost core deposits
increased by $1.6 billion offset by a decrease in higher cost certificates of deposit and wholesale money market deposits of $837 million. The decline in certificate of deposit balances
resulted from management's decision to utilize lower cost alternative funding sources rather than pay higher priced retail rates. Time deposits maturing within one year totaled $2.9 billion at
December 31, 2003. Consistent with historical trends, a substantial portion of these deposits are expected to be renewed. To the extent these deposits are not renewed, funding is expected to be
provided through continued growth in core deposits (checking, savings and money market deposits) and through alternative financing sources.

The
Company and the Bank have received both short-term and long-term debt ratings from three recognized credit rating firms. These ratings allow the Company and
the Bank to access the wholesale debt markets, thereby providing the Company with additional flexibility in accessing and utilizing the most cost effective and appropriate means for meeting its
funding needs. As of December 31, 2003 the Bank had a medium term note shelf with $2.8 billion in available capacity.

51

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Funds
used in investing activities totaled $2.2 billion in 2003, primarily resulting from $8.3 billion of investment securities purchases. These investments were partially
offset by cash flows from maturities and sales of investment securities (primarily mortgage-backed securities) which totaled $2.4 billion as well as significant mortgage and securities
principal prepayments which resulted from the historically low, and generally declining, interest rate environment prevalent since the beginning of 2003.

Funds
provided by operating activities totaled $1.3 billion for the year as total loan originations of $38.9 billion were less than the proceeds from loan sales of
$39.6 billion. The significant loan origination and sale activity in 2003 reflects the continued strong market for mortgage originations and the continued high level of demand for these assets
in the secondary market. At December 31, 2003 the Company had outstanding mortgage loan commitments of $7.0 billion. As of December 31, 2003 there were $15 million of
outstanding mortgage-backed and other securities commitments. The Company anticipates that through the use of internally generated cash flow, the capital markets to securitize and sell its mortgage
loan commitments, and other available financing alternatives that it will have sufficient funds available to meet its current loan and securities commitments.

The
Company's most liquid assets are cash and cash equivalents, including money market investments. The level of these assets is dependent upon the Company's operating, financing,
lending, and investing activities during any given period. Cash and cash equivalents, including money market investments, totaled $335 million at December 31, 2003 compared to
$369 million at December 31, 2002.

Capital Risk Management

The Company and the Bank are subject to minimum regulatory capital requirements imposed by various federal and state banking authorities, including the Federal
Reserve Board, the FDIC and the New York State Banking Department. These capital requirements vary according to an institution's capital level and the composition of its assets. Furthermore, pursuant
to the FDIC Improvement Act of 1991 ("FDICIA"), the federal banking regulators have set the minimum capital ratios for a well-capitalized banking institution at 6% Tier 1
risk-based capital, 10% total risk-based capital and 5% Tier 1 leverage capital. At December 31, 2003, the Company and the Bank exceeded these levels and expect to be in
excess of the minimum ratios required of well-capitalized institutions in the future.

Following
is a table of the components of regulatory capital as defined by the banking regulators for risk-based capital and leverage ratio guidelines.

|Components of Capital    |                                             | At December 31, |       
|------------------------ | ------------------------------------------- | --------------- | ------
|
|
|Tier 1 Capital:          |                                             |                 |       
|                         | Common stockholders' equity                 |                 | $     
|                         | Unallocated ESOP shares                     |                 |       
|                         | Unearned stock plans shares                 |                 |       
|                         | Capital securities                          |                 |       
|                         | Goodwill                                    |                 |       
|                         | Accumulated other comprehensive income, net |                 |       
|                         | Other deductions                            |                 |       
|                         |                                             |                 |       
|                         |                                             | Tier 1 Capital  |       
|                         |                                             |                 |       
|Tier 2 Capital:          |                                             |                 |       
|                         | Subordinated bank notes                     |                 |       
|                         | Qualifying allowance for loan losses        |                 |       
|                         |                                             |                 |       
|                         |                                             | Tier 2 Capital  |       
|                         |                                             |                 |       
|Total qualifying capital |                                             | $               | 1,875 
|                         |                                             |                 |       
|Risk-weighted assets     |                                             | $               | 14,632
|                         |                                             |                 |       

52

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The
calculations of Tier 1 Capital and Total Capital include the Capital Securities. These securities were issues by GreenPoint Capital Trust I, a Delaware statutory business
wholly-owned by the Company. Effective December 31, 2003, the provisions of Financial Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46") required the company
to deconsolidated the Trust. The Company continues to include the Capital Securities in its Tier 1 Capital and Total Capital at December 31, 2003, based on a supervisory letter issued by the
Board of Governors of the Federal Reserve System in July 2003. This letter instructed bank holding companies to continue to include securities such as Capital Securities in these calculations
for regulatory purposes until notice is given to the contrary.

GreenPoint
remains committed to maintaining its capital at levels sufficient to provide for the continued growth of the Company through prudent investments and acquisitions while also
providing shareholder value. The Company manages its capital based on its near and long term needs. GreenPoint's total stockholders' equity decreased by $85 million to $1.8 billion at
December 31, 2002 from $1.9 billion at December 31, 2002. The decrease was the result of treasury stock repurchases offsetting 2003 retained net income.

The
stock repurchase program authorized by the Company's Board of Directors in September 2002 was completed in March 2003. Under this program, the Company purchased
7.5 million of its shares at a cost of approximately $216 million. In February 2003, GreenPoint's Board of Directors authorized a new program to purchase an additional 5%, or
5 million of its outstanding shares.

Credit Risk Management

During 2003, the Company originated mortgage loans for its own portfolio and for disposition in the secondary markets in the form of whole loan sales and
securitizations. In the fourth quarter of 2002, GreenPoint began to originate small business loans through its branch system, which are placed in its portfolio. Outstanding small business loans were
$4 million and $0.1 million, at December 31, 2003 and 2002, respectively. As of December 31, 2001, the Company discontinued originating manufactured housing loans.

In
general, whole loan mortgage sales transfer the credit risk to the purchasers. Loans are sold without recourse to GreenPoint Mortgage, except for the specified representations and
warranties in the sales agreement. These representations and warranties state that if certain deficiencies exist in the loan documentation when the loan was sold, then the purchaser has the option of
returning the purchased loans to the Company. Risk management monitors the Company's loss performance on repurchases and indemnifications on previously sold loans.

In
contrast, for loans placed in the portfolio, or for loans securitized, the Company retains all or much of the credit risk. The Company has a residual interest in its securitizations.
If the loans perform worse than expected, then it could negatively impact the value of the Company's retained interests. The Company has a residual interest in its securitizations. The initial value
of these retained interests is determined at the time that the securitization is closed using a net present value analysis of future cash flows. These cash flows are based on assumptions related to
prepayments and losses on the collateral, overcollateralization requirements, and the spread between the interest rates on the loans and on the certificates. Any difference between the actual cash
flows and the assumptions used in the initial net present value analysis could positively or negatively impact the value of the Company's retained interests. The risk to the Company is that the value
of the retained interests will be less than the initial value, resulting in a reduction of the value on the Company's books, also known as impairment. Impairment in the value of the retained interests
could reduce the Company's income in the period that it occurs.

GreenPoint
Bank and GreenPoint Mortgage maintain underwriting policies, procedures and approval authorities appropriate to their businesses. The chief credit executive in GreenPoint
Mortgage reports directly to the chief executive of the business, outside of the production organization. The chief credit executive in the small business banking group within GreenPoint Bank reports
directly to the

53

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head
of the small business banking group. With respect to mortgage loans originated for whole loan sale to the secondary markets, where credit risk is transferred, underwriting criteria are
established to meet the investor requirements. An executive-level Risk Management Division determines the criteria required for loans which will be transferred to GreenPoint's portfolio or sold
through securitizations. In GreenPoint Bank, a sophisticated scoring system is one of the tools being utilized in the underwriting process.

Oversight
of the appraiser approval and appraisal review process is conducted independent of the production organization. Appraisers are required to meet strict standards for approval by
GreenPoint, and their performance is monitored on a regular basis. With oversight by Risk Management, a comprehensive quality control process is in place to ensure that mortgage loans being originated
meet the Company's underwriting standards, and that required operating procedures are followed. Loans are selected monthly on a pre and post funding basis for review by quality control analysts and
staff appraisers. A quality control process has also been established for the small business loans being originated by GreenPoint with monthly reviews on a post-funding basis.

Risk
Management personnel monitor closely the performance of all loans on which the Company retains credit risk. On securitization or sale, expectations are set on the default, recovery
and voluntary prepayment rates. Each pool of loans is reviewed monthly to ensure that performance is meeting those expectations. In the event performance does not meet expectations, the assumptions
are revised. Final responsibility for these judgments resides with executive management, independent of the business unit.

Risk
Management reviews monthly the delinquency and loss trends for all of the mortgage, manufactured housing, and small business loans serviced by the Company, whether or not it retains
credit exposure. These reviews are intended to identify significant changes in credit quality which may indicate changes to the Company's exposures or to the efficacy of its underwriting of loans sold
to other investors. Such changes could prompt adjustments to the Company's underwriting criteria or servicing procedures. Risk Management also reviews the characteristics and performance of loans in
GreenPoint's owned portfolio that are serviced by third parties on a monthly basis.

GreenPoint's
mortgage loan origination activity is geographically diversified throughout the United States. GreenPoint began originating loans outside of New York State in 1996. At
December 31, 2003, approximately 64% of the Company's held for investment mortgage loan portfolio was secured by properties outside of New York. The Company tracks economic and housing market
trends to identify areas for expansion and as an early warning mechanism. The Company also closely monitors trends in delinquent and non-performing loans through cycles in the economy and
in the real
estate market. These economic and performance trends are analyzed in the ongoing fine-tuning of lending practices.

The
Company uses various collection strategies to maintain contact with the borrowers in order to obtain repayment. Collection activities for GreenPoint Mortgage are centralized in a
servicing unit in Columbus, Georgia. GreenPoint Credit's collection activities were centralized during 2002 in a servicing center in Atlanta, Georgia in order to target delinquent accounts more
effectively utilizing more advanced technology. Remarketing activities for GreenPoint Credit remain decentralized among several regional offices in order to repossess and liquidate collateral more
effectively, thereby minimizing the loss severity. Collection efforts for GreenPoint Bank's business banking loans are handled in a collaborative manner by the credit analysts in New York and the
servicing center in Columbus, Georgia.

The
Company has set forth a policy for establishment and review of the adequacy of the allowance for loan losses in order to provide for estimated costs related to the problem loans.
Management believes that the allowance for loan losses is adequate. However, such determination is susceptible to the effect of future unanticipated changes in general economic and market conditions
that may affect the financial circumstances of borrowers and/or residential real estate values within the Company's lending areas. The Company has also established a liability to cover losses
associated with repurchases and indemnifications of sold loans due to representations and warranties. This liability was sized using historical loss data associated with loan sales and additional
reserves are set aside as the volume of sold loans increases.

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Long-Term Debt and Other Contractual Obligations

The following table represents the Company's long-term debt and other contractual obligations as of December 31, 2003:

|(In millions)                                 |  | Total |       | Less than
1 Year |   | 1-3
Years |  | 3-5
Years |     | More than
5 Years
|--------------------------------------------- |  | ----- | ----- | ---------------- | - | --------- |  | --------- | --- | -----------------
|Certificates of deposits of $100,000 and over |  | $     | 957   |                  | $ | 579       |  | $         | 212 |                  
|Long-term debt                                |  |       | 700   |                  |   |          |  |           |    |                  
|Lease commitments                             |  |       | 246   |                  |   | 33        |  |           | 57  |                  
|Purchase obligations(1)                       |  |       | 90    |                  |   | 29        |  |           | 46  |                  
|                                              |  |       |       |                  |   |           |  |           |     |                  
|                                              |  | $     | 1,993 |                  | $ | 641       |  | $         | 315 |                  
|                                              |  |       |       |                  |   |           |  |           |     |                  

---

Off Balance Sheet Arrangements

The following table represents the Company's off balance sheet arrangements and related expiration dates as of December 31, 2003:

|(In millions)                             |  | Total |       | Less than
1 Year |   | 1-3
Years |  | 3-5
Years |    | More than
5 Years
|----------------------------------------- |  | ----- | ----- | ---------------- | - | --------- |  | --------- | -- | -----------------
|Letters of credit outstanding(1)          |  | $     | 537   |                  | $ |          |  | $         |   |                  
|Guarantees(2)                             |  |       | 40    |                  |   | 40        |  |           |   |                  
|Unused small business lending commitments |  |       | 4     |                  |   | 4         |  |           |   |                  
|Unused Home Equity Lines of Credit        |  |       | 631   |                  |   | 18        |  |           | 85 |                  
|Mortgage loan pipeline(3)                 |  |       | 7,043 |                  |   | 7,043     |  |           |   |                  
|                                          |  |       |       |                  |   |           |  |           |    |                  
|                                          |  | $     | 8,255 |                  | $ | 7,105     |  | $         | 85 |                  
|                                          |  |       |       |                  |   |           |  |           |    |                  

---

In
connection with its sale of mortgage loans, the Company provides certain representations and warranties, which provide the purchaser the option of returning a
purchased loan to the Company under certain conditions. The Company may recognize losses as the result of the repurchases of loans under the arrangements. Losses are estimated based on historical
experience and are recorded as a reduction to the gain on sale of loans at the time of the original sale. Refer to Note 5 for further quantitative information about the liability for
representations and warranties.

Impact of Recent Accounting Pronouncements

On April 30, 2003, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities" ("SFAS 149"). This statement clarifies under what circumstances a contract with an initial net investment meets the
characteristics of a derivative and when a derivative contains a financing component that warrants special reporting in the statement of cash flows. SFAS 149 also amends previous accounting
pronouncements to result in more consistent reporting of contracts that are derivatives in their entity or that contain embedded derivative. Generally, this statement is effective for contracts
entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The adoption of FAS 149 did not have a significant effect on the
Company's earnings or financial position.

55

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On
May 15, 2003, the FASB issued Statement of Financial Accounting Standards No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities
and Equity" ("SFAS 150"). This statement requires issuers of financial instruments falling within the scope of SFAS 150, which have the characteristics of both liabilities and equity to
be classified as liabilities and measured at fair value. This Statement was effective for financial instruments entered into or modified after May 31, 2003 and for all financial instruments on
July 1, 2003. The adoption of SFAS 150 did not have a significant effect on the Company's financial position.

On
December 23, 2003, the FASB issued a revised Statement of Financial Accounting Standards No. 132, "Employer's Disclosures about Pension and Other Post Retirement
Benefits" ("SFAS 132"). The revised statement has no effect on the measurement or recognition of those plans required by FASB Statements No. 87, 88, and No. 106. The revised
statement does require additional disclosures on the assets, obligations, cash flows and net periodic benefit costs of defined benefit pension plans and other postretirement benefit plans. The
disclosure requirements in the revised FAS 132 are effective for interim and annual periods ending after December 15, 2003. The additional disclosures required under SFAS 132 have
been included in Note 11.

On
November 25, 2002, the FASB issued Financial Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others" ("FIN 45"). Fin 45 expands on the accounting guidance of FASB Statements No. 5, 57, and 107. This interpretation also incorporates without change the guidance in FASB
Interpretation No. 34, "Disclosure of Indirect Guarantees of Indebtedness of Others", which is being superseded. FIN 45 elaborates on the disclosures to be made by a guarantor in its interim
and annual financial statements about its obligations under certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at the inception of the guarantee, a
liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and initial measurements provisions apply on prospective basis to guarantees issued or
modified after December 31, 2002. The additional disclosures required under FIN 45 have been included in Note 16.

On
January 17, 2003, the FASB issued Financial Interpretation No. 46, "Consolidation of Variable Interest Entities", ("FIN 46"). This Interpretation of Accounting Research
Bulletin No. 51, "Consolidated Financial Statements" address consolidation by business enterprises of variable interest entities, which have certain characteristics. FIN 46 requires a variable
interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the
entity's residual returns or both. FIN 46 also requires disclosures about variable interest entities that a company is not required to consolidate but in which it has a significant variable interest.
This interpretation applied immediately to variable interest entities created after January 31, 2003. In October of 2003, the FASB announced that the effective date of FIN 46 on variable
interest created before February 1, 2003 was deferred from July 1, 2003 to periods ending after December 15, 2003.

As
of December 31, 2003, the Company had variable interests in various qualified special purposes entities, which are exempt from the provisions of FIN 46. The Company reports the
rights and obligations related to these qualifying special-purpose entities according to the requirements of Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities. The provisions of FIN 46 have resulted in the Company deconsolidating GreenPoint Capital Trust I, a subsidiary trust associated with the issuance of trust preferred
securities. The deconsolidation did not have a significant effect on the Company's earnings or financial position and management anticipates the application of FIN 46 will not have a significant
effect on the Company's earnings or financial position.

56

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Overview

The Company's market risk exposure is limited solely to interest rate risk. Interest rate risk is defined as the sensitivity of the Company's current and future
earnings to changes in the level of market interest rates. Part of the Company's interest rate risk resides on the balance sheet, as the maturity and repricing characteristics of its assets do not
match those of its liabilities. Additionally, a significant source of the Company's revenue, the proceeds from the sale of mortgage loans, depends on the volume of loan originations, which is
sensitive to the level and direction of market interest rates.

Market Risk Management Process

Management of interest rate risk is conducted within policies and limits approved by the Board of Directors. These policies and limits set forth the maximum risks
to earnings and market value that the Board of Directors deems prudent. In addition, they govern permissible investments and off-balance sheet transactions, and maximum counterparty
exposure limits. The formulation and implementation of any Risk Management strategy involves numerous day-to-day decisions involving the acquisition or divestiture of loans and
investment securities, reinvestment of cash flows, the selection of funding instruments and maturities and the use of off-balance sheet instruments. Together, these incremental decisions
result in a strategy that is represented by the interest rate risk position. The performance of the positions and strategies are formally reviewed by the Asset and Liability Management Committee
("ALCO") in the context of the outlook for interest rates and general business conditions, as well as for compliance with established risk tolerances and policies. The committee is chaired by the
Chief Financial Officer and includes the Treasurer, the Head of Risk Management and the Company's Senior Business Unit and Financial Executives.

Interest Rate Risk Management Strategies

Interest rate risk inherent on the balance sheet is managed taking into account the risks to earnings in the Company's main businesses. Most importantly, the
Company's mortgage origination business is sensitive to the level of interest rates. In a low or declining interest rate environment mortgage volumes tend to increase as demand for home purchases and
mortgage refinancing increases, leading to growth in mortgage banking revenues. Conversely, high or rising rates subdue mortgage demand, leading to less revenue.

These
dynamics tend to be partly offset by the sensitivity of retail banking revenues to changes in the level of interest rates. Typically in a high rate environment, spreads earned on
retail deposits increase, as rates paid on those deposits increase more slowly than market rates in general. Additionally, the balance sheet is normally positioned to allow for higher net interest
income and wider net interest margins as rates rise. This is known as an asset sensitive balance sheet position, and provides a further offset to the interest rate cyclicality of mortgage banking
revenue.

The
interest rate sensitivity of the Company's balance sheet originates with the cash flow characteristics of its loan portfolios and deposit products. Management alters the overall
balance sheet sensitivity through adjustments to the securities investment portfolio and the maturities of market borrowings, as well as various deposit pricing and derivatives strategies.

Interest Rate Risk Measurement

The principal tool used to measure balance sheet sensitivity at any point in time, and to assess the impact of potential business and rate risk management
strategies, is a simulation of net interest income. The simulation gives effect to management assumptions concerning the repricing of assets and liabilities, as well as business volumes under a
variety of hypothetical interest rate scenarios. These hypothetical scenarios incorporate parallel yield curve shifts in interest rates of plus or minus 100 and 200 basis points. In addition,
non-parallel yield curve flattening and steepening scenarios are modeled.

57

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Management
also estimates the sensitivity of the market value of equity to supplement the net interest income simulations in the management of market risk. The market value sensitivity
model measures the expected change in the market value of the Company's assets and liabilities resulting from a large, instantaneous change in the level of interest rates. The net impact of the
changing market values of assets and liabilities represents a measure of the change in the market value of the Company's equity.

Management
uses the net interest income simulations as the primary tool in assessing the impacts of business and investment decisions on the Company's market risk profile. The
simulations reflect changes in net interest income only during the period over which the simulations are conducted. By modeling the cash flows over the entire lives of the assets and liabilities, the
market sensitivity model captures the longer-term consequences of balance sheet decisions. As such, management views maintaining market sensitivity at prudent levels, and within
Board-approved limits, as a constraint on its business decisions and tactics.

The
most crucial management assumptions in the net interest income simulation and the market value sensitivity model concern prepayments on the Company's mortgage loan portfolio and the
pricing of retail deposits in various interest rate environments. As interest rates decline, mortgage prepayments tend to increase, reducing loan portfolio growth and lowering the portfolio's average
yield. Management's assumptions are guided by analyzing the prepayment performance of the Company's portfolio in past rate cycles as well as publicly available research on the prepayment behavior of
similar mortgage assets.

Rates
on non-maturity deposits rise and fall with market rates, but tend to move less than proportionately. Rates offered on retail certificates of deposit tend to move in
close concert with market rates, though history suggests they increase less rapidly as market rates rise. Extensive historical analysis shows that the Company's deposit volumes are relatively
insensitive to interest rate movements within the range encompassed by the scenarios.

The
following table presents the results of the net interest income simulations under a variety of hypothetical interest rate scenarios, based on the Company's balance sheet positions at
December 31, 2003 and 2002. The results are expressed as the percentage change in pretax net interest income from the base scenario in which interest rates are unchanged. The change in income
is measured over a period of twelve months.

|                  |          | Short-term Rate Changes: |      
|----------------- | -------- | ------------------------ | -----
|
|December 31, 2003 |          |                          |      
|                  | -150 bps |                          | (13.3
|                  | Parallel |                          | (7.8 
|                  | +150 bps |                          | (2.8 
|December 31, 2002 |          |                          |      
|                  | -150 bps |                          | (13.0
|                  | Parallel |                          | (5.8 
|                  | +150 bps |                          | (0.1 
|                  |          |                          |      

58

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The columns represent 100 and 200 basis point changesdown and upin the level of interest rates over a twelve-month time span. The rows indicate changes in the
shape of the yield curve over the same time period. The parallel row corresponds to changes in rate levels in which the yield curve retains its shape. In the -150 basis point scenarios,
the yield curve flattens, and in the +150 basis point simulations the curve steepens. For example, a parallel downward shift of 200 basis points would reduce net interest income by 7.8% from what
would be earned if rates remained constant. However, a decline of 200 basis points accompanied by a 150 basis point steeper curve, would reduce net interest income by only 2.8% over the unchanged
scenario. (As of December 31, 2003 and 2002 not all rates could fall 200 basis points without reaching zero. In these scenarios rates are reduced until they reach zero. These scenarios are
retained to allow for historical comparisons.)

Management
views the changes in the simulation results between the end of 2002 and the end of 2003 as relatively minor. At the end of both years the Company was asset sensitive, in that
net interest income would benefit from rising interest rates almost irrespective of any change in yield curve slope. Risks to net interest income in the event of declining rates and/or a flattening
yield curve were deemed acceptable. These interest rate scenarios would likely be accompanied by a strong market for residential mortgage origination, and the revenues arising from greater levels of
mortgage banking activities would mitigate or exceed the pressures on net interest income.

The
table below presents the results of the market value sensitivity model based on the balance sheet positions at December 31, 2003 and 2002:

|Market Value Sensitivity |  | -200 bps |    | -100 bps |    | +100 bps |    | +200 bps |   
|------------------------ |  | -------- | -- | -------- | -- | -------- | -- | -------- | --
|December 31, 2003        |  | (8.9     | )% | (2.0     | )% | (4.6     | )% | (11.1    | )%
|December 31, 2002        |  | (11.9    | )% | (3.2     | )% | 2.7      | %  | 0.5      | % 
|                         |  |          |    |          |    |          |    |          |   

The
after-tax value sensitivity to a 200 basis point instantaneous increase in interest rates was (11.1)% at the end of 2003, versus 0.5% at the end of 2002. The change
reflects the extension of the Company's mortgage loans and mortgage-backed securities in response to the increase in interest rates during the year. The extension, implying longer durations, increases
the price sensitivity of those assets to further increases in rates. However, management believes the additional sensitivity to rising rates is an acceptable risk. The position maintains an asset
sensitive income position to offset the potential decline in mortgage banking revenues that could accompany further rate increases.

The
simulations and market value sensitivities measure the exposure of net interest income and market value to changes in interest rates at a particular point of time. The risk position
is always changing. Management continuously monitors the Company's risk profile as it changes, and alters the rate sensitivity to ensure limits are adhered to, and that the resulting risk profile is
appropriate to its views on the likely course of interest rates and developments in its core businesses.

In
addition, the fair value of the mortgage company's servicing assets and retained interests from securitizations are directly affected by the level of prepayments associated with the
underlying loans. As interest rates decline the value of these assets will decline. Conversely as interest rates rise, the value of these assets will increase.

Derivative Financial Instruments

Interest rate derivatives, such as interest rate swaps and Eurodollar futures, are periodically integrated into the Company's interest rate positions and,
therefore, its simulations. The notional amounts of these instruments are not included in the company's balance sheet. At December 31, 2003, the Company had $350 million of
five-year interest rate swaps. These swaps effectively converted the 3.20% fixed rate coupon on the $350 million of Senior Notes maturing on June 6, 2008 into a floating

59

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rate
of 3-month libor minus 35 basis points, resetting quarterly. There were no other outstanding derivative financial instruments hedging the Company's interest rate position at
December 31, 2002.

The
Company does currently utilize derivative instruments to manage its exposure to interest rate risk associated with mortgage loan commitments.

Prior
to the closing of the loan, the Company generally extends an interest rate lock commitment to the borrower. As of December 31, 2003, the notional value of these commitments
is approximately $1.5 billion. The Company is exposed to subsequent changes in the level of market interest rates, and the spread over Treasuries required by investors. An increase in market
interest rates or a widening of spreads will reduce the prices paid by investors and the resultant gain on sale. To mitigate this risk, at the time the Company extends the interest rate lock
commitment to the borrower, the Company will enter into mandatory commitments to deliver mortgage whole loans to various investors, or to issue private securities and/or Fannie Mae and Freddie Mac
securities (forward delivery commitments.) These commitments effectively establish the price the Company will receive for the related mortgage loan thereby minimizing the risk of subsequent changes in
interest rates. At December 31, 2003, the Company had mandatory forward delivery commitments outstanding amounting to $1.8 billion.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

For the Consolidated Financial Statements of GreenPoint, see index on page 51.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

The Company's management, including its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls
and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934) as of December 31, 2003 and, based on its evaluation, has
concluded that the Company's disclosure controls and procedures were effective as of December 31, 2003. In addition, there has been no change in the Company's internal control over financial
reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial
reporting.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following sets forth-certain information regarding the individuals who are deemed to be executive officers of the Company.

Thomas S. Johnson, 63, has been Chairman and Chief Executive Officer of the Corporation since joining the Corporation in
August 1993. He also was President of the Corporation from August 1993 to October 1997. Mr. Johnson has served as President of both Chemical Bank and Manufacturers Hanover
Trust Company. He is a Director of Alleghany Corporation, a company engaged in insurance and industrial products businesses, RR Donnelley & Sons, Inc., a printing company, The Phoenix
Companies, an insurance and wealth management company, and a number of not-for-profit organizations, including Trinity College, The Asia Society, The Cancer Research Institute
of America, WNET Channel 13, New York and United Way of New York City. Mr. Johnson is Chairman of the United States-Japan Foundation and of the Institute of International Education. A graduate
of Trinity, he also has a masters degree in business administration from Harvard University.

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Bharat B. Bhatt, 60, has been a Director of the Corporation since October 1997. Mr. Bhatt joined the Corporation in
June 1995 as Vice Chairman and was appointed as the Corporation's President and Chief Operating Officer in October 1997. Mr. Bhatt served as the Chief Financial Officer of Shawmut
National Corporation from 1992 to 1994, as a Senior Vice President at Mellon Bank from 1989 to 1992 and held various management positions at Chemical Bank from 1971-1989. A graduate of the
University of Bombay, Mr. Bhatt also is a member of The Institute of Chartered Accountants.

Jean C. Bingham, 52, joined the Company in February 1993 and was appointed President of GreenPoint Credit in January 2003.
She formerly served as the Company's Executive Vice President, Risk Management, and Executive Vice President, Production, for GreenPoint Mortgage. Prior to joining the Bank, Mrs. Bingham served
as an Executive Vice President and Chief Operating Officer for Barclays American/Mortgage Corporation. She also served as a Vice President at Anchor Savings Bank and held senior positions at WeSav
Mortgage Corporation and Midland Mortgage Company in their Correspondent Division. Mrs. Bingham holds a BA in Political Science from the University of Minnesota.

Howard C. Bluver, 47, joined GreenPoint in June 1994 and currently serves as Executive Vice President, General Counsel, and
Corporate Secretary. Prior to joining the Bank, Mr. Bluver held a variety of positions at the Office of Thrift Supervision in the Treasury Department. His final assignment was as Deputy Chief
Counsel for Corporate Transactions. Prior to that he worked in private law practice and at the Securities and Exchange Commission and held positions from a Staff Attorney to Branch Chief of the
Division of Corporation Finance. Mr. Bluver is on the Board of Directors of Neighborhood Housing Services of New York City, Inc. Mr. Bluver earned a BA in Political Science from
SUNY Albany and a JD from SUNY Buffalo, School of Law.

S. A. Ibrahim, 52, joined GreenPoint in March 1997 and was appointed President and Chief Executive Officer of GreenPoint Mortgage
in January 2000. Prior to that he served as Chief Operating Officer of the combined mortgage business of GreenPoint Mortgage and Headlands Mortgage upon completion of the Headlands acquisition.
Prior to joining the Bank, Mr. Ibrahim was in charge of International
Reengineering at American Express' Travel Related Services Company. Previously, he held various positions at Chemical Banking Corporation, including Chief Executive Officer of the Mortgage Business,
Chief of Staff to the Vice Chairman in charge of Consumer Banking and Chief Credit Officer for Consumer Banking. He has also been head of the Credit Card Operations at Crocker Bank and Chief Financial
Officer of the Business Services Division at Bank of America. Mr. Ibrahim currently serves on the Residential Board of Governors for the Mortgage Bankers Association of America and is on the
Board of Directors of the California Mortgage Bankers Association. He also is a Director of MERSCORP, Inc. Mr. Ibrahim was invited to serve on Fannie Mae's
2004 - 2005 National Advisory Council. A graduate of Osmania University in Hyderabad, India with a B.E. in Engineering, Mr. Ibrahim also has an MBA in Finance from the
Wharton School at the University of Pennsylvania.

Jeffrey R. Leeds, 58, joined the Bank in September 1995 and serves as Executive Vice President and Chief Financial Officer. Prior
to that, he served as Executive Vice President, Finance, and Treasurer. Before joining the Bank, Mr. Leeds held a variety of positions at Chemical Bank. His final assignment was as Head of the
Asset and Liability Management staff. Prior to that he served for seven years as Chief Money Market Economist. Mr. Leeds began his career as an economist at the First National Bank of Chicago.
He also spent two years as Director of New Product Development at the Chicago Board Options Exchange. Mr. Leeds earned a Bachelor's Degree in economics from the University of Michigan and holds
a Masters in Business Administration and Master of Philosophy from the Columbia University Graduate School of Business.

Mary M. Massimo, 58, joined GreenPoint in November 1999 and serves as Executive Vice President and Human Resources Director. Before
joining GreenPoint, she was head of Human

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Resources
and Office Operations at Rockefeller & Co., Inc., between 1995-1999. From 1988-1994, she headed Human Resources at Swiss Bank Corporation North America.
Ms. Massimo has also held senior positions in Human Resources at Drexel, Burnham, Lambert, Inc., and International Paper Co. She is a long-standing member of the American
Psychological Association and the Society for Industrial and Organizational Psychology. Ms. Massimo earned a BA in psychology from the College of New Rochelle, and she earned both masters and
doctorate degrees in psychology from Fordham University.

Ramesh Shah,56, joined the Bank in June 1996 and serves as Executive Vice President, Retail Banking. Prior to that, he served as
Executive Vice President, Marketing and Product Development. Before joining the Bank, Mr. Shah was Senior Vice President of NatWest Bancorp. (1994-1996); Senior Vice President of
Shearson Lehman Brothers (1991-1993) and Senior Vice President of American Express Company (1988-1991). Mr. Shah holds a Masters in Business Administration from Columbia
University and a Bachelor of Arts degree from Bates College.

The
Corporation has adopted a Code of Business Conduct and Ethics that applies to the Corporation's employees and Directors. In addition, the Corporation has adopted a Financial
Personnel Code of Ethics that applies to the Corporation's chief executive officer, president, chief financial officer and
chief accounting officer and supplements the provisions of the Corporation's Code of Business Conduct and Ethics. Each Code of Ethics is available through the Corporation's web site at
http://www.greenpoint.com. Copies of each Code of Ethics is available, free of charge, to any person who requests them. Such requests may be directed to GreenPoint Financial Corp., Investor Relations
Department, 90 Park Avenue, New York, New York 10016, (212) 834-1202.

The
other information required by Item 10 is incorporated by reference to the Registrant's definitive Proxy Statement for its Annual Meeting of Stockholders to be held on
April 30, 2004, which is expected to be filed with the Securities and Exchange Commission on or about March 26, 2004.

ITEM 11. EXECUTIVE COMPENSATION

Incorporated by reference to the Registrant's definitive Proxy Statement for its Annual Meeting of Stockholders to be held on April 30, 2004, which is
expected to be filed with the Securities and Exchange Commission on or about March 26, 2004.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Equity Compensation Plan Information

|                                                              |  | (a)        |  | (b) |       | (c) |          
|------------------------------------------------------------- |  | ---------- |  | --- | ----- | --- | ---------
|
|Equity compensation plans approved by security holders(1)     |  | 9,272,707  |  | $   | 20.81 |     | 4,528,602
|Equity compensation plans not approved by security holders(3) |  | 1,852,061  |  |     | 28.43 |     | 707,533  
|                                                              |  |            |  |     |       |     |          
|Total                                                         |  | 11,124,768 |  | $   | 22.08 |     | 5,236,135
|                                                              |  |            |  |     |       |     |          

---

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Security Ownership

Incorporated by reference to the Registrant's definitive Proxy Statement for its Annual Meeting of Stockholders to be held on April 30, 2004, which is
expected to be filed with the Securities and Exchange Commission on or about March 26, 2004.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated by reference to the Registrant's definitive Proxy Statement for its Annual Meeting of Stockholders to be held on April 30, 2004, which is
expected to be filed with the Securities and Exchange Commission on or about March 26, 2004.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Incorporated by reference to the Registrant's definitive Proxy Statement for its Annual Meeting of Stockholders to be held on April 30, 2004, which is
expected to be filed with the Securities and Exchange Commission on or about March 26, 2004.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

|(a) | (1) |  | Financial Statements                                                                                                                                                                                                                              
|--- | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |     |  | See index to the Consolidated Financial Statements on page 51.                                                                                                                                                                                    
|    | (2) |  | Financial Statement Schedules                                                                                                                                                                                                                     
|    |     |  | Financial Statement Schedules have been omitted because they are either not applicable or the required information is shown in the Consolidated Financial Statements or Notes thereto under Item 8, "Financial Statements and Supplementary
Data".
|(b) |     |  | Reports on Form 8-K filed during the last quarter of the registrant's fiscal year ended December 31, 2003                                                                                                                                         

On
October 7, 2003, GreenPoint Mortgage Securities Inc. filed a current report on Form 8-K related to the monthly distribution reported to the holders of GreenPoint
Mortgage-Backed Pass-Through Certificates Series 2003-1 pursuant to the terms of the Pooling and Servicing Agreement, dated August 1, 2003 among GreenPoint
Mortgage Securities Inc. as sponsor, GreenPoint Mortgage Funding, Inc., as seller and master servicer, and JPMorgan Chase Bank, as trustee.

On
October 8, 2003, GreenPoint Mortgage Securities Inc. (the "Company") filed a current report on Form 8-K in connection with a previously registered
offer and sale of the GreenPoint Home Equity Loan Trust Asset-Backed Notes, Series 2003-1 ("Series 2003-1 Notes").

On
October 8, 2003, GreenPoint Mortgage Securities Inc. (the "Company") filed a current report on Form 8-K in connection with a previously registered
offer and sale of the GreenPoint Mortgage-Backed Pass-Through Certificates, Series 2003-1 ("Series 2003-1 Certificates").

On
October 16, 2003, GreenPoint Financial Corp., a Delaware corporation (the "Company"), filed a current report on Form 8-K in connection with the issuance of a
press release announcing third quarter results for the period ended September 30, 2003.

On
October 30, 2003, GreenPoint Mortgage Securities Inc. filed a current report on Form 8-K related to the monthly distribution reported to the holders
of GreenPoint Mortgage-Backed Pass-Through Certificates Series 2003-1 pursuant to the terms of the Pooling and Servicing Agreement, dated August 1, 2003 among
GreenPoint Mortgage Securities Inc. as sponsor, GreenPoint Mortgage Funding, Inc., as seller and master servicer, and JPMorgan Chase Bank, as trustee.

On
November 7, 2003, GreenPoint Mortgage Securities Inc. (the "Company") filed a current report on Form 8-K in connection with a previously registered
offer and sale of the GreenPoint Mortgage-Backed Pass-Through Certificates, Series 2003-1 ("Series 2003-1 Certificates").

On
November 7, 2003, GreenPoint Mortgage Securities Inc. (the "Company") filed a current report on Form 8-K in connection with a previously registered
offer and sale of the GreenPoint Mortgage-Backed Pass-Through Certificates, Series 2003-1 ("Series 2003-1 Certificates").

On
November 7, 2003, GreenPoint Mortgage Securities Inc. (the "Company") filed a current report on Form 8-K in connection with a previously registered
offer and sale of the GreenPoint Home Equity Loan Trust Asset-Backed Notes, Series 2003-1 ("Series 2003-1 Notes").

On
November 14, 2003, GreenPoint Financial Corp., a Delaware corporation (the "Company"), filed a current report on Form 8-K in connection with the issuance of
a press release announcing the filing of its third quarter Form 10-Q with the Securities and Exchange Commission and an adjustment

64

---

of
$0.03 per diluted share to the earnings for the period ended September 30, 2003 announced in the Company's press release of October 16, 2003.

On
November 26, 2003, GreenPoint Mortgage Securities Inc. filed a current report on Form 8-K related to the monthly distribution reported to the holders
of GreenPoint Mortgage-Backed Pass-Through Certificates Series 2003-1 pursuant to the terms of the Pooling and Servicing Agreement, dated August 1, 2003 among
GreenPoint Mortgage Securities Inc. as sponsor, GreenPoint Mortgage Funding, Inc., as seller and master servicer, and JPMorgan Chase Bank, as trustee.

On
December 10, 2003, GreenPoint Mortgage Securities Inc. (the "Company") filed a current report on Form 8-K in connection with a previously registered
offer and sale of the GreenPoint Home Equity Loan Trust Asset-Backed Notes, Series 2003-1 ("Series 2003-1 Notes").

On
December 11, 2003, GreenPoint Mortgage Securities Inc. (the "Company") filed a current report on Form 8-K in connection with a previously registered
offer and sale of the GreenPoint Mortgage-Backed Pass-Through Certificates, Series 2003-1 ("Series 2003-1 Certificates").

65

---

(c)   Exhibits

|Number |  |                                                                                                                                       
|------ |  | --------------------------------------------------------------------------------------------------------------------------------------
|2.1    |  | Purchase of Assets and Liability Assumption Agreement by and between Home Savings of America, FSB, and GreenPoint Bank(1)             
|2.2    |  | Stock Purchase Agreement between BankAmerica Corp. and GreenPoint Bank(2)                                                             
|2.3    |  | Agreement and Plan of Merger by and among GreenPoint Financial Corp., GF Acquisition Corp. and Headlands Mortgage Company(3)          
|2.4    |  | Agreement and Plan of Merger between North Fork Bancorporation, Inc. and GreenPoint Financial Corp.                                   
|3.1    |  | Certificate of Incorporation of GreenPoint Financial Corp.(4)                                                                         
|3.2    |  | Bylaws of GreenPoint Financial Corp.(5)                                                                                               
|3.3    |  | Restated Organization Certificate of GreenPoint Bank(6)                                                                               
|3.4    |  | Bylaws of GreenPoint Bank                                                                                                             
|10.1   |  | Employment Agreement Among GreenPoint Financial Corp., GreenPoint Bank and Bharat B. Bhatt(7)                                         
|10.2   |  | Amended Employment Agreement Among GreenPoint Financial Corp., GreenPoint Bank and Thomas S. Johnson(8)                               
|10.3   |  | GreenPoint Financial Corp. Amended and Restated 1994 Stock Incentive Plan(9)                                                          
|10.4   |  | GreenPoint Financial Corp. Non-Employee Directors Stock Option Plan(10)                                                               
|10.5   |  | GreenPoint Bank Recognition and Retention Plan for Employees(11)                                                                      
|10.6   |  | GreenPoint Bank Retirement Plan for Independent Directors(12)                                                                         
|10.7   |  | GreenPoint Bank 1993 Directors' Deferred Fee Stock Unit Plan(13)                                                                      
|10.8   |  | GreenPoint Financial Corp. 1999 Stock Incentive Plan(14)                                                                              
|10.9   |  | GreenPoint Financial Corp. 1999 Annual Incentive Plan(15)                                                                             
|10.10  |  | GreenPoint Financial Corp. 2001 Stock Plan(16)                                                                                        
|10.11  |  | GreenPoint Financial Corp. Non-Employee Directors 2001 Stock Option Plan(17)                                                          
|10.12  |  | Amendment Number One to the Employment Agreement among GreenPoint Financial Corp., GreenPoint Bank and Bharat B. Bhatt.(18)           
|10.13  |  | Amendment Number One to the Amended Employment Agreement among GreenPoint Financial Corp., GreenPoint Bank, and Thomas S. Johnson.(19)
|10.14  |  | GreenPoint Financial Corp. Deferred Compensation Plan(20)                                                                             
|12.1   |  | Ratios of Earnings to Fixed ChargesContinuing Operations                                                                             
|21.1   |  | Subsidiary Activities                                                                                                                 
|23.1   |  | Consent of Independent Auditors                                                                                                       
|31.1   |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                               
|       |  |                                                                                                                                       

66

---

|31.2 |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                               
|---- |  | ----------------------------------------------------------------------------------------------------------------------
|32.1 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|32.2 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

---

67

---



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

|                     |  | GREENPOINT FINANCIAL CORP.
|-------------------- |  | --------------------------
|                     |  | By:                       
|Dated: March 8, 2004 |  |                           

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities
indicated on the dates indicated.

|Signature                                |  | Title                                                      |  | Date         
|---------------------------------------- |  | ---------------------------------------------------------- |  | -------------
|                                         |  |                                                            |  |              
|/s/THOMAS S. JOHNSONThomas S. Johnson    |  | Chairman of the Board and Chief Executive Officer          |  | March 8, 2004
|/s/BHARAT B. BHATTBharat B. Bhatt        |  | Member of the Board, President and Chief Operating Officer |  | March 8, 2004
|/s/KAREN M. GARRISONKaren M. Garrison    |  | Director                                                   |  | March 8, 2004
|/s/WILLIAM M. JACKSONWilliam. M. Jackson |  | Director                                                   |  | March 8, 2004
|/s/ROMAN MARTINEZ, IVRoman Martinez, IV  |  | Director                                                   |  | March 8, 2004
|/s/CHARLES B. MCQUADECharles B. McQuade  |  | Director                                                   |  | March 8, 2004
|/s/J. THOMAS PRESBYJ. Thomas Presby      |  | Director                                                   |  | March 8, 2004
|                                         |  |                                                            |  |              

68

---

|/s/ALVIN N. PURYEARAlvin N. Puryear   |  | Director                                             |  | March 8, 2004
|------------------------------------- |  | ---------------------------------------------------- |  | -------------
|/s/ROBERT P. QUINNRobert P. Quinn     |  | Director                                             |  | March 8, 2004
|/s/ROBERT F. VIZZARobert F. Vizza     |  | Director                                             |  | March 8, 2004
|/s/JEFFREY R. LEEDSJeffrey R. Leeds   |  | Executive Vice President and Chief Financial Officer |  | March 8, 2004
|/s/JOSEPH D. PERILLOJoseph D. Perillo |  | Senior Vice President and Controller                 |  | March 8, 2004

69

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GreenPoint Financial Corp. and Subsidiaries

Table of Contents

|Consolidated Financial StatementsDecember 31, 2003, 2002 and 2001                                              |  |    
|--------------------------------------------------------------------------------------------------------------- |  | ---
|Consolidated Statements of Financial Condition as of December 31, 2003 and 2002                                 |  | 71 
|Consolidated Statements of Operations for the years ended December 31, 2003, 2002 and 2001                      |  | 72 
|Consolidated Statements of Comprehensive Income for the years ended December 31, 2003, 2002 and 2001            |  | 73 
|Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2003, 2002 and 2001 |  | 74 
|Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001                      |  | 75 
|Notes to the Consolidated Financial Statements                                                                  |  | 76 
|Report of Independent Auditors                                                                                  |  | 126

70

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GreenPoint Financial Corp. and Subsidiaries

Consolidated Statements of Financial Condition

|                                                                                         |                                                                        | December 31,                               |      
|---------------------------------------------------------------------------------------- | ---------------------------------------------------------------------- | ------------------------------------------ | -----
|
|
|Assets:                                                                                  |                                                                        |                                            |      
|Cash and due from banks                                                                  |                                                                        | $                                          | 268  
|Money market investments:                                                                |                                                                        |                                            |      
|                                                                                         | Interest-bearing deposits in other banks                               |                                            |      
|                                                                                         | Federal funds sold and securities purchased under agreements to resell |                                            |      
|                                                                                         |                                                                        |                                            |      
|                                                                                         |                                                                        | Total cash and cash equivalents            |      
|                                                                                         |                                                                        |                                            |      
|Securities:                                                                              |                                                                        |                                            |      
|                                                                                         | Securities available for sale                                          |                                            |      
|                                                                                         | Securities available for salepledged to creditors                     |                                            |      
|                                                                                         | Retained interests in securitizations                                  |                                            |      
|                                                                                         | Federal Home Loan Bank of New York stock                               |                                            |      
|                                                                                         | Securities held to maturity (fair value of $6 and $3, respectively)    |                                            |      
|                                                                                         |                                                                        |                                            |      
|                                                                                         |                                                                        | Total securities                           |      
|                                                                                         |                                                                        |                                            |      
|Loans receivable held for sale                                                           |                                                                        |                                            | 4,764
|Loans receivable held for investment (net of allowance for loan losses of $78)           |                                                                        |                                            | 9,885
|Other interest-earning assets                                                            |                                                                        |                                            | 142  
|Accrued interest receivable                                                              |                                                                        |                                            | 81   
|Banking premises and equipment, net                                                      |                                                                        |                                            | 183  
|Servicing assets                                                                         |                                                                        |                                            | 183  
|Goodwill (net of accumulated amortization and impairment of $788)                        |                                                                        |                                            | 395  
|Other assets                                                                             |                                                                        |                                            | 538  
|                                                                                         |                                                                        |                                            |      
|                                                                                         |                                                                        | Total assets                               |      
|                                                                                         |                                                                        |                                            |      
|Liabilities and Stockholders' Equity:                                                    |                                                                        |                                            |      
|Liabilities:                                                                             |                                                                        |                                            |      
|Deposits:                                                                                |                                                                        |                                            |      
|                                                                                         | N.O.W. and checking                                                    |                                            | $    
|                                                                                         | Savings                                                                |                                            |      
|                                                                                         | Variable rate savings                                                  |                                            |      
|                                                                                         | Money market                                                           |                                            |      
|                                                                                         |                                                                        |                                            |      
|                                                                                         |                                                                        | Total core deposits                        |      
|                                                                                         |                                                                        |                                            |      
|                                                                                         | Wholesale money market deposits                                        |                                            |      
|                                                                                         | Term certificates of deposit                                           |                                            |      
|                                                                                         |                                                                        |                                            |      
|                                                                                         |                                                                        | Total deposits                             |      
|                                                                                         |                                                                        |                                            |      
|Borrowings:                                                                              |                                                                        |                                            |      
|                                                                                         | Securities sold under agreements to repurchase                         |                                            |      
|                                                                                         | Other short-term borrowings                                            |                                            |      
|                                                                                         | Federal Home Loan Bank advances                                        |                                            |      
|                                                                                         | Senior notes                                                           |                                            |      
|                                                                                         | Subordinated bank notes                                                |                                            |      
|                                                                                         | Other long term debt                                                   |                                            |      
|                                                                                         |                                                                        |                                            |      
|                                                                                         |                                                                        | Total borrowings                           |      
|                                                                                         |                                                                        |                                            |      
|Mortgagors' escrow                                                                       |                                                                        |                                            | 55   
|Liability under recourse exposure                                                        |                                                                        |                                            | 226  
|Other liabilities                                                                        |                                                                        |                                            | 427  
|                                                                                         |                                                                        |                                            |      
|                                                                                         |                                                                        | Total liabilities                          |      
|                                                                                         |                                                                        |                                            |      
|Commitments and contingencies (Note 16)                                                  |                                                                        |                                            |      
|Stockholders' Equity:                                                                    |                                                                        |                                            |      
|Preferred stock ($0.01 par value; 50,000,000 shares authorized; none issued)             |                                                                        |                                            |     
|Common stock ($0.01 par value; 220,000,000 shares authorized; 165,391,746 shares issued) |                                                                        |                                            | 2    
|Additional paid-in capital                                                               |                                                                        |                                            | 941  
|Unallocated Employee Stock Ownership Plan (ESOP) shares                                  |                                                                        |                                            | (84  
|Retained earnings                                                                        |                                                                        |                                            | 1,926
|Accumulated other comprehensive income, net                                              |                                                                        |                                            | (30  
|Treasury stock, at cost (33,494,909 and 20,930,000 shares, respectively)                 |                                                                        |                                            | (916 
|                                                                                         |                                                                        |                                            |      
|                                                                                         |                                                                        | Total stockholders' equity                 |      
|                                                                                         |                                                                        |                                            |      
|                                                                                         |                                                                        | Total liabilities and stockholders' equity |      
|                                                                                         |                                                                        |                                            |      

See accompanying notes to the consolidated financial statements.

71

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GreenPoint Financial Corp. and Subsidiaries

Consolidated Statements of Operations

|                                                              |                                                          | For the Year Ended December 31,                  |                                          
|------------------------------------------------------------- | -------------------------------------------------------- | ------------------------------------------------ | -----------------------------------------
|
|
|Interest income:                                              |                                                          |                                                  |                                          
|                                                              | Mortgage loans held for investment                       |                                                  | $                                        
|                                                              | Loans held for sale                                      |                                                  |                                          
|                                                              | Securities                                               |                                                  |                                          
|                                                              | Other                                                    |                                                  |                                          
|                                                              |                                                          |                                                  |                                          
|                                                              |                                                          | Total interest income                            |                                          
|                                                              |                                                          |                                                  |                                          
|Interest expense:                                             |                                                          |                                                  |                                          
|                                                              | Deposits                                                 |                                                  |                                          
|                                                              | Other borrowed funds                                     |                                                  |                                          
|                                                              | Long-term debt                                           |                                                  |                                          
|                                                              |                                                          |                                                  |                                          
|                                                              |                                                          | Total interest expense                           |                                          
|                                                              |                                                          |                                                  |                                          
|Net interest income                                           |                                                          |                                                  | 663                                      
|(Provision) benefit for loan losses                           |                                                          |                                                  | (4                                       
|                                                              |                                                          |                                                  |                                          
|Net interest income after (provision) benefit for loan losses |                                                          |                                                  | 659                                      
|                                                              |                                                          |                                                  |                                          
|Non-interest income:                                          |                                                          |                                                  |                                          
|                                                              | Income from fees and commissions:                        |                                                  |                                          
|                                                              |                                                          | Loan servicing fees                              |                                          
|                                                              |                                                          | Banking services fees and commissions            |                                          
|                                                              |                                                          | Fees, commissions and other income               |                                          
|                                                              |                                                          |                                                  |                                          
|                                                              |                                                          |                                                  | Total income from fees and commissions   
|                                                              |                                                          |                                                  |                                          
|                                                              | Net gain on sales of loans                               |                                                  |                                          
|                                                              | Change in valuation of retained interests                |                                                  |                                          
|                                                              | Net gain on securities                                   |                                                  |                                          
|                                                              |                                                          |                                                  |                                          
|                                                              |                                                          |                                                  | Total non-interest income                
|                                                              |                                                          |                                                  |                                          
|Non-interest expense:                                         |                                                          |                                                  |                                          
|                                                              | General and administrative expenses:                     |                                                  |                                          
|                                                              |                                                          | Salaries and benefits                            |                                          
|                                                              |                                                          | Employee Stock Ownership and stock plans expense |                                          
|                                                              |                                                          | Net expense of premises and equipment            |                                          
|                                                              |                                                          | Federal deposit insurance premiums               |                                          
|                                                              |                                                          | Other administrative expenses                    |                                          
|                                                              |                                                          |                                                  |                                          
|                                                              |                                                          |                                                  | Total general and administrative expenses
|                                                              |                                                          |                                                  |                                          
|                                                              | Other real estate owned operating income                 |                                                  |                                          
|                                                              | Goodwill amortization                                    |                                                  |                                          
|                                                              |                                                          |                                                  |                                          
|                                                              |                                                          |                                                  | Total non-interest expense               
|                                                              |                                                          |                                                  |                                          
|Income from continuing operations before income taxes         |                                                          |                                                  | 752                                      
|Income taxes related to earnings from continuing operations   |                                                          |                                                  | 281                                      
|                                                              |                                                          |                                                  |                                          
|                                                              |                                                          | Net income from continuing operations            |                                          
|                                                              |                                                          |                                                  |                                          
|Discontinued operations:                                      |                                                          |                                                  |                                          
|                                                              | Net income (loss) from disposal of discontinued business |                                                  |                                          
|                                                              | Net loss from operations of discontinued business        |                                                  |                                          
|                                                              |                                                          |                                                  |                                          
|                                                              |                                                          | Net income (loss) from discontinued operations   |                                          
|                                                              |                                                          |                                                  |                                          
|Net income (loss)                                             |                                                          | $                                                | 472                                      
|                                                              |                                                          |                                                  |                                          
|Basic earnings per share:                                     |                                                          |                                                  |                                          
|                                                              | Net income from continuing operations                    |                                                  | $                                        
|                                                              | Net income (loss) from discontinued operations           |                                                  | $                                        
|                                                              |                                                          |                                                  |                                          
|                                                              |                                                          | Net income (loss)                                |                                          
|                                                              |                                                          |                                                  |                                          
|Diluted earnings per share:                                   |                                                          |                                                  |                                          
|                                                              | Net income from continuing operations                    |                                                  | $                                        
|                                                              | Net income (loss) from discontinued operations           |                                                  | $                                        
|                                                              |                                                          |                                                  |                                          
|                                                              |                                                          | Net income (loss)                                |                                          
|                                                              |                                                          |                                                  |                                          
|Dividends declared per share                                  |                                                          | $                                                | 0.90                                     
|                                                              |                                                          |                                                  |                                          

See accompanying notes to the consolidated financial statements.

72

---

GreenPoint Financial Corp. and Subsidiaries

Consolidated Statements of Comprehensive Income

|                                                                            |                                          | For the Year Ended December 31,                                    |    
|--------------------------------------------------------------------------- | ---------------------------------------- | ------------------------------------------------------------------ | ---
|
|
|Net income (loss)                                                           |                                          | $                                                                  | 472
|Other comprehensive income, before tax:                                     |                                          |                                                                    |    
|                                                                            | Unrealized (losses) gains on securities: |                                                                    |    
|                                                                            |                                          | Unrealized holding (losses) gains arising during period            |    
|                                                                            |                                          | Less: reclassification adjustment for gains included in net income |    
|                                                                            |                                          |                                                                    |    
|Other comprehensive income (loss), before tax                               |                                          |                                                                    | (95
|Income tax (expense) benefit related to items of other comprehensive income |                                          |                                                                    | 41 
|                                                                            |                                          |                                                                    |    
|Other comprehensive income (loss), net of tax                               |                                          |                                                                    | (54
|                                                                            |                                          |                                                                    |    
|Total comprehensive income (loss), net of tax                               |                                          | $                                                                  | 418
|                                                                            |                                          |                                                                    |    

See
accompanying notes to the consolidated financial statements.

73

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GreenPoint Financial Corp. and Subsidiaries

Consolidated Statements of Changes in Stockholders' Equity

|                                                          |                        | For the Year Ended December 31, |      
|--------------------------------------------------------- | ---------------------- | ------------------------------- | -----
|
|
|Common stock                                              |                        |                                 |      
|Balance at beginning of year                              |                        | $                               | 1    
|Three-for-two stock split                                 |                        |                                 | 1    
|                                                          |                        |                                 |      
|                                                          | Balance at end of year |                                 |      
|                                                          |                        |                                 |      
|Additional paid-in capital                                |                        |                                 |      
|Balance at beginning of year                              |                        |                                 | 907  
|Issuance of common stock for three-for-two stock split    |                        |                                 | (1   
|Reissuance of treasury stock                              |                        |                                 |     
|Amortization of ESOP shares committed to be released      |                        |                                 | 26   
|Amortization of stock plans shares                        |                        |                                 | 1    
|Tax benefit for vested stock plans shares                 |                        |                                 | 8    
|                                                          |                        |                                 |      
|                                                          | Balance at end of year |                                 |      
|                                                          |                        |                                 |      
|Unallocated ESOP shares                                   |                        |                                 |      
|Balance at beginning of year                              |                        |                                 | (89  
|Amortization of ESOP shares committed to be released      |                        |                                 | 5    
|                                                          |                        |                                 |      
|                                                          | Balance at end of year |                                 |      
|                                                          |                        |                                 |      
|Unearned stock plans shares                               |                        |                                 |      
|Balance at beginning of year                              |                        |                                 |     
|Amortization of stock plans shares                        |                        |                                 |     
|                                                          |                        |                                 |      
|                                                          | Balance at end of year |                                 |      
|                                                          |                        |                                 |      
|Retained earnings                                         |                        |                                 |      
|Balance at beginning of year                              |                        |                                 | 1,563
|Net income (loss)                                         |                        |                                 | 472  
|Dividends paid                                            |                        |                                 | (109 
|                                                          |                        |                                 |      
|                                                          | Balance at end of year |                                 |      
|                                                          |                        |                                 |      
|Accumulated other comprehensive income, net               |                        |                                 |      
|Balance at beginning of year                              |                        |                                 | 24   
|Net change in accumulated other comprehensive income, net |                        |                                 | (54  
|                                                          |                        |                                 |      
|                                                          | Balance at end of year |                                 |      
|                                                          |                        |                                 |      
|Treasury stock                                            |                        |                                 |      
|Balance at beginning of year                              |                        |                                 | (482 
|Reissuance of treasury stock                              |                        |                                 | 38   
|Purchase of treasury stock                                |                        |                                 | (472 
|                                                          |                        |                                 |      
|                                                          | Balance at end of year |                                 |      
|                                                          |                        |                                 |      
|                                                          |                        | Total stockholders' equity      |      
|                                                          |                        |                                 |      

See
accompanying notes to the consolidated financial statements.

74

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GreenPoint Financial Corp. and Subsidiaries

Consolidated Statements of Cash Flows

|                                                                                            |                                                                                   | For the Year Ended December 31,       |                                                    
|------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------- | ---------------------------------------------------
|
|
|Cash flows from operating activities:                                                       |                                                                                   |                                       |                                                    
|Net income (loss)                                                                           |                                                                                   | $                                     | 472                                                
|Adjustments to reconcile net income to net cash provided by (used in) operating activities: |                                                                                   |                                       |                                                    
|                                                                                            | Net premium amortization on mortgage loans                                        |                                       |                                                    
|                                                                                            | Net premium amortization on securities                                            |                                       |                                                    
|                                                                                            | Provision for loan losses                                                         |                                       |                                                    
|                                                                                            | Depreciation and amortization                                                     |                                       |                                                    
|                                                                                            | Gain on sale of loans                                                             |                                       |                                                    
|                                                                                            | Gain on sale of securities                                                        |                                       |                                                    
|                                                                                            | Goodwill impairment                                                               |                                       |                                                    
|                                                                                            | ESOP and stock plans expense                                                      |                                       |                                                    
|                                                                                            | Capitalization of servicing assets                                                |                                       |                                                    
|                                                                                            | Amortization and impairment of servicing assets                                   |                                       |                                                    
|                                                                                            | (Increase) decrease in assets associated with operating activities                |                                       |                                                    
|                                                                                            |                                                                                   | Loans receivable held for sale:       |                                                    
|                                                                                            |                                                                                   |                                       | Loan originations                                  
|                                                                                            |                                                                                   |                                       | Proceeds from loan sales                           
|                                                                                            |                                                                                   |                                       | Other                                              
|                                                                                            |                                                                                   | Retained interests in securitizations |                                                    
|                                                                                            |                                                                                   | Accrued interest receivable           |                                                    
|                                                                                            |                                                                                   | Other assets                          |                                                    
|                                                                                            | Increase (decrease) in liabilities associated with operating activities           |                                       |                                                    
|                                                                                            |                                                                                   | Liabilities under recourse exposure   |                                                    
|                                                                                            |                                                                                   | Other liabilities                     |                                                    
|                                                                                            | Other, net                                                                        |                                       |                                                    
|                                                                                            |                                                                                   |                                       |                                                    
|                                                                                            |                                                                                   |                                       | Net cash provided by (used in) operating activities
|                                                                                            |                                                                                   |                                       |                                                    
|Cash flows from investing activities:                                                       |                                                                                   |                                       |                                                    
|                                                                                            | Net change in loans receivable held for investment                                |                                       |                                                    
|                                                                                            | Purchases of premises and equipment                                               |                                       |                                                    
|                                                                                            | Available for sale securities:                                                    |                                       |                                                    
|                                                                                            |                                                                                   | Proceeds from maturities              |                                                    
|                                                                                            |                                                                                   | Proceeds from sales                   |                                                    
|                                                                                            |                                                                                   | Purchase of securities                |                                                    
|                                                                                            |                                                                                   | Principal repayments                  |                                                    
|                                                                                            | Federal Home Loan Bank Stockredemptions (purchases)                              |                                       |                                                    
|                                                                                            | Other, net                                                                        |                                       |                                                    
|                                                                                            |                                                                                   |                                       |                                                    
|                                                                                            |                                                                                   |                                       | Net cash used in investing activities              
|                                                                                            |                                                                                   |                                       |                                                    
|Cash flows from financing activities:                                                       |                                                                                   |                                       |                                                    
|                                                                                            | Net change in:                                                                    |                                       |                                                    
|                                                                                            |                                                                                   | Domestic deposits                     |                                                    
|                                                                                            |                                                                                   | Mortgagors' escrow deposits           |                                                    
|                                                                                            | Proceeds from securities sold under agreements to repurchase and other borrowings |                                       |                                                    
|                                                                                            | Repayments of securities sold under agreements to repurchase and Other borrowings |                                       |                                                    
|                                                                                            | Proceeds from advances from Federal Home Loan Bank                                |                                       |                                                    
|                                                                                            | Repayments of advances from Federal Home Loan Bank                                |                                       |                                                    
|                                                                                            | Proceeds from issuance of senior notes                                            |                                       |                                                    
|                                                                                            | Cash dividends paid                                                               |                                       |                                                    
|                                                                                            | Treasury stock purchased                                                          |                                       |                                                    
|                                                                                            | Exercise of stock options                                                         |                                       |                                                    
|                                                                                            | Retirement of long term debt                                                      |                                       |                                                    
|                                                                                            |                                                                                   |                                       |                                                    
|                                                                                            |                                                                                   |                                       | Net cash provided by financing activities          
|                                                                                            |                                                                                   |                                       |                                                    
|Net (decrease) increase in cash and cash equivalents                                        |                                                                                   |                                       | (34                                                
|Cash and cash equivalents beginning of year                                                 |                                                                                   |                                       | 369                                                
|                                                                                            |                                                                                   |                                       |                                                    
|Cash and cash equivalents end of year                                                       |                                                                                   | $                                     | 335                                                
|                                                                                            |                                                                                   |                                       |                                                    
|Non-cash activities:                                                                        |                                                                                   |                                       |                                                    
|Additions to other real estate owned, net                                                   |                                                                                   | $                                     | 49                                                 
|                                                                                            |                                                                                   |                                       |                                                    
|Supplemental disclosure of cash flow information:                                           |                                                                                   |                                       |                                                    
|Cash paid for income taxes                                                                  |                                                                                   | $                                     | 274                                                
|Interest paid                                                                               |                                                                                   | $                                     | 502                                                
|                                                                                            |                                                                                   |                                       |                                                    

See accompanying notes to the consolidated financial statements.

75

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GreenPoint Financial Corp. and Subsidiaries

Notes to the Consolidated Financial Statements

NOTE 1    Summary of Significant Accounting Policies

Nature of Business

GreenPoint Financial Corp. (the "Corporation", "Company" or "GreenPoint") is a bank holding company organized in 1993 under the laws of the state of Delaware and
registered under the Bank Holding Company Act of 1956, as amended. GreenPoint, a leading national specialty housing finance company with more than $30 billion in loan originations in 2003, has
two principal operating businesses. GreenPoint Mortgage ("GPM"), headquartered in Novato, California, originates a wide variety of exclusively "A" quality loans. This includes agency qualifying loans
and Jumbo "A" loans, and GreenPoint's specialty Alternative A ("Alt A") mortgages. GreenPoint Bank ("Bank"), a New York State chartered savings bank, is the second largest thrift depository in the
Greater New York area with $12 billion in deposits in 90 branches serving more than 450,000 households.

Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation. When necessary, certain reclassifications of prior year financial statement amounts have been made to conform to the current year presentation.

Effective
in the fourth quarter of 2003, the company adopted Financial Interpretation No. 46, "Consolidation of Variable Interest Entities", ("FIN 46"). FIN 46 requires a variable
interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or is entitled to receive a majority of the
entity's residual returns or both. The Company had variable interests in various qualified special purposes entities ("QSPE"), which are exempt from the provisions of FIN 46. The Company reports the
rights and obligations related to these QSPEs according to the requirements of Statement of Financial Accounting Standards No. 140, Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities.

The
Company adopted a plan to exit the manufactured housing lending business in December 2001. Current and comparative prior period consolidated statements of operations present
the results of continuing operations and discontinued operations separately.

Use of Estimates

The preparation of the Consolidated Financial Statements under U.S. Generally Accepted Accounting Principals ("GAAP") requires management to make estimates and
assumptions that affect the reported amounts of revenues, expenses, assets, liabilities and disclosures of contingent assets and liabilities as of the date of the Consolidated Financial Statements.
Actual results could differ from those estimates.

Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase

The Company enters into purchases of securities under agreements to resell ("reverse repurchase agreements") and sales of securities under agreements to
repurchase substantially identical securities ("repurchase agreements"). Since these transactions represent collateralized financings, the amounts advanced under reverse repurchase agreements and the
amounts borrowed under repurchase agreements are carried on the balance sheet at the amount advanced or borrowed, respectively, plus

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accrued
interest. Interest earned on reverse repurchase agreements and interest incurred on repurchase agreements are reported as interest income and interest expense, respectively.

Securities Held to Maturity and Securities Available for Sale

Securities that the Company has the positive intent and ability to hold to maturity are classified as held to maturity and are carried at amortized cost.

Securities
that may be sold in response to or in anticipation of changes in interest rates and resulting prepayment risk, or other factors, are classified as available for sale and are
carried at fair value. Unrealized gains and losses on these securities are reported, net of applicable taxes, in accumulated other comprehensive income, as a separate component of stockholders'
equity. If the unrealized loss of a security held to maturity or available for sale is determined to be an other-than-temporary decline in fair value, a reduction in the cost
basis of that security to fair value is recognized in the Consolidated Statement of Operations as a loss from securities.

Amortization
of premiums and accretion of discounts are reported in interest income, using a method which results in a level yield over the estimated life of the security.

Gains
and losses on the sale of securities are determined using the specific identification method and are recorded on the settlement date.

Loans Receivable Held for Investment

Loans receivable held for investment are stated at the aggregate of their remaining unpaid principal balances, less any related charge-offs, net
deferred loan origination costs and the allowance for loan losses.

Interest
income on loans receivable is recognized on an accrual basis except when a loan has been past due 90 days or upon determination that collection is doubtful. When a loan
is placed on non-accrual status, all accrued but unpaid interest receivable is reversed and charged against current interest income. Thereafter, interest income on non-accrual
loans is recorded only when received in cash. A loan is returned to accrual status when the principal and interest are no longer past due and the borrower's ability to make periodic principal and
interest payments is reasonably assured.

Loan
fees and certain direct loan origination costs are deferred. Net deferred loan origination costs are amortized into interest income over the contractual life of the loan.

Allowance for Loan Losses

The allowance for loan losses is intended to cover probable losses inherent in the loans receivable held for investment portfolio. Additions to the allowance are
made by means of the provision for loan losses. Credit losses are deducted from the allowance and subsequent recoveries are added.

GreenPoint
calculates its allowance for loan losses in accordance with Statement of Financial Accounting Standards No. 5, "Accounting for Contingencies" ("SFAS 5"). This
accounting standard is used to determine the allowance associated with large groups of smaller balance homogeneous loans that are collectively evaluated for impairment. GreenPoint considers all of its
loans held for investment to be smaller-balance homogeneous loans. SFAS 5 requires the accrual of a loss when it is probable that an asset has been impaired and the amount of the loss can be
reasonably estimated. The allowance for loan losses represents management's estimate of probable but unconfirmed asset impairment in the loans held for investment portfolio as of the date of the
financial statements.

Prior
to each quarter end, Management completes an analysis of the adequacy of the allowance for loan losses. Given that the allowance primarily covers a homogeneous pool of loans, the
determination of the allowance is conducted at an aggregate or pooled level. This analysis stratifies GreenPoint's

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mortgage
loans held for investment into three categories: first mortgages, second mortgages and home equity loans. The first mortgage and second mortgage categories are further stratified into
one-to-four family, multi-family and commercial loan strata and then again by delinquency status.

For
each stratum, GreenPoint determines a historical loss percentage based on the percentage of loans it expects to default and the loss expected as a result of that default. For both of
these variables, a default is determined to occur when the borrower cannot pay under the terms of the loan agreement and the loan is satisfied through some other means (often the repossession and sale
of the collateral). Each variable is based on recent trends and is continuously evaluated by management. The resulting historical loss percentage is then multiplied by the principal balance and the
product becomes the allocated reserve for that stratum.

Due
to inherent limitations in using modeling techniques, uncertainties in projected losses and assessment of changes in the macro-economic environment, GreenPoint also maintains an
unallocated allowance. This portion of the allowance also addresses short-term changes in the portfolio's historical real estate owned performance, delinquency trends, loan products,
national real
estate values and portfolio growth. At the end of each quarter, management determines the adequacy of the unallocated reserve to address these risks.

Loans Receivable Held for Sale

Loans receivable held for sale are carried at the lower of cost or estimated fair value in the aggregate. Net unrealized losses are provided for in a valuation
allowance created through charges to income. Transfers from loans held for investment to loans held for sale are recorded at the lower of cost or estimated fair value in the aggregate. Unamortized net
deferred loan origination costs are recognized as a component of gain on sale of loans.

Goodwill

Goodwill represents the excess of cost over fair value of assets of businesses acquired. The goodwill reported on the Consolidated Statements of Financial
Condition arose from the 1995 acquisition of the New York branches of Home Savings of America. In December 2001, GreenPoint formally adopted a plan to discontinue the manufactured housing
lending business. As a result of this decision, management determined that the goodwill relating to the 1998 acquisition of the manufactured housing finance business of BankAmerica Housing Services
("BAHS") was impaired and the remaining carrying value was written-off.

In
accordance with the adoption on January 1, 2002 of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), GreenPoint ceased
the amortization of goodwill. Since that date, the Company is required to test goodwill annually for impairment. The test allocates goodwill to the Company's reporting units and compares the fair
value of a reporting unit with its carrying amount, which includes goodwill. An impairment does not exist if the fair value of a reporting unit exceeds its carrying amount.

The
goodwill shown on the Consolidated Statements of Financial Condition is attributable to the retail-banking segment and is carried at its January 1, 2002 book value of
$395 million. Based on GreenPoint's testing of the retail-banking segment, no goodwill impairment was recognized in either 2003 or 2002.

Other Real Estate Owned

Other real estate owned ("ORE") consists of real estate acquired through foreclosure or deed in lieu of foreclosure. Upon foreclosure, ORE is recorded at the
lower of cost or estimated fair value of

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the
underlying collateral. For loans receivable held for investment, any valuation write downs made at or shortly after the acquisition date are charged against the Company's allowance for loan
losses.

Subsequent
declines in the estimated fair value, net operating results, and gains and losses on the disposition of the related properties are charged against the Company's operating
results as incurred.

Derivative Financial Instruments

Derivative financial instruments are recognized in the statements of financial condition in either "other assets" or "other liabilities" at fair value. The
accounting for changes in the fair value of derivatives depends on whether the derivative is designated and qualifies for hedge accounting. Certain hedging relationships that have qualified for hedge
accounting have been designated as fair value hedges. In fair value hedge accounting, the change in fair value of the hedging instruments and the change in fair value of the hedged item attributed to
the hedged risk are recognized currently in earnings. The amount of hedge ineffectiveness recognized in earnings is based on the extent to which an exact offset is not achieved.

In
order to qualify for fair value hedge accounting, GreenPoint must identify, at the inception of the hedge, the item hedged, the nature of the risk being hedged, the derivative used
and how the hedging instrument's effectiveness will be assessed. GreenPoint designates certain fixed rate mortgage loans held for sale as hedged items in fair value hedges. The risk being hedged on
these loans is the change in fair value attributable to changes in market interest rates. GreenPoint designates interest rate swaps, futures contracts and forward delivery commitments as the hedging
instruments used in the fair value hedges. Previous retrospective assessments of hedge effectiveness have established an expectation that the results of the derivative hedging instruments will
substantially offset the effects of changes in the fair value of the hedged item on a prospective basis. If a subsequent retrospective assessment determines that the hedge was not highly effective,
GreenPoint will discontinue hedge accounting prospectively. GreenPoint will re-establish the prospective expectation of correlation if the hedge is determined to be highly effective.

The
Company accounts for certain fair value hedges under the short cut method of accounting for derivatives. The short cut method assumes no ineffectiveness between an interest-bearing
financial instrument and an interest rate swap. Changes in the fair value of the interest rate swap are recorded as changes in value of the swap and hedged financial instrument.

Certain
derivative financial instruments, such as interest rate lock commitments, do not qualify for hedge accounting. The company records these derivatives at fair value with changes in
fair value recognized through earnings. During the accumulation of interest rate lock commitments with borrowers, the Company is exposed to interest rate risk. If the market interest rates required by
investors are higher than management's assumptions, the prices paid by investors and the resultant gain on sale of loans will be lower than otherwise estimated. In order to mitigate this interest rate
risk, GreenPoint enters into forward delivery commitments and forward sales contracts. The amount and duration of these derivative instruments are selected in order to have the changes in fair value
correlate closely with the changes in fair value of GreenPoint's interest rate lock commitments. The Company's interest rate lock commitments and the forward delivery commitments and forward sales
contracts, used to offset changes in the value of the interest rate lock commitments, are accounted for as derivative financial instruments and are recognized as either assets of liabilities at fair
value.

Banking Premises and Equipment

Buildings, equipment, improvements and furniture and fixtures are carried at cost, less accumulated depreciation and amortization. Equipment and furniture and
fixtures are depreciated over their estimated useful lives using the straight-line method (3 to 10 years). Buildings and leasehold

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improvements
are amortized using the straight-line method over the shorter of their estimated useful lives or the terms of related leases.

Stock-Based Compensation Plans

Deferred compensation for stock award plans are recorded as a reduction of stockholders' equity and are calculated as the cost of the shares purchased by the Bank
and contributed to the plan. Compensation expense is recognized over the vesting period of actual stock awards based upon the fair value of shares at the award date.

Compensation
expense for the Employee Stock Ownership Plan and Trust ("ESOP") is recognized for the number of shares allocated to ESOP participants, as they are committed to be released.
The difference between the fair value of the shares allocated and the cost of the shares to the ESOP is charged or credited to additional paid-in capital.

The
Company adopted the disclosure approach under Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), as amended by
Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based CompensationTransition and Disclosure". Under these standards the Company discloses in the notes to
the financial statements the pro forma effects on net income and earnings per share, determined as if the fair value-based method had been applied in measuring compensation cost. The Company continues
to apply Accounting Principal Board Statement No. 25, "Accounting for Stock Issued to Employees" ("APB 25") in accounting for its plans. Under APB 25, the Company has not recognized any costs
related to its stock option plans since the options granted under these plans have an exercise price equal to the market value of the Company's common stock on the grant date.

The
following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS 123, to stock-based
employee compensation.

|                                                                                                                            |  | For the Year Ended December 31, |     
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ----
|
|
|Net income as reported:                                                                                                     |  | $                               | 472 
|Deduct: Total stock-based employee compensation expense determined under fair value based method net of related tax effects |  |                                 | (10 
|                                                                                                                            |  |                                 |     
|Pro forma net income                                                                                                        |  | $                               | 462 
|                                                                                                                            |  |                                 |     
|Earnings per share:                                                                                                         |  |                                 |     
|Basicas reported                                                                                                           |  | $                               | 3.86
|Basicpro forma                                                                                                             |  | $                               | 3.78
|Dilutedas reported                                                                                                         |  | $                               | 3.79
|Dilutedpro forma                                                                                                           |  | $                               | 3.71
|                                                                                                                            |  |                                 |     

Accounting for Loan Sales

GreenPoint primarily sells loans in the whole loan market. Loans sold on a whole loan basis are sold either with GreenPoint releasing or retaining the right to
service the loans. When GreenPoint does not retain the servicing rights to the loans, the gain or loss on the sale is equal to the difference between the proceeds received and the book basis of the
loans sold. If the loans are sold with GreenPoint retaining the servicing rights, the gain or loss depends in part on the fair value attributed to the servicing rights.

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In
addition to selling through the whole loan market, GreenPoint on occasion securitizes certain mortgage loans.

The
rules governing the accounting for loan securitizations are established in Statement of Financial Accounting Standards No. 140 "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities" ("SFAS 140"). This standard establishes the conditions that must be present for treating a transfer of financial assets as a sale and the
conditions that must be met to treat the transferor as a Qualifying Special Purpose Entity ("QSPE").

GreenPoint's
securitizations of mortgage loans involve the sale of a pool of loans to a QSPE and securities supported by the cash flow from the transferred loans are sold by the QSPE to
third party investors. Funds received from the third-party investors are returned to GreenPoint as payment for the
transferred loans. Generally, the Company may retain servicing rights and one or more retained interests. These retained interests include interest-only strips, subordinated certificates,
transferor interests, demand notes and certain other credit enhancements.

For
a securitization transaction to be treated as a sale under SFAS 140, the loans transferred by the Company must have been isolated from the seller (even in bankruptcy or
receivership), the QSPE must meet the significant limitations on it's activities and the transferor can not maintain effective control of the transferred assets. In order to determine if the loans
have been isolated, GreenPoint obtains an opinion of legal counsel. The opinion must state that the transaction is a sale and that the assets transferred would not be consolidated with the
transferor's other assets in the event of a bankruptcy or receivership. A QSPE is exempt from being consolidated in the financial statements of a transferor or its affiliates under SFAS 140.

In
calculating the gain or loss on the sale, GreenPoint allocates the cost basis of the loans sold between the assets sold, the retained interests and servicing rights based on their
relative fair values at the date of sale. A gain or loss is recognized as the difference between the cash proceeds from the sale and the allocated cost basis of the assets sold. Because market quotes
are generally not available for retained interests and servicing assets, the Company generally estimates fair value using modeling techniques based on the assumptions the Company believes market
participants would use for similar assets and liabilities.

Representations and Warranties

In the normal course of business, GreenPoint may be required to repurchase a previously sold mortgage if certain deficiencies exist in the loan documentation.
GreenPoint has established a liability for losses it estimates might be incurred ("the representation and warranty liability"). This liability is included in the Consolidated Statements of Financial
Condition under other liabilities.

Additions
to the representation and warranty liability are reported as a reduction to gain on sale of loans. Payments made to indemnify an investor for losses and losses that occur after
GreenPoint has re-acquired the loan are deducted from the representation and warranty liability.

Retained Interests in Securitizations

Generally, GreenPoint retains one or more interests in loans sold in a securitization. These interests include interest-only strips, subordinated
certificates, transferor interests, demand notes and the recorded liabilities for limited recourse provided on mortgage loans.

GreenPoint
classifies these retained interests in securitizations as available for sale and carries these securities at fair value. To obtain fair values quoted market prices are used if
available. Since market quotes are generally not available for retained interests, GreenPoint estimates fair value by using modeling techniques to determine the present value of future cash flows
using assumptions of prepayments, defaults, loss severity rates, future interest rates and discount rates. These assumptions

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are
based on GreenPoint's management's best estimates of what market participants would use for similar assets and liabilities.

Generally,
if the fair value of a retained interest declines below its amortized cost basis, the change in valuation is recognized in the consolidated statement of income and is
classified as a change in valuation of retained interests. If the fair value of a retained interest increases above its amortized cost basis, the unrealized gain is reported, net of applicable taxes,
in accumulated other comprehensive income, as a separate component of stockholders' equity.

Servicing Assets

Servicing assets are carried at the lower of cost or fair value and are amortized in proportion to and over the estimated net servicing revenue.

In
determining fair value GreenPoint stratifies its servicing assets based on the risk characteristics of the underlying loan pools. The fair value of servicing assets is determined by
calculating the present value of estimated future net servicing cash flows, using assumptions of prepayments, defaults, ancillary income, servicing costs and discount rates that GreenPoint believes
market participants would use for similar assets.

If
GreenPoint determines that the impairment for a stratum is temporary, a valuation allowance is recognized through a charge to current earnings for the amount the amortized balance
exceeds the current fair value. If the fair value of the stratum were later to increase, the reduction of the valuation allowance may be recorded as an increase to servicing income. However, if
GreenPoint determines that an impairment for a stratum is other-than-temporary, the value of the servicing asset and any related valuation allowance is
written-down.

Income Taxes

The Company and its subsidiaries join in the filing of a consolidated tax return for Federal, state and local taxing authorities as required. In addition, certain
subsidiaries also file separate domestic tax returns where necessary.

Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases ("temporary differences"). Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which
temporary differences are expected to be recovered or settled. A valuation allowance is provided for deferred tax assets where realization is not considered "more likely than not." The effect of
changes in tax laws or rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date.

Earnings per Share

Basic earnings per share ("EPS") is calculated by dividing net income by the weighted average number of common shares outstanding, with no consideration of
potential outstanding shares. Diluted EPS is calculated using the same method as basic EPS, but reflects the potential dilution that would occur if stock options or other contracts were exercised and
converted into common stock. Common stock equivalents are computed using the treasury stock method. ESOP shares that have been allocated to participants' accounts or are committed to be released for
allocation are considered outstanding for EPS calculation.

On
July 8, 2003, GreenPoint approved a three-for-two stock split which was distributed on August 20, 2003 to shareholders of record on
August 8, 2003. Accordingly, the stock split required retroactive restatement of all historical per share data.

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Statement of Cash Flows

For the purpose of reporting cash flows, cash and cash equivalents include cash and due from banks, interest-bearing deposits in other banks, federal funds sold
and reverse repurchase agreements, all of which have initial maturities of less than ninety days.

NOTE 2    Restrictions on Cash and Due from Banks

The Company is required to maintain reserves on deposit with the Federal Reserve Bank of New York. The amount of required reserves on deposit at
December 31, 2003 was $39 million. The average amount of those reserve deposits was approximately $45 million for the year ended December 31, 2003.

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NOTE 3    Securities

Securities Available for Sale

The amortized cost and estimated fair value of securities available for sale at December 31, 2003 and 2002 are summarized as follows:

|                                                     |                           | December 31, 2003                  
|---------------------------------------------------- | ------------------------- | -----------------------------------
|
|
|U.S. Government and Federal Agency Obligations:      |                           |                                    
|                                                     | U.S. Treasury notes/bills |                                    
|                                                     | Agency notes              |                                    
|Mortgage-backed securities                           |                           |                                    
|Collateralized mortgage obligations                  |                           |                                    
|Trust certificates collateralized by GNMA securities |                           |                                    
|Corporate bonds                                      |                           |                                    
|Municipal bonds                                      |                           |                                    
|Equity securities                                    |                           |                                    
|                                                     |                           |                                    
|                                                     |                           | Total securities available for sale
|                                                     |                           |                                    
|
|U.S. Government and Federal Agency Obligations:      |                           |                                    
|                                                     | U.S. Treasury notes/bills |                                    
|                                                     | Agency notes              |                                    
|Mortgage-backed securities                           |                           |                                    
|Collateralized mortgage obligations                  |                           |                                    
|Trust certificates collateralized by GNMA securities |                           |                                    
|Corporate bonds                                      |                           |                                    
|Municipal bonds                                      |                           |                                    
|Equity securities                                    |                           |                                    
|                                                     |                           |                                    
|                                                     |                           | Total securities available for sale
|                                                     |                           |                                    

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The
following is a summary of the fair value of securities with unrealized losses and an aging of those unrealized losses:

|                                                     |                           | At December 31,
|---------------------------------------------------- | ------------------------- | ---------------
|
|
|
|U.S. Government and Federal Agency Obligations:      |                           |                
|                                                     | U.S. Treasury notes/bills |                
|                                                     | Agency notes              |                
|Mortgage-backed securities                           |                           |                
|Collateralized mortgage obligations                  |                           |                
|Trust certificates collateralized by GNMA securities |                           |                
|Corporate bonds                                      |                           |                
|Municipal securities                                 |                           |                
|Equity securities                                    |                           |                
|                                                     |                           |                
|                                                     | Total                     |                
|                                                     |                           |                

The
unrealized losses in the portfolio resulted from changes in market interest rates and not from a deterioration in the creditworthiness of the issuer. At December 31, 2003
there were 190 positions in the portfolio with an unrealized loss.

During
the year ended December 31, 2003, 2002 and 2001 the company sold available for sale securities aggregating $2.2 billion, $1.9 billion and $2.6 billion,
respectively. Gross realized investment gains were $18 million in 2003, $9 million in 2002 and $16 million in 2001. Gross realized investment losses were $15 million in
2003, $1 million in 2002 and $2 million in 2001.

Mortgage-backed
securities and collateralized mortgage obligations, most of which have contractual maturities of more then 10 years, are subject to principal amortization and
estimated prepayments which shorten the average life to an estimated 3.7 years. The amortized cost and the estimated fair value of securities at December 31, 2003 by contractual maturity
are summarized below:

|                                       |                  | December 31, 2003
|-------------------------------------- | ---------------- | -----------------
|
|
|
|Due in one year or less                |                  | $                
|Due after one year through five years  |                  |                  
|Due after five years through ten years |                  |                  
|Due after ten years                    |                  |                  
|                                       |                  |                  
|                                       | Total securities |                  
|                                       |                  |                  

The
Company lends portions of its investment in US government and agency securities to pre-authorized securities dealers in return for a securities lending fee. These loaned
securities are collateralized at 102% of their fair value with government and/or agency securities. At December 31, 2003 and 2002, there were no securities on loan to securities dealers. The
maximum amount of securities loaned on any day during the years ended December 31, 2003 and 2002 was $48 million and $25 million, respectively.

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Securities
pledged to creditors pursuant to repurchase agreements which can be sold or repledged are separately disclosed in the Consolidated Statements of Financial Condition.
Additionally, securities pledged pursuant to the Company's obligations under loan sale and securitization transactions and for other purposes at December 31, 2003 and 2002 totaled
$287 million and $228 million, respectively.

NOTE 4    Loans Receivable

The Company's loans receivable held for sale balances are summarized as follows:

|                                      |                                 | December 31,                        
|------------------------------------- | ------------------------------- | ------------------------------------
|
|
|Conventional first mortgage loans:    |                                 |                                     
|                                      | Residential one- to four-family |                                     
|                                      | Commercial property             |                                     
|Second mortgage and home equity loans |                                 |                                     
|Other                                 |                                 |                                     
|                                      |                                 |                                     
|                                      |                                 | Total loans receivable held for sale
|Net deferred loan origination costs   |                                 |                                     
|                                      |                                 |                                     
|                                      |                                 | Loans receivable held for sale, net 
|                                      |                                 |                                     

The
Company's loans receivable held for investment balances are summarized as follows:

|                                      |                                 | December 31,                               |    
|------------------------------------- | ------------------------------- | ------------------------------------------ | ---
|
|
|Conventional first mortgage loans:    |                                 |                                            |    
|                                      | Residential one- to four-family |                                            | $  
|                                      | Residential multi-family        |                                            |    
|                                      | Commercial property             |                                            |    
|Second mortgage and home equity loans |                                 |                                            | 301
|Manufactured housing loans            |                                 |                                            | 55 
|Other                                 |                                 |                                            | 25 
|                                      |                                 |                                            |    
|                                      |                                 | Total loans receivable held for investment |    
|Net deferred loan origination costs   |                                 |                                            | 47 
|Allowance for loan losses             |                                 |                                            | (78
|                                      |                                 |                                            |    
|                                      |                                 | Loans receivable held for investment, net  |    
|                                      |                                 |                                            |    

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Non-Accrual and Past Due Loans

The outstanding balances of non-accrual loans and loans past due 90 days or more and still accruing as of December 31, 2003 and 2002 are
as follows:

|                                                        |                                        | December 31,                   
|------------------------------------------------------- | -------------------------------------- | -------------------------------
|
|
|
|Non-accruing loans receivable held for investment:      |                                        |                                
|                                                        | Mortgage loans secured by:             |                                
|                                                        |                                        | Residential one- to four-family
|                                                        |                                        | Residential multi-family       
|                                                        |                                        | Commercial property            
|                                                        | Other loans                            |                                
|                                                        |                                        |                                
|Total non-accruing loans receivable held for investment |                                        |                                
|Non-accruing loans receivable held for sale             |                                        |                                
|                                                        |                                        |                                
|                                                        | Total non-accruing loans receivable(1) |                                
|                                                        |                                        |                                

---

The
effect of non-accrual loans on interest income is as follows:

|                 |                          | Year Ended December 31,      |  
|---------------- | ------------------------ | ---------------------------- | -
|
|
|Interest income: |                          |                              |  
|                 | As originally contracted |                              | $
|                 | As recognized            |                              |  
|                 |                          |                              |  
|                 |                          | Reduction of interest income |  
|                 |                          |                              |  

87

---

Allowance for Loan Losses

Activity in the allowance for loan losses is summarized as follows:

|                                       |                                                                 | At or for the Year Ended
December 31, |   
|-------------------------------------- | --------------------------------------------------------------- | ------------------------------------- | --
|
|
|Balance at beginning of year           |                                                                 | $                                     | 78
|Provision (benefit) charged to income: |                                                                 |                                       |   
|                                       | Continuing                                                      |                                       |   
|                                       | Discontinued                                                    |                                       |   
|Charge-offs:                           |                                                                 |                                       |   
|                                       | Mortgage                                                        |                                       |   
|                                       | Manufactured Housing                                            |                                       |   
|                                       | Manufactured Housingtransfer to loans receivable held for sale |                                       |   
|Recoveries:                            |                                                                 |                                       |   
|                                       | Mortgage                                                        |                                       |   
|                                       | Manufactured Housing                                            |                                       |   
|                                       |                                                                 |                                       |   
|Balance at end of year                 |                                                                 | $                                     | 78
|                                       |                                                                 |                                       |   

Geographic Concentration

As of December 31, 2003, 36% and 16% of the Company's mortgage loans held for investment portfolio was collateralized by properties located in New York
State and California, respectively. The properties
securing the remaining held for investment portfolio are dispersed throughout the country, with no state representing more than 10%.

As
of December 31, 2003, 37% and 13% of the Company's mortgage loans held for sale portfolio was by collateralized properties located in California and New York State,
respectively. The properties securing the remaining held for sale portfolio are dispersed throughout the country, with no state representing more than 10%.

NOTE 5    Mortgage Recourse Arrangements, Retained Interests in Securitizations and Servicing Assets

The following describes the balances associated with recourse arrangements, the balances and activity in the corresponding retained interests, the balances and
activity in servicing assets and the economic assumptions used in valuing the retained interests and servicing assets of mortgage loans. The discussion of manufactured housing recourse and servicing
assets is discussed in Note 14.

Recourse Arrangements

GreenPoint sells loans in the secondary market either through whole loan sales or by securitization. Generally the credit risk associated with those loans is
transferred to the buyer. GreenPoint retains recourse on such sales. In whole loan sales the recourse is limited to documentation representations and warranties and in securitizations the recourse is
limited to the amount of credit enhancement GreenPoint contributes to the particular transaction. The investors and the securitization trusts have no recourse to GreenPoint's other assets for failure
of debtors to pay when due except for the limited recourse described herein.

Typically
in securitizations, GreenPoint will provide credit enhancement to the transaction to indemnify losses incurred by the investors. These credit enhancements will be in the form
of over-collateralization, excess interest cash flows, subordinated interests or demand notes. GreenPoint

88

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retains
those interests and, as such, those interests represent the maximum recourse that GreenPoint has on a mortgage securitization. GreenPoint also entered into a whole loan sale where the risk of
loss is shared between GreenPoint and the investor.

The
following table shows the principal balances of mortgage loans and amounts of maximum recourse to GreenPoint for securitizations and risk-share sales:

|                           |                     | December 31,
|-------------------------- | ------------------- | ------------
|
|
|Mortgage securitizations:  |                     |             
|                           | Principal balance   |             
|                           | Maximum recourse(1) |             
|Mortgage risk-share sales: |                     |             
|                           | Principal balance   |             
|                           | Maximum recourse(2) |             

---

The
following table represents quantitative information about delinquencies and net credit losses on loans securitized and loans sold under risk-sharing agreements:

|                                                    |  | At and for the Year Ended December 31,
|--------------------------------------------------- |  | --------------------------------------
|
|
|
|Principal balance of loans                          |  | $                                     
|Principal balance of loans 90 days or more past due |  |                                       
|Net credit losses(1)                                |  |                                       
|                                                    |  |                                       

---

Balances and Changes in Retained Interests

The assets recognized as retained interests in mortgage securitizations include interest-only strips, transferor interests and subordinated
certificates. These retained interests represent the maximum

89

---

amount
of loss GreenPoint can incur in its mortgage securitizations. The activity in retained interests in mortgage securitizations is summarized as follows:

|                                       |                                           | At and for the Year Ended December 31, |  
|-------------------------------------- | ----------------------------------------- | -------------------------------------- | -
|
|
|Retained Interests in Securitizations: |                                           |                                        |  
|                                       | Balance at beginning of year              |                                        | $
|                                       | Additions from securitizations            |                                        |  
|                                       | Interest and other income                 |                                        |  
|                                       | Cash received                             |                                        |  
|                                       | Cleanup call exercise                     |                                        |  
|                                       | Change in unrealized gain                 |                                        |  
|                                       | Change in subordinated certificates       |                                        |  
|                                       | Change in valuation of retained interests |                                        |  
|                                       |                                           |                                        |  
|                                       |                                           | Balance at end of year                 |  
|                                       |                                           |                                        |  

On
a quarterly basis, GreenPoint reviews retained interests for impairment based on management's best estimate of the fair value of future cash flows associated with the retained
interests. During the year ended December 31, 2003, GreenPoint recorded a $4 million charge to adjust its mortgage retained interests. The charge primarily relates to higher expected
prepayment rates.

Valuation Assumptions

The key economic assumptions used in estimating the fair value of mortgage retained interests capitalized during the year ending 2003, and the assumptions used in
estimating the fair value of the entire portfolio of mortgage retained interests at December 31, 2003, 2002 and 2001 were as follows:

|                                 |  | Capitalized
During Year |   | Estimate of Fair Value at
December 31, |  
|-------------------------------- |  | ----------------------- | - | -------------------------------------- | -
|
|Weighted average life (in years) |  | 1.2                     |   | 0.7                                    |  
|Weighted average prepayment rate |  | 53.4                    | % | 59.7                                   | %
|Weighted average loss rate       |  | 1.25                    | % | 3.2                                    | %
|Cumulative loss(1)               |  | 1.5                     | % | 2.2                                    | %
|Asset cash flows discounted at   |  | 7.3                     | % | 8.0                                    | %

---

90

---

The
key economic assumptions and the sensitivity of the current fair value of residual cash flows to immediate 10 percent and 20 percent adverse changes in those
assumptions are as follows:

|                                                    |                                            | December 31,
|--------------------------------------------------- | ------------------------------------------ | ------------
|
|Fair value of retained interests in securitizations |                                            | $           
|Weighted average prepayment rate(1)                 |                                            |             
|                                                    | Impact on fair value of 10% adverse change |             
|                                                    | Impact on fair value of 20% adverse change |             
|Weighted average loss rate                          |                                            |             
|                                                    | Impact on fair value of 10% adverse change |             
|                                                    | Impact on fair value of 20% adverse change |             
|Asset cash flows discount rate                      |                                            |             
|                                                    | Impact on fair value of 10% adverse change |             
|                                                    | Impact on fair value of 20% adverse change |             

---

These
sensitivities are hypothetical and should be used with caution. The changes in fair value based on a variation in assumptions may not be extrapolated because the relationship of
the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption on the fair value of the retained interest is
calculated without changing any other assumption; in reality, changes in one factor may result in changes in another, which might magnify or counteract the sensitivities.

A
majority of GreenPoint's loan sales are done as whole loan sales. GreenPoint makes certain representations and warranties, which permit the investor to return the mortgage loan to the
originator if deficiencies exist in the loan documentation. This is a common practice in the mortgage secondary markets. GreenPoint maintains a liability for such potential indemnifications and
repurchases. The following table summarizes the activity in that reserve and the amount of losses ultimately incurred by GreenPoint on such repurchases:

|                               |                          | At and for the Year Ended December 31, |    
|------------------------------ | ------------------------ | -------------------------------------- | ---
|
|
|Balance at beginning of period |                          | $                                      | 32 
|Provision charged to income(1) |                          |                                        | 55 
|Losses                         |                          |                                        | (26
|                               |                          |                                        |    
|                               | Balance at end of period |                                        | $  
|                               |                          |                                        |    

---

91

---

Servicing Assets

On a quarterly basis, GreenPoint reviews capitalized servicing rights for impairment. This review is performed based on risk strata, which are determined on a
disaggregated basis given the predominant risk characteristics of the underlying loans. For mortgage loans, the predominant risk characteristics are loan type and interest rate. The asset pools
underlying certain mortgage servicing assets at times do not meet agreed-upon servicing covenants. Management evaluates the impact of these covenants on the value of the servicing assets
and incorporates the assessment in their quarterly impairment review.

The
activity in servicing assets is summarized as follows:

|                                            |                              | At and for the Year Ended December 31, |    
|------------------------------------------- | ---------------------------- | -------------------------------------- | ---
|
|
|Servicing assets:                           |                              |                                        |    
|                                            | Balance at beginning of year |                                        | $  
|                                            | Additions                    |                                        |    
|                                            | Sales                        |                                        |    
|                                            | Amortization                 |                                        |    
|                                            |                              |                                        |    
|                                            |                              | Balance at end of year                 |    
|                                            |                              |                                        |    
|Reserve for impairment of servicing assets: |                              |                                        |    
|                                            | Balance at beginning of year |                                        |    
|                                            | Additions                    |                                        |    
|                                            |                              |                                        |    
|                                            |                              | Balance at end of year                 |    
|                                            |                              |                                        |    
|Servicing assets, net                       |                              | $                                      | 176
|                                            |                              |                                        |    

The
estimated fair values of mortgage servicing assets were $177 million, $90 million and $66 million at December 31, 2003, 2002 and 2001, respectively.

Servicer
advances receivable totaled $79 million, $48 million and $22 million at December 31, 2003, 2002 and 2001, respectively.

The
significant assumptions used in estimating the fair value of the servicing assets at December 31, 2003, 2002 and 2001 were as follows:

|                                                         |  | December 31, |  
|-------------------------------------------------------- |  | ------------ | -
|
|Weighted average prepayment rate (includes default rate) |  | 30.5         | %
|Weighted average life (in years)                         |  | 4.2          |  
|Cash flows discounted at                                 |  | 10.3         | %

At
December 31, 2003, the sensitivities to immediate 10 percent and 20 percent adverse changes in weighted average prepayment rates were $10 million and
$18 million, respectively, for mortgage servicing assets.

92

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Securitization Trust Cash Flows

GreenPoint's mortgage securitizations utilize trusts that engage in the business of holding loans, issuing certificates and making payments on certificates. The
following table summarizes certain cash flows received from securitization trusts:

|                                  |  | Year Ended December 31,
|--------------------------------- |  | -----------------------
|
|
|Proceeds from new securitizations |  | $                      
|Servicing fees received           |  |                        

NOTE 6    Other Real Estate Owned

Other real estate owned ("ORE") consists of real estate acquired through foreclosure or deed in lieu of foreclosure. The following is a summary of ORE owned by
the Company:

|                                |  | December 31,
|------------------------------- |  | ------------
|
|
|Residential one-to four-family  |  | $           
|Allowance for declines in value |  |             
|                                |  |             
|Other real estate owned, net    |  | $           
|                                |  |             

The
following is a summary of ORE operating income activity:

|                                                  |  | Year Ended December 31, |   
|------------------------------------------------- |  | ----------------------- | --
|
|
|Operating expense, net of rental and other income |  | $                       | 2 
|Net (gain) on sales of ORE properties             |  |                         | (4
|                                                  |  |                         |   
|Net ORE operating (income)                        |  | $                       | (2
|                                                  |  |                         |   

During
the years ended December 31, 2003, 2002 and 2001, the Company acquired through foreclosure or deed in lieu of foreclosure, loans with book values of $53 million,
$34 million and $21 million, respectively. Charges to the allowance for loan losses, reducing the carrying value of ORE properties to their estimated fair values, amounted to
$3 million, $1 million and $2 million during the years ended December 31, 2003, 2002 and 2001, respectively. Sales of ORE properties during these respective periods totaled
$44 million, $26 million and $20 million.

93

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NOTE 7    Deposits

The contractual maturities of term certificates of deposit are summarized as follows:

|                                |       | December 31, |      
|------------------------------- | ----- | ------------ | -----
|
|
|
|Due within six months           |       | $            | 1,815
|Due within six to twelve months |       |              | 1,013
|Due within one to two years     |       |              | 886  
|Due within two to three years   |       |              | 85   
|Due within three to four years  |       |              | 384  
|Due within four to five years   |       |              | 106  
|Due beyond five years           |       |              | 21   
|                                |       |              |      
|                                | Total |              | $    
|                                |       |              |      

Included
in term certificates of deposit are certificates in denominations of $100,000 or more at December 31, 2003 and 2002, aggregating $957 million and
$1.3 billion, respectively.

Interest
expense on deposits is summarized as follows:

|              |                                 | Year Ended December 31
|------------- | ------------------------------- | ----------------------
|
|
|Account type: |                                 |                       
|              | N.O.W.                          |                       
|              | Savings                         |                       
|              | Variable rate savings           |                       
|              | Money market                    |                       
|              | Wholesale money market deposits |                       
|              | Term certificates of deposit    |                       
|              |                                 |                       
|              |                                 | Total(1)              
|              |                                 |                       

---

Included
in NOW and checking deposits are non-interest bearing checking deposits of $443 million and $343 million at December 31, 2003 and 2002,
respectively.

94

---

NOTE 8    Securities Sold Under Agreements to Repurchase, Federal Home Loan Bank Advances and Other Short-Term Borrowing

Securities sold under agreements to repurchase and Federal Home Loan Bank ("FHLB") advances are summarized, as follows:

|                                                |                                               | At and for the Year Ended December 31, |  
|----------------------------------------------- | --------------------------------------------- | -------------------------------------- | -
|
|
|Securities sold under agreements to repurchase: |                                               |                                        |  
|                                                | Balance at December 31                        |                                        | $
|                                                | Highest balance at any month end              |                                        | $
|                                                | Average balance for the year                  |                                        | $
|                                                | Average interest rate for the year            |                                        |  
|                                                | Weighted average interest rate at December 31 |                                        |  
|                                                |                                               |                                        |  
|Federal Home Loan Bank Advances:                |                                               |                                        |  
|                                                | Balance at December 31                        |                                        | $
|                                                | Highest balance at any month end              |                                        | $
|                                                | Average balance for the year                  |                                        | $
|                                                | Average interest rate for the year            |                                        |  
|                                                | Weighted average interest rate at December 31 |                                        |  
|                                                |                                               |                                        |  

Included
in advances from the Federal Home Loan Bank of New York at December 31, 2002 were overnight borrowings from the FHLB of $1.7 billion. There were no overnight
borrowings from the FHLB at December 31, 2003.

The
advances bear interest at rates ranging from 1.51% to 6.30%. The advances are collateralized by certain one to four family residential mortgage loans pledged under a blanket lien to
the FHLB.

Future
maturities of the securities sold under agreements to repurchase and the FHLB advances are as follows:

Year Ended December 31,

Amount(In millions)2004

$
2,2272005


2502006


6002007


3502008


thereafter


2,700Total

$
6,127


95

---

Other
short-term borrowings represent overnight Federal Funds purchased and are summarized as follows:

|                         |                                               | At and for the Year Ended December 31, |  
|------------------------ | --------------------------------------------- | -------------------------------------- | -
|
|
|Federal Funds purchased: |                                               |                                        |  
|                         | Balance at December 31                        |                                        | $
|                         | Highest balance at any month end              |                                        | $
|                         | Average balance for the year                  |                                        | $
|                         | Average interest rate for the year            |                                        |  
|                         | Weighted average interest rate at December 31 |                                        |  
|                         |                                               |                                        |  

NOTE 9    Senior and Subordinated Bank Notes and Other Long Term Debt

In July 1997, the Company published an Offering Circular under Regulation D authorizing it to issue, from time to time, up to $3 billion of
Senior and Subordinated Bank Notes with maturities ranging from 7 days to 30 years. On July 10, 1997, the Company issued $200 million of 6.70% Senior Bank Notes which
matured July 15, 2002. Interest was paid semi-annually on January 15 and July 15. The proceeds were used by the Company for general corporate and banking purposes in
the ordinary course of business.

On
June 6, 2003, GreenPoint issued $350 of 3.20% Senior Notes (the "Senior Notes"). The Senior Notes are due June 6, 2008. Interest is payable semi-annually on
December 6th and June 6th commencing on December 6, 2003. Net proceeds to GreenPoint of $348 million were used to pay down
short-term borrowings and for general corporate purposes in the ordinary course of its business.

On
October 4, 2000, the Bank issued $150 million of 9.25% Subordinated Bank Notes (the "Notes"). The Notes are due October 1, 2010. Interest is payable
semi-annually on April 1 and October 1 commencing April 1, 2001. Net proceeds to the Bank of $149 million were used for general corporate and banking purposes
in the ordinary course of its business. The Notes qualify as Tier 2 or supplemental capital of the Bank under capital guidelines established by the FDIC, subject to applicable limitations.

Senior
Notes, Subordinated Bank Notes and Senior Bank Notes interest expense was $20 million, $19 million and $24 million for each of the years ended
December 31, 2003, 2002 and 2001, respectively.

In
June 1997, GreenPoint Capital Trust I (the "Trust"), a Delaware statutory business trust wholly owned by the Company, issued $200 million of 9.10% Guaranteed Preferred
Beneficial Interest in the Company's Subordinated Debentures ("Capital Securities"). The Trust exists for the sole purpose of issuing the Capital Securities and investing the proceeds thereof in 9.10%
Junior Subordinated Debentures issued by the Company. The Junior Subordinated Debentures are not redeemable prior to June 1, 2007, unless certain events have occurred and are included in the
Consolidated Statements of Financial Condition as other long term debt.

Effective
December 31, 2003, the provisions of Financial Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN 46") required the company to
deconsolidate the Trust. The Company does continue to include the Capital Securities in the Company's Tier 1 Capital and Total Capital at December 31, 2003. This is based on a supervisory
letter issued by the Board of Governors of the Federal Reserve System in July 2003 instructing bank holding companies to continue to include the Capital Securities in these capital calculations
for regulatory purposes until notice is given to the contrary.

96

---

Payment
of distributions out of monies held by the Trust, and payments on liquidation of the Trust or the redemption of Capital Securities, are guaranteed by the Company to the extent
the Trust has funds available. The obligations of the Company under the Guarantee and the Junior Subordinated Debentures are subordinate and junior in right of payment to all indebtedness of the
Company and will be structurally subordinated to all liabilities and obligations of the Company's subsidiaries.

Interest
on the Junior Subordinated Debentures are payable semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 1997.

The
proceeds from the issuance of the Junior Subordinated Debentures were used to repurchase $200 million of common stock for the year ended December 31, 1997.

Interest
expense on Capital Securities was $18 million, for each of the years ended December 31, 2002, 2001 and 2000, respectively.

NOTE 10    Adoption of SFAS 142Goodwill Amortization

The following table reflects the results adjusted as though the Company had adopted SFAS 142 on January 1, 2001:

|                                                  |                                                   | Year Ended December 31, |    
|------------------------------------------------- | ------------------------------------------------- | ----------------------- | ---
|
|
|Net income from continuing operations as reported |                                                   | $                       | 471
|Goodwill amortization                             |                                                   |                         |   
|Tax effect at effective tax rate                  |                                                   |                         |   
|                                                  |                                                   |                         |    
|                                                  | Net income from continuing operations as adjusted |                         | $  
|                                                  |                                                   |                         |    
|Basic earnings per share:                         |                                                   |                         |    
|                                                  | Net income from continuing operations as reported |                         | $  
|                                                  | Net income from continuing operations as adjusted |                         | $  
|                                                  |                                                   |                         |    
|Diluted earnings per share:                       |                                                   |                         |    
|                                                  | Net income from continuing operations as reported |                         | $  
|                                                  | Net income from continuing operations as adjusted |                         | $  
|                                                  |                                                   |                         |    

NOTE 11    Pension Plan and Other Employee Benefits

The
Company maintains a noncontributory, qualified, defined benefit pension plan (the "Pension Plan") covering substantially all employees who have completed one year of service. The
funding of the Pension Plan is actuarially determined on an annual basis.

In
addition, the Company maintains a non-qualified, unfunded Supplemental Executive Retirement Plan ("SERP") for the primary purpose of providing benefits to certain eligible
employees in excess of the limitations imposed by the Internal Revenue Code, and also maintains a non-qualified, unfunded defined benefit Retirement Plan for Directors who are not entitled
to receive benefits under the Pension Plan.

The
Company also provides a comprehensive medical plan for certain current and future retirees and certain of their spouses until they become eligible for Medicare and a Medicare
Supplemental Plan once they become eligible for Medicare. The plan was amended effective March 1, 1998 to provide different benefit and eligibility provisions to employees who retire after that
date. The Company also offers life insurance to certain current and future retirees. Benefits are funded on a pay-as-you-go basis and there are no plan assets to
pre-fund the liability.

97

---

The following tables set forth the changes in the Company's pension plans' and postretirement plans' accumulated benefit obligations, fair values of plan assets and funded status. An
actuarial analysis of plan assets and benefit obligations is completed as of September 30th of each year.

|                              |                                              | Pension
Benefits                   |   | Postretirement
Benefits |   
|----------------------------- | -------------------------------------------- | ---------------------------------- | - | ----------------------- | --
|
|
|Change in Benefit Obligation: |                                              |                                    |   |                         |   
|                              | Benefit obligation at beginning of plan year |                                    | $ | 50                      |   
|                              | Service cost                                 |                                    |   | 4                       |   
|                              | Interest cost                                |                                    |   | 3                       |   
|                              | Benefit payments                             |                                    |   | (4                      | ) 
|                              | Assumption change                            |                                    |   | 1                       |   
|                              | Curtailment                                  |                                    |   |                        |   
|                              | Actuarial loss                               |                                    |   | (1                      | ) 
|                              |                                              |                                    |   |                         |   
|                              |                                              | Benefit obligation at September 30 |   | $                       | 53
|                              |                                              |                                    |   |                         |   

|                                                                       |                                                     | Pension
Benefits                          |    | Postretirement
Benefits |   
|---------------------------------------------------------------------- | --------------------------------------------------- | ----------------------------------------- | -- | ----------------------- | --
|
|
|Change in Plan Assets:                                                 |                                                     |                                           |    |                         |   
|                                                                       | Fair value of plan assets at beginning of plan year |                                           | $  | 34                      |   
|                                                                       | Actual return on plan assets                        |                                           |    | 6                       |   
|                                                                       | Employer contribution                               |                                           |    | 5                       |   
|                                                                       | Benefits paid                                       |                                           |    | (4                      | ) 
|                                                                       |                                                     |                                           |    |                         |   
|                                                                       |                                                     | Fair value of plan assets at September 30 |    | $                       | 41
|                                                                       |                                                     |                                           |    |                         |   
|Reconciliation of Funded Status:                                       |                                                     |                                           |    |                         |   
|                                                                       | Funded status                                       |                                           | $  | (12                     | ) 
|                                                                       | Employer contribution in the fourth quarter         |                                           |    | 4                       |   
|                                                                       | Unrecognized actuarial loss (gain)                  |                                           |    | 6                       |   
|                                                                       | Unrecognized prior service cost                     |                                           |    | (1                      | ) 
|                                                                       |                                                     |                                           |    |                         |   
|                                                                       |                                                     | Net amount recognized at December 31      |    | $                       | (3
|                                                                       |                                                     |                                           |    |                         |   
|Amounts Recognized in the Statement of Financial Condition Consist of: |                                                     |                                           |    |                         |   
|                                                                       | Prepaid benefit cost                                |                                           | $  |                        |   
|                                                                       | Accrued benefit liability                           |                                           |    | (4                      | ) 
|                                                                       | Intangible asset                                    |                                           |    | 1                       |   
|                                                                       |                                                     |                                           |    |                         |   
|                                                                       |                                                     | Net amount recognized at December 31      |    | $                       | (3
|                                                                       |                                                     |                                           |    |                         |   
|Accumulated benefit obligations                                        |                                                     | $                                         | 47 |                         | $ 
|                                                                       |                                                     |                                           |    |                         |   

Currently
the Company expects to make a post retirement contribution in 2004 of less than $1 million.

98

---

The
following table presents the weighted-average annualized actuarial assumptions for the projected benefit obligation:

|                               |  | Pension Benefits
Year ended |   | Postretirement Benefits
Year Ended(1) |  
|------------------------------ |  | --------------------------- | - | ------------------------------------- | -
|
|Weighted Average Assumptions:  |  |                             |   |                                       |  
|Discount rate                  |  | 5.75                        | % | 6.25                                  | %
|Expected return on plan assets |  | 8.00                        | % | 8.00                                  | %
|Rate of compensation increase  |  | 4.50                        | % | 4.50                                  | %
|                               |  |                             |   |                                       |  

---

The
components of net periodic benefit cost were as follows:

|                                         |                                    | Pension Benefits
Year Ended December 31, |   | Postretirement Benefits
Year Ended December 31, |  
|---------------------------------------- | ---------------------------------- | ---------------------------------------- | - | ----------------------------------------------- | -
|
|
|Components of Net Periodic Benefit Cost: |                                    |                                          |   |                                                 |  
|                                         | Service cost                       |                                          | $ | 4                                               |  
|                                         | Interest cost                      |                                          |   | 3                                               |  
|                                         | Expected return on plan assets     |                                          |   | (3                                              | )
|                                         | Amortization of prior service cost |                                          |   |                                                |  
|                                         | Recognized actuarial gain          |                                          |   | 1                                               |  
|                                         | Curtailment                        |                                          |   |                                                |  
|                                         |                                    |                                          |   |                                                 |  
|                                         |                                    | Net periodic benefit cost                |   | $                                               | 5
|                                         |                                    |                                          |   |                                                 |  

The
following table presents the weighted-average components of the net periodic benefit cost:

|                               |  | Pension Benefits
Year ended |   | Postretirement Benefits
Year Ended(1) |  
|------------------------------ |  | --------------------------- | - | ------------------------------------- | -
|
|Weighted Average Assumptions:  |  |                             |   |                                       |  
|Discount rate                  |  | 6.25                        | % | 7.00                                  | %
|Expected return on plan assets |  | 8.00                        | % | 8.50                                  | %
|Rate of compensation increase  |  | 4.50                        | % | 4.50                                  | %

---

99

---

The
Company also provides non-qualified retirement benefits to members of Executive Management. For the years ended December 31, 2003, 2002 and 2001, the expense was
$6 million, $5 million and $3 million, respectively.

A
one percentage point change in assumed health care cost trend rates would have no material effect on net postretirement benefit costs. A one percentage point increase in assumed health
care cost trend rates would increase the postretirement benefit obligation by $1 million and a one percentage point decrease would decrease the postretirement benefit obligation by the same
amount.

Pension Plan Assets

GreenPoint's pension plan weighted-average asset allocations at December 31, 2003 and 2002, by asset category are as follows:

|                  |       |    |     | Plan Assets
At December 31 |    
|----------------- | ----- | -- | --- | -------------------------- | ---
|
|
|Equity securities |       | 65 | %   | 67                         | %  
|Debt securities   |       | 35 |     | 32                         |    
|Other             |       |   |     | 1                          |    
|                  |       |    |     |                            |    
|                  | Total |    | 100 | %                          | 100
|                  |       |    |     |                            |    

Investment strategy and asset allocation

The investment strategy for the Company's pension plans is determined by a Committee composed of members of the Bank's senior management. The funds in the plan
are to be invested effectively and prudently for the exclusive benefit of Plan participants and beneficiaries. In order to accomplish this strategy, the plan's asset allocation strategy contains a
diversified portfolio of U.S. large and small capitalization equities, international equities and U.S. fixed income securities. The Committee reviews the Plan's asset mix on a regular basis. When the
exposure in a particular asset category reaches either a minimum or maximum level, an asset allocation review process is initiated and the portfolio will be automatically rebalanced back to target
allocation levels. In developing a strategic asset allocation policy for the plan, the Company examined certain factors that affect the risk tolerance of the Plan such as the demographics of
employees, the actuarial and funding characteristics of the plan and the Company's business and financial characteristics.

The
use of derivatives in mutual funds and commingled funds that are part of the Company's plan are limited to ways that are consistent with the stated risk-return
characteristics and objectives of each fund. If the subsequent activities of a fund differ significantly from past practice or from standard industry practice, the relationship with the fund manager
will be reassessed and may be terminated. Derivatives are permissible in separate account portfolio holdings only to the extent they comply with all of the policy guidelines of the Plan and are
consistent with the Plan's risk and return objectives.

Expected Rate of Return

The Expected Return on Asset Assumption was developed through analysis of historical market returns, current market conditions, and a comparison of expectations
on potential future market returns. The assumption represents a long-term average view of the performance of the Pension Plan so that the return may or may not be achieved during any one
calendar year.

100

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401(k) Savings Plan

Substantially all of the employees of the Company employed on or before July 1, 1996 and employees employed after such date who have been credited with
1,000 hours of service during a twelve month period are eligible to participate in the 401(k) Savings Plan. Participants may contribute on a pre-tax basis up to 12% of their
eligible salary and may be eligible to receive a matching contribution equal to 100% of the first 3% of eligible salary they contribute to the 401(k) Savings Plan. The matching contribution may be
funded by using some of the shares released for allocation under the Company's ESOP. Matching contributions generally become vested over a five-year period. 401(k) Savings Plan expenses
for matching contributions were approximately $3 million for each of the years ended December 31, 2003, 2002 and 2001, respectively.

NOTE 12    Income Taxes

Prior to the enactment of Federal legislation in 1996, the Bank was allowed a bad debt deduction based on a reserve method. This legislation requires future bad
debt deductions to be based on current losses. In the event of certain distributions or a complete liquidation, the legislation also requires the Bank to recapture pre-1988 reserve method
deductions of $140 million. Management has no intention of taking any such actions.

For
New York State and City income tax purposes, the Bank is permitted to take reserve method bad debt deductions. Should the Bank fail to meet certain statutory tests, including
maintaining at least 60% of its assets in certain qualifying assets, the Bank would be required to include into taxable income the amount of the State and City tax bad debt reserves. As of
December 31, 2003, the Bank has not provided any tax liability for recognition of the Bank's excess State and City reserves of approximately $482 and $487 million in excess of the
Federal reserve. In addition, the Bank's qualifying asset percentage exceeded the 60% threshold at December 31, 2003.

The
Company's deferred tax asset represents the anticipated federal, state and local tax benefits expected to be realized in future years upon the utilization of the underlying tax
attributes comprising this balance. In management's opinion, the net deferred tax asset is fully realizable. Accordingly, no valuation allowance has been provided.

The
components of income tax expense (benefit) for the combined continued and discontinued operations for the years ended December 31, 2003, 2002 and 2001, are summarized as
follows:

|          |                 | Year Ended December 31, |  
|--------- | --------------- | ----------------------- | -
|
|
|Current:  |                 |                         |  
|          | Federal         |                         | $
|          | State and local |                         |  
|          |                 |                         |  
|          |                 | Total current           |  
|          |                 |                         |  
|Deferred: |                 |                         |  
|          | Federal         |                         |  
|          | State and local |                         |  
|          |                 |                         |  
|          |                 | Total deferred          |  
|          |                 |                         |  
|          |                 | Total                   |  
|          |                 |                         |  

101

---

The
income tax expense for the combined operations is composed of the following:

|                        |                     | Year Ended December 31, |    
|----------------------- | ------------------- | ----------------------- | ---
|
|
|Continuing Operations   |                     | $                       | 281
|Discontinued Operations |                     |                         | 2  
|                        |                     |                         |    
|                        | Combined Operations |                         | $  
|                        |                     |                         |    

In
addition to the income tax expense attributable to combined operations, deferred tax expense (benefit) of $(41) million, $10 million and $(4) million for the change in net
unrealized gain or loss on securities available for sale and current tax benefit of $8 million, $14 million and $11 million for certain stock benefit programs have also been
allocated to stockholders' equity for the years ended December 31, 2003, 2002 and 2001.The amounts reported as income tax expense from combined
operations vary from amounts that would be reported by applying the statutory federal income tax rate to income before income taxes due to the following:

|                                                                   |                    | Year Ended December 31, |    
|------------------------------------------------------------------ | ------------------ | ----------------------- | ---
|
|
|Tax expense (benefit) at federal statutory rate                    |                    | $                       | 264
|State and local taxes, net of federal income tax expense (benefit) |                    |                         | 26 
|Fair market value over cost of Employee Stock Ownership Plan       |                    |                         | 8  
|Other                                                              |                    |                         | (15
|                                                                   |                    |                         |    
|                                                                   | Total income taxes |                         | $  
|                                                                   |                    |                         |    

The
balances of the net deferred tax asset at December 31, 2003 and 2002 were comprised as follows:

|                          |                                                  | December 31,           |    
|------------------------- | ------------------------------------------------ | ---------------------- | ---
|
|
|Deferred Tax Assets:      |                                                  |                        |    
|                          | Goodwill                                         |                        | $  
|                          | Retained interests in securitizations            |                        |    
|                          | Postretirement and post-employment benefits      |                        |    
|                          | Loans                                            |                        |    
|                          | Premises and equipment                           |                        |    
|                          | Unrealized loss on securities available for sale |                        |    
|                          | Other liabilities                                |                        |    
|                          |                                                  |                        |    
|                          |                                                  | $                      | 296
|                          |                                                  |                        |    
|Deferred Tax Liabilities: |                                                  |                        |    
|                          | Unrealized gain on securities available for sale |                        | $  
|                          | Servicing assets                                 |                        |    
|                          | Other assets                                     |                        |    
|                          |                                                  |                        |    
|                          |                                                  |                        | (69
|                          |                                                  |                        |    
|                          |                                                  | Net deferred tax asset |    
|                          |                                                  |                        |    

102

---

In
2001 the Company incurred losses from discontinued operations that will be realized for tax purposes in future periods. Given the Company's substantial earnings history and favorable
future earnings prospects, the existence of substantial refundable prior year tax payments and the extraordinary and infrequent nature of the 2001 discontinuance loss event, all deferred tax assets
are considered fully realizable in future periods. Accordingly, no valuation allowance for deferred tax assets is deemed necessary.

NOTE 13    Discontinued Operations

In December 2001, GreenPoint formally adopted a plan to discontinue the manufactured housing lending business. GreenPoint's consolidated statements of
income have been presented to reflect the manufactured housing lending business as a discontinued operation. Accordingly, the income and expenses relating to the manufactured housing business are
reported as "discontinued operations" in the consolidated statements of income. In conjunction with this plan, GreenPoint honored previously existing loan commitments to fund approved loans, but did
not approve or process any new loan applications subsequent to the announcement to discontinue the business. GreenPoint continues to service a portfolio of manufactured housing loans and will proceed
with the orderly liquidation of the business in conjunction with its existing servicing commitments. See note 14 for a further description of the valuation of retained interests associated with
the discontinued operations.

The
assets and liabilities from discontinued operations at December 31, 2003 and 2002 were as follows:

|                                      |                                          | December 31,                              |    
|------------------------------------- | ---------------------------------------- | ----------------------------------------- | ---
|
|
|Assets:                               |                                          |                                           |    
|Cash, cash equivalents and securities |                                          | $                                         | 37 
|Retained interests in securitizations |                                          |                                           | 1  
|Loans receivable:                     |                                          |                                           |    
|                                      | Loans receivable held for investment     |                                           |    
|                                      | Deferred loan fees and unearned discount |                                           |    
|                                      | Allowance for loan losses                |                                           |    
|                                      |                                          |                                           |    
|                                      |                                          | Loans receivable held for investment, net |    
|                                      |                                          |                                           |    
|Servicing assets                      |                                          |                                           | 7  
|Deferred tax assets                   |                                          |                                           | 117
|Intercompany receivables              |                                          |                                           | 25 
|Other assets                          |                                          |                                           | 134
|                                      |                                          |                                           |    
|                                      | Total assets                             |                                           | $  
|                                      |                                          |                                           |    
|Liabilities:                          |                                          |                                           |    
|Liability under recourse exposure     |                                          | $                                         | 225
|Other liabilities                     |                                          |                                           | 69 
|Allocated equity                      |                                          |                                           | 78 
|                                      |                                          |                                           |    
|                                      | Total liabilities and equity             |                                           | $  
|                                      |                                          |                                           |    

The
deferred tax asset represents the tax receivable associated with the write-down to the carrying value of certain assets of the discontinued business. A portion of the
recorded loss (primarily goodwill) was not currently deductible for tax purposes and will be amortized on a straight-line basis through 2011.

103

---

Other
assets include premises and equipment, servicer advances, intercompany receivables and other operating receivables associated with the servicing operation. Other liabilities
represent balances due to investors and surety providers and accrued expenses incurred in the normal course of the discontinued operation. Allocated equity represents the balance of equity capital
allocated to the discontinued business under the Company's equity allocation formula.

Net
income from discontinued operations for the year ended December 31, 2003 was $1 million, the net income for the year ended December 31, 2002 was
$5 million, and the net loss for the year ended December 31, 2001 was $704 million.

The
net income of $1 million and $5 million reported for the years ended December 31, 2003 and 2002, respectively, represents the result of variances between the
initial estimates and the actual results of the discontinued business. The net loss reported for the year ended December 31, 2001 included the estimated cost of disposal of the discontinued
business and included the estimated performance of the discontinued operations during the phase-out period.

The
change in valuation of retained interests included in the 2002 results, resulted from an agreement to restructure the credit enhancement and servicing arrangements with a surety
provider. Under the terms of the agreement, GreenPoint agreed to issue additional letters of credit totaling $52 million in favor of the surety provider on four of its outstanding
securitizations. Additionally, GreenPoint committed to exercise its optional termination right and retire each transaction insured by the surety provider when the underlying loans in each
securitization total 10% of the original loan balance. The exercise of this option is a standard and expected operating procedure in the securitization markets, and its projected financial statement
impact is included in the projected operating results of the discontinued business. In exchange, the surety provider agreed to amend servicer termination
provisions, which, prior to their amendment, would have enabled the surety provider to transfer the servicing of certain loans to a third party.

Under
this agreement, the Company's obligations under the four letters of credit increased in the aggregate from $629 million to $681 million at the time the agreement was
restructured. Additionally, servicing agreements were amended to provide for servicing termination provisions that were more directly linked to the performance of the servicing operation and not
dependant on the credit performance of the underlying assets.

Consistent
with this agreement, an additional liability under recourse exposure was recorded to recognize the additional draws that could arise from the new letters of credit. The
balances and corresponding liability relating to manufactured housing securitizations included in Note 14 include the impact of the agreement. Additionally, the servicing asset valuation and
the projected operating results have been adjusted to reflect the amended servicing termination provisions.

The
Bank has used swaps for specific manufactured housing securitizations. The combined notional value of these swaps was $533 million and $639 million at
December 31, 2003 and 2002, respectively.

During
2002, GreenPoint originated manufactured housing loans totaling $106 million. These loans related to commitments outstanding at December 31, 2001 and were recorded
at their estimated fair value. These loans were sold during the year at a sales price which exceeded their previously estimated fair value.

The
net loss reported in 2001 included a net loss from disposal of the discontinued business of $440 million and a net loss from operations of the discontinued business of
$264 million. The loss before taxes from disposal of the discontinued business for the year ended December 31, 2001 was $712 million. This total consisted of $390 million
to write-off the remaining carrying value of goodwill, $172 million to adjust the valuation of retained interests, $135 million for write-downs to the valuation of loans,
$10 million for servicing asset impairment, a $10 million restructuring charge, and projected $5 million income from the discontinued business. The restructuring accrual primarily
represented

104

---

severance
costs associated with the decision to discontinue the business and all payments associated with that accrual were made during 2002 to reduce the liability to zero at December 31,
2002.

NOTE 14    Manufactured Housing Recourse Arrangements, Retained Interests in Securitizations and Servicing Assets

In December 2001, GreenPoint formally adopted a plan to discontinue the manufactured housing lending business. Although it exited the manufactured housing
lending business, GreenPoint continues to service existing loans. Such commitments expose GreenPoint to losses on or from securitizations and loan sales. The investors and the securitization trusts
have no recourse to GreenPoint's other assets for failure of debtors to pay when due except for the recourse described herein. The following describes the balances associated with recourse
arrangements, the balances and activity in the corresponding retained interests, the balances and activity in servicing assets and the economic assumptions used in valuing the retained interests and
servicing assets.

Recourse Arrangements

The following table summarizes the principal balances of manufactured housing loans securitized and sold, the maximum recourse to GreenPoint on those loans and
the liability recorded for such recourse.

|                                      |                     | December 31,
|------------------------------------- | ------------------- | ------------
|
|
|Manufactured housing securitizations: |                     |             
|                                      | Principal balance   |             
|                                      | Maximum recourse(1) |             
|                                      | Recorded liability  |             
|Manufactured housing sales:           |                     |             
|                                      | Principal balance   |             
|                                      | Maximum recourse    |             
|                                      | Recorded liability  |             

---

105

---

GreenPoint's largest manufactured housing exposure lies in a corporate guarantee issued with each securitization in the form of a letter of credit to indemnify a limited amount of losses
to the investors. The following table summarizes those letters of credit and the amount of draws GreenPoint expects.

|                                 |                     | December 31, |     
|-------------------------------- | ------------------- | ------------ | ----
|
|
|Letters of credit outstanding    |                     | $            | 537 
|Projected letter of credit draws |                     |              | (239
|                                 |                     |              |     
|                                 | Unreserved exposure |              | $   
|                                 |                     |              |     

GreenPoint's
liability under recourse exposure for manufactured housing securitizations represents the present value of the projected letter of credit draws. Of the $3.6 billion
of securitized loans outstanding there are five securitizations totaling $1.5 billion, with $79 million in letters of credit remaining, in which GreenPoint's recorded liability is equal
to its remaining exposure under those letters of credit.

The
following presents quantitative information about delinquencies and net credit losses on loans sold with recourse:

|                                                       |  | At and for the Year Ended December 31,
|------------------------------------------------------ |  | --------------------------------------
|
|
|
|Principal balance of loans                             |  | $                                     
|Principal balance of loans 90 days or more past due(1) |  |                                       
|Net credit losses(2)                                   |  |                                       

---

Balances and Changes in Retained Interests

The activity in the recorded liability for manufactured housing securitizations and sales is summarized as follows:

|                                 |                                                     | At and for the Year Ended December 31, |  
|-------------------------------- | --------------------------------------------------- | -------------------------------------- | -
|
|
|Liability for Recourse Exposure: |                                                     |                                        |  
|                                 | Balance at beginning of year                        |                                        | $
|                                 | Provisions charged to income at securitization/sale |                                        |  
|                                 | Interest expense                                    |                                        |  
|                                 | Letter of credit draws and other charges            |                                        |  
|                                 | Letter of credit pre-funding                        |                                        |  
|                                 | Change in valuation of retained interests           |                                        |  
|                                 |                                                     |                                        |  
|                                 | Balance at end of year                              |                                        | $
|                                 |                                                     |                                        |  

On
a quarterly basis, GreenPoint reviews the liability for recourse exposure on manufactured housing securitizations based on management's best estimate of future cash flows associated
with the corporate guarantees.

106

---

During
the year ended December 31, 2003, GreenPoint recorded an $8 million change to adjust its manufactured housing corporate guarantee liability. The change reflects that
the letter of credit draws have been occurring largely as projected during the year ended December 31, 2003.

|                                       |                                           | At and for the Year Ended December 31, |  
|-------------------------------------- | ----------------------------------------- | -------------------------------------- | -
|
|
|Retained Interests in Securitizations: |                                           |                                        |  
|                                       | Balance at beginning of year              |                                        | $
|                                       | Additions from securitizations            |                                        |  
|                                       | Letter of credit pre-funding              |                                        |  
|                                       | Interest and other income                 |                                        |  
|                                       | Cash received                             |                                        |  
|                                       | Change in unrealized gain                 |                                        |  
|                                       | Change in valuation of retained interests |                                        |  
|                                       |                                           |                                        |  
|                                       |                                           | Balance at end of year                 |  
|                                       |                                           |                                        |  

In
2002, GreenPoint pre-funded one of its letters of credit. Instead of absorbing losses as they occur over time, GreenPoint placed $32 million into a reserve fund to
cover those projected losses. After expected losses occur the balance of that reserve fund on a present value basis will be $1 million. GreenPoint records that $1 million as a retained
interest asset for manufactured housing securitizations.

Valuation Assumptions

The key economic assumptions used in estimating the fair value of the entire portfolio of manufactured housing retained interests, both assets and liabilities, at
December 31, 2003, 2002 and 2001 were as follows:

|                                    |  | Estimate of Fair Value at
December 31, |  
|----------------------------------- |  | -------------------------------------- | -
|
|Weighted average life (in years)    |  | 5.4                                    |  
|Weighted average prepayment rate(1) |  | 5.9                                    | %
|Weighted average default rate       |  | 6.1                                    | %
|Loss severity rate                  |  | 90.5                                   | %
|Weighted average loss rate          |  | 5.5                                    | %
|Cumulative loss(2)                  |  | 29.7                                   | %
|Asset cash flows discounted at      |  | 14.0                                   | %
|Liability cash flows discounted at  |  | 6.6                                    | %

---

During
the year ended 2003, the prepayment speed assumption was lowered. This resulted in longer average lives of the securitizations. While the average loss rate assumption stayed the
same, longer average life assumptions will result in higher expected cumulative losses.

107

---

At
December 31, 2003, the key economic assumptions and the sensitivity of the current fair value of residual cash flows to immediate 10 percent and 20 percent
adverse changes in those assumptions are as follows:

|                                                    |                                            | Year Ended December 31
|--------------------------------------------------- | ------------------------------------------ | ----------------------
|
|Fair value of retained interests in securitizations |                                            | $                     
|Fair value of recorded liability                    |                                            | $                     
|Weighted average prepayment rate(1)                 |                                            |                       
|                                                    | Impact on fair value of 10% adverse change |                       
|                                                    | Impact on fair value of 20% adverse change |                       
|Weighted average default rate                       |                                            |                       
|                                                    | Impact on fair value of 10% adverse change |                       
|                                                    | Impact on fair value of 20% adverse change |                       
|Loss severity rate                                  |                                            |                       
|                                                    | Impact on fair value of 10% adverse change |                       
|                                                    | Impact on fair value of 20% adverse change |                       
|Asset cash flows discount rate                      |                                            |                       
|                                                    | Impact on fair value of 10% adverse change |                       
|                                                    | Impact on fair value of 20% adverse change |                       
|Liability cash flows discount rate                  |                                            |                       
|                                                    | Impact on fair value of 10% adverse change |                       
|                                                    | Impact on fair value of 20% adverse change |                       

---

These
sensitivities are hypothetical and should be used with caution. The changes in fair value based on a variation in assumptions may not be extrapolated because the relationship of
the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption on the fair value of the retained interest is
calculated without changing any other assumption; in reality, changes in one factor may result in changes in another, which might magnify or counteract the sensitivities.

Servicing Assets

On a quarterly basis, GreenPoint reviews capitalized servicing rights for impairment. This review is performed based on risk strata, which are determined on a
disaggregated basis given the predominant risk characteristics of the underlying loans. For manufactured housing loans, the predominant risk characteristics are loan type and interest rate type. The
asset pools underlying certain manufactured housing servicing assets at times do not meet agreed-upon servicing covenants. Management evaluates the impact of these covenants on the value
of the servicing assets and incorporates the assessment in their quarterly impairment review.

108

---

The
activity in manufactured housing servicing assets is summarized as follows:

|                                            |                              | At and for the Year Ended December 31, |  
|------------------------------------------- | ---------------------------- | -------------------------------------- | -
|
|
|Servicing assets:                           |                              |                                        |  
|                                            | Balance at beginning of year |                                        | $
|                                            | Additions                    |                                        |  
|                                            | Sales                        |                                        |  
|                                            | Amortization                 |                                        |  
|                                            | Charge-off                   |                                        |  
|                                            |                              |                                        |  
|                                            |                              | Balance at end of year                 |  
|                                            |                              |                                        |  
|Reserve for impairment of servicing assets: |                              |                                        |  
|                                            | Balance at beginning of year |                                        |  
|                                            | Additions                    |                                        |  
|                                            | Charge-off                   |                                        |  
|                                            |                              |                                        |  
|                                            |                              | Balance at end of year                 |  
|                                            |                              |                                        |  
|Servicing assets, net                       |                              | $                                      | 7
|                                            |                              |                                        |  

During
the year ended December 31, 2003, $59 million of the reserve for impairment of manufactured housing servicing assets was determined to be permanent and therefore
charged-off. The classification to permanent from temporary had no financial effect on the Company, as the reduction to income from discontinued operations earnings was recorded in the
prior periods when the impairment was recognized.

The
estimated fair values of manufactured housing servicing assets were $16 million, $38 million and $16 million at December 31, 2003, 2002 and 2001,
respectively.

Manufactured
housing servicer advances receivable totaled $39 million, $38 million and $37 million at December 31, 2003, 2002 and 2001, respectively.

The
significant assumptions used in estimating the fair value of manufactured housing servicing assets at December 31, 2003, 2002 and 2001 were as follows:

|                                    |  | December 31, |  
|----------------------------------- |  | ------------ | -
|
|Weighted average prepayment rate(1) |  | 6.6          | %
|Weighted average life (in years)    |  | 5.3          |  
|Weighted average default rate       |  | 5.1          | %
|Cash flows discounted at            |  | 14.0         | %

---

At
December 31, 2003, the sensitivities to immediate 10 percent and 20 percent adverse changes in weighted average prepayment rates were $1 million and
$3 million, respectively, for manufactured housing servicing assets.

109

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Securitization Trust Cash Flows

GreenPoint's manufactured housing securitizations utilize trusts that engage in the business of holding loans, issuing certificates and making payments on
certificates. The following table summarizes certain cash flows received from securitization trusts:

|                                  |  | Year Ended December 31,
|--------------------------------- |  | -----------------------
|
|
|Proceeds from new securitizations |  | $                      
|Servicing fees received           |  |                        

NOTE 15    Derivative Financial Instruments

GreenPoint enters into mandatory commitments to deliver mortgage whole loans to various investors and to issue private securities and Fannie Mae and Freddie Mac
securities ("forward delivery commitments"). The forward delivery commitments are used to manage the interest rate risk associated with mortgage loans and interest rate lock commitments made by
GreenPoint to mortgage borrowers. The notional amounts of these contracts were $2.6 billion and $3.2 billion at December 31, 2003 and 2002, respectively. The forward delivery
commitments designated as fair value hedges associated with mortgage loans had notional values of $2.2 billion and $2.4 billion at December 31, 2003 and 2002, respectively. The
notional amounts of forward delivery commitments used to manage the interest rate risk associated with interest rate lock commitments on mortgage loans were $494 million and
$833 million at December 31, 2003 and 2002, respectively. The following table shows hedge ineffectiveness on fair value hedges included in gain on sale of loans for the years ended
December 31, 2003, 2002 and 2001:

|                                         |  | For the Year Ended December 31, |    
|---------------------------------------- |  | ------------------------------- | ---
|
|
|Gain (loss) on hedged asset or liability |  | $                               | 34 
|Gain (loss) on derivatives               |  | $                               | (23
|                                         |  |                                 |    
|Hedge ineffectiveness                    |  | $                               | 11 
|                                         |  |                                 |    

The
notional amounts of derivatives do not represent amounts exchanged by the parties and, thus, are not a measure of the Company's exposure through its use of derivatives. The amounts
exchanged are determined by reference to the notional amounts and the other terms of the derivatives.

The
risks inherent in derivatives are the potential inability of a counterparty to meet the terms of its contract and the risk associated with changes in the fair values of the contracts
due to movements in the underlying interest rates. The current credit exposure of derivatives is represented by the fair value of contracts with a positive fair value at the reporting date. At
December 31, 2003 and 2002 the receivable on contracts with a positive fair value was $3 million and $1 million, respectively. To reduce credit risk, management may deem it
necessary to obtain collateral.

In
November 2003, the company entered into an interest swap agreement with a notional amount of $350 million. The company has designated this swap as fair value hedge of
the $350 million of 3.20% Senior Notes issued in June of 2003. This swap met the criteria required to qualify for short cut method accounting for derivatives. Based on this method, no
ineffectiveness is assumed and fair value changes in the swap are recorded as changes in value of the swap and the long term debt.

110

---

NOTE 16    Commitments and Contingencies

In the normal course of business, there are various outstanding commitments and contingent liabilities that have not been reflected in the consolidated financial
statements. In addition, in the normal course of business, there are various other outstanding legal and administrative proceedings. In the opinion of management, after consultation with legal
counsel, the financial position and results of operations of the Company will not be affected materially as a result of such commitments and contingent liabilities or by the outcome of such legal or
administrative proceedings.

The
principal commitments and contingent liabilities of the Company are discussed in the following paragraphs.

Pending Litigation

In the ordinary course of business, the Corporation and its subsidiaries are defendants in or parties to a number of pending and threatened legal actions and
proceedings, and are also involved from time to time in investigations and administrative proceedings by governmental agencies. Certain of such actions and proceedings involve alleged violations of
consumer protection laws, including claims relating to the Corporation's loan origination and collection efforts, and other federal and state banking laws. Certain of such actions and proceedings
include claims for breach of contract, restitution, compensatory damages, punitive damages and other forms of relief. Due to the difficulty of predicting the outcome of such matters, the Corporation
can give no assurance that it will prevail on all claims made against it; however, management believes, based on current knowledge and after consultation with counsel, that these legal matters and
administrative proceedings and the losses, if any, resulting from the final outcome thereof, will not have a material adverse effect on the Corporation and its subsidiaries' financial position,
results of operations or liquidity, but can give no assurance that they will not have such an effect.

Loan Commitments

At December 31, 2003 and 2002, the Company had an outstanding pipeline of mortgage loans of approximately, $7.0 billion and $7.9 billion,
respectively. This pipeline represents applications received but not yet funded and is therefore the maximum amount of the Company's origination commitments. The pipeline of mortgage loans at
December 31, 2003 included $2.8 billion of fixed rate mortgage loans and $4.2 billion of adjustable rate mortgage loans.

The
Company is contractually committed to fund the undrawn portion of home equity lines of credit (HELOC's) which it has originated. The commitment extends to HELOC's which are currently
held for sale by the Company, and HELOC's sold by the Company into Headlands Home Equity Loan Trusts. As of December 31, 2003 and 2002 this unfunded commitment was approximately
$631 million and $540 million, respectively.

Guarantees

Under agreements with Terwin Holdings LLC ("Terwin"), an unconsolidated investment, the company has guaranteed a portion of the Terwin's secured lending
arrangements. These lending arrangements are collateralized by Terwin's loan portfolio. As of December 31, 2003, the total potential commitment under this guarantee totaled approximately
$40 million and is renewable annually. This guarantee would require payment by the Company only if Terwin were to default on payment of this borrowing. Management believes that the likelihood
is remote that a material payment will be required under this guarantee.

111

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Lease Commitments

The Company has entered into noncancelable operating lease agreements for banking premises and equipment with expiration dates ranging through the year 2029. The
Company's premises are used principally for branch offices and administrative operations, and it is expected that many agreements will be renewed at expiration in the normal course of business.

Rental
expense for the Company's premises for the years ended December 31, 2003, 2002 and 2001 amounted to $31 million, $30 million and $32 million,
respectively.

The
projected minimum rental payments under the terms of the noncancelable leases, exclusive of taxes and escalation charges, at December 31, 2003 are summarized as follows:

Year Ended December 31,

Amount(In millions)2004

$
332005


302006


272007


242008


23thereafter


109Total

$
246


Minimum
rental income under noncancelable sublease agreements aggregates $12 million at December 31, 2003.

Business Process Outsourcing Agreements

At December 31, 2003, the Company was under an agreement to outsource certain support operations to Progeon, Ltd. Based on the terms of the
agreement, the Company is committed to minimum payments of approximately $6 million per year from 2004 through 2007.

112

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NOTE 17    Fair Value of Financial Instruments

The methods and assumptions used to estimate fair values are set forth in the following paragraphs for each major grouping of the Company's financial instruments.

|                                                                       |                                                            | December 31, 2003 |       | December 31, 2002
|---------------------------------------------------------------------- | ---------------------------------------------------------- | ----------------- | ----- | -----------------
|
|
|Assets:                                                                |                                                            |                   |       |                  
|Cash and due from banks                                                |                                                            | $                 | 268   |                  
|Interest-bearing deposits in other banks                               |                                                            |                   | 3     |                  
|Federal funds sold and securities purchased under agreements to resell |                                                            |                   | 64    |                  
|Securities:                                                            |                                                            |                   |       |                  
|                                                                       | Securities available for sale                              |                   |       | 6,254            
|                                                                       | Retained interests in securitizations                      |                   |       | 49               
|                                                                       | Securities held to maturity                                |                   |       | 6                
|Federal Home Loan Bank of New York stock                               |                                                            |                   | 170   |                  
|Loans receivable held for sale                                         |                                                            |                   | 4,764 |                  
|Loans receivable held for investment                                   |                                                            |                   | 9,885 |                  
|Other interest-earning assets                                          |                                                            |                   | 142   |                  
|Financial instruments included in other assets                         |                                                            |                   | 3     |                  
|Liabilities:                                                           |                                                            |                   |       |                  
|Deposits:                                                              |                                                            |                   |       |                  
|                                                                       | Deposits due on demand and/or with no specified maturities |                   |       | 8,236            
|                                                                       | Term certificates of deposit                               |                   |       | 4,310            
|Accrued Interest:                                                      |                                                            |                   |       |                  
|                                                                       | Receivable                                                 |                   |       | 81               
|                                                                       | Payable                                                    |                   |       | 31               
|Securities sold under agreements to repurchase                         |                                                            |                   | 3,327 |                  
|Other short term borrowings                                            |                                                            |                   | 1,062 |                  
|Federal Home Loan Bank of New York advances                            |                                                            |                   | 2,800 |                  
|Senior notes                                                           |                                                            |                   | 353   |                  
|Subordinated bank notes                                                |                                                            |                   | 150   |                  
|Other long term debt                                                   |                                                            |                   | 200   |                  
|Liability under recourse exposure                                      |                                                            |                   | 226   |                  
|Financial instruments included in other liabilities                    |                                                            |                   | 10    |                  

The
carrying values of the following balance sheet items all approximate their fair values primarily due to their liquidity and very short-term nature:



113

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Securities, Federal Home Loan Bank Stock and Other Interest-Earning Assets

The fair values of these securities are based on published market valuations or estimated price quotations provided by securities dealers. The fair value of
Federal Home Loan Bank Stock is assumed to be equal to its carrying value.

Retained Interests in Securitizations

The fair value of retained interests in securitizations is determined by calculating the present value of estimated future cash flows using assumptions of
prepayments, defaults, loss severity rates, and discount rates that the Company believes market participants would use for similar assets and liabilities.

Loans Receivable Held for Sale

Fair value of mortgage loans held for sale is estimated using quoted market prices for similar loans, mortgage-backed securities backed by similar loans, and
prices obtained by the Company on mandatory forward delivery contracts.

Loans Receivable Held for Investment

Fair value of the Company's mortgage and manufactured housing loan portfolio is based on comprehensive portfolio valuation analyses performed as of
December 31, 2003 and 2002 by an independent pricing firm, engaged specifically for this purpose by the Company. The independent analysis utilizes a discounted cash flow methodology, stratifies
the portfolio by product type and separately analyzes performing loans and non-performing loans.

The
remaining categories of loans, student loans and home improvement loans, were deemed to have estimated fair values approximating their respective carrying values.

Derivative Instruments

Interest rate swaps and mandatory forward delivery commitments are included in financial instruments included in other assets and financial instruments included
in other liabilities. The fair value generally reflects the estimated amounts that the Company would receive or pay to terminate the contracts at the reporting date.

Senior Bank Notes, Subordinated Bank Notes, Other long term debt and Federal Home Loan Bank Advances

The valuation of these liabilities takes into account several factors including current market interest rates and the Company's credit rating. Estimated price
quotations were obtained from securities dealers or the fair value was estimated using the Bank's observed credit spread to the applicable Treasury rate.

Securities Sold Under Agreements to Repurchase

The fair value for the repurchase agreements was estimated using a method that discounts future cash flows against the swap curve, giving effect to optionality
where applicable.

Deposits

The fair value of all deposits with no specified maturities is deemed to be equal to the amounts payable on demand.

114

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The
fair value of the Company's term certificates of deposit was estimated by discounting cash flows based on contractual maturities at current interest rates for raising funds of
similar remaining maturities.

Commitments to Originate Loans

The fair value of loan commitments outstanding at December 31, 2003 and 2002 was estimated by assessing the impact of the change in interest rates on the
commitment from the commitment date to the valuation date and are included in financial instruments included in other assets.

Limitations

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instruments being estimated.
These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. In those instances for
which no market exists for portions of the Company's financial instruments, fair value estimates were based on judgments regarding future expected loss experience, current economic conditions, risk
characteristics of the affected financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, should
not be considered to represent any specific market values. Changes in the assumptions could significantly affect the fair valuation estimates.

NOTE 18    Regulatory Matters

The Company and the Bank are subject to various regulatory capital requirements administered by the federal and state banking agencies. The Board of Governors of
the Federal Reserve System also establishes minimum capital requirements for the consolidated bank holding company as well as for the Bank.

Under
capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its
assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. These guidelines require minimum ratios of risk-based capital to
risk adjusted assets of 4% for Tier 1 capital and 8% for total capital. The Federal Reserve Board also has guidelines for a leverage ratio that is designed to complement the risk-based
capital ratios in determining the overall capital adequacy of banks and bank holding companies. A minimum leverage ratio of Tier 1 capital to average total assets of 3% is required for banks and bank
holding companies, with an additional 100 to 200 basis points required for all but the highest rated institutions. Management believes, as of December 31, 2003, that the Company and the Bank
meet all capital adequacy requirements to which they are subject.

FDICIA,
among other things, identifies five capital categories for insured depository institutions (well capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized) and requires federal bank regulatory agencies to implement systems for "prompt corrective action" for insured depository institutions that do not meet
minimum capital requirements

115

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based
on these categories. As of December 31, 2003, the Bank was well capitalized based on the prompt corrective action guidelines.

|                                          |         | Actual |   | Minimum
For Capital
Adequacy Purposes | 
|----------------------------------------- | ------- | ------ | - | ------------------------------------- | 
|
|
|As of December 31, 2003:                  |         |        |   |                                       | 
|Total Capital (to Risk Weighted Assets):  |         |        |   |                                       | 
|                                          | Company |        | $ | 1,875                                 | 
|                                          | Bank    |        |   | 2,092                                 | 
|Tier 1 Capital (to Risk Weighted Assets): |         |        |   |                                       | 
|                                          | Company |        | $ | 1,647                                 | 
|                                          | Bank    |        |   | 1,864                                 | 
|Tier 1 Capital (to Average Assets):       |         |        |   |                                       | 
|                                          | Company |        | $ | 1,647                                 | 
|                                          | Bank    |        |   | 1,864                                 | 



|                                          |         | Actual |   | Minimum
For Capital
Adequacy Purposes | 
|----------------------------------------- | ------- | ------ | - | ------------------------------------- | 
|
|
|As of December 31, 2002:                  |         |        |   |                                       | 
|Total Capital (to Risk Weighted Assets):  |         |        |   |                                       | 
|                                          | Company |        | $ | 1,924                                 | 
|                                          | Bank    |        |   | 1,905                                 | 
|Tier 1 Capital (to Risk Weighted Assets): |         |        |   |                                       | 
|                                          | Company |        | $ | 1,696                                 | 
|                                          | Bank    |        |   | 1,678                                 | 
|Tier 1 Capital (to Average Assets):       |         |        |   |                                       | 
|                                          | Company |        | $ | 1,696                                 | 
|                                          | Bank    |        |   | 1,678                                 | 

Dividends

For the year ended December 31, 2003 quarterly dividends declared and paid were $0.21 per share for the first and second quarter and $0.24 per share for
the third and fourth quarter. For the years ended December 31, 2002 and 2001, quarterly dividends declared and paid totaled $0.17 per share. The Company's principal source of funds for
distributions of dividends to shareholders, stock repurchase activities and any acquisitions to be made at the holding company level, are dividends from the Bank. Applicable federal and state laws
impose limitations on the payment of dividends. Under such limitations, without appropriate regulatory approvals, dividend payments by the Bank are limited to the lesser of (i) the amount of
undivided profits and (ii) an amount not in excess of net income for the current year plus retained net income for the preceding two years. Dividends paid by the bank during 2003 complied with
all applicable rules.

In
accordance with the requirements of the New York State Banking Law, the Bank established a liquidation account in the amount equal to its capital as of the date of the latest
consolidated statement

116

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of
condition appearing in the final IPO prospectus. The liquidation account is maintained for the benefit of eligible pre-conversion depositors who continue to maintain their accounts at
the Bank after the Transaction. The liquidation account is reduced annually to the extent that such depositors have reduced their qualifying deposits as of each subsequent audited balance sheet date.
Subsequent increases in their balances will not restore such depositors' interest in the liquidation account. In the event of a liquidation of the Bank (a circumstance not envisioned or expected by
management) such depositors would be entitled, under New York State law, to receive a distribution from the liquidation account in an amount proportionate to their then current adjusted qualifying
account balances for all such depositors then holding qualifying deposits in the Bank. The balance of the liquidation account at December 31, 2003 was $18 million.

In
addition to the restrictions described above, the Bank may not declare or pay cash dividends on or repurchase any of its shares of common stock if the effect thereof would cause
stockholders' equity to be reduced below then applicable capital maintenance requirements or if such declaration and payment
would otherwise violate either regulatory requirements and/or applicable banking laws, or would reduce the Bank's capital level below the then aggregate balance required for the liquidation account.

NOTE 19    Stock Benefit Plans

Employee Stock Ownership Plan

The Bank's ESOP covers substantially all employees of the Company who have been credited with 1,000 hours of service during a twelve month period.
Participants receive allocations on the basis of their eligible salary and generally become vested over a five-year period. Participants fully vest in their benefit upon retirement, death
or disability while in active employment, or in the event of a change in control of the Company or the Bank. Participants who terminate employment before becoming 100% vested forfeit the unvested
portion of their accounts. Forfeitures are reallocated among the remaining participants. The ESOP conforms to the applicable requirements of ERISA and the Code.

During
1994, the ESOP purchased 24,701,406 shares of the Company's common stock, at a weighted average price of $5.55 per share. The purchases were funded with a loan of
$137 million from the Company, which is collateralized by the unallocated Company shares owned by the ESOP. The loan will be repaid primarily from contributions by the Bank and dividends paid
by the Company on unallocated shares over the applicable loan amortization period. The outstanding principal balance of the loan as of December 31, 2003 and 2002 was $110 million and
$114 million, respectively, and the interest rate was 6.00% at both dates.

The
shares owned by the ESOP are held by a third party trustee and released for allocation to participants as repayments of the loan are made. The number of shares released for
allocation in any year is based upon the ratio of current year principal and interest payments to the total of current year and all projected future years' principal and interest payments. As of
December 31, 2003, 9,605,676 shares have been allocated under the ESOP. There are 15,095,730 unallocated shares with a value of $533 million, based upon the December 31, 2003
closing price of $35.32 per share.

The
Bank reserves the right to discontinue or amend the ESOP or trust agreement, in whole or in part, provided however, that no amendment shall be made at any time pursuant to which the
Trust or any part thereof may be used for or diverted to purposes other than for the exclusive benefit of the ESOP's participants and their beneficiaries. In the event the ESOP terminates, all
participants will become fully vested in the balance of their account. Upon termination of the ESOP, participants will be distributed their share of plan assets prior to the satisfaction of the ESOP's
liabilities as required by ERISA.

117

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The
Company recognized $31 million, $29 million and $23 million of compensation expense relating to the ESOP for both the continuing and discontinued businesses, for
the years ended December 31, 2003, 2002 and 2001, respectively.

Restricted Stock Plan

The Bank's Recognition and Retention Plan ("RRP") authorizes the granting of up to 3,726,054 shares of the Company's common stock to officers, employees and
directors emeriti of the Company.

In
1994, the Bank purchased 3,726,054 shares of the Company's common stock on behalf of the RRP, at the initial public offering price of $5.00 per share. Through December 31,
2003, 3,646,924 shares have been awarded to participants. These awards vest ratably over a three to five year period on the anniversary dates of the awards. Participants' awards fully vest upon
retirement, death or disability while in active employment, or in the event of the participants' termination of employment due to a change in control of the Company or the Bank.

For
the years ended December 31, 2003, 2002 and 2001, the Company recognized $1 million, $2 million and $2 million, respectively, of compensation expense
relating to the RRP.

Stock Incentive Plans

Under the Company's 2001 Stock Incentive Plan, 1999 Stock Incentive Plan and Amended and Restated 1994 Stock Incentive Plan (the "Stock Incentive Plans"), grants
may be made in the form of incentive stock options ("ISOs"), non-statutory stock options ("NSOs"), limited rights and restricted stock to officers and other key employees. The Stock
Incentive Plans provide that the total number of shares available for grant shall be 23,550,000 shares of the Company's common stock.

The
ISOs and NSOs granted under the Stock Incentive Plans vest and become exercisable over a three to five year period and expire on the tenth anniversary of the grants. In the event of
the employee's retirement (for grants made prior to 1997), death or disability while in active employment, or in the event of an employee's termination of service due to a change in control of the
Company or the Bank, all ISOs and NSOs held by such participant vest and generally become exercisable in full for a period of one year. The term during which any future ISOs and NSOs granted vest and
become exercisable is at the discretion of the Compensation Committee. The exercise price for all ISOs and NSOs is at least 100% of the fair market value of the stock on the grant date.

As
of December 31, 2003, 495,000 shares of restricted stock at a weighted average fair value of $9.15 had been granted under the Stock Incentive Plans.

Directors' Stock Option Plans

Under the Company's Directors' Stock Option Plan, the Company may grant up to 2,175,000 NSOs to directors who are not officers or employees of the Company
("Non-Employee Directors").

The
exercise price is equal to 100% of the fair market value of the stock on the grant date. The term of each NSO is ten years from the grant date. All options become exercisable
immediately upon a change of control, or death, disability or retirement on or after January 28, 2000. In the event of death, disability or retirement prior to January 28, 2000,
one-half of all unexercisable options shall become immediately exercisable, with all remaining options becoming exercisable pro rata over the remaining option term.

118

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The following table presents a summary of the activity in the aforementioned stock option plans for the years ended December 31, 2003, 2002 and 2001:

|                                                               |  | Year Ended December 31,
|-------------------------------------------------------------- |  | -----------------------
|
|
|Stock options outstanding, beginning of year                   |  | 11,515,441             
|Granted                                                        |  | 2,089,800              
|Exercised                                                      |  | (2,318,451             
|Canceled                                                       |  | (162,022               
|                                                               |  |                        
|Stock options outstanding, end of year                         |  | 11,124,768             
|                                                               |  |                        
|Options exercisable at year-end                                |  | 6,995,356              
|Weighted-average fair value of options granted during the year |  |                        
|                                                               |  |                        

The
range of exercise prices on ISO and NSO options outstanding for each of the years ended December 31, 2003, 2002 and 2001 was $5.00 to $34.26. The weighted average remaining
contractual life for ISO and NSO options outstanding at December 31, 2003 is 6.1 years.

The
following table presents a summary of stock options outstanding and exercisable for the ISO and NSO option plan at December 31, 2003:

|                 |  | December 31, 2003
|---------------- |  | -----------------
|
|
|$5.00 to $7.30   |  | 1,218,268        
|$8.09 to $12.09  |  | 120,000          
|$12.91 to $19.25 |  | 2,115,588        
|$20.34 to $28.90 |  | 5,575,112        
|$30.52 to $34.26 |  | 2,095,800        
|                 |  |                  
|                 |  | 11,124,768       
|                 |  |                  

To
determine the effect on net income and earnings per share if the fair value method had been applied to the stock option awards (as disclosed in Note 1(k)), the Company used a
Black Scholes option-pricing model with the following weighted-average assumptions used for grants in 2003, 2002 and 2001:

|                        |  | Year Ended December 31, |  
|----------------------- |  | ----------------------- | -
|
|Dividend yield          |  | 2.87                    | %
|Expected volatility     |  | 36.00                   | %
|Risk-free interest rate |  | 2.58                    | %
|Expected option lives   |  | 4.00 years              |  

119

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NOTE 20    Earnings Per Share

The
Company's reconciliation of the income (loss) and shares used in the basic and diluted EPS computations is summarized as follows:

|                                                                                                             |                                                | For the Year Ended December 31, |            
|------------------------------------------------------------------------------------------------------------ | ---------------------------------------------- | ------------------------------- | -----------
|
|
|Net income (loss) from continuing operations                                                                 |                                                | $                               | 471        
|Net income (loss) from discontinued operations                                                               |                                                |                                 | 1          
|                                                                                                             |                                                |                                 |            
|                                                                                                             | Net income (loss)                              |                                 | $          
|                                                                                                             |                                                |                                 |            
|Weighted average number of common shares outstanding during each periodbasic                                |                                                |                                 | 122,233,000
|Effect of dilutive securitiesstock options                                                                  |                                                |                                 | 2,387,000  
|                                                                                                             |                                                |                                 |            
|Weighted average number of common shares and common stock equivalents outstanding during each perioddiluted |                                                |                                 | 124,620,000
|                                                                                                             |                                                |                                 |            
|Basic earnings per share:                                                                                    |                                                |                                 |            
|                                                                                                             | Net income from continuing operations          |                                 | $          
|                                                                                                             | Net income (loss) from discontinued operations |                                 |            
|                                                                                                             |                                                |                                 |            
|                                                                                                             |                                                | Net income (loss)               |            
|                                                                                                             |                                                |                                 |            
|Diluted earnings per share:                                                                                  |                                                |                                 |            
|                                                                                                             | Net income from continuing operations          |                                 | $          
|                                                                                                             | Net income (loss) from discontinued operations |                                 |            
|                                                                                                             |                                                |                                 |            
|                                                                                                             |                                                | Net income (loss)               |            
|                                                                                                             |                                                |                                 |            

---

NOTE 21    Business Segments

The Company has identified three domestic business segments. The predominant factor by which each segment is organized is the unique products and services they
offer. The accounting policies of the segments are the same as those described in Note 1 "Summary of Significant Accounting Policies". The Mortgage Banking segment orginates, sells and services
mortgage loans with a specialization in Alt A and NoDoc mortgage loan products. The Retail Banking segment consists of 90 full service banking offices offering a variety of financial services to the
Greater New York area. The balance sheet management segment includes earnings from the held for investment mortgage portfolios and other corporate investment activities.

Expenses
under the direct control of each business segment and the expense of premises and equipment incurred to support business operations are allocated accordingly, by segment. Credit
losses are charged to asset management segment in an amount equal to net charge-offs. The expenses relating to administrative units of the Company such as executive, finance and audit are
not allocated to individual operating segments and are identified in the "other" column. The "other" column also includes intercompany eliminations. The

120

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management
of the Company evaluates the performance of each business segment based on income before income taxes

The
following table sets forth information by business segment:

|                                                    |                                           | Balance
Sheet
Management(1) |        | Retail
Banking |    | Sub-total
Banking |     | Mortgage
Banking(5) |        | Segment
Totals |     | Other(4) |     | Consolidated
Continuing
Operations |       
|--------------------------------------------------- | ----------------------------------------- | --------------------------- | ------ | -------------- | -- | ----------------- | --- | ------------------- | ------ | -------------- | --- | -------- | --- | ---------------------------------- | ------
|
|Year ended December 31, 2003                        |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|Net interest income                                 |                                           | $                           | 232    |                | $  | 240               |     | $                   | 472    |                | $   | 191      |     | $                                  | 663   
|Provision for loan losses                           |                                           |                             | (4     | )              |    |                  |     |                     | (4     | )              |     |         |     |                                    | (4    
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|Net interest income after provision for loan losses |                                           |                             | 228    |                |    | 240               |     |                     | 468    |                |     | 191      |     |                                    | 659   
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|Non-interest income:                                |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|                                                    | Loan servicing fees                       |                             |        |               |    |                   |    |                     |        |               |     |          | 26  |                                    |       
|                                                    | Banking fees and commissions              |                             |        |               |    |                   | 69  |                     |        | 69             |     |          |    |                                    |       
|                                                    | Other income                              |                             |        | 21             |    |                   |    |                     |        | 21             |     |          | (7  | )                                  |       
|                                                    | Net gain on sale of loans                 |                             |        |               |    |                   |    |                     |        |               |     |          | 545 |                                    |       
|                                                    | Change in valuation of retained interests |                             |        |               |    |                   |    |                     |        |               |     |          | (4  | )                                  |       
|                                                    | Net gain on securities                    |                             |        | 3              |    |                   |    |                     |        | 3              |     |          |    |                                    |       
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|                                                    |                                           | Total non-interest income   |        |                | 24 |                   |     | 69                  |        |                | 93  |          |     | 560                                |       
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|Non-interest expense:                               |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|                                                    | Depreciation                              |                             |        |               |    |                   | 9   |                     |        | 9              |     |          | 18  |                                    |       
|                                                    | Goodwill amortization                     |                             |        |               |    |                   |    |                     |        |               |     |          |    |                                    |       
|                                                    | ESOP and stock plans expense              |                             |        |               |    |                   | 6   |                     |        | 6              |     |          | 16  |                                    |       
|                                                    | Other expenses                            |                             |        | 2              |    |                   | 124 |                     |        | 126            |     |          | 234 |                                    |       
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|                                                    |                                           | Total non-interest expense  |        |                | 2  |                   |     | 139                 |        |                | 141 |          |     | 268                                |       
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|Segment income (loss) before taxes                  |                                           | $                           | 250    |                | $  | 170               |     | $                   | 420    |                | $   | 483      |     | $                                  | 903   
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|Total Assets                                        |                                           | $                           | 16,052 |                | $  | 515               | (2) | $                   | 16,567 |                | $   | 5,210    |     | $                                  | 21,777
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|Year ended December 31, 2002                        |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|Net interest income                                 |                                           | $                           | 315    |                | $  | 235               |     | $                   | 550    |                | $   | 203      |     | $                                  | 753   
|Benefit for loan losses                             |                                           |                             | (2     | )              |    |                  |     |                     | (2     | )              |     |         |     |                                    | (2    
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|Net interest income after benefit for loan losses   |                                           |                             | 313    |                |    | 235               |     |                     | 548    |                |     | 203      |     |                                    | 751   
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|Non-interest income:                                |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|                                                    | Loan servicing fees                       |                             |        |               |    |                   |    |                     |        |               |     |          | 5   |                                    |       
|                                                    | Banking fees and commissions              |                             |        |               |    |                   | 56  |                     |        | 56             |     |          |    |                                    |       
|                                                    | Other income                              |                             |        | 13             |    |                   | 1   |                     |        | 14             |     |          |    |                                    |       
|                                                    | Net gain on sale of loans                 |                             |        |               |    |                   |    |                     |        |               |     |          | 427 |                                    |       
|                                                    | Change in valuation of retained interests |                             |        |               |    |                   |    |                     |        |               |     |          | (9  | )                                  |       
|                                                    | Net gain on securities                    |                             |        | 9              |    |                   |    |                     |        | 9              |     |          |    |                                    |       
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|                                                    |                                           | Total non-interest income   |        |                | 22 |                   |     | 57                  |        |                | 79  |          |     | 423                                |       
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|Non-interest expense:                               |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|                                                    | Depreciation                              |                             |        |               |    |                   | 9   |                     |        | 9              |     |          | 14  |                                    |       
|                                                    | Goodwill amortization                     |                             |        |               |    |                   |    |                     |        |               |     |          |    |                                    |       
|                                                    | ESOP and stock plans expense              |                             |        |               |    |                   | 5   |                     |        | 5              |     |          | 15  |                                    |       
|                                                    | Other expenses                            |                             |        | 2              |    |                   | 107 |                     |        | 109            |     |          | 195 |                                    |       
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|                                                    |                                           | Total non-interest expense  |        |                | 2  |                   |     | 121                 |        |                | 123 |          |     | 224                                |       
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|Segment income (loss) before taxes                  |                                           |                             | 333    |                |    | 171               |     |                     | 504    |                |     | 402      |     |                                    | 906   
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       
|Total Assets                                        |                                           | $                           | 14,901 |                | $  | 494               | (2) | $                   | 15,395 |                | $   | 6,050    |     | $                                  | 21,445
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                    |       

121

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|                                                    |                                           | Balance
Sheet
Management(1) |        | Retail
Banking |    | Sub-total
Banking |     | Mortgage
Banking(5) |        | Segment
Totals |     | Other(4) |     | Consolidated
Continuing
Operations
|--------------------------------------------------- | ----------------------------------------- | --------------------------- | ------ | -------------- | -- | ----------------- | --- | ------------------- | ------ | -------------- | --- | -------- | --- | ----------------------------------
|
|Year ended December 31, 2001                        |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                   
|Net interest income                                 |                                           | $                           | 289    |                | $  | 213               |     | $                   | 502    |                | $   | 120      |     | $                                 
|Provision for loan losses                           |                                           |                             | 13     |                |    |                  |     |                     | 13     |                |     |         |     |                                   
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                   
|Net interest income after provision for loan losses |                                           |                             | 302    |                |    | 213               |     |                     | 515    |                |     | 120      |     |                                   
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                   
|Non-interest income:                                |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                   
|                                                    | Loan servicing fees                       |                             |        |               |    |                   |    |                     |        |               |     |          | (4  | )                                 
|                                                    | Banking fees and commissions              |                             |        |               |    |                   | 44  |                     |        | 44             |     |          |    |                                   
|                                                    | Other income                              |                             |        | 10             |    |                   | 1   |                     |        | 11             |     |          | (4  | )                                 
|                                                    | Net gain on sale of loans                 |                             |        |               |    |                   |    |                     |        |               |     |          | 477 |                                   
|                                                    | Change in valuation of retained interests |                             |        |               |    |                   |    |                     |        |               |     |          |    |                                   
|                                                    | Net gain on securities                    |                             |        | 14             |    |                   |    |                     |        | 14             |     |          |    |                                   
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                   
|                                                    |                                           | Total non-interest income   |        |                | 24 |                   |     | 45                  |        |                | 69  |          |     | 469                               
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                   
|Non-interest expense:                               |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                   
|                                                    | Depreciation                              |                             |        |               |    |                   | 9   |                     |        | 9              |     |          | 14  |                                   
|                                                    | Goodwill amortization                     |                             |        |               |    |                   | 45  |                     |        | 45             |     |          |    |                                   
|                                                    | ESOP and stock plans expense              |                             |        |               |    |                   | 4   |                     |        | 4              |     |          | 10  |                                   
|                                                    | Other expenses                            |                             |        | 2              |    |                   | 87  |                     |        | 89             |     |          | 184 |                                   
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                   
|                                                    |                                           | Total non-interest expense  |        |                | 2  |                   |     | 145                 |        |                | 147 |          |     | 208                               
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                   
|Segment income (loss) before taxes                  |                                           |                             | 324    |                |    | 113               |     |                     | 437    |                |     | 381      |     |                                   
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                   
|Total Assets                                        |                                           | $                           | 14,031 |                | $  | 487               | (2) | $                   | 14,518 |                | $   | 4,573    |     | $                                 
|                                                    |                                           |                             |        |                |    |                   |     |                     |        |                |     |          |     |                                   

---

NOTE 22    Condensed Parent Company Financial Statements

The following Condensed Statements of Financial Condition at December 31, 2003 and 2002 and Condensed Statements of Income and Cash Flows for the years
ended December 31, 2003, 2002 and 2001 for GreenPoint Financial Corp. (parent company only) reflect the Company's investment in its wholly-owned subsidiaries using the equity method of
accounting.

122

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Parent Company OnlyCondensed Statements of Financial Condition

|                                      |                            | December 31,                              
|------------------------------------- | -------------------------- | ------------------------------------------
|
|
|Assets:                               |                            |                                           
|                                      | Cash and due from banks    |                                           
|                                      | Other assets               |                                           
|                                      | Investment in subsidiaries |                                           
|                                      |                            |                                           
|                                      |                            | Total assets                              
|                                      |                            |                                           
|Liabilities and Stockholders' Equity: |                            |                                           
|Liabilities:                          |                            |                                           
|                                      | Due to subsidiaries        |                                           
|                                      | Senior notes               |                                           
|                                      | Other long term debt       |                                           
|                                      | Accrued interest payable   |                                           
|                                      | Other liabilities          |                                           
|                                      |                            |                                           
|                                      |                            | Total liabilities                         
|                                      |                            |                                           
|                                      | Stockholders' equity       |                                           
|                                      |                            |                                           
|                                      |                            | Total liabilities and stockholders' equity
|                                      |                            |                                           

Parent Company OnlyCondensed Statements of Income

|                                                                                |                           | Year Ended December 31,       |    
|------------------------------------------------------------------------------- | ------------------------- | ----------------------------- | ---
|
|
|Dividends from GreenPoint Bank                                                  |                           | $                             | 320
|                                                                                |                           |                               |    
|Interest Income:                                                                |                           |                               |    
|                                                                                | Line of creditsubsidiary |                               |    
|                                                                                |                           |                               |    
|                                                                                |                           | Total interest income         |    
|                                                                                |                           |                               |    
|Interest Expense:                                                               |                           |                               |    
|                                                                                | Senior notes              |                               |    
|                                                                                | Other long term debt      |                               |    
|                                                                                |                           |                               |    
|                                                                                |                           | Total interest expense        |    
|                                                                                |                           |                               |    
|                                                                                |                           | Net interest income (expense) |    
|                                                                                |                           |                               |    
|Other administrative expenses                                                   |                           |                               | 1  
|                                                                                |                           |                               |    
|Income before income taxes and equity in undistributed earnings of subsidiaries |                           |                               | 297
|Income taxes                                                                    |                           |                               | (10
|                                                                                |                           |                               |    
|Income before equity in undistributed earnings of subsidiaries                  |                           |                               | 307
|Equity in undistributed earnings (loss) of subsidiaries                         |                           |                               | 165
|                                                                                |                           |                               |    
|Net income (loss)                                                               |                           | $                             | 472
|                                                                                |                           |                               |    

123

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Parent Company OnlyCondensed Statements of Cash Flows

|                                                     |                                                                                          | Year Ended December 31, |     
|---------------------------------------------------- | ---------------------------------------------------------------------------------------- | ----------------------- | ----
|
|
|Operating Activities:                                |                                                                                          |                         |     
|                                                     | Net income (loss)                                                                        |                         | $   
|                                                     | Adjustments to reconcile net income (loss) to net cash provided by operating activities: |                         |     
|                                                     | Equity in undistributed (earnings) loss of subsidiaries                                  |                         |     
|                                                     | Net change in other liabilities                                                          |                         |     
|                                                     | Net change in other assets                                                               |                         |     
|                                                     |                                                                                          |                         |     
|Net cash provided by operating activities            |                                                                                          |                         | 305 
|                                                     |                                                                                          |                         |     
|Investing Activities:                                |                                                                                          |                         |     
|                                                     | Payments for investments in and advances to subsidiaries                                 |                         |     
|                                                     | Repayment of investments in and advances to subsidiaries                                 |                         |     
|                                                     |                                                                                          |                         |     
|Net cash (used in) provided by investing activities  |                                                                                          |                         | (110
|                                                     |                                                                                          |                         |     
|Financing Activities:                                |                                                                                          |                         |     
|                                                     | Proceeds from issuance of long-term debt                                                 |                         |     
|                                                     | Proceeds from issuance of common stock                                                   |                         |     
|                                                     | Purchase of treasury stock                                                               |                         |     
|                                                     | Dividends paid                                                                           |                         |     
|                                                     |                                                                                          |                         |     
|Net cash used in financing activities                |                                                                                          |                         | (194
|                                                     |                                                                                          |                         |     
|Net increase (decrease) in cash and cash equivalents |                                                                                          |                         | 1   
|Cash and cash equivalents at beginning of period     |                                                                                          |                         | 1   
|                                                     |                                                                                          |                         |     
|Cash and cash equivalents at end of period           |                                                                                          | $                       | 2   
|                                                     |                                                                                          |                         |     

124

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Quarterly Results of Operations (Unaudited)

|                                                            |         | Year Ended December 31, 2003 |      | Year Ended December 31, 2002
|----------------------------------------------------------- | ------- | ---------------------------- | ---- | ----------------------------
|
|
|Interest income                                             |         | $                            | 285  |                             
|Interest expense                                            |         |                              | 117  |                             
|                                                            |         |                              |      |                             
|Net interest income                                         |         |                              | 168  |                             
|Provision for loan losses                                   |         |                              | (2   | )                           
|                                                            |         |                              |      |                             
|Net interest income after provision for loan losses         |         |                              | 166  |                             
|                                                            |         |                              |      |                             
|Non-interest income                                         |         |                              | 133  |                             
|Non-interest expense                                        |         |                              | 118  |                             
|                                                            |         |                              |      |                             
|Income from continuing operations before income taxes       |         |                              | 181  |                             
|Income taxes related to earnings from continuing operations |         |                              | 68   |                             
|                                                            |         |                              |      |                             
|Net income from continuing operations                       |         |                              | 113  |                             
|Net income from discontinued operations                     |         |                              | 1    |                             
|                                                            |         |                              |      |                             
|Net income                                                  |         | $                            | 114  |                             
|                                                            |         |                              |      |                             
|Basic earnings per share:                                   |         |                              |      |                             
|Net income from continuing operations                       |         | $                            | 0.96 |                             
|Net income from discontinued operations                     |         | $                            |     |                             
|                                                            |         |                              |      |                             
|Net income                                                  |         | $                            | 0.96 |                             
|                                                            |         |                              |      |                             
|Diluted earnings per share:                                 |         |                              |      |                             
|Net income from continuing operations                       |         | $                            | 0.95 |                             
|Net income from discontinued operations                     |         | $                            |     |                             
|                                                            |         |                              |      |                             
|Net income                                                  |         | $                            | 0.95 |                             
|                                                            |         |                              |      |                             
|Dividends declared per share                                |         | $                            | 0.24 |                             
|                                                            |         |                              |      |                             
|Stock price per common share:                               |         |                              |      |                             
|                                                            | High    |                              | $    | 35.43                       
|                                                            | Low     |                              | $    | 29.10                       
|                                                            | Closing |                              | $    | 35.32                       
|                                                            |         |                              |      |                             

NOTE 23    Subsequent Events

On February 16, 2004, an Agreement and Plan of Merger dated February 15, 2004 by and between North Fork Bancorporation, Inc. (North Fork) and
GreenPoint was announced. The agreement provides that North Fork will acquire GreenPoint in an all stock transaction. Under the terms of the agreement, in a tax-free exchange of shares,
GreenPoint shareholders will receive a fixed exchange ratio of 1.0514 shares of North Fork common stock for each GreenPoint share held upon consummation of the acquisition.

The
agreement has been approved unanimously by the Boards of Directors of both companies and is subject to all required regulatory approvals, approval by shareholders of both companies
and other customary conditions. The agreement establishes a reciprocal termination fee of $250 million and is expected to be completed in the fourth quarter of 2004.

Pursuant
to GreenPoint's letter of credit agreements associated with its manufactured housing securitizations, the announcement of a change of control may require GreenPoint to fully
fund its remaining obligations under its outstanding letters of credit. If required, the funding would result in a payment of approximately $526 million into the securitization trusts. The
funds remaining in the trusts would be returned to GreenPoint upon maturity of each securitization agreement. Final assessment of the impact is pending a further determination of the timing, structure
and dollar amount of the fundings to be completed. As GreenPoint has already recognized the projected cash flows associated with the discontinued manufactured housing business, the funding of the
letters of credit is not expected to have a material impact on the Company's financial position.

125

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Report of Independent Auditors

To the Board of Directors and Stockholders of
GreenPoint Financial Corp. and Subsidiaries

In our opinion, the accompanying consolidated statements of financial condition and the related consolidated statements of operations, comprehensive income,
changes in stockholders' equity, and cash flows present fairly, in all material respects, the financial position of GreenPoint Financial Corp. and its subsidiaries ("the Company") at
December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003 in conformity with accounting
principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

As
discussed in Note 1 to the consolidated financial statements, effective January 1, 2002, the Company changed the manner in which it accounts for goodwill and other
intangible assets.

/s/
PricewaterhouseCoopers LLP
New York, New York
January 21, 2004 except for Note 23 for which the date is February 16, 2004

126

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