<PAGE>


                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

  (Mark One)
      /X/           Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                   For the fiscal year ended December 31, 1997

                                       OR

      / /     Transition Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                         Commission file Number 0-22516

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

            Delaware                                06-1379001
  (State or other jurisdiction of      (I.R.S. employer identification number)
  incorporation or organization) 

     90 Park Avenue, New York, New York                      10016
    (Address of principal executive offices)              (Zip Code)

       Registrant's telephone number, including area code: (212) 834-1711

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

    Title of each class          Name of each exchange on which registered
    -------------------          -----------------------------------------
          None                                   None

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

                               Title of each class
                               -------------------
                          Common Stock $0.01 par value

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 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. /X/ Yes  / / No

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. /X/

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 23, 1998: Common stock par value $0.01 per share,
$2,530,860,133.

This figure is based on the closing price by the New York Stock Exchange 
("NYSE") for a share of the registrant's common stock on March 23, 1998, 
which was $36.9375 as reported in the Wall Street Journal on March 24, 1998. 
The number of shares of the registrant's Common Stock issued and outstanding 
as of March 23, 1998 was 85,245,482 shares.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement for the Annual Meeting of
Shareholders to be held on May 1, 1998 and the Annual Report to Shareholders for
fiscal 1997 are incorporated herein by reference - Parts II and III.



<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                             Page
                                                                              No.
                                                                             ----
<S>                                                                          <C>
                                     PART I


ITEM 1.   BUSINESS.......................................................      1

    Description of the Business..........................................      1

    Mortgage Banking Services ...........................................      1

    Consumer Branch Network .............................................      1

    Competition..........................................................      2

    Lending Activities...................................................      2

    Delinquent Loans and Foreclosed Assets...............................      8

    Allowance for Possible Loan Losses...................................     11

    Environmental Issues.................................................     14

    Market Risk Management...............................................     14

    Securities Investment Activities.....................................     14

    Sources of Funds.....................................................     17

    Subsidiary Activities................................................     19

    Savings Bank Life Insurance..........................................     20

    Personnel............................................................     20

    Federal Taxation.....................................................     21

    State and Local Taxation.............................................     22

    Bank Regulation and Supervision......................................     22

    Holding Company Regulation and Supervision...........................     27

ITEM 2.   PROPERTIES.....................................................     29

ITEM 3.   LEGAL PROCEEDINGS..............................................     30

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............     30

ITEM 4A.  EXECUTIVE OFFICERS.............................................     31

                                     PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS.............................................     32

ITEM 6.  SELECTED FINANCIAL DATA.........................................     32

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS.............................     32

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.....................     33

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE.............................     33
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                                                             Page
                                                                              No.
                                                                             ----
<S>                                                                          <C>
                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT............     33

ITEM 11.   EXECUTIVE COMPENSATION........................................     33

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT....................................................     33

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................     33


                                     PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
           FORM 8-K......................................................     34
</TABLE>




<PAGE>
                                     PART I

ITEM 1. BUSINESS

Description of Business

      GreenPoint Financial Corp. (the "Company") is a bank holding company 
organized in August 1993 under the laws of the state of Delaware and 
registered under the Bank Holding Company Act of 1956.

      The Company provides a variety of financial services primarily through 
its bank subsidiary, GreenPoint Bank (the "Bank") including GreenPoint 
Mortgage Corp. ("GPMC"), its mortgage banking subsidiary, and to a lesser 
extent through its community development subsidiary, GreenPoint Community 
Development Corp. ("GPCDC"). As part of the Company's long term business 
plans, the Company intends to continue to explore a variety of alternative 
strategic investment options to complement its existing business strengths, 
including possible acquisitions of other thrift institutions, acquisitions of 
other financial institutions or financial services companies or their assets, 
or expanding into other banking, mortgage, real estate or consumer finance 
related businesses.

      The Bank was organized in 1868 as a New York State chartered savings 
bank. The Bank and its wholly owned subsidiary GPMC, a national home mortgage 
banking company, are primarily engaged in the business of mortgage lending 
throughout the United States, with loans receivable of $8.8 billion, 
representing approximately 67% of total assets at December 31, 1997. The Bank 
continues to attract retail deposits from the general public and invests 
those deposits, together with funds generated from operations, in mortgage 
loans and marketable securities. The Bank's revenues are derived principally 
from interest on its loan portfolio and investment securities. The Bank's 
primary sources of funds are deposits, principal and interest payments from 
loans, and wholesale funds.

      GPCDC is a for-profit community development subsidiary organized in 
1993. 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.

Mortgage Banking Services

      The Company specializes in a limited documentation mortgage loan 
product ("No Doc" loans) which serves a particular niche of borrowers willing 
to pay a premium, in the form of higher interest rates and loan fees, and 
provide larger down payments in exchange for more expedient loan processing 
by virtue of providing less income and asset information as compared to loans 
underwritten in conformance with Federal National Mortgage Association 
("FNMA") standards. As a result of this strategy combined with strict 
appraisal requirements, the Company has achieved higher interest margins and 
levels of net interest income compared to typical FNMA conforming loans 
which, in turn, has resulted in a high level of profitability despite 
traditionally higher levels of loan delinquencies. Prior to February 1997 the 
Bank offered a Low Doc product, which provided a reduced rate with the 
provision of certain income documentation. In February 1997, the Low Doc 
product was discontinued.

      During 1997, the Company continued the expansion of its mortgage 
lending programs into new markets throughout the United States. These new 
markets included Atlanta, Charlotte, Denver, Phoenix, Seattle and San 
Francisco. The Company increased its mortgage loan originations from $2.4 
billion in 1996 to $2.9 billion in 1997.

Consumer Branch Network

      The Consumer Branch Network ("Branch Network") consists of 74 
full-service banking offices, with 90 ATMs, located in the New York City 
metropolitan area and offers a variety of financial services to meet the 
needs of the communities it serves. Among the services offered by the Branch 
Network are traditional time, savings and checking accounts, annuity 
products, mutual funds, mortgages, home equity loans, credit cards, Savings 
Bank Life Insurance, safe deposit services and student loans.

                                       1
<PAGE>

Competition

      The Company faces significant competition both in making loans and in 
attracting deposits. 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, and all 
of which are competitors of the Company to varying degrees. 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 
Company faces additional competition for deposits from non-depository 
competitors such as the mutual fund industry, securities and brokerage firms 
and insurance companies. Competition may also increase as a result of the 
lifting of restrictions on the interstate operations of financial 
institutions.

      The Company's focus on one-to four-family residential lending and No 
Doc loans has allowed it to develop a significant market presence in the 
one-to four-family residential loan market. Due to the Company's current 
presence in these markets and its limited lending focus, no assurance can be 
given that the Company will be able to sustain the growth it has achieved in 
the past in the event loan demand in these markets declines which, in turn, 
may negatively impact its interest rate margin, interest rate spread and net 
income. Further, in the event other financial institutions establish lending 
programs which target the one-to four-family lending similar to the Company's 
No Doc programs, such intensified competition may result in the Company's 
inability to sustain its previous growth in such lending or result in a 
decline in the Company's market share. The Company's narrow lending focus on 
these specialized markets may also place the Company in a less favorable 
position to increase its market share in other types of lending as compared 
to an institution with a broader based lending focus and expertise in other 
types of lending.

Lending Activities

      Lending Programs. The Company's lending activities have historically 
emphasized and continue to emphasize the origination of real estate loans 
which are underwritten with primary reliance placed upon a borrower's level 
of equity in the property securing the loan or level of down payment, as 
compared to other lending institutions which may rely more heavily upon a 
borrower's demonstrated ability to repay the loan and independently verified 
income levels. These equity-based loans are offered in two programs: "With 
Asset Verification" and "Without Asset Verification". Asset verification 
refers to verification of liquid assets held in a depository institution. The 
Company also requires borrowers to have satisfactory credit histories for No 
Doc loans. As compared to the loans originated in accordance with FNMA 
underwriting guidelines and procedures ("FNMA conforming loans"), No Doc 
loans involve a higher degree of risk as there is limited verified knowledge 
of the borrower's level of income or ability to service the indebtedness 
which, in turn, may result in a higher rate of default. In recognition of the 
increased risks associated with No Doc loans, the Company requires borrowers 
to have a higher equity position in the property securing the loan. The 
Company generally does not originate such loans with loan to value ratios in 
excess of 75%. The Company's No Doc lending program accounted for 96.0% of 
total originations.

      As compared to other lending institutions which rely more heavily upon 
a borrower's income and demonstrated ability to repay the loan, the Company 
may be more susceptible to increases in loan delinquencies in periods of 
economic recession and to loan losses in periods of declining real estate 
market values. In recognition of the risks associated with this lending 
strategy, the Company has established strict appraisal standards, whereby all 
appraisals are required to conform to either FNMA, FHLMC, federal or state 
approval standards and are either: 1) conducted or reviewed by in-house 
appraisers who are state licensed real estate appraisers and are subject to 
two additional levels of review by senior management; or are 2) conducted by 
one or more appraisers, or appraisal services, which are to be ordered 
directly by the Company from the Company's approved list of independent 
appraisers.

      Loan Originations. The Company originates both adjustable rate mortgage 
("ARM") loans and fixed rate loans, the amounts of which are dependent upon 
customer demand and market rates of interest. Loan originations are primarily 
obtained from the Company's network of registered mortgage brokers, licensed 
mortgage bankers, attorneys and other real estate professionals participating 
in its three wholesale programs. For the year ended December 31, 1997, the 
Company originated $2.9 billion of mortgage loans.

                                       2
<PAGE>

       The Company's Advantage Program is a structured program in which 
registered mortgage brokers, licensed mortgage bankers, attorneys and other 
real estate professionals, are eligible to participate upon approval by the 
Company. As of December 31, 1997, there were 1,109 Advantage Program members.

      The Company's Lender Associate Program consists of 3,219 approved 
mortgage brokers operating in 47 states. These brokers are generally small to 
mid-sized mortgage originators which rely on the Company to fund loans at 
closing. Each broker is screened by the Company and is approved only if the 
Lender Associate Program requirements are satisfied.

      The Company's Correspondent Program is a closed loan purchase program 
consisting of 417 approved correspondents operating in 47 states. These 
correspondents include mid-sized to large mortgage bankers and other 
financial institutions.

      For the year ended December 31, 1997, the Company originated $2.7 
billion of loans through these programs, or 93.1% of total loan originations.

      The types of loans that the Company may originate are subject to 
federal and state laws and regulations. Interest rates charged by the Company 
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.

       Loan Servicing. In 1997, the Company purchased the Columbus, Georgia, 
mortgage servicing operations of Citizens Financial Group, and transferred 
the servicing responsibilities for certain loans serviced in New York, and 
other loans serviced under contract by a sub-servicer in North Carolina, to 
that location.

      At December 31, 1997, the Company serviced approximately 95,000 
residential mortgage loans with outstanding principal balances of $9.6 
billion, including $8.9 billion of loans in its own portfolio, and $0.7 
billion of loans owned by others. Loans serviced for others are serviced for 
a fee, which, on an annual basis, generally ranges from 25 to 50 basis points 
of the outstanding principal balances of the loans.

       Loan servicing activities generally consist of collecting principal 
and interest payments from borrowers, remitting principal and interest 
payments to investors, accounting for principal and interest payments, 
holding and disbursing funds remitted for taxes, insurance, and other loan 
related expenses, contacting delinquent borrowers and conducting foreclosures 
and property dispositions in the event of unremedied defaults. Because of the 
greater likelihood of delinquencies associated with No Doc lending, the 
Company has implemented programs which allow it to focus its collection 
efforts on those loans and borrowers possessing characteristics at the time 
of origination which have historically experienced a higher propensity for 
delinquency and default. The Company believes these efforts have enabled it 
to minimize losses associated with these types of loans.

       Loans and Credit Parameters. Loan amount limits, maximum loan-to-value 
("LTV") 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 ranging from one to 
five, to which lending parameters have been ascribed by the Company. In 
making this determination, the Company obtains credit verification from 
independent credit bureaus prior to entering into loan commitments. 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 and revolving lines of credit, collection and 
charge-off experience, and prior bankruptcies and foreclosures. The Company 
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.

      Loans held for Investment Portfolio Composition. The majority of the 
Company's 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.

                                       3
<PAGE>

      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.

<TABLE>
<CAPTION>
                                                                                      December 31,
                                                     ------------------------------------------------------------------------------
                                                                1997                        1996                          1995
                                                     -------------------------  ------------------------  -------------------------
                                                                     Percent                   Percent                    Percent
                                                       Amounts      of Total     Amounts      of Total      Amounts      of Total
                                                     ------------------------------------------------------------------------------
                                                                                     (Dollars in millions)
<S>                                                  <C>               <C>      <C>              <C>     <C>                <C>
 Loans receivable held for investment:
 Mortgage loans:
    One-to four-family ..........................    $    7,681.3      86.0%    $  6,394.4       85.9%   $   5,135.4       85.2%
    Multi-family ................................           621.0       7.0          545.5        7.3          475.9        7.9
    Commercial ..................................           537.1       6.0          467.9        6.3          376.8        6.3
    Home equity loans ...........................            66.3       0.7           16.2        0.2            4.7        0.1
                                                     -------------  ---------  ------------  ---------  --------------  ----------
 Total mortgage loans held for investment .......         8,905.7      99.7        7,424.0       99.7        5,992.8       99.5
                                                     -------------  ---------  ------------  ---------  --------------  ----------
 Other loans:
    Loans secured by depositors' funds ..........            30.1       0.3           23.5        0.3           29.5        0.5
    Home improvement loans ......................             --         --             --         --            0.1          --
                                                     -------------  ---------  ------------  ---------  --------------  ----------
 Total other loans ..............................            30.1       0.3           23.5        0.3           29.6        0.5
                                                     -------------  ---------  ------------  ---------  --------------  ----------
 Total loans receivable held for investment .....         8,935.8     100.0%       7,447.5      100.0%       6,022.4      100.0%
                                                     -------------  ---------  ------------  ---------  --------------  ----------
 Less:
 Net deferred loan origination fees and unearned
    discount ....................................            31.2                     48.2                      58.3
 Allowance for possible loan losses .............           109.0                    105.0                     105.5
                                                     -------------             ------------            --------------
    Loans receivable held for investment, net ...    $    8,795.6               $  7,294.3              $    5,858.6
                                                     -------------             ------------            --------------
                                                     -------------             ------------            --------------
</TABLE>



<TABLE>
<CAPTION>
                                                                          December 31,
                                                     -------------------------------------------------------
                                                                1994                        1993
                                                     ---------------------------  --------------------------
                                                                      Percent                     Percent
                                                       Amounts       of Total       Amounts      of Total
                                                     -------------------------------------------------------
                                                                     (Dollars in millions)
 Loans receivable held for investment:
 Mortgage loans:
<S>                                                  <C>            <C>           <C>           <C>  
    One-to four-family...........................    $    4,933.9          85.7%  $   4,770.8          85.4%
    Multi-family.................................           456.9           7.9         456.8           8.2
    Commercial...................................           349.7           6.1         328.1           5.9
    Home equity loans............................            10.1           0.2          19.9           0.4
                                                     -------------  ------------  ------------  ------------
 Total mortgage loans held for investment........         5,750.6          99.9       5,575.6          99.9
                                                     -------------  ------------  ------------  ------------
 Other loans:
    Loans secured by depositors' funds...........             7.7           0.1           7.2           0.1
    Home improvement loans.......................             0.1           --            0.2           --
                                                     -------------  ------------  ------------  ------------
 Total other loans...............................             7.8           0.1           7.4           0.1
                                                     -------------  ------------  ------------  ------------
 Total loans receivable held for investment......         5,758.4         100.0%      5,583.0         100.0%
                                                     -------------  ------------  ------------  ------------

 Less:
 Net deferred loan origination fees and unearned
    discount.....................................            61.3                        59.4
 Allowance for possible loan losses..............           103.0                       147.0
                                                     -------------                ------------
    Loans receivable held for investment, net....     $   5,594.1                 $   5,376.6
                                                     -------------                ------------
                                                     -------------                ------------
</TABLE>

           As of December 31, 1997, 69% of the Company's mortgage loan portfolio
was secured by properties located in New York State. The properties securing the
remaining portfolio are dispersed throughout the country, with no state
representing more than 10%.


                                       4


<PAGE>


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

<TABLE>
<CAPTION>
                                                                              December 31,
                                                         ----------------------------------------------------------
                                                          1997       1996         1995         1994          1993
                                                         ----------------------------------------------------------
                                                                            (In millions)
<S>                                                      <C>         <C>         <C>           <C>          <C>    
Loans receivable held for sale:
Performing residential
    mortgage loans ..............................        $  1.3      $  0.3      $  168.2      $   0.5      $  --
Guaranteed student loans ........................           4.2         4.5           6.9         10.6         13.7
Non-performing residential
 mortgage loans .................................         --          --           --           --             72.1
Valuation allowance .............................         --          --           --           --            (20.0)
                                                         ------      ------      --------      -------      -------
    Loans receivable held for sale, net .........        $  5.5      $  4.8      $  175.1      $  11.1      $  65.8
                                                         ------      ------      --------      -------      -------
                                                         ------      ------      --------      -------      -------
</TABLE>

      Loan Sales. Prior to 1991, the Company was actively engaged in the sale of
its No Doc and Low Doc loans in the secondary market (primarily to FNMA).
Currently, the majority of the Company's loans held for sale are guaranteed
student loans. All newly originated mortgage loans are held in the Company's own
portfolio.

      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, 1997. The table does not include prepayments or 
scheduled principal amortization. Prepayments and scheduled principal 
amortization on mortgage loans totaled $1.3 billion for the year ended 
December 31, 1997.

<TABLE>
<CAPTION>
                                                                        December 31, 1997
                                          ----------------------------------------------------------------------------
                                                           Mortgage Loans
                                          -------------------------------------------
                                          One-to Four-                                       Other         Total Loans
                                             Family       Multi-Family     Commercial        Loans         Receivable
                                          ----------------------------------------------------------------------------
                                                                           (In millions)
<S>                                       <C>               <C>             <C>             <C>            <C>       
Amounts due (1):
  Within one year ..............          $      4.2        $    1.3        $    1.6        $  18.3        $     25.4
  One to five years ............               152.1            99.4           105.6           11.5             368.6
  Over five years ..............             7,320.3           474.3           391.9            0.2           8,186.7
                                          ----------        --------        --------        -------        ----------
     Total amounts due .........          $  7,476.6        $  575.0        $  499.1        $  30.0        $  8,580.7
                                          ----------        --------        --------        -------        ----------
                                          ----------        --------        --------        -------        ----------
</TABLE>

(1)    Does not include non-accrual loans.




           The following table sets forth, at December 31, 1997, the dollar
amount of all fixed rate loans contractually due and adjustable rate loans
repricing after December 31, 1998.



<TABLE>
<CAPTION>
                                              Due or Repricing After December 31, 1998
                                            -------------------------------------------
                                               Fixed         Adjustable          Total
                                            -------------------------------------------
                                                           (In millions)
<S>                                         <C>               <C>             <C>       
Mortgage loans (1):
  One-to four-family .............          $  4,975.3        $  613.9        $  5,589.2
  Multi-family ...................               448.7           107.5             556.2
  Commercial .....................               352.6           125.7             478.3
Other loans (1) ..................                11.7          --                  11.7
                                            ----------        --------        ----------
  Total loans receivable .........          $  5,788.3        $  847.1        $  6,635.4
                                            ----------        --------        ----------
                                            ----------        --------        ----------
</TABLE>

(1)   Does not include non-accrual loans.



                                       5
<PAGE>





      One-to Four-Family Mortgage Loans. The Company offers first mortgage loans
secured by one-to four-family residences, including condominiums and planned
unit developments. The Company does not offer loans secured by cooperative units
or interests therein.

           The Company currently offers fixed rate one-to four-family 
mortgage loans and one-to four-family ARM loans through two loan programs: 
(1) No Doc loans and (2) loans underwritten and made in amounts in accordance 
with FNMA guidelines ("FNMA conforming" or "Full Doc" loans). No Doc loans, 
with the exception of loans secured by condominiums, are offered in amounts 
up to 75% of the lower of the appraised value or purchase price of the 
property. No Doc loans secured by condominiums are made in amounts up to 70% 
of the lower of the appraised value or purchase price of the property for 
loans involving the purchase of the property, and up to 70% of the appraised 
value of the property for loans to refinance existing mortgage loans. The 
maximum loan amount of a No Doc loan is $1.0 million. Although the Company 
reserves the right to verify such asset information, the Company generally 
does not verify such information through other sources. The Company 
additionally obtains credit reports on all borrowers to ascertain the credit 
history of the borrower.

      The Company offers fixed rate mortgage loans with terms of 10 to 30 
years secured by one-to four-family residences. Interest rates charged on 
fixed rate loans are competitively priced on a regular basis and are 
periodically determined based on market conditions. For the year ended 
December 31, 1997, the Company originated $1.9 billion of fixed rate loans, 
which primarily consisted of one-to four-family residential mortgage loans.

           The Company currently offers ARM loans secured by one-to 
four-family residential properties with interest rates that adjust 
periodically with terms of up to 30 years. The interest rates on ARM loans 
fluctuate based upon a spread above the applicable index rate used by the 
Company and are generally subject to limitations on interest rate increases 
of 2% per year and a limitation on the aggregate adjustment of 6% above the 
index at the time of commitment over the term of the loan. The Company's ARM 
loans also have interest rate floors which limit the minimum amount to which 
the interest rate payable on its ARM loans may decline. The Company offers 
ARM loans at fully indexed rates and with initial interest rates below the 
current fully indexed rate. The initial discounted rate on these loans was up 
to 375 basis points below the Company's fully indexed rate, which varies by 
ARM adjustment period. For the year ended December 31, 1997, the Company 
originated $1.0 billion of ARM loans, which primarily consisted of one-to 
four-family residential loans. At December 31, 1997, 25.1% of the Company's 
one-to four-family residential mortgage loans consisted of ARM loans.

      The volume and types of ARM loans originated by the Company have been 
affected by such market factors as the level of interest rates, competition, 
consumer preferences and the availability of funds. The Company will continue 
to offer ARM loans, however, there can be no assurance that in the future the 
Company will be able to originate a sufficient volume of ARM loans to 
increase or maintain the proportion that these loans bear to total loans. The 
retention of ARM loans, as opposed to fixed rate residential mortgage loans, 
in the Company's loan portfolio serves to reduce the Company's exposure to 
increases in interest rates. However, ARM loans generally pose credit risks 
different from the risks inherent in fixed rate loans, primarily because as 
interest rates rise, the underlying payments of the borrower rise, thereby 
increasing the potential for default. In particular, the Company's loans 
which bear initial discounted interest rates involve greater risks of default 
due to the greater potential increase in the borrower's payment after the 
first year of the loan.

      The Company also originates ARM loans secured by first mortgages on 
non-owner-occupied one-to four-family properties pursuant to the same 
underwriting guidelines applicable to similarly situated owner-occupied 
one-to four-family properties but in amounts which are limited to 75% of the 
lower of the appraised value or purchase price for loans involving the 
purchase or refinance of the property subject to a lower limit of up to 65% 
of the appraised value of the property for loans involving the refinancing of 
an existing mortgage where the refinanced loan amount exceeds the unpaid 
principal balance. Additionally, the Company requires the submission of 
rental information and considers such information in arriving at its 
underwriting determination. The Company charges higher rates of interest with 
respect to these loans as compared to its other one-to four-family ARM loans 
secured by owner-occupied properties and may impose penalties for early 
repayment.

                                       6
<PAGE>

      The Company also offers home equity lines of credit which are secured 
by mortgages on one-to four-family properties. The underwriting standards 
applicable to these loans are the same as other one-to four-family loans 
except such loans are offered with terms up to 15 years in amounts, including 
any balance of the first mortgage, up to 75% of the appraised value of the 
property with a maximum loan amount of $750,000. As of December 31, 1997, 
loans drawn against home equity lines of credit totaled $66.3 million, or 
0.7%, of total loans held for investment.

      The Company's mortgage loans generally include due-on-sale clauses 
which provide the Company with the contractual right to deem the loan 
immediately due and payable in the event that the borrower transfers 
ownership of the property without the Company's consent. It is the Company's 
policy to enforce due-on-sale provisions within the applicable regulations 
and guidelines imposed by federal and state laws and secondary market 
purchasers.

      Multi-Family Lending. The Company offers fixed rate and ARM loans 
secured by residential properties with five or more units and other mixed use 
properties (primarily residential properties with business or retail space) 
located in the New York metropolitan area. As of December 31, 1997, the 
Company had 5,216 of such loans with an average loan balance of $119,000. 
Multi-family loans are generally made with terms of 5 to 25 years in amounts 
up to a maximum of $3.0 million. These loans are made in amounts up to 70% of 
the appraised value or purchase price of the property for loans to purchase 
the property and up to 65% of the appraised value of the property for loans 
to refinance an existing mortgage. The Company's multi-family loans are 
underwritten pursuant to the same standards and procedures applicable to its 
one-to four-family No Doc loans; however, the Company additionally requires 
the submission of documentation regarding rental and vacancy levels, rental 
income, property expense statements and tax return information. The Company 
verifies rental income of the property but does not verify the borrower's 
personal income levels. The Company imposes penalties for early repayment on 
all non-owner-occupied multi-family properties and owner-occupied 
multi-family properties with seven units or more.

      Commercial Real Estate Lending. The Company also originates commercial 
real estate loans located in the New York metropolitan area. The 
Company's commercial real estate loans are offered in the same amounts and 
under the same terms and underwriting guidelines applicable to its 
multi-family loans. The Company imposes penalties for early repayments on its 
commercial real estate loans. As of December 31, 1997, the Company had 3,625 
of such loans with an average loan balance of $148,000. The largest 
commercial real estate loan in the Company's portfolio at December 31, 1997 
had an outstanding balance of $6.4 million, secured by a non-residential 
building located in New York.

      Student Loans and Other Lending. The Company also originates student 
loans guaranteed by federal and New York State agencies and personal savings 
loans collateralized by a borrower's existing savings account balance at the 
Bank. With the exception of student loans, which the Company generally sells 
in the secondary market upon the borrower's commencement of repayment of the 
loan, these other loans are originated for retention. The Company does not 
currently originate or purchase any other types of business or consumer loans 
such as loans secured by automobiles, unsecured business loans or credit card 
loans.

      Loan Approval, Authority and Underwriting. Due to the Company's 
emphasis on an equity-based lending strategy and reliance upon the value of 
the property securing a loan to reduce the potential risk of principal loss 
to the Company, particularly with respect to its No Doc loan programs, the 
Company has established a comprehensive in house appraisal system made up of 
99 staff appraisers, all of whom are state licensed. From time to time, the 
Company also utilizes third party independent appraisers. The Company's 
appraisal system involves a three-tier review for every mortgage loan 
originated by the Company, consisting of an appraisal conducted or reviewed 
by a licensed appraiser, which is then reviewed by an appraisal manager and, 
finally, by a loan underwriter familiar with the market. All loans are 
subject to various approval requirements depending on the size of the loan 
and assigned credit level.

      Additionally, all one-to four-family mortgage loans exceeding $1.0 
million and commercial loans exceeding $3.0 million, require the approval of 
executive management. The Bank also limits the maximum loan amount to any 
one individual or business entity to $15.0 million. The Board of Directors is 
provided a listing of approved loans on a monthly basis. In recent years, the 
Company has made no loans in excess of $6.5 million.


                                       7


<PAGE>

Delinquent Loans and Foreclosed Assets

      The Company's collection procedures include maintaining continuous 
contact with the borrower through telephone calls, collection letters and 
property inspections. The collection staff attempts to make personal contact, 
Monday through Saturday, by using both the business and home telephone 
numbers. Telephone calls continue until the loan is current or payment 
arrangements are made. The Company recently initiated property inspections on 
selected delinquent loans as both a collateral assessment and collection 
technique. Such property inspections involve a review of the condition of the 
property and, if available, contact with the borrower. On or about the 55th 
day of delinquency, a default letter is sent to the customer which demands 
payment in full of all arrears within 30 days. On the 91st day of delinquency 
a certified letter is sent informing the borrower that foreclosure action has 
commenced. On the 101st day of delinquency the loan is referred to an 
attorney for foreclosure proceedings. With respect to delinquent mortgage 
loans with principal balances in excess of $400,000, the same procedures 
generally apply except that the notices are sent at earlier dates of 
delinquency, and such loans are referred to the Company's attorney for 
foreclosure upon the loan becoming 60 days past due.

      The Company discontinues accruing interest and charges-off the accrued 
interest on all delinquent mortgage loans upon the loan becoming 90 days past 
due. The Company generally does not restructure the original terms of 
delinquent loans by modifying the interest rate paid or capitalizing past due 
interest.

      The Company attempts to accommodate the needs of its borrowers who find 
themselves in difficult circumstances and minimize its potential losses upon 
foreclosure by emphasizing the use of forbearance agreements. These 
forbearance agreements generally provide that the Company will agree to delay 
foreclosure proceedings if the borrower agrees to repay any accrued interest 
and principal arrears over a period of up to 36 months in addition to paying 
the principal and interest due in accordance with the original terms of the 
loan. The forbearance agreements typically provide that in the event the 
borrower is not current with payments under the forbearance agreement or any 
payments due under the original mortgage note, the Company may resume its 
foreclosure action. As of December 31, 1997, the Company had $61.1 million of 
loans, or 17.2%, of total non-performing loans subject to such forbearance 
agreements, the substantial majority of which were one-to four-family 
mortgage loans.

      Historically, the Company has relied solely on its collection and 
foreclosure process to reduce its level of non-performing loans. This 
process, combined with the Company's low loan to value ratios, has in the 
past protected the Company from high loan losses. Due to increases in the 
cost of holding other real estate owned, the Company continues to investigate 
alternative methods for reducing non-performing loans that may result in a 
higher present value received by the Company.

      Based upon the Company's loan-to-value policies, the Company does not 
believe that the overall risk of loss associated with its current loan 
portfolio and non-performing assets is excessive. However, the Company's 
underwriting determinations rely heavily upon the market value of the 
properties securing the loans and, consequently, no assurances can be given 
that declines in real estate values in the Company's primary lending area 
will not result in unanticipated principal losses to the Company or that 
declines in the regional economies will not result in increased delinquencies 
or increases in foreclosure-related expenses and expenses related to its 
other real estate.


                                       8


<PAGE>

      At December 31, 1997, 1996, 1995, 1994 and 1993, loans delinquent 90 
days or more were as follows:

<TABLE>
<CAPTION>
                                                          December 31,
                                     --------------------------------------------------------
                                             1997                            1996
                                     --------------------------------------------------------
                                                         90 days or more
                                     --------------------------------------------------------
                                                   Principal                      Principal
                                    Number of      Balance of      Number of      Balance of
                                      Loans           Loans          Loans          Loans
                                     --------------------------------------------------------
                                                     (Dollars in millions)
<S>                                  <C>            <C>             <C>            <C>     
Mortgage loans:
    One-to four-family ...........   2,596          $  254.6        2,559          $  242.7
    Multi-family .................     372              41.0          430              46.0
    Commercial real estate .......     258              34.0          271              35.2
    Home equity loans ............      48               1.1            7               0.5
                                    ------          --------        -----          --------
       Total mortgage loans ......   3,274             330.7        3,267             324.4
Other loans ......................      84               0.1          168               0.1
                                    ------          --------        -----          --------
       Total loans ...............   3,358          $  330.8        3,435          $  324.5
                                    ------          --------        -----          --------
                                    ------          --------        -----          --------
  Delinquent loans to total loans                      3.71%                           4.36%
</TABLE>


<TABLE>
<CAPTION>
                                                                                  December 31,
                                             ---------------------------------------------------------------------------------------
                                                        1995                           1994                      1993 (1)
                                             -------------------------     -------------------------    ----------------------------
                                                                                  90 Days or More
                                             ---------------------------------------------------------------------------------------
                                                            Principal                     Principal                       Principal
                                             Number of      Balance of     Number of      Balance of     Number of        Balance of
                                               Loans          Loans          Loans          Loans          Loans            Loans
                                             ---------------------------------------------------------------------------------------
                                                                            (Dollars in millions)
<S>                                           <C>            <C>             <C>            <C>             <C>            <C>
Mortgage loans:
   One -to four-family .............          2,737          $  254.3        2,438          $  220.9        4,664          $  467.8
   Multi-family ....................            533              57.9          619              68.6          871              93.1
   Commercial real estate ..........            358              46.8          413              56.8          473              65.0
   Home equity loans ...............             16               0.8           14               0.7           26               1.2
                                              -----          --------        -----          --------        -----          --------
      Total mortgage loans .........          3,644             359.8        3,484             347.0        6,034             627.1
Other loans ........................           --              --               46               0.3           64               0.5
                                              -----          --------        -----          --------        -----          --------
      Total loans ..................          3,644          $  359.8        3,530          $  347.3        6,098          $  627.6
                                              -----          --------        -----          --------        -----          --------
                                              -----          --------        -----          --------        -----          --------
Delinquent loans to total loans                                  5.81%                          6.02%                         11.11%
</TABLE>

(1) Includes non-performing mortgage loans held for sale, net of charge-offs and
valuation reserves.



                                       9
<PAGE>

      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 $45.3 million, as opposed to $29.5 million, which was included in
interest income for the year ended December 31, 1997.

<TABLE>
<CAPTION>
                                                                                  December 31,
                                                       -------------------------------------------------------------
                                                          1997        1996         1995         1994          1993
                                                       -------------------------------------------------------------
                                                                               (Dollars in millions)
<S>                                                    <C>          <C>          <C>          <C>          <C>        
Non-accrual mortgage loans .......................     $   355.0    $   356.0    $   402.1    $   391.9    $  678.3(1)
Non-accrual other loans (2) ......................           0.1          0.1       --           --          --
Other loans 90 days or more delinquent
   and still  accruing ...........................        --           --           --              0.3         0.5
                                                       ----------    ---------    ---------    ---------    --------- 
          Total non-performing loans (3) .........         355.1        356.1        402.1        392.2       678.8
                                                       ----------    ---------    ---------    ---------    --------- 
Other real estate owned, net (4) .................          24.0         28.6         29.2         54.0        74.8
                                                       ----------    ---------    ---------    ---------    --------- 
          Total non-performing assets ............     $   379.1    $   384.7    $   431.3    $   446.2    $  753.6
                                                       ----------    ---------    ---------    ---------    --------- 
                                                       ----------    ---------    ---------    ---------    --------- 
Non-performing loans to total loans ..............           3.97%        4.78%        6.49%        6.80%      12.02% (1) (5)
Non-performing assets to total assets ............           2.90%        2.89%        2.94%        6.42%      10.21% (1) (5)
</TABLE>

-------------
(1)   Includes net non-performing mortgage loans held for sale.

(2)   Excluding certain other loans delinquent 90 days or more, such as
      guaranteed student loans, on which principal and interest are guaranteed
      by the U.S. government and certain other loans on which delinquent
      principal and interest may be deducted from the borrower's deposit account
      balances.

(3)   As of December 31, 1997, non-accrual loans included 2,824 one-to
      four-family loans, with an aggregate balance of $269.4 million, 423
      multi-family loans with an aggregate balance of $46.0 million, 296
      commercial real estate loans with an aggregate balance of $38.0 million,
      92 other loans with an aggregate balance of $0.1 million and 54 home
      equity loans with an aggregate balance of $1.6 million.

(4)   Net of related valuation allowance of $0.9 million, $1.3 million, $2.2
      million, $5.1 million, and $14.4 million for foreclosed real estate at
      December 31, 1997, 1996, 1995, 1994 and 1993, respectively.

(5)   Excluding the effect of charge-offs and the $20 million valuation
      allowance relating to the portfolio of non-performing mortgage loans held
      for sale, the Company's ratio of non-performing loans to total loans and
      non-performing assets to total assets would have been 12.61% and 10.70% at
      December 31, 1993, respectively.



                                       10
<PAGE>

      At December 31, 1997, the Company's net other real estate owned totaled 
$24.0 million and was held directly by the Company and by subsidiaries of the 
Company which were formed for the purpose of holding and maintaining certain 
other real estate. See --"Subsidiary Activities." At such date, the aggregate 
gross value of other real estate owned was comprised of 214 one-to 
four-family properties with an aggregate carrying value of $18.4 million, 39 
multi-family properties with an aggregate carrying value of $2.6 million and 
24 commercial real estate properties with an aggregate carrying value of $3.9 
million. The Company or an independent inspector generally conducts monthly 
external inspections on all properties securing loans in foreclosure and 
generally conducts external appraisals on all properties prior to taking 
ownership of the property. Based upon such inspections and appraisals, the 
Company will charge off any loan principal it deems necessary. The Company or 
an independent inspector conducts periodic inspections of its foreclosed real 
estate and periodically adjusts its valuation allowance for possible declines 
in the value of other real estate owned. The Company's valuation allowance 
for other real estate owned at December 31, 1997 totaled $0.9 million, or 
3.6% of the aggregate gross value of other real estate owned. The Company is 
currently offering for sale substantially all real estate owned as a result 
of foreclosure, through brokers and through its own personnel.

       The Company's policies permit the financing of the sale of its 
foreclosed real estate on substantially the same terms applicable to its 
other real estate mortgage loans with the exception that the Company may loan 
up to 85% of the lesser of the appraised value or sales price of the 
foreclosed property.

Allowance for Possible Loan Losses

      The allowance for possible loan losses is maintained through provisions 
for possible loan losses based on management's on-going comprehensive 
evaluation of the risk inherent in its loan portfolio in consideration of the 
trends in its loan portfolio, the national and regional economies and the 
real estate markets covering the Company's portfolio. The Company's loan loss 
allowance determinations also incorporate factors and analyses which consider 
the potential principal loss associated with the loan, costs of acquiring the 
property securing the loan through foreclosure or deed in lieu thereof, the 
periods of time involved with the acquisition and sale of such property, 
costs and expenses associated with maintaining and holding the property until 
sale, and the costs associated with the Company's inability to utilize funds 
for other income producing activities during the estimated holding period of 
the property. In this regard, on at least a quarterly basis, the Company 
conducts: a review of the amount and frequency of delinquent loans which 
become non-performing and the average period of time for such loans to become 
non-performing; a review of the amount and frequency of non-accrual loans 
that are transferred to other real estate owned and the costs and average 
periods of time associated with such transfer; a review of the historical 
holding periods of foreclosed properties; a review of historical principal 
loss experience of sales of its foreclosed properties; and, based on recent 
sales activity, an analysis of the average estimated principal loss on loans 
in its portfolio. Through these analyses the Company attempts to maintain an 
allowance for possible loan losses sufficient to fund, in the aggregate, 
future net cash flow shortfalls related to the resolution of problem loans 
(both known and unknown but reasonably estimable) in its loan portfolio. The 
Company believes that, based on its loan underwriting criteria, including its 
lower loan-to-value ratio requirements, and historical charge-off activity, 
which has historically been below other savings institutions, the Company's 
current level of allowance for possible loan losses is adequate.

                                       11
<PAGE>

      The following table sets forth the Company's allowance for possible 
loan losses at the dates and for the periods indicated. The balances below 
represent general loan loss reserves and are not allocable to specific loans 
in the Company's portfolio.


<TABLE>
<CAPTION>
                                                                                                      Six Months         Year
                                                                                                        Ended           Ended
                                                            Year Ended December 31,                  December 31,      June 30,
                                             ----------------------------------------------------    ------------    ----------
                                                1997          1996          1995          1994          1993            1993
                                             ----------    ----------    ----------    ----------    ------------    ----------
                                                                            (Dollars in millions)
<S>                                          <C>           <C>           <C>           <C>           <C>             <C>

Balance at beginning of period.............    $105.0        $105.5        $103.0        $147.0        $136.5          $130.5
                                                                                          

Provisions charged to income...............      18.9          15.7           9.5          32.3          25.3            63.6
Transfer from (to) allowance for loans
held for sale..............................        --            --            --          11.6            --           (20.0)

Loans charged-off:

  Mortgage loans held for investment.......      (4.4)        (4.7)          (5.3)        (15.3)        (9.4)           (5.6)
  Other loans..............................      (0.3)        (0.2)           --            --            --             --
  Mortgage loans held for sale.............        --           --            --           (4.9)          --           (20.0)
  Bulk sale charge-off of
    non-performing loans...................        --           --            --          (56.1)(3)       --            --

  Net loan foreclosure costs...............     (11.3)       (12.6)         (10.2)        (16.8)        (6.1)          (12.0)
                                             ----------    ----------    ----------    ----------    ------------    ----------
Total charge-offs..........................     (16.0)       (17.5)         (15.5)        (93.1)       (15.5)          (37.6)
Recoveries.................................       1.1          1.3            8.5 (2)       5.2          0.7             --
                                             ----------    ----------    ----------    ----------    ------------    ----------
Balance at end of period...................    $109.0        $105.0        $105.5        $103.0        $147.0          $136.5
                                             ----------    ----------    ----------    ----------    ------------    ----------
                                             ----------    ----------    ----------    ----------    ------------    ----------

Ratio of net charge-offs during the
 period to average loans outstanding
  during the period........................      0.18%         0.25%         0.12%(2)      1.54%(3)      0.27%           0.71%

Ratio of allowance for possible loan
 losses to total loans receivable at the
  end of the period........................      1.22%         1.41%         1.75%         1.79%         2.63% (1)       2.52% (1)

Ratio of allowance for possible loan
 losses to total non-performing loans at
 the end of the period.....................      30.70%        29.48%        26.24%        26.26%       23.45%          23.70%

</TABLE>

(1)   Excludes $52.1 million and $60.0 million, net, of non-performing mortgage
      loans held for sale at December 31, 1993 and June 30, 1993, respectively.

(2)   Includes a $6.1 million recovery of 1994's bulk sale charge-off. 
      Excluding the effect of this recovery, the ratio of net charge-offs 
      during the period to average loans during the period was 0.22%.

(3)   Excluding the bulk sale charge-off of non-performing loans, the ratio 
      of net charge-offs during the period to average loans during the period
      was 0.56%.



                                       12


<PAGE>

      The following table sets forth the Company's allocation of the allowance
for possible loan losses by loan category and the percent of loans in each
category to total loans held for investment at December 31, 1997, 1996, 1995,
1994, and 1993. The entire allowance for possible loan losses is a general
valuation allowance applicable to the entire loan portfolio, and the portion of
the allowance for possible loan losses allocated to each loan category has been
estimated for presentation purposes and does not represent a limitation on the
total allowance available to each loan category.

<TABLE>
<CAPTION>

                                                                                    December 31,                                    
                                            ---------------------------------------------------------------------------------------
                                                        1997                          1996                          1995           
                                            -----------------------------  ---------------------------  ---------------------------
                                                            Percentage                   Percentage                  Percentage    
                                                            of Loans in                  of Loans in                 of Loans in   
                                                            Category to                  Category to                 Category to   
                                               Amount       Total Loans       Amount     Total Loans      Amount     Total Loans   
                                            ------------  ---------------  ----------- ---------------  ----------- ---------------
                                                                              (Dollars in millions)
<S>                                         <C>            <C>             <C>         <C>               <C>        <C>
Loan Category:                                                                                                                     
Mortgage loans:                                                                                                                    
One-to-four family                             $81.9           86.0%          $75.5         85.9%         $72.5          85.2%     
Multi-family residential                        12.8            7.0            16.0          7.3           18.2           7.9      
Commercial                                      13.2            6.0            13.2          6.3           14.6           6.3      
Home equity loans from lines of credit           1.1            0.7             0.3          0.2            0.2           0.1      
Other loans                                      ---            0.3             ---          0.3            ---           0.5      
                                            ------------  ---------------  ----------- --------------- -----------  ---------------
 Total allowance for possible loan losses   $  109.0          100.0%       $  105.0        100.0%        $105.5         100.0%     
                                            ============  ===============  =========== =============== ===========  ===============
                                                                                                                                   

                                                                   December 31,
                                            ----------------------------------------------------------
                                                         1994                          1993           
                                            ----------------------------  ----------------------------
                                                             Percentage                   Percentage
                                                             of Loans in                  of Loans in
                                                             Category to                  Category to
                                                Amount       Total Loans      Amount      Total Loans 
                                             -----------  --------------- ------------  --------------
                                                               (Dollars in millions)
<S>                                          <C>          <C>             <C>           <C>
Loan Category:                                                                                        
Mortgage loans:                                                                                       
One-to-four family                             $66.5          85.7%        $  99.1         85.4%      
Multi-family residential                        19.8           7.9            26.2          8.2       
Commercial                                      16.4           6.1            21.1          5.9       
Home equity loans from lines of credit           0.3           0.2             0.6          0.4       
Other loans                                      ---           0.1             ---          0.1       
                                             -----------  --------------- ------------ ---------------
 Total allowance for possible loan losses    $ 103.0         100.0%        $ 147.0        100.0%     
                                             ===========  =============== ============ ===============
</TABLE>

                                       13
<PAGE>

Environmental Issues

      The Company encounters certain environmental risks in its lending
activities. Under federal and state environmental laws, lenders may become
liable for costs of cleaning up hazardous materials found on property securing
its loans. In addition, the existence of hazardous materials may make it
unattractive for a lender to foreclose on such properties. Although
environmental risks are usually associated with loans secured by commercial real
estate, risks also may be substantial for loans secured by residential real
estate if environmental contamination makes security property unsuitable for
use. This could also have a negative effect on nearby property values. The
Company attempts to control its risk by training its appraisers, underwriters
and members of its Executive Mortgage Loan Committee to be cognizant of signs
indicative of environmental hazards. Prior to foreclosure, the Company
additionally conducts environmental risk assessments on one-to four-family
properties, where the Company has an indication of an environmental problem, and
on multi-family and commercial properties, which are used for activities which
have a greater degree of environmental risk, such as dry cleaning establishments
and other industrial uses. The Company additionally conducts housing and
building code violation searches on all multi-family properties prior to
foreclosure to assess any potential environmental problems. The Company
currently does not make loans secured by gasoline stations, automobile repair
facilities or properties on which it is known that gasoline tanks are located.
As of December 31, 1997, the Company had 23 loans with an aggregate balance of
$2.4 million secured by gas stations, 82 loans aggregating $8.3 million secured
primarily by automobile repair facilities or parking facilities, and 128 loans
aggregating $18.8 million secured by factories, warehouses and other industrial
buildings. At that date, the Company's other real estate owned included two
warehouse or industrial properties and two auto repair facilities, with an
aggregate carrying value of $0.4 million, all of which were held by a subsidiary
of the Company. No gas stations or parking facilities were owned by the Company
as of December 31, 1997. The Company has been named as a defendant in several
legal complaints involving alleged ingesting of lead based paint, chips or dust
by infant plaintiffs. See Item 3-- "Legal Proceedings."

      The Company believes its procedures regarding the assessment of
environmental risk are adequate and, as of December 31, 1997, the Company was
unaware of any environmental issues which would subject it to any material
liability at this time. However, no assurance can be given that the values of
properties securing loans in the Company's portfolio will not be adversely
affected by unforeseen environmental risks.

Market Risk Management

      Interest rate risk arises in the ordinary course of the Company's
business, as the repricing characteristics of its mortgage loans do not
necessarily match those of its deposit liabilities. The resulting interest rate
risk is managed by careful attention to the mix of asset maturities and deposit
offerings and by adjustments to the Company's investment portfolio and the use
of off balance sheet instruments such as interest rate swaps. The investment
strategies are designed and implemented (within policies and limits approved by
the Board of Directors) by the Asset and Liability Management Committee,
("ALCO") comprised of the Chief Executive Officer, the Chief Operating Officer
and other Senior Management Officers. Refer to Company's Annual Report to
Stockholders for Fiscal Year ended December 31, 1997, pages 15-18.

      The Company entered into interest rate swap contracts to manage interest
rate risk. The notional amounts of these contracts approximate $475 million and
$300 million at December 31, 1997 and 1996, respectively. The contracts
outstanding at December 31, 1997 have an average term of approximately 2 years.
Under the terms of the contracts outstanding at December 31, 1997, the Bank pays
an average fixed rate of 6.37% and receives an average variable rate of 5.84% on
the swaps hedging the fixed rate loan portfolio and pays an average variable
rate of 6.01% and receives an average variable rate of 5.88% on the swaps
hedging the variable rate securities portfolio.

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, corporate debt securities,
money market instruments, banker's acceptances, commercial paper and municipal
obligations.



                                       14
<PAGE>

       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"). These reverse repurchase
agreements generally bear a higher rate of interest than federal funds sold and
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.

      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 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 realized 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 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 default, market risk and delivery
failures.

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

<TABLE>
<CAPTION>
                                                                                 December 31,
                                          ----------------------------- ----------------------------- -----------------------------
                                                      1997                           1996                         1995
                                          ----------------------------- ----------------------------- -----------------------------
                                             Amortized         Fair       Amortized          Fair        Amortized          Fair
                                               Cost           Value         Cost            Value          Cost            Value
                                          ----------------------------- ----------------------------- -----------------------------
                                                                              (In millions)

<S>                                         <C>             <C>           <C>             <C>             <C>           <C>
Money market investments (1)                $ 1,060.0       $ 1,060.0     $   494.1       $   494.1       $ 1,550.7     $ 1,550.7
                                          ============= =============== ============= =============== =============== =============
Securities: 
Securities available for sale:
U.S. Government and Federal agency
obligations:
   U.S. Treasury notes/bills                $   700.6       $   695.8     $ 1,944.3       $ 1,928.4       $ 1,352.3     $ 1,356.3
   Agency notes/Asset-backed
     securities                                 125.9           125.8          66.4            66.4         2,417.0       2,417.0
Mortgage-backed securities                      780.6           779.6       1,881.0         1,857.9         1,668.8       1,693.8

Collateralized mortgage obligations             113.9           114.4          32.4            32.4           ---           ---
 
Trust certificates collateralized by
     GNMA securities                            124.5           123.6         409.8           406.5           430.3         428.8
Corporate asset-backed securities                25.0            25.0         ---             ---             ---           ---
Commercial paper                                113.5           113.5         ---             ---             ---           ---
Other                                            30.0            30.0          63.9            63.8             0.6           0.6
                                          ------------- --------------- ------------- --------------- --------------- -------------
    Total securities available for sale     $ 2,014.0       $ 2,007.7     $ 4,397.8       $ 4,355.4       $ 5,869.0     $ 5,896.5
                                          ============= =============== ============= =============== =============== =============
Securities held to maturity:
Tax-exempt municipals                       $     0.6       $     0.6     $     0.6       $     0.6       $     0.7     $     0.7
Financial                                         3.4             3.4           3.4             3.4             3.6           3.7
                                          ------------- --------------- ------------- --------------- --------------- -------------
    Total securities held to maturity       $     4.0       $     4.0     $     4.0       $     4.0       $     4.3     $     4.4
                                          ============= =============== ============= =============== =============== =============
Trading assets                              $    25.0       $    25.0     $   ---         $   ---         $   ---       $   ---
                                          ============= =============== ============= =============== =============== =============
</TABLE>

(1)   Consists of interest-bearing deposits in other banks, federal funds sold
      and securities purchased under agreements to resell



                                       15
<PAGE>

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 trading
assets at December 31, 1997. 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,
1997.

<TABLE>
<CAPTION>

                                                                               December 31, 1997
                                        --------------------------------------------------------------------------------------  
                                          One Year or Less      One to Five Years    Five to Ten Years    More than Ten Years   
                                        ---------------------  -------------------  --------------------  --------------------  
                                                                                                                                
                                                    Weighted              Weighted              Weighted              Weighted  
                                        Amortized   Average   Amortized   Average   Amortized   Average   Amortized   Average   
                                          Cost       Yield      Cost        Yield      Cost     Yield        Cost      Yield    
                                        ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  
                                                                                                           (Dollars in millions)
<S>                                     <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Money market investments (1)            $ 1,060.0     6.44%      $  ---       ---%     $  ---      ---%      $  ---       ---%  
Securities available for sale:
U.S. Treasury notes/bills               $   350.4     5.36%      $350.2      5.27%     $  ---      ---%      $  ---       ---%  
Agency notes/Asset-
  backed securities                           ---      ---         90.0      6.37        35.9     5.97          ---       ---   
Mortgage-backed securities                    ---      ---        116.6      5.99        17.3     6.50        646.7      6.46   
Collateralized mortgage                       
   obligations                                ---      ---         13.0      5.81        56.8     6.76         44.1      6.45   
Trust certificates  
   collateralized by 
     GNMA securities                          ---      ---          ---       ---       124.5     6.18          ---       ---   
Corporate asset-backed securities             ---      ---          ---       ---        25.0     6.09          ---       ---   
Commercial paper                            113.5     6.52          ---       ---         ---      ---          ---       ---   
Other (2)                                     ---      ---          ---       ---         ---      ---         30.0      5.04   
                                        ---------             ---------             ---------             ---------             
  Total securities available for sale   $   463.9     5.64%     $ 569.8      5.60%     $259.5     6.29%     $ 720.8      6.40%  
                                        =========             =========             =========             =========             
Securities held to maturity:
Tax exempt municipals                   $     ---      ---%     $   ---       ---%     $  ---      ---%     $  0.6       7.50%  
Financial                                     ---      ---          2.1      8.25         ---      ---         1.3       8.00   
                                        ---------             ---------             ---------             ---------             
  Total securities  held to maturity    $     ---      ---%     $   2.1      8.25%     $  ---      ---%     $  1.9       7.85%  
                                        =========             =========             =========             =========             
Trading assets                          $    25.0     5.71%     $   ---       ---%     $  ---      ---%     $  ---        ---%  
                                        =========             =========             =========             =========             



                                                      ----------------------------------------
                                                                Total Securities              
                                                      ----------------------------------------
                                                      Average                                 
                                                      Remaining                       Weighted
                                                      Years to   Amortized   Fair      Average
                                                      Maturity    Cost       Value     Yield  
                                                      ---------  ---------  --------  --------
<S>                                                   <C>        <C>        <C>        <C>
Money market investments (1)                               ---    $1,060.0  $1,060.0    6.44% 
Securities available for sale:                                                                
U.S. Treasury notes/bills                                 1.97    $  700.6  $  695.8    5.31% 
Agency notes/Asset-                                                                           
  backed securities                                       3.29       125.9     125.8    6.25  
Mortgage-backed securities                               11.13       780.6     779.6    6.39  
Collateralized mortgage
   obligations                                            9.05       113.9     114.4    6.53  
Trust certificates                                                                            
   collateralized by                                                                          
     GNMA securities                                      7.80       124.5     123.6    6.18  
Corporate asset-backed securities                         5.40        25.0      25.0    6.09  
Commercial paper                                          0.02       113.5     113.5    6.52  
Other (2)                                                  ---        30.0      30.0    5.04  
                                                                 ---------  --------          
  Total securities available for sale                             $2,014.0  $2,007.7    5.98% 
                                                                 =========  ========          
Securities held to maturity:                                                                  
Tax exempt municipals                                    10.33    $    0.6  $   0.6     7.50% 
Financial                                                12.47         3.4      3.4     8.15  
                                                                 ---------  --------          
  Total securities  held to maturity                              $    4.0  $    4.0    8.05% 
                                                                 =========  ========          
Trading assets                                            1.83    $   25.0  $   25.0    5.71% 
                                                                 =========  ========          
</TABLE>


(1)   Consists of interest-bearing deposits in other banks, federal funds sold
      and securities purchased under agreements to resell.

(2)   Consists primarily of U.S. Agency preferred stock with no stated maturity.



                                         16
<PAGE>

During the year ended December 31, 1997, the Company sold available for sale
securities aggregating $2.1 billion, resulting in gross realized gains of $3.9
million and gross realized losses of $1.9 million.

During the year ended December 31, 1996, the Company sold available for sale
securities aggregating $3.2 billion, resulting in gross realized gains of $2.7
million and gross realized losses of $2.1 million. There were no sales of
securities during the year ended December 31, 1995.

Sources of Funds

      General. Deposits, payments on loans and mortgage-backed securities and
maturities and redemptions of investment securities are the primary sources of
the Company's funds for lending, investing and other general purposes.
Additionally, during 1997, the Company supplemented its funding sources by
obtaining investment grade credit ratings from four credit rating agencies. This
has allowed the Company to access the wholesale funding markets, as the Company
may issue debt instruments.

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

      Long Term Debt. 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 ("Notes"). Of this allowable capacity, the Company has,
thus far, issued $200 million of 6.70% Senior Notes maturing July 15, 2002.
Interest expense attributed to these Notes for the year ended December 31, 1997
was $6.4 million.

      Guaranteed Preferred Beneficial Interest in Company's Junior Subordinated
Debentures. In June 1997, GreenPoint Capital Trust I, a Delaware statutory
business trust owned by the Company, issued $200 million of 9.10% Guaranteed
Preferred Beneficial Interest in the Company's Subordinated Debentures ("Capital
Securities"). The Junior Subordinated Debentures mature on June 1, 2027.
Interest expense attributable to these Capital Securities was $10.7 million for
the year ended December 31, 1997.

      At December 31, 1997, the Company had outstanding $723.7 million in
certificates of deposit in amounts of $100,000 or more, maturing as follows:
<TABLE>
<CAPTION>                                                                                                           Weighted
                                                                                                Amount            Average Rate
                                                                                             ------------         ------------
                                                                                                   (Dollars in millions)      
              <S>                                                                            <C>                  <S>
              Maturity Period:

              Three months or less........................................................   $   135.6               5.27%
              Over three through six months.............................................         155.2               5.34
              Over six through twelve months..............................................       250.8               5.47
              Over twelve months..........................................................       182.1               5.88
                                                                                             ---------              
                    Total.................................................................   $   723.7               5.51%
                                                                                             =========              
</TABLE>

                                       17
<PAGE>

      The following table sets forth the distribution of the Company's deposit
accounts at the dates indicated and the weighted average nominal interest rates
on each category of deposits presented. Management does not believe that the use
of period end balances instead of average balances results in any material
differences to the information presented.

<TABLE>
<CAPTION>

                                                                        December 31,
                                ---------------------------------------------------------------------------------------------------
                                                         1997                                        1996
                                -----------------------------------------------   -------------------------------------------------
                                                                    Weighted                                          Weighted
                                                      Percent       Average                            Percent        Average
                                                      of Total      Nominal                            of Total        Nominal
                                       Amount         Deposits        Rate             Amount          Deposits          Rate
                                -----------------  -------------  ------------   -----------------   ------------   --------------
                                                                    (Dollars in millions)
<S>                             <C>                <C>            <C>            <C>                 <C>            <C>
Account type:
Savings and club                    $1,739.4            15.85%        2.43%           $1,901.7           16.60%          2.77%
N.O.W. and checking                    533.9             4.87         1.24               524.2            4.58           1.86
Variable rate savings                1,702.1            15.51         3.37             1,853.7           16.19           3.36
Money market                           478.4             4.36         3.25               561.3            4.90           3.25
                                    --------            -----                         --------           -----
      Total                          4,453.8            40.59         2.68             4,840.9           42.27           2.88
                                    --------            -----                         --------           -----

Term certificates of deposit:
  Certificates of deposit
    over $100,000                      723.7             6.59         5.51               687.8            6.01           5.29
  Certificates of deposit
    less than $100,000 with
    original maturities of:
       Six months or less              222.5             2.03         4.44               227.1            1.98           3.83
       Six to 12 months              1,243.9            11.33         4.84             1,811.2           15.82           4.63
       12 to 30 months               2,054.9            18.73         5.64             1,702.1           14.86           5.44
       30 to 48 months                 334.3             3.05         6.25               258.9            2.26           6.26
       48 to 72 months                 683.9             6.23         5.51               695.6            6.07           5.88
       72 to 84 months                  75.3             0.69         6.40                72.0            0.63           6.56
IRA and Keoghs less than 3 years     1,180.7            10.76         5.21             1,156.7           10.10           5.08

         Total term certificates    --------            -----                         --------           -----
           of deposit                6,519.2            59.41         5.38             6,611.4           57.73           5.17
                                    --------            -----                         --------           -----

         Total deposits            $10,973.0           100.00%        4.28%          $11,452.3          100.00%          4.21%
                                   ---------           ------                        ---------          ------
                                   ---------           ------                        ---------          ------

                                                    December 31,
                                 ---------------------------------------------
                                                        1995
                                 ---------------------------------------------
                                                                     Weighted
                                                       Percent       Average 
                                                       of Total      Nominal
                                        Amount         Deposits        Rate 
                                 -----------------  -------------  ------------
                                                (Dollars in millions)

Account type:
Savings and club                    $ 2,034.7           15.77%         2.79%
N.O.W. and checking                     501.8            3.89          1.89
Variable rate savings                 1,995.3           15.47          3.52
Money market                            635.7            4.93          3.31

                                     --------           -----                         
       Total                          5,167.5           40.06          2.99
                                     --------           -----                         
Term certificates of deposit:
  Certificates of deposit over
    $100,000                            771.0            5.98          5.72
  Certificates of deposit less
    than $100,000 with original
    maturities of:
       Six months or less               589.7            4.57          4.87
       Six to 12 months               2,111.9           16.37          5.20
       12 to 30 months                1,659.7           12.87          5.88
       30 to 48 months                  272.3            2.11          5.93
       48 to 72 months                  944.3            7.32          6.42
       72 to 84 months                   80.6            0.63          6.80
IRA and Keoghs less than 3 years      1,301.3           10.09          5.42

       Total term certificates       --------           -----
        of deposit                    7,730.8           59.94          5.62
                                     --------           -----

       Total deposits               $12,898.3          100.00%         4.57%
                                    ---------          ------
                                    ---------          ------


</TABLE>
                                       18


<PAGE>



      The following table presents, by various rate categories, the amount of
certificates of deposit outstanding at the dates indicated.
<TABLE>
<CAPTION>
                                         December 31,                              Maturities at December 31, 1997
                           -------------------------------------      --------------------------------------------------------
                                                                        Within         One to
                              1997         1996         1995           One Year      Three Years    Thereafter      Total
                           ------------ ------------ -----------      ------------  -------------- ------------- -------------
                                                                            (In millions)
<S>                         <C>           <C>         <C>              <C>               <C>        <C>            <C>
Certificates of deposit
   accounts:

3.99% or less               $  1,064.4    $ 1,237.3   $    127.8       $   1,001.6       $ 62.7     $      0.1     $   1,064.4

4.00% to 4.99%                   343.6      1,149.5      1,215.0             143.2        180.6           19.8           343.6

5.00% to 5.99%                 4,300.9      3,166.9      3,869.6           3,335.9        890.9           74.1         4,300.9

6.00% to 6.99%                   664.3        751.5      1,893.2             154.0        379.8          130.5           664.3

7.00% to 7.99%                   141.2        297.2        606.2             113.3         13.6           14.3           141.2

8.00% to 8.99%                     3.8          8.1         11.1               1.4          1.9            0.5             3.8

9.00% or greater                   1.0          0.9          7.9               0.4          0.6            ---             1.0
                           ------------ ------------ -----------      ------------  -------------- ------------- -------------
        Total               $  6,519.2    $ 6,611.4   $  7,730.8       $   4,749.8   $  1,530.1     $    239.3     $   6,519.2
                           ============ ============ ===========      ============  ============== ============= =============
</TABLE>

Subsidiary Activities

      The Company has formed three subsidiaries:

      GreenPoint Community Development Corp. This for-profit community
development subsidiary was incorporated in 1993. The subsidiary offers lending
programs, development opportunities and assistance, consulting and other
activities which promote the objective of greater access to affordable housing
for low-and moderate-income persons residing in the New York metropolitan area.
GreenPoint Community Development Corp. is a subsidiary of the holding company.

      GreenPoint Bank. The Bank was organized in 1868 as a New York State
chartered mutual savings bank. On January 28, 1994, the Bank converted from the
mutual to the stock form of ownership, and 100% of its outstanding shares were
acquired by the Company. The Bank is the principal subsidiary of the Company.

      GreenPoint Capital Trust I. This subsidiary was incorporated on June 3,
1997. The subsidiary issued $200 million of Capital Securities, the proceeds of
which were used for general corporate purposes, including the repurchase of
stock and financing growth.

      As of December 31, 1997 the Bank has formed ten subsidiaries:

      GreenPoint Mortgage Corp. This subsidiary was incorporated on October 12,
1994 and began operations in the first quarter of 1995. On July 7, 1995, GPMC
acquired the wholesale residential mortgage lending business of
BarclaysAmerican/Mortgage Corp. ("BAM"). On April 30, 1997, the Company
purchased the Columbus, Georgia mortgage servicing operations of Citizens
Financial Group. GPMC's activities consist of the origination, sale and 
servicing of mortgage loans.

      GreenPoint Purchasing Corp. This subsidiary was incorporated on July 19,
1996, with an agreement between the Company and the Nassau County Industrial
Development Agency. This agreement enables the Company, on a sales tax exempt
basis, to (1) purchase and/or lease machinery and equipment for the Lake Success
facility and (2) renovate and improve the facility.

      3090 Ocean Avenue Realty Corp. This subsidiary was incorporated on June 6,
1996, as a real estate investment subsidiary.

      75 Route 25A Realty Corp. This subsidiary was incorporated on June 7,
1996, as a real estate investment subsidiary.

      GreenPoint Corporate Officer Life Insurance. This subsidiary was
incorporated on July 25, 1996, as an insurance trust established for the purpose
of purchasing corporate life insurance policies for the officers of the Company.



                                       19
<PAGE>

           Other Real Estate Subsidiaries. The Bank has formed five wholly-owned
subsidiary corporations, all of which are incorporated under the laws of the
State of New York, for the purpose of holding and maintaining certain properties
acquired by the Bank as a result of foreclosure proceedings or deeds in lieu
thereof. As of December 31, 1997, four of these subsidiaries were active. The
Bank attempts to limit the carrying value of property held by any one subsidiary
to approximately $5 million. Accordingly, in the event the Bank acquires
additional properties through foreclosure or deeds in lieu thereof, the Bank may
form additional subsidiaries for the purpose of holding and maintaining such
properties. The properties selected by the Bank to be held in its subsidiaries
generally consist of multi-family properties with five units or more, commercial
properties and one-to four-family properties which have been identified by the
Bank as having attributes which may subject the Bank to liabilities beyond those
normally associated with its other real estate such as properties which are not
in compliance with building codes or properties with potential environmental
problems. A description of the Bank's subsidiaries are set forth below:

      Neerg Corp. This subsidiary was formed in January 1990 and currently holds
11 properties having an aggregate carrying value of $1.1 million and an
aggregate appraised value of $1.3 million, as of December 31, 1997, based on the
Company's most recent appraisals.

      298 15th Street Realty Corp. This subsidiary was formed in January 1993
and currently holds 13 properties having an aggregate carrying value of $1.2
million and an aggregate appraised value of $1.4 million as of December 31,
1997, based on the Company's most recent appraisals.

      Neerg Second Corp. This subsidiary was formed in June 1993 and currently
holds 26 properties having an aggregate carrying value of $2.8 million and an
aggregate appraised value of $3.8 million, as of December 31, 1997, based on the
Company's most recent appraisals.

      Alpha REO Corporation. This subsidiary was formed in March 1994 and
currently holds 6 properties having an aggregate carrying value of $0.5 million
and an aggregate appraised value of $0.7 million, as of December 31, 1997, based
on the Company's most recent appraisals.

      Beta REO Corp. This subsidiary was formed in June 1994 and currently holds
no properties.

      Liquidation of Subsidiary:

      GreenPoint Mortgage Trust. This subsidiary was incorporated on February
16, 1996, as a real estate investment trust established for the purpose of
acquiring, holding and managing real estate mortgage assets. On December 15,
1997, the voluntary liquidation of GreenPoint Mortgage Trust was completed.

Savings Bank Life Insurance

      As an issuing Company, the Company offers Savings Bank Life Insurance
("SBLI") to its customers up to the legal maximum of $50,000 per insured
individual and, as a trustee Company, offers an additional $500,000 in group
coverage per insured under SBLI's Financial Institution Group Life Insurance
policy. The Company also offers insurance coverage for qualifying full-time
employees in amounts up to $1,000,000 and group mortgage life insurance in
amounts up to $220,000. The SBLI Department's activities are segregated from the
Company and, while they do not materially affect the Company's earnings,
management believes that offering SBLI is beneficial to the Company's
relationship with its depositors and the general public. The SBLI Department
pays its own expenses and reimburses the Company for expenses incurred on its
behalf.

Personnel

      As of December 31, 1997, the Company had 1,739 full-time employees and 212
part-time employees. The employees are not represented by a collective
bargaining unit and the Company considers its relationship with its employees to
be good.



                                       20
<PAGE>

Federal Taxation

       Generally, 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
certain exceptions, including 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, under the Internal
Revenue Code a special bad debt deduction for additions to the tax bad debt
reserve was allowed. Recently enacted federal legislation eliminated this
reserve method. For tax years beginning after December 31, 1995, the Bank is
only permitted to take federal deductions for bad debts on the basis of actual
loan charge off activity (specific charge-offs). This legislation also requires
that the Bank recapture into taxable income the portion of existing tax bad debt
reserve created in tax years beginning after December 31, 1987 over a six year
period. The amount of such reserve subject to recapture at December 31, 1997 is
approximately $2 million.

       Provided the Bank continues to satisfy certain definitional tests and
other conditions, for New York State and City income tax purposes, the Bank is
permitted to continue to take special reserve method bad debt deductions. The
deductible annual addition to the state reserve may be computed using a specific
formula based on 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"). The Bank used the percentage method for 1996 and expects
to use the percentage method for 1997.

       Taxable Distributions and Recapture. Under prior federal law, tax bad
debt reserves created prior to January 1, 1988 were subject to recapture into
taxable income should the Bank fail to meet certain thrift asset and
definitional tests. New federal legislation eliminated these thrift related
recapture rules. However, under current law, pre-1988 reserves remain subject to
recapture should the Bank make certain non dividend distributions or cease to
maintain a bank charter. Management has no intention of taking such actions.

      At December 31, 1997, the Bank's total federal pre-1988 reserve was
approximately $140 million. This reserve reflects the cumulative effects of
federal tax deductions by the Bank for which no Federal income tax provision has
been made.

       The Bank also maintains a state and local tax reserve for qualifying
loans in excess of the federal reserve for which no state and local tax has been
provided. The amount of the Bank's state and city tax reserve for qualifying
loans in excess of the Federal Reserve balance as of December 31, 1997 was
approximately $295 million and $296 million, respectively. In the event the Bank
were to allow "qualifying assets" to fall below 60% of total assets or otherwise
fail definitional tests, the Bank would no longer be subject to the New York
State and City reserve method of computing bad debt deductions as described
above. As a result, the Bank would record a charge relating to this balance of
the then existing state and city tax reserves. Future bad debt deductions would
be based on a "5 year experience" method which is closely reflective of
financial statement loan charge-off activity. Management is not contemplating
any actions that would cause recapture of the qualifying 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". For tax years beginning before January 1, 1996, an
environmental tax of 0.12% of the excess of AMTI (with certain modifications)
over $2 million, was imposed on corporations, including the Company, whether or
not an alternative minimum tax ("AMT") was paid. The Company does not expect to
be subject to the AMT. The Company was subject to an environmental tax liability
for the tax year ended December 31, 1995, which was not material.

       Dividends Received Exclusion and Other Matters. The Company may exclude
from its income 100% of dividends received from the Bank as a member of the same
affiliated group of corporations. The corporate dividends received exclusion is
generally 70% in the case of dividends received from unaffiliated corporations
with which the Company will not file a consolidated tax return, except that if
the Company owns more than 20% of the stock of a corporation distributing a
dividend, then 80% of any dividends received may be excluded.



                                       21
<PAGE>

State and Local Taxation

       New York State and New York City Taxation. The Company and the Bank
report income on a combined calendar year basis to both New York State and New
York City. New York State Franchise Tax on corporations is imposed in an amount
equal to the greater of (a) 9% of "entire net income" allocable to New York
State (b) 3% of "alternative entire net income" allocable to New York State (c)
0.01% of the average value of assets allocable to New York State or (d) nominal
minimum tax. Entire net income is based on federal taxable income, subject to
certain modifications. Alternative entire net income is equal to entire net
income without certain modifications. The New York City Corporation Tax is
imposed using similar alternative taxable income methods and rates.

      A temporary Metropolitan Transportation Business Tax Surcharge on Banking
corporations doing business in the Metropolitan District has been applied since
1982. The Company transacts a significant portion of its business within this
District and is subject to this surcharge. For the tax year ended December 31,
1997, the surcharge rate is 17% of the State franchise tax liability. New York
City does not impose surcharges applicable to the Company.

      The Company is being audited by the New York City Department of Finance
for the tax years 1992 and 1993. Management of the Company believes that any
actions taken by the taxing authorities will not materially affect the financial
condition and results of operations of the Company.

       Multi State Taxation. Generally, GPMC is subject to tax in a state on the
basis of income generating activities occurring within that state. Generally,
state taxes are imposed on allocated income, average assets or a nominal minimum
tax. For the tax year ended December 31, 1997, GPMC is expected to file returns
in most states using the allocated income alternative.

       Delaware State Taxation. As a Delaware holding company not earning income
in Delaware, the Company is exempt from Delaware corporate income tax but is
required to file an annual report with and pay an annual franchise tax to the
State of Delaware. The tax is imposed as a percentage of the capital base of the
Company with an annual maximum of $150,000.

Bank Regulation and Supervision

      The Bank is a New York State chartered savings bank and its deposit
accounts are insured up to applicable limits by the FDIC. The Bank is subject to
extensive regulation by the New York State Banking Department (the "Banking
Department"), as its chartering agency, and by the FDIC, as the deposit insurer.
The Bank must file reports with the Banking Department and the FDIC concerning
its activities and financial condition, in addition to obtaining regulatory
approvals prior to entering into certain transactions such as establishing
branches, mergers with, or acquisitions of, other depository institutions and
the acquisition of assets and the assumption of liabilities of other financial
services companies. There are periodic examinations by the Banking Department
and the FDIC to assess the Bank's compliance with various regulatory
requirements. This regulation and supervision establishes a comprehensive
framework of activities in which a savings bank can engage and is intended
primarily for the protection of the insurance fund and depositors. The
regulatory structure also gives the regulatory authorities extensive discretion
in connection with their supervisory and enforcement activities and examination
policies, including policies with respect to the classification of assets and
the establishment of adequate loan loss reserves for regulatory purposes. Any
change in such regulation, whether by the Banking Department, the FDIC or
through legislation, could have a material adverse impact on the Company and the
Bank and their operations and stockholders. The Company is also required to file
certain reports with, and otherwise comply with the rules and regulations of the
Board of Governors of the FRB and of the United States Securities and Exchange
Commission ("SEC") under the federal securities laws. Certain of the regulatory
requirements applicable to the Company and to the Bank are referred to below or
elsewhere herein.

      New York State Law. The exercise by an FDIC-insured savings bank of the
lending and investment powers of a savings bank under the New York State Banking
Law is limited by FDIC regulations and other federal law and regulations. In
particular, the applicable provisions of New York State Banking law and
regulations governing the investment authority and activities of an FDIC insured
state-chartered savings bank have been effectively limited by the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") and the FDIC
regulations issued pursuant thereto. See "Federal Deposit Insurance Corporation
Improvement Act of 1991--Restrictions on State-Chartered Banks."



                                       22
<PAGE>

      The Bank derives its lending, investment and other authority primarily
from the applicable provisions of New York State Banking Law and the regulations
of the Banking Department, as limited by FDIC regulations. See "Federal Deposit
Insurance Corporation Improvement Act of 1991--Restrictions on State-Chartered
Banks." Under these laws and regulations, savings banks, including the Bank, may
invest in real estate mortgages, consumer and commercial loans, certain types of
debt securities, including certain corporate debt securities and obligations of
federal, state and local governments and agencies, certain types of corporate
equity securities and certain other assets subject to specified limits.

      New York State chartered savings banks may also invest in subsidiaries
under their service corporation investment power. A savings bank may use this
power to invest in corporations that engage in various activities authorized for
savings banks, plus any additional activities which may be authorized by the
Banking Department. Investment by a savings bank in the stock, capital notes and
debentures of its service corporations is limited to 3% of the bank's assets,
and such investments, together with the bank's loans to its service
corporations, may not exceed 10% of the savings bank's assets.

      Under the New York State Banking Law, the Superintendent may issue an
order to a New York State chartered Banking institution to appear and explain an
apparent violation of law, to discontinue unauthorized or unsafe practices and
to keep prescribed books and accounts. Upon a finding by the Banking Department
that any director, employee or officer of any banking organization has violated
any law, or has continued unauthorized or unsafe practices in conducting the
business of the banking organization after having been notified by the
Superintendent to discontinue such practices, such director, employee or officer
may be removed from office after notice and an opportunity to be heard. The Bank
does not know of any past or current practice, condition or violation that might
lead to any proceeding by the Superintendent or the Banking Department against
the Bank or any of its directors, officers or employees.

      Federal Deposit Insurance Corporation Improvement Act of 1991. On December
19, 1991, FDICIA became law. While FDICIA primarily addresses required capital
levels of insured institutions, and prompt corrective action for such
institutions as capital levels decline, it also imposes a number of new
mandatory supervisory measures on commercial banks, savings banks and savings
associations.

      FDICIA requires financial institutions to take certain actions relating to
their internal operations, including: providing annual reports on financial
condition and management to the appropriate federal banking regulators, having
an annual audit of financial statements performed by an independent public
accountant and establishing an independent audit committee comprised solely of
outside directors. FDICIA and its implementing regulations also mandates certain
operational and managerial standards on financial institutions relating to
internal controls, loan documentation, credit underwriting, interest rate
exposure, asset growth, compensation, fees and benefits.

      Restrictions Upon State-Chartered Banks. FDICIA added new Section 24 to
the Federal Deposit Insurance Act (the "FDI Act") which generally limits the
activities and equity investments of state-chartered FDIC insured banks and
their subsidiaries to those permissible for national banks and their
subsidiaries, unless such activities and investments are specifically exempted
by Section 24 thereof ("Section 24") or consented to by the FDIC.

       In October 1992, the FDIC adopted final regulations governing the equity
investments of such banks, effective on December 9, 1992, which generally
prohibit equity investments in securities and real estate by such banks and
require the divestiture of such investments by December 19, 1996. Section 24
provides an exception for investments in common and preferred stocks listed on a
national securities exchange or the shares of registered investment companies by
a bank if (1) the bank held such types of investments during the 14 month period
from September 30, 1990 through November 26, 1991, (2) the state in which the
bank is chartered permitted such investments as of September 30, 1991, and (3)
the bank notifies the FDIC and obtains approval from the FDIC to make or retain
such investments. Upon receiving such FDIC approval, an institution's investment
in such equity securities will be subject to an aggregate limit up to its core
capital. Section 24 also contains an exception for certain majority owned
subsidiaries. Any bank holding impermissible equity investments that do not
receive FDIC approval must submit to the FDIC a plan for divesting such
investments as quickly and prudently as possible.

      In December 1993 the FDIC adopted final regulations pertaining to the
activity restrictions imposed upon insured savings banks and their subsidiaries
by Section 24. Savings banks not engaging in such activities but that desire to
engage in otherwise impermissible activities may apply for approval from the
FDIC to do so if such bank meets its minimum capital requirements. The FDIC will
not approve an activity that it determines to present a significant risk to the
FDIC insurance funds.



                                       23
<PAGE>

      Prompt Corrective Action. FDICIA also establishes a system of prompt
corrective action to resolve the problems of undercapitalized institutions. The
FDIC, FRB, the Office of the Comptroller of the Currency ("OCC") and the Office
of Thrift Supervision ("OTS") have adopted final rules, effective December 19,
1992, which require such regulators to take certain supervisory actions against
undercapitalized institutions, the severity of which depends upon the
institution's degree of capitalization. Regulatory action taken will depend on
the level of capitalization of the institution and may range from restrictions
on capital distributions and dividends to seizure of the institution. Generally,
subject to a narrow exception, FDICIA requires the Banking regulator to appoint
a receiver or conservator for an institution that is critically undercapitalized
within 90 days after becoming critically undercapitalized.

      The final rule adopted by the FDIC on September 15, 1992, to implement the
prompt corrective action section of FDICIA, generally provides that an insured
institution that has a total capital to risk-based assets ratio of less than
8.0%, core capital to risk-based assets of less than 4.0% or core capital to
total assets ("leverage capital ratio") of less than 4.0% would be considered to
be "undercapitalized." An insured institution that has total capital to
risk-based assets of less than 6.0%, core capital to risk-based assets of less
than 3.0% or a leverage capital ratio that is less than 3.0% would be considered
to be "significantly undercapitalized" and an insured institution that has a
tangible capital to assets ratio equal to or less than 2.0% would be deemed to
be "critically undercapitalized." See "--Capital Maintenance." Generally, under
the rule, an insured institution that is "undercapitalized," "significantly
undercapitalized" or "critically undercapitalized" becomes immediately subject
to certain regulatory restrictions, including, but not limited to, restrictions
on growth, investment activities, capital distributions and affiliate
transactions. The filing of a capital restoration plan, which must be guaranteed
by any parent holding company, is also required. In addition, "critically
undercapitalized" institutions must receive prior written approval from the FDIC
to engage in any material transaction other than in the normal course of
business.

      Insurance of Deposit Accounts. The Bank is a member of the Bank Insurance
Fund ("BIF") of the FDIC. Approximately 76% of the Bank's deposits (or
approximately $8.42 billion), are insured by the BIF, while the remainder, (or
approximately $2.65 billion), are insured by the Savings Association Insurance
Fund ("SAIF") of the FDIC. Deposit insurance premium rates on the Bank's
BIF-insured deposits are currently 1.256 and 6.28 basis points on the Bank's
SAIF deposits.

      Under the FDI Act, insurance of deposits may be terminated by the FDIC
upon a finding that the institution has engaged in unsafe or unsound practices,
is in an unsafe or unsound condition to continue operations or has violated any
applicable law, regulation, rule, order or condition imposed by the FDIC. The
management of the Bank does not know of any practice, condition or violation
that might lead to termination of deposit insurance. At December 31, 1997, the
Bank's capital exceeded the capital requirements imposed by the FDIC.

      Capital Maintenance. FDIC regulations require insured banks, such as the
Bank, to maintain minimum levels of capital. The regulations establish a minimum
leverage capital ratio requirement of not less than 3% for banks that receive
the highest examination rating awarded by the FDIC. For all other banks, the
minimum leverage capital requirement is 3% plus an additional cushion of at
least 100 to 200 basis points. Tier 1 capital (also referred to as "Core
capital") is comprised of the sum of common stockholders' equity, non-cumulative
perpetual preferred stock (including any related surplus) and minority interests
in consolidated subsidiaries, minus all intangible assets (other than qualifying
servicing rights). At December 31, 1997, the Bank's ratio of Tier 1 capital to
total assets equaled 7.08%, which exceeded the minimum leverage requirement.

      The FDIC also requires that savings banks meet a risk-based capital
standard. The risk-based capital standard requires the maintenance of total
capital (which is defined as core capital and supplementary capital) to
risk-weighted assets of at least 8% and Tier 1 capital to risk-weighted assets
of at least 4%. In determining the amount of risk-weighted assets, all assets,
plus certain off-balance sheet items, are multiplied by a risk-weight of 0% to
100%, based on the risks the FDIC believes are inherent in the type of asset or
off-balance sheet item. The components of core capital are equivalent to those
discussed above under the leverage capital ratio requirement. The components of
supplementary capital currently include cumulative perpetual preferred stock,
perpetual preferred stock, mandatory convertible securities, subordinated debt,
intermediate preferred stock and allowance for possible loan and lease losses.
Allowance for possible loan and lease losses includable in supplementary capital
is limited to a maximum of 1.25% of risk-weighted assets. Overall, the amount of
capital counted toward supplementary capital cannot exceed 100% of Tier 1
capital.



                                       24
<PAGE>

      At December 31, 1997, the Bank's total capital to risk-weighted assets
("risk-based capital ratio") was 15.34% and its Tier 1 capital to risk-weighted
assets ("Tier 1 risk-based capital ratio") was 14.09%, which exceeded the FDIC
risk-based capital requirements.

      Loans-to-One-Borrower Limitations. With certain limited exceptions, a New
York State chartered savings bank may not make loans or extend credit for
commercial, corporate or business purposes (including lease financing) to a
single borrower, the aggregate amount of which would be in excess of 15% of the
bank's net worth. The Bank currently complies with all applicable
loans-to-one-borrower limitations.

      Standards for Safety and Soundness. The FDI Act, as amended by FDICIA and
the Riegle Community Development and Regulatory Improvement Act of 1994
("Community Development Act"), requires the FDIC, together with the other
federal bank regulatory agencies, to prescribe standards, by regulations or
guidelines, relating to internal controls, information systems and internal
audit systems, loan documentation, credit underwriting, interest rate risk
exposure, asset growth, assets quality, earnings, stock valuation, and
compensation, fees and benefits and such other operational and managerial
standards as the agencies deem appropriate. The FDIC and the federal bank
regulatory agencies have adopted, effective August 9, 1995, a set of guidelines
prescribing safety and soundness standards pursuant to FDICIA as amended. The
guidelines establish general standards relating to internal controls and
information systems, internal audit systems, loan documentation, credit
underwriting, interest rate exposure, asset growth, and compensation, fees and
benefits. In general, the guidelines require, among other things, appropriate
systems and practices to identify and manage the risks and exposures specified
in the guidelines. In addition, the FDIC adopted regulations that authorize, but
do not require, the FDIC to order an institution that has been given notice by
the FDIC that it is not satisfying any of such safety and soundness standards to
submit a compliance plan. If, after being so notified, an institution fails to
submit an acceptable compliance plan or fails in any material respect to
implement an accepted compliance plan, the FDIC must issue an order directing
action to correct the deficiency and may issue an order directing other actions
of the types to which an undercapitalized association is subject under the
"prompt corrective action" provisions of FDICIA. If an institution fails to
comply with such an order, the FDIC may seek to enforce such order in judicial
proceedings and to impose civil money penalties.

     Annual Independent Audit and Reporting Requirements. On June 2, 1993, the
FDIC adopted a final rule and related guidelines implementing the external
audit, audit committee and management reporting requirements of Section 36 of
the FDI Act. Under the FDIC rule, each insured depository institution with $500
million or more in total assets as of the beginning of each fiscal year after
December 31, 1992 must have an annual audit of its financial statements by an
independent accountant in accordance with GAAP and file an annual report with
the FDIC, its primary federal regulator and any appropriate state Banking
agency. For an insured depository institution that is a subsidiary of a holding
company, the independent audit requirement of the rule may be satisfied by
audited financial statements of the consolidated holding company. The annual
report required by the rule must contain: financial statements audited by an
independent public accountant; a statement of management's responsibilities for
preparing the annual financial statements, establishing and maintaining adequate
internal control over financial reporting, and complying with laws, regulations,
or guidelines relating to safety and soundness designated by the FDIC and the
appropriate Federal Banking agency; a separate assessment by management on the
effectiveness of internal control and the institution's compliance with the
designated safety and soundness laws, regulations and guidelines; and the
independent public accountant's report on management's assertions concerning the
internal control over financial reporting.

      In addition, insured depository institutions with total assets of $500
million or more are required to establish an audit committee comprised entirely
of independent outside directors to review the annual audit findings and reports
with management and the independent public accountant. There are more stringent
criteria for audit committees of institutions with $3 billion or more in total
assets, such as the Bank, including the requirements that at least two committee
members have banking or related financial management experience and that the
committee have access to its own outside counsel. The Bank has an audit
committee in place which complies with this requirement.



                                       25


<PAGE>

      Extensions of Credit. Under FDICIA, the federal banking agencies are
required to adopt uniform regulations prescribing standards for extensions of
credit that are secured by liens on interests in real estate or made for the
purpose of financing the construction of a building or other improvements to
real estate. Under joint regulations adopted by the banking agencies, which
became effective March 19, 1993, all financial institutions must adopt and
maintain written policies that establish appropriate limits and standards for
extensions of credit that are secured by liens or interests in real estate or
are made for the purpose of financing permanent improvements to real estate.
These policies must establish loan portfolio diversification standards, prudent
underwriting standards (including loan-to-value limits) that are clear and
measurable, loan administration procedures, and documentation, approval and
reporting requirements. The real estate lending policies must reflect
consideration of the interagency Guidelines for Real Estate Lending Policies
that have been adopted by the federal bank regulators.

      Community Reinvestment Act. Under the Community Reinvestment Act ("CRA"),
as implemented by FDIC regulations, a savings institution has a continuing and
affirmative obligation consistent with its safe and sound operation to help meet
the credit needs of its entire community, including low and moderate income
neighborhoods. The CRA does not establish specific lending requirements or
programs for financial institutions nor does it limit an institution's
discretion to develop the types of products and services that it believes are
best suited to its particular community. The CRA requires the FDIC, in
connection with its examination of a savings institution, to assess the
institution's record of meeting the credit needs of its community and to take
such record into account in its evaluation of certain applications by such
institution. The CRA requires public disclosure of an institution's CRA rating
and requires the FDIC to provide a written evaluation of an institution's CRA
performance utilizing a four-tiered descriptive rating system. The Bank's latest
CRA rating received during 1996 from the FDIC, was "outstanding", the highest
rating available.

      New York State Regulation. New York State also requires banking
institutions organized in New York State to serve the credit needs of its local
community ("NYCRA"), which are substantially similar to those imposed by the
CRA. Pursuant to the NYCRA, a bank is subject to periodic reviews by the Banking
Department in regards to a bank's CRA performance. The NYCRA requires the
Banking Department to make a written assessment of a bank's compliance with the
NYCRA, utilizing a four-tiered rating system, and make such assessment available
to the public. The NYCRA also requires the Superintendent to consider a bank's
NYCRA rating when reviewing a bank's application to engage in certain
transactions, including mergers, asset purchases and the establishment of branch
offices or automated teller machines, and provides that such assessment may
serve as a basis for the denial of any such application. The Bank's NYCRA
rating, received at its last review from the Banking Department in 1996, was
"outstanding", the highest rating available.

      Federal Reserve System. Under FRB regulations, the Bank is required to
maintain non-interest-earning reserves against its transaction accounts
(primarily NOW and regular checking accounts). The FRB regulations generally
require that an institution maintain reserves of 3% against aggregate
transaction accounts of $52.0 million or less (subject to adjustment by the FRB)
plus 10% (subject to adjustment by the FRB between 8% and 14%) against that
portion of total transaction accounts in excess of $52.0 million. The first $4.3
million of otherwise reservable balances (subject to adjustments by the FRB) are
exempted from the reserve requirements. The Bank is in compliance with the
foregoing requirements. Because required reserves must be maintained in the form
of either vault cash, a non-interest-bearing account at a Federal Reserve Bank
or a pass-through account as defined by the FRB, the effect of this reserve
requirement is to reduce the Bank's interest-earning assets.

      Interstate Banking and Branching. In the past, interstate banking has
been limited under the Bank Holding Company Act (the "BHCA") to those states
that permitted interstate banking by statute. New York was one of a number of
states that, subject to the reciprocity conditions of the New York Banking Law
(the "Banking Law"), permitted out-of-state bank holding companies to acquire
New York banks. By 1994, most states had adopted statutes permitting multistate
bank holding companies. The Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 ("Interstate Banking Act") was enacted on September 29,
1994. The Interstate Banking Act now permits approval under the BHCA of the
acquisition by a bank holding company that is well capitalized and managed of a
bank outside the holding company's home state regardless of whether the
acquisition is permitted under the law of the state of the acquired bank. The
Federal Reserve Board may not approve an acquisition under the BHCA that would
result in the acquiring holding company controlling more than 10% of the
deposits in the United States or more than 30% of the deposits in any particular
state.



                                       26
<PAGE>

       In the past, branching across state lines was not generally available to
a state bank, such as the Bank. Out-of-state branches are authorized under the
Banking Law, but similar authority does not exist generally under the laws of
most other states. The Interstate Banking Act, beginning June 1, 1997, permits
the responsible banking agencies to approve merger transactions between banks
located in different states, regardless of whether the merger would be
prohibited under state law. Accordingly, the Interstate Banking Act will permit
a bank to have branches in more than one state. A state may "opt in" to the
provisions of the Interstate Banking Act prior to June 1, 1997, and a state may
"opt out" of the provisions of the Interstate Banking Act by adopting
appropriate legislation before that date.

       The Interstate Banking Act will facilitate the consolidation of the
banking industry that has taken place over recent years and will allow the
creation of larger, presumably more efficient, banking networks, which may
affect the competition the Bank faces in the future. The effect of the
Interstate Banking Act on the Bank, if any, is likely to occur as banking
institutions, state legislators and bank regulators respond to the new federal
regulatory structure. The states will have to establish appropriate corporate
law, tax and regulatory structures to adjust to the growth of new interstate
banks.

       Dividend Restrictions. New York law imposes certain restrictions on the
payment of dividends, including a provision that, without regulatory approval,
the Bank cannot declare and pay dividends in any calendar year in excess of its
"net profits" for such year combined with its "retained net profits" of the two
preceding years, less any required transfer to surplus.

Holding Company Regulation and Supervision

      Federal Regulation. The Company is a registered bank holding company
pursuant to the Bank Holding Company Act of 1956, as amended ("BHCA").

      The Company is subject to examination, regulation and periodic reporting
under the BHCA, as administered by the FRB. The FRB has adopted capital adequacy
guidelines for bank holding companies (on a consolidated basis) substantially
similar to those of the FDIC for the Bank.

      The Company is required, under certain circumstances, to obtain the prior
approval of the FRB to acquire all, or substantially all, of the assets of any
bank or bank holding company. Prior FRB approval is required for the Company to
acquire direct or indirect ownership or control of any voting securities of any
bank or bank holding company if, after giving effect to such acquisition, it
would, directly or indirectly, own or control more than 5% of any class of
voting shares of such bank or bank holding company. The BHCA also prohibits the
acquisition by the Company of more than 5% of the voting shares, or
substantially all the assets of a bank located outside the State of New York
unless such an acquisition is specifically authorized by the laws of the state
in which such bank is located. New York State banking law permits the interstate
acquisition of banking institutions by bank holding companies on a nationwide
and reciprocal basis. In addition to the approval of the FRB, before any bank
acquisition can be completed, prior approval thereof may also be required to be
obtained from other agencies having supervisory jurisdiction over the bank to be
acquired, including the Banking Department.

      The Company is required to give the FRB prior written notice of any
purchase or redemption of its outstanding equity securities if the gross
consideration for the purchase or redemption, when combined with the net
consideration paid for all such purchases or redemptions during the preceding 12
months, is equal to 10% or more of the Company's consolidated net worth. The FRB
may disapprove such a purchase or redemption if it determines that the proposal
would constitute an unsafe and unsound practice, or would violate any law,
regulation, FRB order or directive, or any condition imposed by, or written
agreement with, the FRB.

      The status of the Company as a registered bank holding company under the
BHCA does not exempt it from certain federal and state laws and regulations
applicable to corporations generally, including, without limitation, certain
provisions of the federal securities laws.



                                       27
<PAGE>

      In addition, a bank holding company is generally prohibited from engaging
in, or acquiring direct or indirect control of any company engaged in
non-banking activities. One of the principal exceptions to this prohibition is
for activities found by the FRB to be so closely related to banking or managing
or controlling banks as to be a proper incident thereto. Some of the activities
that the FRB has determined by regulation to be closely related to banking are:
(i) making or servicing loans; (ii) performing certain data processing services;
(iii) providing discount brokerage services; (iv) acting as a fiduciary,
investment or financial advisor; (v) leasing personal or real property; (vi)
making investments in corporations or projects designed primarily to promote
community welfare; and (vii) acquiring a savings and loan association.

      Under the FDI Act, depository institutions are liable to the FDIC for
losses suffered or anticipated by the FDIC in connection with the default of a
commonly controlled depository institution or any assistance provided by the
FDIC to such an institution in danger of default. This law would have potential
applicability if the Company ever acquired as a separate subsidiary a depository
institution in addition to the Bank.

      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 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, provisions of the Federal
Reserve Act and federal regulations limit the amounts of, and establish required
procedures and credit standards with respect to, loans and other extensions of
credit to officers, Directors and principal shareholders of the Bank, the
Company, any subsidiary of the Company and related interests of such persons.
Moreover, subsidiaries of bank holding companies are prohibited from engaging in
certain tie-in arrangements (with the Company or any of its subsidiaries) in
connection with any extension of credit, lease or sale of property or furnishing
of services.

      The Company and its subsidiary, the Bank, will be affected by the monetary
and fiscal policies of various agencies of the United States Government,
including the Federal Reserve System. In view of changing conditions in the
national economy and in the money markets, it is impossible for management of
the Company to accurately predict future changes in monetary policy or the
effect of such changes on the business or financial condition of the Company.

      New York State Bank Holding Company Regulation. In addition to federal
bank holding company regulations, a bank holding company organized or doing
business in New York State may be also subject to regulation under the New York
State Banking Law. The term "bank holding company," for the purposes of the New
York State Banking Law, is defined generally to include any person, company or
trust that directly or indirectly either controls the election of a majority of
the directors or owns, controls or holds with power to vote more than 10% of the
voting stock of a bank holding company or, if the company is a banking
institution, another banking institution, or 10% or more of the voting stock of
each of two or more banking institutions. In general, a bank holding company
controlling, directly or indirectly, only one banking institution is not deemed
to be a bank holding company for the purposes of the New York State Banking Law.
Under New York State Banking Law, the prior approval of the Banking Department
is required before: (1) any action is taken that causes any company to become a
bank holding company; (2) any action is taken that causes any banking
institution to become or to be merged or consolidated with a subsidiary of a
bank holding company; (3) any bank holding company acquires direct or indirect
ownership or control of more than 5% of the voting stock of a banking
institution; (4) any bank holding company or subsidiary thereof acquires all or
substantially all of the assets of a banking institution; or (5) any action is
taken that causes any bank holding company to merge or consolidate with another
bank holding company. Additionally, certain restrictions apply to New York State
bank holding companies regarding the acquisition of banking institutions which
have been chartered five years or less and are located in smaller communities.
Officers, directors and employees of New York State bank holding companies are
subject to limitations regarding their affiliation with securities underwriting
or brokerage firms and other bank holding companies and limitations regarding
loans obtained from its subsidiaries. Although the Company is not currently a
bank holding company for purposes of New York State law, any future acquisition
of ownership, control, or the power to vote 10% or more of the voting stock of
another bank or bank holding company would cause it to become such.



                                       28
<PAGE>

      Acquisition of the Company--Federal Restrictions. Under the Federal Change
in Bank Control Act ("CIBCA"), a notice must be submitted to the FRB if any
person (including a company), or group acting in concert, seeks to acquire 10%
or more of the Company's shares of Common Stock outstanding, unless the FRB has
found that the acquisition will not result in a change in control of the
Company. Under the CIBCA, the FRB has 60 days within which to act on such
notice, taking into consideration certain factors, including the financial and
managerial resources of the acquirer, the convenience and needs of the
communities served by the Company and the Bank, and the anti-trust effects of
the acquisition. Under the BHCA, any company would be required to obtain prior
approval from the FRB before it may obtain "control" of the Company within the
meaning of the BHCA. Control generally is defined to mean the ownership or power
to vote 25 percent or more of any class of voting securities of the Company or
the ability to control in any manner the election of a majority of the Company's
directors. See "Holding Company Regulation."

      New York State Change-in-Control Restrictions. In addition to the CIBCA,
the New York State Banking Law generally requires prior approval of the New York
State Banking Board before any action is taken that causes any company to
acquire direct or indirect control of a banking institution which is organized
in New York State. See "Restrictions on Acquisition of the Company and the
Bank--Regulatory Restrictions--New York State Change-in-Control Regulation."

      Federal Securities Law. The Company's Common Stock is registered with the
SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
The Company is subject to the information, proxy solicitation, insider trading
restrictions and other requirements under the Exchange Act.

ITEM 2.  PROPERTIES

      The Company's executive office is located at 90 Park Avenue, New York, New
York. This location contains approximately 41.1 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 105.3 thousand square feet of
commercial office space, which the Company leases. In addition to Lake Success,
New York, the Company's operating center in Charlotte, North Carolina at 5032
Parkway Plaza Boulevard, contains 40.6 thousand square feet, which the Company
leases. The Company's servicing operations center is located in Columbus,
Georgia. In Columbus, the Company owns the property at 2300 Brookstone
Boulevard, which contains 34.7 thousand square feet of office space. Also, in
Columbus, is another property which the Company leases, located at 2920 Fourth
Avenue. This property contains 15.4 thousand square feet, and is used for office
and storage space.

      The Company operates its consumer banking activities out of 74 branches
located throughout the New York Metropolitan area.

      The Company operates its mortgage lending activities from its Lake Success
operating center, as well as Charlotte, North Carolina and Englewood Cliffs, New
Jersey. Hub offices are located in California, Connecticut, Florida, Illinois,
Massachusetts, Pennsylvania, Texas and Virginia.



                                       29
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

Pending Litigation

      With the exception of the matters set forth below, the Company is not
involved in any pending legal proceedings other than routine legal proceedings
occurring in the ordinary course of business which, in the aggregate, involve
amounts which are believed by management to be immaterial to the consolidated
financial statements of the Company. The Bank has been named as a defendant in
fifteen unrelated legal complaints which assert that infant plaintiffs sustained
personal injuries from the ingestion of lead based paint, chips or dust.
Additionally there are ten other instances of threatened litigation. The
complaints are in various early stages of discovery. Outside counsel has advised
the Bank that because discovery on these claims has only recently begun, counsel
is not yet in a position to express an opinion as to the Bank's liability or to
quantify the Bank's potential exposure, if any, in dollar terms at this time.
The Company currently believes that such liability exposure, if any, would not
be material to the Bank's financial condition and results of operations.

      The Bank is a defendant in a purported class action lawsuit titled Joseph
Sabbatino and Jean Sabbatino, and all others similarly situated, v. GreenPoint
Savings Bank, CV-97-1838, United States District Court, Eastern District of New
York, in which plaintiffs allege that the Bank collected monthly mortgage escrow
reserves in excess of the amounts it is entitled to collect under applicable law
and the mortgage contract. Plaintiffs seek, among other things, treble damages
and injunctive relief under breach of contract theories and alleged violation of
the Federal Racketeer Influenced and Corrupt Organization Act ("RICO"), and a
judgment based upon alleged breach of contract, breach of fiduciary duty and
intentional and/or negligent misrepresentation. The Bank has filed an answer
denying all of the Plaintiff's claims, believes its mortgage loan servicing
practices with respect to escrow deposits comply in all material respects with
applicable requirements, and intends to defend vigorously this action. While the
ultimate outcome of this lawsuit, whether by judgment or a satisfactory
settlement, cannot be predicted, management does not believe that the outcome of
this litigation is likely to have a material adverse effect on the consolidated
financial condition and results of operations of the Company.

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, 1997.



                                       30
<PAGE>

ITEM 4A.  EXECUTIVE OFFICERS

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

   Thomas S. Johnson, 57, was Chairman, President and Chief Executive Officer of
the Company and of the Bank from August 1993 to October 1997. Since that time,
he has been Chairman and Chief Executive Officer. Mr. Johnson previously served
as President of both Chemical Bank and Manufacturers Hanover Trust Company. He
is a Director of R.R. Donnelley & Sons Company, a printing company, Online
Resources & Communications Corporation and Alleghany Corporation, and a trustee
of not-for-profit organizations including The Institute of International
Education, The Asia Society, The United States Japan Foundation, WNET Channel
13, New York, and Trinity College. A graduate of Trinity, Mr. Johnson received a
masters degree in business administration from Harvard University.

   Bharat B. Bhatt, 54, joined the Company in July 1995 and serves as President
and Chief Operating Officer. Prior to that he served as Vice Chairman of the
Company and the Bank. Prior to joining the Company, Mr. Bhatt was the Chief
Financial Officer of Shawmut National Corporation (1992 -1994), Senior Vice
President at Mellon Bank (1989-1992) and Vice President at Chemical Bank
(1971-1989). Mr. Bhatt holds a Bachelor of Laws and a Bachelor of Commerce
degree from the University of Bombay. Mr. Bhatt attended the Management Program
at Harvard Business School. Mr. Bhatt is also a member of the Institute of
Chartered Accountants.

   Ralph Hall, 48, is Executive Vice President, Mortgage Banking, of the 
Company and the Bank. Mr. Hall had been General Manager, Chief Operating 
Officer and Director of General Motors Acceptance Corporation (GMAC) Mortgage 
from 1992 to 1994; and President, Chief Executive Officer and a Director of 
GMAC Capital Corp. from 1988 to 1992. Mr. Hall began his mortgage career at 
Citicorp Mortgage, Inc. from 1986 to 1988; his last position at the Company 
being Vice President of Operations and Product Development. Previously, he 
was a Senior Consulting Manager with Arthur Andersen & Co. from 1978 to 1986. 
Ralph Hall served in the United States Marine Corps from 1967 to 1971. Mr. 
Hall holds a MBA at the University of Houston (1977) and a BS/BA in 
Accounting and Economics at Southwest Missouri State University (1974).

   S.A. Ibrahim, 46, joined GreenPoint Bank in March 1997 as Executive Vice
President, Risk Management. 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 holds a B.E. in Engineering from Osmania University in
Hyderabad, India, and an MBA in Finance from the Wharton School at the
University of Pennsylvania.

   Jeffrey R. Leeds, 52, joined the Bank in September 1995 and serves as
Executive Vice President of Finance. Prior to that, he served as Senior Vice
President and Treasurer. Prior to 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.

   Charles P. Richardson, 51, joined the Company in April, 1993 and serves as
the Company's and Bank's Executive Vice President, Corporate Development. Prior
to that, he served as Executive Vice President and Chief Financial Officer.
Prior to his joining the Company, Mr. Richardson was Executive Vice President
and Chief Financial Officer for Dollar Dry Dock Bank (1985-1992) and was a
banking and thrift industry consultant (1992-1993). Mr. Richardson holds a
business degree in Accounting from Temple University.

   Ramesh Shah, 49, joined the Bank in June 1996 as Executive Vice President,
Marketing and Product Development. Prior to joining the Bank, Mr. Shah was
Senior Vice President of NatWest Bancorp. (1994 - 1996); Senior Vice President
of Shearson Lehman Brothers (1991 - 1994) 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.



                                       31
<PAGE>

                                     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 March 23, 1998, 85,245,482 shares of common stock
were issued and outstanding, and held by approximately 4,412 holders of record.
The Company paid a cash dividend of $0.125 per share in March, June, September
and December 1997. In 1996 the Company paid a cash dividend of $0.10 per share
in February, May, August and November.

      Information relating to the high, low and quarter-end closing sales prices
of the Common Stock appears on page 44 in the Company's 1997 Annual Report to
Shareholders and is incorporated herein by reference.

      On March 4, 1998, the Company completed a 2-for-1 split of its common
stock. Accordingly, the financial statements for all years presented have been
restated to reflect the impact of the stock split.

ITEM 6.  SELECTED FINANCIAL DATA

      The above-captioned information appears under "Five Year Selected
Consolidated Data" on pages 11 and 12 in the Company's 1997 Annual Report to
Shareholders and is incorporated herein by reference.

      In addition, the Company's ratios of average equity to average assets is
10.19%, 10.58%, and 17.00% for the years ended December 31, 1997, 1996 and 1995,
respectively.

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

      The above captioned information appears under "Management's Discussion and
Analysis" on pages 13 through 21 in the Company's 1997 Annual Report to
Shareholders and is incorporated herein by reference.


      Impact of the Year 2000

      The Year 2000 issue is the result of many computer programs that were
written using two digits rather than four to define an applicable year. Any of
the computer programs used by the Company, its suppliers or outside service
providers that have date-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in a system failure
or miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions or engage in normal
business activities.

      The Company has determined that it will be required to modify or replace
portions of its software so that its computer system will properly utilize dates
beyond December 31, 1999. The Company presently believes that with modifications
to existing software and conversions to new software, the Year 2000 issue will
be mitigated. However, if such modifications and conversions are not made, or
are not completed on a timely basis, the Year 2000 issue could have a material
impact on the operations of the Company.

      The Company has also initiated formal communications with all of its
suppliers and service providers (including hardware, software, processing, voice
and data communication, facility components and services) to determine the
extent to which the Company is vulnerable to those third parties' failure to
remediate their respective Year 2000 issue. The Company will work with each of
these third parties, to the extent it can to facilitate remediation of the Year
2000 issue and will actively participate in testing of each system to ensure
Year 2000 compliance. However, there can be no guarantee that the systems of
third parties upon which the Company relies will be timely remediated, or that a
failure to remediate by a third party would not have a material adverse effect
on the Company. The Company will utilize both internal and external resources
for the Year 2000 project.



                                       32
<PAGE>

      The Company's total Year 2000 project cost includes estimated costs and 
time associated with the impact of a third party's Year 2000 issue, together 
with the costs of outside consultants and the purchase of replacement 
programs. The total cost of the Year 2000 project is estimated to be 
immaterial to the Company's financial statements. Such costs will be funded 
through operating cash flows and expensed as incurred. The current status and 
costs of the project are based on management's best estimates, which were 
derived utilizing numerous assumptions of future events, including the 
continued availability of certain resources, third party modification plans 
and other factors. However, there can be no guarantee that these estimates 
will be achieved and actual results could differ materially from those plans. 
Specific factors that might cause such material differences include, but are 
not limited to, the availability and cost of personnel trained in this area, 
the ability to locate and correct all relevant computer codes, the failure of 
outside third parties to remediate their Year 2000 issue on a timely basis, 
and similar uncertainties.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The above captioned information appears on pages 22 through 44 in the
Company's 1997 Annual Report to Shareholders and is incorporated herein by
reference.

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

      Information contained in the Company's Current Report on Form 8-K, which
was filed with the SEC on March 12, 1996, is incorporated herein by reference.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      Information presented under the heading "Information with Respect to
Nominees and Continuing Directors" on pages 3 through 5 in the Company's
definitive Proxy Statement for its Annual Meeting of Shareholders to be held on
May 1, 1998, which was filed with the SEC on March 19, 1998, is incorporated
herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

       Information relating to executive compensation included under the heading
"Executive Compensation" on pages 10 through 12 (excluding the Stock Performance
Graph on page 12) in the Company's Definitive Proxy Statement for its Annual
meeting of Shareholders to be held on May 1, 1998, which was filed with the SEC
on March 19, 1998, is incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

       Information relating to security ownership of certain beneficial owners
and management included under the heading "Securities Owned by Directors and
Executive Officers" on page 6 in the Company's Definitive Proxy Statement for
its Annual Meeting of Shareholders to be held on May 1, 1998, which was filed
with the SEC on March 19, 1998, is incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Information regarding certain relationships and related transactions is
included under the heading "Transactions with Certain Related Persons" on page
17 in the Company's Definitive Proxy Statement for its Annual Meeting of
Shareholders to be held on May 1, 1998, which was filed with the SEC on March
19, 1998, is incorporated herein by reference.



                                       33
<PAGE>

                                     PART IV
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
                           GreenPoint Financial Corp.
            List of Exhibits (filed herewith unless otherwise noted)

(a) The following documents are filed as a part of this report:

      (1)   Consolidated Financial Statements of the Company are incorporated by
            reference to the following indicated pages of the 1997 Annual Report
            to Shareholders:


<TABLE>
<CAPTION>
                                                                            Pages
                                                                            -----
<S>                                                                         <C>
Consolidated Statements of Financial Condition as of December 31, 1997
and 1996 ...............................................................     22

Consolidated Statements of Income for the years ended December 31,
1997, 1996 and 1995 ....................................................     23

Consolidated Statements of Changes in Stockholders' Equity for the years
ended December 31, 1997, 1996 and 1995 .................................     24

Consolidated Statements of Cash Flows for the years ended December 31,
1997, 1996 and 1995 ....................................................     25

Notes to the Consolidated Financial Statements .........................     27
</TABLE>



                                       34
<PAGE>

Exhibit
Number
-------

 2.1      Purchase of Assets and Liability Assumption Agreement by and between
          Home Savings of America, FSB, and GreenPoint Bank (1)
 3.1      Certificate of Incorporation of GreenPoint Financial Corp. (2)
 3.2      Bylaws of GreenPoint Financial Corp.
 3.3      Restated Organization Certificate of GreenPoint Bank (3)
 3.4      Bylaws of GreenPoint Bank
10.1      Employment Agreement and Change of Control Agreement between
          GreenPoint Financial Corp., GreenPoint Bank and Bharat B. Bhatt (4)
10.2      Amended Employment Agreement between GreenPoint Financial Corp.,
          GreenPoint Bank and Thomas S. Johnson (5)
10.3      Change of Control Agreement between GreenPoint Financial Corp.,
          GreenPoint Bank and Charles P. Richardson
10.4      GreenPoint Financial Corp. Amended and Restated 1994 Stock Incentive
          Plan (6)
10.5      GreenPoint Financial Corp. 1994 Non-Employee Directors Stock Option
          Plan (7)
10.6      GreenPoint Financial Corp. 1994 Annual Incentive Plan (8)
10.7      GreenPoint Financial Corp. 1994 Long Term Incentive Plan (9)
10.8      GreenPoint Bank Recognition and Retention Plan for Employees (10)
10.9      GreenPoint Bank Retirement Plan for Independent Directors (11)
10.10     GreenPoint Bank 1993 Directors' Deferred Fee Stock Unit Plan (12)
10.11     GreenPoint Bank Employee Protection Plan for Officers (13)
10.12     GreenPoint Bank Employee Protection Plan for Staff Members (14)
11.1      Statement Regarding Computation of Per Share Earnings
12.1      Statement Regarding Computation of Ratios
13.1      Annual Report to Shareholders for Fiscal Year ended December 31, 1997
21.1      Subsidiaries of the Company
23.1      Consents of Independent Accountants 
23.2      Reports of Independent Accountants
27.1      Financial Data Schedule

---------------
(1)  Incorporated by reference to Exhibit 2.1 to the Company's Quarterly Report
     on Form 10-Q, dated June 30, 1995
(2)  Incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report
     on Form 10-Q, dated March 31, 1995
(3)  Incorporated by reference to Exhibit 3.3 to the 1994 10-K
(4)  Incorporated by reference to Exhibit 10.1 to the 1996 10-K
(5)  Incorporated by reference to Exhibit 10.1 to the 1994 10-K
(6)  Incorporated by reference to Exhibit 10.3 to the 1994 10-K
(7)  Incorporated by reference to Exhibit 10.4 to the 1994 10-K
(8)  Incorporated by reference to Exhibit 10.5 to the 1994 10-K
(9)  Incorporated by reference to Exhibit 10.6 to the 1994 10-K
(10) Incorporated by reference to Exhibit 10.7 to the 1994 10-K
(11) Incorporated by reference to Exhibit 10.8 to the 1994 10-K
(12) Incorporated by reference to Exhibit 10.9 to the 1994 10-K
(13) Incorporated by reference to Exhibit 10.10 to the 1994 10-K
(14) Incorporated by reference to Exhibit 10.11 to the 1994 10-K

                                       35

<PAGE>

Financial Statements Schedules
     The Schedules have been omitted as the required information is either not
applicable or has been included in the Notes to the Consolidated Financial
Statements in the Company's Annual Report to Shareholders.

Reports on Form 8-K

    No current reports on Form 8-K were filed by the Company with the Securities
and Exchange Commission during the quarter ended December 31, 1997.





                                       36
<PAGE>

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:
                                      ------------------------------
                                      Thomas S. Johnson
                                      Chairman of the Board
                                      and Chief Executive Officer

Dated: March 11, 1998

      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 and on the dates indicated.

<TABLE>
<CAPTION>

Signature                                 Title                           Date
---------                                 -----                           -----
<S>                               <C>                                    <C>

 /s/ Thomas S. Johnson
----------------------------      Chairman of the Board                  3/11/98 
     Thomas S. Johnson            and Chief Executive Officer

 /s/ Bharat B. Bhatt
----------------------------      Member of the Board,
     Bharat B. Bhatt              President and Chief                    3/11/98
                                  Operating Officer

 /s/ Edward C. Bessey
----------------------------      Director                               3/11/98
     Edward C. Bessey

 /s/ Dan F. Huebner
----------------------------      Director                               3/11/98
     Dan F. Huebner


----------------------------      Director                               3/11/98
     William M. Jackson

</TABLE>


                                       37
<PAGE>

<TABLE>
<CAPTION>

Signature                                 Title                           Date
---------                                 -----                           -----
<S>                               <C>                                    <C>

 /s/ Susan J. Kropf
----------------------------      Director                               3/11/98
     Susan J. Kropf

 /s/ Robert M. McLane
----------------------------      Director                               3/11/98
     Robert M. McLane

 /s/ Charles B. McQuade
----------------------------      Director                               3/11/98
     Charles B. McQuade

 /s/ Alvin N. Puryear
----------------------------      Director                               3/11/98
     Alvin N. Puryear

 /s/ Robert P. Quinn
----------------------------      Director                               3/11/98
     Robert P. Quinn

 /s/ Edward C. Schmults
----------------------------      Director                               3/11/98
     Edward C. Schmults

 /s/ Wilfred O. Uhl
----------------------------      Director                               3/11/98
     Wilfred O. Uhl

 /s/ Robert F. Vizza
----------------------------      Director                               3/11/98
     Robert F. Vizza
</TABLE>

                                       38
<PAGE>

<TABLE>
<CAPTION>

Signature                                 Title                           Date
---------                                 -----                           -----
<S>                               <C>                                    <C>
 /s/ Jules Zimmerman
----------------------------      Director                               3/11/98
     Jules Zimmerman

 /s/ Charles P. Richardson
----------------------------      Executive Vice President               3/11/98
     Charles P. Richardson

 /s/ Jeffrey R. Leeds
----------------------------      Executive Vice President,              3/11/98
     Jeffrey R. Leeds             Finance (Principal Financial
                                  Officer)

 /s/ Mary Beth Farrell
----------------------------      Senior Vice President                  3/11/98
     Mary Beth Farrell            and Comptroller
</TABLE>

                                       39