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                                 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, 1998

                                       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 
incorporation or organization)           (I.R.S. employer identification number)

   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, 1999: Common stock par value $0.01 per share,
$2,639,300,664.

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, 1999 which
was $33.00 as reported in the Wall Street Journal on March 24, 1999. The number
of shares of the registrant's Common Stock issued and outstanding as of March
23, 1999 was 96,631,642 shares.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement for the Annual Meeting of
Shareholders to be held on May 7, 1999 and the Annual Report to Shareholders for
fiscal 1998 are incorporated herein by reference - Parts II, III and IV.

<PAGE>



                                TABLE OF CONTENTS
                                                                            Page
                                                                             No.
                                                                            ----
                                     PART I

ITEM 1.  BUSINESS...........................................................   1
    General.................................................................   1
    Mortgage Banking Activities ............................................   2
    Manufactured Housing Activities.........................................   5
    Delinquent Loans and Foreclosed Assets..................................  10
    Allowance for Possible Loan Losses......................................  13
    Consumer Banking Activities.............................................  15
    Competition.............................................................  15
    Market Risk Management..................................................  16
    Liquidity Management....................................................  16
    Securities Investment Activities........................................  16
    Sources of Funds........................................................  19
    Subsidiary Activities...................................................  21
    Savings Bank Life Insurance.............................................  22
    Personnel...............................................................  23
    Federal Taxation........................................................  23
    State and Local Taxation................................................  24
    Bank Regulation and Supervision.........................................  24

ITEM 2.  PROPERTIES.........................................................  27

ITEM 3.  LEGAL PROCEEDINGS..................................................  27

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................  28

ITEM 4A. EXECUTIVE OFFICERS.................................................  28

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS................................................  29

ITEM 6.  SELECTED FINANCIAL DATA............................................  29

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS................................  29

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ON MARKET RISK............  29

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........................  29

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE................................  29

<PAGE>

                                                                            Page
                                                                             No.
                                                                            ----
                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT................  30

ITEM 11.  EXECUTIVE COMPENSATION............................................  30

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT........................................................  30

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS....................  30

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
          FORM 8-K..........................................................  31

<PAGE>

                                     PART I

ITEM 1. BUSINESS

General

      GreenPoint Financial Corp. (the "Company" or "GreenPoint") is a bank
holding company organized under the laws of the state of Delaware and registered
under the Bank Holding Company Act of 1956, as amended.

      The Company provides a variety of financial services, primarily through
its bank subsidiary, GreenPoint Bank, a New York State chartered savings bank
(the "Bank"), GreenPoint Mortgage Corp. ("GreenPoint Mortgage "), a national
home mortgage banking company wholly-owned by the Bank and headquartered in
Charlotte, North Carolina, and GreenPoint Credit Corp. ("GreenPoint Credit"), a
Delaware corporation wholly-owned by the Bank and headquartered in San Diego,
California.

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

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

      On December 9, 1998, the Company announced a definitive agreement to
acquire Headlands Mortgage Company ("Headlands") in a stock transaction valued
at approximately $473 million. The acquisition will be accounted for as a
tax-free pooling of interests, with 0.62 shares of the Company's stock being
exchanged for each share of Headlands stock. The acquisition is expected to be
completed by the end of the first quarter of 1999.

Forward-Looking Statements

      This Annual Report on Form 10-K contains certain forward-looking
statements which are based on management's current expectations. These
forward-looking statements include information concerning possible or assumed
future results of operations and business plans, including those relating to
earnings growth, revenue growth, expense levels, and other business operations.
Forward-looking statements involve inherent risks and uncertainties. We caution
you that a number of important factors could cause actual results to differ
materially from those contained in any forward-looking statement. Such factors
include, but are not limited to: risks and uncertainties related to execution of
pending or future acquisitions, including integration activities and the ability
of the Company to realize the revenue growth and expense reductions assumed in
such acquisitions; changes in interest rates, loan demand, real estate values,
and competition, which can affect the ability of the Company to meet its
origination goals; the level of defaults and prepayments on loans made by the
Company and its affiliates; changes in accounting principles, policies, and
guidelines; adverse changes or conditions in capital or financial markets, which
can affect the ability of the Company and its affiliates to sell loans in the
secondary market at favorable prices; changes in any applicable law, rule,
regulation or practice with respect to tax or legal issues; and other economic,
competitive, governmental, regulatory, and technological factors affecting the
Company's operations, pricing, products, and services. The forward-looking
statements are made as of the date of this release, and the Company assumes no
obligation to update the forward-looking statements or to update the reasons why
actual results could differ from those projected in the forward-looking
statements.


                                       1
<PAGE>

Mortgage Banking Activities

Products and Services

      The Company, through its mortgage banking subsidiary, specializes in a
limited documentation mortgage loan product ("No Doc" loans). These loans serve
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 return, the
borrower receives more expedient loan processing by virtue of providing less
income and asset information, as compared to loans underwritten in conformance
with Fannie Mae ("FNMA") standards. These loans are typically held for
investment in the Company's loan portfolio. As a result of this strategy,
combined with strict appraisal requirements, GreenPoint Mortgage 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.

      GreenPoint Mortgage originates both adjustable rate ("ARM") and fixed rate
mortgage loans, the amounts and maturities of which are dependent upon customer
demand and market rates of interest. The most significant origination volume
relates to loans secured by one to four family residences including condominiums
and planned unit developments.

      GreenPoint Mortgage'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 generally do not have loan to value ratios in excess of 75%. 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, GreenPoint Mortgage prices loans according to a risk based system or
requires borrowers to have a higher equity position in the property securing the
loan. GreenPoint Mortgage's No Doc lending program accounted for 99% of total
mortgage originations.

      As compared to other lending institutions which rely more heavily upon a
borrower's income and demonstrated ability to repay the loan, GreenPoint
Mortgage 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) prepared or reviewed by in-house
appraisers who are state licensed real estate appraisers and are subject to two
additional levels of appraisal and underwriting review; or are (2) conducted by
one or more appraisers, or appraisal services, which are chosen directly by the
Company from the Company's approved list of independent appraisers.

      One-to Four-Family Mortgage Lending. GreenPoint Mortgage currently offers
one-to four-family mortgage 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. Generally, the maximum loan
amount of a No Doc loan is $1.0 million. Additionally, credit reports are
obtained on all borrowers to ascertain the credit history of the borrower.

      GreenPoint Mortgage also originates 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 70% of the lower of
the appraised value or purchase price for loans involving the purchase or
refinance of the property and subject to a lower limit of up to 60% 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, GreenPoint Mortgage requires the submission of rental
information and considers such information in arriving at its underwriting
determination. GreenPoint Mortgage charges higher rates of interest with respect
to these loans as compared to its other one-to four-family loans secured by
owner-occupied properties and may


                                       2
<PAGE>

impose penalties for early repayment. At December 31, 1998 non-owner occupied
loans totaled approximately 7% of loans held for investment.

      GreenPoint Mortgage offers fixed rate mortgage loans with terms of 10 to
30 years. 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, 1998, GreenPoint Mortgage originated $2.2 billion of
fixed rate loans, which primarily consisted of one-to four-family residential
mortgage loans.

      GreenPoint Mortgage offers ARM loans 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 GreenPoint
Mortgage 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
original loan rate at the time of commitment over the term of the loan. Such
loans also have interest rate floors which limit the minimum amount the interest
rate payable may decline. The product line includes 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
GreenPoint Mortgage's fully indexed rate, which varies by ARM adjustment period.
For the year ended December 31, 1998, GreenPoint Mortgage originated $0.5
billion of ARM loans, which primarily consisted of one-to four-family
residential loans. At December 31, 1998, 23.5% of GreenPoint Mortgage's one-to
four-family residential mortgage loans consisted of ARM loans.

      The volume and types of ARM loans originated have been affected by such
market factors as the level of interest rates, competition, and consumer
preferences. GreenPoint Mortgage will continue to offer ARM loans; however,
there can be no assurance that in the future GreenPoint Mortgage 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 GreenPoint Mortgage's loan
portfolio serves to reduce the exposure to increases in interest rates. However,
ARM loans generally pose credit risks and prepayment 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, GreenPoint Mortgage'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.

      During 1998, GreenPoint Mortgage expanded its product offerings to include
loans specifically designed to be sold to third parties on a servicing released
basis. This program offers loans in excess of 75% LTV to a maximum of 90% LTV.
These programs place a greater reliance on the borrower's past credit history.
Loans are offered in two forms: "With Asset Verification" and "Without Asset
Verification". Asset verification refers to verification of liquid assets held
in a depository institution.

      GreenPoint Mortgage also offers home equity loans and 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. Home equity fixed rate loans are available with No Income, as
well as Full Income verification, for terms from 5 to 15 years in amounts
ranging from $20,000 up to $750,000. Depending on the balance of the first
mortgage, the loan amount and verification method, a maximum LTV of 80% is
available. As of December 31, 1998, there were 1,593 home equity lines
outstanding with loans drawn against such lines totaling $82.1 million, or 0.9%,
of total loans held for investment.

      GreenPoint Mortgage's mortgage loans generally include due-on-sale clauses
which provide for the contractual right to deem the loan immediately due and
payable in the event that the borrower transfers ownership of the property
without GreenPoint Mortgage's consent. Such due-on-sale provisions are enforced
within the applicable regulations and guidelines imposed by federal and state
laws and secondary market purchasers.

      Multi-Family Lending. GreenPoint Mortgage 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, 1998, GreenPoint
Mortgage had 4,881 of such loans with an average loan balance of $121,000.
Multi-family loans are generally made with terms of 5 to 20 years for fixed rate
loans and 5 to 25 years for ARM loans, in amounts up to a maximum of $3.0
million. Product enhancements implemented during the year included a 20 year
fixed rate mortgage and a 5 year ARM with a 20 year term. Loans on multi-family
properties are made in amounts up to 70% of the appraisal value or purchase
price of the property for loans to purchase the property and up to 65%


                                       3
<PAGE>

of the appraised value for loans to refinance an existing mortgage. The
underwriting guidelines for multi-family loans are the same standards and
procedures applicable to its one-to four-family No Doc loans. In addition,
documentation regarding rental and vacancy levels, rental income, property
expense statements and tax return information must be submitted. GreenPoint
Mortgage verifies rental income of the property but does not verify the
borrower's personal income levels, unless the loan amount exceeds $1.0 million,
in which case the borrower's financial statements are required. GreenPoint
Mortgage 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. GreenPoint Mortgage also originates
commercial real estate loans located in the New York metropolitan area.
Commercial real estate loans are offered in amounts up to $1.0 million, under
the same terms and underwriting guidelines applicable to its multi-family loans.
Loans in excess of $1.0 million are made on an exception basis. There are
penalties imposed for early repayments. As of December 31, 1998, there were
3,925 commercial real estate loans with an average balance of $145,000. The
largest commercial real estate loan in GreenPoint Mortgage's portfolio at
December 31, 1998 had an outstanding balance of $4.3 million, secured by a
non-residential building located in New York.

      Origination Sources. During 1998, the New York metropolitan sales network
continued to be the largest originator of loans. On the national front, we
continued to expand into new markets moving into 14 locations across the United
States. This brings the total number of cities covered to 28.

      Loan originations are primarily obtained from GreenPoint Mortgage's
network of registered mortgage brokers, licensed mortgage bankers, attorneys and
other real estate professionals. GreenPoint Mortgage'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. Based on licensing and other criteria, members may
submit loans through the program in various capacities. Eligible members may
table fund or process one-to four-family residential loans on behalf of
GreenPoint Mortgage, while others simply refer a completed loan application for
processing. In all cases, GreenPoint Mortgage requires that the appraisal and
underwriting be performed by its in house appraisers and underwriters, thereby
controlling key components of risk. As of December 31, 1998, there were 1,058
Advantage Program members.

      GreenPoint Mortgage's Lender Associate Program consists of 3,751 approved
mortgage brokers operating in 47 states. These brokers are generally small to
mid-sized mortgage originators, which rely on GreenPoint Mortgage 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 197 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, 1998, 92.6% of total mortgage loans were
originated through these programs .

      Student Loans and Other Lending. The Bank 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 Bank generally sells in the
secondary market upon the borrower's commencement of repayment of the loan,
these other loans are originated for retention. The Bank does not currently
originate or purchase other types of business or consumer loans such as loans
secured by automobiles, unsecured business loans or credit card loans.

Credit Parameters

      Loan amount limits, maximum loan-to-value ratios and loan pricing are
guided by an evaluation of a borrower's credit history and the loan purpose.
This evaluation results in a borrower being classified in a particular loan
level category ranging from one to five, to which lending parameters have been
ascribed by GreenPoint Mortgage. In making this determination, GreenPoint
Mortgage obtains credit verification from three 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 loans and revolving
lines of credit, collection and charge-off experience, and prior bankruptcies
and foreclosures. GreenPoint Mortgage also considers a credit score ascribed to
the borrower under a credit evaluation methodology developed by Fair, Isaac and
Company ("FICO").


                                       4
<PAGE>

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.

      Due to GreenPoint Mortgage'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, particularly with respect to its No Doc loan
programs, GreenPoint Mortgage has established a comprehensive in-house appraisal
system made up of 96 staff appraisers, all of whom are state licensed. From time
to time, third party independent appraisers are utilized. GreenPoint Mortgage's
appraisal system generally involves a three-tier review for every mortgage loan
originated, consisting of an appraisal conducted by a licensed appraiser, which
is then reviewed by a senior appraiser or 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. GreenPoint Mortgage 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,
GreenPoint Mortgage has made no loans in excess of $6.5 million.

Loan Servicing

      At December 31, 1998, GreenPoint Mortgage serviced approximately 95,000
mortgage loans with outstanding principal balances of $9.8 billion, including
$9.2 billion of loans in its own portfolio, and $0.6 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
balance of the loans.

      GreenPoint Mortgage's 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, GreenPoint Mortgage has implemented programs which allow it to focus
its early 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. GreenPoint Mortgage believes
these efforts have enabled it to minimize losses associated with these types of
loans.

Manufactured Housing Activities

Products and Services

      During 1998, the Company expanded its lending activities through the
acquisition of BankAmerica Housing Services which is the second largest lender
nationally in the manufactured housing finance industry. The Company was renamed
GreenPoint Credit. GreenPoint Credit originates a variety of fixed and variable
term loans in the manufactured housing market. GreenPoint Credit serves 48
states through its principal offices in San Diego, California and service
centers throughout the United States. Manufactured housing ("MH") or a
"manufactured home" is a structure, transportable in one or more sections, which
is designed to be a dwelling with or without a permanent foundation. MH does not
include modular housing or recreational vehicles.

      GreenPoint Credit pools and securitizes substantially all of the loans it
originates, retaining the servicing on these loans. Such pools are structured
into asset-backed securities which are primarily sold in the public securities
markets. GreenPoint Credit services these loans, collecting payments from the
borrower and remitting principal and interest payments to the holder of the
contract, or investor certificate backed by the loans. The Company securitized
and sold $728 million of manufactured housing loans during the fourth quarter of
1998.

      Manufactured housing financing transactions are originated on either an
"indirect" or "direct" basis. All direct or indirect originations are written on
forms provided or approved by GreenPoint Credit and are originated or purchased
on an individually approved basis in accordance with GreenPoint Credit
underwriting guidelines. Under an "indirect" financing transaction, a dealer
sells a product to a customer and enters into a sales contract with the customer
evidencing a monetary obligation and providing security for that obligation.
Upon satisfactory review, GreenPoint Credit purchases such sales contracts from
retailers. If a retailer wishes to make such financing available to its
customers, the retailer would apply for retailer approval. Upon satisfactory
results of GreenPoint Credit's investigation of the retailer's creditworthiness
and general business reputation, GreenPoint Credit and the retailer would enter
into a retailer agreement.


                                       5
<PAGE>

      Under a "direct" origination, GreenPoint Credit and the borrower are
direct parties to the loan documentation which evidences the borrower's
obligation to GreenPoint Credit. GreenPoint Credit originated $656 million of
manufactured housing loans in the fourth quarter of 1998, 92% indirectly
purchased from dealers and 8% directly originated.

      GreenPoint Credit offers a variety of "Home Only" and "Land/Home" products
with fixed and variable rate options. The Home Only loans are secured by the
manufactured home and is a conventional loan program for new and previously
owned manufactured homes. "Land/Home" loans are secured by both the manufactured
home and the land.

Credit Parameters

      GreenPoint Credit believes that the creditworthiness of a potential
borrower should be the most important criterion in determining whether to
approve the purchase or origination of a loan. The borrower's creditworthiness
is measured by custom credit scorecards which were developed based on GreenPoint
Credit's extensive portfolio in conjunction with Fair Isaac & Company.
GreenPoint Credit continually monitors the performance of its scorecards to
ensure that they are correctly rank-ordering the borrowers' credit risk. The
borrowers' credit history, employment history, residence history and debt to
income ratio are also reviewed by GreenPoint Credit personnel as part of the
underwriting decision. GreenPoint Credit's lending criteria also varies by
product type to reflect the risk associated with each product.

Loan Servicing

      GreenPoint Credit's servicing responsibilities include collecting
principal and interest payments, taxes, insurance premiums and other payments
from obligors and, when such loans are not owned by GreenPoint Credit, remitting
principal and interest payments to the owners. Collection procedures which are
managed at the regional office level include repossession and resale of
manufactured homes securing defaulted loans (and foreclosure if land is
involved). GreenPoint Credit will enter into workout agreements with obligors
under certain defaulted loans, if deemed advisable. Although decisions as to
whether to repossess any manufactured home are made on an individual basis,
GreenPoint Credit's general policy is to institute repossession procedures
promptly after regional office personnel determine that it is unlikely that a
defaulted loan will be brought current, and thereafter to diligently pursue the
resale of such manufactured homes.

      GreenPoint Credit services loans on behalf of other entities and its own
portfolio. In conjunction with the purchase of BAHS, GreenPoint Credit acquired
$108.3 million of servicing assets associated with servicing loans for
BankAmerica Corporation ("BAC"). In addition, GreenPoint Credit sold $728
million of manufactured housing loans in one securitization transaction
resulting in retained servicing assets of $15.0 million. At December 31, 1998,
GreenPoint Credit's servicing assets totaled $115.1 million, relating primarily
to the underlying loan portfolio serviced for BAC. GreenPoint Credit serviced
approximately 388,700 manufactured housing loans owned by other entities with an
outstanding principal balance of $10.5 billion at December 31, 1998.

      GreenPoint Credit receives a servicing fee equal to 1% of the outstanding
principal balance of each loan serviced for customers. Servicing fees are
collected by GreenPoint Credit out of the borrowers monthly payments. In
addition, GreenPoint Credit recognizes interest income on trust accounts and
late charge fee income on loans serviced for other entities. GreenPoint Credit
is not responsible for repossession costs incurred on loans serviced for other
entities. In 1998, GreenPoint Credit's revenues generated from loan servicing
totaled $21.7 million, primarily as a result of the revenue stream received from
the loan portfolio serviced for BAC.

      At December 31, 1998, GreenPoint Credit serviced approximately 20,300
manufactured housing loans in its own portfolio with an outstanding principal
balance of $764.3 million. GreenPoint Credit does not recognize service fee
income for loans serviced in its own portfolio.

      GreenPoint Credit sells its portfolio of loans to a real estate mortgage
investment conduit ("REMIC") or owner trust, that issues classes of certificates
representing undivided ownership interests in the income stream to the trust.
The agreements between GreenPoint Credit and the REMIC typically require
GreenPoint Credit to advance interest (but not principal) on delinquent loans to
holders of the senior interests in the related REMIC trust.


                                       6
<PAGE>

Loans held for Investment Portfolio

      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.

      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,
                                                -----------------------------------------------------------------
                                                       1998                   1997                   1996
                                                -------------------    -------------------    -------------------
                                                            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                           $8,022.9       85.3%   $7,681.3       86.0%   $6,394.4       85.9%
   Multi-family                                    594.4        6.3       621.0        7.0       545.5        7.3
   Commercial                                      573.8        6.1       537.1        6.0       467.9        6.3
   Home equity loans                                82.1        0.9        66.3        0.7        16.2        0.2
                                                --------   --------    --------   --------    --------   --------
Total mortgage loans held for investment         9,273.2       98.6     8,905.7       99.7     7,424.0       99.7
                                                --------   --------    --------   --------    --------   --------
Other loans:
    Loans secured by depositors' funds              24.0        0.3        30.1        0.3        23.5        0.3
    Construction in process                         50.6        0.5          --         --          --         --
    Recreational vehicle loans                      23.7        0.3          --         --          --         --
    Manufactured housing loans                      28.9        0.3          --         --          --         --
    Home improvement loans                            --         --          --         --          --         --
                                                --------   --------    --------   --------    --------   --------
Total other loans                                  127.2        1.4        30.1        0.3        23.5        0.3
                                                --------   --------    --------   --------    --------   --------
Total loans receivable held for investment       9,400.4      100.0%    8,935.8      100.0%    7,447.5      100.0%
                                                --------   --------    --------   --------    --------   --------

Less:
Net deferred loan origination fees and
  unearned discount                                 14.3                   31.2                   48.2
Allowance for possible loan losses                 113.0                  109.0                  105.0
                                                --------               --------               --------
    Loans receivable held for investment, net   $9,273.1               $8,795.6               $7,294.3
                                                ========               ========               ========
</TABLE>

<TABLE>
<CAPTION>
                                                               December 31,
                                                ------------------------------------------
                                                       1995                   1994
                                                -------------------    -------------------
                                                            Percent                Percent
                                                Amounts    of Total    Amounts    of Total
                                                --------   --------    --------   --------
                                                          (Dollars in millions)
<S>                                             <C>            <C>     <C>            <C>
Loans receivable held for investment:
Mortgage loans:
   One-to four-family                           $5,135.4     85.2 %    $4,933.9       85.7 %
   Multi-family                                    475.9        7.9       456.9        7.9
   Commercial                                      376.8        6.3       349.7        6.1
   Home equity loans                                 4.7        0.1        10.1        0.2
                                                --------   --------    --------   --------
Total mortgage loans held for investment         5,992.8       99.5     5,750.6       99.9
                                                --------   --------    --------   --------
Other loans:
    Loans secured by depositors' funds              29.5        0.5         7.7        0.1
    Construction in process                           --         --          --         --
    Recreational vehicle loans                        --         --          --         --
    Manufactured housing loans                        --         --          --         --
    Home improvement loans                           0.1         --         0.1         --
                                                --------   --------    --------   --------
Total other loans                                   29.6        0.5         7.8        0.1
                                                --------   --------    --------   --------
Total loans receivable held for investment       6,022.4      100.0%    5,758.4      100.0%
                                                --------   --------    --------   --------

Less:
Net deferred loan origination fees and
  unearned discount                                 58.3                   61.3
Allowance for possible loan losses                 105.5                  103.0
                                                --------               --------
    Loans receivable held for investment, net   $5,858.6               $5,594.1
                                                ========               ========
</TABLE>


                                       7
<PAGE>

      As of December 31, 1998, 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%.

Loans Held for Sale

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

<TABLE>
<CAPTION>
                                                              December 31,
                                              -------------------------------------------
                                               1998      1997     1996     1995     1994
                                              ------    ------   ------   ------   ------
                                                           (Dollars in millions)
<S>                                           <C>       <C>      <C>      <C>      <C>   
Loans receivable held for sale:               $  0.6    $  1.3   $  0.3   $168.2   $  0.5
   Residential mortgage loans                    3.3       4.2      4.5      6.9     10.6
   Guaranteed student loans                    535.2        --       --       --       -- 
   Manufactured housing loans                  139.1        --       --       --       -- 
   Manufactured housing land/home loans
   Deferred loan origination fees and
       Unearned discount                       (10.8)       --       --       --       -- 
                                              ------    ------   ------   ------   ------
        Loans receivable held for sale, net   $667.4    $  5.5   $  4.8   $175.1   $ 11.1
                                              ======    ======   ======   ======   ======
</TABLE>

Loan Sales

      GreenPoint sells the loans it purchases or originates through either (1)
securitization, which involves the private placement or public offering of
pass-through asset-backed securities; or (2) whole loan sales, which involves
selling pools of loans to individual purchasers. This approach allows GreenPoint
to capitalize on favorable conditions in either the securitization or whole loan
sale market when loan production is sold. In addition, this dual approach allows
GreenPoint to diversify its exposure to the volatility of the capital markets.

Securitization. The primary funding strategy of GreenPoint Credit is to
securitize manufactured housing loans originated or purchased. During the 4th
quarter of 1998, GreenPoint Credit sold $728 million manufactured housing loans
in one securitization transaction. Management has structured the operations and
processes specifically for the purpose of efficiently originating, purchasing,
underwriting and servicing loans for securitization in order to meet the
requirements of rating agencies, credit enhancers, and investors.

      The purchasers of the pass-through certificates issued in the 1998
securitization transaction received a credit-enhanced security. Credit
enhancement on the 1998 security was achieved by (1) the Bank's subordination of
their residual excess spread, (2) corporate guarantee issued by the Bank and
backed by a letter of credit, (3) an insurance policy by a monoline insurance
company. As a result, the 1998 offering of the senior REMIC pass-through
certificates has received ratings of AAA from Standard & Poor's and Aaa from
Moody's Investor Service.

Whole Loan Sales. Mortgage loans in excess of 75% LTV originated outside of
Metropolitan New York City, and fixed rate loans originated through the
correspondent channel, may be sold into the secondary market. All loans
originated in Metropolitan New York City are held in the Company's own
portfolio. The Company also originates guaranteed student loans which are held
for sale.


                                       8
<PAGE>

      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, 1998. The table does not include prepayments or scheduled
principal amortization. Prepayments and scheduled principal amortization on
mortgage loans totaled $2.3 billion for the year ended December 31, 1998.

<TABLE>
<CAPTION>
                                                  December 31, 1998
                          --------------------------------------------------------------------
                                      Mortgage Loans
                          ----------------------------------------
                          One-to Four-                                  Other      Total Loans
                             Family     Multi-Family   Commercial       Loans      Receivable
                          ------------  ------------   ----------       -----      ----------
                                                 (Dollars in millions)
<S>                         <C>           <C>           <C>           <C>           <C>     
Amounts due (1):
  Within one year           $    6.2      $    1.8      $    2.2      $   84.6      $   94.8
  One to five years            173.0          52.2          56.9          13.9         296.0
  Over five years            7,700.5         506.9         489.0         706.3       9,402.7
                            --------      --------      --------      --------      --------
     Total amounts due      $7,879.7      $  560.9      $  548.1      $  804.8      $9,793.5
                            ========      ========      ========      ========      ========
</TABLE>

(1)    Does not include non-accrual loans.

      The following table sets forth, at December 31, 1998, the dollar amount of
all fixed rate loans contractually due and adjustable rate loans repricing after
December 31, 1999.

                                        Due or Repricing After December 31, 1999
                                        ----------------------------------------
                                            Fixed      Adjustable       Total
                                        -----------  -------------   -----------
                                                  (Dollars in millions)
Mortgage loans (1):
   One-to four-family                     $5,804.5      $  105.4      $5,909.9
   Multi-family                              548.2           0.3         548.5
   Commercial                                533.0           0.3         533.3
Other loans (1)                              554.8            --         554.8
                                          --------      --------      --------
  Total loans receivable                  $7,440.5      $  106.0      $7,546.5
                                          ========      ========      ========

(1)   Does not include non-accrual loans.


                                       9
<PAGE>

Delinquent Loans and Foreclosed Assets

Mortgage Loans

      GreenPoint Mortgage'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,
as well as property inspections. Telephone calls and property inspections
continue until the loan is current or payment arrangements are made. On or about
the 61st 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 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 GreenPoint Mortgage's attorney for foreclosure upon the loan
becoming 61 days past due.

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

      GreenPoint Mortgage 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 GreenPoint Mortgage 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, GreenPoint Mortgage may resume
its foreclosure action. As of December 31, 1998, GreenPoint Mortgage had $55.0
million of loans, or 19.3%, of total non-performing loans subject to such
forbearance agreements, the substantial majority of which were one-to
four-family mortgage loans.

      Historically, GreenPoint Mortgage has relied solely on its collection and
foreclosure process to reduce its level of non-performing loans. This process,
combined with GreenPoint Mortgage's low LTV ratios, has in the past protected
GreenPoint Mortgage from high loan losses.

      Based on its LTV policies, GreenPoint Mortgage does not believe that the
overall risk of loss associated with its current loan portfolio and
non-performing assets is excessive. However, GreenPoint Mortgage'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 regional economies will not result in increased delinquencies or
increases in foreclosure-related expenses and expenses related to its other real
estate owned.

Manufactured Housing Loans

      GreenPoint Credit maintains regular contact with the borrower through
telephone calls, approved mailings and field contact to collect delinquent
accounts. The collection staff work staggered schedules to maximize customer
contact while following the guidelines of the Federal Fair Debt and Collection
Practices Act. On or about the 61st day of delinquency, a notice of default is
sent to the borrower demanding payment in full of all arrears within a 30 day
time period. Collection efforts continue throughout the default period and if
the borrower has not paid by the default deadline, the account is referred to an
attorney to commence repossession proceedings.

      GreenPoint Credit charges off delinquent loans at the earlier of
repossession date or the month end following 120 days of delinquency. GreenPoint
Credit records partial charge-offs of delinquent loans to approximate net
realizable value if foreclosure occurs before the loans become 120 days
delinquent. Accounts are 100% charged-off if still in repossession 91 days after
date of foreclosure. Accounts that have not yet been repossessed are 100%
charged-off after 120 days of delinquency.

      GreenPoint Credit relies on its platform of regional offices throughout
the United States and its experienced personnel to collect delinquent accounts
effectively and reduce its level of non-performing loans. GreenPoint Credit does
not believe that the overall risk of loss associated with its loan portfolio is
excessive based on its credit policies. GreenPoint Credit's underwriting
determinations rely heavily upon the borrower's ability to pay. No assurances
can be given that declines in regional economics will not result in increased
delinquencies and losses.


                                       10
<PAGE>

      At December 31, 1998, 1997, 1996, 1995 and 1994, loans delinquent 90 days
or more were as follows:

<TABLE>
<CAPTION>
                                                        December 31,
                                    ---------------------------------------------------
                                             1998                       1997
                                    ---------------------------------------------------
                                                      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                 1,930       $ 213.1         2,596      $ 254.6
    Multi-family                         286          33.7           372         41.0
    Commercial real estate               192          24.7           258         34.0
    Home equity loans                     26           1.6            48          1.1
                                     -------       -------       -------      -------
       Total mortgage loans            2,434         273.1         3,274        330.7
Other loans                              134           1.3            84          0.1
                                     -------       -------       -------      -------
       Total loans                     2,568       $ 274.4         3,358      $ 330.8
                                     =======       =======       =======      =======
Delinquent loans to total loans                       2.72%                      3.71%
</TABLE>

<TABLE>
<CAPTION>
                                                                      December 31,
                                    -------------------------------------------------------------------------------
                                             1996                         1995                        1994
                                    -------------------------------------------------------------------------------
                                                                    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                 2,559       $ 242.7         2,737       $ 254.3         2,438      $ 220.9
   Multi-family                          430          46.0           533          57.9           619         68.6
   Commercial real estate                271          35.2           358          46.8           413         56.8
   Home equity loans                       7           0.5            16           0.8            14          0.7
                                     -------       -------       -------       -------       -------      -------
      Total mortgage loans             3,267         324.4         3,644         359.8         3,484        347.0
Other loans                              168           0.1            --            --            46          0.3
                                     -------       -------       -------       -------       -------      -------
      Total loans                      3,435       $ 324.5         3,644       $ 359.8         3,530      $ 347.3
                                     =======       =======       =======       =======       =======      =======
Delinquent loans to total loans                       4.36%                       5.81%                      6.02%
</TABLE>


                                       11
<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 $37.0 million, as opposed to $30.7 million, which was included in
interest income for the year ended December 31, 1998.

<TABLE>
<CAPTION>
                                                                        December 31,
                                              ---------------------------------------------------------------
                                                1998          1997          1996          1995          1994
                                              -------       -------       -------       -------       -------
                                                                    (Dollars in millions)
<S>                                           <C>           <C>           <C>           <C>           <C>    
Non-accrual mortgage loans                    $ 285.1       $ 355.0       $ 356.0       $ 402.1       $ 391.9
Non-accrual other loans (1)                       0.1           0.1           0.1            --            --
Other loans 90 days or more delinquent
and still accruing                                1.2            --            --            --           0.3
                                              -------       -------       -------       -------       -------
          Total non-performing loans (2)        286.4         355.1         356.1         402.1         392.2
                                              -------       -------       -------       -------       -------
Other real estate owned, net (3)                 11.2          24.0          28.6          29.2          54.0
                                              -------       -------       -------       -------       -------
          Total non-performing assets         $ 297.6       $ 379.1       $ 384.7       $ 431.3       $ 446.2
                                              =======       =======       =======       =======       =======
Non-performing loans to total loans
   held for investment                           3.03%         3.97%         4.78%         6.68%         6.80%

Non-performing assets to total assets            2.12%         2.90%         2.89%         2.94%         6.42%
</TABLE>

----------
(1)   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.

(2)   As of December 31, 1998, non-accrual loans included 2,026 one-to
      four-family loans, with an aggregate balance of $225.1 million, 290
      multi-family loans with an aggregate balance of $33.4 million, 205
      commercial real estate loans with an aggregate balance of $26.0 million,
      117 other loans with an aggregate balance of $0.1 million and 27 home
      equity loans with an aggregate balance of $1.7 million.

(3)   Net of related valuation allowance of $0.3 million, $0.9 million, $1.3
      million, $2.2 million, and $5.1 million for foreclosed real estate at
      December 31, 1998, 1997, 1996, 1995 and 1994, respectively.

      At December 31, 1998, the Company's net other real estate owned totaled
$11.2 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 99 one-to four-family
properties with an aggregate carrying value of $7.8 million, 17 multi-family
properties with an aggregate carrying value of $1.7 million and 17 commercial
real estate properties with an aggregate carrying value of $2.0 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 that 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, 1998 totaled $0.3 million, or 2.6% 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.


                                       12
<PAGE>

Allowance for Possible Loan Losses

      The Company has set forth a policy for establishment and review of the
adequacy of the allowance for loan losses. The policy requires management to
provide for estimated future costs related to problem loans. Management believes
that the allowance for loan losses is adequate. However, such determination is
susceptible to the effect of future unanticipated changes in general economic
and market conditions that may affect the financial circumstances of borrowers
and/or residential real estate values within the Company's lending areas.

      The 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>
                                                                              Year Ended December 31,
                                                    ---------------------------------------------------------------------------
                                                      1998            1997            1996            1995               1994
                                                    --------        --------        --------        --------           --------
                                                                               (Dollars in millions)
<S>                                                 <C>             <C>             <C>             <C>                <C>     
Balance at beginning of period                      $  109.0        $  105.0        $  105.5        $  103.0           $  147.0

Provisions charged to income                            13.8            18.9            15.7             9.5               32.3
Transfer from allowance for loans
  held for sale                                           --              --              --              --               11.6
Loans charged-off:
  Mortgage loans held for investment                    (1.9)           (4.4)           (4.7)           (5.3)             (15.3)
  Other loans                                           (1.0)           (0.3)           (0.2)             --                 --
  Mortgage loans held for sale                            --              --              --              --               (4.9)
  Bulk sale charge-off of
    non-performing loans                                  --              --              --              --              (56.1)(2)
  Net loan foreclosure costs                            (7.7)          (11.3)          (12.6)          (10.2)             (16.8)
                                                    --------        --------        --------        --------           --------
Total charge-offs                                      (10.6)          (16.0)          (17.5)          (15.5)             (93.1)
Recoveries                                               0.8             1.1             1.3             8.5(1)             5.2
                                                    --------        --------        --------        --------           --------
Balance at end of period                            $  113.0        $  109.0        $  105.0        $  105.5           $  103.0
                                                    ========        ========        ========        ========           ========
Ratio of net charge-offs during the
  period to average loans outstanding
  during the period                                     0.11%           0.18%           0.25%           0.12%(1)           1.54%(2)
Ratio of allowance for possible loan
  losses to total loans held for investment at
  the end of the period                                 1.20%           1.22%           1.41%           1.75%              1.79%
Ratio of allowance for possible loan
  losses to total non-performing loans at
  the end of the period                                39.63%          30.70%          29.48%          26.24%             26.26%
</TABLE>

(1)   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%.

(2)   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%.


                                       13
<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, 1998, 1997, 1996, 1995, and
1994. 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,
                          ----------------------------------------------------------------------------------------------------------
                                  1998                 1997                  1996                  1995                 1994
                          --------------------  -------------------  --------------------  --------------------  -------------------

                                  Percentage            Percentage            Percentage            Percentage           Percentage
                                  of Loans in           of Loans in           of Loans in           of Loans in          of Loans in
                                  Category to           Category to           Category to           Category to          Category to
                          Amount  Total Loans   Amount  Total Loans   Amount  Total Loans   Amount  Total Loans  Amount  Total Loans
                          ------  -----------   ------  -----------   ------  -----------   ------  -----------  ------  -----------
                                                                      (Dollars in millions)                          
<S>                       <C>         <C>       <C>         <C>       <C>         <C>       <C>         <C>      <C>         <C>  
Loan Category:                                 
Mortgage loans:                                
One-to four family        $ 86.3      85.3%     $ 81.9      86.0%     $ 75.5      85.9%     $ 72.5      85.2%    $ 66.5      85.7%
Multi-family residential    12.9       6.3        12.8       7.0        16.0       7.3        18.2       7.9       19.8       7.9
Commercial                  11.4       6.1        13.2       6.0        13.2       6.3        14.6       6.3       16.4       6.1
Home equity loans                              
from lines of credit         1.4       0.9         1.1       0.7         0.3       0.2         0.2       0.1        0.3       0.2
Other loans                  1.0       1.4          --       0.3          --       0.3          --       0.5         --       0.1
                          ------    ------      ------    ------      ------    ------      ------    ------     ------    ------
     Total allowance for                            
     possible loan 
     losses               $113.0     100.0%     $109.0     100.0%     $105.0     100.0%     $105.5     100.0%    $103.0     100.0%
                          ======    ======      ======    ======      ======    ======      ======    ======     ======    ======
</TABLE>


                                       14
<PAGE>

Consumer Banking Activities

      The Consumer Branch Network ("Branch Network") consists of 73 full-service
banking offices with 95 automated teller machines. The Branch Network operates
29 branches in Long Island, 40 branches in New York City, and 4 branches in
Westchester County in New York. In addition to its branch system, the Bank's
deposit gathering network includes its telephone banking system. The Branch
Network also offers a variety of financial services to meet the needs of the
communities it serves. Among the services offered are traditional time, savings
and checking accounts, annuity products, mutual funds, mortgages, home equity
loans, credit cards, Savings Bank Life Insurance, safe deposit services, student
loans, installment loans and automatic payroll and Social Security deposit
programs.

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 Bank faces
additional competition for deposits from non-depository competitors such as the
mutual fund industry, securities and brokerage firms and insurance companies.

      GreenPoint Mortgage'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. However, strong competition is
emerging in the no/low doc market, bringing increased pressure on interest rates
charged and net income realized from this niche business. As demand for these
products increases and more companies begin to compete in this market niche,
investor interest for these products will grow, creating the possibility of
reduced margins and profitability from execution. In particular, FNMA and
Freddie Mac ("FHLMC") are both showing increased interest in targeting the
no-low doc market niche. Additionally, boundaries continue to erode over the
differences between No Doc and Low Doc products in the mortgage market, as well
as within the spectrum of credit risk assumed by these companies. This will
result in increased competition from companies offering alternative products to
borrowers who previously had only limited opportunities for the extension of
mortgage credit. Due to these factors, no assurance can be given that the
Company will be able to retain its market share and profitability.

      GreenPoint Credit is directly influenced by consumer demand for new
financing and refinancing of manufactured and modular homes. This demand is
driven by several variables, including regional market trends, economic
conditions, individual preferences and market demographics. GreenPoint Credit's
competition is comprised of a variety of regional and national lending
institutions. Finance companies, banks and credit unions are consistently the
primary competitors. Recently, consolidation has taken place in the retail
sector, dominated mainly by vertically-integrated manufacturers. This
consolidation could affect the competitive environment.

      GreenPoint Credit's major form of loan origination consists of competitive
interest rates and flexible financing programs, outstanding service to retailers
and customers, as well as timely credit reviews and decisions. Interest rates
are a key component to overall profitability.

      As with traditional, site-built homes, sales of manufactured and modular
homes are subject to seasonal peaks and declines. Sales peak during the spring
and summer months, and decline during fall and winter. Home sales involving land
improvement and/or construction are particularly vulnerable in geographic areas
with inclement winters. To increase home sales during seasonal declines,
GreenPoint Credit frequently offers special incentive and/or loan programs to
retailers and customers.

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


                                       15
<PAGE>

Market Risk Management

      Interest rate risk arises in the ordinary course of the Company's
business, as the repricing characteristics of its loans do not necessarily match
those of its deposit liabilities. 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 the Company's Annual Report to Stockholders for
Fiscal Year ended December 31, 1998, pages 13-16.

      The Bank entered into interest rate swap contracts to manage interest rate
risk. The notional amounts of these contracts approximate $1.40 billion and $475
million at December 31, 1998 and 1997, respectively. The contracts outstanding
at December 31, 1998 have an average term of approximately 4 years. Under the
terms of the contracts outstanding at December 31, 1998, the Bank pays an
average fixed rate of 5.96% and receives an average variable rate of 5.32% on
the swaps hedging the fixed rate loan portfolio.

Liquidity Management

      Liquidity management involves planning to meet anticipated funding needs
at a reasonable cost, as well as contingency plans to meet unanticipated funding
needs or a loss of funding sources. Liquidity management is governed by policies
formulated and monitored by ALCO, which take into account the marketability of
assets, the sources and stability of funding, and the level of unfunded
commitments.

      Long-term liquidity needs are provided by a large core deposit base, which
is the most stable source of liquidity a bank can have, due to the long-term
relationship with depositors and the deposit insurance provided by the FDIC.

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, commercial paper and municipal obligations.

      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 in accumulated other comprehensive income as a separate component of
stockholders' equity, net of tax. Securities held for trading purposes are
carried at fair value with market revaluations recognized as 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.


                                       16
<PAGE>

      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,
                                                 --------------------------------------------------------------------------
                                                          1998                      1997                      1996
                                                 ----------------------    ----------------------    ----------------------
                                                 Amortized        Fair     Amortized        Fair     Amortized        Fair
                                                    Cost         Value        Cost         Value        Cost         Value
                                                 ---------     --------    ---------     --------    ---------     --------
                                                                              (Dollars in millions)
<S>                                               <C>          <C>          <C>          <C>          <C>          <C>     
Money market investments (1)                      $  924.2     $  924.2     $1,060.0     $1,060.0     $  494.1     $  494.1
                                                  ========     ========     ========     ========     ========     ========
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

   Agency notes/Asset-backed
     securities                                      260.5        260.3        125.9        125.8         66.4         66.4
Mortgage-backed securities                           561.0        566.4        780.6        779.6      1,881.0      1,857.9

Collateralized mortgage obligations                  206.2        209.6        113.9        114.4         32.4         32.4

Trust certificates collateralized by
     GNMA securities                                  26.6         26.5        124.5        123.6        409.8        406.5
Corporate asset-backed securities                     25.0         24.9         25.0         25.0           --           --
Corporate bonds                                       24.3         24.2           --           --           --           --
Commercial paper                                     145.7        145.7        113.5        113.5           --           --
Other                                                 80.0         80.0         30.0         30.0         63.9         63.8
                                                  --------     --------     --------     --------     --------     --------
          Total securities available for sale     $1,329.3     $1,337.6     $2,014.0     $2,007.7     $4,397.8     $4,355.4
                                                  ========     ========     ========     ========     ========     ========

Securities held to maturity:
Tax-exempt municipals                             $    0.6     $    0.6     $    0.6     $    0.6     $    0.6     $    0.6
Financial                                              2.7          2.7          3.4          3.4          3.4          3.4
                                                  --------     --------     --------     --------     --------     --------
          Total securities held to maturity       $    3.3     $    3.3     $    4.0     $    4.0     $    4.0     $    4.0
                                                  ========     ========     ========     ========     ========     ========
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.


                                       17
<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, 1998. 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,
1998.

<TABLE>
<CAPTION>
                                                                       December 31, 1998
                                  --------------------------------------------------------------------------------------------------
                                    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>            
Money market investments (1)       $ 924.2        6.16%     $    --          --%     $    --          --%     $    --          --%
Securities available for sale:
   Agency notes/Asset-
      backed securities            $ 150.0        5.10%     $  84.9        5.79%     $  25.6        5.18%     $    --          --%
   Mortgage-backed securities           --          --         60.5        5.64         29.8        6.17        470.7        6.39
   Collateralized mortgage
     obligations                        --          --        147.5        6.12         24.7        6.18         34.0        5.98
   Trust certificates
     collateralized by
     GNMA securities                    --          --           --          --         26.6        5.84           --          -- 
   Corporate asset- backed
     securities                         --          --         25.0        5.43           --          --           --          -- 
   Corporate bonds                      --          --           --          --           --          --         24.3        6.10
   Commercial  paper                 145.7        5.69           --          --           --          --           --          -- 
   Other (2)                            --          --           --          --           --          --         80.0        4.27
                                  --------                 --------                 --------                 --------
      Total securities
        available for sale         $ 295.7        5.39%     $ 317.9        5.89%     $ 106.7        5.85%     $ 609.0        6.08%
                                  ========                 ========                 ========                 ========
Securities held to maturity:
    Tax exempt municipals          $    --         -- %     $    --          --%     $   0.6        7.45%     $    --          --%
    Financial                          2.0        8.30           --          --           --          --          0.7        8.30
                                  --------                 --------                 --------                 --------
      Total securities
        held to maturity           $   2.0        8.30%     $    --          --%     $   0.6        7.45%     $   0.7        8.30%
                                  ========                 ========                 ========                 ========
</TABLE>

                                                Total Securities
                                  --------------------------------------------
                                   Average
                                  Remaining                           Weighted
                                  Years to    Amortized      Fair     Average
                                  Maturity      Cost        Value      Yield
                                  ---------   ---------   --------    --------
                                             (Dollars in millions)
Money market investments (1)            --    $  924.2    $  924.2        6.16%
Securities available for sale:
   Agency notes/Asset-
      backed securities               1.88    $  260.5    $  260.3        5.33%
   Mortgage-backed securities        12.31       561.0       566.4        6.30
   Collateralized mortgage
     obligations                      6.71       206.2       209.6        6.10
   Trust certificates
     collateralized by
     GNMA securities                  6.80        26.6        26.5        5.84
   Corporate asset- backed
     securities                       4.40        25.0        24.9        5.43
   Corporate bonds                   28.56        24.3        24.2        6.10
   Commercial  paper                  0.04       145.7       145.7        5.69
   Other (2)                            --        80.0        80.0        4.27
                                              --------    --------
      Total securities
        available for sale            7.35    $1,329.3    $1,337.6        5.86%
                                              ========    ========
Securities held to maturity:
    Tax exempt municipals             9.47    $    0.6    $    0.6        7.45%
    Financial                         7.62         2.7         2.7        8.30
                                              --------    --------
      Total securities
        held to maturity              7.94    $    3.3    $    3.3        8.15%
                                              ========    ========

(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.


                                       18
<PAGE>

      During the year ended December 31, 1998, the Company sold available for
sale securities aggregating $1.0 billion, resulting in gross realized gains of
$3.7 million and gross realized losses of $1.1 million.

      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.

Sources of Funds

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

      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 years ended December 31, 1998
and 1997 was $13.9 million and $6.4 million, respectively.

      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 $18.3 million and
$10.7 million for the years ended December 31, 1998 and 1997, respectively.

      At December 31, 1998, the Company had outstanding $819.4 million in
certificates of deposit in amounts of $100,000 or more, maturing as follows:

                                                                  Weighted
                                                       Amount   Average Rate
                                                       ------   ------------
                                                     (Dollars in millions)
      Maturity Period:

      Three months or less ......................      $130.0        5.18%
      Over three through six months .............       164.4        5.32
      Over six through twelve months ............       436.1        5.29
      Over twelve months ........................        88.9        5.63
                                                       ------
            Total ...............................      $819.4        5.32%
                                                       ======


                                       19
<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,
                                                     -------------------------------------------------------------------------------
                                                                     1998                                      1997
                                                     -------------------------------------------------------------------------------
                                                                                  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                                     $1,551.9         13.89%          2.17%     $1,739.4        15.85%         2.43%
N.O.W. and checking                                     539.9          4.83           0.99         533.9         4.87          1.24
Variable rate savings                                 1,804.5         16.15           3.26       1,702.1        15.51          3.37
Money market                                            524.2          4.69           3.20         478.4         4.36          3.25
                                                    ---------        ------                    ---------       ------
             Total                                    4,420.5         39.56           2.55       4,453.8        40.59          2.68
                                                    ---------        ------                    ---------       ------
Term certificates of deposit:
   Certificates of deposit over $100,000                819.4          7.33           5.32         723.7         6.59          5.51
   Certificates of deposit less than $100,000
      with original maturities of:
          Six months or less                            343.7          3.08           4.97         222.5         2.03          4.44
          Six to 12 months                            2,074.6         18.57           4.93       1,243.9        11.33          4.84
          12 to 30 months                             1,722.8         15.42           5.28       2,054.9        18.73          5.64
          30 to 48 months                               155.3          1.39           5.79         334.3         3.05          6.25
          48 to 72 months                               459.1          4.11           6.02         683.9         6.23          5.51
          72 to 84 months                                75.8          0.68           6.28          75.3         0.69          6.40
   IRA and Keoghs less than 3 years                   1,101.9          9.86           4.99       1,180.7        10.76          5.21
                                                    ---------        ------                    ---------       ------
              Total term certificates of deposit      6,752.6         60.44           5.19       6,519.2        59.41          5.38
                                                    ---------        ------                    ---------       ------
              Total deposits                        $11,173.1        100.00%          4.14%    $10,973.0       100.00%         4.28%
                                                    =========        ======                    =========       ======
</TABLE>

<TABLE>
<CAPTION>
                                                                     December 31,
                                                        -------------------------------------
                                                                         1996
                                                        -------------------------------------
                                                                                     Weighted
                                                                      Percent         Average
                                                                      of Total        Nominal
                                                         Amount       Deposits         Rate
                                                        --------      --------       --------
                                                                  (Dollars in millions)
<S>                                                     <C>              <C>             <C>  
Account type:
Savings and club                                        $1,901.7         16.60%          2.77%
N.O.W. and checking                                        524.2          4.58           1.86
Variable rate savings                                    1,853.7         16.19           3.36
Money market                                               561.3          4.90           3.25
                                                        --------      --------
             Total                                       4,840.9         42.27           2.88
                                                        --------      --------
Term certificates of deposit:
   Certificates of deposit over $100,000                   687.8          6.01           5.29
   Certificates of deposit less than $100,000 with
      original maturities of:
          Six months or less                               227.1          1.98           3.83
          Six to 12 months                               1,811.2         15.82           4.63
          12 to 30 months                                1,702.1         14.86           5.44
          30 to 48 months                                  258.9          2.26           6.26
          48 to 72 months                                  695.6          6.07           5.88
          72 to 84 months                                   72.0          0.63           6.56
   IRA and Keoghs less than 3 years                      1,156.7         10.10           5.08
                                                        --------      --------
              Total term certificates of deposit         6,611.4         57.73           5.17
                                                        --------      --------
              Total deposits                            $11,452.3       100.00%          4.21%
                                                        ========      ========
</TABLE>


                                       20
<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, 1998
                             ------------------------------------      --------------------------------------------------
                                                                        Within       One to
                               1998          1997          1996        One Year    Three Years    Thereafter      Total
                             --------      --------      --------      --------    -----------    ----------      -----
                                                                    (In millions)
<S>                          <C>           <C>           <C>           <C>           <C>           <C>           <C>     
Certificates of deposit
   accounts:
3.99% or less                $1,008.9      $1,064.4      $1,237.3      $  913.8      $   95.1      $     --      $1,008.9
4.00% to 4.99%                  963.0         343.6       1,149.5         793.9         158.1          11.0         963.0
5.00% to 5.99%                4,234.2       4,300.9       3,166.9       3,850.6         342.0          41.6       4,234.2
6.00% to 6.99%                  514.8         664.3         751.5         210.0         290.4          14.4         514.8
7.00% to 7.99%                   28.9         141.2         297.2           1.2          27.7            --          28.9
8.00% to 8.99%                    2.1           3.8           8.1           1.2           0.9            --           2.1
9.00% or greater                  0.7           1.0           0.9           0.7            --            --           0.7
                             --------      --------      --------      --------      --------      --------      --------
        Total                $6,752.6      $6,519.2      $6,611.4      $5,771.4      $  914.2      $   67.0      $6,752.6
                             ========      ========      ========      ========      ========      ========      ========
</TABLE>

Subsidiary Activities

      The Company has formed three subsidiaries:

      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 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 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, 1998 the Bank has formed thirteen 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,
GreenPoint Mortgage 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. GreenPoint Mortgage's activities consist of the origination,
sale and servicing of mortgage loans.

      GreenPoint Credit Corp. This subsidiary was incorporated on May 4, 1998
and began operations in the fourth quarter of 1998. GreenPoint Credit was formed
for the purpose of acquiring the assets of BankAmerica Housing Services, a
division of Bank of America, FSB. This acquisition was consummated on September
30, 1998. GreenPoint Credit's activities consist of the origination, sale and
servicing of manufactured housing loans. In Mississippi and Minnesota,
GreenPoint Credit conducts activities through its wholly owned subsidiaries,
GreenPoint Credit Corp. of Mississippi (incorporated on September 4, 1998), and
GreenPoint Credit Corp. of Minnesota (incorporated on September 14, 1998).

      GreenPoint Agency, Inc. This subsidiary was incorporated on June 30, 1998
as an insurance agency. GreenPoint Agency acts as an agent in connection with
the sale of forced placed property insurance and standard property and casualty
insurance.


                                       21
<PAGE>

      GreenPoint Insurance Corp. This subsidiary was incorporated on September
10, 1998 as an insurance underwriting and reinsurance subsidiary. GreenPoint
Insurance's activities include the reinsurance of life and disability insurance
risks.

      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. This subsidiary was dissolved on
December 9, 1998.

      GreenPoint Corporate Owned 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.

      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, 1998, 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. Descriptions of the Bank's subsidiaries are set forth below:

      Neerg Corp. This subsidiary was formed in January 1990 and currently holds
7 properties having an aggregate carrying value of $0.7 million and an aggregate
appraised value of $1.5 million, as of December 31, 1998, based on the Company's
most recent appraisals.

      298 15th Street Realty Corp. This subsidiary was formed in January 1993
and currently holds 5 properties having an aggregate carrying value of $0.5
million and an aggregate appraised value of $1.0 million as of December 31,
1998, based on the Company's most recent appraisals.

      Neerg Second Corp. This subsidiary was formed in June 1993 and currently
holds 5 properties having an aggregate carrying value of $0.5 million and an
aggregate appraised value of $1.0 million, as of December 31, 1998, based on the
Company's most recent appraisals.

      Alpha REO Corporation. This subsidiary was formed in March 1994 and
currently holds 7 properties having an aggregate carrying value of $0.7 million
and an aggregate appraised value of $1.5 million, as of December 31, 1998, based
on the Company's most recent appraisals.

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

Savings Bank Life Insurance

      As an issuing company, the Company offers Savings Bank Life Insurance
("SBLI") through its SBLI department. 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.


                                       22
<PAGE>

Personnel

      As of December 31, 1998, the Company had 3,188 full-time employees and 208
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.

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, 1998 is
approximately $1.7 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 1997 and expects
to use the percentage method for 1998.

      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, 1998, 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, 1998 was
approximately $303 million and $305 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".

      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.


                                       23
<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,
1998, 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 State Department of Taxation
and Finance for the tax years 1995 through 1997 and the New York City Department
of Finance for the tax years 1992, 1993 and 1996. 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, GreenPoint Mortgage and GreenPoint Credit
are 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, 1998, GreenPoint Mortgage and GreenPoint Credit are 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 following discussion sets forth certain of the material elements of
the regulatory framework applicable to GreenPoint and its subsidiaries. This
regulatory framework is intended primarily for the protection of depositors and
the federal deposit insurance funds and not for the protection of security
holders. To the extent that the following information describes statutory and
regulatory provisions, it is qualified in its entirety by reference to those
provisions. A change in the statutes, regulations or regulatory policies
applicable to GreenPoint or its subsidiaries may have a material effect on the
business of GreenPoint.

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

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

      In addition, if GreenPoint were to acquire another bank or bank holding
company, it could become subject to the bank holding company regulations
promulgated under New York State Banking Law ("State Banking Laws"). GreenPoint
is not currently subject to the bank holding company regulations of State
Banking Laws because a company such as GreenPoint that controls only one banking
institution is not deemed to be a bank holding company under State Banking Laws.


                                       24
<PAGE>

However, the Bank is subject to other State Banking Laws and to extensive
regulation by the Banking Department, as its chartering agency, and by the
Federal Deposit Insurance Corporation (the "FDIC"), as its deposit insurer. The
Bank is also subject to regulation by the FRB. GreenPoint and its subsidiaries
also are affected by the fiscal and monetary policies of the federal government
and the FRB, and by various other governmental requirements and regulations.

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

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

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

      GreenPoint, like other bank holding companies, currently is required to
maintain Tier 1 and "total capital" (the sum of Tier 1 and Tier 2 capital) equal
to at least 4% and 8% of its total risk-weighted assets (including certain
off-balance-sheet items, such as standby letters of credit), respectively. At
December 31, 1998, GreenPoint met both requirements, with Tier 1 and total
capital equal to 12.16% and 13.41% of its total risk-weighted assets.

      The FRB, the FDIC and the Banking Department have adopted rules to
incorporate market and interest rate risk components into their risk-based
capital standards. Amendments to the risk-based capital requirements of the FRB
and the FDIC, incorporating market risk, became effective January 1, 1998. Under
the new market risk requirements, capital will be allocated to support the
amount of market risk related to a financial institution's ongoing trading
activities.

      The FRB also requires bank holding companies to maintain a minimum
"leverage ratio" (Tier 1 capital to adjusted total assets) of 3% if the holding
company has the highest regulatory rating and meets certain other requirements,
or of 3% plus an additional cushion of at least 100 to 200 basis points if the
holding company does not meet these requirements. At December 31, 1998,
GreenPoint's leverage ratio was 7.58%.

      The FRB may set capital requirements higher than the minimums noted above
for holding companies whose circumstances warrant it. For example, holding
companies experiencing or anticipating significant growth may be expected to
maintain capital positions substantially above the minimum supervisory levels
without significant reliance on intangible assets. Furthermore, the FRB has
indicated that it will consider a "tangible Tier 1 capital leverage ratio"
(deducting all intangibles) and other indicia of capital strength in evaluating
proposals for expansion or new activities.


                                       25
<PAGE>

      The Bank is subject to similar risk-based and leverage capital
requirements adopted by the FDIC. The Bank was in compliance with the applicable
minimum capital requirements as of December 31, 1998. The Bank has not been
advised by any federal banking agency or by the Banking Department of any
specific minimum leverage ratio requirement applicable to it.

      Failure to meet capital requirements could subject a bank to a variety of
enforcement remedies, including the termination of deposit insurance by the
FDIC, and to certain restrictions on its business, which are described under "-
FDICIA."

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

      As of December 31, 1998, GreenPoint Bank was "well capitalized," based on
the "prompt corrective action" ratios and guidelines described above. It should
be noted, however, that the Bank's capital category is determined solely for the
purpose of applying the FDIC's "prompt corrective action" regulations and that
the capital category may not constitute an accurate representation of the Bank's
overall financial condition or prospects.

      Dividend Restrictions. State Banking Laws impose certain restrictions on
the payment of dividends by the Bank to GreenPoint, including a provision that,
without regulatory approval, the Bank cannot declare and pay dividends in any
calendar year in excess of its net profits, as defined by the State Banking
Laws, for that year combined with its retained net profits, as defined by the
State Banking Laws, of the two preceding years, less any required transfer to
surplus. Likewise, the approval of the FDIC is required for any dividend if the
total of all dividends declared by the Bank in any calendar year would exceed
the total of its net profits, as defined by the FDIC, for such year combined
with its retained net profits, as defined by the FDIC, for the preceding two
years. In addition, GreenPoint may not pay a dividend in an amount greater than
its net profits then on hand. At December 31, 1998, $131.3 million of the total
stockholders' equity of the Bank was available for payment of dividends to
GreenPoint without approval by the applicable regulatory authority.

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

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

      Due to the Bank's current risk-based assessment, as of January 1, 1999,
the annual insurance premiums on bank deposits insured by the BIF (approximately
75% of the Bank's deposits) and the SAIF (approximately 25% of the Bank's
deposits) were both zero.

      The Deposit Insurance Funds Act of 1996 provides for assessments to be
imposed on insured depository institutions with respect to deposits insured by
the BIF and the SAIF (in addition to assessments currently imposed on depository
institutions with respect to BIF- and SAIF-insured deposits) to pay for the cost
of Financing Corporation ("FICO") funding. The FICO assessment rates as of
January 1, 1999 were $0.0122 per $100 annually for BIF-assessable deposits and
$0.061 per $100 annually for SAIF-assessable deposits.


                                       26
<PAGE>

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

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

      Interstate Banking And Branching. Under the Riegle-Neal Interstate Banking
and Branching Efficiency Act of 1994 ("Riegle-Neal"), subject to certain
concentration limits and other requirements, (i) bank holding companies such as
GreenPoint are permitted to acquire banks and bank holding companies located in
any state; (ii) any bank that is a subsidiary of a bank holding company is
permitted to receive deposits, renew time deposits, close loans, service loans
and receive loan payments as an agent for any other bank subsidiary of that
holding company; and (iii) banks are permitted to acquire branch offices outside
their home states by merging with out-of-state banks, purchasing branches in
other states, and establishing de novo branch offices in other states; provided
that, in the case of any such purchase or opening of individual branches, the
host state has adopted legislation "opting in" to those provisions of
Riegle-Neal; and provided that, in the case of a merger with a bank located in
another state, the host state has not adopted legislation "opting out" of that
provision of Riegle-Neal. GreenPoint could use Riegle-Neal to acquire banks in
additional states.

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, GreenPoint
Mortgage leases an operating center in Charlotte, North Carolina at 5032 Parkway
Plaza Boulevard which contains 40.6 thousand square feet. GreenPoint Mortgage
also leases 21.3 thousand square feet of commercial office space at 15720 John
Delaney Drive in Charlotte, North Carolina. The Company's servicing operations
center is located in Columbus, Georgia. In Columbus, GreenPoint Mortgage 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. Additionally, GreenPoint
Credit leases 90.0 thousand square feet of office space at 10089 Willow Creek
Road, San Diego, California. This location is the headquarters for the
manufactured housing operations.

      The Bank operates its consumer banking activities out of 73 branches
located throughout the New York metropolitan area.

      GreenPoint Mortgage operates its mortgage lending activities from its
Charlotte, North Carolina operating center. Hub offices are located in Arizona,
California, Colorado, Connecticut, Florida, Georgia, Illinois, Massachusetts,
Michigan, New Jersey, Pennsylvania, Texas, Virginia and Washington.

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. 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.


                                       27
<PAGE>

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, 1998.

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, 58, 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 of the Company and the
Bank. 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, 55, joined the Company in July 1995 and serves as
President and Chief Operating Officer of the Company and the Bank. 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, 49, 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
Southeast Missouri State University (1974).

      S.A. Ibrahim, 47, joined GreenPoint Bank in March 1997 and currently
serves as Executive Vice President, Risk Management of the Company and the Bank.
Mr. Ibrahim will become Chief Operating Officer of the combined mortgage
business of GreenPoint Mortgage and Headlands Mortgage upon completion of the
Headlands acquisition. Prior to joining the Bank, Mr. Ibrahim was in charge of
International Reengineering at American Express' Travel Related Services
Company. Previously, he held various positions at Chemical Banking Corporation,
including Chief Executive Officer of the Mortgage Business, Chief of Staff to
the Vice Chairman in charge of Consumer Banking and Chief Credit Officer for
Consumer Banking. He has also been head of the Credit Card Operations at Crocker
Bank and Chief Financial Officer of the Business Services Division at Bank of
America. Mr. Ibrahim 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, 53, joined the Bank in September 1995 and serves as
Executive Vice President and Chief Financial Officer. Prior to that, he served
as Executive Vice President, Finance, and Treasurer. Before joining the Bank,
Mr. Leeds held a variety of positions at Chemical Bank. His final assignment was
as Head of the Asset and Liability Management staff. Prior to that he served for
seven years as Chief Money Market Economist. Mr. Leeds began his career as an
economist at the First National Bank of Chicago. He also spent two years as
Director of New Product Development at the Chicago Board Options Exchange. Mr.
Leeds earned a Bachelor's Degree in economics from the University of Michigan
and holds a Masters in Business Administration and Master of Philosophy from the
Columbia University Graduate School of Business.

      Charles P. Richardson, 52, 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.


                                       28
<PAGE>

      Ramesh Shah, 50, joined the Bank in June 1996 and serves as Executive Vice
President, Consumer Banking of the Company and the Bank. Prior to that, he
served as Executive Vice President, Marketing and Product Development. Before
joining the Bank, Mr. Shah was Senior Vice President of NatWest Bancorp. (1994 -
1996); Senior Vice President of Shearson Lehman Brothers (1991 - 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.

      John W. Wheeler, 61, serves as President of GreenPoint Credit Corp. Prior
to that, he served as Chairman and President of BankAmerica Housing Services
(1986-1998) and was Executive Vice President and Director of Green Tree
Acceptance (1977-1986). Mr. Wheeler began his career in the manufactured finance
business with his own company, Mobile Marketing Corp. (1972-1977) and holds a
Bachelor of Arts degree in Marketing from Michigan State University.

                                     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, 1999, 96,631,642 shares of common stock
were issued and outstanding, and held by approximately 4,216 holders of record.
In 1998 the Company paid a cash dividend of $0.16 per share in March, June,
September and December. In 1997 the Company paid a cash dividend of $0.125 per
share in March, June, September and December. 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 46 of the Company's 1998 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 9 and 10 in the Company's 1998 Annual Report to
Shareholders and is incorporated herein by reference.

      In addition, the Company's ratios of average equity to average assets is
11.14%, 10.19%, and 10.58% for the years ended December 31, 1998, 1997 and 1996,
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 11 through 20 in the Company's 1998 Annual Report to
Shareholders and is incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ON MARKET RISK

      The above captioned information appears under "Management's Discussion and
Analysis" on pages 13 through 16 in the Company's 1998 Annual Report to
Shareholders and is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The above captioned information appears on pages 21 through 46 in the
Company's 1998 Annual Report to Shareholders and is incorporated herein by
reference.

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

      None.


                                       29
<PAGE>

                                    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 7, 1999, which was filed with the SEC on March 24, 1999, is incorporated
herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

      Information relating to executive compensation included under the heading
"Executive Compensation" on pages 10 through 16 (excluding the Stock Performance
Graph on page 13) in the Company's Definitive Proxy Statement for its Annual
Meeting of Shareholders to be held on May 7, 1999, which was filed with the SEC
on March 24, 1999, 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 7, 1999, which was filed
with the SEC on March 24, 1999, 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
16 in the Company's Definitive Proxy Statement for its Annual Meeting of
Shareholders to be held on May 7, 1999, which was filed with the SEC on March
24, 1999, is incorporated herein by reference.


                                       30
<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 1998 Annual Report
            to Shareholders:

                                                                           Pages
                                                                           -----
Consolidated Statements of Financial Condition as of December 31, 1998
and 1997                                                                      21

Consolidated Statements of Income for the years ended December 31,
1998, 1997 and 1996                                                           22

Consolidated Statements of Comprehensive Income for the years ended
December 31, 1998, 1997 and 1996                                              23

Consolidated Statements of Changes in Stockholders' Equity for the years
ended December 31, 1998, 1997 and 1996                                        24

Consolidated Statements of Cash Flows for the years ended December 31,
1998, 1997 and 1996                                                        25-26

Notes to the Consolidated Financial Statements                                27

Report of Independent Accountants                                             47


                                       31
<PAGE>

Exhibit
Number
------

2.1   Purchase of Assets and Liability Assumption Agreement by and between Home
      Savings of America, FSB, and GreenPoint Bank (1)

2.2   Stock Purchase Agreement between BankAmerica Corp. and GreenPoint Bank (2)

2.3   Agreement and Plan of Merger by and among GreenPoint Financial Corp., GF
      Acquisition Corp. and Headlands Mortgage Company (3)

3.1   Certificate of Incorporation of GreenPoint Financial Corp. (4)

3.2   Bylaws of GreenPoint Financial Corp. (5)

3.3   Restated Organization Certificate of GreenPoint Bank (6)

3.4   Bylaws of GreenPoint Bank (7)

10.1  Employment Agreement and Change of Control Agreement between GreenPoint
      Financial Corp., GreenPoint Bank and Bharat B. Bhatt (8)

10.2  Amended Employment Agreement between GreenPoint Financial Corp.,
      GreenPoint Bank and Thomas S. Johnson (9)

10.3  Change of Control Agreement between GreenPoint Financial Corp., GreenPoint
      Bank and Charles P. Richardson (10)

10.4  GreenPoint Financial Corp. Amended and Restated 1994 Stock Incentive Plan
      (11)

10.5  GreenPoint Financial Corp. 1994 Non-Employee Directors Stock Option Plan
      (12)

10.6  GreenPoint Financial Corp. 1994 Annual Incentive Plan (13)

10.7  GreenPoint Financial Corp. 1994 Long Term Incentive Plan (14)

10.8  GreenPoint Bank Recognition and Retention Plan for Employees (15)

10.9  GreenPoint Bank Retirement Plan for Independent Directors (16)

10.10 GreenPoint Bank 1993 Directors' Deferred Fee Stock Unit Plan (17)

10.11 GreenPoint Bank Employee Protection Plan for Officers (18)

10.12 GreenPoint Bank Employee Protection Plan for Staff Members (19)

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, 1998

21.1  Subsidiaries of the Company

23.1  Consent 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 2.1 to the Company's Quarterly Report
      on Form 10-Q, dated March 31, 1998
(3)   Incorporated by reference to Exhibit 2.1 to Company's Registration
      Statement on Form S-4, dated February 18, 1999
(4)   Incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report
      on Form 10-Q, dated March 31, 1995
(5)   Incorporated by reference to Exhibit 3.2 to the 1997 10-K
(6)   Incorporated by reference to Exhibit 3.3 to the 1994 10-K
(7)   Incorporated by reference to Exhibit 3.4 to the 1997 10-K
(8)   Incorporated by reference to Exhibit 10.1 to the 1996 10-K
(9)   Incorporated by reference to Exhibit 10.1 to the 1994 10-K
(10)  Incorporated by reference to Exhibit 10.3 to the 1997 10-K
(11)  Incorporated by reference to Exhibit 10.3 to the 1994 10-K
(12)  Incorporated by reference to Exhibit 10.4 to the 1994 10-K
(13)  Incorporated by reference to Exhibit 10.5 to the 1994 10-K
(14)  Incorporated by reference to Exhibit 10.6 to the 1994 10-K
(15)  Incorporated by reference to Exhibit 10.7 to the 1994 10-K
(16)  Incorporated by reference to Exhibit 10.8 to the 1994 10-K
(17)  Incorporated by reference to Exhibit 10.9 to the 1994 10-K
(18)  Incorporated by reference to Exhibit 10.10 to the 1994 10-K
(19)  Incorporated by reference to Exhibit 10.11 to the 1994 10-K

      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.


                                       32
<PAGE>

      Reports on Form 8-K

      On October 5, 1998, GreenPoint Financial Corp. (the "Company") filed a
current report on Form 8-K reporting that GreenPoint Bank, a New York chartered
savings bank and wholly-owned subsidiary of the Company (the "Bank"), completed
its acquisition of the manufactured housing loan business of BankAmerica Housing
Services, a division of Bank of America, FSB, a federal savings bank and
wholly-owned subsidiary of BankAmerica Corporation ("BankAmerica"), pursuant to
a Stock Purchase Agreement, dated as of April 11, 1998, as amended, by and
between the Bank and BankAmerica.

      On December 1, 1998, GreenPoint Credit Corp. filed a current report on
Form 8-K reporting (i) the execution of an Underwriting Agreement, dated
November 17, 1998, between GreenPoint Credit Corp. and Credit Suisse First
Boston, as the representative of several Underwriters, whereby GreenPoint Credit
Corp. agreed to sell, and each Underwriter agreed to purchase, the respective
principal amounts of the Offered Certificates set forth in the Underwriting
Agreement and (ii) the sale by GreenPoint Credit Corp. on November 30, 1998 of
approximately $728 million of GreenPoint Credit Manufactured Housing Contract
Trust Pass-Through Certificates, Series 1998-1, pursuant to a Pooling and
Servicing Agreement, dated as of November 1, 1998, between GreenPoint Credit
Corp. and The First National Bank of Chicago, as the Trustee.

      On December 11, 1998, GreenPoint Financial Corp. (the "Company") filed a
current report on Form 8-K reporting the execution of an Agreement and Plan of
Merger (the "Plan"), dated December 8, 1998, among the Company, GF Acquisition
Corp. ("Merger Sub"), and Headlands Mortgage Company ("Headlands"). The Plan
provides for the merger of Merger Sub with and into Headlands (the "Merger"),
with Headlands surviving the Merger and becoming a wholly owned subsidiary of
the Company.


                                       33
<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: /s/ Thomas S. Johnson
                                        -------------------------
                                        Thomas S. Johnson
                                        Chairman of the Board
                                        and Chief Executive Officer

Dated:  March 23, 1999

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

Signature                          Title                                 Date
---------                          -----                                 ----


/s/  Thomas S. Johnson             Chairman of the Board                 3/23/99
-------------------------------    and Chief Executive Officer
     Thomas S. Johnson        


/s/  Bharat B. Bhatt               Member of the Board,                  3/23/99
-------------------------------    President and Chief
     Bharat B. Bhatt               Operating Officer  


/s/  Dan F. Huebner                Director                              3/23/99
-------------------------------
     Dan F. Huebner


                                   Director                              3/23/99
-------------------------------
     William M. Jackson


/s/  Susan J. Kropf                Director                              3/23/99
-------------------------------
     Susan J. Kropf


                                       34
<PAGE>

Signature                          Title                                 Date
---------                          -----                                 ----


/s/  Robert M. McLane              Director                              3/23/99
-------------------------------
     Robert M. McLane


/s/  Charles B. McQuade            Director                              3/23/99
-------------------------------
     Charles B. McQuade


/s/  Alvin N. Puryear              Director                              3/23/99
-------------------------------
     Alvin N. Puryear


                                   Director                              3/23/99
-------------------------------
     Robert P. Quinn


/s/  Edward C. Schmults            Director                              3/23/99
-------------------------------
     Edward C. Schmults


/s/  Wilfred O. Uhl                Director                              3/23/99
-------------------------------
     Wilfred O. Uhl


/s/  Robert F. Vizza               Director                              3/23/99
-------------------------------
     Robert F. Vizza


/s/  Jules Zimmerman               Director                              3/23/99
-------------------------------
     Jules Zimmerman


/s/  Jeffrey R. Leeds              Executive Vice President              3/23/99
-------------------------------    and Chief Financial Officer
     Jeffrey R. Leeds         


/s/  Mary Beth Farrell             Senior Vice President                 3/23/99
-------------------------------    and Comptroller
     Mary Beth Farrell        


                                       35