**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-K**

** **
| **(Mark One)** |   |
|----------------|--------|

** **
| **ý** | **Annual Report Pursuant to Section 13 or 15(d)  of the Securities Exchange Act of 1934** |
|------------|-------------------------------------------------------------------------------------------|
|       | **For the fiscal year ended December  31, 2001**                                          |

 
|   | **OR** |
|--------|--------|

 
| **o** | **Transition Report Pursuant to Section 13 or  15(d) of the  Securities Exchange Act of 1934** |
|-------|------------------------------------------------------------------------------------------------|

 

**Commissionfile Number 0-22516**

 

**GreenPoint Financial Corp.**

(Exactname of registrant as specified in its charter)

 

| **Delaware**                                                                |   | **06-1379001**                       |
|-----------------------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization)              |   | (IRS 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) 834-1000** |

 

Securitiesregistered pursuant to Section 12(b) of the Act:

 

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

 

Securitiesregistered 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 reportsrequired to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for shorter period that the registrantwas required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.  ý  **Yes**  o  **No**

 

Indicate by check mark if disclosure of delinquent filers pursuant toitem 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 informationstatements incorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K.  ý

 

The aggregate market value of the voting stock held by non-affiliatesof the registrant as of March 15, 2002: Common stock par value $0.01 per share,$4,499,954,043.

 

This figure is based on the closing price by the New York StockExchange (“NYSE”) for a share of the registrant’s common stock on March 15,2002 which was $45.12 as reported in the Wall Street Journal on March 18, 2002.The number of shares of the registrant’s Common Stock issued and outstanding asof March 15, 2002 was 99,733,024 shares.

 

DOCUMENTS INCORPORATED BYREFERENCE

 

Portions of the definitive Proxy Statement for theAnnual Meeting of Shareholders to be held on May 14, 2002, and the AnnualReport to Shareholders for fiscal 2001 are incorporated herein byreference—Parts II, III and IV.

 

 

**TABLE OFCONTENTS**

 
| FORWARD-LOOKING STATEMENTS        |
|-----------------------------------|
| RISK FACTORS                      |
| **PART I**                        |
| ITEM 1.                           | BUSINESS |
| General                           |
| Mortgage Banking Activities       |
| Consumer Banking  Activities      |
| Manufactured  Housing Activities  |
| Competition                       |
| Market  Risk Management           |
| Liquidity  Management             |
| Credit Risk                       |
| Securities Investment  Activities |
| Sources of  Funds                 |
| Subsidiary  Activities            |
| Personnel                         |
| Federal  Taxation                 |
| State  and Local Taxation         |
| Bank Regulation and  Supervision  |
|                              |
| ITEM 2.                           | PROPERTIES |
| ITEM 3.                           | LEGAL PROCEEDINGS |
| ITEM  4.                          | SUBMISSION  OF MATTERS TO A VOTE OF SECURITY HOLDERS |
| ITEM 4A.                          | EXECUTIVE OFFICERS |
|                              |   |
| **PART II**                       |
| ITEM  5.                          | MARKET  FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS |
| ITEM 6.                           | SELECTED FINANCIAL DATA |
| ITEM  7.                          | MANAGEMENT’S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
| ITEM  7A.                         | QUANATATIVE  AND QUALATATIVE DISCLOSURES ON MARKET RISK |
| ITEM  8.                          | FINANCIAL  STATEMENTS AND SUPPLEMENTARY DATA |
| ITEM  9.                          | CHANGES  AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
|                              |   |
| **PART III**                      |
| ITEM  10.                         | DIRECTORS  AND EXECUTIVE OFFICERS OF THE REGISTRANT |
| ITEM 11.                          | EXECUTIVE COMPENSATION |
| ITEM  12.                         | SECURITY  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
| ITEM  13.                         | CERTAIN  RELATIONSHIPS AND RELATED TRANSACTIONS |
|                              |   |
| **PART IV**                       |
| ITEM  14.                         | EXHIBITS,  FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K |
|                                   |  |  |  |  |

 

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**FORWARD-LOOKING STATEMENTS**

 

This Annual Report on Form 10-Kcontains certain forward-looking statements, which are based on management’scurrent expectations. These forward-looking statements include informationconcerning possible or assumed future results of operations, trends, financialresults and business plans, including those relating to earnings growth;revenue growth; origination volume in the Company’s mortgage business;non-interest income levels, including fees from product sales; creditperformance on loans made by the Company; tangible capital generation; marginson sales or securitizations of loans; market share; expense levels; and otherbusiness operations and strategies. For these statements, GreenPoint claims theprotection of the safe harbor for forward-looking statements contained in thePrivate Securities Litigation Reform Act of 1995 to the extent provided byapplicable law. Forward-looking statements involve inherent risks anduncertainties. We caution you that a number of important factors could causeactual results to differ materially from those contained in any forward-lookingstatement. Such factors include, but are not limited to: risks anduncertainties related to acquisitions, divestitures andterminating business segments, including related integration and restructuringactivities; prevailing economic conditions; changes in interest rates, loandemand, real estate values, and competition, which can materially affectorigination levels and gain on sale results in the Company’s mortgage business;the level of defaults, losses and prepayments on loans made by the Company, whetherheld in portfolio, sold in the whole loan secondary markets or securitized,which can materially affect required loan loss reserve levels and the Company’speriodic valuation of its retained interests from securitizations; changes inaccounting principles, policies, and guidelines; adverse changes or conditionsin capital or financial markets, which can adversely affect the ability of theCompany to sell or securitize loan originations on a timely basis or at priceswhich are acceptable to the Company; actions by rating agencies and the affectsof these actions on the Company’s businesses, operations and funding requirements; changes in any applicable law, rule, regulationor practice with respect to tax or legal issues; and other economic,competitive, governmental, regulatory, and technological factors affecting theCompany’s operations, pricing, products and services. The forward-lookingstatements are made as of the date of this report, and the Company assumes noobligation to update the forward-looking statements or to update the reasonswhy actual results could differ from those projected in the forward-lookingstatements.

 

The Company regularly exploresopportunities for acquisitions of and holds discussions with financialinstitutions and related businesses, and also regularly explores opportunitiesfor acquisitions of liabilities and assets of financial institutions and otherfinancial services providers. The Company routinelyanalyzes its lines of business and from time to time may increase, decrease orterminate one or more activities.

 

**RISKFACTORS**

 

In addition to all of the information in this Report,and the documents incorporated herein by reference, the following risk factorsshould be considered. Many of these risk factors are discussed in greaterdetail throughout this Report.

 

***The Companyoperates in a competitive market***

The Company faces significant competition both in making loans and in attractingdeposits. The Company competes primarily on the basis of pricing in many of themarkets in which it conducts business. From time to time, the Company’scompetitors seek to compete aggressively on the basis of pricing factors andthe Company may lose market share to the extent it is unwilling to match itscompetitors’ pricing in order to maintain its interest margins. To the extentthat the Company matches competitors’ pricing, it may experience lower interestmargins.

 

***The Company faces market risk relating to interest rates andmortgage rates***

Interest rate risk arises in the ordinary courseof the Company’s business, as the repricing characteristics of its loans do notnecessarily match those of its deposit liabilities. Changes in interest ratescan also affect the number of loans the Company originates, as well as thevalue of its loans and other interest-earning assets and its ability to realizegains on the sale of those assets and liabilities. Prevailing interest ratesalso affect the extent to which borrowers prepay loans owned by the Company.When interest rates increase, borrowers are less likely to prepay their loans,and when interest rates decrease, borrowers are more likely to prepay loans.The Company may then be forced to invest the funds generated by thoseprepayments at less favorable interest rates. Similarly, prepayments on mortgage-backedsecurities can hurt the value of those securities and the interest incomegenerated from them. In addition, an increase in interest rates could hurt theability of the Company’s borrowers who have loans with floating interest ratesto meet their increased payment obligations. If those borrowers were not ableto make their payments, then the Company would suffer  losses, and its level of performing assets would decline.

 

Increases in interest rates might cause depositors toshift funds from accounts that have comparatively lower cost (such as regularsavings accounts) to accounts with a higher cost (such as certificates ofdeposit).  If the cost of depositsincreased at a rate greater than the yield on interest-earning assetsincreases, the Company’s interest-rate spread would suffer.

 

1

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Market risk also arises as the Company originates andaccumulates fixed rate mortgage loans prior to their sale or securitization. Asapplications are approved, a commitment is made to lend at a specified interestrate. Should rates rise, either prior to closing or after closing but prior tosale or securitization, the price at which the loan will be sold or securitizedwill decline. Hedging strategies are implemented to mitigate the risk oflowered prices in rising rate environments.

 

***The Company is exposed to credit risk***

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

 

Prior to exiting the manufactured housing financebusiness, the Company securitized and sold with recourse most of itsmanufactured housing loans. The Company retains most of the credit riskinherent in these loans. The Company also securitizes or sells certain mortgageloans with recourse. Expected losses are deducted when estimating the gain onsale and the initial value of retained interests. The value of retainedinterests in the securitizations is reviewed each quarter, as are theliabilities associated with letters of credit issued in the securitizations.Based on recent loss trends, the values are updated. The Company’s operatingresults from discontinued operations could be adversely affected if itssecuritizations do not perform well. These risks are further described in Note7 of the Company’s 2001 Annual Report to Shareholders and is incorporatedherein by reference.

 

***Expanding into new markets may result in increased losses***

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

 

***The Company is extensively regulated***

The Company’s operations are subject to extensiveregulation by federal, state and local authorities and are subject to variouslaws and judicial and administrative decisions imposing requirements andrestrictions on its operations. Policies adopted by these entities cansignificantly affect the Company’s business operations. In addition, these authoritiesperiodically conduct examinations of the Company and may impose variousrequirements or sanctions.

 

***Legislative and regulatory proposals may unfavorably affectthe Company’s businesses***

Proposals to change the laws governing financialinstitutions are frequently raised in federal, state and local legislatures andbefore regulatory authorities. Changes in applicable laws or policies couldmaterially affect the Company’s businesses, and the likelihood of any majorchanges in the future and their effects are impossible to determine. Moreover,it is impossible to predict the ultimate form any proposed legislation orregulation might take or how it might affect the Company. Similarly, changes inapplicable accounting principles, policies or guidelines could impact themanner in which the Company reports the results of its operations.

 

***The Company’s ability to pay dividends is limited***

The Company is a holding company and all of itsoperations are conducted through its subsidiaries. Therefore, the Company’s abilityto pay dividends is dependent upon the earnings of its subsidiaries and theirability to pay dividends or make other payments to the Company. Certain lawsand regulatory requirements limit the ability of the Company’s subsidiaries topay dividends or make other payments to it.

 

***The Company faces several risks relating to businesscombinations***

The Company continually evaluates mergers,acquisitions and other business combination opportunities and it may undertakeinformal discussions or negotiations that may result in formal discussions andfuture business combinations. Transactions of this type have risks relating to,among other things, the loss of key employees, the disruption of ongoingbusinesses, the failure to integrate the combined businesses and the failure toachieve expected synergies. The Company cannot predict what the consequenceswould be of any such business combination. However, an unsuccessful businesscombination, and other factors, could ultimately result in the Company’sdivestiture or termination of a business segment. In addition, any businesscombination in which the Company issues common stock could dilute the ownershipinterest of its stockholders.

 

2

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***The Company’s charter and by-laws contain provisions withpossible anti-takeover effects***

The Company’s certificate of incorporation and bylawscontain provisions that might have the effect of discouraging certaintransactions involving an actual or threatened change of control of theCompany, and Delaware law contains certain provisions, including those relatedto transactions with certain interested stockholders, that might have theeffect of discouraging certain transactions not approved by a company’s boardof directors.

 

**PART I**

 

**ITEM 1.       BUSINESS**

 

**General**

 

GreenPoint Financial Corp. (the “Company” or“GreenPoint”) is a bank holding company organized under the laws of the stateof Delaware and registered under the Bank Holding Company Act of 1956, asamended.

 

The Company, a leading national specialty housingfinance company with more than $25 billion in mortgage loan originations in2001, has two principal businesses. GreenPoint Mortgage (“GPM”), headquarteredin Novato, California, is a leading national lender in non-conforming residentialmortgages, specializing in “Alternative A” (“Alt A”) mortgage loans. GreenPointBank (the “Bank”), a New York State chartered savings bank, is the thirdlargest thrift depository in the Greater New York area with $11 billion indeposits in 74 branches serving more than 400,000 households.

 

Through the Bank and GPM, the Company is primarilyengaged in lending throughout the nation. GPM originates both adjustable andfixed rate mortgage loans, primarily through a network of mortgage brokers,mortgage bankers, attorneys and other real estate professionals and, to alesser extent, from customers and members of the local communities inGreenPoint’s lending area. The Bank continues to attract retail deposits fromthe general public and invests those deposits, together with funds generatedfrom operations, in loans and marketable securities. The Bank’s revenues arederived principally from interest on its loan portfolio and investmentsecurities, proceeds from the sales or securitizations of mortgage loans, feesfrom the servicing of these loans and retail consumer banking fees andcommissions earned. The Bank’s primary sources of funds are deposits, proceedsfrom loan sales and securitizations, and proceeds from principal and interestpayments on loans, mortgage-backed securities and other securities.

 

In December 2001, GreenPoint formally adopted a Planto discontinue the manufactured housing lending business. The Plan ofdiscontinuation includes the decision to cease accepting loan applications andfund only new loans pertaining to existing loan commitments. The Company willcontinue to honor its contractual commitments to service its current loanportfolio and plans to sell most of the remaining loans on its balance sheet of$705 million. A restructuring accrual has been established to account forcurrent and future contractual commitments outstanding, however this accrualmay need to be adjusted in the future if events change significantly.

 

GreenPoint Community Development Corp. (“GPCDC”) wasorganized in 1993 as a for-profit community development subsidiary of theCompany. Complementing the Bank’s leadership in lending in low- andmoderate-income areas and to minorities, GPCDC’s focus is primarily on speciallending programs, development opportunities and assistance, consulting andother activities that promote the objective of greater access to affordablehousing for low-and moderate-income persons residing in the areas served by theCompany.

 

3

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**MortgageBanking Activities**

 

***Products and Services***

The Company, through its mortgage banking subsidiaryGreenPoint Mortgage Funding, Inc. (“GPM”) is in the business of originating,selling, securitizing, and servicing mortgage loans secured by one–to–fourfamily residences. Also, certain loans originated by GPM are retained in theBank’s loan portfolio. As a specialty mortgage lender, GPM’s strategy is tofocus on specialized mortgage loan products for primarily high credit qualityborrowers. GPM generally places an emphasis on credit scores obtained fromthree major credit bureaus to evaluate the credit quality of borrowers. GPMconsiders “ high credit quality borrowers” to be those whose credit scoresequal or exceed levels required for the sale or exchange of their mortgageloans through the Federal National Mortgage Association (“Fannie Mae”) or theFederal Home Loan Mortgage Corporation (“Freddie Mac”) (collectively “theAgencies”). The specialized mortgage loans targeted by GPM provide a relativelygreater “spread” (i.e., greater interest and other income to the originatorrelative to the cost associated with funding and selling the mortgage loans)compared to other mortgage loans that present a similar credit risk. GPMbelieves that its wholesale lending channel supported by its correspondent andretail lending channels, provides an efficient and responsive originationsystem for the types of mortgage loans it seeks to originate.

 

GPM presently offers a broad range of mortgage loanproducts in order to provide maximum flexibility to borrowers and third partymortgage brokers and other entities through which it originates mortgage loans.These products include conforming agency mortgage loans, non-conformingmortgage loans (including Alt A mortgage loans), home equity loans and limiteddocumentation (“No Doc”) loans. Alt A loans may fail to satisfy certainelements of the agency underwriting criteria, such as those relating todocumentation, employment history, income verification, loan to value ratios,qualifying ratios, or other compensating factors. No Doc loans serve aparticular niche of borrowers willing to pay a premium in the form of higherinterest rates and provide larger down payments. In return, the borrowerreceives more expedient loan processing by virtue of providing less income andasset information, as compared to loans underwritten in conformance with Agencystandards.

 

***Credit Parameters***

Loan amount limits, maximum loan-to-value ratios andloan pricing are guided by an evaluation of a borrower’s credit history and theloan purpose. This evaluation results in a borrower being classified in aparticular loan level category, to which lending parameters have been ascribedby GPM. In making this determination, GPM obtains credit verification fromthree independent credit bureaus prior to entering into loan commitments.Factors considered in making the commitment include the number and length oftime credit lines have been outstanding, prior mortgage loan payment histories,performance on installment loans and revolving lines of credit, collection andcharge-off experience, and prior bankruptcies and foreclosures. GPM alsoconsiders a credit score ascribed to the borrower under a credit evaluationmethodology developed by Fair, Isaac and Company (“FICO”). This scoreindicates, based on their statistical analysis, the percentage of borrowersthat would be expected to become 90 days delinquent on an additional loan.

 

***Mortgage Loan Servicing***

GPM also engages in mortgage loan servicing, whichincludes the processing of mortgage loan payments and the administration ofmortgage loans. GPM’s primary source of servicing rights is the Bank’s loanportfolio and mortgage loans it has originated and sold, and for which it hasretained the right to service. As of December 31, 2001, GPM’s mortgage loanservicing portfolio consisted of approximately 195,786 one–to–four familyresidential mortgage loans with an aggregate principal balance of $25.8billion, including $14.0 billion serviced for GreenPoint and $11.8 billion servicedfor other investors. GPM can realize the value embedded in its mortgage loanservicing portfolio immediately by selling its mortgage loan servicing rightsor, alternatively, it can realize the value gradually over the life of themortgage loan servicing portfolio through the receipt of monthly mortgage loanservicing fees and imputed interest.

 

**ConsumerBanking Activities**

 

The Consumer Branch Network (“Branch Network”)consists of 74 full-service banking offices with 113 automated teller machines.The Branch Network operates 29 branches in Long Island, 41 branches in New YorkCity, and 4 branches in Westchester County in New York. In addition to itsbranch system, the Bank’s deposit gathering network includes its telephonebanking system. The Branch Network also offers a variety of financial servicesto meet the needs of the communities it serves. Among the services offered aretraditional time, savings and checking accounts, annuity products, mutualfunds, mortgages, home equity loans, credit and debit cards, on-line banking,Life Insurance, safe deposit services, student loans, installment loans andautomatic payroll and Social Security deposit programs. The Bank has recentlystarted to offer a variety of financial services to meet the needs of businesscommunities it serves. Services included are business checking, savings, time,escrow management, IOLA and lease security accounts, Keogh, SEP-IRA, simpleIRA, 401k and 403b plans, credit and debit cards, night deposit, on-linebanking and merchant credit/debit processing.

 

4

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**ManufacturedHousing Loan Servicing Activities**

 

GreenPoint Credit, LLC (“GPC”) servicingresponsibilities include collecting principal and interest payments, taxes,insurance premiums and other payments from obligors and, when such loans arenot owned by GPC, remitting principal and interest payments to the owners.Collection procedures, which are managed at the regional office level, includerepossession and resale of manufactured homes securing defaulted loans (andforeclosure if land is involved). GPC will enter into workout agreements withobligors under certain defaulted loans, if deemed advisable. Although decisionsas to whether to repossess any manufactured home are made on an individualbasis, GPC’s general policy is to institute repossession procedures promptlyafter regional office personnel determine that it is unlikely that a defaultedloan will be brought current, and thereafter to pursue diligently the resale ofsuch manufactured homes.

 

GPC services loans on behalf of other entities and itsown portfolio. At December 31, 2001, GPC serviced approximately 412,111manufactured housing loans with an outstanding principal balance of $13.0billion. At December 31, 2001, GPC serviced approximately 25,060 manufacturedhousing loans in its own portfolio with an outstanding principal balance of$973 million. GPC does not recognize service fee income separately for loansserviced in its own portfolio.

 

**Competition**

 

The Company faces significant competition both inmaking loans and in attracting deposits. The Company’s competition for loanscomes principally from savings banks, commercial banks, savings and loanassociations, mortgage banking companies and credit unions. Its most direct competitionfor deposits has historically come from savings and loan associations, savingsbanks, commercial banks and credit unions. The New York City metropolitan areahas a high density of financial institutions, many of which are branches ofsignificantly larger institutions which have greater financial resources thanthe Company. The Bank faces additional competition for deposits fromnon-depository competitors such as the mutual fund industry, securities andbrokerage firms and insurance companies.

 

GPM faces intense competition, primarily fromcommercial banks, savings and loans and other mortgage lenders. As GPM expandsinto particular geographic markets, it will face competition from mortgagelenders with established positions in such markets. Competition can take placeon various levels, including convenience in obtaining a mortgage loan, service,marketing, origination channels and pricing. Many of GPM’s competitors in thefinancial services business are substantially larger and have more capital andother resources than GPM. Many of GPM’s competitors are well established in thespecialty mortgage loan market and a number of others are recent entrants intothat market seeking the relatively attractive profit margins currentlyassociated with specialty mortgage loan products. Fannie Mae and Freddie Macare currently developing technologies and business practices that will expandthe scope of mortgage loans eligible to be Agency mortgage loans, which mayinclude some Alt A and subprime mortgage loans. To the extent market pricingfor GPM’s mortgage loan products becomes more competitive, it may be moredifficult to originate and purchase mortgage loans with attractive yields insufficient volume to maintain profitability.

 

GPM depends primarily on independent mortgage brokersand, to a lesser extent, on correspondent lenders, for the origination andpurchase of its wholesale mortgage loans, which constitute a significantportion of GPM’s mortgage loan production. These independent mortgage brokersdeal with multiple lenders for each prospective borrower. GPM competes withthese lenders for the independent brokers’ business on the basis of price,service, loan fees, costs and other factors. GPM’s competitors also seek toestablish relationships with such brokers, who are not obligated by contract orotherwise to do business with GPM. GPM’s future results of operations andfinancial condition may be vulnerable to changes in the volume and costs of itswholesale mortgage loans resulting from, among other things, competition fromother lenders and purchasers of such mortgage loans.

 

The types of loans that the Company may originate aresubject to federal and state laws and regulations. Interest rates charged byGreenPoint on loans are affected principally by the demand for such loans andthe supply of money available for lending purposes and the rates offered by itscompetitors. These factors are, in turn, affected by general and economicconditions, monetary policies of the federal government, including the FederalReserve Board (“FRB”), legislative tax policies and governmental budgetarymatters.

 

5

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**Market Risk Management**

 

Interest rate risk arises in the ordinary course ofthe Company’s business, as the repricing characteristics of its loans do notnecessarily match those of its deposit liabilities. The resulting interest raterisk is managed by careful attention to the mix of asset maturities and depositofferings and by adjustments to the Company’s investment portfolio and the useof off balance sheet instruments such as interest rate swaps. The investmentstrategies are designed and implemented by the Asset and Liability ManagementCommittee, (“ALCO”) within policies and limits approved by the Board of Directors.ALCO makes use of a variety of tools to measure market risk. Among these aregap repricing reports and income simulations that provide estimates of theCompany’s earnings sensitivities to various interest rate changes.

 

Market risk also arises as the Company originates andaccumulates fixed rate mortgage and manufactured housing loans prior to theirsale or securitization. As applications are approved, a commitment is made tolend at a specified interest rate. Should rates rise, either prior to closingor after closing but prior to sale or securitization, the price at which theloan will be sold or securitized will decline. Hedging strategies, usingforward sales in the case of residential mortgages, are implemented to mitigatethe risk of lowered prices in rising rate environments. Refer to Company’sAnnual Report to Shareholders for Fiscal Year ended December 31, 2001, pages16-20. The Company assumes counterparty risk primarily in its short terminvestments, hedging activities, and mortgage purchases or sales. Counterpartyexposure limits are assigned by Risk Management based on internal policies andare monitored on an ongoing basis.

 

**LiquidityManagement**

 

Liquidity management involves planning to meetanticipated funding needs at a reasonable cost, as well as developingcontingency plans to meet unanticipated funding needs. Liquidity management isgoverned by policies formulated and monitored by ALCO, which take into accountthe marketability of assets, the sources and stability of funding, and the levelof unfunded commitments.

 

Long-term liquidity needs are also provided by a largecore deposit base, which is the most stable source of liquidity a bank canhave, due to the long-term relationship with depositors and the depositinsurance provided by the FDIC. Deposit funding is supplemented by long-termdebt, advances from the Federal Home Loan Bank of New York (“FHLB”) and otherborrowings. The discount window of the Federal Reserve Bank of New York isavailable to the Company, to the extent that eligible collateral has beenpledged, as a lender of last resort.

 

**Credit Risk**

 

The Company assumes credit risk primarily in itsheld-for-investment loan portfolio, and in the recourse it provides inconjunction with loan sales or securitizations. These risks are furtherdescribed on page 19 of the Company’s 2001 Annual Report to Shareholders and isincorporated herein by reference.

 

***Loans held forInvestment Portfolio***

The majority of the Company’s loan portfolio consistsof fixed and ARM loans secured by one-to four-family residences and to a lesserextent, multi-family residential loans, commercial real estate loans and otherloans held for investment.

 

6

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

 

|                                                                        |   | **December  31,**         |         |
|-----------------------------------------------------------------------------|--------|---------------------------|--------------|
|                                                                        |   | **2001**                  |         | **2000** |   | **1999** |   |
|                                                                        |   | **Amounts**               |         | **Percent   of Total** |   | **Amounts** |   | **Percent  of Total** |   | **Amounts** |   | **Percent   of Total** | *** *** |
|                                                                        |   | **(Dollars in millions)** | *** *** |
| Loans receivable  held for investment:                                      |   |                      |         |   |   |   |   |   |   |   |   |   |   |
| Mortgage loans:                                                             |   |                      |         |   |   |   |   |   |   |   |   |   |   |
| One-to  four-family                                                         |   | $                         | 8,930        |   | 89 | % | $ | 7,018 |   | 81 | % | $ | 7,475 |   | 80 | % |
| Multi-family                                                                |   | 356                       |         | 4 |   | 366 |   | 4 |   | 458 |   | 5 |   |
| Commercial                                                                  |   | 576                       |         | 5 |   | 631 |   | 7 |   | 627 |   | 7 |   |
| Home equity  loans                                                          |   | 87                        |         | 1 |   | 101 |   | 1 |   | 89 |   | 1 |   |
| Total mortgage  loans held for investment                                   |   | 9,949                     |         | 99 |   | 8,116 |   | 93 |   | 8,649 |   | 93 |   |
| Other loans:                                                                |   |                      |         |   |   |   |   |   |   |   |   |   |   |
| Loans secured by  depositors’ funds                                    |   | 19                        |         | — |   | 22 |   | — |   | 23 |   | — |   |
| Manufactured  housing loans                                                 |   | 9                         |         | — |   | 514 |   | 6 |   | 590 |   | 6 |   |
| Recreational  vehicle loans                                                 |   | 8                         |         | — |   | 12 |   | — |   | 16 |   | — |   |
| All other loans                                                             |   | 34                        |         | 1 |   | 32 |   | 1 |   | 30 |   | 1 |   |
| Total other  loans                                                          |   | 70                        |         | 1 |   | 580 |   | 7 |   | 659 |   | 7 |   |
| Total loans  receivable held for investment                                 |   | 10,019                    |         | 100 | % | 8,696 |   | 100 | % | 9,308 |   | 100 | % |
| Net deferred  loan origination costs (fees) and unearned premium (discount) |   | 23                        |         |   |   | (9 | ) |   |   | (15 | ) |   |   |
| Allowance for  possible loan losses                                         |   | (81                       | )            |   |   | (113 | ) |   |   | (113 | ) |   |   |
| Loans receivable  held for investment, net                                  |   | $                         | 9,961        |   |   |   | $ | 8,574 |   |   |   | $ | 9,180 |   |   |   |

 
|                                                      |   | **December  31,**         |   |
|-----------------------------------------------------------|--------|---------------------------|--------|
|                                                      |   | **1998**                  |   | **1997** |   |
|                                                      |   | **Amounts**               |   | **Percent  of Total** |   | **Amounts** |   | **Percent  of Total** | *** *** |
|                                                      |   | **(Dollars in millions)** |   |
| Loans receivable  held for investment:                    |   |                      |   |   |   |   |   |   |   |
| Mortgage loans:                                           |   |                      |   |   |   |   |   |   |   |
| One-to  four-family                                       |   | $                         | 8,023  |   | 85 | % | $ | 7,682 |   | 86 | % |
| Multi-family                                              |   | 594                       |   | 7 |   | 621 |   | 7 |   |
| Commercial                                                |   | 574                       |   | 6 |   | 537 |   | 6 |   |
| Home equity  loans                                        |   | 82                        |   | 1 |   | 66 |   | 1 |   |
| Total mortgage  loans held for investment                 |   | 9,273                     |   | 99 |   | 8,906 |   | 100 |   |
| Other loans:                                              |   |                      |   |   |   |   |   |   |   |
| Loans secured by  depositors’ funds                  |   | 24                        |   | — |   | 30 |   | — |   |
| Manufactured  housing loans                               |   | —                    |   | — |   | — |   | — |   |
| Recreational  vehicle loans                               |   | 24                        |   | — |   | — |   | — |   |
| All other loans                                           |   | 79                        |   | 1 |   | — |   | — |   |
| Total other  loans                                        |   | 127                       |   | 1 |   | 30 |   | — |   |
| Total loans  receivable held for investment               |   | 9,400                     |   | 100 | % | 8,936 |   | 100 | % |
| Less:                                                     |   |                      |   |   |   |   |   |   |   |
| Net deferred  loan origination fees and unearned discount |   | (14                       | )      |   |   | (31 | ) |   |   |
| Allowance for  possible loan losses                       |   | (113                      | )      |   |   | (109 | ) |   |   |
| Loans receivable  held for investment, net                |   | $                         | 9,273  |   |   |   | $ | 8,796 |   |   |   |

 

7

----

 

As of December 31, 2001, 43.2% of the Company’smortgage loan portfolio was secured by properties located in New YorkState and 26.6% of the portfolio was secured by properties in California. Theproperties securing the remaining portfolio are dispersed throughout thecountry, with no state representing more than 10%.

 

*Loan Maturity and Repricing*. The following table shows the contractual maturitiesof the Company’s loan portfolio, including loans receivable held for sale, atDecember 31, 2001. The table does not include prepayments or scheduledprincipal amortization. Prepayments and scheduled principal amortization onmortgage loans totaled $2.7 billion for the year ended December 31, 2001.

 
|               |   | **December  31, 2001**    |       |
|--------------------|--------|---------------------------|------------|
|               |   | **Mortgage  Loans**       |       |   |   |   |   |
|               |   | **One-to  Four-Family**   | ** ** | **Multi-Family** | ** ** | **Commercial** | ** ** | **Other  Loans** | ** ** | **Total  Loans Receivable** | ** ** |
|               |   | **(Dollars in millions)** |       |
| Amounts due (1):   |   |                      |       |   |   |   |   |   |   |   |   |
| Within one year    |   | $                         | 47         |   | $ | 2 |   | $ | 2 |   | $ | 66 |   | $ | 117 |   |
| One to five  years |   | 136                       |       | 43 |   | 55 |   | 15 |   | 249 |   |
| Over five years    |   | 12,847                    |       | 302 |   | 519 |   | 686 |   | 14,354 |   |
| Total amounts  due |   | $                         | 13,030     |   | $ | 347 |   | $ | 576 |   | $ | 767 |   | $ | 14,720 |   |

 

----

*(1)Does not include non-accrual loans.*

 

The following table sets forth, at December 31, 2001,the dollar amount of all fixed rate loans contractually due and adjustable rateloans repricing after December 31, 2002.

 
|                    |   | **Due or  Repricing After December 31, 2002** |   |
|-------------------------|--------|-----------------------------------------------|--------|
|                    |   | **Fixed**                                     |   | **Adjustable** |   | **Total** |   |
|                    |   | **(Dollars  in millions)**                    |   |
| Mortgage loans  (1):    |   |                                          |   |   |   |   |   |
| One-to  four-family     |   | $                                             | 8,055  |   | $ | 3,356 |   | $ | 11,411 |   |
| Multi-family            |   | 329                                           |   | 11 |   | 340 |   |
| Commercial              |   | 551                                           |   | 16 |   | 567 |   |
| Other loans (1)         |   | 426                                           |   | — |   | 426 |   |
| Total loans  receivable |   | $                                             | 9,361  |   | $ | 3,383 |   | $ | 12,744 |   |

* *

----

*(1)Does not include non-accrual loans.*

 

8

----

 

At December 31, 2001, 2000, 1999, 1998 and 1997, loansdelinquent 90 days or more were as follows:

 
|                             |   | **December  31,**         |       |
|----------------------------------|--------|---------------------------|------------|
|                             |   | **2001**                  |       | **2000** |   | **1999** |   |
|                             |   | **90 days or  more**      |       |
|                             |   | **Number  of loans**      |       | **Principal  Balance  of Loans** |   | **Number  of loans** |   | **Principal  Balance  of loans** |   | **Number  of loans** |   | **Principal  Balance  of loans** |   |
|                             |   | **(Dollars in millions)** | ** ** |
| Mortgage loans:                  |   |                      |       |   |   |   |   |   |   |   |   |   |   |
| One-to  four-family              |   | 1,295                     |       | $ | 172 |   | 1,306 |   | $ | 164 |   | 1,379 |   | $ | 167 |   |
| Multi-family                     |   | 80                        |       | 8 |   | 103 |   | 12 |   | 184 |   | 24 |   |
| Commercial real  estate          |   | 96                        |       | 14 |   | 103 |   | 13 |   | 152 |   | 21 |   |
| Home equity  loans               |   | 27                        |       | 2 |   | 19 |   | 1 |   | 27 |   | 2 |   |
| Total mortgage  loans            |   | 1,498                     |       | 196 |   | 1,531 |   | 190 |   | 1,742 |   | 214 |   |
| Other loans                      |   | 676                       |       | 12 |   | 586 |   | 4 |   | 239 |   | 2 |   |
| Total loans                      |   | 2,174                     |       | $ | 208 |   | 2,117 |   | $ | 194 |   | 1,981 |   | $ | 216 |   |
|                             |   |                      |       |   |   |   |   |   |   |   |   |   |   |
| Delinquent loans  to total loans |   |                      |       | 1.39 | % |   |   | 1.82 | % |   |   | 2.05 | % |

 

 
|                             |   | **December  31,**         |       |
|----------------------------------|--------|---------------------------|------------|
|                             |   | **1998**                  |       | **1997** |   |
|                             |   | **90 days or  more**      | ** ** |
|                             |   | **Number  of loans**      |       | **Principal  Balance  of Loans** |   | **Number  of loans** |   | **Principal  Balance  of loans** |   |
|                             |   | **(Dollars in millions)** |       |
| Mortgage loans:                  |   |                      |       |   |   |   |   |   |   |
| One-to  four-family              |   | 1,930                     |       | $ | 213 |   | 2,596 |   | $ | 255 |   |
| Multi-family                     |   | 286                       |       | 34 |   | 372 |   | 41 |   |
| Commercial real  estate          |   | 192                       |       | 25 |   | 258 |   | 34 |   |
| Home equity  loans               |   | 26                        |       | 1 |   | 48 |   | 1 |   |
| Total mortgage  loans            |   | 2,434                     |       | 273 |   | 3,274 |   | 331 |   |
| Other loans                      |   | 134                       |       | 1 |   | 84 |   | — |   |
| Total loans                      |   | 2,568                     |       | $ | 274 |   | 3,358 |   | $ | 331 |   |
|                             |   |                      |       |   |   |   |   |   |   |
| Delinquent loans  to total loans |   |                      |       | 2.50 | % |   |   | 3.46 | % |

 

9

----

 

The following table sets forth information regardingall non-accrual loans, including loans in forbearance, loans which are90 days or more delinquent but on which the Company is accruing interestand other real estate owned at the dates indicated. If all non-accrual loanshad been performing in accordance with their original terms, the Company wouldhave recorded interest income of $23 million, as opposed to $21 million, whichwas included in interest income for the year ended December 31, 2001.

 
|                                                       |   | **December  31,**          |   |
|------------------------------------------------------------|--------|----------------------------|--------|
|                                                       |   | **2001**                   |   | **2000** |   | **1999** |   | **1998** |   | **1997** |   |
|                                                       |   | **(Dollars  in millions)** |   |
| Non-accrual  mortgage loans                                |   | $                          | 199    |   | $ | 195 |   | $ | 219 |   | $ | 285 |   | $ | 355 |   |
| Non-accrual  other loans (1)                               |   | 7                          |   | 2 |   | — |   | — |   | — |   |
| Total  non-performing loans (2)                            |   | 206                        |   | 197 |   | 219 |   | 285 |   | 355 |   |
| Other real  estate owned, net (3)                          |   | 12                         |   | 13 |   | 8 |   | 12 |   | 24 |   |
| Total  non-performing assets                               |   | $                          | 218    |   | $ | 210 |   | $ | 227 |   | $ | 297 |   | $ | 379 |   |
|                                                       |   |                       |   |   |   |   |   |   |   |   |   |
| Other loans 90  days or more delinquent and still accruing |   | $                          | 5      |   | $ | 4 |   | $ | 2 |   | $ | 1 |   | $ | — |   |

 
| **Continuing Operations:**                                  |   |   |   |   |   |   |   |   |   |   |   |
|-------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Non-performing  loans to mortgage loans held for investment |   | 2.04   | %      | 2.41   | %      | 2.54   | %      | 3.03   | %      | 3.97   | %      |
| Non-performing  assets to total assets                      |   | 1.06   | %      | 1.31   | %      | 1.47   | %      | 1.98   | %      | 2.74   | %      |

 

----

*(1) Excluding certain other loansdelinquent 90 days or more, such as guaranteed student loans, on whichprincipal and interest are guaranteed by the U.S. government and certain otherloans on which delinquent principal and interest may be deducted from theborrower’s deposit account balances.*

*(2) As of December 31, 2001,non-accrual loans included 1,359 one-to four-family loans, with an aggregatebalance of $175 million, 83 multi-family loans with an aggregate balance of $8million, 100 commercial real estate loans with an aggregate balance of $14million, 369 other loans with an aggregate balance of $7 million and 29 homeequity loans with an aggregate balance of $2 million.*

*(3) Net of related valuationallowance of $0.2 million, $0.6 million, $0.3 million, $0.3 million, and $0.9million for foreclosed real estate at December 31, 2001, 2000, 1999, 1998 and1997, respectively.*

 

**Allowancefor Loan Losses**

 

The Company has set forth a policy for establishmentand review of the adequacy of the allowance for loan losses. The policyrequires management to provide for 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 changesin general economic and market conditions that may affect the financialcircumstances of borrowers and/or residential real estate values within theCompany’s lending areas. The policy is further described in the CriticalAccounting Policies section, page 22, of the Company’s 2001 Annual Report toShareholders and is incorporated herein by reference.

 

10

----

 

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

 
|                                                                   |   | **December  31,**          |   |
|------------------------------------------------------------------------|--------|----------------------------|--------|
|                                                                   |   | **2001**                   |   | **2000** |   | **1999** |   | **1998** |   | **1997** |   |
|                                                                   |   | **(Dollars  in millions)** |   |
| Balance at  beginning of period                                        |   | $                          | 113    |   | $ | 113 |   | $ | 113 |   | $ | 109 |   | $ | 105 |   |
| (Benefit)  provision charged to income:                                |   |                       |   |   |   |   |   |   |   |   |   |
| Continuing                                                             |   | (13                        | )      | 5 |   | (20 | ) | 12 |   | 19 |   |
| Discontinued                                                           |   | 122                        |   | 32 |   | 34 |   | 2 |   | — |   |
| Total provision  charged to income                                     |   | 109                        |   | 37 |   | 14 |   | 14 |   | 19 |   |
| Loans  charged-off:                                                    |   |                       |   |   |   |   |   |   |   |   |   |
| Mortgage loans  held for investment                                    |   | (5                         | )      | (6 | ) | (8 | ) | (9 | ) | (16 | ) |
| Manufactured  housing loans held for investment                        |   | (26                        | )      | (43 | ) | (12 | ) | (2 | ) | — |   |
| Manufactured  housing –transfer to loans receivable held for sale |   | (114                       | )      | — |   | — |   | — |   | — |   |
| Total  charge-offs                                                     |   | (145                       | )      | (49 | ) | (20 | ) | (11 | ) | (16 | ) |
| Recoveries:                                                            |   |                       |   |   |   |   |   |   |   |   |   |
| Mortgage loans  held for investment                                    |   | —                     |   | — |   | 1 |   | 1 |   | 1 |   |
| Manufactured  housing loans held for investment                        |   | 4                          |   | 12 |   | 5 |   | — |   | — |   |
| Total recoveries                                                       |   | 4                          |   | 12 |   | 6 |   | 1 |   | 1 |   |
| Balance at end  of period                                              |   | $                          | 81     |   | $ | 113 |   | $ | 113 |   | $ | 113 |   | $ | 109 |   |

 
| **Asset Quality Ratios – Continuing  Operations:** |   |   |   |   |   |   |   |   |   |   |   |
|---------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Net loan  charge-off experience to average total loans  |   | 0.05   | %      | 0.06   | %      | 0.08   | %      | 0.09   | %      | 0.18   | %      |
| Allowance for  loan losses to loans held for investment |   | 0.75   | %      | 1.14   | %      | 1.08   | %      | 1.20   | %      | 1.22   | %      |
| Allowance for  loan losses to non-performing loans      |   | 36.76  | %      | 47.10  | %      | 42.56  | %      | 39.50  | %      | 30.70  | %      |

 

In determining the adequacy of the allowance for loanlosses for GreenPoint’s mortgage loans held for investment, managementcompletes a General Valuation Allowance (“GVA”) analysis prior to the end ofeach quarterly reporting period. The GVA analysis stratifies GreenPoint’smortgage loans held for investment portfolio into three categories: firstmortgages, second mortgages and home equity loans. The first mortgage andsecond mortgage categories are further stratified into one-to-four family,multi-family and commercial loan strata. The GVA analysis calculates theexpected losses as a percentage of loans outstanding in each loan stratum (“GVAPercentage”) based upon the current delinquency status within each stratum.Management combines the results of the GVA analysis with judgments concerningmacro-economic conditions and portfolio concentrations to determine theappropriate level of the allowance for loan losses.

 

Due to inherent limitations in using modelingtechniques and GVA percentages, GreenPoint also maintains an unallocatedallowance. This allowance addresses short-term changes in the loan portfolio’shistorical real estate owned performance, delinquency trends, loan products,and portfolio growth, in addition to changes in the macro-economic environment.At the end of each quarter, management determines the adequacy of theunallocated reserve to address these risks.

 

In conjunction with its exit from the manufacturedhousing lending business, GreenPoint charged-off $114 million upon the transferof manufactured housing loans to loans receivable held for sale. The allowancefor possible loan losses at December 31, 2001 includes a $6 million allowancebalance associated with the remaining $50 million of loans from thediscontinued operation which remain in the held for investment portfolio.

 

11

----

 

**OtherCredit Exposure**

 

Prior to exiting the manufactured housing financelending business, GreenPoint securitized or sold with recourse most of itsmanufactured housing loans. At December 31, 2001, total loans outstanding underthese arrangements were $5.3 billion. GreenPoint retains most of the creditrisk inherent in these loans. GreenPoint also securitizes or sells certainmortgage loans with recourse. At December 31, 2001, total loans outstandingunder these arrangements were $2.1 billion. Expected losses were deducted whenestimating the gain on sale and the initial value of retained interests. Referto Note 1(l) in the Company’s 2001 Annual Report to Shareholders, foradditional information on Accounting for Loan Sales. The value of retainedinterests in the securitizations is reviewed each quarter as are the liabilitiesassociated with letters of credit issued in the securitizations. Based onrecent loss trends, the values are updated. Refer to the Company’s 2001Annual Report to Shareholders, page 38 to 40 for further quantitativeinformation about recourse arrangements and retained interests.

 

**LoansHeld for Sale**

 

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

 
|                                                               |   | **December  31,**          |   |
|--------------------------------------------------------------------|--------|----------------------------|--------|
|                                                               |   | **2001**                   |   | **2000** |   | **1999** |   | **1998** |   | **1997** |   |
|                                                               |   | **(Dollars  in millions)** |   |
| Loans receivable  held for sale:                                   |   |                       |   |   |   |   |   |   |   |   |   |
| Residential  mortgage loans                                        |   | $                          | 4,206  |   | $ | 1,749 |   | $ | 814 |   | $ | 905 |   | $ | 646 |   |
| Guaranteed  student loans                                          |   | 1                          |   | 2 |   | 2 |   | 3 |   | 4 |   |
| Manufactured  housing loans                                        |   | 517                        |   | 101 |   | 266 |   | 535 |   | — |   |
| Manufactured  housing land/home loans                              |   | 188                        |   | 119 |   | 131 |   | 139 |   | — |   |
| Net, deferred  loan origination costs (fees) and unearned discount |   | 33                         |   | 10 |   | (5 | ) | (4 | ) | 7 |   |
| Loans receivable  held for sale, net                               |   | $                          | 4,945  |   | $ | 1,981 |   | $ | 1,208 |   | $ | 1,578 |   | $ | 657 |   |

 

**LoanSales**

 

GreenPoint sells those loans it does not place in itsportfolio through either (1) whole loan sales, which involves selling pools ofloans to individual purchasers, or (2) securitization, which involves theprivate placement or public offering of pass-through asset-backed securities. Thisapproach allows GreenPoint to capitalize on favorable conditions in either thesecuritization or whole loan sale market when loan production is sold. Inaddition, this dual approach allows GreenPoint to diversify its exposure to thevolatility of the capital markets.

* *

*Whole Loan Sales.* Most mortgage loans and some manufactured housingloans were sold as whole loans. These sales were predominately done withoutrecourse, meaning the credit risk on the loans was transferred to the buyer.For those whole loans sold with recourse, the Company retains some credit risk.Whole loan sales may either retain, or transfer to the buyer, the right toservice the loans.

* *

*Securitization.*The primary funding strategy of GPC was to securitizemanufactured housing loans originated or purchased. At GPM, home equity loanoriginations are typically sold through securitizations. Management hasstructured the operations and processes specifically for the purpose ofefficiently originating, purchasing, underwriting and servicing loans forsecuritization in order to meet the requirements of rating agencies, creditenhancers, and investors.

 

The Company has also established a reserve to coverlosses associated with repurchases of sold loans due to representation andwarranty violations. This reserve was determined using historical loss dataassociated with loan sales and additional reserves are set aside as the volumeof sold loans increases.

 

12

----

 

**SecuritiesInvestment Activities**

 

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

 

The Company’s investment policy permits investments invarious types of marketable investments including U.S. Treasury obligations,securities of various federal agencies, mortgage-backed securities,asset-backed securities, corporate debt securities, money market instruments,CD’s, Bank notes, preferred stock, commercial paper, municipal obligations, andequity. In addition, the Company, as a member of the FHLB, is required tomaintain a specified investment in the capital stock of the FHLB.

 

The Company’s money market investments consist ofinterest-bearing deposits in other banks, federal funds sold and securitiespurchased under agreements to resell (“reverse repurchase agreements”). Thereverse repurchase agreements are collateralized by securities having marketvalues of at least 102% of the amount of the funds advanced which are held by athird party custodian.

 

The Company designates securities as held to maturity,available for sale, or held for trading purposes. Securities held forindefinite periods of time for use in asset/liability management are classifiedas available for sale and are carried at fair value with unrealized gains orlosses excluded from earnings and reported in accumulated other comprehensiveincome as a separate component of stockholders’ equity, net of tax. Securitiesheld for trading purposes are carried at fair value with market revaluationsrecognized as realized gains and losses included in non-interest income.

 

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

 

The table below sets forth certain informationregarding the carrying and market values of the Company’s money marketinvestments, securities available for sale and securities held to maturity.

 
|                                                  |   | **December  31,**         |   |
|-------------------------------------------------------|--------|---------------------------|--------|
|                                                  |   | **2001**                  |   | **2000** |   | **1999** |   |
|                                                  |   | **Amortized  Cost**       |   | **Fair  Value** |   | **Amortized  Cost** |   | **Fair  Value** |   | **Amortized  Cost** |   | **Fair  Value** |   |
|                                                  |   | **(Dollars in millions)** |   |
| Money market  investments (1)                         |   | $                         | 167    |   | $ | 167 |   | $ | 171 |   | $ | 171 |   | $ | 1,053 |   | $ | 1,053 |   |
| Securities:                                           |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Securities  available for sale:                       |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government  and Federal agency obligations:      |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury  Notes/Bills                            |   | $                         | 6      |   | $ | 6 |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   |
| Agency  notes/asset-backed securities                 |   | 89                        |   | 90 |   | 158 |   | 159 |   | 140 |   | 138 |   |
| Mortgage-backed  securities                           |   | 550                       |   | 560 |   | 757 |   | 758 |   | 918 |   | 894 |   |
| Collateralized  mortgage obligations                  |   | 2,211                     |   | 2,210 |   | 1,926 |   | 1,934 |   | 590 |   | 584 |   |
| Trust  certificates collateralized by GNMA securities |   | 7                         |   | 7 |   | 13 |   | 12 |   | 16 |   | 17 |   |
| Corporate  asset-backed securities                    |   | —                    |   | — |   | — |   | — |   | 25 |   | 25 |   |
| Corporate bonds                                       |   | 104                       |   | 102 |   | 34 |   | 32 |   | 34 |   | 34 |   |
| Commercial paper                                      |   | —                    |   | — |   | — |   | — |   | 169 |   | 169 |   |
| Other                                                 |   | 246                       |   | 244 |   | 167 |   | 171 |   | 115 |   | 114 |   |
| Total securities  available for sale                  |   | $                         | 3,213  |   | $ | 3,219 |   | $ | 3,055 |   | $ | 3,066 |   | $ | 2,007 |   | $ | 1,975 |   |
|                                                  |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Securities held  to maturity:                         |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt  municipals                                |   | $                         | 1      |   | $ | 1 |   | $ | 1 |   | $ | 1 |   | $ | 1 |   | $ | 1 |   |
| Other                                                 |   | 2                         |   | 2 |   | 2 |   | 2 |   | 1 |   | 1 |   |
| Total securities  held to maturity                    |   | $                         | 3      |   | $ | 3 |   | $ | 3 |   | $ | 3 |   | $ | 2 |   | $ | 2 |   |

 

----

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

 

13

----

 

The table below sets fourth certain informationregarding the amortized costs, weighted average yields and maturities of theCompany’s money market investments, securities available for sale and held tomaturity, and Federal Home Loan Bank of New York stock at December 31, 2001.There were no securities (exclusive of obligations of the U.S. government andfederal agencies) issued by any one entity with a total carrying value inexcess of 10% of stockholders’ equity at December 31, 2001.

 
|                                                 |   | **At  December 31, 2001**  |   |
|------------------------------------------------------|--------|----------------------------|--------|
|                                                 |   | **One Year  or Less**      |   | **One to  Five Years** |   | **Five to  Ten Years** |   | **More Than  Ten Years** |   | **Total  Securities** |   |
|                                                 |   | **Amortized  Cost**        |   | **Weighted  Average  Yield** |   | **Amortized  Cost** |   | **Weighted  Average  Yield** |   | **Amortized  Cost** |   | **Weighted  Average  Yield** |   | **Amortized  Cost** |   | **Weighted  Average  Yield** |   | **Average  Remaining  Years to  Maturity** |   | **Amortized  Cost** |   | **Fair  Value** |   | **Weighted  Average  Yield** |   |
|                                                 |   | **(Dollars  in millions)** |   |
| Money market investments (1)                         |   | $                          | 167    |   | 1.20 | % | $ | — |   | — | % | $ | — |   | — | % | $ | — |   | — | % | — |   | $ | 167 |   | $ | 167 |   | 1.20 | % |
|                                                 |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities available for sale:                       |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bonds and other investment securities:               |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury Notes/Bills                            |   | $                          | 6      |   | 2.03 | % | $ | — |   | — | % | $ | — |   | — | % | $ | — |   | — | % | 0.80 |   | $ | 6 |   | $ | 6 |   | 2.03 | % |
| Agency notes                                         |   | —                     |   | — |   | 34 |   | 6.30 |   | 55 |   | 7.32 |   | — |   | — |   | 6.13 |   | 89 |   | 90 |   | 6.93 |   |
| Mortgage-backed securities                           |   | —                     |   | — |   | — |   | — |   | 135 |   | 6.29 |   | 415 |   | 6.75 |   | 19.69 |   | 550 |   | 560 |   | 6.63 |   |
| Collateralized mortgage obligations                  |   | —                     |   | — |   | — |   | — |   | — |   | — |   | 2,211 |   | 6.85 |   | 28.51 |   | 2,211 |   | 2,210 |   | 6.85 |   |
| Trust certificates collateralized by GNMA securities |   | —                     |   | — |   | 7 |   | 2.14 |   | — |   | — |   | — |   | — |   | 3.80 |   | 7 |   | 7 |   | 2.14 |   |
| Equity investments                                   |   | —                     |   | — |   | — |   | — |   | — |   | — |   | 177 |   | 4.30 |   |   |   | 177 |   | 173 |   | 4.30 |   |
| Municipal bonds                                      |   | —                     |   | — |   | — |   | — |   | 5 |   | 5.19 |   | 64 |   | 5.43 |   | 11.50 |   | 69 |   | 71 |   | 5.41 |   |
| Corporate bonds                                      |   | —                     |   | — |   | — |   | — |   | — |   | — |   | 104 |   | 2.98 |   | 27.24 |   | 104 |   | 102 |   | 2.98 |   |
| Total securities available for sale                  |   | $                          | 6      |   | 2.03 | % | $ | 41 |   | 5.61 | % | $ | 195 |   | 6.55 | % | $ | 2,971 |   | 6.52 | % | 24.30 |   | $ | 3,213 |   | $ | 3,219 |   | 6.50 | % |
|                                                 |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities held to maturity:                         |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt municipals                                |   | $                          | — |   | — | % | $ | — |   | — | % | $ | 1 |   | 7.45 | % | $ | — |   | — | % | 6.50 |   | $ | 1 |   | $ | 1 |   | 7.45 | % |
| Financial                                            |   | —                     |   | — |   | 1 |   | 3.66 |   | — |   | — |   | 1 |   | 7.44 |   | 16.06 |   | 2 |   | 2 |   | 5.68 |   |
| Total bonds and other debt securities                |   | $                          | — |   | — | % | $ | 1 |   | 3.66 | % | $ | 1 |   | 7.45 | % | $ | 1 |   | 7.44 | % | 14.22 |   | $ | 3 |   | $ | 3 |   | 6.03 | % |
|                                                      |        |                            |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

----

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

 

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

 

During the year ended December 31, 2000, the Companysold available for sale securities aggregating $763 million, resulting in grossrealized gains of $4 million and gross realized losses of $1 million.

 

During the year ended December 31, 1999, the Companysold available for sale securities aggregating $102 million, resulting in grossrealized gains of $2 million and gross realized losses of $1 million.

 

14

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**Sourcesof Funds**

* *

*General.* The bank’s primary sources of funds are deposits,Federal Funds purchased and Overnight FHLB Advances, FHLB Term Advances, loansales and securitizations, payments on loans, mortgage backed and other debtsecurities, maturities and redemptions of investment securities, and borrowingsunder repurchase agreements. Additionally, the Company has supplemented itsfunding sources through the prior acquisition of investment grade creditratings from three credit rating agencies. Obtaining investment grade creditratings has afforded the Company the ability to access the investment gradedebt markets. Refer to the Company’s 2001 Annual Report to Shareholders, page18 for additional information and discussion about the Company’s Liquidity RiskManagement.

* *

*Deposits.* The Bank offers a variety of deposit accounts havinga range of interest rates and terms. The Bank’s deposits consist of varioustypes of savings, N.O.W., non-interest bearing checking, money market andcertificates of deposit. The flow of deposits is influenced significantly bygeneral economic conditions, changes in prevailing interest rates andcompetition. The Bank’s deposits are obtained primarily from the areas servedby its Branch Network. Management determines the Bank’s deposit rates basedupon market conditions and local competition. The Bank relies primarily oncompetitive rates of interest, offering promotional rates, marketing andlong-standing relationships with customers to attract and retain deposits. The Bankdoes not actively solicit certificates of deposit accounts in excessof $100,000.

* *

*Federal Funds purchased and Overnight FHLB Advances.*At December 31, 2001, the outstandingbalance of Federal Funds purchased was $960 million. Interest expense related topurchased Federal Funds totaled $18 million for the year ended December 2001.Federal Funds are unsecured lines of credit from other financial institutions.At December 31, 2001, the outstanding balance of overnight FHLB advances was $1billion. Interest expense related to these borrowings totaled $14 million forthe year ended December 31, 2001. These advances are collateralized by certainone-to four-family residential mortgage loans pledged under a blanket lien tothe FHLB.

* *

*FHLB Term Advances.* At December 31, 2001 and 2000, the outstandingbalance of FHLB term advances was $2.8 billion and $1.0 billion respectively.Interest expense related to these borrowings totaled $102 million and $53million for the years ended December 31, 2001 and 2000. These advances arecollateralized by certain one-to four-family residential mortgage loans pledgedunder a blanket lien to the FHLB. At December 31, 2001, $1.1 billion of suchFHLB term advances are callable by the FHLB in 2002.

* *

*Repurchase Agreements.*At December 31, 2001 and 2000, the outstanding balanceof repurchase agreements was $1.6 billion and $350 million respectively.Interest expense related to these borrowings totaled $55 million and $9 millionfor the years ended December 31, 2001 and 2000. All of the outstandingrepurchase agreements are collateralized by US Government agency securities ornon-agency mortgage backed securities. At December 31, 2001, $900 million ofsuch repurchase agreements are callable in 2002 and $500 million are callablein 2003.

* *

*Senior and Subordinated Bank Notes.* In July 1997, the Company published anOffering Circular under Regulation D authorizing it to issue up to $3 billionof Senior and Subordinated Bank Notes (the “Notes”). Of this allowablecapacity, the Company has, thus far, issued $200 million of 6.70% Senior Notesmaturing July 15, 2002 and $150 million of 9.25% Subordinated Bank Notesmaturing October 1, 2010. Interest expense attributed to the Notes was $24million, $15 million and $14 million for each of the years ended December 31,2001, 2000 and 1999, respectively.

* *

*Guaranteed Preferred Beneficial Interest in Company’s JuniorSubordinated Debentures.* In June 1997, GreenPoint Capital Trust I, a Delaware statutorybusiness trust owned by the Company, issued $200 million of 9.10% GuaranteedPreferred 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 millionfor each of the years ended December 31, 2001, 2000 and 1999.

 

15

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At December 31, 2001, the Company had outstanding $928million in certificates of deposit in amounts of $100,000 or more, maturing asfollows:

 
|                            |   | **Amount**                 |   | **Weighted  Average Rate** |   |
|---------------------------------|--------|----------------------------|--------|----------------------------|--------|
|                            |   | **(Dollars  in millions)** |   |
| Maturity period:                |   |                       |   |                       |   |
| Three  months or less           |   | $                          | 256    |                       | 5.15   | % |
| Over  three through six months  |   | 311                        |   | 4.68                       |   |
| Over  six through twelve months |   | 179                        |   | 3.72                       |   |
| Over  twelve months             |   | 182                        |   | 4.47                       |   |
| Total                           |   | $                          | 928    |                       | 4.58   | % |

 

The following table sets forth the distribution of theCompany’s deposit accounts at the dates indicated and the weighted averagenominal interest rates on each category of deposits presented. Management doesnot believe that the use of period end balances instead of average balancesresults in any material differences to the information presented.

 
|                                                                     |   | **December  31,**          | ** ** |
|--------------------------------------------------------------------------|--------|----------------------------|------------|
|                                                                     |   | **2001**                   |       | **2000** | ** ** |
|                                                                     |   | **Amount**                 |       | **Percent of  Total Deposits** |   | **Weighted  Average Nominal  Rate** |   | **Amount** |   | **Percent of  Total Deposits** |   | **Weighted  Average Nominal  Rate** | ** ** |
|                                                                     |   | **(Dollars  in millions)** |       |
| Account type:                                                            |   |                       |       |   |   |   |   |   |   |   |   |   |   |
| Savings  and club                                                        |   | $                          | 1,215      |   | 11 | % | 1.87 | % | $ | 1,213 |   | 11 | % | 2.10 | % |
| N.O.W.  and checking                                                     |   | 648                        |       | 6 |   | 1.05 |   | 577 |   | 5 |   | 0.48 |   |
| Variable  rate savings                                                   |   | 2,089                      |       | 20 |   | 2.14 |   | 1,872 |   | 17 |   | 3.32 |   |
| Money  market                                                            |   | 895                        |       | 8 |   | 2.27 |   | 629 |   | 5 |   | 4.01 |   |
| Total                                                                    |   | 4,847                      |       | 45 |   | 1.95 |   | 4,291 |   | 38 |   | 2.69 |   |
| Term  certificates of deposit:                                           |   |                       |       |   |   |   |   |   |   |   |   |   |   |
| Certificates  of deposit over $100,000                                   |   | 967                        |       | 9 |   | 4.58 |   | 1,031 |   | 9 |   | 5.91 |   |
| Certificates  of deposit less than $100,000 with original maturities of: |   |                       |       |   |   |   |   |   |   |   |   |   |   |
| 6 months or less                                                         |   | 236                        |       | 2 |   | 2.35 |   | 154 |   | 1 |   | 3.44 |   |
| 6 to 12 months                                                           |   | 1,075                      |       | 10 |   | 3.21 |   | 1,725 |   | 16 |   | 5.93 |   |
| 12 to 30 months                                                          |   | 3,068                      |       | 29 |   | 4.76 |   | 3,555 |   | 32 |   | 5.81 |   |
| 30 to 48 months                                                          |   | 331                        |       | 3 |   | 5.10 |   | 206 |   | 2 |   | 5.43 |   |
| 48 to 72 months                                                          |   | 155                        |       | 2 |   | 5.50 |   | 183 |   | 2 |   | 5.60 |   |
| 72 to 84 months                                                          |   | 27                         |       | — |   | 6.04 |   | 31 |   | — |   | 6.22 |   |
| Total term  certificates of deposit                                      |   | 5,859                      |       | 55 |   | 4.39 |   | 6,885 |   | 62 |   | 5.79 |   |
| Total deposits                                                           |   | $                          | 10,706     |   | 100 | % | 3.29 | % | $ | 11,176 |   | 100 | % | 4.60 | % |

 

16

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|                                                                     |   | **December  31,1999**      |   |
|--------------------------------------------------------------------------|--------|----------------------------|--------|
|                                                                     |   | **Amount**                 |   | **Percent   of Total   Deposits** |   | **Weighted   Average   Nominal   Rate** | ** ** |
|                                                                     |   | **(Dollars  in millions)** |   |
| Account type:                                                            |   |                       |   |   |   |   |   |
| Savings  and club                                                        |   | $                          | 1,370  |   | 12 | % | 2.19 | % |
| N.O.W.  and checking                                                     |   | 540                        |   | 5 |   | 0.99 |   |
| Variable  rate savings                                                   |   | 1,981                      |   | 17 |   | 3.30 |   |
| Money  market                                                            |   | 460                        |   | 4 |   | 3.23 |   |
| Total                                                                    |   | 4,351                      |   | 38 |   | 2.60 |   |
| Term  certificates of deposit:                                           |   |                       |   |   |   |   |   |
| Certificates  of deposit over $100,000                                   |   | 962                        |   | 8 |   | 5.43 |   |
| Certificates  of deposit less than $100,000 with original maturities of: |   |                       |   |   |   |   |   |
| 6  months or less                                                        |   | 344                        |   | 3 |   | 3.52 |   |
| 6 to  12 months                                                          |   | 1,040                      |   | 9 |   | 4.50 |   |
| 12  to 30 months                                                         |   | 4,336                      |   | 38 |   | 5.50 |   |
| 30  to 48 months                                                         |   | 222                        |   | 2 |   | 5.24 |   |
| 48  to 72 months                                                         |   | 256                        |   | 2 |   | 5.89 |   |
| 72  to 84 months                                                         |   | 49                         |   | — |   | 6.17 |   |
| Total  term certificates of deposit                                      |   | 7,209                      |   | 62 |   | 5.26 |   |
| Total  deposits                                                          |   | $                          | 11,560 |   | 100 | % | 4.26 | % |

 

The following table presents, by various ratecategories, the amount of certificates of deposit outstanding at the datesindicated.

 
|                               |   | **December 31,**          |   | **Maturities at  December 31, 2001** |   |
|------------------------------------|--------|---------------------------|--------|--------------------------------------|--------|
|                               |   | **2001**                  |   | **2000**                             |   | **1999** |   | **Within   One year** |   | **One to   Three   Years** |   | **Thereafter** |   | **Total** | ** ** |
|                               |   | **(Dollars in millions)** |   |
| Certificates  of deposit accounts: |   |                      |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| 3.99%  or less                     |   | $                         | 2,183  |                                 | $      | 762 |   | $ | 928 |   | $ | 1,834 |   | $ | 341 |   | $ | 8 |   | $ | 2,183 |   |
| 4.00%  to 4.99%                    |   | 1,748                     |   | 318                                  |   | 945 |   | 1,171 |   | 500 |   | 77 |   | 1,748 |   |
| 5.00%  to 5.99%                    |   | 802                       |   | 1,441                                |   | 4,146 |   | 729 |   | 53 |   | 20 |   | 802 |   |
| 6.00%  to 6.99%                    |   | 1,110                     |   | 4,347                                |   | 1,161 |   | 980 |   | 130 |   | — |   | 1,110 |   |
| 7.00%  to 7.99%                    |   | 16                        |   | 17                                   |   | 28 |   | 16 |   | — |   | — |   | 16 |   |
| 8.00%  to 8.99%                    |   | —                    |   | —                               |   | 1 |   | — |   | — |   | — |   | — |   |
| Total                              |   | $                         | 5,859  |                                 | $      | 6,885 |   | $ | 7,209 |   | $ | 4,730 |   | $ | 1,024 |   | $ | 105 |   | $ | 5,859 |   |

 

**SubsidiaryActivities**

 

The Company has formed four subsidiaries:

 

*GreenPointBank.* The Bankwas organized in 1868 as a New York State chartered mutual savings bank. OnJanuary 28, 1994, the Bank converted from the mutual to the stock form ofownership, and the Company acquired 100% of its outstanding shares. The Bank isthe principal subsidiary of the Company.

* *

*GreenPointCommunity Development Corp.* This for-profit community development subsidiary wasincorporated in 1993. The subsidiary offers lending programs, developmentopportunities and assistance, consulting and other activities which promote theobjective of greater access to affordable housing for low-and moderate-incomepersons residing in the New York metropolitan area.

* *

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

 

17

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*TrueWeb,Inc.* TWeeb, Inc.,subsequently renamed TrueWeb, Inc. (“TrueWeb”), was incorporated in December1999. TrueWeb is a wholly-owned subsidiary of the Company and was formed topursue Internet businesses strategic to GreenPoint. TrueWeb discontinuedoperating activity on June 30, 2000. In August of 2001, TrueWeb was dissolved.

 

As of December 31, 2001 the Bank has formed twentysubsidiaries:

* *

*HeadlandsMortgage Company.*Headlands was acquired in a pooling of interests transaction on March 30, 1999.Headlands is located in Novato, California. On September 30, 1999, Headlandstransferred all of its assets and liabilities related to loan origination andservicing operations to its wholly-owned subsidiary GPM.

* *

*GreenPointMortgage Funding, Inc.* GPM was acquired on April 8, 1999. On September 30, 1999, the Banktransferred all of the issued and outstanding shares of GPM to Headlands. Also,on September 30, 1999, GreenPoint Mortgage Corp. (a wholly-owned subsidiary ofHeadlands) merged into GPM, with GPM as the surviving entity. GPM isheadquartered in Novato, California and its activities consist of theorigination, sale and servicing of mortgage loans.

* *

*GreenPointCredit, LLC.* OnSeptember 30, 1999, the Bank transferred all issued and outstanding shares ofGreenPoint Credit Corp., to Headlands, which then transferred these shares toGPM. GreenPoint Credit Corp. then merged into GPC, with GPC as the survivingentity. GPC’s activities currently consist of the servicing of manufacturedhousing loans. In Mississippi, GPC conducts activities through its wholly-ownedsubsidiary, GreenPoint Credit of Mississippi, LLC. On September 30, 1999,GreenPoint Credit Corp. of Mississippi was merged into GreenPoint Credit ofMississippi, LLC.

* *

*GPAsset LLC.* Thissubsidiary was incorporated on August 17, 2000 as a special purpose entity formanufactured housing securitizations. The company is a wholly-owned subsidiaryof GPC and was inactive at December 31, 2001.

* *

*GreenPointMortgage Securities, Inc.* With the transfer of its mortgage assets and liabilities, Headlandstransferred ownership of its securitization subsidiary, Headland MortgageSecurities, Inc., and its related subsidiaries Marin Conveyancing Corp. andHeadlands Insurance Agency to GreenPoint Mortgage Funding, Inc. HeadlandsMortgage Securities, Inc. changed its name to GreenPoint Mortgage Securities,Inc.

* *

*GreenPoint Agency, Inc.* This subsidiary was incorporated on June 30, 1998 asan insurance agency. GreenPoint Agency acts as an agent in connection with thesale of forced placed property insurance and standard property and casualtyinsurance. In Alabama, GreenPoint Agency conducts its activities through theBank’s wholly-owned subsidiary, GreenPoint Agency of Alabama, Inc.

* *

*GreenPoint Insurance Corp.*This subsidiary was incorporated onSeptember 10, 1998 as an insurance underwriting and reinsurance subsidiary.GreenPoint Insurance’s activities include the reinsurance of life anddisability insurance risks.

* *

*GreenPoint Purchasing Corp.*This subsidiary was incorporated on July19, 1996, with an agreement between the Company and the Nassau CountyIndustrial Development Agency. This agreement enables the Company, on a salestax exempt basis, to (1) purchase and/or lease machinery and equipment for theLake Success facility and (2) renovate and improve the facility.

* *

*3090 Ocean Avenue Realty Corp.* This subsidiary was incorporated on June6, 1996, as a real estate investment subsidiary.

* *

*GreenPoint Corporate Owned Life Insurance.*This subsidiary was incorporated on July25, 1996 as an insurance trust established for the purpose of purchasing corporatelife insurance policies for the officers of the Company.

* *

*e4close Inc*. This subsidiary was incorporated on October 21,1999. e4close Inc. lists foreclosed properties on the Internet. All of theassets of e4close were sold on June 20, 2000 to Smart Online, Inc. In August2001, this subsidiary was dissolved with all of its remaining assets andliabilities transferred to the Bank.

* *

*GreenPoint Securities LLC*. This subsidiary was incorporated on August 25, 1999for the purpose of establishing an entity to sell mutual funds. This subsidiarywas inactive during 2001.

 

18

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* *

*Other Real Estate Subsidiaries*. The Bank has formed five wholly-ownedsubsidiary corporations, all of which are incorporated under the laws of theState of New York, for the purpose of holding and maintaining certainproperties acquired by the Bank as a result of foreclosure proceedings or deedsin lieu thereof. As of December 31, 2001, four of these subsidiaries wereactive. The Bank attempts to limit the carrying value of property held by anyone subsidiary to approximately $5 million. Accordingly, in the event the Bankacquires additional properties through foreclosure or deeds in lieu thereof,the Bank may form additional subsidiaries for the purpose of holding andmaintaining such properties. The properties selected by the Bank to be held inits subsidiaries generally consist of multi-family properties with five unitsor more, commercial properties and one-to four-family properties which havebeen identified by the Bank as having attributes which may subject the Bank toliabilities beyond those normally associated with its other real estate, suchas properties which are not in compliance with building codes or propertieswith potential environmental problems. Descriptions of the these subsidiariesare set forth below:

* *

*Neerg Corp.*This subsidiary was formed in January1990 and currently holds one property having an aggregate carrying value of$0.1 million and an aggregate appraised value of $0.2 million, as of December31, 2001, based on the Company’s most recent appraisals.

* *

*298 15th Street Realty Corp.*This subsidiary was formed in January1993 and currently holds two properties having an aggregate carrying value of$0.2 million and an aggregate appraised value of $0.3 million as ofDecember 31, 2001, based on the Company’s most recent appraisals.

 

*Neerg**Second Corp.*This subsidiary was formed in June 1993and currently holds no properties.

 

*Alpha**REO Corporation*. This subsidiary was formed in March 1994 andcurrently holds no properties.

 

*Beta**REO Corp.* This subsidiary was formed in June 1994 and currentlyholds no properties.

 

**Personnel**

 

At December 31, 2001, the Company had 4,498 full-timeemployees and 257 part-time employees. A collective bargaining unit does notrepresent the employees and the Company considers its relationship with itsemployees to be good.

 

**Federal Taxation**

 

Generally, the Company and its subsidiaries reportincome on a consolidated calendar year basis using the accrual method ofaccounting and are subject to federal income taxation in the same manner asother corporations with certain exceptions, including particularly, the Bank’saddition to its tax reserve for bad debts as discussed below. The followingdiscussion of tax matters is intended as a summary and does not purport to be acomprehensive description of the tax rules applicable to the Company and itssubsidiaries.

 

*Bad Debt Reserves.* For tax years prior to 1996, under the InternalRevenue Code a special bad debt deduction for additions to the tax bad debtreserve was allowed. This reserve method was eliminated by Federal legislationenacted in 1996. For tax years beginning after December 31, 1995, the Bank isonly permitted to take federal deductions for bad debts on the basis of actualloan charge-off activity (specific charge-offs).

 

Provided the Bank continues to satisfy certaindefinitional tests and other conditions, for New York State and City income taxpurposes, the Bank may continue to take special reserve method bad debtdeductions. The deductible annual addition to the reserve may be computed usinga specific formula based on the Bank’s loss history (“Experience Method”) or astatutory percentage equal to 32% of the Bank’s New York State or City taxableincome (“Percentage Method”).

 

*Taxable Distributions and Recapture.*Under prior federal law, tax bad debtreserves created prior to January 1, 1988 were subject to recapture intotaxable income should the Bank fail to meet certain thrift asset and definitionaltests. As a result of the 1996 legislation, these thrift related recapturerules were also eliminated. However, under current law, pre-1988 reservesremain subject to recapture should the Bank make certain distributions or ceaseto maintain a bank charter. Management has no intention of taking such actions.

 

19

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At December 31, 2001, the Bank’s total federalpre-1988 reserve was approximately $140 million. This reserve reflects thecumulative effects of federal tax deductions by the Bank for which no Federalincome tax provision has been made.

* *

The Bank also maintains a state and local tax reservefor qualifying loans in excess of the federal reserve for which no state andlocal tax has been provided. The amount of the Bank’s state and city taxreserve for qualifying loans in excess of the federal reserve balance as ofDecember 31, 2001 was approximately $422 million and $428 million,respectively. In the event the Bank were to allow “qualifying assets” to fallbelow 60% of total assets or otherwise fail certain definitional tests, theBank would no longer be subject to the New York State and City reserve methodof computing bad debt deductions as described above. As a result, the Bankwould record a charge relating to the recapture of the then existing state andcity tax reserves. Future bad debt deductions would be based on a “5-yearexperience” method, which is closely reflective of financial statement loancharge-off activity. Management is not contemplating any actions that wouldcause recapture of the qualifying reserves into taxable income.

 

*Corporate Alternative Minimum Tax.* The Internal Revenue Code of 1986, asamended, imposes a tax on alternative minimum taxable income (“AMTI”) at a rateof 20%. AMTI is calculated as federal taxable income adjusted for certain itemsof “tax preference.”

 

*Dividends Received Exclusion and Other Matters.* The Company may exclude from its income100% of dividends received from the Bank as a member of the same affiliatedgroup of corporations. The corporate dividends received exclusion is generally70% in the case of dividends received from unaffiliated corporations with whichthe Company does not file a consolidated tax return, except that if the Companyowns more than 20% of the stock of a corporation distributing a dividend, then80% of any dividends received may be excluded.

 

**Stateand Local Taxation**

 

*New York State and New York City Taxation.* The Company and the Bank join in thefiling of a combined New York State and New York City return. For calendar year2001, the New York State Franchise Tax on corporations is imposed in an amountequal to the greater of (a) 8.5% of “entire net income” allocable to New YorkState (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) nominalminimum tax. Entire net income is based on federal taxable income, subject tocertain modifications. Alternative entire net income is equal to entire netincome with certain modifications. The New York City Corporation Tax is imposedusing similar alternative taxable income methods.

 

A temporary Metropolitan Transportation Business TaxSurcharge on banking corporations doing business in the Metropolitan Districthas been applied since 1982. The Company transacts a significant portion of itsbusiness within this district and is subject to this surcharge. For the taxyear ended December 31, 2001 the surcharge rate is 17% of the state franchisetax liability. New York City does not impose surcharges applicable to theCompany.

 

*Multi State Taxation*. Generally, the Company and its subsidiaries aresubject to tax in a state on the basis of income generating activitiesoccurring within that state. Generally, state taxes are imposed on allocatedincome, average capital or a nominal minimum tax. For the tax year endedDecember 31, 2001, the Company and its subsidiaries are expected to filereturns in most states using the allocated income alternative.

 

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

 

**Bank Regulation and Supervision**

 

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

* *

*General.* As a registered bank holding company under the BankHolding Company Act of 1956, as amended (the “BHCA”), GreenPoint is subject toexamination and supervision by the FRB. Under the BHCA, bank holding companiesgenerally may not acquire ownership or control of more than 5% of the votingshares or substantially all of the assets of any company, including a bank,without the FRB’s prior approval. In addition, bank holding companies generallymay engage, directly or indirectly, only in banking and such other activitiesas are determined by the FRB to be closely related to banking.

 

20

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Subsidiary banks of a bank holding company are subjectto certain quantitative and qualitative restrictions imposed by the Federal ReserveAct on any extension of credit to, or purchase of assets from, or letter ofcredit issued on behalf of, the bank holding company or its non-banksubsidiaries, and on the investment in or acceptance of stocks or securities ofsuch holding company or its subsidiaries as collateral for loans. In addition,federal laws and regulations limit the amounts of, and establish requiredprocedures and credit standards with respect to, loans and other extensions ofcredit 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 anotherbank or bank holding company, it could become subject to the bank holdingcompany regulations promulgated under New York State Banking Law (“StateBanking Laws”). GreenPoint is not currently subject to the bank holding companyregulations of State Banking Laws because a company such as GreenPoint thatcontrols only one banking institution is not deemed to be a bank holdingcompany under State Banking Laws.

 

However, the Bank is subject to other State BankingLaws and to extensive regulation by the Banking Department, as its charteringagency, and by the Federal Deposit Insurance Corporation (the “FDIC”), as itsdeposit insurer. The Bank is also subject to regulation by the FRB. GreenPointand its subsidiaries also are affected by the fiscal and monetary policies ofthe federal government and the FRB, and by various other governmentalrequirements and regulations.

 

*Liability for Bank Subsidiaries.* Under current FRB policy, a bank holdingcompany is expected to act as a source of financial and managerial strength toeach of its subsidiary banks and to maintain resources adequate to support eachsuch subsidiary bank.  This support maybe required at times when the bank holding company may not have the resourcesto provide it. In the event of a bank holding company’s bankruptcy, anycommitment by the bank holding company to a federal bank regulatory agency tomaintain the capital of a subsidiary bank would be assumed by the bankruptcytrustee and entitled to priority of payment.

 

Similarly, any depository institution insured by theFDIC, including the Bank, can be held liable for any loss incurred, orreasonably expected to be incurred, by the FDIC in connection with (i) thedefault of a commonly controlled FDIC-insured depository institution or (ii)any assistance provided by the FDIC to a commonly controlled FDIC-insureddepository institution in danger of default. “Default” is defined generally asthe appointment of a conservator or receiver and “in danger of default” isdefined generally as the existence of certain conditions indicating that adefault is likely to occur in the absence of regulatory assistance. Also, ifsuch a default occurred with respect to a bank, any capital loans to the bankfrom its parent holding company would be subordinate in right of payment topayment of the bank’s depositors and certain of its other obligations.

* *

*Capital Requirements*. GreenPoint is subject to risk-based capitalrequirements and guidelines imposed by the FRB, which are substantially similarto the capital requirements and guidelines imposed by the FDIC, the Office ofThrift Supervision and the Office of the Comptroller of the Currency on thedepository institutions within their respective jurisdictions. For thispurpose, a depository institution’s or holding company’s assets and certainspecified off-balance sheet commitments are assigned to four risk categories,each weighted differently based on the level of credit risk that is ascribed tosuch assets or commitments. A depository institution’s or holding company’scapital, in turn, is divided into two tiers: core (“Tier 1”) capital, whichincludes common equity, non-cumulative perpetual preferred stock and a limitedamount of cumulative perpetual preferred stock and related surplus (excludingauction rate issues) and a limited amount of cumulative perpetual preferredstock 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, mandatoryconvertible securities, subordinated debt and allowances for loan and leaselosses, 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 1and Tier 2 capital) equal to at least 4% and 8% of its total risk-weightedassets (including certain off-balance-sheet items, such as standby letters ofcredit), respectively. At December 31, 2001, GreenPoint met both requirements,with Tier 1 and total capital equal to 10.10% and 11.72% of its totalrisk-weighted assets.

 

The FRB, the FDIC and the Banking Department haveadopted rules to incorporate market and interest rate risk components intotheir risk-based capital standards. Amendments to the risk-based capitalrequirements of the FRB and the FDIC, incorporating market risk, became effectiveJanuary 1, 1998. Under the new market risk requirements, capital will beallocated to support the amount of market risk related to a financialinstitution’s ongoing trading activities.

 

The FRB also requires bank holding companies tomaintain a minimum “leverage ratio” (Tier 1 capital to adjusted total assets)of 3% if the holding company has the highest regulatory rating and meetscertain other requirements, or of 3% plus an additional cushion of at least 100to 200 basis points if the holding company does not meet these requirements. AtDecember 31, 2001, GreenPoint’s leverage ratio was 7.23%.

 

21

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

 

The Bank is subject to similar risk-based and leveragecapital requirements adopted by the FDIC. The Bank was in compliance with theapplicable minimum capital requirements as of December 31, 2001. The Bank hasnot been advised by any federal banking agency or by the Banking Department ofany specific minimum leverage ratio requirement applicable to it.

 

Failure to meet capital requirements could subject abank to a variety of enforcement remedies, including the termination of depositinsurance by the FDIC, and to certain restrictions on its business, which aredescribed under “FDICIA.”

 

*FDICIA. *FDICIA, among other things, identifiesfive capital categories for insured depository institutions (well capitalized,adequately capitalized, undercapitalized, significantly undercapitalized andcritically undercapitalized) and requires federal bank regulatory agencies toimplement systems for “prompt corrective action” for insured depositoryinstitutions that do not meet minimum capital requirements, based on thesecategories. FDICIA imposes progressively more restrictive constraints onoperations, management and capital distributions, depending on the category inwhich an institution is classified. Unless a bank is “well capitalized,” it issubject to restrictions on its ability to offer brokered deposits and oncertain other aspects of its operations. An “undercapitalized” bank mustdevelop a capital restoration plan and its parent holding company must guaranteethe bank’s compliance with the plan up to the lesser of 5% of the bank’s assetsat the time it became undercapitalized and the amount needed to comply with theplan.

 

As of December 31, 2001, GreenPoint Bank was “wellcapitalized,” based on the “prompt corrective action” ratios and guidelinesdescribed above. It should be noted, however, that the Bank’s capital categoryis determined solely for the purpose of applying the FDIC’s “prompt correctiveaction” regulations and that the capital category may not constitute anaccurate representation of the Bank’s overall financial condition or prospects.

* *

*Dividend Restrictions*. State Banking Laws impose certain restrictions onthe payment of dividends by the Bank to GreenPoint, including a provision that,without regulatory approval, the Bank cannot declare and pay dividends in anycalendar year in excess of its net profits, as defined by the State BankingLaws, for that year combined with its retained net profits, as defined by theState Banking Laws, of the two preceding years, less any required transfer tosurplus. At December 31, 2001, $410 million of the total stockholders’ equityof the Bank was available for payment of dividends to GreenPoint pursuant tothese provisions, as long as the Bank continues to be well-capitalized pursuantto FDICIA.

 

In addition, federal bank regulatory authorities haveauthority to prohibit the Bank from engaging in an unsafe or unsound practicein conducting its business. The payment of dividends, depending upon thefinancial condition of the bank in question, could be deemed to constitute suchan unsafe or unsound practice. The ability of the Bank to pay dividends in thefuture is currently, and could be further, influenced by bank regulatorypolicies and capital guidelines.

* *

*Deposit Insurance Assessments*. The deposits of the Bank are insured up toregulatory limits by the FDIC and, accordingly, are subject to depositinsurance assessments to maintain the Bank Insurance Fund (the “BIF”) and theSavings Association Insurance Fund (“SAIF”) administered by the FDIC. The FDIChas adopted regulations establishing a permanent risk-related deposit insuranceassessment system. Under this system, the FDIC places each insured bank in oneof nine risk categories based on (i) the bank’s capitalization and (ii)supervisory evaluations provided to the FDIC by the institution’s primaryfederal regulator. Each insured bank’s insurance assessment rate is thendetermined by the risk category in which it is classified by the FDIC.

 

Due to the Bank’s current risk-based assessment, as ofJanuary 1, 2001, the annual insurance premiums on bank deposits insured by theBIF (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 forassessments to be imposed on insured depository institutions with respect todeposits insured by the BIF and the SAIF (in addition to assessments currentlyimposed on depository institutions with respect to BIF- and SAIF-insureddeposits) to pay for the cost of Financing Corporation (“FICO”) funding. TheFICO assessment rates as of January 1, 2001 were $0.02120 per $100 annually forBIF-assessable deposits and $0.02120 per $100 annually for SAIF-assessabledeposits.

 

22

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*Depositor Preference Statute.* Federal legislation has been enacted providing thatdeposits and certain claims for administrative expenses and employeecompensation against an insured depository institution would be afforded apriority over other general unsecured claims against such institution,including federal funds and letters of credit, in the “liquidation or otherresolution” of the institution by any receiver.

* *

*Brokered Deposits*. Under FDIC regulations, no FDIC-insured depositoryinstitution can accept brokered deposits unless it (i) is well capitalized, or(ii) is adequately capitalized and receives a waiver from the FDIC. Inaddition, these regulations prohibit any depository institution that is notwell capitalized from (a) paying an interest rate on deposits in excess of 75basis points over certain prevailing market rates or (b) offering “passthrough” deposit insurance on certain employee benefit plan accounts subject tocertain exceptions.

* *

*Interstate Banking And Branching.* Under the Riegle-Neal Interstate Bankingand Branching Efficiency Act of 1994 (“Riegle-Neal”), subject to certainconcentration limits and other requirements, (i) bank holding companies such asGreenPoint are permitted to acquire banks and bank holding companies located inany state; (ii) any bank that is a subsidiary of a bank holding company ispermitted to receive deposits, renew time deposits, close loans, service loansand receive loan payments as an agent for any other bank subsidiary of thatholding company; and (iii) banks are permitted to acquire branch officesoutside their home states by merging with out-of-state banks, purchasingbranches in other states, and establishing de novo branch offices in otherstates; provided that, in the case of any such purchase or opening ofindividual branches, the host state has adopted legislation “opting in” tothose provisions of Riegle-Neal; and provided that, in the case of a mergerwith a bank located in another state, the host state has not adoptedlegislation “opting out” of that provision of Riegle-Neal. GreenPoint could useRiegle-Neal to acquire banks in additional states.

* *

*Control Acquisitions*. The Change in Bank Control Act prohibits a person orgroup of persons from acquiring “control” of a bank holding company, unless theFederal Reserve Board has been notified and has not objected to thetransaction. Under a rebuttable presumption established by the Federal ReserveBoard, the acquisition of 10% or more of a class of voting stock of a bankholding company with a class of securities registered under Section 12 of thesecurities Exchange Act of 1934, such as the Company, would, under thecircumstances set forth in the presumption, constitute acquisition of controlof the bank holding company.

 

In addition, a company is required to obtain theapproval of the Federal Reserve Board under the Bank Holding Company Act beforeacquiring 25% (5% in the case of an acquirer that is a bank holding company) ormore of any class of outstanding common stock of a bank holding company, orotherwise obtaining control or a “controlling influence” over the bank holdingcompany.

* *

*Financial Modernization Legislation*. On November 12, 1999, theGramm-Leach-Bliley Act was signed into law. It permits bank holding companiesto become financial holding companies and, by doing so, affiliate withsecurities firms and insurance companies and engage in other activities thatare financial in nature or complementary thereto. A bank holding company maybecome an FHC, if each of its subsidiary banks is well capitalized under theFDICIA prompt corrective action provisions, well managed and has at least asatisfactory rating under the Community Reinvestment Act, by filing adeclaration that the bank holding company wishes to become an FHC and meets allapplicable requirements.

 

No prior regulatory approval will be required for anFHC to acquire a company, other than a bank or savings association, engaged inactivities permitted under the Gramm-Leach-Bliley Act. Activities cited by theGramm-Leach-Bliley Act as being “financial in nature” include:

 

•      securitiesunderwriting, dealing and market making

•      sponsoringmutual funds and investment companies

•      insuranceunderwriting and agency

•      merchantbanking activities

•      activitiesthat the Board has determined to be closely relate to banking

 

The Gramm-Leach-Bliley Act may change the operatingenvironment of the Company and its subsidiaries in substantial andunpredictable ways. We cannot accurately predict the ultimate effect that thislegislation, or implementing regulations, will have upon the financialcondition or results of operations of the Company or any of its subsidiaries.

 

23

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**ITEM 2.       PROPERTIES**

 

The Company’s executive office is located at 90 ParkAvenue, New York, New York. This location contains approximately 41 thousandsquare feet of commercial office space, located on the 4th floor, which theCompany leases. The Company also has an operating center at 1981 Marcus Avenue,Lake Success, New York. This location contains approximately 105 thousandsquare feet of commercial office space, which the Company leases, including 43thousand square feet which has been subleased to others. In addition, GPMleases an operating center in Charlotte, North Carolina at 5032 Parkway PlazaBoulevard, which contains 41 thousand square feet. GPM leases 125 thousandsquare feet of commercial office space located in Novato, California and 131thousand square feet of commercial office space in Larkspur, California,including 90 thousand square feet, which is unoccupied and available forsublease. The Company maintains a servicing operations center located inColumbus, Georgia. In Columbus, GPM owns the property at 2300 BrookstoneBoulevard, which contains 35 thousand square feet of office space. GPM alsoleases and maintains servicing operations centers at 1435 N. Dutton Avenue andat 981 Airway Court in Santa Rosa, California, which have 12 and 44 thousandsquare feet of office space, respectively. Also in Santa Rosa, GPM leases 16thousand square feet of warehouse space at 1160 N. Dutton Avenue. Additionally,GPC leases 112 thousand square feet of office space at 10089 Willow Creek Road,San Diego, California. This location is the headquarters for the manufacturedhousing operations.

 

The Bank operates its consumer banking activities outof 74 branches located throughout the New York metropolitan area.

 

GPM operates its mortgage lending activities from itsCharlotte, North Carolina operating center. Hub offices are located in Arizona,California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois,Massachusetts, Nevada, New Jersey, Oregon, Pennsylvania, Texas, Virginia andWashington.

 

**ITEM 3****.       LEGAL PROCEEDINGS**

 

**Pending Litigation**

 

In the ordinary course of business, the Corporationand its subsidiaries are routinely defendants in or parties to a number ofpending and threatened legal actions and administrative proceedings, in whichmonetary damages and other forms of relief are sought. Certain of such actionsinvolve alleged violations of consumer protection laws, including claimsrelating to the Corporation’s loan origination and collection efforts, andother federal and state banking laws. Certain of such actions involve claimsfor punitive damages. Management has established what it believes to besufficient allocated reserves to cover any final judgments rendered in any suchcases. Accordingly, management believes that these actions and administrativeproceedings and the losses, if any, resulting from the final outcome thereof,will not be material in the aggregate to the Corporation’s financial position,results of operations or liquidity.

 

**ITEM4.       SUBMISSION OF MATTERS TO A VOTEOF SECURITY HOLDERS**

 

No matter was submitted to the Company’s shareholdersduring the quarter ended December 31, 2001.

 

**ITEM 4A.   ****EXECUTIVE OFFICERS**

 

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

 

**Thomas S. Johnson**, 61, has been Chairman and Chief Executive Officer ofthe Corporation since joining the Corporation in August 1993. He was alsoPresident of the Corporation from August 1993 to October 1997. Mr. Johnson hasserved as President of both Chemical Bank and Manufacturers Hanover TrustCompany. He is a Director of Alleghany Corporation, a company engaged ininsurance and industrial products businesses, RR Donnelley & Sons, Inc., aprinting company, Online Resources, a financial information servicescompany, The Phoenix Companies, an insurance and wealth management company, anda number of not-for-profit organizations, including The Institute ofInternational Education, The Asia Society, The Cancer Research Institute ofAmerica and WNET Channel 13, New York. Mr. Johnson is Chairman of the Board ofTrustees of Trinity College and of the Board of Directors of the United StatesJapan Foundation. A graduate of Trinity, he also has a masters degree inbusiness administration from Harvard University.

 

24

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**Bharat B. Bhatt**,****58, has been a Director of the Corporationsince October 1997. Mr. Bhatt joined the Corporation in June 1995 as ViceChairman and was appointed as the Corporation’s President and Chief OperatingOfficer in October 1997. Mr. Bhatt served as the Chief Financial Officer ofShawmut National Corporation from 1992 to 1994, as a Senior Vice President atMellon Bank from 1989 to 1992 and held various positions at Chemical Bank from1971-1989. A graduate of the University of Bombay, Mr. Bhatt also attended theManagement Program at the Harvard Business School. Mr. Bhatt is a member of TheInstitute of Chartered Accountants.

 

**Howard C. Bluver**, 45, joined GreenPoint in June 1994 and currentlyserves as Executive Vice President, General Counsel, and Corporate Secretary.Prior to joining the Bank, Mr. Bluver held a variety of positions at the Officeof Thrift Supervision in the Treasury Department. His final assignment was asDeputy Chief Counsel for Corporate Transactions. Prior to that he worked inprivate law practice and at the Securities and Exchange Commission and heldpositions from a Staff Attorney to Branch Chief of the Division of CorporationFinance. Mr. Bluver earned a BA in Political Science from SUNY Albany and a JDfrom SUNY Buffalo, School of Law.

 

**S. A. Ibrahim**, 50, joined GreenPoint in March 1997 and wasappointed President and Chief Executive Officer of GreenPoint Mortgage inJanuary 2000. Prior to that he served as Chief Operating Officer of thecombined mortgage business of GreenPoint Mortgage and Headlands Mortgage uponcompletion of the Headlands acquisition. Prior to joining the Bank, Mr. Ibrahimwas in charge of International Reengineering at American Express’ TravelRelated Services Company. Previously, he held various positions at ChemicalBanking Corporation, including Chief Executive Officer of the MortgageBusiness, Chief of Staff to the Vice Chairman in charge of Consumer Banking andChief Credit Officer for Consumer Banking. He has also been head of the CreditCard Operations at Crocker Bank and Chief Financial Officer of theBusiness Services Division at Bank of America. Mr. Ibrahim holds a B. E. inEngineering from Osmania University in Hyderabad, India, and an MBA in Financefrom the Wharton School at the University of Pennsylvania.

 

**Jeffrey R. Leeds**, 56, joined the Bank in September 1995 and serves asExecutive Vice President and Chief Financial Officer. Prior to that, he servedas Executive Vice President, Finance, and Treasurer. Before joining the Bank, Mr.Leeds held a variety of positions at Chemical Bank. His final assignment was asHead of the Asset and Liability Management staff. Prior to that he served forseven years as Chief Money Market Economist. Mr. Leeds began his career as aneconomist at the First National Bank of Chicago. He also spent two years asDirector of New Product Development at the Chicago Board Options Exchange. Mr.Leeds earned a Bachelor’s Degree in economics from the University of Michiganand holds a Masters in Business Administration and Master of Philosophy fromthe Columbia University Graduate School of Business.

 

**Mary M. Massimo**, 56, joined GreenPoint in November 1999 and serves asSenior Vice President and Human Resources Director. Before joining GreenPoint,she was head of Human Resources and office operations at Rockefeller & Co.,Inc., between 1994-1999. From 1988-1994, she headed Human Resources at SwissBank Corporation North America. Ms. Massimo has also held senior positions inHuman Resources at Drexel, Burnham, Lambert, Inc., and International Paper Co.Ms. Massimo earned a BA in psychology from the College of New Rochelle, and sheearned both masters and doctorate degrees in psychology from FordhamUniversity.

 

**Charles P. Richardson**, 55, joined the Company in April 1993 and wasappointed Executive Vice President and Chief Operating Officer for GreenPointCredit in May 2001.  He formerly servedas Executive Vice President and Chief Financial Officer for GPC.  Prior to that he served as the Company’sExecutive Vice President, Corporate Development. Prior to joining the Company,Mr. Richardson was Executive Vice President and Chief Financial Officer forDollar Dry Dock Bank (1985-1992) and was a banking and thrift industryconsultant (1992–1993). Mr. Richardson holds a business degree inaccounting from Temple University.

 

**Ramesh Shah,** 54, joined the Bank in June 1996 and serves asExecutive Vice President, Consumer Banking. Prior to that, he served asExecutive Vice President, Marketing and Product Development. Before joining theBank, Mr. Shah was Senior Vice President of NatWest Bancorp. (1994 -1996); Senior Vice President of Shearson Lehman Brothers (1991–1994) andSenior Vice President of American Express Company (1988 - 1991). Mr. Shah holdsa Masters in Business Administration from Columbia University and a Bachelor ofArts degree from Bates College.

 

25

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**PART II**

 

**ITEM5.       MARKET FOR REGISTRANT’S COMMONEQUITY AND RELATED STOCKHOLDER MATTERS.**

 

The Company’s Common Stock is currently listed on theNew York Stock Exchange (NYSE) under the symbol “GPT.” Trading in the Company’sstock commenced on January 28, 1994. As of March 15, 2002, 99,733,024 shares ofcommon stock were issued and outstanding, and held by approximately 3,756holders of record. In 2001 the Company paid a cash dividend of $0.25 per sharein March, June, September and December. In 2000 the Company paid a cashdividend of $0.25 per share in March, June, September and December. In 1999 theCompany paid a cash dividend of $0.22 per share in March, June, September andDecember.

 

Information relating to the high, low and quarter-endclosing sales prices of the Common Stock appears on page 54 of the Company’s2001 Annual Report to Shareholders and is incorporated herein by reference.

 

**ITEM6.       SELECTED FINANCIAL DATA**

 

The above-captioned information appears under “FiveYear Selected Consolidated Data” on pages 9 and 10 in the Company’s 2001 AnnualReport to Shareholders and is incorporated herein by reference.

 

In addition, the Company’s ratios of average equity toaverage assets is 11.79%, 13.15%, and 13.31% for the years ended December 31,2001, 2000 and 1999, respectively.

 

**ITEM7.       MANAGEMENT’S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OF                     OPERATIONS**

 

The above captioned information appears under“Management’s Discussion and Analysis” on pages 11 through 25 in the Company’s2001 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 16 through 20 in the Company’s2001 Annual Report to Shareholders and is incorporated herein by reference.

 

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

 

The above captioned information appears on pages 26through 31 in the Company’s 2001 Annual Report to Shareholders and isincorporated herein by reference.

 

**ITEM9.       CHANGES IN AND DISAGREEMENTS WITHACCOUNTANTS ON ACCOUNTING AND FINANCIAL                     DISCLOSURE**

 

None.

 

26

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**PART III**

 

**ITEM 10.     DIRECTORSAND EXECUTIVE OFFICERS OF THE REGISTRANT**

 

Information presented under the heading “Informationwith Respect to Nominees and Continuing Directors” on pages 3 through 5 in theCompany’s definitive Proxy Statement for its Annual Meeting of Shareholders tobe held on May 14, 2002, which was filed with the SEC on March 29, 2002, isincorporated herein by reference.

 

**ITEM11.     EXECUTIVE COMPENSATION**

 

Information relating to executive compensationincluded under the heading “Executive Compensation” on pages 10 through 16(excluding the Stock Performance Graph on page 13) in the Company’s DefinitiveProxy Statement for its Annual Meeting of Shareholders to be held on May 14,2002, which was filed with the SEC on March 29, 2002, is incorporated herein byreference.

 

**ITEM12.     SECURITY OWNERSHIP OF CERTAINBENEFICIAL OWNERS AND MANAGEMENT**

 

Information relating to security ownership of certainbeneficial owners and management included under the heading “Securities Ownedby Directors and Executive Officers” on page 5 in the Company’s DefinitiveProxy Statement for its Annual Meeting of Shareholders to be held on May 14,2002, which was filed with the SEC on March 29, 2002, is incorporated hereinby reference.

 

**ITEM 13.     CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS**

 

Information regarding certain relationships andrelated transactions is included under the heading “Transactions with CertainRelated Persons” on page 16 in the Company’s Definitive Proxy Statement for itsAnnual Meeting of Shareholders to be held on May 14, 2002, which was filed withthe SEC on March 29, 2002, is incorporated herein by reference.

 

27

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**PART IV**

** **

**ITEM 14.    ****EXHIBITS, FINANCIALSTATEMENT SCHEDULES, AND REPORTS ON FORM 8-K**

** **

**GreenPointFinancial Corp.**

**List ofExhibits (filed herewith unless otherwise noted)**

 

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

 

(1)          Consolidated Financial Statements of the Company areincorporated by reference to the following indicated pages of the 2001 AnnualReport to Shareholders:

 
| Consolidated Statements  of Financial Condition as of December 31, 2001 and 2000                                      |
|-----------------------------------------------------------------------------------------------------------------------|
|                                                                                                                  |
| Consolidated Statements of Operations for the years  ended December 31, 2001, 2000 and 1999                           |
|                                                                                                                  |
| Consolidated Statements of Comprehensive Income for  the years ended December 31, 2001, 2000 and 1999                 |
|                                                                                                                  |
| Consolidated Statements of Changes in Stockholders’  Equity for the years ended December 31, 2001, 2000 and 1999 |
|                                                                                                                  |
| Consolidated Statements of Cash Flows for the years  ended December 31, 2001, 2000 and 1999                           |
|                                                                                                                  |
| Notes to the Consolidated Financial Statements                                                                        |
|                                                                                                                  |
| Report of Independent Accountants                                                                                     |

 

28

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| **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 (16)                                                                                                            |
| 10.1                |   | Employment Agreement Among GreenPoint Financial  Corp., GreenPoint Bank and Bharat B. Bhatt (7)                                           |
| 10.2                |   | Amended Employment Agreement Among GreenPoint  Financial Corp., GreenPoint Bank and Thomas S. Johnson (8)                                 |
| 10.3                |   | GreenPoint Financial Corp. Amended and Restated 1994  Stock Incentive Plan (9)                                                            |
| 10.4                |   | GreenPoint Financial Corp. Non-Employee Directors  Stock Option Plan (10)                                                                 |
| 10.5                |   | GreenPoint Bank Recognition and Retention Plan for  Employees (11)                                                                        |
| 10.6                |   | GreenPoint Bank Retirement Plan for Independent  Directors (12)                                                                           |
| 10.7                |   | GreenPoint Bank 1993 Directors’ Deferred Fee Stock  Unit Plan (13)                                                                   |
| 10.8                |   | GreenPoint Financial Corp. 1999 Stock Incentive Plan  (14)                                                                                |
| 10.9                |   | GreenPoint Financial Corp. 1999 Annual Incentive  Plan (15)                                                                               |
| 10.10               |   | GreenPoint Financial Corp. 2001 Stock Plan (17)                                                                                           |
| 10.11               |   | GreenPoint Financial Corp. Non-Employee Directors  2001 Stock Option Plan (18)                                                            |
| 10.12               |   | GreenPoint Financial Corp. Letter Agreement with  Peter T. Paul (19)                                                                      |
| 10.13               |   | Amendment Number  One to the Employment Agreement among GreenPoint Financial Corp., GreenPoint  Bank and Bharat B. Bhatt. (20)            |
| 10.14               |   | Amendment Number  One to the Amended Employment Agreement among GreenPoint Financial Corp.,  GreenPoint Bank, and Thomas S. Johnson. (21) |
| 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, 2000                                                                    |
| 21.1                |   | Subsidiaries of the Company                                                                                                               |
| 23.1                |   | Consent of Independent Accountants                                                                                                        |

 
|        |
|--------|
| *(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 10.1 to the 1996 10-K.* |
| *(8)*  | *Incorporated by reference to  Exhibit 10.1 to the 1994 10-K.* |
| *(9)*  | *Incorporated by reference to  Exhibit 10.3 to the 1994 10-K.* |
| *(10)* | *Incorporated by reference to  Exhibit 10.4 to the 1994 10-K.* |
| *(11)* | *Incorporated by reference to  Exhibit 10.7 to the 1994 10-K.* |
| *(12)* | *Incorporated by reference to  Exhibit 10.8 to the 1994 10-K.* |
| *(13)* | *Incorporated by reference to  Exhibit 10.9 to the 1994 10-K.* |
| *(14)* | *Incorporated by reference to  Exhibit 10.13 to the 1999 10-K.* |
| *(15)* | *Incorporated by reference to  Exhibit 10.14 to the 1999 10-K.* |
| *(16)* | *Incorporated by reference to  Exhibit 3.4 to the 2000 10-K.* |
| *(17)* | *Incorporated by reference to  Exhibit 10.10 to the 2000 10-K.* |
| *(18)* | *Incorporated by reference to  Exhibit 10.11 to the 2000 10-K.* |
| *(19)* | *Incorporated by reference to  Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q, dated June 30,  2001.* |
| *(20)* | *Incorporated by reference to  Exhibit 10.13 to the Company’s Quarterly Report on Form 10-Q, dated September  30, 2001.* |
| *(21)* | *Incorporated by reference to  Exhibit 10.14 to the Company’s Quarterly Report on Form 10-Q, dated September  30, 2001.* |

 

The Schedules have beenomitted as the required information is either not applicable or has beenincluded in the Notes to the Consolidated Financial Statements in the Company’s2001 Annual Report to Shareholders.

 

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**Reportson Form 8-K**

 

On October 16, 2001, GreenPoint Credit, LLC, themanufactured housing finance subsidiary of GreenPoint Bank, filed a currentreport on Form 8-K that included a Pooling and Servicing Agreement, dated as ofSeptember 1, 2001, between GreenPoint Credit, LLC, as Contract Seller andServicer and Bank One, National Association, as Trustee and First UnionNational Bank as Co-Trustee in connection with the October 2, 2001 sale ofapproximately $425,893,906 of GreenPoint Credit Manufactured Housing ContractTrust Pass-Through certificates, Series 2001-2 (the “Certificates”).

 

On October 22, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K providing for the issuanceof the GreenPoint Home Equity Loan Trust 2001-1 Home Equity Loan Asset-BackedNotes, Series 2001-1. Included was the Monthly Remittance Statement to theCertificateholders dated as of August 15, 2001.

 

On October 26, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K providing for the issuanceof the GreenPoint Home Equity Loan Trust 2001-1 Home Equity Loan Asset-Backed Notes,Series 2001-1. Included was the Monthly Remittance Statement to theCertificateholders dated as of October 15, 2001.

 

On October 26, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K providing for the issuanceof the GreenPoint Home Equity Loan Trust 2001-1 Home Equity Loan Asset-BackedNotes, Series 2001-1. Included was the Monthly Remittance Statement to theCertificateholders dated as of September 17, 2001.

 

On November 8, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K in connection with theoffering of GreenPoint Home Equity Loan Asset-Backed Securities, Series 2001-2,Class A-1 Notes, Class A-2 Notes and Class A-3 Notes, of which GreenPoint HomeEquity Loan Trust 2001-2 is the issuer. As described in a Prospectus Supplement to the Prospectus dated as ofNovember 7, 2001, certain “Collateral Term Sheets” within the meanings of theMay 20, 1994 Kidder, Peabody No-Action Letter and the February 17, 1995 PublicSecurities Association No-Action Letter were furnished to certain prospectiveinvestors.

 

On November 19, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K for the previouslyregistered offer and sale of the GreenPoint Home Equity Loan Trust Asset-BackedNotes, Series 2000-2, Class A-1, Class A-2 and Class A-3 Home Equity LoanAsset-Backed Notes (the “Series 2000-3 Notes”). Included was the MonthlyPayment Date Statement distributed to holders of Series 2000-3 Notes datedDecember 17, 2001.

 

On November 19, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K for the previouslyregistered offer and sale of the GreenPoint Home Equity Loan Trust Asset-BackedNotes, Series 2000-2, Class A-1, Class A-2 and Class A-3 Home Equity LoanAsset-Backed Notes (the “Series 2000-3 Notes”). Included was the MonthlyPayment Date Statement distributed to holders of Series 2000-3 Notes datedSeptember 17, 2001.

 

On November 19, 2001, GreenPoint Mortgage Securities Inc., a subsidiaryof Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank,filed a current report on Form 8-K for the previously registered offer and saleof the GreenPoint Home Equity Loan Trust Asset-Backed Notes, Series 2000-2,Class A-1, Class A-2 and Class A-3 Home Equity Loan Asset-Backed Notes (the“Series 2000-3 Notes”). Included was the Monthly Payment Date Statementdistributed to holders of Series 2000-3 Notes dated August 15, 2001.

 

On November 19, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K for the previouslyregistered offer and sale of the GreenPoint Home Equity Loan Trust Asset-BackedNotes, Series 2000-2, Class A-1, Class A-2 and Class A-3 Home Equity LoanAsset-Backed Notes (the “Series 2000-3 Notes”). Included was the MonthlyPayment Date Statement distributed to holders of Series 2000-3 Notes datedOctober 15, 2001.

 

On November 19, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K for the previouslyregistered offer and sale of the GreenPoint Home Equity Loan Trust Asset-BackedCertificates, Series 2001-1 (“Series 2001-1 Certificates”). Included was theMonthly Payment Date Statement distributed to holders of Series 2001-1Certificates dated October 15, 2001.

 

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On November 19, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K for the previouslyregistered offer and sale of the GreenPoint Home Equity Loan Trust Asset-BackedCertificates, Series 2001-1 (“Series 2001-1 Certificates”). Included was theMonthly Payment Date Statement distributed to holders of Series 2001-1Certificates dated August 15, 2001.

 

On November 19, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K for the previouslyregistered offer and sale of the GreenPoint Home Equity Loan Trust Asset-BackedCertificates, Series 2001-1 (“Series 2001-1 Certificates”). Included was theMonthly Payment Date Statement distributed to holders of Series 2001-1Certificates dated September 17, 2001.

 

On November 30, 2001, GreenPoint Credit, LLC, themanufactured housing finance subsidiary of GreenPoint Bank, filed a currentreport on Form 8-K that included the following information: (i) a Pooling andServicing Agreement, dated as of March 1, 2001, between GreenPoint Credit, LLC,as Contract Seller and Servicer and Bank One, National Association, as Trusteeand First Union National Bank as Co-Trustee (ii) the Monthly Report for theGreenPoint Credit Manufactured Housing Contract Trust Pass-ThroughCertificates, Series 2001-1.

 

On November 30, 2001, GreenPoint Credit, LLC, themanufactured housing finance subsidiary of GreenPoint Bank, filed a currentreport on Form 8-K that included the following information: (i) a Pooling andServicing Agreement, dated as of March 1, 2001, between GreenPoint Credit, LLC,as Contract Seller and Servicer and Bank One, National Association, as Trusteeand First Union National Bank as Co-Trustee (ii) the Monthly Report for theGreenPoint Credit Manufactured Housing Contract Trust Pass-ThroughCertificates, Series 2001-1.

 

On December 5, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K in order to satisfy anundertaking to file copies of certain agreements executed in connection withthe issuance of GreenPoint Home Equity Loan Asset-Backed Notes, Series 2001-2,on November 20, 2001 (the “Closing Date”) pursuant to the registration of anissuance of up to $1,012,326,549 in principal amount of Asset-Backed Securitieson a delayed or continuous basis. Included was the (i) Underwriting Agreement,dated as of November 6, 2001 among GreenPoint Mortgage Securities Inc. (the“Registrant”), as Sponsor (the “Sponsor”), GreenPoint Mortgage Funding, Inc.and Greenwich Capital Markets, Inc., as underwriter (the “Underwriter”) (ii)Sale and Servicing Agreement, dated as of November 1, 2001, among the Sponsor,GreenPoint Mortgage Funding Inc., as Servicer, the Trust, as Issuer, and theIndenture Trustee (iii) Trust Agreement, dated as of November 1, 2001, betweenthe Sponsor, and Wilmington Trust Company, as Owner Trustee, relating to theformation of the Trust (iv) Indenture, dated as of November 1, 2001, betweenthe Trust and the Indenture Trustee (v) Mortgage Loan Purchase Agreement, datedas of November 1, 2001, between GreenPoint Mortgage Funding, Inc., as Seller,and the Sponsor, as Purchaser (vi) Financial Guaranty Insurance Policy relatingto the Notes, dated as of November 20, 2001, and issued and delivered by MBIA InsuranceCorporation (vii) Opinion of Tobin & Tobin regarding legality which waspreviously filed on Form S-3 with the Securities and Exchange Commission onJune 8, 2001 (viii) Opinion of Dewey Ballantine LLP regarding tax matters whichwas previously filed on Form S-3 with the Securities and Exchange Commission onJune 8, 2001 (ix) Indemnification Agreement, dated as of November 6, 2001,between the Underwriter, GreenPoint Mortgage Funding, Inc., as Seller andServicer, and MBIA Insurance Corporation, as Insurer (x) Consent ofPricewaterhouseCoopers LLP (“PWC”) regarding financial statements of MBIAInsurance Corporation and their report.

 

On December 7, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K providing for the issuanceof the GreenPoint Home Equity Loan Trust 2001-1 Home Equity Loan Asset-BackedNotes, Series 2001-1. Included was the Monthly Remittance Statement to theCertificateholders dated as of November 15, 2001.

 

On December 17, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K for the previouslyregistered offer and sale of the GreenPoint Home Equity Loan Trust Asset-BackedNotes, Series 2000-2, Class A-1, Class A-2 and Class A-3 Home Equity LoanAsset-Backed Notes (the “Series 2000-3 Notes”).  Included was the Monthly Payment Date Statement distributed toholders of Series 2000-3 Notes dated November 15, 2001.

 

On December 17, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K for the previouslyregistered offer and sale of the GreenPoint Home Equity Loan Trust Asset-BackedCertificates, Series 2001-1 (“Series 2001-1 Certificates”). Included was theMonthly Payment Date Statement distributed to holders of Series 2001-1Certificates dated November 15, 2001.

 

31

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On December 18, 2001, GreenPoint Credit, LLC, themanufactured housing finance subsidiary of GreenPoint Bank, filed a currentreport on Form 8-K that included a Pooling and Servicing Agreement (Series2000-3), dated May 1, 2000, between GreenPoint Credit, LLC, as Contract Sellerand Servicer and Bank One, National Association, as Trustee in connection withits securitization referred to as the GreenPoint Credit Manufactured HousingContract Trust Pass-Through Certificates, Series 2000-3.

 

On December 18, 2001, GreenPoint Credit, LLC, themanufactured housing finance subsidiary of GreenPoint Bank, filed a currentreport on Form 8-K that included a Pooling and Servicing Agreement, dated March1, 2000, between GreenPoint Credit, LLC, as Contract Seller and Servicer andBank One, National Association, as Trustee in connection with itssecuritization referred to as the GreenPoint Credit Manufactured HousingContract Trust Pass-Through Certificates, Series 2000-1.

 

On December 28, 2001, GreenPoint Mortgage SecuritiesInc., a subsidiary of Headlands Mortgage Company, a wholly owned subsidiary ofGreenPoint Bank, filed a current report on Form 8-K for the previouslyregistered offer and sale of the GreenPoint Home Equity Loan Trust Asset-BackedCertificates, Series 2001-1 (“Series 2001-1 Certificates”). Included was theMonthly Payment Date Statement distributed to holders of Series 2001-1Certificates dated December 17, 2001.

 

32

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**SIGNATURES**

 

Pursuant to the requirements of Section 13 or 15(d) ofthe Securities Exchange Act of 1934, the Registrant has duly caused this reportto 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 29, 2002

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, this report has been signed below by the followingpersons on behalf of the Registrant and in the capacities indicated on thedates indicated.

 
| **Signature** |               | **Title** |                                                         | **Date**       |
|---------------|--------------------|-----------|--------------------------------------------------------------|----------------|
|          |
| /s/           | Thomas S. Johnson  |      | Chairman of the Board  and Chief Executive Officer           | March 29, 2002 |
|          | Thomas S. Johnson  |
|          |               |      |                                                         |
| /s/           | Bharat B. Bhatt    |      | Member of the Board,  President and Chief  Operating Officer | March 29, 2002 |
|          | Bharat B. Bhatt    |
|          |               |
|          |               |      |                                                         |
| /s/           | Peter T. Paul      |      | Director                                                     | March 29, 2002 |
|          | Peter T. Paul      |      |                                                         |
|          |               |      |                                                         |
| /s/           | Dan F. Huebner     |      | Director                                                     | March 29, 2002 |
|          | Dan F. Huebner     |      |                                                         |
|          |               |      |                                                         |
| /s/           | William M. Jackson |      | Director                                                     | March 29, 2002 |
|          | William M. Jackson |      |                                                         |
|          |               |      |                                                         |
| /s/           | Robert M. McLane   |      | Director                                                     | March 29, 2002 |
|          | Robert M. McLane   |      |                                                         |
|          |               |      |                                                         |
| /s/           | Charles B. McQuade |      | Director                                                     | March 29, 2002 |
|          | Charles B. McQuade |      |                                                         |
|               |                    |           |                                                              |                |  |  |  |  |  |

 

33

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| **Signature** |               | **Title** |                                                  | **Date**       |
|---------------|--------------------|-----------|-------------------------------------------------------|----------------|
|          |
| /s/           | Alvin N. Puryear   |      | Director                                              | March 29, 2002 |
|          | Alvin N. Puryear   |      |                                                  |
|          |               |      |                                                  |
| /s/           | Robert P. Quinn    |      | Director                                              | March 29, 2002 |
|          | Robert P. Quinn    |      |                                                  |
|          |               |      |                                                  |
| /s/           | Edward C. Schmults |      | Director                                              | March 29, 2002 |
|          | Edward C. Schmults |      |                                                  |
|          |               |      |                                                  |
| /s/           | Robert F. Vizza    |      | Director                                              | March 29, 2002 |
|          | Robert F. Vizza    |      |                                                  |
|          |               |      |                                                  |
| /s/           | Jeffrey R. Leeds   |      | Executive Vice President  and Chief Financial Officer | March 29, 2002 |
|          | Jeffrey R. Leeds   |
|          |               |      |                                                  |
|          |               |      |                                                  |
| /s/           | Joseph D. Perillo  |      | Senior Vice President  and Controller                 | March 29, 2002 |
|          | Joseph D. Perillo  |
|          |               |      |                                                  |
|               |                    |           |                                                       |                |  |  |  |  |

 

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