UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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For the Quarter Ended
MARCH 31, 2001
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
0-22516
Securities and Exchange Commission File Number
GREENPOINT FINANCIAL CORP.
--------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 06-1379001
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(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
90 PARK AVENUE, NEW YORK, NEW YORK 10016
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(Address of principal executive offices) (Zip Code)
(212) 834-1000 NOT APPLICABLE
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(Registrant's telephone number, (Former name, former address and former
including area code) fiscal year if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
/X/ Yes / / No
As of May 4, 2001 there were 100,985,053 shares of common stock outstanding.
GREENPOINT FINANCIAL CORP.
FORM 10-Q
FOR THE QUARTER ENDED
MARCH 31, 2001
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION PAGE
----
Item 1 - Financial Statements
Consolidated Statements of Financial Condition (unaudited) as of
March 31, 2001 and December 31, 2000 3
Consolidated Statements of Income (unaudited) for the quarters ended
March 31, 2001 and 2000 4
Consolidated Statements of Comprehensive Income (unaudited) for the
quarters ended March 31, 2001 and 2000 5
Consolidated Statements of Changes in Stockholders' Equity
(unaudited) for the three months ended March 31, 2001 and 2000 6
Consolidated Statements of Cash Flows (unaudited) for the three
months ended March 31, 2001 and 2000 7
Notes to the Unaudited Consolidated Financial Statements 8
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations 18
Item 3 - Quantitative and Qualitative Disclosure about Market Risk 30
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 37
Item 6 - Exhibits and Reports on Form 8-K 39
2
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
MARCH 31, DEC. 31,
(IN MILLIONS, EXCEPT SHARE AMOUNTS) 2001 2000
======================================================================================
ASSETS
Cash and due from banks $ 164 $ 140
Money market investments 49 171
Loans receivable held for sale 2,765 1,981
Federal Home Loan Bank of New York stock 117 96
Securities available for sale 3,440 2,678
Securities available for sale-pledged to creditors 469 388
Retained interests in securitizations 178 159
Securities held to maturity (fair value of $3 and $3,
respectively) 3 3
Loans receivable held for investment:
Mortgage loans 8,121 8,116
Other loans 560 580
Deferred loan fees and unearned discount (5) (9)
Allowance for possible loan losses (113) (113)
--------------------------------------------------------------------------------------
Loans receivable held for investment, net 8,563 8,574
--------------------------------------------------------------------------------------
Other interest-earning assets 130 128
Accrued interest receivable 86 87
Banking premises and equipment, net 128 131
Servicing assets 200 197
Goodwill, net 844 864
Other assets 176 168
--------------------------------------------------------------------------------------
Total assets $ 17,312 $ 15,765
======================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
N.O.W. and checking $ 598 $ 577
Savings 1,214 1,213
Variable rate savings 1,873 1,872
Money market 724 629
Term certificates of deposit 6,635 6,885
--------------------------------------------------------------------------------------
Total deposits 11,044 11,176
--------------------------------------------------------------------------------------
Notes payable 2 2
Mortgagors' escrow 111 90
Federal funds purchased and securities sold under
agreements to repurchase 460 350
Federal Home Loan Bank of New York advances 2,150 1,000
Senior bank notes 134 138
Subordinated bank notes 150 150
Guaranteed preferred beneficial interest in Company's
junior subordinated debentures 200 200
Liability under recourse exposure 106 132
Other liabilities 817 477
--------------------------------------------------------------------------------------
Total liabilities 15,174 13,715
--------------------------------------------------------------------------------------
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock ($0.01 par value; 50,000,000 shares
authorized; none issued) -- --
Common stock ($0.01 par value; 220,000,000 shares
authorized; 100,583,086 shares and 100,105,414 shares
issued, respectively) 1 1
Additional paid-in capital 866 862
Unallocated Employee Stock Ownership Plan (ESOP) shares (99) (100)
Unearned stock plans shares (1) (2)
Retained earnings 1,587 1,532
Accumulated other comprehensive income, net 36 17
Treasury stock, at cost (9,678,078 shares and
10,155,750 shares, respectively) (252) (260)
--------------------------------------------------------------------------------------
Total stockholders' equity 2,138 2,050
--------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 17,312 $ 15,765
======================================================================================
(SEE ACCOMPANYING NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS)
3
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
QUARTER ENDED
MARCH 31,
--------------------------------------------------------------------------------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS) 2001 2000
================================================================================
INTEREST INCOME:
Mortgage loans held for investment $ 179 $ 188
Securities 56 35
Loans held for sale 47 31
Money market investments 3 9
Other 22 25
--------------------------------------------------------------------------------
Total interest income 307 288
--------------------------------------------------------------------------------
INTEREST EXPENSE:
Deposits 125 124
Other borrowed funds 28 13
Long-term debt 11 8
--------------------------------------------------------------------------------
Total interest expense 164 145
--------------------------------------------------------------------------------
Net interest income 143 143
Provision for loan losses (5) (8)
--------------------------------------------------------------------------------
Net interest income after provision for loan losses 138 135
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NON-INTEREST INCOME:
Income from fees and commissions:
Loan servicing fees 31 32
Banking services fees and commissions 11 9
Other 4 2
--------------------------------------------------------------------------------
Total income from fees and commissions 46 43
Net gain on sales of loans 76 46
Change in valuation of retained interests -- (3)
Net gain on securities 6 1
--------------------------------------------------------------------------------
Total non-interest income 128 87
--------------------------------------------------------------------------------
NON-INTEREST EXPENSE:
General and administrative expenses:
Salaries and benefits 57 51
Employee Stock Ownership and stock plans expense 6 3
Net expense of premises and equipment 21 20
Federal deposit insurance premiums 1 1
Other administrative expenses 31 29
--------------------------------------------------------------------------------
Total general and administrative expenses 116 104
Goodwill amortization 20 20
--------------------------------------------------------------------------------
Total non-interest expense 136 124
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Income before income taxes 130 98
Income taxes related to earnings 52 40
--------------------------------------------------------------------------------
Net income $ 78 $ 58
================================================================================
Basic earnings per share $0.88 $0.63
================================================================================
Diluted earnings per share $0.86 $0.63
================================================================================
(SEE ACCOMPANYING NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS)
4
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
QUARTER ENDED
MARCH 31,
---------------------------------------------------------------------------------------------------------
(IN MILLIONS) 2001 2000
=========================================================================================================
Net income $ 78 $ 58
---------------------------------------------------------------------------------------------------------
Other comprehensive income, before tax:
Unrealized gain on securities:
Unrealized holding gain arising during period 41 1
Less: reclassification adjustment for gains included in net income (6) (1)
---------------------------------------------------------------------------------------------------------
Other comprehensive income, before tax 35 --
Income tax expense related to items of other comprehensive income (16) --
---------------------------------------------------------------------------------------------------------
Other comprehensive income, net of tax 19 --
---------------------------------------------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME, NET OF TAX $ 97 $ 58
=========================================================================================================
(SEE ACCOMPANYING NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS)
5
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
-----------------------------------------------------------------------------------------------------------
(IN MILLIONS) 2001 2000
===========================================================================================================
COMMON STOCK
Balance at beginning of period $ 1 $ 1
-----------------------------------------------------------------------------------------------------------
Balance at end of period 1 1
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ADDITIONAL PAID-IN CAPITAL
Balance at beginning of period 862 858
Reissuance of treasury stock (8) (2)
Amortization of ESOP shares committed to be released 5 2
Amortization of stock plans shares -- --
Tax benefit for vested stock plans shares 7 1
-----------------------------------------------------------------------------------------------------------
Balance at end of period 866 859
-----------------------------------------------------------------------------------------------------------
UNALLOCATED ESOP SHARES
Balance at beginning of period (100) (105)
Amortization of ESOP shares committed to be released 1 1
-----------------------------------------------------------------------------------------------------------
Balance at end of period (99) (104)
-----------------------------------------------------------------------------------------------------------
UNEARNED STOCK PLANS SHARES
Balance at beginning of period (1) (3)
Amortization of stock plans shares -- --
-----------------------------------------------------------------------------------------------------------
Balance at end of period (1) (3)
-----------------------------------------------------------------------------------------------------------
RETAINED EARNINGS
Balance at beginning of period 1,531 1,408
Net income 78 58
Dividends declared (22) (23)
-----------------------------------------------------------------------------------------------------------
Balance at end of period 1,587 1,443
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ACCUMULATED OTHER COMPREHENSIVE INCOME, NET
Balance at beginning of period 17 (11)
Net change in accumulated other comprehensive income, net 19 --
-----------------------------------------------------------------------------------------------------------
Balance at end of period 36 (11)
-----------------------------------------------------------------------------------------------------------
TREASURY STOCK, AT COST
Balance at beginning of period (261) (160)
Reissuance of treasury stock 21 2
Purchase of treasury stock (12) (8)
-----------------------------------------------------------------------------------------------------------
Balance at end of period (252) (166)
-----------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY $ 2,138 $ 2,019
===========================================================================================================
(SEE ACCOMPANYING NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS)
6
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
--------------------------------------------------------------------------------------------------------------------------
(IN MILLIONS) 2001 2000
==========================================================================================================================
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 78 $ 58
Adjustments to reconcile net income to net cash used in operating activities:
Provision for loan losses 5 8
Depreciation and amortization 28 28
ESOP and stock plans expense 6 3
Capitalization of servicing assets (17) (17)
Amortization and impairment of servicing assets 14 10
(Increase) decrease in assets associated with operating activities:
Loans receivable held for sale (784) (489)
Retained interests in securitizations (9) 36
Accrued interest receivable 1 (7)
Other assets (24) 19
Increase (decrease) in liabilities associated with operating activities:
Trading related liabilities -- 2
Liabilities under recourse exposure (26) 3
Other liabilities (15) (315)
Other, net (4) (1)
--------------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities (747) (662)
--------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net change in:
Loans receivable held for investment 3 26
Premises and equipment (6) (6)
Available for sale securities:
Proceeds from maturities 68 342
Proceeds from sales 664 50
Purchase of securities (1,404) (439)
Principal repayments 216 51
Federal Home Loan Bank Stock: purchases (21) (4)
Other, net 6 2
--------------------------------------------------------------------------------------------------------------------------
Net cash (used in) provided by investing activities (474) 22
--------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in:
Domestic deposits (133) (101)
Mortgagors' escrow accounts 21 25
Notes payable -- (1)
Securities sold under agreements to repurchase 110 123
Federal Home Loan Bank advances: proceeds 1,150 --
Cash dividends paid (22) (23)
Treasury stock purchased (12) (8)
Exercise of stock options 13 --
Retirement of long term debt (4) --
--------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 1,123 15
--------------------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (98) (625)
Cash and cash equivalents at beginning of period 311 1,232
--------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 213 $ 607
==========================================================================================================================
NON-CASH ACTIVITIES:
Additions to other real estate owned, net $ (4) $ (4)
==========================================================================================================================
Unsettled trades $ (466) $ (2)
==========================================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes $ 44 $ 22
==========================================================================================================================
Interest paid $ 123 $ 132
==========================================================================================================================
(SEE ACCOMPANYING NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS)
7
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The unaudited consolidated financial statements of GreenPoint Financial Corp.
and Subsidiaries ("GreenPoint" or the "Company") are prepared in accordance with
generally accepted accounting principles for interim financial information. In
the opinion of management, all adjustments (consisting only of normal recurring
accruals) necessary for a fair presentation of the Company's interim financial
condition as of the dates indicated and the results of operations for the
periods presented have been included. Certain reclassifications have been made
to the prior period financial statements to conform to the current year
presentation. The results of operations for the interim periods shown are not
necessarily indicative of results that may be expected for the entire year.
The unaudited consolidated interim financial statements presented should be read
in conjunction with the consolidated financial statements and notes included in
the Company's Annual Report to shareholders for the year ended December 31,
2000.
ACCOUNTING FOR LOAN SALES
The Company sells loans both in the whole loan market as well as through various
securitization vehicles.
When the Company sells mortgages or manufactured housing loans on a whole loan
basis, in some cases it retains the servicing rights related to the loans. In
instances where the Company does not retain the servicing rights to the loans,
the gain or loss on the sale is equal to the difference between the proceeds
received and the book basis of the loans sold. In instances where the Company
does retain the servicing rights, the gain or loss also depends in part on the
fair value attributed to the servicing rights.
When the Company securitizes manufactured housing loans and mortgages it may
retain servicing rights and one or more retained interests. In addition, the
Company may sell loans under recourse arrangements, which may be in the form of
a corporate guarantee issued by GreenPoint Bank (the "Bank") and backed by a
letter of credit or a credit default swap. In calculating the gain or loss on
the sale, the Company allocates the cost basis of the loans sold between the
assets sold, and the retained interests and servicing rights based on their
relative fair values at the date of sale. The liabilities associated with these
guarantees are reported separately as liability under recourse exposure. A gain
or loss is recognized as the difference between the cash proceeds from the sale
and the allocated cost basis of the assets sold, less the estimated fair value
of the corporate guarantee.
8
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
RETAINED INTERESTS IN SECURITIZATIONS
Retained interests in securitizations include interest-only strips, subordinated
certificates and transferor interests and the recorded liabilities for limited
recourse provided on mortgage loans and recourse provided on manufactured
housing loans securitized and sold.
During the fourth quarter of 2000, the Company adopted the Emerging Issues Task
Force Issue No. 99-20 "Recognition of Interest Income and Impairment on
Purchased and Retained Beneficial Interests in Securitized Financial Assets"
under which interest income and expense on retained interests are recognized
using the effective yield method. The Company classifies its retained interests
in securitizations as available for sale and carries these securities at fair
value. If the fair value of retained interests declines below its carrying
amount (excluding unrealized gains), the change in valuation is recognized in
the consolidated statement of income and is classified as a change in valuation
of retained interests. Unrealized gains are reported, net of applicable taxes,
in accumulated other comprehensive income, as a separate component of
stockholders' equity.
On a quarterly basis, GreenPoint reviews the adequacy of the liability under
recourse exposure based on management's best estimate of future cash flows
associated with the recourse arrangements. The change in valuation is recognized
in the Consolidated Statement of Income as a change in valuation of retained
interests.
To obtain fair values, quoted market prices are used if available. Because
market quotes are generally not available for retained interests, the Company
generally estimates fair value based upon the present value of estimated future
cash flows using assumptions of prepayments, defaults, loss severity rates, and
discount rates that the Company believes market participants would use for
similar assets and liabilities.
SERVICING ASSETS
Servicing assets are carried at the lower of cost or fair value based on defined
risk strata and are amortized in proportion to and over the expected servicing
period.
The Company stratifies its servicing assets based on the risk characteristics of
the underlying loan pools and the assets are evaluated for impairment based on
the risk characteristics. A valuation allowance is recognized through a charge
to current earnings for servicing assets that have an amortized balance in
excess of the current fair value.
The fair value of servicing assets is determined by calculating the present
value of estimated future net servicing cash flows, using assumptions of
prepayments, defaults, servicing costs and discount rates that the Company
believes market participants would use for similar assets.
2. STOCK INCENTIVE PLAN
For the three months ended March 31, 2001, the Company granted options to
purchase 1,600,500 shares of the Company's common stock to certain officers, at
an average exercise price of $36.12. These awards vest over two to three years
on the anniversary dates of the awards.
9
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
3. LOANS RECEIVABLE HELD FOR SALE
The following table sets forth the composition of the Company's loans receivable
held for sale, at the dates indicated.
MARCH 31, DECEMBER 31,
(IN MILLIONS) 2001 2000
--------------------------------------------------------------------------------
LOANS RECEIVABLE HELD FOR SALE:
Residential mortgage loans $2,230 $1,572
Home equity lines of credit 390 178
Manufactured housing loans 78 101
Manufactured housing land/home loans 46 118
Guaranteed student loans 2 2
Deferred loan origination fees and unearned
discount 19 10
--------------------------------------------------------------------------------
Loans receivable held for sale $2,765 $1,981
================================================================================
10
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
4. RECOURSE ARRANGEMENTS, RETAINED INTERESTS IN SECURITIZATIONS AND SERVICING
ASSETS
GreenPoint securitizes manufactured housing loans and mortgages and may enter
into recourse arrangements in the form of the retention of subordinated
interests or the issuance of a corporate guarantee. In addition, when GreenPoint
securitizes and sells manufactured housing loans and mortgages, it may retain
servicing assets. The following describes the balances associated with recourse
arrangements, the balances and activity in the corresponding retained interests,
the balances and activity in servicing assets and the economic assumptions used
in valuing the retained interests and servicing assets.
RECOURSE ARRANGEMENTS
GreenPoint has established liabilities for limited recourse provided on mortgage
loans and recourse provided on manufactured housing loans that have been
securitized or sold. The investors and the securitization trusts have no
recourse to GreenPoint's other assets for failure of debtors to pay when due,
except for the retained interests related to both mortgage and manufactured
housing securitizations and the liability under the corporate guarantee related
to the manufactured housing securitizations.
GreenPoint has loans sold with recourse with the following principal balances,
maximum recourse exposures and recorded liabilities:
MARCH 31, 2001
----------------------------------------------------------------------------------
MAXIMUM
PRINCIPAL RECOURSE RECORDED
(IN MILLIONS) BALANCE EXPOSURE(1) LIABILITY
==================================================================================
Manufactured housing securitizations $ 5,119 $ 905 $ 97
Manufactured housing sales 328 328 8
Mortgage securitizations (2) 1,520 131 ---
Mortgage sales (3) 1,065 1,043 1
==================================================================================
DECEMBER 31, 2000
----------------------------------------------------------------------------------
MAXIMUM
PRINCIPAL RECOURSE RECORDED
(IN MILLIONS) BALANCE EXPOSURE (1) LIABILITY
==================================================================================
Manufactured housing securitizations $ 5,057 $ 899 $ 121
Manufactured housing sales 334 334 10
Mortgage securitizations (2) 1,744 125 ---
Mortgage sales (3) 1,175 1,152 1
==================================================================================
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(1) REPRESENTS THE MAXIMUM RECOURSE EXPOSURE RELATING TO RECOURSE ARRANGEMENTS
IN THE FORM OF THE RETENTION OF SUBORDINATED INTERESTS OR THE ISSUANCE OF A
CORPORATE GUARANTEE.
(2) THE NET PRESENT VALUE OF EXPECTED CASH OUTFLOWS ON THE MORTGAGE
SECURITIZATION RECOURSE ARRANGEMENTS IS REFLECTED IN THE VALUATION OF THE
MORTGAGE RETAINED INTERESTS.
(3) THE RECOURSE ARRANGEMENTS UNDER THE MORTGAGE SALE TRANSACTIONS REPRESENT A
RISK SHARING ARRANGEMENT IN WHICH GREENPOINT HAS TRANSFERRED THE FIRST 2%
OF LOSSES TO THE PURCHASER.
11
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
In addition to the recourse arrangements described in the table above, at March
31, 2001 and December 31, 2000, GreenPoint has provided representations and
warranties on mortgage loans with remaining principal balances of $7.5 billion
and $6.7 billion, respectively. GreenPoint has established liabilities related
to representations and warranties for mortgage loans of $8 million and $7
million, which is included in other liabilities, at March 31, 2001 and December
31, 2000, respectively.
The following presents quantitative information about delinquencies on loans
sold with recourse:
MARCH 31, DEC. 31, MARCH 31, DEC. 31,
2001 2000 2001 2000
------------------------------------------------------------------------------------
(IN MILLIONS) MANUFACTURED HOUSING MORTGAGE
====================================================================================
Principal balance of loans $5,447 $5,391 $2,585 $2,919
Principal balance of loans 90 days or
more past due (1) 183 182 30 29
====================================================================================
----------
(1) MANUFACTURED HOUSING PAST DUE LOANS INCLUDE REPOSSESSED INVENTORY.
BALANCES AND CHANGES IN RETAINED INTERESTS
The activity in the recorded liability for manufactured housing securitizations
and sales is summarized as follows:
AT AND FOR THE
QUARTER ENDED
-----------------------------------------------------------------------
MARCH 31, MARCH 31,
(IN MILLIONS) 2001 2000
=======================================================================
LIABILITY FOR RECOURSE EXPOSURE
Balance at beginning of period $ 131 $ 32
Provisions charged to income at
securitization/sale -- 1
Letter of credit draws and other charges (26) (1)
Change in valuation of retained interests -- 3
-----------------------------------------------------------------------
Balance at end of period $ 105 $ 35
=======================================================================
12
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
The assets recognized as retained interests in securitizations include
interest-only strips, transferor interests and subordinated certificates. The
activity in retained interests in securitizations is summarized as follows:
AT AND FOR THE QUARTER ENDED
MARCH 31,
------------------------------------------------------------------------
2001 2000 2001 2000
------------------------------------------------------------------------
MANUFACTURED
(IN MILLIONS) HOUSING MORTGAGE
========================================================================
RETAINED INTERESTS IN
SECURITIZATIONS
Balance at beginning of period $ 46 $ 53 $ 113 $ 72
Additions from securitizations 13 6 2 15
Interest income 2 --- 5 4
Cash received (5) (4) (8) (6)
Unrealized gain (loss) 4 --- 6 (2)
Sales of subordinated certificates --- (40) --- ---
------------------------------------------------------------------------
Balance at end of period $ 60 $ 15 $ 118 $ 83
========================================================================
On a quarterly basis, GreenPoint reviews retained interests for impairment based
on management's best estimate of the fair value of future cash flows associated
with the retained interests. GreenPoint also reviews the adequacy of the value
of the recorded liability on a quarterly basis, based on management's best
estimate of future cash flows associated with the corporate guarantee.
VALUATION ASSUMPTIONS
The key economic assumptions used in estimating the fair value of retained
interests capitalized during the quarter ended March 31, 2001 and the
assumptions used in estimating the fair value of the entire portfolio of
retained interests at March 31, 2001 were as follows:
CAPITALIZED DURING
THE QUARTER ENDED ESTIMATE OF FAIR VALUE AT
-----------------------------------------------------------------------------
MARCH 31, 2001 MARCH 31, 2001
-----------------------------------------------------------------------------
MANUFACTURED MANUFACTURED
HOUSING HOUSING MORTGAGE
=============================================================================
Weighted average life (in years) 4.9 4.5 1.4
Weighted average prepayment rate(1) 12.5 % 12.7 % 47.4 %
Weighted average default rate 3.0 % 4.2 % N/A
Loss severity rate 61.2 % 63.4 % N/A
Weighted average loss rate 1.8 % 2.7 % 0.8 %
Asset cash flows discounted at 14.0 % 14.0 % 12.8 %
Liability cash flows discounted at --- 6.5 % ---
=============================================================================
----------
(1) EXCLUDES WEIGHTED AVERAGE DEFAULT RATE.
13
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
SERVICING ASSETS
On a quarterly basis, GreenPoint reviews capitalized servicing rights for
impairment. This review is performed based on risk strata, which are determined
on a disaggregated basis given the predominant risk characteristics of the
underlying loans. For manufactured housing loans, the predominant
risk characteristics are loan type and interest rate type. For mortgage
loans, the predominant risk characteristics are loan type and interest rate.
GreenPoint receives annual servicing fees approximating 1.0% and 0.5% of the
principal balances for manufacturing housing loans and mortgage loans,
respectively.
The activity in servicing assets is summarized as follows:
AT AND FOR THE QUARTER ENDED MARCH 31,
-----------------------------------------------------------------------------------
2001 2000 2001 2000
(IN MILLIONS) MANUFACTURED HOUSING MORTGAGE
===================================================================================
SERVICING ASSETS
Balance at beginning of period $ 142 $ 126 $ 60 $ 55
Additions 5 11 12 6
Amortization (6) (7) (5) (3)
-----------------------------------------------------------------------------------
Balance at end of period 141 130 67 58
-----------------------------------------------------------------------------------
RESERVE FOR IMPAIRMENT OF SERVICING
ASSETS
Balance at beginning of period -- -- (5) --
Additions -- -- (3) --
-----------------------------------------------------------------------------------
Balance at end of period -- -- (8) --
-----------------------------------------------------------------------------------
SERVICING ASSETS, NET $ 141 $ 130 $ 59 $ 58
===================================================================================
At March 31, 2001, the estimated fair values of manufactured housing and
mortgage servicing assets were $171 million and $67 million, respectively.
At December 31, 2000, the estimated fair values of manufactured housing and
mortgage servicing assets were $169 million and $64 million, respectively.
The significant assumptions used in estimating the fair value of the servicing
assets were as follows:
MARCH 31, 2001
------------------------------------------------------------
MANUFACTURED
HOUSING MORTGAGE
------------------------------------------------------------
Weighted average prepayment rate 13.1 % (1) 31.4 %
Weighted average life (in years) 4.3 3.2
Weighted average default rate 3.8 % N/A
Cash flows discounted at 14.0 % 10.2 %
------------------------------------------------------------
----------
(1) EXCLUDES WEIGHTED AVERAGE DEFAULT RATE.
14
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
5. BUSINESS SEGMENTS
The Company consists of three domestic business segments offering unique
products and services. The Mortgage Banking segment is in the business of
originating, selling, securitizing and servicing residential mortgage loans. The
Company has historically funded its mortgage portfolio with consumer deposits
raised through its Consumer Banking operations. The Consumer Banking segment
consists of 74 full service banking offices offering a variety of financial
services to the Greater New York City area. The Manufactured Housing segment
primarily originates, securitizes and services manufactured housing loans.
The accounting policies of the segments are the same as described in Note 1
"Summary of Significant Accounting Policies." The Company evaluates the
performance of its business segments based on income before income taxes.
Expenses under the direct control of each business segment and the expense of
premises and equipment incurred to support business operations are allocated
accordingly, by segment. The expenses relating to the executive, strategic
planning, information systems personnel, finance, audit and human resources
functions of the Company are not allocated to individual operating segments.
QUARTER ENDED MARCH 31, 2001
-----------------------------------------------------------------------------------------------------------------------
MANUFACTURED SEGMENT CONSOLIDATED
(IN MILLIONS) MORTGAGE CONSUMER HOUSING TOTALS OTHER TOTALS
=======================================================================================================================
Net interest income $ 61 $ 53 $ 9 $ 123 $ 20 $ 143
Income from fees and commissions (1) 11 4 14 1 15
Loan servicing fees 2 --- 29 31 --- 31
Net gain on sale of loans 65 --- 11 76 --- 76
Segment gain (loss) before taxes 93 29 8 130 --- 130
Significant non-cash items:
Depreciation and amortization 4 13 10 27 1 28
ESOP and stock plans expense 2 1 2 5 1 6
Change in valuation of retained --- --- --- --- --- ---
interests
Total Assets $ 11,011 $ 11,484 $ 1,239 $ 23,734 $ (6,422) $ 17,312
=======================================================================================================================
QUARTER ENDED MARCH 31, 2000
-----------------------------------------------------------------------------------------------------------------------
MANUFACTURED SEGMENT CONSOLIDATED
(IN MILLIONS) MORTGAGE CONSUMER HOUSING TOTALS OTHER TOTALS
=======================================================================================================================
Net interest income $ 58 $ 58 $ 11 $ 127 $ 16 $ 143
Income from fees and commissions --- 9 2 11 --- 11
Loan servicing fees 5 --- 27 32 --- 32
Net gain on sale of loans 24 --- 22 46 --- 46
Segment gain (loss) before taxes 72 34 17 123 (25) 98
Significant non-cash items:
Depreciation and amortization 4 12 9 25 3 28
ESOP and stock plans expense 1 1 1 3 --- 3
Change in valuation of retained --- --- (3) (3) --- (3)
interests
Total Assets $ 9,994 $ 11,950 $ 1,701 $ 23,645 $ (8,469) $ 15,176
=======================================================================================================================
----------
(1) REPRESENTS UNALLOCATED CORPORATE AMOUNTS AND ELIMINATIONS.
(2) FOR THE PURPOSE OF INTERNAL MANAGEMENT REPORTING, THE COMPANY RECORDS
INTERSEGMENT FUNDS TRANSFERS AND ELIMINATES THESE TRANSFERS ON A
CONSOLIDATED BASIS FOR GAAP REPORTING. INTERSEGMENT ASSETS AND LIABILITIES
ELIMINATED FOR CONSOLIDATION PURPOSES WERE $11.0 BILLION AND $8.5 BILLION
FOR THE QUARTERS ENDED MARCH 31, 2001 AND 2000, RESPECTIVELY. NET INTEREST
INCOME CORRESPONDING TO THE ASSUMED FUNDS TRANSFERS IS ALLOCATED
ACCORDINGLY.
15
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
6. HEDGING ACTIVITIES
On June 15, 1998, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
and Hedging Activities ("SFAS 133"), subsequently amended by Statement of
Financial Accounting Standards No. 138, Accounting for Certain Derivative
Instruments and Certain Hedging Activities (an amendment of FASB Statement No.
133). On January 1, 2001, GreenPoint adopted SFAS 133 as amended, in accounting
for its derivative financial instruments. SFAS 133 requires that all derivative
instruments be recorded on the balance sheet at fair value. GreenPoint's
interest rate lock commitments are recorded as derivative instruments and
measured using a discounted cash flow model. The fair value of the interest rate
lock commitments represents the change in fair value resulting from interest
rate movements between inception and the reporting date. Changes in the fair
value of derivatives are recorded in each period in current earnings. A
transition adjustment was recognized as a cumulative effect of a change in
accounting principle in the consolidated statement of income at January 1, 2001.
The transition adjustment did not have a material impact on the consolidated
statement of income.
The Bank uses interest rate swaps to manage the interest rate risk associated
with its fixed rate manufactured housing loans and interest rate lock
commitments prior to securitization. The notional amounts of these contracts
were $140 million and $175 million at March 31, 2001 and December 31, 2000,
respectively. The interest rate swaps designated as fair value hedging
instruments to manage the interest rate risk associated with fixed rate
manufactured housing loans had notional values of $60 million and $95 million
at March 31, 2001 and December 31, 2000, respectively. The net gain
representing the amount of hedge ineffectiveness during the quarter ended
March 31, 2001 was $0.3 million and is included in other non-interest income.
GreenPoint enters into mandatory commitments to deliver mortgage whole loans to
various investors and to issue private securities and Fannie and Freddie Mac
securities ("forward delivery commitments"). The forward delivery commitments
are used to manage the interest rate risk associated with mortgage loans and
interest rate lock commitments made by GreenPoint to mortgage borrowers. The
notional amounts of these contracts were $638 million and $941 million at March
31, 2001 and December 31, 2000, respectively. The forward delivery commitments
designated as fair value hedging instruments to manage the interest rate risk
associated with mortgage loans had notional values of $339 million and $752
million at March 31, 2001 and December 31, 2000, respectively. GreenPoint did
not have a material gain or loss representing the amount of hedge
ineffectiveness during the quarter ended March 31, 2001.
16
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
7. IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS
On September 29, 2000, the FASB issued Statement of Financial Accounting
Standards No. 140, Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities, a replacement of SFAS 125 ("SFAS 140"). This
statement revises the standards of accounting for securitizations and other
transfers of financial assets and collateral established by SFAS 125 and
requires certain additional disclosures, but carries over most of SFAS 125's
provisions without reconsideration. SFAS 140 will be effective for transfers and
servicing of financial assets and extinguishments of liabilities occurring after
March 31, 2001. SFAS 140 is to be applied prospectively with certain exceptions.
Management of the Company anticipates that the adoption of SFAS 140 will not
have a significant effect on the Company's earnings or financial position.
Disclosures required under SFAS 140 were included in GreenPoint's Annual Report
to shareholders for the year ended December 31, 2000.
8. STOCK REPURCHASE PROGRAM
In February 2001, the Company's Board of Directors authorized a new share
repurchase program of up to 5%, or approximately five million, of its
outstanding shares. The repurchase will be at the Company's discretion, based on
ongoing assessments of the capital needs of the business and the market
valuation of its stock.
As of March 31, 2001, the Company has not repurchased any shares under this
program.
17
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
QUARTER ENDED
------------------------------------------------------------------------------------------------------------------------------------
MAR. 31, DEC. 31, SEPT. 30, JUNE 30, MAR. 31,
2001 2000 2000 2000 2000
====================================================================================================================================
PERFORMANCE RATIOS (ANNUALIZED)
Core cash earnings return on average assets (1) 2.58 % 1.23 % 2.45 % 2.28 % 2.14 %
Core cash earnings return on average equity (1) 20.05 9.17 18.62 17.74 16.33
Core cash earnings return on tangible equity (1) 34.92 16.01 33.08 31.96 30.14
Core return on average assets (1) 1.94 0.59 1.81 1.68 1.53
Core return on average equity (1) 15.10 4.42 13.79 13.03 11.63
Net interest margin 3.96 4.11 4.17 4.19 4.21
Net interest spread during period 3.50 3.64 3.71 3.77 3.80
Operating expense to average assets (2) 2.91 2.72 2.81 2.75 2.76
Efficiency ratio (3) 43.1 60.9 42.8 44.2 45.4
Average interest-earning assets to average
interest-bearing liabilities 1.10 x 1.11 x 1.10 x 1.10 x 1.10 x
PER SHARE DATA:
Core cash earnings (1)* $ 1.15 $ 0.53 $ 1.04 $ 0.97 $ 0.88
Common book value** 23.56 22.77 22.91 22.38 21.87
Tangible common book value** 14.25 13.17 13.17 12.46 11.88
Shares used in calculations - (In thousands):
* Average 90,475 90,279 91,061 91,612 92,479
** Period - end 90,755 90,024 90,596 90,936 92,310
Total 100,583 100,105 101,351 102,294 103,832
ASSET QUALITY RATIOS:
Non-performing loans to total loans held for
investment 2.15 % 2.27 % 2.21 % 2.21 % 2.16 %
Non-performing assets to total assets 1.15 1.33 1.32 1.32 1.39
Allowance for loan losses to non-performing loans 60.53 57.27 58.31 57.28 56.40
Allowance for loan losses to loans held for
investment 1.30 1.30 1.29 1.27 1.22
CAPITAL RATIOS:
Company:
Leverage capital 9.59 % 9.39 % 9.55 % 9.14 % 9.17 %
Risk-based capital:
Tier I 9.24 9.17 9.69 9.61 10.29
Total 10.91 10.94 10.48 10.42 11.18
Bank:
Leverage capital 9.36 9.27 9.49 8.91 9.09
Risk-based capital:
Tier I 9.00 9.03 9.63 9.35 10.19
Total 10.67 10.80 10.42 10.16 11.08
Tangible equity to tangible managed assets 5.17 5.10 5.39 5.31 5.63
Tangible equity to managed receivables 6.45 6.19 6.49 6.47 6.75
OTHER DATA:
Total managed assets (4) 25,197 23,784 22,923 22,434 20,615
Total managed receivables (5) 19,496 18,866 18,301 17,667 16,411
Earnings to combined fixed charges and preferred
stock dividends (6):
Excluding interest on deposits 11.20 x 3.86 x 13.55 x 12.46 x 11.11 x
Including interest on deposits 1.94 x 1.25 x 1.80 x 1.80 x 1.73 x
----------
(1) EXCLUDES RESTRUCTURING CHARGE AND NON-RECURRING PERSONNEL EXPENSE.
(2) EXCLUDES GOODWILL EXPENSE, ORE INCOME, RESTRUCTURING CHARGE AND
NON-RECURRING PERSONNEL EXPENSE.
(3) THE EFFICIENCY RATIO IS CALCULATED BY DIVIDING OPERATING EXPENSE BY THE SUM
OF NET INTEREST INCOME AND NON-INTEREST INCOME.
(4) MANAGED ASSETS IS THE SUM OF TOTAL ASSETS AND OFF-BALANCE SHEET MANAGED
RECEIVABLES.
(5) MANAGED RECEIVABLES IS THE SUM OF ON-BALANCE SHEET LOANS AND OFF-BALANCE
SHEET MANAGED RECEIVABLES.
(6) FOR PURPOSES OF COMPUTING THE RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS, EARNINGS REPRESENT NET INCOME
PLUS APPLICABLE INCOME TAXES, FIXED CHARGES AND PREFERRED STOCK DIVIDEND
REQUIREMENTS OF A CONSOLIDATED SUBSIDIARY. FIXED CHARGES REPRESENT INTEREST
EXPENSE ON LONG-TERM DEBT AND ONE-THIRD (THE PORTION DEEMED TO BE
REPRESENTATIVE OF THE INTEREST FACTOR) OF RENTS.
18
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
1. GENERAL
GreenPoint Financial Corp. (the "Company" or "GreenPoint") is a leading national
specialty housing finance company with three principal businesses. GreenPoint
Mortgage Funding, Inc. ("GPM"), a national mortgage banking company
headquartered in Larkspur, California, is the leading national lender in
non-conforming residential mortgages, specializing in alternative A ("Alt A")
residential mortgages. GreenPoint Credit, LLC ("GPC"), headquartered in San
Diego, California, is the nation's second largest lender and servicer nationally
in the manufactured housing finance industry. GreenPoint Bank (the "Bank"), a
New York State chartered savings bank, has $11 billion in deposits in 74
branches serving more than 400,000 households in the Greater New York City area.
FORWARD LOOKING STATEMENTS
This Quarterly report on Form 10Q contains certain forward-looking statements,
which are based on management's current expectations. These forward-looking
statements include information concerning possible or assumed future results of
operations and business plans, including those relating to earnings growth (on
both a GAAP and cash basis); revenue growth; origination volume in both the
Company's mortgage and manufactured housing finance businesses; non-interest
income levels, including fees from product sales; tangible capital generation;
margins on sales or securitizations of loans; market share; expense levels; and
other business operations and strategies. For these statements, GreenPoint
claims the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995 to the extent
provided by applicable law. Forward-looking statements involve inherent risks
and uncertainties. We caution you that a number of important factors could cause
actual results to differ materially from those contained in any forward-looking
statement. Such factors include, but are not limited to: risks and uncertainties
related to acquisitions and related integration and restructuring activities;
prevailing economic conditions; changes in interest rates, loan demand, real
estate values, and competition, which can materially affect origination levels
in the Company's mortgage and manufactured housing finance businesses; the level
of defaults, losses and prepayments on loans made by the Company, whether held
in portfolio or sold in the secondary markets, which can materially affect the
Company's quarterly valuation of its retained interests from securitizations;
changes in accounting principles, policies, and guidelines; adverse changes or
conditions in capital or financial markets, which could adversely affect the
ability of the Company to sell or securitize mortgage and manufactured housing
originations on a timely basis or at prices which are acceptable to the Company;
changes in any applicable law, rule, regulation or practice with respect to tax
or legal issues; and other economic, competitive, governmental, regulatory, and
technological factors affecting the Company's operations, pricing, products and
services. The forward-looking statements are made as of the date of this Report,
and the Company assumes no obligation to update the forward-looking statements
or to update the reasons why actual results could differ from those projected in
the forward-looking statements.
19
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM - 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
The Company regularly explores opportunities for acquisitions of and holds
discussions with financial institutions and related businesses, and also
regularly explores opportunities for acquisitions of liabilities and assets of
financial institutions and other financial services providers. The Company
routinely analyzes its lines of business and from time to time may increase,
decrease or terminate one or more activities.
2. OPERATING RESULTS
The first quarter's results include the following:
o Net income was $78 million, an increase of 35% over the first quarter of
2000. Net income per diluted share was $0.86 for the quarter, an increase of
37% over the first quarter of 2000.
o Core cash earnings were $104 million, an increase of 28% over the first
quarter of 2000. Core cash earnings per diluted share were $1.15, an
increase of 31% over the same quarter a year ago.
o Total loan originations for the first quarter of 2001 were $4.4 billion, an
increase of 62% from the first quarter of 2000, and an increase of 16%
compared to the prior quarter. Mortgage originations for the same period
were $4.2 billion, an increase of 112% from the first quarter of 2000, and
an increase of 22% from the fourth quarter of 2000. Manufactured housing
loan originations were $187 million, a decrease of 45% from the fourth
quarter of 2000 and 74% from a year ago.
o GPM sold certain whole loan mortgages of $2.8 billion, recording a gain of
$62 million. Draws on previously securitized home equity lines of credit
totaling $79 million resulted in a gain of $3 million.
o GPC recorded a gain of $11 million from a securitization of $272 million of
fixed and variable rate manufactured housing loans.
o Asset quality in the mortgage loan portfolio improved further over 2000.
Non-performing loans decreased 7% to $187 million, and total non-performing
assets decreased 5% to $199 million at March 31, 2001.
20
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
CORE CASH EARNINGS
Core cash earnings are net of non-recurring items and exclude certain non-cash
charges related to goodwill and the Employee Stock Ownership Plan ("ESOP"). The
non-cash expenses, unlike other expenses incurred by the Company, do not reduce
GreenPoint's tangible capital thereby enabling the Company to increase
shareholder value through the growth of earning assets, increases in cash
dividends and additional repurchases of the Company's stock.
QUARTER ENDED
----------------------------------------------------------------
MARCH 31, MARCH 31,
(IN MILLIONS) 2001 2000
================================================================
Net income $ 78 $ 58
Non-recurring items, net of tax --- ---
----------------------------------------------------------------
Core net income 78 58
Add back:
Goodwill amortization 20 20
Employee Stock Ownership and stock
plans expense 6 3
----------------------------------------------------------------
Core cash earnings $ 104 $ 81
================================================================
Core cash earnings per share (1) $ 1.15 $ 0.88
================================================================
----------
(1) BASED ON THE WEIGHTED AVERAGE SHARES USED TO CALCULATE DILUTED EARNINGS PER
SHARE.
NET INTEREST INCOME
Net interest income on a tax-equivalent basis was unchanged versus the
comparable period in 2000. Net interest income benefited from an increase in
average earning assets, which included an increase in loans held for sale. The
net interest margin was 3.96% down from 4.21% in the first quarter of 2000. The
narrower margin resulted from a change in the mix of interest-earning assets and
a rise in CD costs reflecting a rise in interest rate levels during 2000, and an
increasingly competitive market for these deposits in the New York area.
Average earning assets increased by $882 million in the quarter ended March 31,
2001. Growth in loans held for sale, due to higher origination volume, and
investment securities, including money market, more than offset declines in
loans held for investment. The cost of interest-bearing liabilities rose by 33
basis points, reflecting higher rates for both deposits and other borrowings.
21
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
AVERAGE BALANCE SHEETS AND INTEREST YIELD/COST
The following table sets forth certain information relating to the Company's
average statements of financial condition (unaudited) and statements of income
(unaudited) for the three months ended March 31, 2001 and 2000, and reflects the
average yield on assets and average cost of liabilities for the periods
indicated. Such annualized yields and costs are derived by dividing income or
expense by the average balance of assets or liabilities, respectively, for the
periods shown. Average balances are derived from average daily balances. Average
balances and yields include non-accrual loans. The yields and costs include fees
that are considered adjustments to yields. Interest and yields are presented on
a taxable-equivalent yield basis.
QUARTER ENDED
-----------------------------------------------------------------------------------------------------------------------------
MARCH 31, 2001 MARCH 31, 2000
-----------------------------------------------------------------------------------------------------------------------------
AVERAGE AVERAGE
AVERAGE YIELD/ AVERAGE YIELD/
(TAXABLE-EQUIVALENT INTEREST AND RATES, IN MILLIONS)(1) BALANCE INTEREST COST BALANCE INTEREST COST
=============================================================================================================================
ASSETS:
Interest-earning assets:
Mortgage loans held for investment (2) $ 8,198 $ 179 8.71 % $ 8,672 $ 187 8.65 %
Other loans (2) 564 14 9.72 636 16 10.15
Loans held for sale 2,245 47 8.58 1,419 31 8.77
Money market investments (3) 190 3 5.78 598 9 5.92
Securities (4) 3,139 55 7.08 2,079 36 6.94
Other interest-earning assets 289 11 15.65 339 11 12.53
-----------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets 14,625 309 8.48 13,743 290 8.45
-----------------------------------------------------------------------------------------------------------------------------
Non-interest earning assets (5) 1,444 1,426
-----------------------------------------------------------------------------------------------------------------------------
Total assets $ 16,069 $ 15,169
=============================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest-bearing liabilities:
Savings $ 1,209 6 2.02 $ 1,356 7 2.16
N.O.W. 276 1 0.98 297 1 0.98
Money market and variable rate savings 2,541 22 3.46 2,444 20 3.35
Term certificates of deposit 6,747 96 5.77 7,133 96 5.38
Mortgagors' escrow 102 --- 3.04 102 --- ---
Other borrowed funds 1,917 28 5.85 800 13 6.27
Senior bank notes 135 2 7.04 200 3 6.94
Subordinated bank notes 150 4 9.36 --- --- ---
Guaranteed preferred beneficial interest in
Company's junior subordinated debentures 200 5 9.16 200 5 9.16
-----------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 13,277 164 4.98 12,532 145 4.65
-----------------------------------------------------------------------------------------------------------------------------
Other liabilities (6) 724 646
-----------------------------------------------------------------------------------------------------------------------------
Total liabilities 14,001 13,178
Stockholders' equity 2,068 1,991
-----------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 16,069 $ 15,169
=============================================================================================================================
Net interest income/interest rate spread (7) $ 145 3.50 % $ 145 3.80 %
=============================================================================================================================
Net interest-earning assets/net interest margin (8) $ 1,348 3.96 % $ 1,211 4.21 %
=============================================================================================================================
Ratio of interest-earning assets to interest-earning
liabilities 1.10 x 1.10 x
=============================================================================================================================
(1) NET INTEREST INCOME IS CALCULATED ON A TAXABLE-EQUIVALENT BASIS.
(2) IN COMPUTING THE AVERAGE BALANCES AND AVERAGE YIELD ON LOANS, NON-ACCRUING
LOANS HAVE BEEN INCLUDED.
(3) INCLUDES INTEREST-BEARING DEPOSITS IN OTHER BANKS, FEDERAL FUNDS SOLD AND
SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL.
(4) THE AVERAGE YIELD DOES NOT GIVE EFFECT TO CHANGES IN FAIR VALUE THAT ARE
REFLECTED AS A COMPONENT OF STOCKHOLDERS' EQUITY.
(5) INCLUDES GOODWILL, BANKING PREMISES AND EQUIPMENT, SERVICING ASSETS,
DEFERRED TAX ASSETS, ACCRUED INTEREST RECEIVABLE, AND OTHER MISCELLANEOUS
NON-INTEREST EARNING ASSETS.
(6) INCLUDES ACCRUED INTEREST PAYABLE, ACCOUNTS PAYABLE AND OTHER MISCELLANEOUS
NON-INTEREST BEARING OBLIGATIONS OF THE COMPANY.
(7) NET INTEREST RATE SPREAD REPRESENTS THE DIFFERENCE BETWEEN THE AVERAGE
YIELD ON INTEREST-EARNING ASSETS AND THE AVERAGE COST OF INTEREST-BEARING
LIABILITIES.
(8) NET INTEREST MARGIN REPRESENTS NET INTEREST INCOME DIVIDED BY AVERAGE
INTEREST-EARNING ASSETS.
22
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
RATE/VOLUME ANALYSIS
The following table presents the effects of changes in interest rates and
changes in volume of interest-earning assets and interest-bearing liabilities on
the Company's interest income on a tax equivalent basis and interest expense
during the periods indicated. Information is provided in each category on
changes (i) attributable to changes in volume (changes in volume multiplied by
prior rate), (ii) changes attributable to changes in rate (changes in rate
multiplied by prior volume), and (iii) the net change. The changes attributable
to the combined impact of volume and rate have been allocated proportionately to
volume and rate.
QUARTER ENDED MARCH 31, 2001
COMPARED TO
QUARTER ENDED MARCH 31, 2000
INCREASE/(DECREASE)
-----------------------------------------------------------------------------------------------
DUE TO
-----------------------------------------------------------------------------------------------
AVERAGE AVERAGE NET
(IN MILLIONS) VOLUME RATE CHANGE
===============================================================================================
Mortgage loans held for investment (1) $ (9) $ 1 $ (8)
Other loans (1) (1) (1) (2)
Loans held for sale 18 (2) 16
Money market investments (2) (6) -- (6)
Securities 19 -- 19
Other interest-earning assets (3) 3 --
-----------------------------------------------------------------------------------------------
Total interest earned on assets 18 1 19
-----------------------------------------------------------------------------------------------
Savings (1) -- (1)
N.O.W -- -- --
Money market and variable rate savings 2 -- 2
Term certificate of deposit (6) 6 --
Mortgagors' escrow -- -- --
Other borrowed funds 16 (1) 15
Senior bank notes (1) -- (1)
Subordinated bank notes 4 -- 4
Guaranteed preferred beneficial interest in Company's junior
subordinated debentures -- -- --
-----------------------------------------------------------------------------------------------
Total interest paid on liabilities 14 5 19
-----------------------------------------------------------------------------------------------
Net change in net interest income $ 4 $ (4) $ --
===============================================================================================
(1) IN COMPUTING THE VOLUME AND RATE COMPONENTS OF NET INTEREST INCOME FOR
LOANS, NON-ACCRUAL LOANS HAVE BEEN INCLUDED.
(2) INCLUDES INTEREST-BEARING DEPOSITS IN OTHER BANKS, FEDERAL FUNDS SOLD AND
SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL.
23
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
PROVISION FOR LOAN LOSSES
The provision for loan losses was $5 million for the first quarter of 2001, down
from $8 million for the comparable 2000 period. The decrease is primarily
attributable to a change in the timing of charge-offs on the manufactured
housing loan portfolio to conform with recent changes in regulatory standards.
Charge-offs for the quarter ended March 31, 2001 on the residential mortgage
portfolio were essentially unchanged versus a year ago. The provision equaled
net charge-offs for all periods.
NON-INTEREST INCOME
The following table summarizes the components of non-interest income:
QUARTER ENDED
MARCH 31,
-------------------------------------------------------------------------------------------
(IN MILLIONS) 2001 2000
===========================================================================================
Income from fees and commissions:
Loan servicing fees $ 31 $ 32
Banking services fees and commissions 11 9
Other 4 2
-------------------------------------------------------------------------------------------
Total income from fees and commissions 46 43
Net gain on sales of mortgage loans 65 24
Net gain on sales of manufactured housing assets 11 22
Change in valuation of retained interests - Manufactured housing -- (3)
Net gain on securities 6 1
-------------------------------------------------------------------------------------------
Total non-interest income $128 $ 87
===========================================================================================
Non-interest income was $128 million in the first quarter, up from $87 million
in the comparable quarter a year ago. The results for the quarter a reflect
higher gain on sale of mortgage loans offset by a lower gain on sale of
manufactured housing assets.
Income from fees and commissions was $46 million in the first quarter, up from
$43 million in the comparable quarter a year ago principally due to higher
banking services fees and commissions. Loan servicing fees fell by $1 million
due to a $3 million write-down in the value of mortgage servicing rights.
24
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
NON-INTEREST INCOME (CONTINUED)
GAIN ON SALE OF LOANS:
The following table is a summary of loans sold and average margins for the
reported periods:
QUARTER ENDED
MARCH 31,
----------------------------------------------------------------------
(IN MILLIONS) 2001 2000
----------------------------------------------------------------------
WHOLE LOAN - MORTGAGE:
Sales $ 2,836 $ 1,205
Gain on sale $ 62 $ 22
Average margin 2.18 % 1.82 %
----------------------------------------------------------------------
SECURITIZATIONS - MORTGAGE:
Sales $ 79 $ 53
Gain on sale $ 3 $ 2
Average margin 3.42 % 3.42 %
----------------------------------------------------------------------
SECURITIZATIONS - MANUFACTURED HOUSING:
Sales $ 272 $ 590
Gain on sale $ 11 $ 22
Average margin 4.08 % 3.76 %
----------------------------------------------------------------------
Gain on sale of mortgage loans increased for the quarter, principally due to a
higher volume of loans sold along with better market pricing. The decrease in
gain on sale of manufactured housing assets for the quarter was attributable to
a lower volume of loans sold.
NON-INTEREST EXPENSE
The following is a summary of the components of non-interest expense:
QUARTER ENDED
MARCH 31,
----------------------------------------------------------------
(IN MILLIONS) 2001 2000
================================================================
Salaries and benefits $ 57 $ 51
Employee Stock Ownership and stock plans expense 6 3
Net expense of premises and equipment 21 20
Advertising 2 1
Federal deposit insurance premiums 1 1
Other administrative expenses 29 28
----------------------------------------------------------------
Total general and administrative expenses 116 104
Goodwill amortization 20 20
----------------------------------------------------------------
Total non-interest expense $ 136 $ 124
================================================================
Total non-interest expense was $136 million for the first quarter, an increase
of 10% over the same period a year ago. Salaries and benefits increased $6
million principally due to additional staff and incentive commissions related to
the higher mortgage volume. Employee stock ownership and stock plans expense
increased $3 million due to a higher average stock price versus the same period
a year ago.
25
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
INCOME TAX EXPENSE
Total income tax expense increased $12 million, or 30%, to $52 million for the
first quarter of 2001. The effective tax rate declined from 41% in the 2000
quarter to 39.75% in the 2001 quarter.
LOAN ORIGINATIONS
The following table summarizes loan origination activity for each of the
reported periods:
QUARTER ENDED
MARCH 31,
------------------------------------------------------
(IN MILLIONS) 2001 2000
======================================================
MORTGAGE:
Total applications received $ 10,575 $4,619
------------------------------------------------------
Loans originated:
Specialty products (1) $ 2,239 $1,108
Home equity / Seconds 424 466
Agency / Jumbo 1,554 412
------------------------------------------------------
Total loans originated $ 4,217 $1,986
------------------------------------------------------
Commitments to originate loans $ 5,641 $2,503
------------------------------------------------------
Loans held for sale $ 2,643 $1,190
------------------------------------------------------
----------
(1) SPECIALTY PRODUCTS INCLUDE: ALT A, NO DOC AND A MINUS PROGRAMS.
MANUFACTURED HOUSING:
Total loans originated $ 187 $731
------------------------------------------------------
Loans held for sale $ 122 $506
------------------------------------------------------
Total loan originations during the quarter for the mortgage and manufactured
housing businesses were $4 billion, up from $2 billion during the first quarter
of 2000. Continued strength in specialty mortgage originations, attributable to
declining interest rates and increased market share, offset the decline in
manufactured housing originations resulting from lower industry volumes,
tightened underwriting standards and risk based pricing initiatives.
26
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
NON-PERFORMING ASSETS:
During the quarter ended March 31, 2001, non-performing assets decreased by 5%.
The ratio of non-performing loans to loans held for investment fell to 2.15% at
March 31, 2001 from 2.27% at December 31, 2000 while the ratio of non-performing
assets to total assets fell to 1.15% at March 31, 2001 from 1.33% at December
31, 2000.
Non-performing assets, net of related specific reserves, were as follows:
MARCH 31, DECEMBER 31,
(IN MILLIONS) 2001 2000
===================================================================
Mortgage loans secured by:
Residential one-to four-family $ 165 $ 170
Residential multi-family 10 12
Commercial property 10 14
Other loans 2 1
------------------------------------------------------------------
Total non-performing loans (1) 187 197
Total other real estate owned, net 12 13
------------------------------------------------------------------
Total non-performing assets $ 199 $ 210
==================================================================
(1) INCLUDES $5 MILLION AND $6 MILLION OF NON-ACCRUAL MORTGAGE LOANS UNDER 90
DAYS PAST DUE AT MARCH 31, 2001 AND DECEMBER 31, 2000, RESPECTIVELY.
27
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
ALLOWANCE FOR POSSIBLE LOAN LOSSES:
The following is a summary of the provision and allowance for possible loan
losses:
QUARTER ENDED
MARCH 31,
-----------------------------------------------------
(IN MILLIONS) 2001 2000
-----------------------------------------------------
Balance at beginning of period $ 113 $ 113
Provision charged to income 5 8
Charge-offs:
Residential mortgage (2) (2)
Manufactured housing (8) (9)
-----------------------------------------------------
Total charge-offs (10) (11)
-----------------------------------------------------
Recoveries:
Residential mortgage --- ---
Manufactured housing 5 3
-----------------------------------------------------
Total recoveries 5 3
-----------------------------------------------------
Balance at end of period $ 113 $ 113
-----------------------------------------------------
Net mortgage loan charge-offs were $2 million for the quarters ended March 31,
2001 and 2000. Net charge-offs on the portfolio of manufactured housing loans
held for investment were $3 million for the quarter ended March 31, 2001, versus
$6 million for the comparable period a year ago. The improvement versus a year
ago on the portfolio of manufactured housing loans was primarily attributable to
a change in the timing of charge-offs to conform with recent changes in
regulatory standards.
CAPITAL RATIOS
The Company's ratio of period-end stockholders' equity to ending total assets at
March 31, 2001 was 12.35% compared to 13.00% at December 31, 2000.
The Company and the Bank are subject to various regulatory capital requirements
administered by the federal and state banking agencies. The Board of Governors
of the Federal Reserve System establishes minimum capital requirements for the
consolidated bank holding company, as well as for the Bank.
28
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
CAPITAL RATIOS (CONTINUED)
Under capital adequacy guidelines and the regulatory framework for prompt
corrective action, the Bank must meet specific capital guidelines that involve
quantitative measures of its assets, liabilities, and certain off balance sheet
items as calculated under regulatory accounting practices. These guidelines
require minimum ratios of risk-based capital to risk adjusted assets of 4% for
Tier 1 capital and 8% for total capital. The Federal Reserve Board also has
guidelines for a leverage ratio that is designed to complement the risk-based
capital ratios in determining the overall capital adequacy of banks and bank
holding companies. A minimum leverage ratio of Tier 1 capital to average total
assets of 3% is required for banks and bank holding companies, with an
additional 100 to 200 basis points required for all but the highest rated
institutions. Management believes, as of March 31, 2001, that the Company and
the Bank met all capital adequacy requirements to which they are subject.
As of September 30, 2000, the most recent notification from the FDIC categorized
the Bank as well capitalized under the regulatory framework for prompt
corrective action. To be categorized as well capitalized, the Bank must maintain
minimum Tier 1 capital, total capital and leverage ratios of 6%, 10% and 5%,
respectively. There have been no conditions or events since that notification
that management believes have changed the Company's or Bank's category.
REQUIRED FOR CAPITAL
ACTUAL ADEQUACY PURPOSES
-----------------------------------------------------------------------------------------------------
(IN MILLIONS) AMOUNT RATIO AMOUNT RATIO
=====================================================================================================
AS OF MARCH 31, 2001
Total Capital (to Risk Weighted Assets):
Company $1,720 10.91% $1,261 8.00%
Bank 1,684 10.67 1,263 8.00
Tier 1 Capital (to Risk Weighted Assets):
Company $1,457 9.24% $ 631 4.00%
Bank 1,421 9.00 631 4.00
Tier 1 Capital (to Average Assets):
Company $1,457 9.59% $ 608 4.00%
Bank 1,421 9.36 607 4.00
AS OF DECEMBER 31, 2000
Total Capital (to Risk Weighted Assets):
Company $1,629 10.94% $1,191 8.00%
Bank 1,608 10.80 1,191 8.00
Tier 1 Capital (to Risk Weighted Assets):
Company $1,366 9.17% $ 596 4.00%
Bank 1,345 9.03 596 4.00
Tier 1 Capital (to Average Assets):
Company $1,366 9.39% $ 582 4.00%
Bank 1,345 9.27 580 4.00
29
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK
MARKET RISK MANAGEMENT
The Company's primary market risk exposure is limited solely to interest rate
risk.
Interest rate risk is defined as the sensitivity of the Company's current and
future earnings to changes in the level of market interest rates. It arises in
the ordinary course of the Company's business, as the repricing characteristics
of its loans do not match those of its liabilities. The resulting interest rate
risk is managed by adjustments to the Company's investment portfolio and the
maturities of market borrowings.
Management responsibility for interest rate risk resides with the Asset and
Liability Management Committee ("ALCO"). The committee is chaired by the Chief
Financial Officer and includes the Treasurer, the Head of Risk Management and
the Company's senior business-unit and financial executives. Interest rate risk
management strategies are formulated and monitored by ALCO within policies and
limits approved by the Board of Directors. These policies and limits set forth
the maximum risk which the Board of Directors deems prudent, govern permissible
investment securities and off-balance sheet instruments and identify acceptable
counter-parties to securities and off-balance sheet transactions.
ALCO risk management strategies allow for the assumption of interest rate risk
within the Board approved limits. The strategies are formulated based upon
ALCO's assessments of likely market developments and trends in the Company's
lending and consumer banking businesses. Strategies are developed with the aim
of enhancing the Company's net income and capital, while ensuring the risks to
income and capital from adverse movements in interest rates are acceptable.
30
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK - (CONTINUED)
The Company's income is affected by changes in the level of market interest
rates based upon mismatches between the repricing of its assets and liabilities.
One measure of interest rate sensitivity is provided by the accompanying net gap
analysis, which organizes assets and liabilities according to the time period in
which they reprice or mature. For many of the Company's assets and liabilities,
the maturity or repricing date is not determinable with certainty. For example,
the Company's mortgage and manufactured housing loans and its mortgage-backed
securities can be prepaid before contractual amortization and/or maturity. Also,
repricing of the Company's non-time deposits is subject to management's
evaluation of the existing interest rate environment, current funding and
liquidity needs, and other factors influencing the market competition for such
deposits. The amounts in the accompanying table reflect management's judgment of
the most likely repricing schedule; actual results could vary from those
detailed herein.
The difference between assets and liabilities repricing in a given period is one
approximate measure of interest rate sensitivity. More assets than liabilities
repricing in a period (a positive gap) implies earnings will rise as interest
rates rise, and decline as interest rates decline. More liabilities repricing
than assets implies declining income as rates rise and rising income as rates
fall.
The use of interest rate instruments such as interest rate swaps is integrated
into the Company's interest rate risk management. The notional amounts of these
instruments are not reflected in the Company's balance sheet. Where applicable,
these instruments are included in the interest rate sensitivity table for
purposes of analyzing interest rate risk.
These relationships do not consider the impact that rate movements might have on
other components of the Bank's risk profile; for example, an increase in
interest rates, while implying that earnings will rise in a positive gap period,
might also result in higher credit or default risk due to a higher probability
of borrowers being unable to pay the contractual payments on loans. Likewise, a
decrease in rates might result in an increase in the risk that funds received
from loan prepayments are reinvested at lower rates and/or spreads.
31
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK - (CONTINUED)
INTEREST RATE SENSITIVITY GAP ANALYSIS
The table below depicts the Company's interest rate sensitivity as of March 31,
2001. Allocations of assets and liabilities, including non-interest bearing
sources of funds to specific periods, are based upon management's assessment of
contractual or anticipated repricing characteristics, adjusted periodically to
reflect actual experience. Those gaps are then adjusted for the net effect of
off-balance sheet financial instruments such as interest rate swaps.
REPRICING PERIODS
-------------------------------------------------------------------------------------------------------------------------------
MORE THAN MORE THAN MORE THAN
THREE MONTHS THREE MONTHS SIX MONTHS ONE YEAR MORE THAN
(IN MILLIONS) OR LESS TO SIX MONTHS TO ONE YEAR TO THREE YEARS THREE YEARS TOTAL
-------------------------------------------------------------------------------------------------------------------------------
Total loans, net $ 3,798 $ 734 $ 1,071 $ 2,430 $ 3,295 $ 11,328
Money market investments (1) 49 --- --- --- --- 49
Securities held to maturity (2) 1 --- --- --- 119 120
Securities available for sale 689 388 769 1,364 877 4,087
Other interest-earning assets 130 --- --- --- --- 130
-------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets 4,667 1,122 1,840 3,794 4,291 15,714
Cash and due from banks 164 --- --- --- --- 164
Servicing assets 11 10 15 54 110 200
Goodwill 20 20 40 161 603 844
Other non-interest earning assets 390 --- --- --- --- 390
-------------------------------------------------------------------------------------------------------------------------------
Total assets $ 5,252 $ 1,152 $ 1,895 $ 4,009 $ 5,004 $ 17,312
-------------------------------------------------------------------------------------------------------------------------------
Term certificates of deposit $ 1,788 $ 1,494 $ 1,962 $ 1,273 $ 118 $ 6,635
Core deposits 351 314 621 2,076 1,047 4,409
-------------------------------------------------------------------------------------------------------------------------------
Total deposits 2,139 1,808 2,583 3,349 1,165 11,044
Mortgagors' escrow 6 6 12 50 37 111
Securities sold under agreements
to repurchase 160 --- --- 300 --- 460
Federal Home Loan Bank of New
York advances 1,200 --- 50 300 600 2,150
Long term debt --- --- --- 134 --- 134
Subordinated debt --- --- --- --- 150 150
Guaranteed preferred beneficial
interest in Company's junior
subordinated debentures --- --- --- --- 200 200
Notes payable 2 --- --- --- --- 2
Other liabilities 923 --- --- --- --- 923
Stockholders' equity --- --- --- --- 2,138 2,138
-------------------------------------------------------------------------------------------------------------------------------
Total liabilities and
stockholders' equity $ 4,430 $ 1,814 $ 2,645 $ 4,133 $ 4,290 $ 17,312
-------------------------------------------------------------------------------------------------------------------------------
Off balance sheet financial
instruments $ --- $ --- $ --- $ --- $ --- $ ---
-------------------------------------------------------------------------------------------------------------------------------
Interest rate sensitivity gap $ 822 $ (662) $ (750) $ (124) $ 714
-------------------------------------------------------------------------------------------------------------------------------
Cumulative gap $ 822 $ 160 $ (590) $ (714) ---
-------------------------------------------------------------------------------------------------------------------------------
Interest rate sensitivity gap as
a percentage of total assets 4.75% (3.82)% (4.33)% (0.72)% 4.12%
-------------------------------------------------------------------------------------------------------------------------------
Cumulative gap as a percentage of
total assets 4.75% 0.93% (3.40)% (4.12)% ---
-------------------------------------------------------------------------------------------------------------------------------
----------
(1) CONSISTS OF INTEREST-BEARING DEPOSITS IN OTHER BANKS, FEDERAL FUNDS SOLD
AND SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL.
(2) CONSISTS OF SECURITIES HELD TO MATURITY AND FEDERAL HOME LOAN BANK OF NEW
YORK STOCK.
As of March 31, 2001, the cumulative volume of liabilities maturing or repricing
within one year exceeded assets by $590 million, or 3.41% of total assets.
32
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK - (CONTINUED)
The static gap analysis is an incomplete representation of interest rate risk
for several reasons. It fails to account for changes in prepayment speeds on the
Company's mortgage and manufactured housing loans and mortgage backed securities
portfolios. The behavior of deposit balances will vary with changes in the
general level of interest rates and management's pricing strategies. The gap
analysis does not provide a clear presentation of the risks to income arising
from options embedded in the balance sheet.
Accordingly, ALCO makes extensive use of an earnings simulation model in the
formulation of its market risk management strategy.
The model gives effect to management assumptions concerning the repricing of
assets, liabilities and off-balance sheet financial instruments, as well as
business volumes, under a variety of hypothetical interest rate scenarios. These
hypothetical scenarios incorporate interest rate increases and decreases of 200
basis points. Actual interest rate changes during the past three years have
fallen within this range and management expects that any changes over the next
year will not exceed this range.
The most crucial management assumptions concern prepayments on the Company's
mortgage loan portfolio and the pricing of consumer deposits in various interest
rate environments. As interest rates decline, mortgage prepayments tend to
increase, reducing loan portfolio growth and lowering the portfolio's average
yield. Rates on non-maturity deposits rise and fall with the general level of
interest rates, but tend to move less than proportionately. Rates offered on
consumer certificates of deposits tend to move in close concert with market
rates, though history suggests they increase less rapidly when market rates
rise. Analysis shows that the Company's deposit volumes are relatively
insensitive to interest rate movements within the range encompassed in the
scenarios.
At March 31, 2001, based on this model, the Company's potential earnings at risk
to a gradual, parallel 200 basis point decline in market interest rates over the
next twelve months on instruments held for other than trading purposes was a
decline of approximately 1.7% of projected 2001 net income. Conversely, a
similar gradual 200 basis point increase in interest rates over the next twelve
months would result in a projected decline in 2001 net income of 1.8% over what
would be earned if rates remained constant. GreenPoint does not have significant
exposure to such risk on instruments held for trading purposes.
Management has included all derivative and other financial instruments that have
a material effect in calculating the Company's potential earning at risk.
These measures of risk represent the Company's exposure to interest rate
movements at a particular point in time. The risk position is always changing.
ALCO continuously monitors the Company's risk profile as it changes, and alters
the rate sensitivity to ensure limits are adhered to, and that the resulting
risk profile is appropriate to its views on the likely course of interest rates
and developments in its core businesses.
33
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK - (CONTINUED)
The Company is exposed to interest rate risk during the accumulation of mortgage
loans prior to sale or securitization. Prior to the closing of the loan, the
Company generally extends an interest rate lock commitment to the borrower. The
Company is exposed to subsequent changes in the level of market interest rates,
and the spread over Treasuries required by investors. An increase in market
interest rates or a widening of spreads will reduce the prices paid by investors
and the resultant gain on sale. To mitigate this risk, at the time the Company
extends the interest rate commitment to the borrower, the Company will enter
into mandatory commitments to deliver mortgage whole loans to various investors,
or to issue private securities and/or Fannie Mae and Freddie Mac securities
(forward delivery commitments). These commitments effectively establish the
price the Company will receive for the related mortgage loan thereby minimizing
the risk of subsequent changes in interest rates.
During 1998, the Company entered the manufactured housing finance business,
which introduced additional market risk. One set of risks resulted from the
accumulation of fixed rate manufactured housing loans prior to sale of
securitization of those loans. The level of market interest rates, and the
spread over treasuries required by investors determines the prices of the
securities backed by the Company's manufactured housing loans. A rise in market
interest rates, or a widening of spreads on manufactured housing-backed
securities during the accumulation period will reduce the prices paid for the
securities backed by the Company's manufactured housing loans and the gain on
sale.
The Company mitigates the risk associated with accumulating manufactured housing
loans by hedging fixed-rate manufactured housing loan production prior to sale
or securitization. Historical analysis indicates that interest rate swap rates
correlate highly with rates paid on manufactured housing securities. Reports are
prepared on the origination of fixed rate manufactured housing loans on a daily
and weekly basis. As the loans are accumulated, the Bank enters into swaps in
which it agrees to pay a fixed rate and receive a floating rate. The amount and
duration of the swaps entered into are selected so the change in fair value
correlates closely with the changes in the fair value of securities backed by
manufactured housing loans similar to the Company's loan inventory. The loans
and the resultant hedging relationships are monitored throughout the
accumulation period. At the time a securitization is priced, establishing the
gain on sale, the swap transactions are unwound. The gain or loss on the swap
position is included as part of the gain on sale from the sale of
securitization.
The Company acquired servicing assets as part of the GreenPoint Credit
acquisition and holds retained interests in the manufactured housing
securitizations completed in 1999, 2000 and 2001.
The fair value of the Company's servicing assets and retained interests from
securitizations are directly affected by the level of prepayments associated
with the underlying loans. However, manufactured housing contracts historically
have exhibited far less prepayment sensitivity to changing interest rate levels
than do residential mortgage loans. Much of this reduced prepayment sensitivity
can be attributed to lower borrower equity against which to refinance, and
smaller loan sizes which reduce the incentive to refinance. Thus, in
management's judgment, there is little earnings sensitivity solely attributable
to the effect of changes in general market interest rates on servicing assets.
34
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK - (CONTINUED)
CREDIT RISK MANAGEMENT
The Company originates mortgage and manufactured housing loans for its own
portfolio and for disposition in the secondary markets in the form of whole loan
sales and securitizations. In general, whole loan sales transfer the credit risk
to the purchasers. In contrast, for loans placed in the portfolio, or for loans
securitized, the Company retains all or much of the credit risk.
Both GreenPoint Mortgage and GreenPoint Credit maintain underwriting policies,
procedures and approval authorities appropriate to their businesses. In both
companies, the chief credit executive reports directly to the chief executive of
the business, outside of the production organization. With respect to loans
originated for whole loan sale to the secondary markets, where credit risk is
transferred, underwriting criteria are established to meet the investor
requirements. An independent, executive-level Risk Management Division
determines the criteria required for loans which will be transferred to
GreenPoint's portfolio or sold through securitizations. Within GreenPoint
Credit, sophisticated custom scoring models are also used to determine a
borrower's creditworthiness.
Oversight of the appraiser approval and appraisal review process is provided
independent of the production organization. Appraisers are required to meet
strict standards for approval by GreenPoint, and their performance is monitored
on a regular basis. With oversight by Risk Management, a comprehensive quality
control process is in place in each business unit to ensure that loans being
originated meet the company's underwriting standards, and that required
operating procedures are followed. Loans are selected monthly on a pre and post
funding basis for review by quality control analysts and staff appraisers.
Risk Management personnel monitor closely the performance of all loans on which
the Company retains credit risk. On securitization or sale, expectations are set
on the default, recovery and voluntary prepayment rates. Each pool of loans is
reviewed monthly to ensure that performance is meeting those expectations. In
the event performance does not meet expectations, the assumptions are revised.
Final responsibility for these judgments resides with executive management,
independent of the business unit.
Risk Management reviews monthly the delinquency and loss trends in all the
mortgage and manufactured housing loans serviced by the Company, whether or not
it retains credit exposure. These reviews are intended to identify significant
changes in credit quality which may indicate changes to the Company's exposures
or to the efficacy of its underwriting of loans sold to other investors. Such
changes could prompt adjustments to the Company's underwriting criteria or
servicing procedures.
GreenPoint's loan origination activity is geographically diversified throughout
the U.S. GreenPoint began originating loans outside of New York State in 1996.
The Company tracks economic and housing market trends to identify areas for
expansion and as an early warning mechanism. The Company also closely monitors
trends in delinquent and non-performing loans through cycles in the economy and
in the real estate market. These economic and performance trends are analyzed in
the ongoing fine-tuning of lending practices.
35
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK - (CONTINUED)
The Company uses various collection strategies and works to maintain contact
with the borrowers in order to obtain repayment. Collection activities for
GreenPoint Mortgage are centralized in a servicing unit in Columbus, Georgia.
GreenPoint Credit's collection activities are decentralized among its 24
regional offices in order to more effectively repossess and liquidate
collateral, thereby minimizing the loss severity. In 2000, a centralized
collection center was opened in California to target early stage delinquencies
more cost-effectively, thereby allowing the regional offices to focus on serious
delinquencies.
The Company has set forth a policy for establishment and review of the adequacy
of the allowance for loan losses in order to provide for estimated costs related
to the problem loans. Management believes that the allowance for loan losses is
adequate. However, such determination is susceptible to the effect of future
unanticipated changes in general economic and market conditions that may affect
the financial circumstances of borrowers and/or residential real estate values
within the Company's lending areas.
36
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
In the ordinary course of business, the Corporation and its subsidiaries are
routinely defendants in or parties to a number of pending and threatened legal
actions and proceedings, in which monetary damages and other forms of relief are
sought. Certain of such actions involve alleged violations of consumer
protection laws, including claims relating to the Corporation's loan collection
efforts, and other federal and state banking laws. Certain of such actions
involve claims for punitive damages. Management has established what it believes
to be sufficient allocated reserves to cover any anticipated losses stemming
from the settlement or payment of any final judgments rendered in any such
cases. Accordingly, management believes that these actions and proceedings and
the losses, if any, resulting from the final outcome thereof, will not be
material in the aggregate to the Corporation's financial position or results of
operations.
37
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
EXHIBIT NUMBER:
11.1 Statement Regarding Computation of Per Share Earnings
12.1 Ratios of Earnings to Combined Fixed Charges and Preferred Stock
Dividends
27.1 Financial Data Schedule
38
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 6 -EXHIBITS AND REPORTS ON FORM 8-K - (CONTINUED)
(b) REPORTS ON FORM 8-K
On January 2, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K to satisfy an undertaking to file certain
agreements executed in connection with the issuance of GreenPoint Home Equity
Loan Trust 2000-3, Home Equity Loan Asset-Backed Notes. GreenPoint Mortgage
Securities Inc. is sponsor under the Sale and Servicing Agreement, dated as of
December 1, 2000.
On January 8, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K providing for the issuance of the GreenPoint Home
Equity Loan Trust 1999-2 Revolving Home Equity Loan Asset-Backed Notes, Series
1999-2 (the "Series 1999-2 Notes"). GreenPoint Mortgage Securities Inc. is
sponsor under the Sale and Servicing Agreement, dated as of December 1, 1999.
Also included was the Monthly Payment Date Statement distributed to holders of
Series 1999-2 Notes dated December 15, 2000.
On January 8, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K for the previously registered offer and sale of the
GreenPoint Home Equity Loan Trust Asset-Backed Notes, Series 2000-1, Class A-2
Variable Rate Asset-Backed Notes (the "Series 2000-1 Notes"). Also included was
the Monthly Payment Date Statement distributed to holders of Series 2000-1 Notes
dated December 15, 2000.
On January 8, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K for the previously registered offer and sale of the
GreenPoint Home Equity Loan Trust Asset-Backed Notes, Series 2000-2, Class A-2
Variable Rate Asset-Backed Notes (the "Series 2000-2 Notes"). Also included was
the Monthly Payment Date Statement distributed to holders of Series 2000-2 Notes
dated December 15, 2000.
On January 9, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K providing for the issuance of the GreenPoint Home
Equity Loan Trust 2000-1 Home Equity Loan Asset-Backed Securities. GreenPoint
Mortgage Securities Inc. is sponsor under the Sale and Servicing Agreement,
dated as of June 1, 2000. Also included was the Monthly Remittance Statement
distributed to the Certificateholders dated December 15, 2000.
On January 24, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K providing for the issuance of the GreenPoint Home
Equity Loan Trust 2000-1 Home Equity Loan Asset-Backed Securities. GreenPoint
Mortgage Securities Inc. is sponsor under the Sale and Servicing Agreement,
dated as of June 1, 2000. Also included was the Monthly Remittance Statement
distributed to the Certificateholders dated December 15, 2000.
39
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 6 -EXHIBITS AND REPORTS ON FORM 8-K - (CONTINUED)
On January 26, 2001, GreenPoint Credit, LLC, the manufactured housing finance
subsidiary of GreenPoint Bank, filed a current report on Form 8-K that includes
the following information: (i) a Pooling and Servicing Agreement, dated March 1,
2000, between GreenPoint Credit, LLC, as Contract Seller and Servicer and Bank
One, National Association, as Trustee (ii) the required Monthly Investor
Servicing Report.
On January 26, 2001, GreenPoint Credit, LLC, the manufactured housing finance
subsidiary of GreenPoint Bank, filed a current report on Form 8-K that includes
the following information: (i) a Pooling and Servicing Agreement, dated March
13, 2000, between GreenPoint Credit, LLC, as Contract Seller and Servicer and
The First National Bank of Chicago as Trustee (ii) the required Monthly Investor
Servicing Report.
On January 26, 2001, GreenPoint Credit, LLC, the manufactured housing finance
subsidiary of GreenPoint Bank, filed a current report on Form 8-K that includes
the following information: (i) a Pooling and Servicing Agreement, dated May 1,
2000, between GreenPoint Credit, LLC, as Contract Seller and Servicer and Bank
One, National Association, as Trustee (ii) the required Monthly Investor
Servicing Report.
On January 26, 2001, GreenPoint Credit, LLC, the manufactured housing finance
subsidiary of GreenPoint Bank, filed a current report on Form 8-K that includes
the following information: (i) a Pooling and Servicing Agreement, dated
September 1, 2000, between GreenPoint Credit, LLC, as Contract Seller and
Servicer and Bank One, National Association, as Trustee (ii) the required
Monthly Investor Servicing Report for November 30, 2000.
On January 26, 2001, GreenPoint Credit, LLC, the manufactured housing finance
subsidiary of GreenPoint Bank, filed a current report on Form 8-K that includes
the following information: (i) a Pooling and Servicing Agreement, dated
September 1, 2000, between GreenPoint Credit, LLC, as Contract Seller and
Servicer and Bank One, National Association, as Trustee (ii) the required
Monthly Investor Servicing Report for December 31, 2000.
On January 26, 2001, GreenPoint Credit, LLC, the manufactured housing finance
subsidiary of GreenPoint Bank, filed a current report on Form 8-K that includes
the following information: (i) a Pooling and Servicing Agreement, dated December
1, 2000, between GreenPoint Credit, LLC, as Contract Seller and Servicer and
Bank One, National Association, as Trustee (ii) the required Monthly Investor
Servicing Report for Pass Through Certificate Series 2000-7.
On January 26, 2001, GreenPoint Credit, LLC, the manufactured housing finance
subsidiary of GreenPoint Bank, filed a current report on Form 8-K that includes
the following information: (i) a Pooling and Servicing Agreement, dated December
1, 2000, between GreenPoint Credit, LLC, as Contract Seller and Servicer and
Bank One, National Association, as Trustee (ii) the required Monthly Investor
Servicing Report for Pass Through Certificate Series 2000-6.
40
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 6 -EXHIBITS AND REPORTS ON FORM 8-K - (CONTINUED)
On January 29, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K providing for the issuance of the GreenPoint Home
Equity Loan Trust 1999-2 Home Equity Loan Trust 1999-2 Revolving Home Equity
Loan Asset Backed Notes, Series 1999-2 (the "Series 1999-2 Notes"). GreenPoint
Mortgage Securities Inc. is sponsor under the Sale and Servicing Agreement,
dated as of December 1, 1999. Also included was the Monthly Payment Date
Statement distributed to holders of Series 1999-2 Notes dated January 16, 2001.
On January 29, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K for the previously registered offer and sale of the
GreenPoint Home Equity Loan Trust Asset-Backed Notes, Series 2000-1, Class A-2
Variable Rate Asset-Backed Notes (the "Series 2000-1 Notes"). Also included was
the Monthly Payment Date Statement distributed to holders of Series 2000-1 Notes
dated January 16, 2001.
On January 29, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K for the previously registered offer and sale of the
GreenPoint Home Equity Loan Trust Asset-Backed Notes, Series 2000-2, Class A-2
Variable Rate Asset-Backed Notes (the "Series 2000-2 Notes"). Also included was
the Monthly Payment Date Statement distributed to holders of Series 2000-2 Notes
dated January 16, 2001.
On February 5, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K for the previously registered offer and sale of 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"). Also included was the Monthly Payment Date Statement distributed to
holders of Series 2000-3 Notes dated January 16, 2001.
On February 28, 2001, GreenPoint Credit, LLC, the manufactured housing finance
subsidiary of GreenPoint Bank, filed a current report on Form 8-K that includes
the following information: (i) a Pooling and Servicing Agreement, dated
September 1, 2000, between GreenPoint Credit, LLC, as Contract Seller and
Servicer and Bank One, National Association, as Trustee (ii) the required
Monthly Investor Servicing Report.
On March 14, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K providing for the issuance of the GreenPoint Home
Equity Loan Trust 1999-2 Revolving Home Equity Loan Asset-Backed Notes, Series
1999-2 (the "Series 1999-2 Notes"). GreenPoint Mortgage Securities Inc. is
sponsor under the Sale and Servicing Agreement, dated as of December 1, 1999.
Also included was the Monthly Payment Date Statement distributed to holders of
Series 1999-2 Notes dated February 15, 2001.
41
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 6 -EXHIBITS AND REPORTS ON FORM 8-K - (CONTINUED)
On March 14, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K providing for the issuance of the GreenPoint Home
Equity Loan Trust 1999-2 Revolving Home Equity Loan Asset-Backed Notes, Series
1999-2 (the "Series 1999-2 Notes"). GreenPoint Mortgage Securities Inc. is
sponsor under the Sale and Servicing Agreement, dated as of December 1, 1999.
Also included was the Monthly Payment Date Statement distributed to holders of
Series 1999-2 Notes dated March 15, 2001.
On March 14, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K for the previously registered offer and sale of the
GreenPoint Home Equity Loan Trust Asset-Backed Notes, Series 2000-1, Class A-2
Variable Rate Asset-Backed Notes (the "Series 2000-1 Notes"). Also included was
the Monthly Payment Date Statement distributed to holders of Series 2000-1 Notes
dated February 15, 2001.
On March 14, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K for the previously registered offer and sale of the
GreenPoint Home Equity Loan Trust Asset-Backed Notes, Series 2000-2, Class A-2
Variable Rate Asset-Backed Notes (the "Series 2000-2 Notes"). Also included was
the Monthly Payment Date Statement distributed to holders of Series 2000-2 Notes
dated February 15, 2001.
On March 14, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K for the previously registered offer and sale of the
GreenPoint Home Equity Loan Trust Asset-Backed Notes, Series 2000-2, Class A-2
Variable Rate Asset-Backed Notes (the "Series 2000-2 Notes"). Also included was
the Monthly Payment Date Statement distributed to holders of Series 2000-2 Notes
dated March 15, 2001.
On March 14, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K for the previously registered offer and sale of the
GreenPoint Home Equity Loan Trust Asset-Backed Notes, Series 2000-2, Class A-1,
Class A-2 and Class A-3 Home Equity Asset-Backed Notes (the "Series 2000-3
Notes"). Also included was the Monthly Payment Date Statement distributed to
holders of Series 2000-3 Notes dated February 15, 2001.
On March 27, 2001, GreenPoint Credit, LLC, the manufactured housing finance
subsidiary of GreenPoint Bank, filed a current report on Form 8-K that includes
the following information: (i) the opinion of Orrick, Herrington & Sutcliffe LLP
relating to certain tax matters in connection with the offering of GreenPoint
Manufactured Housing Contract Trust Pass-Through Certificates, Series 2001-1;
(ii) External Computational Materials prepared by Salomon Smith Barney Inc.
42
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 6 -EXHIBITS AND REPORTS ON FORM 8-K - (CONTINUED)
On March 29, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K for the previously registered offer and sale of the
GreenPoint Home Equity Loan Trust Asset-Backed Notes, Series 2000-1, Class A-2
Variable Rate Asset-Backed Notes (the "Series 2000-1 Notes"). Also included was
the Monthly Payment Date Statement distributed to holders of Series 2000-1 Notes
dated February 15, 2001.
On March 30, 2001, GreenPoint Mortgage Securities Inc., a subsidiary of
Headlands Mortgage Company, a wholly owned subsidiary of GreenPoint Bank, filed
a current report on Form 8-K for the previously registered offer and sale of the
GreenPoint Home Equity Loan Trust Asset-Backed Notes, Series 2000-2, Class A-1,
Class A-2 and Class A-3 Home Equity Asset-Backed Notes (the "Series 2000-3
Notes"). Also included was the Monthly Payment Date Statement distributed to
holders of Series 2000-3 Notes dated March 2001.
43
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GreenPoint Financial Corp.
By: /s/ Thomas S. Johnson
------------------------------
Thomas S. Johnson
Chairman of the Board and
Chief Executive Officer
By: /s/ Jeffrey R. Leeds
--------------------------------
Jeffrey R. Leeds
Executive Vice President and
Chief Financial Officer
By: /s/ Joseph D. Perillo
--------------------------------
Joseph D. Perillo
Senior Vice President and
Controller
Dated May 11, 2001
44