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North Fork Bancorp will buy GreenPoint

New York regional bank North Fork Bancorp. said Monday it agreed to buy cross-town rival GreenPoint Financial Corp. for $6.3 billion in stock, creating one of New York City’s biggest retail banks.
/ Source: Reuters

New York regional bank North Fork Bancorp. said Monday it agreed to buy cross-town rival GreenPoint Financial Corp. for $6.3 billion in stock, creating one of New York City’s biggest retail banks.

The deal, North Fork’s second in two months, would combine its strengths in commercial banking with GreenPoint’s consumer banking and mortgage operations. The new company would be one of New York’s most dominant retail banking franchises, with $50 billion in assets and more than 340 branches.

North Fork, based in Melville, New York, said it would pay 1.0514 shares of its common stock for each GreenPoint share.

Those terms valued GreenPoint’s shares at $46 each, below where they closed  Friday at $46.83, based on North Fork’s Friday closing price of $43.75.

Shares of GreenPoint have risen considerably since it said it hired Keefe, Bruyette & Woods and Lehman Brothers Holdings two weeks ago to advise it on a possible sale of the company.

North Fork’s offer represents a 14 percent premium to where GreenPoint shares closed on Feb. 3 at $40.33, just before the news that it was exploring a possible sale of the company.

Rapid retail expansion
Like many U.S. banks, New York-based GreenPoint has seen its mortgage business squeezed recently by a slowdown in the U.S. refinancing boom and a gradual climb in interest rates.

Still, the bank boasts a sizable retail presence in the New York City region that will give the fast-growing North Fork one of the area’s largest branch networks.

North Fork agreed in mid-December to purchase Trust Co. of New Jersey for about $750 million in stock, expanding the bank’s reach beyond its traditional New York and Connecticut marketplace.

The bank expects its purchase of GreenPoint to add 12 percent to its earnings per share in 2005, and 13.5 percent to its tangible book value.

The U.S. Northeast corridor has been home to several major banking deals recently, including J.P. Morgan Chase & Co.’s $58 billion agreement to purchase Bank One Corp. and New York Community Bancorp’s $1.5 billion agreement for Roslyn Bancorp.