Investor Alert

Feb. 16, 2004, 7:05 p.m. EST

North Fork to buy GreenPoint

NYC-area banks in all-stock deal valued at $6.3 billion

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By Carolyn Pritchard, CBS MarketWatch.com

SAN FRANCISCO (CBS.MW) -- North Fork Bancorp. said Monday that it will buy GreenPoint Financial in an all-stock deal worth $6.3 billion, creating the largest regional bank in the New York City metro area and the 16th-largest U.S. bank holding company.

The deal will create a company with more than $50 billion in assets, $30 billion in deposits and more than 340 branches.

Under terms of the agreement, GreenPoint shareholders will receive 1.0514 shares of North Fork common stock for each GreenPoint share held, valuing GreenPoint shares at $46 based on North Fork's closing price Friday.

Shares of GreenPoint, based in Lake Success, N.Y., ended Friday's session at $46.83, up 0.9 percent. North Fork shares lost 0.4 percent to $43.75.

North Fork said the transaction would boost its 2005 earnings per share by 12 percent. The companies expect cost savings of more than $100 million. Melville, N.Y-based North Fork said it expects to generate more than $1.5 billion in pre-tax income in the first full year of combined operations

The deal has been approved unanimously by both companies' boards of directors and is expected to close in the fourth quarter of 2004.

"The economics of this transaction are compelling," John Adam Kanas, chairman and CEO of North Fork, said in a press release. "We are bringing together two very simple and profitable banking strategies under one management team. We intend to maintain both brand names and their strong respective brand identities in the marketplace."

North Fork said in mid-December it was buying Trust Co. of Jersey City, N.J., for $726 million, giving it the Garden State's fourth biggest bank, with 93 branches, $4.3 billion in assets and $3.4 billion in deposits. The deal, subject to regulatory approval, is expected to close in the second quarter of 2004. See full story.

Monday's deal is the second similarly sized regional bank merger this year. Birmingham, Ala.-based Regions Financial's $6 billion stock-swap acquisition of Memphis, Tenn.-based Union Planters, announced in late January, is creating the nation's 12th largest bank in terms of assets. See full story.

The move is part of a larger banking merger trend, one that's more cautionary one than in years past. See full story.

Carolyn Pritchard is a reporter for CBS.MarketWatch.com in San Francisco.

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