GreenPoint Financial May Be in Play

The regional New York bank has reportedly hired investment bankers to find a buyer.
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Updated from 11:18 a.m. EST

Shares of

GreenPoint Financial

(GPT)

, the big New York-area thrift, were surging Wednesday on a news report that it could be latest regional bank to put itself on the auction block.

The 136-year-old bank's stock rose $3, or 7.5%, to $43.34, in morning trading, following a

Bloomberg

report that the savings and loan had hired investment bankers to explore a possible sale.

A GreenPoint spokesman declined to comment on whether the bank had retained the investment banks

Lehman Brothers

(LEH)

and

Keefe Bruyette & Woods

to find possible suitors. A Lehman Brothers spokeswoman declined to comment. Keefe Bruyette did not return a telephone call.

The news that GreenPoint, which has more than 80 branches in the New York City-area, would entertain a sale is no great surprise, given the current outbreak of merger fever in the banking sector. Over the years, the thrift has often been viewed as a prime buyout target for a bigger bank looking to expand its retail operation in New York City.

"It's very logical," said James Ackor, an analyst at RBC Capital Markets, who doesn't own GreenPoint shares. "The buyers seem to be willing to pay pretty robust prices and the earnings for GreenPoint are going to be under some kind of pressure in 2004."

Ackor said the bank's earnings will suffer as mortgage banking, which led to a surge in revenue in the past year, ebbs in 2004.

Lately, trying to guess which regional bank or thrift will be the next merge candidate has been a hot topic on Wall Street. That's especially so following

J.P. Morgan Chase's

(JPM) - Get Report

deal to buy

Bank One

(ONE) - Get Report

earlier this year.

But the merger speculation surrounding GreenPoint did little to help other bank stocks. The Philadelphia KBW Bank Index was down about 2 points, to 988.