With its deal for Dime Bancorp Inc., Washington Mutual Inc. is hoping to land a “one-two punch” in the New York metropolitan area with its mortgage and banking businesses and to compete with all comers in the market, a company executive said.

Craig S. Davis, president of the Seattle-based thrift’s home loans and insurance services group, said the unit is often the trailblazer in establishing the company’s brand in new markets.

New York consumers are now aware of Washington Mutual as “the mortgage company” through its marketing beachhead, and the thrift’s banking army plans to follow into the market with products and services it feels New Yorkers do not currently have, he said.

Once the invasion is complete, Wamu would do everything local New York banks do — and much more, officials said. With no-fee ATMs and checking accounts, superior customer service, and cafe-like Occasio branches, the company can entice middle-market people in New York that banks there all but ignore, Wamu said.

After the mortgage group sets up a base camp, “the banking group comes in behind us and pours a four-lane superhighway over the trail we blazed,” Mr. Davis said. “We think this is a great one-two punch, and it should play very well in greater New York.”

Wamu initiated a marketing and branding effort in New York last July by perching the cross-section of a furnished house on the side of a Times Square building. Since then its home loan ads have been spotted all over the Middle Atlantic region, from Washington Metro stops to New Jersey billboards and Manhattan taxicabs.

Now, after a year of laying the foundation, Wamu is ready to take on the Big Apple, Mr. Davis said.

The paving work began in earnest Sunday night, when Wamu agreed to buy Dime for about $5.2 billion, a deal that would give it a retail banking presence in New York and a nationwide mortgage lending operation with Dime’s North American Mortgage Co. The deal is scheduled to close in the first quarter.

Wamu has an opportunity to compete against the big dogs — J.P. Morgan Chase & Co. and Citigroup Inc. — in the New York retail market Mr. Davis said.

The middle market has been underserved for years by the large commercial banking companies, both in New York and in the entire Northeast, he said. “We’re respectful of the large commercial banks that are in the Northeast, but I have every confidence that we can compete effectively in terms of the level of service to the large middle market,” he said. In terms of both products and customer service, “there’s a big segment of the market that no one pays attention to, and they get lost.”

Wamu’s research has indicated that there is an overwhelming appetite for products and services it offers, Mr. Davis said.

“No one addresses the needs of that middle market the way that Washington Mutual does, and we’re going to be effective competitors there,” he said.

North American Mortgage would also substantially strengthen Wamu’s mortgage banking operation by bringing it a strong national retail organization, Mr. Davis said. With several hundred home loan centers around the country, Dime’s mortgage unit would help Wamu, which now has about 314 home loan centers, reach its goal of 500.

More importantly, the deal would accelerate Wamu’s mortgage business in the Northeast and advance its goal of becoming the nation’s leading home lender. Integrating Dime would give the thrift more than $500 billion of servicing business and more than $42 billion of origination volume, based on first-quarter numbers.

Though Mr. Davis stressed that the Dime deal “is not the end of the journey” for Wamu, he said reaching the half-trillion-dollar mark in servicing and gaining a double-digit percentage share of originations would be important achievements.

“We’re not there yet, but this would give us an opportunity to hit both of those key numbers, and they would be milestones,” he said.

Dime and its units would operate under the Washington Mutual brand, and though some geographical overlap could force branch consolidations or closings, Mr. Davis said it is too early to say exactly how Wamu would integrate all of Dime’s assets.

Wamu’s home loan group currently has 1,400 job openings, and Mr. Davis implied that few job losses would occur as a result of the Dime deal.

Several observers have suggested that the deal would be the first of several acquisitions Wamu could make in the New York area. Recalling its assault on California in 1997 and 1998, when it bought the state’s two biggest thrifts, these observers said Wamu could easily buy up other Dime-size companies in New York, such as GreenPoint Financial Corp., North Fork Bancorp. Inc., or Astoria Financial Corp.

Mr. Davis said “it’s fair to say” that if Wamu’s market share remained unchanged in the four or five years after the Dime deal, officials would be disappointed. “You will see the buy-and-build approach,” he said.

In addition, some observers have said that the current interest rate and mortgage business environments are the best of all possible worlds for Wamu and other thrifts. Rates have been slashed dramatically, and both the refinancing business and the home purchase market remain strong.

As a result, Wamu’s first-quarter mortgage loan production surged 141% from a year earlier, and its stock soared along with it. From February 2000 through December its stock price rose almost 150%, to a Dec. 26 close of $37.25.

However, since closing at $39.39 on June 21, Wamu’s stock has fallen 4.2%. It rose 2.47% Thursday to close at $37.72.

“We’ve just had one of the most dramatic declines in short-term interest rates ever, in terms of the size and speed of the decline,” said Gary Gordon, an analyst at UBS Warburg. “The interest margin will peak this quarter or next quarter and then go down to normal. So that will be a challenge to manage a declining interest margin.”

Further, Wamu’s buying spree has been heavy on mortgage assets — since last summer it has completed acquisitions of PNC Mortgage, Bank United Corp. of Houston, and three divisions of Fleet Mortgage Group. Several analysts said Wamu might have trouble avoiding some pain when the refinancing market disappears.

Yet Mr. Davis said Wamu has focused on boosting mortgage banking operations in recent years to equal its portfolio lending and that, by combining them, it hopes to take the peaks and valleys out of the otherwise cyclical business.

Wamu officials said they believe the Dime acquisition would give them a long-term competitive advantage that would outweigh any vulnerability to the mortgage business cycle.

“Dime’s two businesses really complement our desire to be a national brand and to build powerhouses in banking and mortgages across the country,” Mr. Davis said. “And we felt it was very important and a great opportunity to be in the greater New York market, the best market in the country in terms of deposits.”

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