Greenpoint Financial Corp., which began to convert the skeptics with a strong earnings report in July, won another accolade Thursday when Advest Inc. lifted its yearend price target for the thrift's stock to $40.

Shares of New York-based Greenpoint, which rose 75 cents Thursday to $35.625 on twice the average trading volume, came to life last month after the thrift reported a 16% gain over second quarter 1995 earnings, to 72 cents a share.

"The company's strategy is beginning to pay off," said Salvatore J. DiMartino, an Advest analyst.

Prior to the earnings statement, the $14 billion-asset thrift's stock had languished in the $27-to-$30 range, as investors groused about the lack of earnings growth since the company went public in January 1994.

Management, led by chairman and chief executive Thomas S. Johnson, a former top executive with Manufacturers Hanover Corp., even had to face down a proposal to sell the company. Some shareholders complained that the 1995 acquisition of 60 New York branches from H.F. Ahmanson & Co. was not producing revenue, and that the $670 million price tag was too high.

"People were not giving Greenpoint credit; they were only focused on the short term," said analyst Martin Friedman, of Friedman Billings & Ramsay.

In the second quarter, however, Greenpoint's low-doc mortgage program kicked into high gear.

The loans, which are being marketed nationally using New York retail deposits as a cheap funding source, are geared to people who are unwilling to submit documentation of income but capable of making a 25% down payment. Greenpoint charges interest rates that are 50 to 100 basis points higher than typical mortgages.

Thrifts have gotten in trouble with a similar strategy, but Mr. Friedman said Greenpoint's underwriting standards are higher and that the 25% down payment is larger than in past low-doc programs.

Net interest income increased at a 17.2% annualized rate to $112.2 million in the second quarter, and loan volume rose 45% from the first quarter to $539.6 million, Mr. DiMartino said.

The analysts also noted that Greenpoint has completed three 5% repurchase programs, and that a 5% restriction on buybacks when the thrift went public is due to be lifted in January.

As investors recognize the growth potential of Greenpoint, the stock could trade like a finance company at about 15-times projected annual earnings, Mr. Friedman said. That suggests a stock price of about $60 a share within two years, he added.

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