Following TD Banknorth’s announcement yesterday that it will buy Hudson United Bancorp for $1.9 billion, other regional banks in the New York metropolitan area may be headed for the auction block.

Thanks to its affluence and rapid growth, greater New York boasts one of the most competitive retail banking markets in America. The landscape is also highly fragmented. The nation’s three biggest banks – Citigroup, Bank of America, and JPMorgan Chase & Company – together control about one-third of the market, according to First Manhattan Consulting Group.

But more than a dozen smaller banks – some of which, like HSBC Holdings, Washington Mutual, and Wachovia, aren’t very small – also have gained sizable slices of the market.

Industry observers consider the New York market ripe for consolidation. And a number of recent factors, including TD Banknorth’s announcement yesterday that it plans to buy Hudson United of Mahwah, N.J., adding 204 branches in several mid-Atlantic states, may kick the mergers and acquisitions market into higher gear.

“It stirs the pot,” said Anthony Davis, an analyst with Ryan Beck & Company. “When something like this happens, it serves to intensify bank managements, thoughts about response from a competitive standpoint. … There are not that many franchises that are acquirable. It’s not an infinite number of candidates. There’s an issue of urgency when there’s a merger like this.”

Contributing to that urgency is that banks are having a tougher time in New York winning new customers without turning to acquisitions. The market is so crowded, some analysts said, that it has become difficult for banks to find attractive spots for new branches. That’s fostering a “bias toward buying” franchises instead of pursuing internal growth, Mr. Davis said.

At the same time, a flattening yield curve is chipping away at banks’ profit margins. The forecast of tough times through 2005 may spur some banks to consider selling, analysts said.

The result: Some smaller regional banks that control key slices of the New York metro market may be snapped up.

“All of the banks are very much on the hunt for acquisitions,” said Tanya Azarchs, managing director of Standard & Poor’s financial services department. “Any smaller bank is up for grabs.”

Among the relatively small banks that are seen as possible takeover targets: Astoria Financial, Dime Community Bancshares, Independence Community Bank, New York Community Bancorp, and Valley National Bancorp. Analysts also see Commerce Bancorp of Cherry Hill, N.J., which has 182 locations in the New York metro area, as a possible seller.

Shares of Dime Community and Valley National increased by more than 1% yesterday, a sign that investors see them as potential acquisition candidates. Commerce’s stock also inched up, while Astoria fell slightly and New York Community was flat.

But much of the speculation about New York consolidation revolves around North Fork Bancorp.

The Melville, N.Y., bank holds about 4% of the metro area’s retail deposits and has successfully penetrated the Manhattan market. John Adam Kanas, North Fork’s longtime chairman and chief executive, has been an aggressive acquirer in the past, most recently shelling out $6.4 billion for GreenPoint Financial in February 2004. And analysts say some of the smaller New York banks would make attractive targets for North Fork, which is almost done digesting GreenPoint.

But the same characteristics that have positioned North Fork to expand have also transformed the company into a possible takeover candidate itself.

“North Fork is the one that everybody covets,” said Todd Hagerman, a regional banking analyst for Fox-Pitt Kelton.

North Fork’s stock climbed as much as 2.4% yesterday to $29.98 amid speculation of the company following the path of Hudson United. Shares ended the day up 19 cents, or 0.6%, at $29.48.

But the 58-year-old Mr. Kanas is generally considered unlikely to sell North Fork until he’s ready to retire. In an interview yesterday, Mr. Kanas downplayed the likelihood of North Fork being for sale. “