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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One) Quarterly Report Pursuant to Section 13 or 15(d) of
_X_ the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2002
OR
_ _ Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from ______ to _______
Commission File No.: 0-29826
--------------
LONG ISLAND FINANCIAL CORP.
---------------------------
(Exact name of registrant as specified in its charter)
Delaware 11-3453684
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Suffolk Square, Islandia, New York 11749
-------------------------------------- -------
(Address of Principal Executive Offices) (Zip Code)
(631) 348-0888
-----------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days; Yes ( ) No ( )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
The registrant had 1,446,226 shares of Common Stock outstanding as of August 9,
2002.
Form 10-Q
LONG ISLAND FINANCIAL CORP.
INDEX
Page
PART I - FINANCIAL INFORMATION Number
ITEM 1. Consolidated Financial Statements - Unaudited
Consolidated Balance Sheets at June 30, 2002
and December 31, 2001 2
Consolidated Statements of Earnings for the Three Months and Six
Months Ended June 30, 2002 and 2001 3
Consolidated Statement of Changes in Stockholders' Equity
for the Six Months Ended June 30, 2002 4
Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 2002 and 2001 5
Notes to Consolidated Financial Statements 6
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 18
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings 19
ITEM 2. Changes in Securities and Use of Proceeds 19
ITEM 3. Defaults Upon Senior Securities 19
ITEM 4. Submission of Matters to a Vote of Security Holders 19
ITEM 5. Other Information 19
ITEM 6. Exhibits and Reports on Form 8-K 19
Signatures 20
===============================================================================
Statements contained in this Form 10-Q, which are not historical facts, are
forward-looking statements, as that term is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risks and uncertainties, which could cause actual results to differ materially
from those projected. Such risks and uncertainties include potential changes in
interest rates, competitive factors in the financial services industry, general
economic conditions, the effect of new legislation, and other risks detailed in
documents filed by the Company with the Securities and Exchange Commission from
time to time.
===============================================================================
1
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
LONG ISLAND FINANCIAL CORP.
Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
June 30, December 31,
2002 2001
---- ----
Assets:
Cash and due from banks $ 14,041 $ 30,347
Interest earning deposits 342 279
Federal funds sold 29,900 -
------ ----
Total cash and cash equivalents 44,283 30,626
Securities held-to-maturity (fair value of $13,205 and $12,937, respectively) 12,454 12,457
Securities available-for-sale, at fair value 153,644 201,967
Federal Home Loan Bank stock, at cost 3,585 2,858
Loans, net of unearned income and deferred fees 192,920 178,797
Less allowance for loan losses (2,144) (2,028)
------ -------
Loans, net 190,776 176,769
Premises and equipment, net 3,035 2,929
Accrued interest receivable 2,211 2,121
Bank owned life insurance 6,657 6,495
Prepaid expenses and other assets 1,309 2,168
----- -----
Total assets $ 417,954 $ 438,390
======= =======
Liabilities and Stockholders' Equity:
Deposits:
Demand deposits $ 67,692 $ 61,502
Savings deposits 66,768 43,032
NOW and money market deposits 71,727 111,058
Time certificates issued in excess of $100,000 29,534 35,861
Other time deposits 92,107 94,464
------ ------
Total deposits 327,828 345,917
Federal funds purchased and securities sold under agreements
to repurchase - 4,500
Other borrowings 55,000 55,000
Accrued expenses and other liabilities 3,717 4,346
----- -----
Total liabilities 386,545 409,763
------- -------
Guaranteed preferred beneficial interest in junior subordinated
debentures 7,500 7,500
----- -----
Stockholders' equity:
Common stock (par value $.01 per share; 10,000,000 shares, authorized;
1,783,126 shares issued; 1,446,226 and 1,439,926
shares outstanding, respectively) 18 18
Surplus 20,281 20,191
Accumulated surplus 6,580 5,323
Accumulated other comprehensive income (loss) 1,208 (227)
Treasury stock at cost, (336,900 shares in 2002 and 2001) (4,178) (4,178)
------- -------
Total stockholders' equity 23,909 21,127
------ ------
Total liabilities and stockholders' equity $ 417,954 $ 438,390
======= =======
See accompanying notes to consolidated financial statements.
2
LONG ISLAND FINANCIAL CORP.
Consolidated Statements of Earnings
(Unaudited)
(In thousands, except share data)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------- --------------
2002 2001 2002 2001
---- ---- ---- ----
Interest income:
Loans $ 3,610 $ 3,193 $ 7,022 $ 6,222
Securities 2,267 2,568 4,596 5,323
Federal funds sold 27 144 54 394
Earning deposits 2 2 4 6
- - - -
Total interest income 5,906 5,907 11,676 11,945
----- ----- ------ ------
Interest expense:
Savings deposits 248 280 401 563
NOW and money market deposits 221 325 413 712
Time certificates issued in excess of $100,000 191 545 418 1,194
Other time deposits 980 1,321 2,062 2,614
Borrowed funds 669 568 1,334 1,101
--- --- ----- -----
Total interest expense 2,309 3,039 4,628 6,184
----- ----- ----- -----
Net interest income 3,597 2,868 7,048 5,761
----- ----- ----- -----
Provision for loan losses 60 - 150 -
-- ----- --- -----
Net interest income after provision
for loan losses 3,537 2,868 6,898 5,761
----- ----- ------ -----
Other operating income:
Service charges on deposit accounts 423 272 842 531
Net loss on sale of securities - - - (53)
Net gain on sale of residential loans 173 89 336 155
Earnings on bank owned life insurance 96 90 192 179
Other 99 55 218 124
-- -- --- ---
Total other operating income 791 506 1,588 936
--- --- ----- ---
Other operating expenses:
Salaries and employee benefits 1,513 1,234 2,962 2,398
Occupancy expense 215 197 429 373
Premises and equipment expense 292 232 582 448
Capital securities 206 200 405 399
Other 883 745 1,796 1,485
--- --- ----- -----
Total other operating expenses 3,109 2,608 6,174 5,103
----- ----- ----- -----
Income before income taxes 1,219 766 2,312 1,594
----- --- ----- -----
Income taxes 420 264 795 547
--- --- --- ---
Net income $ 799 $ 502 $ 1,517 $ 1,047
=== === ===== =====
Basic earnings per share $ .55 $ .35 $ 1.05 $ .71
=== === ==== ===
Diluted earnings per share $ .53 $ .34 $ 1.02 $ .71
=== === ==== ===
Weighted average shares outstanding 1,446,226 1,453,986 1,443,332 1,466,194
========= ========= ========= =========
Diluted weighted average shares outstanding 1,497,044 1,468,786 1,486,930 1,480,610
========= ========= ========= =========
See accompanying notes to consolidated financial statements.
3
LONG ISLAND FINANCIAL CORP.
Consolidated Statement of Changes in Stockholders' Equity
For the Six Months Ended June 30, 2002
(Unaudited)
(In thousands, except share data)
Accumulated
other
Common Accumulated comprehensive Treasury
stock Surplus surplus (loss)/income stock Total
-------------------------------------------------------------------------
Balance at December 31, 2001 $ 18 20,191 5,323 (227) (4,178) 21,127
Comprehensive income:
Net income - - 1,517 - - 1,517
Other comprehensive income,
net of tax:
Unrealized appreciation in available-
for-sale securities, net of
reclassification adjustment - - - 1,435 1,435
-----
Total comprehensive income - - - - - 2,952
Exercise of stock options and related
tax benefit (6,300 shares) - 90 - - - 90
Dividends declared on common stock
($.18 per common share) - - (260) - - (260)
-----------------------------------------------------------------------
Balance at June 30, 2002 $ 18 20,281 6,580 1,208 (4,178) 23,909
=======================================================================
See accompanying notes to consolidated financial statements.
4
LONG ISLAND FINANCIAL CORP.
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
For the Six Months
Ended June 30,
2002 2001
==== ====
Cash flows from operating activities:
Net income $ 1,517 $ 1,047
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 150 -
Depreciation and amortization 450 334
Amortization of premiums, net of discount accretion 582 (733)
Net loss on sale of securities - 53
Loans originated for sale, net of proceeds
from sales (209) (110)
Net deferred loan origination fees 56 5
Earnings on bank owned life insurance (192) (179)
Deferred income taxes (66) (10)
Changes in other assets and liabilities:
Accrued interest receivable (90) 23
Prepaid expenses and other assets 138 (285)
Accrued expenses and other liabilities (629) 162
---- ---
Net cash provided by operating activities 1,707 307
----- ---
Cash flows from investing activities:
Purchases of securities held-to-maturity, available-for-sale (623,248) (812,925)
Net purchase of Federal Home Loan Bank stock (727) -
Proceeds from the sale of securities available-for-sale - 25,470
Proceeds from maturities of securities 651,018 802,496
Principal repayments on securities 22,226 13,082
Loan originations net of principal repayments (14,004) (19,416)
Purchase of premises and equipment (556) (675)
----- -----
Net cash provided by investing activities 34,709 8,032
------ -----
Cash flows from financing activities:
Net decrease in demand deposit, savings, NOW,
and money market accounts (9,405) (20,233)
Net (decrease) increase in certificates of deposit (8,684) 11,802
Net decrease in federal funds purchased and securities sold
under agreement to repurchase (4,500) -
Net increase in other borrowings - 14,000
Exercise of stock options 90 -
Payments for cash dividends (260) (233)
Purchase of treasury stock - (564)
- ----
Net cash (used) provided in financing activities (22,759) 4,772
-------- -----
Net increase in cash and cash equivalents 13,657 13,111
Cash and cash equivalents at beginning of period 30,626 16,208
------ ------
Cash and cash equivalents at end of period $ 44,283 $ 29,319
====== ======
Supplemental disclosure of cash flow information
- ------------------------------------------------
Cash paid during the period for:
Interest $ 5,231 $ 6,118
===== =====
Income taxes $ 987 $ 559
=== ===
See accompanying notes to consolidated financial statements.
5
LONG ISLAND FINANCIAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the
accounts of Long Island Financial Corp. (the "Company") and its wholly-owned
subsidiaries. All significant inter-company accounts and transactions have been
eliminated in consolidation.
The accompanying unaudited consolidated financial statements included herein
reflect all normal recurring adjustments which are, in the opinion of
management, necessary for a fair presentation of the results for the interim
periods presented. The results of operations for the six month period ended June
30, 2002 are not necessarily indicative of the results of operations that may be
expected for the entire fiscal year. Certain information and note disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain reclassifications have been made to prior year
amounts to conform to the current year presentation.
These unaudited consolidated financial statements should be read in conjunction
with the audited consolidated financial statements, and notes thereto, included
in the Company's 2001 Annual Report on Form 10-K.
2. SECURITIES
The following table sets forth certain information regarding amortized cost and
estimated fair values of the securities held-to-maturity and available-for-sale
as of the dates indicated:
June 30, 2002 December 31, 2001
------------- -----------------
Amortized Fair Amortized Fair
Cost Value Cost Value
(In thousands)
Held-to-maturity:
Corporate debt $ 12,454 13,205 $ 12,457 12,937
------ ------ ------ ------
Total held-to-maturity $ 12,454 13,205 $ 12,457 12,937
====== ====== ====== ======
Available-for-sale:
U.S. Government and agency obligations $ 47,306 47,626 $ 89,930 89,732
Mortgage-backed securities:
GNMA 71,283 72,362 85,171 85,021
FHLMC 11,972 11,978 4,402 4,304
FNMA 19,172 19,663 20,803 20,918
Corporate debt 2,015 2,015 2,017 1,992
----- ----- ----- -----
Total securities available-for-sale $ 151,748 153,644 $ 202,323 201,967
======= ======= ======= =======
6
3. LOANS, NET
Loans, net, are summarized as follows:
June 30, 2002 December 31, 2001
------------- -----------------
(Dollars in thousands)
Commercial and industrial loans $ 44,497 22.7 % $ 43,972 24.2 %
Commercial real estate loans 122,822 62.6 116,646 64.2
Automobile loans 24,930 12.7 18,300 10.1
Consumer loans 2,402 .9 1,312 .7
Residential real estate loans held-for-sale 1,681 1.2 1,472 .8
----- --- ----- ---
196,332 100.0 181,702 100.0
Less:
Unearned income 2,709 2,258
Deferred fees, net 703 647
Allowance for loan losses 2,144 2,028
----- -----
$ 190,776 $ 176,769
======= =======
4. RECENT DEVELOPMENTS
On May 23, 2002 the Board of Directors of the Company declared a quarterly
dividend of nine cents ($0.09) per common share. The dividend was paid on July
1, 2002, to shareholders of record as of June 21, 2002.
5. RECENT ACCOUNTING PRONOUNCEMENTS
In April 2002, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 145, "Rescission of FASB Statements
Nos. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." The Statement updates, clarifies and simplifies existing
accounting pronouncements. SFAS No. 145 rescinds SFAS No. 4, "Reporting Gains
and Losses from Extinguishment of Debt," which required all gains and losses
from extinguishment of debt to be aggregated and, if material, classified as an
extraordinary item, net of related income tax effect. As a result, the criteria
in Accounting Principles Board Opinion (APB) No. 30, "Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions," will now be used to classify those gains and
losses. SFAS No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund
Requirements," amended SFAS No. 4, and is no longer necessary because SFAS No. 4
has been rescinded. SFAS No. 145 amends SFAS No. 13, "Accounting for Leases," to
require that certain lease modifications that have economic effects similar to
sale-leaseback transactions be accounted for in the same manner as
sale-leaseback transactions. This amendment is consistent with the FASB's goal
of requiring similar accounting treatment for transactions that have similar
economic effects. SFAS No. 145 also makes technical corrections to existing
pronouncements. While those corrections are not substantive in nature, in some
instances, they may change accounting practice. The provisions of SFAS No. 145
are effective for fiscal years beginning after May 15, 2002. Early application
of SFAS No. 145 is encouraged. There will be no material impact on the Company's
consolidated balance sheets or consolidated statements of earnings upon adoption
of SFAS No. 145.
7
In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," which replaced SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
SFAS No. 144 established a single accounting model, based on the framework
established in SFAS No. 121, for long-lived assets to be disposed of by sale.
SFAS No. 144 also resolved significant implementation issues related to SFAS No.
121. The provisions of SFAS No. 144 are effective for financial statements
issued for fiscal years beginning after December 15, 2001. There was no impact
on the Company's consolidated balance sheets or consolidated statements of
earnings upon adoption of SFAS No. 144, on January 1, 2002.
In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets," which requires that goodwill and intangible assets with indefinite
useful lives no longer be amortized, but instead be tested for impairment at
least annually in accordance with the provision of SFAS No. 142. SFAS No. 142
also requires that other intangible assets with estimable useful lives be
amortized over their respective estimated useful lives to their estimated
residual values. Amortizing intangible assets must also be reviewed for
impairment. SFAS No. 142 is applicable to fiscal years beginning after December
15, 2001 and is required to be applied at the beginning of the entities fiscal
year. There was no impact on the Company's consolidated statements of financial
condition or consolidated statements of income upon adoption of SFAS No. 142, on
January 1, 2002.
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
General
The principal business of Long Island Financial Corp. currently consists of the
operation of a wholly-owned subsidiary, Long Island Commercial Bank. Long Island
Commercial Bank is a New York state-chartered commercial bank, founded in 1989,
which is engaged in commercial banking in Islandia, New York, and the
surrounding communities of Suffolk and Nassau counties. The Bank offers a broad
range of commercial and consumer banking services, including loans to and
deposit accounts for small and medium-sized businesses, professionals, high net
worth individuals and consumers. The Bank is an independent local bank,
emphasizing personal attention and responsiveness to the needs of its customers.
Critical Accounting Policies
The Company identifies accounting policies critical to the Company's operations
and understanding of the Company's results of operations. Certain accounting
policies are considered to be important to the portrayal of the Company's
financial condition, since they require management to make complex or subjective
judgments, some of which may relate to matters that are inherently uncertain.
The inherent sensitivity of the Company's consolidated financial statements to
critical accounting policies and, the use of judgments, estimates and
assumptions could result in material differences in the Company's results of
operations or financial condition.
The Company has determined that the methodology used in determining the level of
its allowance for loan losses is critical in the presentation and understanding
of the Company's consolidated financial statements. The allowance for loan
losses represents management's estimate of probable losses inherent in the
portfolio. This evaluation process is subject to numerous estimates and
judgments. Changes in these estimates could have a direct impact on the
provision for loan losses and could result in a change in the allowance. While
management uses available information to determine losses on loans, future
additions to the allowance may be necessary based on, among other things,
unanticipated changes in economic conditions, particularly in the counties of
Nassau and Suffolk.
8
In evaluating the portfolio, management takes into consideration numerous
factors such as the Company's loan growth, prior loss experience, present and
potential risks of the loan portfolio, risk ratings assigned by lending
personnel, ratings assigned by the independent loan review function, the present
financial condition of the borrowers, current economic conditions and other
portfolio risk characteristics. The Company's formalized process for assessing
the adequacy of the allowance for loan losses and the resultant need, if any,
for periodic provisions to the allowance charged to income consists of both
individual loan analyses and loan pool analyses. The individual loan analyses
are periodically performed on individually significant loans or when otherwise
deemed necessary and primarily encompass commercial real-estate and commercial
and industrial loans. Management believes that the Company's allowance for loan
losses at June 30, 2002 is adequate to provide for estimated probable losses
inherent in the portfolio.
Financial Condition
The Company's total assets were $418.0 million as of June 30, 2002, compared to
$438.4 million at December 31, 2001. The decrease in total assets was primarily
attributable to the decline in the securities available-for-sale portfolio,
which decreased $48.3 million, or 23.9%, as the proceeds of maturing short-term
U.S. Government and agency obligations purchased in December 2001 were used to
pay maturing seasonal municipal deposits. Offsetting this decrease in part, were
loans, net, which increased $14.0 million, or 7.9%, from $176.8 million at
December 31, 2001, to $190.8 million at June 30, 2002, reflecting increases
primarily in the automobile loan and commercial real estate loan portfolio.
Total deposits decreased $18.1 million, or 5.2%, from $345.9 million at December
31, 2001 to $327.8 million at June 30, 2002, primarily reflecting a decrease in
NOW and money market deposits. The decrease in NOW and money market deposits of
$39.4 million, or 35.4%, from $111.1 million at December 31, 2001 to $71.7
million at June 30, 2002, is attributable to the withdrawal of seasonal
municipal deposits. Time deposits issued in excess of $100,000 decreased $6.3
million, or 17.6%, and other time deposits decreased $2.4 million, or 2.5%, from
period to period. The effects of those declines were offset in part by a $23.7
million, or 55.2%, increase in savings deposits and a $6.2 million, or 10.1%,
increase in demand deposits. There were no federal funds purchased or securities
sold under agreements to repurchase outstanding at June 30, 2002. Other
borrowings, which consist of Federal Home Loan Bank of New York advances,
remained unchanged at $55.0 million.
Stockholders' equity increased $2.8 million, or 13.2%, to $23.9 million at June
30, 2002 compared to $21.1 million at December 31, 2001. Increases to
stockholders equity included $1.5 million of net income for the six months
ending June 30, 2002, and a decrease in the accumulated other comprehensive loss
on securities available-for-sale of $1.4 million. Offsetting those increases in
part were dividends declared of $260,000.
Analysis of Net Interest Income
Net interest income represents the difference between income on interest-earning
assets and expense on interest-bearing liabilities. Net interest income depends
upon the volume of interest-earning assets and interest-bearing liabilities and
the interest rates earned or paid on them.
The following tables set forth certain information relating to the Company's
consolidated average balance sheets and its consolidated statements of earnings
for the three months and six months ended June 30, 2002 and 2001, and reflect
the average yield on interest-earning assets and average cost of
interest-bearing liabilities for the periods indicated. Yields and costs are
derived by dividing annualized income or expense by the average balance of
interest-earning assets or interest-bearing liabilities, respectively. Average
balances are derived from average daily balances. Average balances include
non-accrual loans although they are not material.
9
Three Months Ended June 30,
-----------2002----------- -----------2001-----------
Average Average
Average Yield / Average Yield /
Balance Interest Cost Balance Interest Cost
Interest earning assets: (Dollars in thousands)
Federal funds sold and
interest earning deposits $ 6,843 $ 29 1.70 % $ 12,881 $ 146 4.53 %
Securities net (1) 183,725 2,267 4.94 170,895 2,556 5.98
Municipal obligations (2) - - - 1,168 17 5.82
Loans, net (3) 187,842 3,610 7.69 148,979 3,193 8.57
------- ----- ---- ------- ----- -----
Total interest-earning assets 378,410 5,906 6.24 333,923 5,912 7.08
Non-interest-earning assets 34,228 25,162
-------- --------
Total assets $ 412,638 $ 359,085
======= =======
Interest-bearing liabilities:
Savings deposits $ 60,169 $ 248 1.65 $ 36,862 $ 280 3.04
NOW and money market deposits 72,460 221 1.22 66,790 325 1.95
Certificates of deposit 123,300 1,171 3.80 131,464 1,866 5.68
------- ----- ---- ------- ----- ----
Total interest-bearing deposits 255,929 1,640 2.56 235,116 2,471 4.20
Borrowed funds 57,349 669 4.67 45,088 568 5.04
-------- ------ ---- -------- ----- -----
Total interest-bearing liabilities 313,278 2,309 2.95 280,204 3,039 4.34
Other non-interest bearing liabilities 76,739 58,737
-------- --------
Total liabilities 390,017 338,941
Stockholders' Equity 22,621 20,144
-------- ------
Total liabilities and
stockholders' equity $ 412,638 $ 359,085
======= =======
Net interest income/
interest rate spread (4) $ 3,597 3.29 % $ 2,873 2.74 %
===== ---- ===== ====
Net interest margin (5) 3.80 % 3.44 %
==== ====
Ratio of interest-earning assets to
interest-bearing liabilities 1.21x 1.19x
===== =====
(1) Securities, net, excludes municipal obligations. Unrealized appreciation / depreciation on available-for-sale securities
are recorded in non-interest earning assets.
(2) Interest income and yields are presented on a fully taxable equivalent basis.
(3) Amount is net of residential real estate loans held-for-sale, deferred loan fees and allowance for loan losses but includes
non-performing loans.
(4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing
liabilities.
(5) Net interest margin represents net interest income divided by average interest-earning assets.
10
Six Months Ended June 30,
-----------2002----------- -----------2001-----------
Average Average
Average Yield / Average Yield /
Balance Interest Cost Balance Interest Cost
Interest earning assets: (Dollars in thousands)
Federal funds sold and
interest earning deposits $ 6,960 $ 58 1.67 % $ 15,859 $ 400 5.04 %
Securities net (1) 185,285 4,596 4.96 170,696 5,299 6.21
Municipal obligations (2) - - - 1,168 34 5.82
Loans, net (3) 183,492 7,022 7.65 142,685 6,222 8.72
------- ----- ---- ------- ----- ----
Total interest-earning assets 375,737 11,676 6.21 330,408 11,955 7.24
Non-interest-earning assets 33,678 23,988
-------- --------
Total assets $ 409,415 $ 354,396
======= =======
Interest-bearing liabilities:
Savings deposits $ 53,230 $ 401 1.51 $ 35,557 $ 563 3.17
NOW and money market deposits 72,933 413 1.13 68,805 712 2.07
Certificates of deposit 127,666 2,480 3.89 128,599 3,808 5.92
------- ----- ---- ------- ----- ----
Total interest-bearing deposits 253,829 3,294 2.60 232,961 5,083 4.36
Borrowed funds 57,650 1,334 4.63 43,654 1,101 5.04
-------- ----- ---- -------- ----- ----
Total interest-bearing liabilities 311,479 4,628 2.97 276,615 6,184 4.47
Other non-interest bearing liabilities 75,621 57,827
-------- ------
Total liabilities 387,100 334,442
Stockholders' Equity 22,315 19,954
-------- ------
Total liabilities and
stockholders' equity $ 409,415 $ 354,396
======= =======
Net interest income/
interest rate spread (4) $ 7,048 3.24 % $ 5,771 2.77 %
===== ---- ===== ====
Net interest margin (5) 3.75 % 3.49 %
==== ====
Ratio of interest-earning assets to
interest-bearing liabilities 1.21x 1.19x
===== =====
(1) Securities, net, excludes municipal obligations. Unrealized appreciation / depreciation on available-for-sale securities
are recorded in non-interest earning assets.
(2) Interest income and yields are presented on a fully taxable equivalent basis.
(3) Amount is net of residential real estate loans held-for-sale, deferred loan fees and allowance for loan losses but includes
non-performing loans.
(4) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing
liabilities.
(5) Net interest margin represents net interest income divided by average interest-earning assets.
11
Comparison of Operating Results for the Three Months Ended June 30, 2002 and
2001
General
The Company reported net income of $799,000, or basic earnings per share of $.55
and diluted earnings per share of $.53 for the quarter ended June 30, 2002,
compared to $502,000, or basic earnings per share of $.35 and diluted earnings
per share of $.34, for the prior year period. The increase in net income was
attributable primarily to a $669,000, or 23.3% increase in net interest income
after provision for loan losses and an increase in other operating income of
$285,000, or 56.3%. Offsetting those increases was a $501,000, or 19.2% increase
in other operating expenses.
Interest Income
Interest income, on a fully taxable equivalent basis, decreased $6,000, or 0.1%,
for the three months ended June 30, 2002, compared to the three months ended
June 30, 2001. This decrease was primarily the result of a 84 basis point
decrease in the average yield on interest-earning assets from 7.08% for the
three months ended June 30, 2001, to 6.24% for the comparable 2002 period. The
decrease in average yield on interest-earning assets was attributable to a 104
basis point decrease in yield on securities, net, (exclusive of municipal
obligations) which declined from 5.98% for the three months ended June 30, 2001,
to 4.94% for the three months ended June 30, 2002. The average yield on loans
receivable, net, decreased 88 basis points from 8.57% for the three months ended
June 30, 2001, to 7.69% for the comparable 2002 period. Partially offsetting the
decline in yield from period to period, the average balance of securities, net,
(exclusive of municipal obligations) increased $12.8 million, or 7.5%, from
$170.9 million for three months ended June 30, 2001, to $183.7 million for the
three months ended June 30, 2002. The average balance of loans, net, increased
$38.8 million, or 26.1% from $149.0 million for the three months ended June 30,
2001, to $187.8 million for the comparable 2002 period.
Interest Expense
Interest expense for the three months ended June 30, 2002 was $2.3 million,
compared to $3.0 million for the three months ended June 30, 2001, a decrease of
$730,000, or 24.0%. The decrease was attributable to a 139 basis point decrease
in the average cost of interest-bearing liabilities from 4.34% for the three
months ended June 30, 2001 to 2.95% for the three months ended June 30, 2002.
The decrease in average cost was partially offset by a $33.1 million, or 11.8%,
increase in the average balance of total interest-bearing liabilities from
$280.2 million for the three months ended June 30, 2001 to $313.3 million for
the three months ended June 30, 2002. The increase in average interest-bearing
liabilities reflects a $20.8 million increase in the average balance of
interest-bearing deposits and a $12.3 million increase in the balance of
borrowed funds as compared to the prior year period.
Interest expense on interest-bearing deposits for the three months ended June
30, 2002 decreased $831,000, or 33.6%, to $1.6 million from $2.5 million for the
corresponding 2001 period. This decrease was primarily due to a 164 basis point
decrease in the average rate paid on interest-bearing deposits from 4.20% for
three months ended June 30, 2001 to 2.56% for the corresponding period in 2002.
Offsetting the decrease in the average rate paid was an increase in the average
balance of interest-bearing deposits of $20.8 million for the three months ended
June 30, 2002 from the corresponding period in 2001. The increase in the average
balance of interest-bearing deposits was the result of increases in the average
balance of savings deposits of $23.3 million, or 63.2%, and NOW and money market
deposits of $5.7 million, or 8.5% from period to period. The increase in average
balances of interest-bearing deposits is the result of the Company's branch
expansion and the development of competitive deposit products that meet the
needs of its commercial and consumer customers.
12
Interest expense on borrowed funds for the three months ended June 30, 2002
increased $101,000, or 17.8%, to $669,000 from $568,000 for the corresponding
2001 period. The increase was primarily due to an increase in the average
balance of borrowed funds of $12.2 million, or 27.2%, from $45.1 million for the
three months ended June 30, 2001 to $57.3 million for the three months ended
June 30, 2002. Offsetting the increase in the average balance was a 37 basis
point decrease in the average cost of borrowed funds from 5.04% for the 2001
period, to 4.67% for the 2002 period.
Net Interest Income
Net interest income on a fully taxable equivalent basis increased by $724,000,
or 25.2%, from $2.9 million for the three months ended June 30, 2001, to $3.6
million for the three months ended June 30, 2002. The average cost of total
interest-bearing liabilities for the period decreased 139 basis points from
4.34% in the 2001 period to 2.95% in the 2002 period. The average yield on total
interest-earning assets for the period decreased 84 basis points from 7.08% in
the 2001 period to 6.24% in the 2002 period. The net interest rate spread
increased by 55 basis points from 2.74% in the 2001 period, to 3.29% in the 2002
period.
Provision for Loan Losses
The Company made a $60,000 provision for loan losses for the three months ended
June 30, 2002. The provision for loan losses for the three months ended June 30,
2002 reflects management's qualitative and quantitative assessment of the loan
portfolio, net charge-offs and collection of delinquent loans. No provision was
made for the three months ended June 30, 2001. The allowance for loan losses
amounted to $2.1 million and $2.0 million at June 30, 2002 and December 31,
2001, respectively. The allowance for loan losses as a percentage of loans was
1.11% and 1.13% at June 30, 2002 and December 31, 2001, respectively.
The following table sets forth information regarding non-accrual loans and loans
delinquent 90 days or more and still accruing interest at the dates indicated.
It is the Company's general policy to discontinue accruing interest on all
loans, which are past-due more than 90 days or when, in the opinion of
management, such suspension is warranted. When a loan is placed on non-accrual
status, the Company ceases the accrual of interest owed and previously accrued
interest is charged against interest income. Loans are generally returned to
accrual status when principal and interest payments are current, there is
reasonable assurance that the loan will be fully collectable and a consistent
record of performance has been demonstrated.
June 30, 2002 December 31, 2001
(Dollars in thousands)
Non-accrual loans:
Commercial and industrial loans $ 128 $ 153
Consumer loans 4 25
- --
Total non-accrual and non-performing loans 132 178
--- ---
Allowance for loan losses as a percentage
of loans (1) 1.11 % 1.13 %
Allowance for loan losses as a percentage
of total non-performing loans 1624.24 % 1139.33 %
Non-performing loans as a percentage of loans (1) .07 % .10 %
(1) Loans include loans, net, excluding the allowance for loan losses.
13
Other Operating Income
Other operating income increased $285,000, or 56.3%, to $791,000 for the three
months ended June 30, 2002. Service charges on deposit accounts increased
$151,000, or 55.5%, reflecting overall growth in the depositor base, and the
introduction of new and electronic banking services. Included in other operating
income was a $84,000, or 94.4%, increase in net gain on sale of residential
loans as a result of an overall increase in residential mortgage loan production
resulting from a more favorable interest rate environment.
Other Operating Expense
Other operating expense increased $501,000, or 19.2%, from $2.6 million for the
three months ended June 30, 2001, to $3.1 million for the three months ended
June 30, 2002. Increases in salaries and employee benefits, premises and
equipment expense, and other expense for the three months ended June 30, 2002
result from the Bank's branch expansion.
Income Taxes
Income taxes increased $156,000, or 59.1%, from $264,000 for the three months
ended June 30, 2001, to $420,000 for the three months ended June 30, 2002, as a
result of the increase in income before income taxes. The effective tax rates
for the three months ended June 30, 2002 and those ended June 30, 2001 were
34.5% and 34.4%, respectively.
Comparison of Operating Results for the Six Months Ended June 30, 2002 and 2001
General
The Company reported net income of $1.5 million, or basic earnings per share of
$1.05, and diluted earnings per share of $1.02 for the six months ended June 30,
2002, compared to $1.0 million, or basic and diluted earnings of $.71 per share
for the prior year period. The increase in net income was primarily attributable
to an increase in net interest income after provision for loan losses of $1.1
million, or 19.7%, and an increase in other operating income of $652,000, or
69.7%. Offsetting those increases was a $1.1 million, or 21.0% increase in other
operating expenses.
Interest Income
Interest income, on a fully taxable equivalent basis, decreased $279,000, or
2.3%, from $12.0 million for the six months ended June 30, 2001, to $11.7
million for the six months ended June 30, 2002. The decrease was attributable to
a decrease in the average yield on interest-earning assets of 103 basis points
from 7.24% for the six months ended June 30, 2001, to 6.21% for the six months
ended June 30, 2002. The decrease in average yield on interest earning-assets
was attributable to a 125 basis point decrease in yield on securities, net,
(exclusive of municipal obligations) which declined from 6.21% for the six
months ended June 30, 2001, to 4.96% for the comparable 2002 period. The average
yield on loans, net, decreased 107 basis points from 8.72% for the six months
ended June 30, 2001, to 7.65% for the six months ended June 30, 2002. Partially
offsetting the decline in yield from period to period, the average balance of
securities, net, (exclusive of municipal obligations) increased $14.6 million,
or 8.5%, from $170.7 million for the six months ended June 30, 2001, to $185.3
million for the six months ended June 30, 2002. Similarly, the average balance
of loans, net, increased $40.8 million, or 28.6%, from $142.7 million for the
six months ended June 30, 2002, to $183.5 million for the six months ended June
30, 2002.
14
Interest Expense
Interest expense for the six months ended June 30, 2002 was $4.6 million,
compared to $6.2 million for the six months ended June 30, 2001, a decrease of
$1.6 million, or 25.2%. The decrease in interest expense was the result of a 150
basis point decrease in the average cost of interest-bearing liabilities from
4.47% for the six months ending June 30, 2001 as compared to 2.97% for the six
months ended June 30, 2002. The decrease in average cost was offset by a $34.9
million, or 12.6% increase in the average balance of total interest-bearing
liabilities from $276.6 million for the 2001 period to $311.5 million for the
2002 period. The increase in average interest-bearing liabilities reflects a
$20.9 million increase in the average balance of interest-earning deposits and a
$14.0 million increase in the average balance of borrowed funds as compared to
the prior year period.
Interest expense on interest-bearing deposits for the six months ended June 30,
2002 decreased $1.8 million, or 35.2%, to $3.3 million from $5.1 million for the
corresponding 2001 period. This decrease was primarily due to a 176 basis point
decrease in the average rate paid on interest-bearing deposits from 4.36% for
six months ended June 30, 2001 to 2.60% for the corresponding period in 2002.
Offsetting the decrease in the average rate paid was an increase in the average
balance of interest-bearing deposits of $20.9 million for the six months ended
June 30, 2002 from the corresponding period in 2001. The increase in the average
balance of interest-bearing deposits was the result of increases in the average
balance of savings deposits of $17.7 million, or 49.7%, and NOW and money market
deposits of $4.1 million, or 6.0% from period to period. The increase in average
balances of interest-bearing deposits is the result of the Company's branch
expansion and the development of competitive deposit products that meet the
needs of its commercial and consumer customers.
Interest expense on borrowed funds for the six months ended June 30, 2002
increased $233,000, or 21.2%, to $1.3 million from $1.1 million for the
corresponding 2001 period. The increase was primarily due to a $14.0 million, or
32.0%, increase in the average balance of borrowed funds from $43.7 million for
the six months ended June 30, 2001 to $57.7 million for the six months ended
June 30, 2002. Offsetting the increase in the average balance was a 41 basis
point decrease in the average cost of borrowed funds from 5.04% for the 2001
period, to 4.63% for the 2002 period.
Net Interest Income
Net interest income on a fully taxable equivalent basis increased by $1.2
million, or 22.1%, from $5.8 million for the six months ended June 30, 2001, to
$7.0 million for the six months ended June 30, 2002. The average cost of total
interest-bearing liabilities for the period decreased 150 basis points from
4.47% in the 2001 period to 2.97% in the 2002 period. The average yield on
interest-earning assets for the period decreased 103 basis points from 7.24% in
the 2001 period to 6.21% in the 2002 period. The net interest rate spread
increased by 47 basis points from 2.77% in the 2001 period, to 3.24% in the 2002
period.
Provision for Loan Losses
The Company made a $150,000 provision for loan losses for the six months ended
June 30, 2002. No provision was made for the six months ended June 30, 2001. The
provision for loan losses is based on analysis of the loan portfolio and
reflects an amount, which in management's judgment is adequate to provide for
probable loan losses in the existing portfolio.
15
Other Operating Income
Other operating income increased $652,000, or 69.7%, to $1.6 million for the six
months ended June 30, 2002. Service charges on deposit accounts increased
$311,000, or 58.6%, reflecting an overall increase in the Bank's deposit fee
structure, growth in the depositor base, and the introduction of new and
electronic banking services. Gain on sale of residential loans increased
$181,000, or 116.8%, as a result of an overall increase in residential mortgage
loan production made possible by lower market interest rates.
Other Operating Expense
Other operating expenses increased $1.1 million, or 21.0%, from $5.1 million for
the six months ended June 30, 2001, to $6.2 million in the six months ended June
30, 2002. Increases in salaries and employee benefits, premises and equipment
expense, and other expense for the six months ended June 30, 2002 are a result
of the Bank's continuing branch expansion.
Income Taxes
Income taxes increased $248,000, or 45.3%, from $547,000 for the six months
ended June 30, 2001, to $795,000 for the six months ended June 30, 2002 and was
attributable to the increase in income before income taxes. The effective tax
rate for the six months ended June 30, 2002 was 34.4%, compared to 34.3% for the
six months ended June 30, 2001.
Liquidity
Liquidity management for the Company requires that funds be available to pay all
deposit withdrawal and maturing financial obligations and meet credit funding
requirements promptly and fully in accordance with their terms. For most banks,
including the Bank, maturing assets provide only a limited portion of the funds
required to pay maturing liabilities over a short time frame. The balance of the
funds required is provided by liquid assets and the acquisition of additional
liabilities, making liability management integral to liquidity management in the
short term.
The Company's liquid assets consist of cash and due from banks, federal funds
sold, interest-earning deposits with other financial institutions and securities
classified as available-for-sale, less securities pledged as collateral. The
Company has established a minimum liquidity level, average liquid assets to
average assets, at 10%. Average balances are derived from average daily
balances. During the three months ended June 30, 2002, the Company's average
minimum liquidity level was 26.6%.
The Company maintains levels of liquidity that it considers adequate to meet its
current needs. The Company's principal sources of cash include incoming
deposits, the repayment of loans and conversion of investment securities. When
cash requirements increase faster than cash is generated, either through
increased loan demand or withdrawal of deposited funds, the Company can arrange
for the sale of loans or liquidate available-for-sale securities. It can also
access its lines of credit, totaling $6.5 million, with unaffiliated financial
institutions, which enable it to borrow federal funds on an unsecured basis. In
addition, the Company has available lines of credit with the Federal Home Loan
Bank of New York (FHLB) equal to 8.0% of the Company's assets at June 30, 2002,
which enable it to borrow funds on a secured basis. The Company could also
engage in other forms of borrowings, including reverse repurchase agreements.
16
At June 30, 2002, the Company's borrowings consisted of convertible and medium
term advances from the FHLB. The convertible feature of these advances allows
the FHLB, at a specified call date and quarterly thereafter, to convert these
advances into replacement funding for the same or lesser principal amount, based
on any advance then offered by the FHLB, at then current market rates. If the
FHLB elects to convert these advances, the Bank may repay any portion of the
advances without penalty. The convertible advances are secured by various
mortgage-backed and callable U.S. agency securities. At June 30, 2002,
convertible and medium term advances outstanding were as follows:
Call Contractual
Amount Rate Date Maturity
Convertible advance $ 14,000,000 5.49 % 02/19/2003 02/19/2008
Convertible advance 15,000,000 4.59 07/22/2002 01/21/2009
Convertible advance 14,000,000 4.97 01/19/2004 01/19/2011
Convertible advance 3,000,000 4.11 12/11/2005 12/11/2011
Medium term advance 4,000,000 3.31 12/11/2003 12/11/2003
Medium term advance 5,000,000 3.99 12/13/2004 12/13/2004
---------
Total $ 55,000,000
The primary investing activities of the Company are the purchase of securities
available-for-sale and the origination of loans. During each of the six months
ended June 30, 2002, and 2001, the Company's purchases of securities were
classified available-for-sale and totaled $625.0 million and $808.5 million,
respectively. Loan originations, net of principal repayments on loans, totaled
$14.0 million and $19.4 million for the six months ended June 30, 2002, and
2001, respectively. Those activities were funded primarily by borrowings,
principal repayments and maturities of securities.
Capital Resources
The Bank is subject to the risk based capital guidelines administered by the
banking regulatory agencies. The guidelines currently require all banks to
maintain a minimum ratio of total risk based capital to total risk weighted
assets of 8%, including a minimum ratio of Tier 1 capital to total risk weighted
assets of 4% and a Tier 1 capital to average adjusted assets of 4%. Failure to
meet minimum capital requirements can initiate certain mandatory, and possibly
additional discretionary actions by regulators, that, if undertaken, could have
a direct material effect on the Bank's financial statements. As of December 31,
2001, the most recent notification from the federal banking regulators
categorized the Bank as well capitalized under the regulatory framework for
prompt corrective action.
In accordance with the requirements of the FDIC and the New York State Banking
Department, the Bank must meet certain measures of capital adequacy with respect
to leverage and risk-based capital. As of June 30, 2002, the Bank exceeded those
requirements with a leverage capital ratio, and risk-based capital ratio and
total-risk based capital ratio of 6.20%, 10.58%, and 11.46%, respectively.
On May 24, 2001, the Company announced a plan for a stock repurchase program to
acquire an additional 75,000 shares of the outstanding common stock of the
Company. As of June 30, 2002, no repurchases had been made under this program.
The plan for the repurchase program was undertaken because management believed
that the repurchase of shares would enhance shareholder value and provide
additional liquidity for otherwise thinly traded shares. The repurchase program,
which remains in effect, generally will be conducted through open market
purchases, although unsolicited negotiated transactions or other types of
repurchases may be considered. Management does not believe the stock repurchase
will adversely affect the strong liquidity or capital positions of the Company,
its designation as well-capitalized or its compliance with established
regulatory capital requirements. At June 30, 2002, the Company held 336,900
shares of treasury stock at an average cost of $12.40 per share.
17
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The principal objective of the Company's interest rate management is to evaluate
the interest rate risk inherent in certain balance sheet accounts, determine the
level of risk appropriate given the Company's business strategy, operating
environment, capital and liquidity requirements and performance objectives, and
manage the risk consistent with guidelines approved by the Board of Directors.
Through such management, the Company seeks to reduce the vulnerability of it
operations to changes in interest rates. The Board has directed the Investment
Committee to review the Company's interest rate risk position on a quarterly
basis.
Funds management is the process by which the Company seeks to maximize the
profit potential which is derived from the spread between the rates earned on
interest-earning assets and the rates paid on interest-bearing liabilities
through the management of various balance sheet components. It involves
virtually every aspect of the Company's management and decision-making process.
Accordingly, the Company's results of operations and financial condition are
largely dependent on the movements in market interest rates and the Company's
ability to manage its assets and liabilities in response to such movements.
At June 30, 2002, 62.6% of the Company's gross loans had adjustable interest
rates and its loan portfolio had an average weighted maturity of 9.1 years. At
that date, $43.6 million, or 25.7%, of the Company's securities had adjustable
interest rates, and its securities portfolio had a weighted average maturity of
3.5 years. At June 30, 2002, the Company had $51.7 million of certificates of
deposit with maturities of one year or less and $29.5 million of deposits over
$100,000, which tend to be less stable sources of funding when compared to core
deposits, and which represented 25.8% of the Company's interest-bearing
liabilities. In a rising interest rate environment the Company's
interest-bearing liabilities may adjust upwardly more rapidly than the yield on
its adjustable-rate assets. Thus, due to the Company's level of shorter term
certificates of deposit, the Company's cost of funds may increase at a greater
rate in a rising rate environment than if it had a greater amount of core
deposits which, in turn, may adversely affect net interest income and net
income.
The Company's interest rate sensitivity is monitored by management through the
use of a quarterly interest rate risk analysis model which evaluates (i) the
potential change in the net interest income over the succeeding four quarter
periods and (ii) the potential change in the fair market value of equity, of the
Company ("Net Economic Value of Equity"), which would result from an
instantaneous and sustained interest rate change of zero and plus or minus 200
basis points in 100 basis point increments.
At June 30, 2002, the effect of instantaneous and sustained interest rate
changes on the Company's Net Interest Income and Net Economic Value of Equity
are as follows:
Change in Potential Change in Potential Change in
Interest Rates Net Interest Income Net Economic Value of Equity
in Basis Points $ Change % Change $Change % Change
--------------- -------- -------- -------- --------
(Dollars in thousands)
200 $ 934 6.14 % $ (2,882) (10.46) %
100 436 2.87 (2,078) (7.54)
Static -- -- -- --
(100) (603) (3.96) (1,599) (5.80)
(200) $(1,323) (8.69) % $ (1,664) (6.04) %
18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities and Use of Proceeds
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Stockholders was held on April 24, 2002,
and the following individuals were elected as Directors for a term of three
years each:
Vote Votes Broker
For Withheld Abstentions Non-Votes
Harvey Auerbach 1,294,752 5,656 - -
Perry B. Duryea 1,294,752 5,656 - -
Frank J. Esposito 1,294,752 5,656 - -
Roy M. Kern, Sr. 1,294,752 5,656 - -
Douglas C. Manditch 1,294,052 6,356 - -
The term of the following Directors continued after the Annual Meeting:
John L. Ciarelli, Esq., Donald Del Duca, Waldemar Fernandez, Gordon A.
Lenz, Werner S. Neuberger, Thomas F. Roberts, III, Alfred Romito, Sally Ann
Slacke, John C. Tsunis, Esq.
The amendment to the Company's 1998 Stock Option Plan was ratified at the
Company's Annual Meeting of Stockholders on April 24, 2002 with 908,252
votes for the amendment, 15,088 votes withheld and 32,588 votes against.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
11.0 Statement Re: Computation of Per Share Earnings
99.1 Certification of Chief Executive Officer pursuant to
Section 906 of Sarbanes-Oxley Act of 2002
99.2 Certification of Chief Financial Officer pursuant to
Section 906 of Sarbanes-Oxley Act of 2002
b. Reports on Form 8K
None
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf of the undersigned
thereunto duly authorized.
LONG ISLAND FINANCIAL CORP.
(Registrant)
Date: August 13, 2002 By: /s/ Douglas C. Manditch
----------------------------------
Douglas C. Manditch
President and Chief Executive Officer
Date: August 13, 2002 By: /s/ Thomas Buonaiuto
--------------------------
Thomas Buonaiuto
Vice President and Treasurer
20
Exhibit 11.0 Statement Regarding Computation Of Earnings Per Share
(Unaudited)
(In thousands, except share and per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
---- ---- ---- ----
Net income available to
common shareholders $ 799 $ 502 $ 1,517 $ 1,047
Total weighted average
common shares outstanding 1,446,226 1,453,986 1,443,332 1,466,194
Basic earnings per common share $ .55 $ .35 $ 1.05 $ .71
=== === ==== ===
Total weighted average
common shares outstanding 1,446,226 1,453,986 1,443,332 1,466,194
Dilutive effect of stock options using
the treasury stock method 50,818 14,800 43,598 14,416
Total average common and common
equivalent shares 1,497,044 1,468,786 1,486,930 1,480,610
Diluted earnings common per share $ .53 $ .34 $ 1.02 $ .71
=== === ==== ===
21
Exhibit 99.1 Certification of Chief Executive Officer pursuant to Section
906 of Sarbanes- Oxley Act of 2002
In connection with the Quarterly Report of Long Island Financial Corp., (the
Company) on Form 10-Q for the period ended June 30, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the Report), I, Douglas
C. Manditch, President & Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15 (d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ Douglas C. Manditch
-----------------------
President & Chief Executive Officer
August 13, 2002
Exhibit 99.2 Certification of Chief Financial Officer pursuant to Section
906 of Sarbanes- Oxley Act of 2002
In connection with the Quarterly Report of Long Island Financial Corp., (the
Company) on Form 10-Q for the period ended June 30, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the Report), I, Thomas
Buonaiuto, Vice President & Treasurer of the Company, certify, pursuant to 18
U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15 (d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ Thomas Buonaiuto
--------------------
Vice President & Treasurer
August 13, 2002
22