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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 March 31, 2003
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 [X] No [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12B-2 of the Exchange Act): Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock par value $.01, per share. The registrant had 1,473,832 shares of
Common Stock outstanding as of May 9, 2003.
Form 10-Q
LONG ISLAND FINANCIAL CORP.
INDEX
Page
PART I - FINANCIAL INFORMATION Number
ITEM 1. Consolidated Financial Statements - Unaudited
Consolidated Balance Sheets at March 31, 2003
and December 31, 2002 2
Consolidated Statements of Earnings for the Three Months
Ended March 31, 2003 3
Consolidated Statement of Changes in Stockholders' Equity
for the Three Months Ended March 31, 2003 4
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 2003 5
Notes to Consolidated Financial Statements 6
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 16
ITEM 4. Controls and Procedures 17
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings 17
ITEM 2. Changes in Securities and Use of Proceeds 17
ITEM 3. Defaults Upon Senior Securities 17
ITEM 4. Submission of Matters to a Vote of Security Holders 17
ITEM 5. Other Information 17
ITEM 6. Exhibits and Reports on Form 8-K 17
SIGNATURES 18
CERTIFICATIONS 19
1
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
LONG ISLAND FINANCIAL CORP.
Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
March 31, December 31,
2003 2002
---- ----
Assets:
Cash and due from banks $ 15,812 $ 20,443
Interest earning deposits 93 47
Federal funds sold - 5,300
----- -----
Total cash and cash equivalents 15,905 25,790
Securities held-to-maturity (fair value of $14,260 and $14,027, respectively) 12,464 12,461
Securities available-for-sale, at fair value 198,722 219,590
Federal Home Loan Bank stock, at cost 4,000 3,588
Loans, net of unearned income and deferred fees 214,582 217,731
Less allowance for loan losses (2,406) (2,346)
----- -----
Loans, net 212,176 215,385
Premises and equipment, net 3,830 3,530
Accrued interest receivable 2,818 2,654
Bank owned life insurance 7,946 7,859
Prepaid expenses and other assets 1,263 1,094
----- -----
Total assets $ 459,124 $ 491,951
======= =======
Liabilities and Stockholders' Equity:
Deposits:
Demand deposits $ 88,530 $ 78,697
Savings deposits 84,416 73,780
NOW and money market deposits 76,262 130,636
Time certificates issued in excess of $100,000 12,752 20,516
Other time deposits 93,298 96,905
------ ------
Total deposits 355,258 400,534
Federal funds purchased and securities sold under agreements
to repurchase 12,000 -
Other borrowings 55,000 55,000
Accrued expenses and other liabilities 3,260 3,344
----- -----
Total liabilities 425,518 458,878
------- -------
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;
1,797,286 and 1,783,126 shares issued; 1,460,386 and
1,446,226 shares outstanding, respectively) 18 18
Surplus 20,524 20,281
Accumulated surplus 8,278 7,625
Accumulated other comprehensive income 1,464 1,827
Treasury stock at cost, (336,900 shares in 2003 and 2002) (4,178) (4,178)
----- -----
Total stockholders' equity 26,106 25,573
------ ------
Total liabilities and stockholders' equity $ 459,124 $ 491,951
======= =======
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
Ended March 31,
2003 2002
---- ----
Interest income:
Loans $ 3,793 $ 3,412
Securities 2,293 2,329
Federal funds sold 11 27
Earning deposits 1 2
-- --
Total interest income 6,098 5,770
----- -----
Interest expense:
Savings deposits 278 153
NOW and money market deposits 261 192
Time certificates issued in excess of $100,000 76 227
Other time deposits 894 1,082
Borrowed funds 678 665
--- ---
Total interest expense 2,187 2,319
----- -----
Net interest income 3,911 3,451
----- -----
Provision for loan losses 60 90
-- --
Net interest income after provision
for loan losses 3,851 3,361
----- -----
Other operating income:
Service charges on deposit accounts 462 419
Net gain on sale of securities 89 -
Net gain on sale of residential loans 157 163
Earnings on bank owned life insurance 102 96
Other 138 119
--- ---
Total other operating income 948 797
--- ---
Other operating expenses:
Salaries and employee benefits 1,769 1,449
Occupancy expense 256 214
Premises and equipment expense 321 290
Capital securities 206 199
Other 1,003 913
----- ---
Total other operating expenses 3,555 3,065
----- -----
Income before income taxes 1,244 1,093
Income taxes 446 375
--- ---
Net income $ 798 $ 718
=== ===
Basic earnings per share $ .55 $ .50
=== ===
Diluted earnings per share $ .53 $ .49
=== ===
Weighted average shares outstanding 1,449,530 1,440,405
========= =========
Diluted weighted average shares outstanding 1,513,895 1,472,264
========= =========
See accompanying notes to consolidated financial statements.
3
LONG ISLAND FINANCIAL CORP.
Consolidated Statement of Changes in Stockholders' Equity
For the Three Months Ended March 31, 2003
(Unaudited)
(In thousands, except share data)
Accumulated
other
Common Accumulated comprehensive Treasury
stock Surplus surplus income stock Total
-----------------------------------------------------------------------
Balance at December 31, 2002 $ 18 20,281 7,625 1,827 (4,178) 25,573
Comprehensive income:
Net income - - 798 - - 798
Other comprehensive income,
net of tax:
Unrealized depreciation in
available-for-sale securities,
net of reclassification adjustment - - - (363) (363)
---
Total comprehensive income - - - - - 435
Exercise of stock options and related
tax benefit (14,160 shares) - 243 - - - 243
Dividends declared on common stock
($.10 per common share) - - (145) - - (145)
-----------------------------------------------------------------------
Balance at March 31, 2003 $ 18 20,524 8,278 1,464 (4,178) 26,106
=======================================================================
See accompanying notes to consolidated financial statements.
4
LONG ISLAND FINANCIAL CORP.
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
For the Three Months
Ended March 31,
2003 2002
---- ----
Cash flows from operating activities:
Net income $ 798 $ 718
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 60 90
Depreciation and amortization 232 222
Amortization of premiums, net of discount accretion 590 328
Net gain on sale of securities (89) -
Loans originated for sale, net of proceeds
from sales and gains 367 716
Net deferred loan origination fees 31 57
Earnings on bank owned life insurance (102) (96)
Deferred income taxes (388) (44)
Change in other assets and liabilities:
Accrued interest receivable (164) (300)
Prepaid expenses and other assets 441 47
Accrued expenses and other liabilities (84) (348)
---- -----
Net cash provided by operating activities 1,692 1,390
----- -----
Cash flows from investing activities:
Purchases of securities held-to-maturity, available-for-sale (268,765) (304,368)
Net purchase of Federal Home Loan Bank stock (412) (617)
Proceeds from the sale of securities available-for-sale 9,562 -
Proceeds from maturities of securities 268,432 347,125
Principal repayments on securities 10,565 11,610
Loan originations net of principal repayments 2,751 (9,312)
Purchase of premises and equipment (532) (465)
----- -----
Net cash provided by investing activities 21,601 43,973
------ ------
Cash flows from financing activities:
Net decrease in demand deposit, savings, NOW,
and money market accounts (33,905) (66,123)
Net decrease in certificates of deposit (11,371) (5,945)
Net increase in federal funds purchased and securities sold
under agreements to repurchase 12,000 8,300
Proceeds from exercise of stock options 243 90
Payments for cash dividends (145) (130)
----- -----
Net cash used in financing activities (33,178) (63,808)
-------- --------
Net decrease in cash and cash equivalents (9,885) (18,445)
Cash and cash equivalents at beginning of period 25,790 30,626
------ ------
Cash and cash equivalents at end of period $ 15,905 $ 12,181
====== ======
Supplemental disclosure of cash flow information Cash paid during the period
for:
Interest $ 2,186 $ 2,785
===== =====
Income taxes $ 101 $ 32
=== ==
See accompanying notes to consolidated financial statements.
5
LONG ISLAND FINANCIAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Private Securities Litigation Reform Act Safe Harbor Statement
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. Amounts stated herein could vary as a result of
market and other factors. Such forward-looking statements are subject to risks
and uncertainties which could cause actual results to differ materially from
those currently anticipated due to a number of factors, which include, but are
not limited to, factors discussed in documents filed by Long Island Financial
Corp. (the "Company") with the Securities and Exchange Commission from time to
time. Such forward-looking statements may be identified by the use of such words
as "believe," "expect," "anticipate," "should," "planned," "estimated," "intend"
and "potential". Examples of forward looking statements include, but are not
limited to, estimates with respect to the financial condition, expected or
anticipated revenue, results of operations and business of the Company that are
subject to various factors which could cause actual results to differ materially
from these estimates. The Company's ability to predict results or the actual
effect of future plans or strategies is inherently uncertain. Factors which
could have a material adverse effect on the operations of the Company include,
but are not limited to, changes in: interest rates; general economic conditions;
monetary and fiscal policies of the U. S. Government, including policies of the
U.S. Treasury and the Federal Reserve Board; the quality or composition of the
loan or investment portfolios; demand for loan and non-deposit products; deposit
flows; real estate values; the level of defaults, losses and prepayments on
loans held by the Company in its portfolio or sold in the secondary markets;
demand for financial services in the Company's market area; competition;
accounting principles, policies, practices or guidelines; legislation or
regulation; and other economic, competitive, governmental, regulatory, and
technological factors affecting the Company's operations, pricing, products and
services. The forward-looking statements are made as of the date of this Form
10-Q, and, except as required by applicable law, the Company assumes no
obligation to update the forward-looking statements or to update the reasons why
actual results could differ from those projected in the forward-looking
statements. These risks and uncertainties should be considered in evaluating
forward-looking statements, which speak only as of the date of this Form 10-Q,
and undue reliance should not be placed on such statements.
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the
accounts of Long Island Financial Corp. 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 three month period ended
March 31, 2003 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
2002 Annual Report on Form 10-K.
6
The Company makes available through its Internet website, www.licb.com, its
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8K, and all amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934. Such reports are
free of charge and are available as soon as reasonably practicable after the
Company electronically files such material with, or furnish it to, the
Securities and Exchange Commission.
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:
March 31, 2003 December 31, 2002
-------------- -----------------
Amortized Fair Amortized Fair
Cost Value Cost Value
--------- ----- --------- -----
(In thousands)
Held-to-maturity:
Corporate debt $ 12,464 14,260 $ 12,461 14,027
------ ------ ------ ------
Total held-to-maturity $ 12,464 14,260 $ 12,461 14,027
====== ====== ====== ======
Available-for-sale:
U.S. Government and Agency obligations $ 129,312 130,038 $ 129,345 130,422
Mortgage-backed securities:
GNMA 45,702 46,915 62,565 63,971
FHLMC 8,989 9,142 9,879 10,015
FNMA 10,409 10,549 12,920 13,122
Corporate debt 2,012 2,078 2,013 2,060
----- ----- ----- -----
Total securities available-for-sale $ 196,424 198,722 $ 216,722 219,590
======= ======= ======= =======
3. LOANS, NET
Loans, net, are summarized as follows:
March 31, 2003 December 31, 2002
-------------- -----------------
(Dollars in thousands)
Commercial and industrial loans $ 46,290 21.1 % $ 54,001 24.3 %
Commercial real estate loans 132,440 60.5 130,275 58.7
Automobile loans 36,915 16.9 34,188 15.4
Consumer loans 2,306 1.1 2,238 1.0
Residential real estate loans held-for-sale 822 .4 1,189 .6
--- -- ----- --
218,773 100.0 221,891 100.0
Less:
Unearned income 3,427 3,396
Deferred fees, net 764 764
Allowance for loan losses 2,406 2,346
----- -----
$ 212,176 $ 215,385
======= =======
7
4. STOCK BASED COMPENSATION
The Company applies the intrinsic-value based method of accounting prescribed by
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations including Financial Accounting Standards
Board (FASB) Interpretation No. 44, Accounting for Certain Transactions
involving Stock Compensation, an interpretation of APB Opinion No. 25, issued in
March 2000, to account for its fixed-plan stock options. Under this method,
compensation expense is recorded on the date of grant only if the current market
price of the stock exceeded the exercise price. SFAS No. 123, Accounting for
Stock Based Compensation, established accounting and disclosure requirements
using a fair-value-based method of accounting for stock-based employee
compensation plans. As allowed by Statement of Financial Accounting Standards
(SFAS) No. 123, the Company has elected to continue to apply the
intrinsic-value-based method of accounting described above, and has adopted only
the disclosure requirements of SFAS No. 123. The following table illustrates the
effect on net income if the fair-value-based method had been applied to all
stock options granted or vested in each period.
For the Three Months
Ended March 31,
(Dollars in thousands, except per share data) 2003 2002
---- ----
Net income as reported $ 798 $ 718
Deduct total stock-based employee compensation
expense determined under fair-value-based
method for all awards, net of tax 135 58
--- --
Pro forma net income 663 660
--- ---
Earnings per share:
Basic As Reported .55 .50
Pro forma .46 .46
Diluted As Reported .50 .49
Pro forma $ .44 $ .45
5. RECENT DEVELOPMENTS
On February 26, 2003 the Board of Directors of the Company declared a quarterly
dividend of ten cents ($0.10) per common share. The dividend was paid on April
1, 2003, to shareholders of record as of March 21, 2003.
6. OTHER COMMITMENTS AND CONTINGENT LIABILITIES
In the normal course of business, the Bank enters into commitments to purchase
investment securities . At March 31, 2003, the Bank had no outstanding
commitments to purchase investment securities.
7. RECENT ACCOUNTING PRONOUNCEMENTS
In April 2003, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities," for certain
decisions made by the Board as part of the Derivatives Implementation Group
process. This statement is effective for contracts entered into or modified
after June 30, 2003 and hedging relationships designated after June 30, 2003.
Management does not expect that the adoption of SFAS No. 149 will have a
significant impact on the Company's consolidated balance sheets or consolidated
statement of earnings.
In November 2002, FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, an interpretation of FASB Statements No.
5, 57, and 107 and Rescission of FASB Interpretation No. 34." This
Interpretation clarifies the requirements of FASB Statement No. 5, "Accounting
for Contingencies," relating to the guarantor's accounting for and disclosure of
the issuance of certain types of guarantees. The disclosure provision of the
Interpretation are effective for financial statements of interim or annual
reports that end after December 15, 2002. However, the provisions for initial
recognition and measurement are effective on a prospective basis for guarantees
that are issued or modified after December 31, 2002, irrespective of the
guarantor's year-end. The application of this Interpretation did not have a
material impact on the Company's consolidated balance sheet or consolidated
statement of earnings.
8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
General
The principal business of Long Island Financial Corp. 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, Nassau, and Kings 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 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. The evaluation process for making provisions for loan losses is
subject to numerous estimates and judgments. Changes in those estimates would
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 Suffolk and Nassau.
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 March 31, 2003 is adequate to provide for estimated probable losses
inherent in the portfolio.
9
Financial Condition
The Company's total assets were $459.1 million as of March 31, 2003, compared to
$492.0 million at December 31, 2002. The decrease in total assets was primarily
attributable to the decline in the securities available-for-sale portfolio,
which decreased $20.9 million, or 9.5%, as the proceeds of maturing short-term
U.S. Government and agency obligations purchased in December 2002 were used to
pay maturing seasonal municipal deposits. Also contributing to that decrease in
part, was a $3.1 million, or 1.4%, decrease in loans, net, from $217.7 million
at December 31, 2002, to $214.6 million at March 31, 2003, reflecting a decrease
primarily in commercial and industrial loans.
Total deposits decreased $45.3 million, or 11.3%, from $400.5 million at
December 31, 2002 to $355.3 million at March 31, 2003, primarily reflecting a
decrease in NOW and money market deposits. The decrease in NOW and money market
deposits of $54.3 million, or 41.6%, from $130.6 million at December 31, 2002 to
$76.3 million at March 31, 2003, is attributable to the withdrawal of seasonal
municipal deposits. Time certificates in excess of $100,000 decreased $7.8
million, or 37.8%, from $20.5 million at December 31, 2002 to $12.8 million at
March 31, 2003. The effects of those declines were offset in part by a $10.6
million, or 14.4%, increase in savings deposits and a $9.8 million, or 12.5%,
increase in demand deposits. Federal funds purchased and securities sold under
agreements to repurchase were $12.0 million at March 31, 2003. Other borrowings,
which consist of Federal Home Loan Bank of New York advances, remained unchanged
at $55.0 million.
Stockholders' equity increased $533,000, or 2.1%, to $26.1 million at March 31,
2003 compared to $25.6 million at December 31, 2002. The increase to
stockholders equity included $798,000 of net income for the three months ending
March 31, 2003. Offsetting this increase in part were dividends declared of
$145,000.
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 ended March 31, 2003 and 2002, 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 loan balances include non-accrual loans although
they are not material.
10
Three Months Ended March 31,
-----------2003----------- -----------2002-----------
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 $ 4,289 $ 12 1.12 % $ 7,079 $ 29 1.64 %
Securities, net (1) 219,944 2,293 4.17 186,863 2,329 4.99
Loans, net (2) 215,006 3,793 7.06 181,142 3,412 7.53
------- ----- ---- ------- ----- ----
Total interest-earning assets 439,239 6,098 5.55 375,084 5,770 6.15
Non-interest-earning assets 41,482 31,073
------ ------
Total assets $ 480,721 $ 406,157
======= =======
Interest-bearing liabilities:
Savings deposits $ 82,899 278 1.34 $ 46,214 153 1.32
NOW and money market deposits 107,375 261 .97 73,412 192 1.05
Certificates of deposit 110,918 970 3.50 132,081 1,309 3.96
------- --- ---- ------- ----- ----
Total interest-bearing deposits 301,192 1,509 2.00 251,707 1,654 2.63
Borrowed funds 63,135 678 4.30 57,953 665 4.59
------ --- ---- ------ --- ----
Total interest-bearing liabilities 364,327 2,187 2.40 309,660 2,319 3.00
Other non-interest bearing liabilities 90,750 74,492
------ ------
Total liabilities 455,077 384,152
Stockholders' equity 25,644 22,005
------ ------
Total liabilities and
stockholders' equity $ 480,721 $ 406,157
======= =======
Net interest income/
interest rate spread (3) $ 3,911 3.15 % $ 3,451 3.15 %
===== ---- ===== ====
Net interest margin (4) 3.56 % 3.68 %
==== ====
Ratio of interest-earning assets to
interest-bearing liabilities 1.21x 1.21x
===== =====
(1) Securities, net, excludes municipal obligations. Unrealized appreciation / depreciation on available-for-sale securities are
recorded in non-interest earning assets.
(2) Amount excludes residential real estate loans held-for-sale and allowance for loan losses, and includes deferred loan fees and
non-performing loans.
(3) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing
liabilities.
(4) Net interest margin represents net interest income divided by average interest-earning assets.
11
Comparison of Operating Results for the Three Months Ended March 31, 2003 and
2002
General
The Company reported net income of $798,000, or basic earnings per share of $.55
and diluted earnings per share of $.53 for the quarter ended March 31, 2003,
compared to $718,000, or basic earnings per share of $.50 and diluted earnings
per share of $.49, for the prior year period. The increase in net income was
attributable primarily to a $490,000, or 14.6% increase in net interest income
after provision for loan losses and an increase in other operating income of
$151,000, or 18.9%. Offsetting those increases was a $490,000, or 16.0% increase
in other operating expenses.
Interest Income
Interest income increased $328,000, or 5.7%, for the three months ended March
31, 2003, compared to the three months ended March 31, 2002. This increase was
attributable to the increase in the average balance of interest-earning assets
of $64.1 million, or 17.1%, from $375.1 million for the three months ended March
31, 2002, to $439.2 million for the three months ended March 31, 2003. The
increase in the average balance of interest earning assets was offset in part by
a 60 basis point decrease in the average yield on interest-earning assets from
6.15% for the three months ended March 31, 2002, to 5.55% for the comparable
2003 period. The decrease in average yield on interest-earning assets was
attributable to a 82 basis point decrease in yield on securities, net, which
declined from 4.99% for the three months ended March 31, 2002, to 4.17% for the
three months ended March 31, 2003. The average yield on loans receivable, net,
decreased 47 basis points from 7.53% for the three months ended March 31, 2002,
to 7.06% for the comparable 2003 period. Partially offsetting the decline in
yield from period to period was the $33.0 million, or 17.7% increase in the
average balance of securities, net, from $186.9 million for three months ended
March 31, 2002, to $219.9 million for the three months ended March 31, 2003. The
average balance of loans, net, increased $33.9 million, or 18.7% from $181.1
million for the three months ended March 31, 2002, to $215.0 million for the
comparable 2003 period.
Interest Expense
Interest expense for the three months ended March 31, 2003 was $2.2 million,
compared to $2.3 million for the three months ended March 31, 2002, a decrease
of $132,000, or 5.7%. The decrease was attributable to a 60 basis point decrease
in the average cost of interest-bearing liabilities from 3.00% for the three
months ended March 31, 2002 to 2.40% for the three months ended March 31, 2003.
The decrease in average cost was partially offset by a $54.6 million, or 17.7%,
increase in the average balance of total interest-bearing liabilities from
$309.7 million for the three months ended March 31, 2002 to $364.3 million for
the three months ended March 31, 2003. The increase in average interest-bearing
liabilities reflects increases of $49.5 million in the average balance of
interest-bearing deposits and $5.2 million in the average balance of borrowed
funds when compared to the prior year period.
Interest expense on interest-bearing deposits for the three months ended March
31, 2003 decreased $145,000, or 8.8%, to $1.5 million from $1.7 million for the
corresponding 2002 period. This decrease was primarily due to a 63 basis point
decrease in the average rate paid on interest-bearing deposits from 2.63% for
three months ended March 31, 2002 to 2.00% for the corresponding period in 2003.
Offsetting the decrease in the average rate paid was an increase in the average
balance of interest-bearing deposits of $49.5 million for the three months ended
March 31, 2003 from the corresponding period in 2002. The increase in the
average balance of interest-bearing deposits was the result of increases in the
average balance of savings deposits of $36.7 million, or 79.4%, and in the
average balances of NOW and money market deposits of $34.0 million, or 46.3%
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 increased $13,000, or 2.0%, from $665,000 for
the three months ended March 31, 2002, to $678,000 for the three months ended
March 31, 2003. The increase was primarily due to an increase in the average
balance of borrowed funds of $5.1 million, or 8.9%, from $58.0 million for the
three months ended March 31, 2002 to $63.1 million for the three months ended
March 31, 2003. Offsetting the increase in the average balance was a 29 basis
point decrease in the average cost of borrowed funds from 4.59% for the 2002
period, to 4.30% for the 2003 period.
Net Interest Income
Net interest income increased by $460,000, or 13.3%, from $3.5 million for the
three months ended March 31, 2002, to $3.9 million for the three months ended
March 31, 2003. The average cost of total interest-bearing liabilities for the
period decreased 60 basis points from 3.00% in the 2002 period to 2.40% in the
2003 period. The average yield on total interest-earning assets for the period
decreased 60 basis points from 6.15% in the 2002 period to 5.55% in the 2003
period. The net interest rate spread remained unchanged at 3.15% from period to
period.
Provision for Loan Losses
The Company made a $60,000 provision for loan losses for the three months ended
March 31, 2003, compared to a $90,000 provision for loan losses for the three
months ended March 31, 2002. The provision for loan losses for the three months
ended March 31, 2003 reflects management's qualitative and quantitative
assessment of the loan portfolio, net charge-offs and collection of delinquent
loans. The allowance for loan losses amounted to $2.4 million and $2.3 million
at March 31, 2003 and December 31, 2002, respectively. The allowance for loan
losses as a percentage of loans was 1.12% and 1.08% at March 31, 2003 and
December 31, 2002, 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.
March 31, 2003 December 31, 2002
-------------- -----------------
(Dollars in thousands)
Non-accrual loans:
Commercial and industrial loans $ 326 $ 307
--- ---
Total non-accrual and non-performing loans 326 307
--- ---
Allowance for loan losses as a percentage
of loans (1) 1.12 % 1.08 %
Allowance for loan losses as a percentage
of total non-performing loans 738.04 % 764.17 %
Non-performing loans as a percentage of loans (1) .15 % .14 %
(1) Loans include loans, net, excluding the allowance for loan losses.
13
Other Operating Income
Other operating income increased $151,000, or 18.9%, to $948,000 for the three
months ended March 31, 2003. Service charges on deposit accounts increased
$43,000, or 10.3%, reflecting overall growth in the depositor base, and the
introduction of new electronic banking services. In addition, the Company
realized a gain on the sale of securities of $89,000 for the three months ended
March 31, 2003.
Other Operating Expenses
Other operating expenses increased $490,000, or 16.0%, from $3.1million for the
three months ended March 31, 2002, to $3.6 million for the three months ended
March 31, 2003. The increase resulted primarily from increases in salaries and
employee benefits, premises and equipment expense, and other expense for the
three months ended March 31, 2003 attributable to the Bank's branch expansion.
Income Taxes
Income taxes increased $71,000, or 18.9%, from $375,000 for the three months
ended March 31, 2002, to $446,000 for the three months ended March 31, 2003, as
a result of the increase in income before income taxes. The effective tax rates
for the three months ended March 31, 2003 and those ended March 31, 2002 were
35.9% and 34.3%, respectively.
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 March 31, 2003, 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 12.0% of the Company's assets at March 31,
2003, which enable it to borrow funds on a secured basis. The Company could also
engage in other forms of borrowings, including reverse repurchase agreements.
At March 31, 2003, 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.
14
At March 31, 2003, convertible and medium term advances outstanding were as
follows:
Call Contractual
Amount Rate Date Maturity
------ ---- ---- --------
Convertible advance $ 14,000,000 5.49 % 05/19/2003 02/19/2008
Convertible advance 15,000,000 4.59 04/21/2003 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 12/12/2011
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 three months
ended March 31, 2003, and 2002, the Company's purchases of securities that were
classified available-for-sale totaled $268.8 million and $304.4 million,
respectively. Loan originations, net of principal repayments on loans, totaled
($2.8) million and $9.3 million for the three months ended March 31, 2003, and
2002, respectively. Borrowings, principal repayments and maturities of
securities were used primarily to fund those activities.
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,
2002, 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 March 31, 2003, the Bank exceeded
those requirements with a leverage capital ratio, risk-based capital ratio and
total-risk based capital ratio of 5.54%, 9.71%, and 10.59%, respectively.
The Company achieves what it considers "capital adequacy" through the continuous
monitoring of its financial performance and plans for expansion. Sources of the
Company's capital are generated primarily through current period earnings and
the issuance of common stock via the dividend reinvestment plan or the exercise
of stock options. Uses of capital currently result from the payment of dividends
on common stock or the repurchase of common stock through a stock repurchase
program. In February 2003, the Board of Directors, suspended the current stock
repurchase program that had enabled the Company to repurchase 75,000 shares of
its outstanding common stock. There have been no repurchases made under this
stock purchase program since its announcement in May, 2001. In determining the
extent and timing of stock repurchase programs, the Company considers, in
addition to capital adequacy, the effect on the Company's financial condition,
average daily trading volume, and listing requirements applicable to the NASDAQ
National Market System. At March 31, 2003, the Company held 336,900 shares of
treasury stock at an average cost of $12.40 per share.
15
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's
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 March 31, 2003, 75.0% of the Company's gross loans had adjustable interest
rates and its loan portfolio had an average weighted maturity of 8.7 years. At
that date, $32.7 million, or 15.2%, of the Company's securities had adjustable
interest rates, and its securities portfolio had a weighted average maturity of
1.8 years. At March 31, 2003, the Company had $60.4 million of certificates of
deposit with maturities of one year or less and $12.8 million of deposits over
$100,000, which tend to be less stable sources of funding when compared to core
deposits, and which represented 21.9% 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 March 31, 2003, 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 $ (440) (2.58) % $ (7,308) (24.97) %
100 (353) (2.07) (4,498) (15.37)
Static --- ---- ----- -----
(100) (818) (4.80) (2,014) (6.88)
(200) (1,683) (9.88) (1,505) (5.14)
16
Item 4. Controls and Procedures
1. Evaluation of disclosure controls and procedures. The Company maintains
controls and procedures designed to ensure that information required to
be disclosed in the reports that the Company files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of
the Securities and Exchange Commission. Based upon their evaluation of
those controls and procedures performed within 90 days of the filing
date of this report, the Chief Executive and Chief Financial officers
of the Company concluded that the Company's disclosure controls and
procedures were adequate.
2. Changes in internal controls. The Company made no significant changes
in its internal controls or in other factors that could significantly
affect these controls subsequent to the date of the evaluation of those
controls by the Chief Executive and Chief Financial officers.
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
Not applicable.
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
17
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: May 15, 2003 By: /s/ Douglas C. Manditch
---------------------------------
Douglas C. Manditch
President and Chief Executive Officer
Date: May 15, 2003 By: /s/ Thomas Buonaiuto
-------------------------
Thomas Buonaiuto
Vice President and Treasurer
18
CERTIFICATION
I, Douglas C. Manditch, certify, that:
1. I have reviewed this quarterly report on Form 10-Q of Long Island
Financial Corp.;
2. Based on my knowledge, the quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):
b. all significant deficiencies in the design or operation of the
internal controls which could adversely affect the registrant's
ability to record process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
a. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
the internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: May 15, 2003
/s/ Douglas C. Manditch
-----------------------
Douglas C. Manditch
President & Chief Executive Officer
19
CERTIFICATION
I, Thomas Buonaiuto, certify, that:
1. I have reviewed this quarterly report on Form 10-Q of Long Island
Financial Corp.;
2. Based on my knowledge, the quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):
a. all significant deficiencies in the design or operation of the
internal controls which could adversely affect the registrant's
ability to record process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
the internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: May 15, 2003
/s/ Thomas Buonaiuto
--------------------
Thomas Buonaiuto
Vice President & Treasurer
20
Exhibit 11.0 Statement Regarding Computation Of Earnings Per Share
(Unaudited)
(In thousands, except share and per share amounts)
Three Months Ended
March 31,
2003 2002
---- ----
Net income available to
common shareholders $ 798,000 $ 718,000
Total weighted average
common shares outstanding 1,449,530 1,440,405
Basic earnings per common share $ .55 $ .50
Total weighted average
common shares outstanding 1,449,530 1,440,405
Dilutive effect of stock options using
the treasury stock method 64,365 31,859
Total average common and common
equivalent shares 1,513,895 1,472,264
Diluted earnings per common share $ .53 $ .49
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 March 31, 2003 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
May 15, 2003
A signed original of this written statement required by Section 906 has been
provided to Long Island Financial Corp. and will be retained by Long Island
Financial Corp. and furnished to the Securities and Exchange Commission or its
staff upon request.
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 March 31, 2003 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
May 15, 2003
A signed original of this written statement required by Section 906 has been
provided to Long Island Financial Corp. and will be retained by Long Island
Financial Corp. and furnished to the Securities and Exchange Commission or its
staff upon request.
22