LICB Long Island Financial (MM)

Long Island Financial Corp. (the "Company") (NASDAQ/NMS: LICB), the holding company for Long Island Commercial Bank (the "Bank"), today reported net income of $754,000, or $.47 per diluted share, for the three months ended September 30, 2005, compared to net income of $1.2 million, or $.73 per diluted share for the three months ended September 30, 2004. For the nine months ended September 30, 2005, the Company reported net income of $2.4 million, or $1.52 per diluted share, compared to net income of $1.2 million, or $.74 per diluted share, for the nine months ended September 30, 2004. The financial results for the three and nine months ended September 30, 2004, were substantially impacted by both provisions for loan losses and automobile loan expenses recognized with regard to the Company's automobile loan portfolio. Commenting on the results of the Company for the current quarter, Douglas C. Manditch, President and Chief Executive Officer, stated, "current quarter and year to date performance compared to 2004 reflect the effects of our automobile loan portfolio, balance sheet repositioning, and the increasingly unfavorable interest rate environment. The quarter ended September 30, 2004 benefited from aggressive cost cutting and expense control, a restructured branch expansion plan, and a steep yield curve. The quarter ended September 30, 2005 reflects our emphasis on core business growth through an improved asset mix. Loan growth was funded from maturing automobile loans and from market opportunities in which investment securities were liquidated, which reduced our reliance on borrowed funds. The balance sheet repositioning, combined with an emphasis on increasing core deposit funding, improves our overall interest rate risk profile and better positions us to address anticipated increases in short term rates and a continued flattening yield curve." Mr. Manditch continued, "we are excited about opportunities to serve a broader range of clients in new markets with both the establishment of New York Commercial Bank, pending the close of our transaction with New York Community Bancorp, Inc., and the newest addition to the Bank's executive management team, Dennis D. Jurs. Dennis, who joined us this week, comes to us with 30 years of middle market commercial lending experience. Dennis currently serves as our Chief Lending Officer and will spearhead the lending effort for New York Commercial Bank." At September 30, 2005, total assets amounted to $532.8 million, a decrease of $5.1 million, or 1.0%, from the $537.9 million held at September 30, 2004. Taking into consideration $17.7 million of matured automobile loans that were repaid, loans at that date, net of unearned income and deferred fees, increased by $30.6 million, or 14.1%, from the September 30, 2004 level. Year-over-year, the average balance of demand deposits increased $10.7 million, or 11.0%, from $97.7 million for the nine months ended September 30, 2004, to $108.4 million for the nine months ended September 30, 2005. Similarly, the average balance of savings deposits increased by $14.2 million, or 13.5%, from $105.2 million for the nine months ended September 30, 2004, to $119.4 million for the nine months ended September 30, 2005. Automobile Loans As discussed in releases for prior periods, the Company continues to monitor the performance of its automobile loan portfolio. At September 30, 2005, the automobile loan portfolio consisted of 524 loans with balances aggregating $10.4 million. Automobile loans represented 4.0% of the Bank's loan portfolio, net of unearned income and deferred fees. Delinquencies at September 30, 2005, were $21,989. The Company incurred operating expenses relating to the automobile loan portfolio of $96,000 for the quarter ended September 30, 2005, compared to $206,000 for the quarter ended September 30, 2004. Those expenses include expenses for legal services, portfolio servicing and administration, collateral perfection, verification and disposition, and audit and accounting services. While the Company expects to continue to incur operating expenses related to the automobile loan portfolio, it expects those expenses to decrease as the portfolio matures. Operating costs for the automobile loan portfolio are expensed when incurred and recorded in "automobile loan expense" in the consolidated statements of earnings. Supplemental Information On August 1, 2005, the Company and New York Community Bancorp, Inc. ("NYCB") entered into an Agreement and Plan of Merger (the "Merger Agreement") under which the Company will merge with and into NYCB, with NYCB as the surviving entity, in an all-stock transaction valued at approximately $69.8 million. Under the terms of the Merger Agreement, shareholders of the Company will receive 2.32 shares of NYCB common stock for each share of the common stock of the Company held at the closing date. Additional information concerning the Merger Agreement can be found in the Form 8-K filed by the Company on August 3, 2005. On August 24, 2005, the Board of Directors of Long Island Financial Corp. declared a dividend of $.12 per common share. The dividend will be paid on November 16, 2005, to stockholders of record on November 1, 2005. Long Island Financial Corp. has set November 16, 2005, as the date of its Special Meeting of Shareholders to vote on the Company's pending merger with New York Community Bancorp, Inc. (NYSE: NYB). The meeting will start at 12 Noon, Eastern Time, and will be held at Stonebridge Country Club in Smithtown, New York. The voting record date is September 30, 2005, and shareholder proxy materials were mailed on or about October 14, 2005. Long Island Commercial Bank, the wholly-owned subsidiary of Long Island Financial Corp., is a New York state chartered commercial bank, which began operations in January of 1990, and provides commercial and consumer banking services through twelve branch offices, maintaining its headquarters in Islandia. The Bank is an independent local bank emphasizing personal service and responsiveness to the needs of its customers. -0- *T Branch Offices -------------- Suffolk County, N.Y. Nassau County, N.Y. Kings County, N.Y. ------------------- ------------------- ------------------ Islandia Babylon Jericho Westbury Bay Ridge-Brooklyn Central Islip Deer Park Melville Ronkonkoma Shirley Smithtown Hauppauge *T This release may contain certain forward-looking statements, which are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact the Company's earnings in future periods. Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, changes in interest rates, deposit flows, real estate values, and competition; changes in accounting principles, policies, or guidelines; changes in legislation or regulation; and other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products, and services. -0- *T LONG ISLAND FINANCIAL CORP. Consolidated Balance Sheets (Unaudited) (In thousands, except share data) Sept. 30, Dec. 31, Sept. 30, 2005 2004 2004 --------- --------- --------- Assets: Cash and due from banks $ 13,399 $ 10,310 $ 11,547 Interest earning deposits 229 37 45 --------- --------- --------- Total cash and cash equivalents 13,628 10,347 11,592 Securities available-for-sale, at fair value 237,196 278,814 258,821 Federal Home Loan Bank stock, at cost 5,943 4,925 6,372 Loans, held for sale 164 604 786 Loans, net of unearned income and deferred fees 257,676 243,477 244,768 Less allowance for loan losses (3,725) (5,591) (5,794) --------- --------- --------- Loans, net 253,951 237,886 238,974 Premises and equipment, net 5,009 5,422 5,504 Accrued interest receivable 2,882 3,342 2,957 Bank owned life insurance 7,998 7,779 7,712 Deferred tax asset, net 4,180 3,169 2,588 Prepaid expenses and other assets 1,802 2,521 2,580 --------- --------- --------- Total assets $532,753 $554,809 $537,886 --------- --------- --------- Liabilities and Stockholders' Equity: Deposits: Demand deposits $110,374 $ 99,876 $105,324 Savings deposits 104,964 123,142 109,950 NOW and money market deposits 82,341 126,509 85,769 Time deposits, $100,000 or more 15,435 9,863 10,860 Other time deposits 62,703 58,905 61,436 --------- --------- --------- Total deposits 375,817 418,295 373,339 Federal funds purchased and securities sold under agreements to repurchase 47,865 27,500 50,430 Other borrowings 71,000 71,000 76,000 Subordinated debentures 7,732 7,732 7,732 Accrued expenses and other liabilities 3,385 3,245 2,976 --------- --------- --------- Total liabilities $505,799 $527,772 $510,477 --------- --------- --------- Stockholders' equity: Common stock (par value $.01 per share; 10,000,000 shares authorized; 1,881,146, 1,850,378, and 1,846,589 shares issued; 1,544,246, 1,513,478, and 1,509,689 shares outstanding, respectively) 19 19 18 Surplus 22,239 21,590 21,500 Retained earnings 13,285 11,417 10,967 Accumulated other comprehensive loss (4,411) (1,811) (898) Treasury stock at cost, (336,900 shares) (4,178) (4,178) (4,178) --------- --------- --------- Total stockholders' equity 26,954 27,037 27,409 --------- --------- --------- Total liabilities and stockholders' equity $532,753 $554,809 $537,886 --------- --------- --------- *T -0- *T LONG ISLAND FINANCIAL CORP. Consolidated Statements of Earnings (Unaudited) (In thousands, except share data) For the Three Months For the Nine Months Ended September 30, Ended September 30, -------------------- --------------------- 2005 2004 2005 2004 ---------- --------- ---------- --------- Interest income: Loans $ 4,293 $ 4,091 $ 12,314 $ 11,762 Securities 2,682 2,803 8,457 8,107 Federal funds sold and earning deposits 5 1 77 6 ---------- --------- ---------- --------- Total interest income 6,980 6,895 20,848 19,875 ---------- --------- ---------- --------- Interest expense: Savings deposits 529 309 1,440 872 NOW and money market deposits 429 124 1,442 583 Time deposits, $100,000 or more 102 51 273 180 Other time deposits 580 529 1,638 1,770 Borrowed funds 1,089 1,141 2,849 2,778 Subordinated debentures 205 208 620 621 --------- --------- ---------- --------- Total interest expense 2,934 2,362 8,262 6,804 --------- --------- ---------- --------- Net interest income 4,046 4,533 12,586 13,071 --------- --------- ---------- --------- Provision for loan losses 50 75 175 5,575 --------- --------- ---------- --------- Net interest income after provision for loan losses 3,996 4,458 12,411 7,496 --------- --------- ---------- --------- Other operating income: Service charges on deposit accounts 680 572 2,024 1,842 Net gain (loss) on sales and calls of securities 17 (11) 17 2,869 Net gain on sale of residential loans 186 208 469 604 Earnings on bank- owned life insurance 92 85 272 480 Other 170 141 561 404 ---------- --------- ---------- --------- Total other operating income 1,145 995 3,343 6,199 --------- --------- ---------- --------- Other operating expenses: Salaries and employee benefits 2,078 1,771 6,330 5,772 Occupancy expense 348 335 1,032 964 Premises and equipment expense 369 354 1,089 1,120 Automobile loan expense 96 206 350 1,061 Other 1,088 972 3,201 3,132 --------- --------- ---------- --------- Total other operating expenses 3,979 3,638 12,002 12,049 --------- --------- --------- --------- Income before income taxes 1,162 1,815 3,752 1,646 Income taxes 408 664 1,331 471 --------- --------- ---------- --------- Net income $ 754 $ 1,151 2,421 1,175 --------- --------- ---------- --------- Basic earnings per share $ .49 $ .76 $ 1.58 $ .78 --------- --------- ---------- --------- Diluted earnings per share $ .47 $ .73 $ 1.52 $ .74 --------- --------- ---------- --------- Weighted average shares outstanding 1,543,967 1,508,636 1,533,011 1,503,608 --------- --------- ---------- --------- Diluted weighted average shares outstanding 1,610,782 1,580,404 1,597,040 1,583,682 --------- --------- ---------- --------- *T -0- *T LONG ISLAND FINANCIAL CORP. (Unaudited) (In thousands, except share data) September 30, December 31, September 30, 2005 2004 2004 ------------- ------------ ------------- ASSET QUALITY RATIOS AND OTHER DATA ------------------ Non-accrual loans: Commercial and industrial loans $ 200 $ - $ - Automobile loans - 89 69 ------------- ------------ ------------- Total non-accrual loans 200 89 69 ------------- ------------ ------------- Accruing loans contractually past due 90 days or more as to principal or interest payments: Commercial and industrial loans (1) 2,016 - - ------------- ------------ ------------- Total non-performing loans $ 2,216 $ 89 $ 69 Allowance for loan losses $ 3,725 $ 5,591 $ 5,794 Non-performing loans as a percent of total loans, net (2) .86 % .04 % .03 % Non-performing loans as a percent of total assets .42 % .02 % .01 % Allowance for loan losses as a percent of: Non-performing loans 168 % 6,282 % 8,397 % Total loans, net(2) 1.45 % 2.30 % 2.37 % Book value per share $ 17.45 $ 17.86 $ 18.16 Book value per share, as adjusted (3) $ 20.31 $ 19.06 $ 18.75 Shares outstanding 1,544,246 1,513,478 1,509,689 Full service offices 12 12 12 *T -0- *T For the Three Months For the Nine Months Ended September 30, Ended September 30, ------------------- -------------------- 2005 2004 2005 2004 ---------- --------- --------- --------- Interest rate spread 2.47% 3.00% 2.65% 2.99% Net interest margin 3.14% 3.45% 3.21% 3.39% (1) These loans have matured. The Bank is in the process of renewing these obligations and/or awaiting repayment. (2) Loans include loans, net of unearned income and deferred fees. (3) Excludes net unrealized depreciation/appreciation in available-for-sale securities, net of tax. *T