<PAGE>
                                  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 September 30, 2000
                                       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 the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

The registrant had 1,509,426  shares of Common Stock  outstanding as of November
10, 2000.



<PAGE>
                                    Form 10-Q
                           LONG ISLAND FINANCIAL CORP.

                                      INDEX

                                                                           Page
PART I   FINANCIAL INFORMATION                                            Number

ITEM 1.  Consolidated Financial Statements - Unaudited
              Consolidated Balance Sheets at September 30, 2000
                   and December 31, 1999                                     2
              Consolidated Statements of Earnings for the Three Months
                   and Nine Months Ended September 30, 2000 and 1999         3
              Consolidated Statement of Changes in Stockholders' Equity
                   for the Nine Months Ended September 30, 2000              4
              Consolidated Statements of Cash Flows for the Nine Months
                   Ended September 30, 2000 and 1999                         5
         Notes to Consolidated Financial Statements                          7

ITEM 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations                           10

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk         21

PART II  OTHER INFORMATION

ITEM 1.  Legal Proceedings                                                  23
ITEM 2.  Changes in Securities and Use of Proceeds                          23
ITEM 3.  Defaults Upon Senior Securities                                    23
ITEM 4.  Submission of Matters to a Vote of Security Holders                23
ITEM 5.  Other Information                                                  23
ITEM 6.  Exhibits and Reports on Form 8-K                                   23

         Signatures                                                         24

================================================================================
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
<PAGE>
<TABLE>
<CAPTION>

Part 1 - FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements (Unaudited)
------------------------------------------------------


                           LONG ISLAND FINANCIAL CORP.
                           Consolidated Balance Sheets
                        (In thousands, except share data)

                                                     September 30,  December 31,
                                                          2000          1999
                                                     -------------  ------------
<S>                                                     <C>           <C>

Cash and due from banks................................ $  6,724        9,301
Interest earning deposits..............................      118          204
Federal funds sold.....................................    5,000       18,300
                                                         -------      -------
     Total cash and cash equivalents...................   11,842       27,805

Securities held-to-maturity
     (fair value of $311 and $338, respectively) ......      327          341
Securities available-for-sale, at fair value...........  124,252      169,808
Loans, net of unearned income and deferred fees........  134,833      121,311
Less allowance for loan losses.........................   (1,875)      (1,475)
                                                         -------      -------
     Total loans, net..................................  132,958      119,836
Premises and equipment, net............................    1,867        2,089
Accrued interest receivable............................    2,453        2,062
Bank owned life insurance..............................    6,128        5,921
Prepaid expenses and other assets......................    3,644        3,192
                                                         -------      -------
     Total assets...................................... $283,471      331,054
                                                         =======      =======

Liabilities and Stockholders' Equity:

Deposits:
    Demand deposits.................................... $ 44,161       36,191
    Savings deposits...................................   32,717       28,444
    NOW and money market deposits......................   29,226      103,126
    Time certificates issued in excess of $100,000.....   31,531       18,242
    Other time deposits................................   77,078       83,737
                                                         -------      -------
         Total deposits................................  214,713      269,740

Borrowed funds.........................................   39,000       39,500
Accrued expenses and other liabilities.................    3,506        3,471
                                                         -------      -------
         Total liabilities.............................  257,219      312,711
                                                         -------      -------

Guaranteed preferred beneficial interest in
     junior subordinated debentures....................    7,500            -

Stockholders' equity:
    Common stock (par value $.01 per share; 10,000,000
    shares, authorized; 1,776,326 shares issued;
    1,550,826 and 1,646,326 outstanding, respectively).       18           18
    Surplus............................................   20,185       20,185
    Accumulated surplus................................    3,680        2,587
    Accumulated other comprehensive loss...............   (2,449)      (2,984)
    Treasury stock, at cost............................   (2,682)      (1,463)
                                                         -------      -------
              Total stockholders' equity...............   18,752       18,343
                                                         -------      -------
    Total liabilities and stockholders' equity......... $283,471      331,054
                                                         =======      =======

See accompanying notes to consolidated financial statements.
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                                        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,
                                                         --------------------        -------------------
                                                           2000         1999           2000        1999
                                                           ----         ----           ----        ----
<S>                                                     <C>         <C>            <C>         <C>
Interest income:
     Loans                                              $   3,047       2,364          8,680       6,591
     Securities                                             2,054       2,178          7,082       6,860
     Federal funds sold                                         4          36             19         296
     Earning deposits                                           4           4             12           8
                                                            -----       -----          -----       -----
         Total interest income                              5,109       4,582         15,793      13,755
                                                            -----       -----          -----       -----

Interest expense:
     Savings deposits                                   $     294         224            839         526
     NOW and money market deposits                            174         192            824         806
     Time certificates issued in
          excess of $100,000                                  485         298          1,042         955
     Other time deposits                                    1,214       1,087          3,670       3,334
     Borrowed funds                                           548         520          2,031       1,465
                                                            -----       -----          -----       -----
         Total interest expense                             2,715       2,321          8,406       7,086
                                                            -----       -----          -----       -----

         Net interest income                                2,394       2,261          7,387       6,669

Provision for loan losses                                       -         150            150         450
                                                            -----       -----          -----       -----

         Net interest income after provision
         for loan losses                                    2,394       2,111          7,237       6,219
                                                            -----       -----          -----       -----

Other operating income:
     Service charges on deposit accounts                $     218         166            639         476
     Net gain on sale of securities                             -           -              -          88
     Net gain on sale of residential loans                     84         114            183         439
     Other                                                    141         135            428         325
                                                            -----       -----          -----       -----
         Total other operating income                         443         415          1,250       1,328

Other operating expenses:
     Salaries and employee benefits                           998         962          3,084       2,903
     Occupancy expense                                        168         135            444         415
     Premises and equipment expense                           210         186            602         535
     Capital trust securities                                  54           -             54           -
     Other                                                    695         642          2,085       1,810
                                                            -----       -----          -----       -----
         Total other operating expenses                     2,125       1,925          6,269       5,663

         Income before income taxes                           712         601          2,218       1,884

Income taxes                                                  237         220            742         672
                                                            -----       -----          -----       -----

         Net income                                     $     475         381          1,476       1,212
                                                            =====       =====          =====       =====
         Basic and diluted earnings per share           $    0.30        0.22           0.91        0.68
                                                            =====       =====          =====       =====

Weighted average shares outstanding                     1,596,201   1,758,364      1,627,160   1,770,163

See accompanying notes to unaudited consolidated financial statements.

</TABLE>

                                                         3
<PAGE>
<TABLE>
<CAPTION>
                                                  LONG ISLAND FINANCIAL CORP.
                                   Consolidated Statement of Changes in Stockholders' Equity
                                         For the Nine Months Ended September 30, 2000
                                                          (Unaudited)
                                               (In thousands, except share data)

                                                                                          Accumulated
                                                                                             Other
                                                 Common                  Accumulated     Comprehensive     Treasury
                                                 Stock       Surplus        Surplus      (Loss)/Income       Stock      Total
                                                 ------      -------     -----------     -------------     --------     -----

<S>                                              <C>          <C>           <C>             <C>             <C>        <C>
Balance at December 31, 1999                     $    18      20,185         2,587          (2,984)         (1,463)    18,343

Comprehensive income:
     Net income                                        -           -         1,476               -               -      1,476
         Other comprehensive income (loss),
               net of tax:
         Unrealized gain in available-
              for-sale securities, net of
              reclassification adjustment              -           -             -             535               -        535
                                                  ------      ------        ------          ------          ------     ------

Total comprehensive income                             -           -         1,476             535               -      2,011

Common stock repurchased (95,500 shares)               -           -             -               -          (1,219)    (1,219)

Dividends declared  ($.24 per common share)            -           -          (383)              -               -       (383)
                                                  ------      ------        ------          ------          ------     ------


Balance at September 30, 2000                    $    18      20,185         3,680          (2,449)         (2,682)    18,752
                                                  ======      ======        ======          ======          ======     ======


See accompanying notes to unaudited consolidated financial statements.

</TABLE>

                                                               4
<PAGE>
<TABLE>
<CAPTION>

                                            LONG ISLAND FINANCIAL CORP.
                                       Consolidated Statements of Cash Flows
                                                    (Unaudited)
                                                  (In thousands)

                                                                             For the Nine Months
                                                                             Ended September 30,
                                                                             -------------------
                                                                             2000           1999
                                                                             ----           ----
<S>                                                                       <C>            <C>
Cash flows from operating activities:
     Net income                                                           $  1,476          1,212
     Adjustments to reconcile net income to net cash
         provided by operating activities:
              Provision for loan losses                                        150            450
              Depreciation and amortization                                    452            427
              Gain on sale of securities                                         -            (88)
              Amortization of premiums, net of discount accretion             (831)           (65)
              Loans originated for sale, net of proceeds
                  from sales and gains                                         583          1,297
              Net deferred loan origination fees                                39            102
              Deferred income taxes                                            (49)           (27)
              Changes in assets and liability account:                        (391)          (587)
                  Accrued expenses and other liabilities                        35            534
                  Prepaid expenses and other assets                           (990)           405
                                                                           -------        -------

     Net cash provided by operating activities                                 474          3,660
                                                                           -------        -------

Cash flows from investing activities:
     Purchases of securities available-for-sale                           (347,070)      (226,838)
     Proceeds from sales of securities available-for-sale                        -         12,777
     Proceeds from maturities of securities                                389,600        211,695
     Principal repayments on securities                                      4,786         11,844
     Loan originations net of principal repayments                         (13,894)       (15,863)
     Purchase of premises and equipment                                       (230)          (663)
     Purchase of bank owned life insurance                                       -         (5,715)
                                                                           -------        -------
         Net cash provided by (used in) investing activities                33,192        (12,763)

Cash flows from financing activities:
     Net decrease in demand deposit, savings,  NOW,
         and money market accounts                                         (61,657)       (25,732)
     Net increase in certificates of deposit                                 6,630          5,302
     Net increase in borrowed funds                                           (500)        15,370
     Payments for cash dividends                                              (383)          (425)
     Purchase of treasury stock                                             (1,219)          (370)
     Corporate reorganization costs                                              -           (115)
     Issuance of junior subordinated debt                                    7,500              -
     Proceeds from shares issued under the dividend
         reinvestment and stock purchase plan                                    -             59
                                                                           -------        -------
         Net cash used in financing activities                             (49,629)        (5,911)
                                                                           -------        -------

         Net decrease in cash and cash equivalents                         (15,963)       (15,014)

Cash and cash equivalents at beginning of period                            27,805         21,489
                                                                           -------        -------
Cash and cash equivalents at end of period                                  11,842          6,475
                                                                           =======        =======
</TABLE>
                                                    (Continued)

                                                         5
<PAGE>
                           LONG ISLAND FINANCIAL CORP.
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
                                 (In thousands)

                                                             For the Nine Months
                                                             Ended September 30,
                                                             -------------------
                                                               2000       1999
                                                               ----       ----

Supplemental disclosure of cash flow information

Cash paid during the period for:
     Interest                                                $8,252      7,392
                                                              =====      =====
     Income taxes                                            $1,395          -
                                                              =====      =====


See accompanying notes to consolidated financial statements.


                                        6
<PAGE>
                           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,  LIF Statutory  Trust I  and  Long Island  Commercial  Bank   (the
"Bank"), and its subsidiary, Long  Island  Commercial  Capital Corporation.  All
significant  intercompany  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 nine month period ended
September 30, 2000 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 generally  accepted  accounting  principles  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 1999 Annual Report on Form 10-K.

2.  REORGANIZATION

At a special  meeting on  December  8, 1998,  the  stockholders  of Long  Island
Commercial  Bank approved a Plan of Acquisition  dated as of September 15, 1998,
which subsequently  became effective January 28, 1999, and as a result of which:
(i) the Bank became a wholly-owned  subsidiary of Long Island Financial Corp., a
Delaware  corporation;  and (ii) all of the  outstanding  shares  of the  Bank's
common stock were  converted,  subject to dissenter's  rights,  on a one-for-one
basis,  into  outstanding  shares of the common  stock of Long Island  Financial
Corp.  No  stockholder   asserted   dissenter's   rights.  This  transaction  is
hereinafter referred to as the "Reorganization."

The  Reorganization  created a bank holding  company  structure  which  provides
greater operating flexibility by allowing the Company to conduct a broader range
of business  activities  and permits  the Board of  Directors  of the Company to
determine  whether  to  conduct  such  activities  in the  Bank  or in  separate
subsidiaries of the Company.  Finally,  the reorganization will permit expansion
into a broader range of financial  services and other business  activities  that
are not currently permitted to the Bank as a New York state-chartered commercial
bank. Such  activities  include,  among others,  operating  non-bank  depository
institutions  or  engaging  in  financial  and  investment   advisory  services,
securities brokerage and management consulting activities.


                                        7
<PAGE>
<TABLE>
<CAPTION>

3.  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:


                                                                 September 30, 2000                December 31, 1999
                                                             --------------------------        -------------------------
                                                             Amortized            Fair         Amortized           Fair
                                                                Cost              Value           Cost             Value
                                                             ---------            -----        ---------           -----
                                                                                    (In thousands)
<S>                                                          <C>                  <C>           <C>               <C>
Held-to-maturity:
Mortgage-backed securities:
     CMO                                                     $     327               311             341              338
                                                              ========           =======         =======          =======

Available-for-sale:
U.S. Government and Agency Obligations                       $  77,514            74,520         122,423          118,907
     Mortgage-backed securities:
          GNMA                                                  37,987            36,834          41,136           39,580
          FHLMC                                                  1,101             1,121           1,350            1,369
          FNMA                                                   5,347             5,311           3,599            3,571
Municipal obligations                                            1,167             1,140           1,166            1,143
Other debt securities                                                -                 -              92               91
                                                              --------           -------         -------          -------

      Total debt securities                                    123,116           118,926         169,766          164,661

Equity securities - FHLB stock                                   5,326             5,326           5,147            5,147
                                                              --------           -------         -------          -------

      Total securities available-for-sale                    $ 128,442           124,252         174,913          169,808
                                                              ========           =======         =======          =======

</TABLE>

<TABLE>
<CAPTION>

4.  LOANS, NET

Loans, net consists of the following as of the dates indicated:

                                                                      September 30, 2000        December 31, 1999
                                                                      ------------------        -----------------
                                                                                 (Dollars in thousands)
<S>                                                                   <C>         <C>           <C>        <C>

Commercial and industrial loans                                       $ 40,268     29.7%        $ 34,057    27.9%
Commercial real estate loans                                            93,609     69.1           84,133    69.0
Automobile loans                                                           121       .1            1,463     1.2
Consumer loans                                                           1,032       .8            1,250     1.0
Residential real estate loans held-for-sale                                436       .3            1,019     0.9
                                                                       -------    -----          -------   -----
                                                                       135,466    100.0          121,922   100.0
Less:
    Unearned income                                                         25                        42
    Deferred fees, net                                                     608                       569
    Allowance for loan losses                                           1, 875                     1,475
                                                                       -------                   -------
                                                                      $132,958                  $119,836
                                                                       =======                   =======
</TABLE>

                                                           8
<PAGE>

5.  GUARANTEED PREFERRED BENEFICIAL INTEREST IN JUNIOR SUBORDINATED DEBENTURES

On September 7, 2000,  LIF Statutory Trust I, a wholly-owned finance  subsidiary
of the  Company,  issued  $7.5  million  aggregate  liquidation amount of 10.60%
Capital  Securities  due  September 7, 2030, referred  to as Capital Securities.
The Company has fully and  unconditionally  guaranteed  the  Capital  Securities
along with all obligations  of  LIF Statutory Trust I under the trust agreement.
Long Island Financial  Statutory Trust I was formed for the exclusive purpose of
issuing the Capital  Securities  and common securities and using the proceeds to
acquire an aggregate principal amount of $7.7 million of  the  Company's  10.60%
Junior  Subordinated  Debentures   due  September 7, 2030  referred  to  as  the
Company's Junior  Subordinated  Debentures.  The Junior Subordinated  Debentures
are prepayable,  in whole  or  in  part, at the Company's  option  on  or  after
September  7,  2010  at  declining   premiums  to  maturity.  Proceeds  totaling
approximately  $7.2  million  are  being  used  for general  corporate  purposes
including the repurchase of common stock.

The balance  outstanding on the Capital Securities was $7.5 million at September
30, 2000. The costs  associated with the Capital  Securities  issuance have been
capitalized and are being amortized using the interest method over  a period  of
thirty  years.   Distributions   on  the  Capital Securities  are  payable semi-
annually  beginning  March 7, 2001 and   are   reflected  in  the   Consolidated
Statements of Earnings as a component of non-interest  expense under the caption
"Capital trust securities."


6.  RECENT DEVELOPMENTS

On August 29, 2000 the Board of  Directors  of the Company  declared a quarterly
dividend  of eight cents  ($0.08) per common  share.  The  dividend  was paid on
October 2, 2000, to shareholders' of record as of September 22, 2000.

On September 1, 2000, the Company announced an extension of the stock repurchase
program  which  enables  the Company to  repurchase  an  additional  10% of it's
outstanding  common stock or  approximately  160,000  shares.  Repurchases  will
continue to be made in the open market,  from time to time,  depending on market
conditions  and subject to compliance  with  applicable  securities  laws. As of
September 30, 2000,  225,500  shares had been  repurchased  by the Company at an
aggregate cost of $2.7 million.


                                        9
<PAGE>

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.

Financial Condition

The  Company's  total  assets  were $283.5  million as of  September  30,  2000,
compared to $331.1  million at December 31,  1999.  The decline in cash and cash
equivalents of $16.0 million,  or 57.4%, was attributable to seasonal  municipal
deposits which were not on deposit at September 30, 2000. Loans, net,  increased
$13.1  million,  or 11.0%,  from $119.8  million at December 31, 1999, to $133.0
million at September 30, 2000, reflecting a $15.7 million increase in commercial
real  estate  and  commercial  and  industrial  loans,  offset in part by a $1.3
million decrease in the automobile loan portfolio. Securities available-for-sale
decreased  $45.6  million or 26.8% as a portion of the  proceeds of the maturing
short term U.S.  Government  and agency  obligations  purchased in December 1999
were used to pay the maturing seasonal municipal deposits.

Total  deposits  decreased  $55.0  million,  or 20.4%,  from  $269.7  million at
December 31, 1999 to $214.7 million at September 30, 2000,  primarily reflecting
a decrease  in NOW and money  market  deposits.  The  decrease  in NOW and money
market deposits of $73.9 million,  or 71.7%, from $103.1 million at December 31,
1999 to $29.2 million at September 30, 2000,  is  attributable  to the timing of
seasonal municipal deposits which were not on deposit at September 30, 2000. The
effects  of those  declines  were  offset  in part by a $8.0  million,  or 22.0%
increase in core demand deposits and a $4.3 million, or 15.0%,  increase in core
savings deposits from December 31, 1999 to September 30, 2000.

Total stockholders'  equity increased $409,000 to $18.8 million at September 30,
2000  primarily due to a $535,000  decrease in accumulated  other  comprehensive
loss on  securities  available-for-sale  and net income of $1.5  million for the
nine months ended  September  30, 2000.  Offsetting  these events were dividends
declared of $383,000, and $1.2 million  employed to  repurchase 95,500 shares of
common stock.


                                       10
<PAGE>

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 nine months ended  September  30,  2000, and 1999,  and
reflects  the  average  yield on  interest-earning  assets and  average  cost of
interest-bearing  liabilities for the periods  indicated.  Such yields and costs
are derived by dividing income or expense, annualized, by the average balance of
interest-earning assets or  interest-bearing liabilities,  respectively. Average
balances are derived from average daily  balances.  Average  balances and yields
include non-accrual loans although they are not material.


                                       11
<PAGE>
<TABLE>
<CAPTION>

                                                                 Three Months Ended September 30,
                                             ------------------------------------------------------------------------
                                                            2000                                    1999
                                             --------------------------------        --------------------------------
                                                                      Average                                 Average
                                             Average                  Yield /        Average                  Yield /
                                             Interest       Cost      Balance        Interest       Cost      Balance
                                             --------       ----      -------        --------       ----      -------
                                                                      (Dollars in thousands)
<S>                                          <C>           <C>         <C>           <C>           <C>         <C>

Interest earning assets:
     Federal funds sold and
         interest-earning deposits           $    582      $    8       5.50%        $  3,150      $   40      5.08%
     Securities held-to-maturity and
         available-for-sale, net (1)          127,083       2,042       6.43          137,164       2,166      6.32
     Municipal obligations (2)                  1,167          17       5.83            1,166          17      5.83
     Loans receivable, net (3)                132,247       3,047       9.22          104,675       2,364      9.03
                                              -------       -----       ----          -------       -----      ----
         Total interest-earning assets        261,079       5,114       7.84          246,155       4,587      7.45
Non-interest-earning assets (4)                16,649                                  15,066
                                              -------                                 -------
Total assets                                 $277,728                                $261,221
                                              =======                                 =======


Interest-bearing liabilities:
     Savings deposits                        $ 31,741      $  294       3.70         $ 25,960      $  224      3.45
     NOW and money market deposits             29,821         174       2.33           36,235         192      2.12
     Certificates of deposit                  107,807       1,699       6.30          101,027       1,385      5.48
                                              -------       -----       ----          -------       -----      ----
         Total interest-bearing deposits      169,369       2,167       5.12          163,222       1,801      4.41
     Borrowed funds                            42,760         548       5.13           41,662         520      4.99
                                              -------       -----       ----          -------       -----      ----
         Total interest-bearing liabilities   212,129       2,715       5.12          204,884       2,321      4.53
Other non-interest bearing liabilities         47,209                                  36,602
                                              -------                                 -------
Total liabilities                             259,338                                 241,486
Stockholders' Equity                           18,390                                  19,735
                                              -------                                 -------
Total liabilities and
     stockholders' equity                    $277,728                                $261,221
                                              =======                                 =======

Net interest income/
     interest rate spread (5)                              %2,399       2.72%                      $2,266      2.92%
                                                            =====       ====                        =====      ====

Net interest margin (6)                                                 3.68%                                  3.68%
                                                                        ====                                   ====

Ratio of interest-earning assets to
     interest-bearing liabilities                                       1.23                                   1.20
                                                                        ====

(1) Securities, net excludes municipal obligations.
(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 and
    includes non-performing loans.
(4) Unrealized gains/(losses) on available-for-sale securities are recorded in other assets.
(5) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of
    interest-bearing liabilities.
(6) Net interest margin represents net interest income divided by average interest-earning assets.

</TABLE>

                                                          12
<PAGE>
<TABLE>
<CAPTION>

                                                                   Nine Months Ended September 30,
                                              ------------------------------------------------------------------------
                                                            2000                                     1999
                                              --------------------------------         -------------------------------
                                                                       Average                                 Average
                                              Average                  Yield /         Average                 Yield /
                                              Balance     Interest      Cost           Balance     Interest     Cost
                                              -------     --------     -------         -------     --------    -------
                                                                        (Dollars in thousands)
<S>                                          <C>           <C>          <C>           <C>           <C>          <C>
 Interest earning assets:
     Federal funds sold and
       interest-earning deposits             $    679    $     31       6.09%         $  8,536      $   304      4.75%
     Securities , net (1)                     149,471       7,046       6.29           144,533        6,682      6.16
     Municipal obligations (2)                  1,167          51       5.83             5,490          251      6.10
     Loans receivable, net (3)                128,165       8,680       9.03           100,821        6,591      8.72
                                              -------      ------       ----           -------       ------      ----
       Total interest-earning assets          279,482      15,808       7.54           259,380       13,828      7.11
Non-interest-earning assets (4)                17,438                                   17,517
                                              -------                                  -------
Total assets                                  296,920                                 $276,897
                                              =======                                  =======



Interest-bearing liabilities:
     Savings deposits                        $ 30,434     $   839       3.68          $ 21,530      $   526      3.26
     NOW and money market deposits             47,824         824       2.30            54,799          806      1.96
     Certificates of deposit                  104,983       4,712       5.98           104,007        4,289      5.50
                                              -------      ------       ----           -------       ------      ----
       Total interest-bearing deposits        183,241       6,375       4.64           180,336        5,621      4.16
     Borrowed funds                            51,891       2,031       5.22            39,791        1,465      4.91
                                              -------      ------       ----           -------       ------      ----
       Total interest-bearing liabilities     235,132       8,406       4.77           220,127        7,086      4.29
Other non-interest bearing liabilities         43,704                                   35,912
                                              -------                                  -------
Total liabilities                             278,836                                  256,039
Stockholders' Equity                           18,084                                   20,858
Total liabilities and
     stockholders' equity                     296,920                                 $276,897
                                              =======                                  =======

Net interest income/
     interest rate spread (5)                             $ 7,402       2.77%                       $ 6,742      2.82%
                                                           ======       ====                         ======      ====

Net interest margin (6)                                                 3.53%                                    3.47%
                                                                        ====                                     ====

Ratio of interest-earning assets to
     interest-bearing liabilities                                       1.19                                     1.18
                                                                        ====                                     ====


(1) Securities, net excludes municipal obligations.
(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 and
    includes non-performing loans.
(4) Unrealized gains/(losses) on available-for-sale securities  are  recorded in other assets.
(5) Net interest  rate spread  represents  the difference  between the yield on interest-earning assets and  the cost
    of interest-bearing liabilities.
(6) Net interest margin represents net interest income divided by average interest-earning assets.

</TABLE>

                                                          13
<PAGE>

Comparison of Operating Results for the
Three Months Ended September 30, 2000 and 1999

General

The Company  reported net income of $475,000,  or basic and diluted earnings per
share of $.30 for the quarter ended September 30, 2000, compared to $381,000, or
basic and  diluted  earnings  per share of $.22 for the prior year  period.  The
increase in net income was attributable primarily to an increase in net interest
income after provision for loan losses of $283,000,  or 13.4%, which was  offset
in part by increases in other operating expenses of $200,000, or 10.4%.

Interest Income

Interest income, on a fully-taxable  equivalent  basis,  increased  527,000,  or
11.5%,  from $4.6 million for the three months ended September 30, 1999, to $5.1
million  for the three  months  ended  September  30,  2000.  The  increase  was
attributable  to an increase in the  average  balance of total  interest-earning
assets of $14.9 million, or 6.1%, from $246.2 million for the three months ended
September 30, 1999, to $261.1  million for the three months ended  September 30,
2000.  The  average  balance  of  securities,   net,   (exclusive  of  municipal
obligations)  decreased  $10.1  million, or 7.4%, but returned an 11 basis point
increase in the average yield to 6.43% for the three months ended  September 30,
2000,  compared to 6.32% for the 1999 period. The average balance of loans, net,
increased $27.6 million, or 26.3% from $104.7 million for the three months ended
September 30, 1999, to $132.2 million for the 2000 period.  The average yield on
loans receivable, net, increased 19 basis points from 9.03% for the 1999 period,
to 9.22% for the three months ended  September  30, 2000.  The average  yield on
total  interest-earning  assets  increased from 7.45% for the three months ended
September 30, 1999, to 7.84% for the three months ended  September 30, 2000 as a
result of increased rates available in the market.

Interest Expense

Interest expense increased  $394,000,  or 17.0%, from $2.3 million for the three
months  ended  September  30,  1999,  to $2.7 million for the three months ended
September 30, 2000,  primarily as a result of a $7.2 million or 3.5% increase in
the average balance of total  interest-bearing  liabilities  from $204.9 million
for the 1999 period to $212.1  million for the three months ended  September 30,
2000.  The increased  interest  expense  resulted  from increases  in short-term
market rates resulting  in  higher  funding  costs.  The  average  rate  paid on
interest-bearing deposits increased 71 basis points from 4.41% paid for the 1999
period to 5.12% paid for the three months ended  September 30, 2000. The average
balance of savings deposits increased by $5.8 million, or 22.3%, and the average
balance of NOW and money market  deposits  decreased by $6.4  million,  or 17.7%
from period to period.  The average balance of certificates of deposit increased
$6.8  million  as  the  Company  utilized  over  $100,000  time  deposits  as an
alternative  funding  source.  The average cost of borrowed  funds  increased 14
basis points from 4.99% for the 1999 period, to 5.13% for the three months ended
September 30, 2000, due to higher market interest rates on overnight borrowings.



                                       14
<PAGE>

Net Interest Income

Net interest income on a fully-taxable  equivalent  basis increased by $133,000,
or 5.9%,  from $2.3 million for  the three months  ended  September 30, 1999, to
$2.4 million for the three  months  ended September 30,  2000.  The average cost
of total interest-bearing liabilities  for the period  increased 59 basis points
from 4.53% in the 1999 period to 5.12% in the 2000  period.  The  average  yield
on total interest-earning  assets for the period  increased 39 basis points from
7.45% in the 1999 period  to 7.84% in the 2000  period.  The net  interest  rate
spread decreased  by 20 basis points from 2.92% in the 1999 period,  to 2.72% in
the 2000 period.

Provision for Loan Losses

The  Company made no  provision  for loan  losses  for the  three  months  ended
September 30 2000,  compared to a $150,000  provision for the three month period
ended  September  30, 1999.  The absence of a provision  for loan losses for the
three months ended  September 30, 2000  reflects  management's  qualitative  and
quantitative assessment of the loan portfolio, net charge-offs and recoveries of
charged-off loans.  At September 30, 2000 and  December 31, 1999, the  allowance
for loan  losses  amounted  to $1.9  million  and $1.5  million,  respectively.
The  increase  in  the  allowance  for loan  losses  at September  30, 2000  was
primarily  attributable  to the  Company  successfully  recovering $397,000 on a
commercial and industrial  loan previously charged  off. The  allowance for loan
losses as a percentage  of loans  was  1.40%  and  1.22% at  September  30, 2000
and December 31, 1999, respectively.

The  determination of the amount of the allowance for loan losses is based on an
analysis of the loan  portfolio  and reflects an amount which,  in  management's
judgement  is  adequate  to provide for  probable  loan  losses in the  existing
portfolio.  This  analysis  considers,  among  other  things,  present and known
inherent  risks in the  portfolio,  adverse  situations  which  may  affect  the
borrower's  ability  to  repay,  overall  portfolio  quality,  and  current  and
prospective economic conditions.  While management uses available information to
provide for loan  losses,  future  additions to the  allowance  may be necessary
based on  changes  in  economic  conditions.  In  addition,  various  regulatory
agencies,  as an integral part of the examination  process,  periodically review
the Companys  allowance for loan losses.  Such agencies may require the Company
to  recognize   additions  to  the  allowance  based  upon  their  judgement  of
information available to them at the time of their examination.

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.





                                       15
<PAGE>
                                                  September 30,     December 31,
                                                      2000              1999
                                                  -------------     ------------
                                                           (In thousands)
Non-accrual loans:
     Commercial and industrial loans                $  384                 42
     Automobile loans                                    -                 32
     Consumer loans                                     50                105
                                                     -----              -----

         Total non-accrual loans                       434                179

     Loans contractually past due 90 days or
     more, other than non-accruing(2)                    -                  -
                                                     -----              -----
        Total non-performing loans                  $  434                179
                                                     -----              -----

Allowance for loan losses as a percentage
     of loans (1)                                     1.39%              1.22%
Allowance for loan losses as a percentage
     of total non-performing loans                  432.03%            824.02%
Non-performing loans as a percentage of loans(1)       .32%               .15%


(1) Loans include loans receivable, net excluding the allowance for loan losses.
(2) Excludes  $231,000  of loans at  December  31,  1999,  which  have  matured,
    however,  are  current  with  respect to scheduled periodic principal and/or
    interest payments. The Company is in the process of renewing these obliga-
    tions  and/or  awaiting  anticipated  repayment.  There were  no loans  con-
    tractually  past  due  more  than  90  days in a matured status at September
    30, 2000.

Other Operating Income

Other operating  income  increased  $28,000,  or 6.7%, to $443,000 for the three
months ended September 30, 2000.  Service charges on deposit accounts  increased
$52,000,  or 31.3%,  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.  Offsetting this increase in other operating income
was a decrease in net gain on sale of residential  loans which decreased $30,000
or 26.3%. This decrease was a result of overall decrease in residential mortgage
loan production.  Higher market interest rates have resulted in an industry wide
slowdown in residential lending.

Other Operating Expense

Other operating expenses increased $200,000, or 10.4%, from $1.9 million for the
three months ended September 30, 1999, to $2.1 million in the three months ended
September 30, 2000.  Increases in salaries and employee  benefits,  premises and
equipment  expense,  and other expense for the three months ended  September 30,
2000 are a result of the Bank's  overall  growth and included $54,000 of expense
related to the issuance of $7.5 million of capital securities.

Income Taxes

Income taxes  increased  $17,000,  or 7.7%,  from  $220,000 for the three months
ended  September 30, 1999, to $237,000 for the three months ended  September 30,
2000, as a result of the increase in income before income taxes.

                                       16
<PAGE>

The effective tax rate for the three months ended  September 30, 2000 was 33.3%,
compared to 36.6% for the three months ended September 30, 1999.

Comparison of Operating Results for the
Nine Months Ended September 30, 2000 and 1999

General

The Company  reported net income of $1.5 million,  or basic and diluted earnings
per share of $.91 for the nine months ended September 30, 2000, compared to $1.2
million,  or basic and  diluted  earnings  of $.68 per share for the prior  year
period. The increase in net income was attributable  primarily to an increase in
net interest income after  provision for loan losses of $1.0 million,  or 16.4%,
which was offset in part by increases in other  operating  expenses of $606,000,
or 10.7%.

Interest Income

Interest income, on a fully-taxable equivalent basis, increased $2.0 million, or
14.3 %, from $13.8  million for the nine months ended  September  30,  1999,  to
$15.8  million for the nine months ended  September  30, 2000.  The increase was
attributable  to an increase in the  average  balance of total  interest-earning
assets of $20.1 million,  or 7.8%, from $259.4 million for the nine months ended
September  30, 1999, to $279.5  million for the nine months ended  September 30,
2000.  The  average  balance  of  securities,   net,   (exclusive  of  municipal
obligations)  increased  $4.9  million,  or 3.4%,  and returned a 13 basis point
increase in the average  yield to 6.29% for the nine months ended  September 30,
2000,  compared to 6.16 % for the 1999 period.  The $4.3 million  decline in the
average balance of municipal obligations for the nine months ended September 30,
2000 from $5.5 million for the comparable  prior year period,  resulted from the
sale of approximately  $11.8 million in municipal  obligations during the second
quarter of 1999.  The proceeds from that sale were  reinvested in higher earning
assets,  primarily bank owned life insurance and available-for-sale  securities.
The average balance of loans, net, increased $27.3 million, or 27.1% from $100.8
million for the nine months ended  September 30, 1999, to $128.2 million for the
2000 period.  The average  yield on loans  receivable,  net,  increased 31 basis
points  from  8.72%  for the 1999  period,  to 9.03% for the nine  months  ended
September 30, 2000. The average yield on interest-earning  assets increased from
7.11% for the nine months ended September 30, 1999, to 7.54% for the nine months
ended September 30, 2000, as  a result  of increased interest rates available in
the market.

Interest Expense

Interest  expense  increased $1.3 million,  or 18.6%,  from $7.1 million for the
nine months ended  September 30, 1999, to $8.4 million for the nine months ended
September 30, 2000, primarily as a result of a $15.0 million or 6.8% increase in
the average balance of total  interest-bearing  liabilities  from $220.1 million
for the 1999 period to $235.1  million for the nine months ended  September  30,
2000. The increased interest expense resulted from an increase of $12.1 million,
or 30.4% in the average  balance of  borrowed  funds.  The average  rate paid on
interest-bearing deposits increased 48 basis points from 4.16% paid for the 1999
period to 4.64% paid for the nine month period  ended  September  30, 2000.  The
average balance of savings deposits increased by $8.9 million, or 41.4%, and the
average balance of NOW and money market deposits  decreased by $7.0 million,  or
12.7% from period to period.  The  average  balance of  certificates  of deposit
increased  $1.0  million as the Company  utilizes  certificates  of deposit over
$100,000 as a funding source when necessary.  The average cost of borrowed funds
increased 31 basis points from 4.91% for the 1999 period, to 5.22% for the  nine
months ended September 30, 2000, due to higher market short term interest rates.

                                       17
<PAGE>

Net Interest Income

Net interest income on a fully-taxable  equivalent  basis increased by $660,000,
or 9.8%, from $6.7 million for the nine months ended September 30, 1999, to $7.4
million for the nine months ended  September 30, 2000. The average cost of total
interest-bearing liabilities for the period increased 48 basis points from 4.29%
in  the1999  period  to  4.77%  in  the  2000  period.   The  average  yield  on
interest-earning  assets for the period  increased  43 basis point from 7.11% in
the 1999  period  to 7.54% in the 2000  period.  The net  interest  rate  spread
decreased by 5 basis points from 2.82% in the 1999 period,  to 2.78% in the 2000
period.

Provision for Loan Losses

The  Company's  provision for loan losses was $150,000 for the nine months ended
September  30, 2000 as compared to $450,000 for the nine months ended  September
30,  1999.  The  provision  for loan  losses  is based on  analysis  of the loan
portfolio and reflects an amount which, in management's judgement is adequate to
provide for probable loan losses in the existing portfolio.

Other Operating Income

Other operating income decreased $78,000,  or 5.9%, to $1.3 million for the nine
month period ended  September 30, 2000.  This  decrease was  attributable  to  a
decrease in net gain on sale of residential  loans of $256,000 or 58.3%.  Higher
market  interest rates have resulted in an industry wide slowdown in residential
lending.  In addition, the  Company had benefitted  from an $88,000  gain on the
sale of securities  in  the nine  months  ended  September  30,  1999, and there
were no securities sales in the nine months ended September 30, 2000. Offsetting
these  decreases, in part, were increases in service charges on deposit accounts
of $163,000, or 34.2%, 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.

Other Operating Expense

Other operating expenses increased $606,000, or 10.7%, from $5.7 million for the
nine months ended  September  30, 1999, to $6.2 million in the nine months ended
September  30, 2000.  Increases in salaries  and employee  benefits,  occupancy,
premises  and  equipment  expense,  and other  expense for the nine months ended
September  30, 2000 are a result of the Bank's  overall  growth with  additional
space  leased in the main  office and through its  increased  sales  efforts and
introduction of new products and services.

Income Taxes

Income taxes  increased  $70,000,  or 10.4%,  from  $672,000 for the nine months
ended  September 30, 1999,  to $742,000 for the nine months ended  September 30,
2000, as a result of the increase in income  before income taxes.  The effective
tax  rate  for the nine  months ended  September 30, 2000 was 33.4%, compared to
35.2% for the nine months ended September 30, 1999.

                                       18
<PAGE>

Recent Accounting Pronouncements

In June 1998, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
133,  "Accounting  for  Derivative  Instruments  and Hedging  Activities."  This
statement  requires  companies  to record  derivatives  on the balance  sheet as
assets or liabilities, measured at fair value. The accounting for changes in the
fair value of a derivative depends on the intended use of the derivative and its
specific designation.

In June  1999,  the  FASB  issued  SFAS  No.  137,  "Accounting  for  Derivative
Instruments  and  Hedging  Activities-Deferral  of the  Effective  Date  of FASB
Statement  No.  133--an  amendment of FASB  Statement  No. 133." This  statement
delays  the  effective  date for one  year of SFAS  No.  133,  to  fiscal  years
beginning  after  June 15,  2000 SFAS No.'s 133 and 137 apply to  quarterly  and
annual financial  statements.  The Company does not believe that there will be a
material  impact on its financial  condition or results of  operations  upon the
adoption of SFAS No. 133 and No. 138.

In  June  2000  the  FASB  issued  SFAS  No.  138,  "Accounting  for  Derivative
Instruments and Certain Hedging  Activities--An  Amendment of FASB Statement No.
133,"  or SFAS No.  138.  SFAS No.  138  amends  the  accounting  and  reporting
standards of SFAS No. 133 for certain derivative instruments and certain hedging
activities. SFAS No. 138 will be adopted concurrently with SFAS No. 133.

In  September  2000,  the  Financial  Accounting Standards  Board  (FASB) issued
Statement  of Financial  Accounting  Standards (SFAS)  No. 140, "Accounting  for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities."
This  statement  replaces  SFAS  No. 125, issued  in June 1996.  SFAS No. 140 is
effective for transfers  occurring  after  March 31, 2001  and  for  disclosures
relating to securitization transactions and collateral for fiscal  years  ending
after  December 15, 2000.  The  Company does not  believe that there  will be a
material impact  on its financial  condition or  results of  operations upon the
adoption of SFAS No. 140.

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 very 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 primary  investing  activities of the Company are the purchase of securities
available-for-sale  and the origination of loans. During each of the nine months
ended  September 30, 2000, and 1999, the Company's  purchases of securities were
all classified available-for-sale and totaled $389.6 million and $211.7 million,
respectively.  Loan originations,  net of principal repayments on loans, totaled
$13.9 million and $15.9 million,  for the nine months ended  September 30, 2000,
and 1999, respectively. Those activities were funded primarily by borrowings and
principal repayments and maturities on securities.

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


                                       19
<PAGE>

increased loan demand or withdrawal of deposited funds, the Company can arranged
for the  sale of  loans,  liquidate  available-for-sale  securities  and  access
its lines of credit,  totaling $6.0 million with  unaffiliated  financial insti-
tutions  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 9.5% of the  Company's  assets at September 30,
2000, 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 September 30, 2000, the Company's primary borrowings consisted of convertible
advances from the FHLB. The convertible feature othese 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.  These  convertible advances  are  secured by various mortgage-
backed  and callable  agency securities.  At September 30, 2000, convertible ad-
vances outstanding were as follows:

           Interest          Call          Contractual
            Amount           Rate             Date             Maturity
         -----------         -----         -----------        ----------
         $14,000,000         5.49%         02/19/2003         02/19/2008
         $15,000,000         4.59%         01/21/2002         01/21/2009
         $10,000,000         4.24%         10/08/1998         10/08/2000

Management of the Company has set minimum  liquidity level of 10% as  a  target.
The  average  of  the  Company's liquid assets (cash and due from banks, federal
funds sold,  interest  earning  deposits with  other financial institutions  and
investment securities available-for-sale, less securities pledged as collateral)
as a percentage  of average assets of the  Company during the three months ended
September 30, 2000, was 20.7%.

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,
1999,  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 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 September 30, 2000, the Bank exceeded
those  requirements with a leverage capital ratio, and risk-based  capital ratio
and total-risk based capital ratio of 7.97%, 13.18%, and 14.30%, respectively.


                                       20
<PAGE>

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 the market interest rates and its ability
to manage its assets and liabilities in response to such movements.

At  September 30, 2000,  83.45% of  the Company's  gross  loans  had  adjustable
interest rates and its loan portfolio had an average  weighted  maturity of  7.8
years.  At  such  date,  $11.6  million,  or  9.6%,  of the Company's securities
had adjustable  interest rates, and  its securities  portfolio  had  a  weighted
average  maturity of 6.4 years.  At  September  30,  2000, the Company had $56.3
million of certificates of deposit with maturities of one year or less and $27.0
million  of  deposits  over $100,000,  which  tend  to be less stable sources of
funding as compared to core deposits  and  represented  38.8%  of  the Company's
interest-bearing  liabilities.  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.  Accordingly,  in  a  rising  interest  rate  environment, the Company's
interest-bearing liabilities may adjust upwardly more  rapidly  than  the  yield
on its  adjustable-rate  loans,  adversely affecting the Company's net  interest
rate spread,  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
period 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 in-
stantaneous and  sustained interest  rate change of zero  and plus or  minus 200
basis point increments.

At September 30, 2000, 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:


                                       21
<PAGE>

                        Potential Change in             Potential Change in
  Change in             Net Interest Income        Net Economic Value of Equity
Interest Rates        ----------------------       ----------------------------
in Basis Points       $ Change      % Change         $ Change        % Change
---------------       --------      --------         --------        --------
                                      (Dollars in Thousands)

     200               $   63         0.58            $3,674          (17.80)%
     100                   62         0.57               362           (1.75)
    Static                  -            -                 -               -
    (100)                  52          .48             4,647           22.51
    (200)                 (78)        (.72)            6,504           31.51


                                       22
<PAGE>
                           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

         None

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
             27.0  Financial Data Schedule


                                       23
<PAGE>
                                   SIGNATURES

Pursuant  to the requirements of the Securities Exchange Act of 1934, the regis-
trant has duly caused  this  report to  be signed  on behalf of the  undersigned
thereunto duly authorized.


                                             LONG ISLAND FINANCIAL CORP.
                                             (Registrant)



Date:  November 13, 2000                     By: /s/ Douglas C. Manditch
                                                 Douglas C. Manditch
                                                 President and Chief Executive
                                                 Officer


Date:  November 13, 2000                     By: /s/ Thomas Buonaiuto
                                                 Thomas Buonaiuto
                                                 Vice President and Treasurer


                                       24
<PAGE>
<TABLE>
<CAPTION>

Exhibit 11.0  Computation Of Per Share Earnings

Long Island Financial Corp.
Statement Re: Computation of Per Share Earnings
(In thousands, except for share amounts)

                                        Three Months Ended Sept 30,         Nine Months Ended Sept 30,
                                        ---------------------------         --------------------------
                                           2000            1999                2000           1999
                                           ----            ----                ----           ----
<S>                                     <C>             <C>                 <C>            <C>

Net income                              $     475             381               1,476          1,212

Weighted average shares outstanding     1,596,201       1,758,364           1,627,160      1,770,163

Basic and diluted earnings per share    $     .30             .22                 .91            .68
                                              ===             ===                 ===            ===

</TABLE>