UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

 (Mark One)    Quarterly Report Pursuant to Section 13 or 15(d) of
     [X]               the Securities Exchange Act of 1934
                  For the quarterly period ended March 31, 2004
                                       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
      1601 Veterans Memorial Highway
            Islandia, New York                             11749
 (Address of Principal Executive Offices)                (Zip Code)

                                 (631) 348-0888
              (Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]


Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12B-2 of the Exchange Act): Yes [ ] No [X]


Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Common Stock par value $.01, per share. The registrant had 1,501,967 shares of
Common Stock outstanding as of May 7, 2004.


<PAGE>


<TABLE>
<S>                                 <C>                                                                  <C>
                                    Form 10-Q
                           LONG ISLAND FINANCIAL CORP.

                                      INDEX
                                                                                                        Page
PART I - FINANCIAL INFORMATION                                                                         Number
------------------------------                                                                         ------

ITEM 1.       Consolidated Financial Statements - Unaudited

              Consolidated Balance Sheets at March 31, 2004
                    and December 31, 2003                                                                 2
              Consolidated Statements of Earnings for the Three Months
                    Ended March 31, 2004 and 2003                                                         3
              Consolidated Statement of Changes in Stockholders' Equity
                    for the Three Months Ended March 31, 2004                                             4
              Consolidated Statements of Cash Flows for the Three Months
                    Ended March 31, 2004 and 2003                                                         5
              Notes to Consolidated Financial Statements                                                  6

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

ITEM 3.       Quantitative and Qualitative Disclosures About Market Risk                                 18

ITEM 4.       Controls and Procedures                                                                    19


PART II  - OTHER INFORMATION
----------------------------

ITEM 1.       Legal Proceedings                                                                          19

ITEM 2.       Changes in Securities, Use of Proceeds, and Issuer Purchases
                    of Equity Securities                                                                 19

ITEM 3.       Defaults Upon Senior Securities                                                            20

ITEM 4.       Submission of Matters to a Vote of Security Holders                                        20

ITEM 5.       Other Information                                                                          20

ITEM 6.       Exhibits and Reports on Form 8-K                                                           20

SIGNATURES                                                                                               21

                                       1
<PAGE>

</TABLE>






PART I - FINANCIAL INFORMATION
------------------------------
<TABLE>

Item 1. Consolidated Financial Statements
------- ---------------------------------

                           LONG ISLAND FINANCIAL CORP.
                           Consolidated Balance Sheets
                                   (Unaudited)
                        (In thousands, except share data)
<S>                                                                                <C>                 <C>
                                                                                     March 31,         December 31,
                                                                                       2004                2003
                                                                                       ----                ----
Assets:

Cash and due from banks                                                            $   12,983         $   21,447
Interest earning deposits                                                                  14                 98
Federal funds sold                                                                          -             25,200
                                                                                           --             ------
              Total cash and cash equivalents                                          12,997             46,745
Securities held-to-maturity (fair value $14,438 at December 31, 2003)                       -             12,474
Securities available-for-sale, at fair value                                          266,787            216,967
Federal Home Loan Bank stock, at cost                                                   5,164              3,050
Loans, held for sale                                                                      954              2,360
Loans, net of unearned income and deferred fees                                       234,684            226,128
Less allowance for loan losses                                                         (2,444)             (2,290)
                                                                                       ------              ------
              Loans, net                                                              232,240            223,838
Premises and equipment, net                                                             5,821              5,756
Accrued interest receivable                                                             2,673              2,401
Bank owned life insurance                                                               7,564              8,213
Prepaid expenses and other assets                                                       1,415              2,867
                                                                                        -----              -----
              Total assets                                                         $  535,615         $  524,671
                                                                                      -------            -------

Liabilities and Stockholders' Equity:

Deposits:
    Demand deposits                                                                $   97,183         $   98,693
    Savings deposits                                                                  106,098            104,231
    NOW and money market deposits                                                      94,780            123,732
    Other time deposits                                                                79,169             85,515
    Time certificates issued in excess of $100,000                                     13,146             13,272
                                                                                       ------             ------
              Total deposits                                                          390,376            425,443
Federal funds purchased                                                                37,275                  -
Other borrowings                                                                       66,000             61,000
Subordinated debentures                                                                 7,732              7,732
Accrued expenses and other liabilities                                                  4,198              4,078
                                                                                        -----              -----
              Total liabilities                                                       505,581            498,253
                                                                                      -------            -------

Stockholders' equity:
    Common stock (par value $.01 per share; 10,000,000 shares authorized;
      1,837,280 and 1,825,211 shares issued; 1,500,380 and
      1,488,311 shares outstanding, respectively)                                          18                 18
    Surplus                                                                            21,238             20,973
    Accumulated surplus                                                                11,074             10,333
    Accumulated other comprehensive income (loss)                                       1,882               (728)
    Treasury stock at cost, (336,900 shares in 2004 and 2003)                          (4,178)            (4,178)
                                                                                       ------             ------
              Total stockholders' equity                                               30,034             26,418
                                                                                       ------             ------
              Total liabilities and stockholders' equity                           $  535,615         $  524,671
                                                                                      -------            -------


    See accompanying notes to consolidated financial statements.

                                       2
<PAGE>

</TABLE>




<TABLE>
                           LONG ISLAND FINANCIAL CORP.
                       Consolidated Statements of Earnings
                                   (Unaudited)
                        (In thousands, except share data)
<S>                                                                           <C>         <C>
                                                                            For the Three Months
                                                                               Ended March 31,
                                                                               ---------------

                                                                               2004        2003
                                                                               ----        ----
Interest income:
     Loans                                                                  $  3,800    $  3,793
     Securities                                                                2,547       2,293
     Federal funds sold                                                            1          11
     Earning deposits                                                              1           1
                                                                                  --          --
         Total interest income                                                 6,349       6,098
                                                                               -----       -----

Interest expense:
     Savings deposits                                                            291         278
     NOW and money market deposits                                               236         261
     Other time deposits                                                         648         894
     Time certificates issued in excess of $100,000                               69          76
     Borrowed funds                                                              766         678
     Subordinated debentures                                                     207         206
                                                                                 ---         ---
         Total interest expense                                                2,217       2,393
                                                                               -----       -----

         Net interest income                                                   4,132       3,705
                                                                               -----       -----

Provision for loan losses                                                        500          60
                                                                                 ---          --

         Net interest income after provision for loan losses                   3,632        3,645
                                                                               -----        -----

Other operating income:
     Service charges on deposit accounts                                         652         462
     Net gain on sale of securities                                              397          89
     Net gain on sale of residential loans                                       192         157
     Earnings on bank-owned life insurance                                       295         102
     Other                                                                       135         138
                                                                                 ---         ---
         Total other operating income                                          1,671         948
                                                                               -----         ---

Other operating expenses:
     Salaries and employee benefits                                            2,131       1,769
     Occupancy expense                                                           315         256
     Premises and equipment expense                                              387         321
     Other                                                                     1,150       1,003
                                                                               -----       -----
         Total other operating expenses                                        3,983       3,349
                                                                               -----       -----

         Income before income taxes                                            1,320       1,244

Income taxes                                                                     399         446
                                                                                 ---         ---

         Net income                                                         $    921    $    798
                                                                                ----        ----
Basic earnings per share                                                    $    .61    $    .55
                                                                                ----        ----
Diluted earnings per share                                                  $    .58    $    .53
                                                                                ----        ----
Weighted average shares outstanding                                        1,498,528   1,449,530
                                                                           ---------   ---------
Diluted weighted average shares outstanding                                1,584,728   1,513,895
                                                                           ---------   ---------

See accompanying notes to consolidated financial statements.

                                       3
<PAGE>
</TABLE>




<TABLE>
<S>                                        <C>           <C>        <C>              <C>          <C>        <C>
                                                            LONG ISLAND FINANCIAL CORP.
                                           Consolidated Statement of Changes in Stockholders' Equity
                                                    For the Three Months Ended March 31, 2004
                                                                   (Unaudited)
                                                        (In thousands, except share data)
                                                                                  Accumulated
                                                                                     other
                                           Common                  Accumulated   comprehensive   Treasury
                                             stock       Surplus     surplus     income (loss)    stock      Total
                                           -------------------------------------------------------------------------
Balance at December 31, 2003               $   18        20,973     10,333           (728)        (4,178)    26,418

Comprehensive income:
    Net income                                  -             -        921              -              -        921
      Other comprehensive income,
        net of tax:
         Unrealized appreciation in
         available-for-sale securities,
         net of reclassification adjustment     -             -          -          2,610              -      2,610
Total comprehensive income                                                                                    3,531

Exercise of stock options and related
     tax benefit, issued 11,785 shares          -           256          -              -              -        256

Dividend reinvestment and stock purchase
     plan, issued 284 shares                    -             9          -              -              -          9

Dividends declared on common stock
     ($.12 per common share)                    -             -       (180)             -              -       (180)
                                           -------------------------------------------------------------------------
Balance at March 31, 2004                  $   18        21,238     11,074          1,882         (4,178)    30,034
                                           -------------------------------------------------------------------------
</TABLE>

<TABLE>
<S>                                                               <C>                    <C>

                                                                  Three Months Ended March 31,
                                                                 ------------------------------

                                                                    2004                  2003
                                                                    ----                  ----
                                                                        (In thousands)
Net unrealized appreciation (depreciation)
  arising during the year, net of tax                             $ 2,860                $ (306)
Less: Reclassification adjustment for net
  gains included in net income, net of tax                            250                    57
                                                                 ------------------------------
Net unrealized gain (loss) on securities, net of tax              $ 2,610                $ (363)
                                                                 ------------------------------


See accompanying notes to consolidated financial statements.

                                       4
<PAGE>
</TABLE>



<TABLE>
<S>                                                                                 <C>              <C>
                                                LONG ISLAND FINANCIAL CORP.
                                           Consolidated Statements of Cash Flows
                                                        (Unaudited)
                                                                                     For the Three Months
                                                                                        Ended March 31,
                                                                                        ---------------
(In thousands)                                                                       2004            2003
                                                                                     ----            ----
Cash flows from operating activities:
    Net income                                                                $       921      $       798
    Adjustments to reconcile net income to net cash
    provided by operating activities:
     Provision for loan losses                                                        500               60
     Depreciation and amortization                                                    277              232
     Amortization of premiums, net of discount accretion                               66              590
     Net gain on sales and calls of securities, held-to-maturity                     (335)               -
     Net gain on sales and calls of securities, available-for-sale                    (62)             (89)
     Loans originated for sale, net of proceeds from sales and gains                1,406              367
     Net deferred loan origination fees                                                22               31
     Earnings on bank owned life insurance                                           (103)            (102)
     Bank owned life insurance benefit                                               (192)               -
     Deferred income taxes                                                            (55)            (388)
     Change in other assets and liabilities:
         Accrued interest receivable                                                 (272)            (164)
         Prepaid expenses and other assets                                              7              441
         Accrued expenses and other liabilities                                       120              (84)
                                                                                      ---              ---
         Net cash provided by operating activities                                  2,300            1,692

Cash flows from investing activities:
     Purchases of securities available-for-sale                                  (440,996)        (268,765)
     Net purchase of Federal Home Loan Bank stock                                  (2,114)            (412)
     Proceeds from sales of securities available-for-sale                          13,649                -
     Proceeds from maturities and calls of securities held-to-maturity              1,347            9,562
     Proceeds from maturities and calls of securities available-for-sale          389,163          268,432
     Principal repayments on securities                                             3,954           10,565
     Loan originations, net of principal repayments                                (8,924)           2,751
     Redemption of bank owned life insurance                                          922                -
     Purchase of premises and equipment                                              (342)            (532)
                                                                                     ----             ----
         Net cash (used in) provided by investing activities                      (43,341)          21,601
                                                                                  -------           ------

Cash flows from financing activities:
     Net decrease in demand deposit, savings, NOW,and money market accounts       (28,595)         (33,905)
     Net decrease in certificates of deposit                                       (6,472)         (11,371)
     Net increase in federal funds purchased                                       42,275           12,000
     Shares issued under the dividend reinvestment and stock purchase plan              9                -
     Exercise of stock options                                                        256              243
     Payments for cash dividends                                                     (180)            (145)
                                                                                     ----             ----
         Net cash provided by (used in) financing activities                        7,293          (33,178)
                                                                                    -----          -------
         Net decrease in cash and cash equivalents                                (33,748)          (9,885)
Cash and cash equivalents at beginning of period                                   46,745           25,790
                                                                                   ------           ------
Cash and cash equivalents at end of period                                    $    12,997      $    15,905
                                                                                   ------           ------
Supplemental disclosure of cash flow information: Cash paid during the period
for:
     Interest                                                                 $     2,447      $     2,593
                                                                                    -----            -----
     Income taxes                                                             $       200      $       101
                                                                                      ---              ---
Non-cash investing activities:
     Fair value of securities transferred from held-to-maturity
         to available-for-sale                                                $    13,454      $         -
                                                                                   ------               --
See accompanying notes to consolidated financial statements.

                                       5
<PAGE>
</TABLE>




                           LONG ISLAND FINANCIAL CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Private Securities Litigation Reform Act Safe Harbor Statement

Statements contained in this Form 10-Q which are not historical facts are
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Amounts stated herein could vary as a result of
market and other factors. Such forward-looking statements are subject to risks
and uncertainties which could cause actual results to differ materially from
those currently anticipated due to a number of factors, which include, but are
not limited to, factors discussed in documents filed by Long Island Financial
Corp. (the "Company") with the Securities and Exchange Commission from time to
time. Such forward-looking statements may be identified by the use of such words
as "believe," "expect," "anticipate," "should," "planned," "estimated," "intend"
and "potential." Examples of forward looking statements include, but are not
limited to, estimates with respect to the financial condition, expected or
anticipated revenue, results of operations and business of the Company that are
subject to various factors which could cause actual results to differ materially
from these estimates. The Company's ability to predict results or the actual
effect of future plans or strategies is inherently uncertain. Factors which
could have a material adverse effect on the operations of the Company include,
but are not limited to, changes in: interest rates; general economic conditions;
monetary and fiscal policies of the U. S. Government, including policies of the
U.S. Treasury and the Federal Reserve Board; the quality or composition of the
loan or investment portfolios; demand for loan and non-deposit products; deposit
flows; real estate values; the level of defaults, losses and prepayments on
loans held by the Company in its portfolio or sold in the secondary markets;
demand for financial services in the Company's market area; competition;
accounting principles, policies, practices or guidelines; legislation or
regulation; and other economic, competitive, governmental, regulatory, and
technological factors affecting the Company's operations, pricing, products and
services. The forward-looking statements are made as of the date of this Form
10-Q, and, except as required by applicable law, the Company assumes no
obligation to update the forward-looking statements or to update the reasons why
actual results could differ from those projected in the forward-looking
statements. These risks and uncertainties should be considered in evaluating
forward-looking statements, which speak only as of the date of this Form 10-Q,
and undue reliance should not be placed on such statements.

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements include the
accounts of Long Island Financial Corp. and its wholly-owned subsidiaries. All
significant inter-company accounts and transactions have been eliminated in
consolidation.

The accompanying unaudited consolidated financial statements included herein
reflect all normal recurring adjustments which are, in the opinion of
management, necessary for a fair presentation of the results for the interim
periods presented. The results of operations for the three-month period ended
March 31, 2004, are not necessarily indicative of the results of operations that
may be expected for the entire fiscal year. Certain information and note
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain reclassifications have been made to
prior year amounts to conform to the current year presentation. These unaudited
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements, and notes thereto, included in the Company's
2003 Annual Report on Form 10-K.

                                       6
<PAGE>

The Company makes  available  through its Internet  website,  www.licb.com,  its
annual reports on Form 10-K,  quarterly reports on Form 10-Q, current reports on
Form 8-K, and all  amendments to those  reports  filed or furnished  pursuant to
Section 13(a) or 15(d) of the Securities  Exchange Act of 1934. Such reports are
free of charge and are  available as soon as  reasonably  practicable  after the
Company  electronically  files  such  material  with,  or  furnishes  it to, the
Securities and Exchange Commission.

2. SECURITIES

The following table sets forth certain information regarding amortized cost and
estimated fair value of the securities held-to-maturity and available-for-sale
as of the dates indicated:

<TABLE>
<S>                                                        <C>              <C>        <C>               <C>
                                                                 March 31, 2004             December 31, 2003
                                                                 --------------             -----------------
                                                             Amortized       Fair        Amortized       Fair
                                                               Cost          Value         Cost          Value
                                                               ----          -----         ----          -----
                                                                                (In thousands)
    Held-to-maturity:
    Corporate debt                                         $        -             -    $   12,474         14,438
                                                               ------        ------        ------         ------
        Total held-to-maturity                             $        -             -    $   12,474         14,438
                                                               ------        ------        ------         ------

    Available-for-sale:
    U.S. Government and Agency obligations                 $  214,406       215,429    $  176,141        175,194
    Mortgage-backed securities:
       GNMA                                                    31,182        31,034        33,669         33,283
       FHLMC                                                    2,685         2,693         3,743          3,757
       FNMA                                                     2,051         2,091         2,547          2,595
    Corporate debt                                             13,474        15,540         2,010          2,138
                                                               ------        ------         -----          -----
        Total securities available-for-sale                $  263,798       266,787    $  218,110        216,967
                                                              -------       -------       -------        -------
</TABLE>

On March 10, 2004, the Company complied with an issuer's tender offer which
resulted in the redemption of a $1,000,000 par value corporate debt security
classified as "held to maturity" and recognized a gain of $335,155. On March 10,
2004, as a result of that tender offer, the Company transferred the remaining
$12.0 million par value of corporate debt securities with a market value of
$13.5 million from the classification of "held-to-maturity" to
"available-for-sale." Subsequently, on April 1, 2004, the Company sold the
entire corporate debt securities portfolio recognizing a gain of approximately
$2.5 million, which will be reflected in the Company's second quarter results.

3. LOANS, NET

Loans, net, are summarized as follows:
<TABLE>
<S>                                                        <C>            <C>                <C>           <C>
                                                               March 31, 2004                  December 31, 2003
                                                               --------------                  -----------------
                                                                            (Dollars in thousands)
    Loans held-for-sale:
       Residential real estate loans                               954   100.0    %                2,360  100.0   %
                                                                   ---   -----                     -----  -----

    Loans, net:
       Commercial and industrial loans                     $    46,944    19.7    %          $    42,723   18.5   %
       Commercial real estate loans                            149,673    62.7                   145,084   63.0
       Automobile loans                                         41,051    17.2                    41,158   17.9
       Consumer loans                                              982      .4                     1,381    0.6
                                                                   ---      --                     -----    ---
                                                               238,650   100.0                   230,346  100.0
       Less:
             Unearned income                                     3,054                             3,328
             Deferred fees, net                                    912                               890
             Allowance for loan losses                           2,444                             2,290
                                                                 -----                             -----
             Total loans, net                              $   232,240                       $   223,838
                                                               -------                           -------
</TABLE>

                                       7
<PAGE>

Automobile loans
----------------

The Company maintained a program of making non-recourse loans to a local
automobile leasing company (the "third party") and received as security an
assignment of each individual lease and a collateral interest in each
automobile. The third party, in addition to providing complete servicing of the
portfolio, was obligated for the repayment of the entire principal balance of
each loan at the time each individual lease terminated. In March, 2004, the
Company learned that due to liquidity issues and financial difficulties, the
third party would not have the ability to fulfill its obligations.

At March 31, 2004, the automobile loan portfolio consisted of approximately
1,891 loans with approximately 87.4% of the loans maturing through December
2006. As of March 31, 2004, the balance of the automobile loan portfolio, net of
unearned income, amounted to $38.0 million and represented 16.2% of the Bank's
loan portfolio, net of unearned income and deferred fees. Portfolio
delinquencies at March 31, 2004, consisted of twenty-eight loans, 30-89 days
past due, representing $551,488, or 1.5 % of the portfolio, and three loans,
aggregating $72,901, or .2% of the portfolio, greater than 90 days past due.
Those three loans are included in the Company's total non-accrual loans at March
31, 2004.

Allowance for loan losses
-------------------------

Due to the issues relating to the automobile portfolio, the Company has
recognized losses related to the shortfall between the principal balance of
loans and the collateral value realized upon termination of the leases. The
extent to which the Company can recover value will depend to a large extent on
market conditions in the future. The Company is closely monitoring issues
concerning the third party's performance.

The Company made a provision for loan losses of $500,000 during the quarter
ended March 31, 2004. That provision was made in accordance with the Company's
methodology for calculating the allowance for loan losses and reflects
shortfalls experienced on loans in which the collateral liquidated was not
sufficient to satisfy the loan balance. Based on the size of the automobile loan
portfolio, the Company anticipates additional provisions to the allowance for
loan losses in future periods in amounts not presently determinable. Total
charge-offs relating to the automobile portfolio amounted to $346,000 at March
31, 2004.

4. STOCK BASED COMPENSATION

The Company applies the intrinsic-value based method of accounting prescribed by
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations. That method includes Financial
Accounting Standards Board (FASB) Interpretation No. 44, Accounting for Certain
Transactions involving Stock Compensation, an interpretation of APB Opinion No.
25, issued in March 2000, to account for its fixed-plan stock options. Under
that method, compensation expense is recorded on the date of grant only if the
current market price of the stock exceeds the exercise price. Statement of
Financial Accounting Standards (SFAS) No. 123, Accounting for Stock Based
Compensation, established accounting and disclosure requirements using a
fair-value-based method of accounting for stock-based employee compensation
plans. As allowed by SFAS No. 123, the Company has elected to continue to apply
the intrinsic-value-based method of accounting described above, and has adopted
only the disclosure requirements of SFAS No. 123. The following table
illustrates the effect on net income if the fair-value-based method had been
applied to all stock options granted or vested in each period:

                                       8
<PAGE>

<TABLE>
<S>                                                                         <C>           <C>
                                                                            For the Three Months
                                                                               Ended March 31,
                                                                            --------------------
                                                                            2004          2003
                                                                            --------------------
                                                                (Dollars in thousands, except per share data)

       Net income as reported                                               $  921        $  798
       Deduct total stock-based employee compensation
                expense determined under fair-value-based
                method for all awards, net of tax                               99           135
                                                                                --           ---
       Pro forma net income                                                 $  822        $  663
                                                                               ---           ---

       Earnings per share:
       Basic                                   As Reported                  $  .61        $  .55
                                               Pro forma                       .55           .46
       Diluted                                 As Reported                     .58           .53
                                               Pro forma                       .52           .44
</TABLE>

5. RECENT DEVELOPMENTS

On February 25, 2004, the Board of Directors of the Company declared a quarterly
dividend of $.12 per common share. The dividend was paid April 1, 2004, to
shareholders of record as of March 19, 2004.

6. OTHER COMMITMENTS AND CONTINGENT LIABILITIES

In the normal course of business, the Bank enters into commitments to purchase
investment securities. At March 31, 2004, the Bank had outstanding commitments
of $10 million to purchase investment securities.

7. RECENT ACCOUNTING PRONOUNCEMENTS

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity." SFAS No. 150
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity, and
requires that an issuer classify financial instruments that are considered a
liability (or an asset in some circumstances) when that financial instrument
embodies an obligation of the issuer. SFAS No. 150 is effective for financial
instruments entered into or modified after May 31, 2003, and is otherwise
effective at the beginning of the first interim period beginning after June 15,
2003. In November 2003, the FASB also issued a staff position that indefinitely
deferred the effective date of SFAS No. 150 for certain mandatorily redeemable
non-controlling interests. The Company currently believes that the deferral of
the effective date of SFAS No. 150 will not have a material impact on its
consolidated balance sheets or consolidated statements of earnings when
implemented.

In December 2003, FASB issued FASB Interpretation No. 46(R) ("FIN 46(R)"),
"Consolidation of Variable Interest Entities" which clarified certain provisions
of a previously released interpretation. On December 31, 2003, the Company
adopted FIN 46(R). Under the provisions of FIN 46(R), the Company deconsolidated
LIF Statutory Trust I and accounts for its investment in the trust as an asset,
its subordinated debentures as a liability, and the interest paid on those
debentures as interest expense. As a result of the adoption of FIN 46(R), the
Company's prior period presentations have been restated to conform to the
current presentation.


                                       9
<PAGE>

In April 2003,  the FASB issued SFAS No. 149,  "Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  149  amends  and
clarifies  accounting for derivative  instruments  (collectively  referred to as
derivatives),   including  certain  derivative  instruments  embedded  in  other
contracts and for hedging activities under SFAS 133,  "Accounting for Derivative
Instruments and Hedging Activities." SFAS 149 is effective for contracts entered
into or modified after March 31, 2004, and for hedging relationships  designated
after March 31, 2004, and is to be applied prospectively. The provisions of SFAS
No.  149 that  relate to  Statement  133  Implementation  Issues  that have been
effective  for fiscal  quarters  that began prior to September  15,  2003,  will
continue to be applied in accordance with their  respective  effective dates. In
addition,   certain  provisions  relating  to  forward  purchases  or  sales  of
when-issued  securities  or  other  securities  that do not yet  exist,  will be
applied to existing  contracts as well as new contracts entered into after March
31, 2004.  The adoption of SFAS No. 149 did not have an impact on the  Company's
consolidated balance sheets or consolidated statements of earnings.

In March 2004, the FASB published an Exposure Draft, "Share-based Payment, an
Amendment of FASB Statements No. 123 and 95." The Exposure Draft proposes
changes in accounting that would replace existing requirements under SFAS 123
and APB Opinion No 25. Under the proposal, all forms of share-based payments to
employees, including employee stock options, would be treated the same as other
forms of compensation by recognizing the related cost in the income statement.
The expense of the award would generally be measured at fair value at the grant
date. Current accounting guidance requires that the expense relating to employee
stock options only be disclosed in the footnotes to the financial statements.

In March 2004, the SEC issued Staff Accounting Bulletin ("SAB") No. 105,
"Application of Accounting Principles to Loan Commitments." SAB No. 105
clarifies certain provisions of SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities," which amended portions of SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities" and is
effective for periods following March 31, 2004. Together, SAB No. 105 and SFAS
No. 149 provide guidance with regard to accounting for loan commitments. Under
SAB No. 105 and SFAS No. 149, loan commitments relating to the origination of
mortgage loans that will be held for sale shall be accounted for as derivative
instruments by the issuer of the commitment. At March 31, 2004, the Company had
$8.4 million of one-to-four family loan commitments that will be held for sale
upon origination. The adoption of SFAS No. 149 subsequent to March 31, 2004 will
not have a material impact on the Company's consolidated financial statements.



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


Overview

The principal business of Long Island Financial Corp. consists of the operation
of a wholly-owned subsidiary, Long Island Commercial Bank. Long Island
Commercial Bank is a New York state-chartered commercial bank, which began
operations in 1990, and is engaged in commercial and consumer banking in
Islandia, New York and the surrounding communities of Suffolk, and Nassau
counties and in Kings County. 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.

                                       10
<PAGE>

Critical Accounting Policies and Estimates

The Company identifies accounting policies critical to the Company's operations
and understanding of the Company's results of operations. Certain accounting
policies are considered to be important to the portrayal of the Company's
financial condition, since they require management to make complex or subjective
judgments, some of which may relate to matters that are inherently uncertain.

Allowance for Loan Losses

The Company has determined that the methodology used in determining the level of
its allowance for loan losses is critical in the presentation and understanding
of the Company's consolidated financial statements. The allowance for loan
losses represents management's estimate of probable losses inherent in the
portfolio. The evaluation process for making provisions for loan losses is
subject to numerous estimates and judgments. Changes in those estimates would
have a direct impact on the provision for loan losses and could result in a
change in the allowance. While management uses available information to
determine losses on loans, future additions to the allowance may be necessary
based on, among other things, unanticipated changes in economic conditions,
particularly in Suffolk and Nassau counties.

In evaluating the portfolio, management takes into consideration numerous
factors such as the Company's loan growth, prior loss experience, present and
potential risks of the loan portfolio, risk ratings assigned by lending
personnel, ratings assigned by the independent loan review function, the present
financial condition of the borrowers, current economic conditions, and other
portfolio risk characteristics. The Company's formalized process for assessing
the adequacy of the allowance for loan losses and the resultant need, if any,
for periodic provisions to the allowance charged to income consists of both
individual loan analyses and loan pool analyses. The individual loan analyses
are periodically performed on individually significant loans or when otherwise
deemed necessary and primarily encompass commercial real estate and commercial
and industrial loans. Management believes that the Company's allowance for loan
losses at March 31, 2004 is adequate to provide for estimated probable losses
inherent in the portfolio.

Securities

The fair value of securities classified as held-to-maturity or
available-for-sale is based upon quoted market prices. If quoted market prices
are not available, fair values are extrapolated from the quoted prices of
similar instruments.

Deferred Tax Assets

The Company uses estimates of future earnings to support the position that the
benefit of its deferred tax assets will be realized. If future income should
prove non-existent or less than the amount of the deferred tax assets within the
tax years to which they may be applied, the asset may not be realized and our
net income will be reduced.


Financial Condition

Total  assets were  $535.6  million as of March 31,  2004,  an increase of $10.9
million,  or 2.1%,  from  $524.7  million at December  31,  2003.  The  increase
primarily was due to an increase in the securities available-for-sale portfolio,
offset by  decreases  in cash and due from banks,  federal  funds sold,  and the
securities held-to-


                                       11
<PAGE>

maturity portfolio.  Securities  available-for-sale  increased $49.8 million, or
23.0%,  to $266.8  million at March 31, 2004,  as compared to $217.0  million at
December 31, 2003. The increase in securities  available-for-sale was due to the
transfer of  securities,  with a market value of $13.5  million,  classified  as
held-to-maturity,  to  available-for-sale  in March, 2004, as well as additional
portfolio  purchases.  The decrease  from period to period in federal funds sold
and cash and due from banks,  of $25.2 million and $8.5  million,  respectively,
primarily  reflects  the  decrease  of  seasonal  municipal  funds on deposit at
December 31, 2003.  Loans,  net of unearned income and deferred fees,  increased
$8.6 million,  from $226.1  million at December 31, 2003,  to $234.7  million at
March 31, 2004,  reflecting  increases  primarily in commercial  real estate and
commercial and industrial  loans.  Prepaid  expenses and other assets  decreased
$1.5 million,  or 50.6%, from $2.9 million at December 31, 2003, to $1.4 million
at March 31,  2004,  primarily  due to the  decrease in the  deferred  tax asset
which,  in turn,  was  directly  related to the  decrease in  accumulated  other
comprehensive loss.

Total liabilities increased $7.3 million, or 1.5%, from $498.3 million at
December 31, 2003 to $505.6 million at March 31, 2004. The increase in total
liabilities was due principally to an increase in federal funds purchased and
other borrowings, partially offset by a decrease in total deposits. The Company
utilizes borrowings, primarily in the form of overnight federal funds purchased
and medium and convertible term advances from the Federal Home Loan Bank of New
York (FHLBNY), as a low cost funding source to fund asset growth. The decrease
in total deposits is the result of a decrease in NOW and money market deposits
of $28.9 million, or 23.4%, from $123.7 million at December 31, 2003 to $94.8
million at March 31, 2004, attributable to the withdrawal of seasonal municipal
funds on deposit at December 31, 2003. Other time deposits decreased $6.3
million, or 7.4%, from $85.5 million at December 31, 2003, to $79.2 million at
March 31, 2004 as the Bank continued aggressively to substitute low cost core
deposits for time deposits. There were $37.3 million of federal funds purchased
at March 31, 2004. Other borrowings, increased $5.0 million, or 8.2%, to $66.0
million at March 31, 2004.

Stockholders' equity increased $3.6 million, or 13.7%, from $26.4 million at
December 31, 2003, to $30.0 million at March 31, 2004. The increase in
stockholders equity included $921,000 of net income for the three months ending
March 31, 2004, $265,000 related to the exercise of stock options and shares
issued under the dividend and stock purchase plan, and an increase in
accumulated other comprehensive income on securities available-for-sale of $2.6
million. Offsetting these increases was a dividend declared on common stock
which amounted to $180,000.

Analysis of Net Interest Income

Net interest income represents the difference between income on interest-earning
assets and expense on interest-bearing liabilities. Net interest income depends
upon both the volume of interest-earning assets and interest-bearing liabilities
and the rates earned or paid on them.

The following tables set forth certain information relating to the Company's
consolidated average balance sheets and its consolidated statements of earnings
for the three months ended March 31, 2004 and 2003, and reflect the average
yield on interest-earning assets and average cost of interest-bearing
liabilities for the periods indicated. Yields and costs are derived by dividing
annualized income or expense by the average balance of interest-earning assets
or interest-bearing liabilities, respectively. Average balances are derived from
average daily balances. Average loan balances include non-performing loans
although the amount of non-performing loans is not material.

                                       12
<PAGE>




<TABLE>
<S>                                       <C>            <C>             <C>      <C>           <C>            <C>
                                                              Three Months Ended March 31,
                                                              ----------------------------
                                               -----------2004-----------             -----------2003-----------
                                                                     Average                               Average
                                              Average                Yield /         Average               Yield /
                                              Balance    Interest     Cost           Balance    Interest    Cost
                                              -------    --------     ----           -------    --------    ----
                                                                      (Dollars in thousands)
Assets:
Interest-earning assets:
     Federal funds sold and
         interest-earning deposits      $        926   $       2       .86 %    $     4,289   $      12      1.12  %
     Securities, net (1)                     268,934       2,547      3.79          219,944       2,293      4.17
     Loans, net of unearned income and
         deferred fees (2)                   229,868       3,800      6.61          215,006       3,793      7.06
                       --                    -------       -----      ----          -------       -----      ----
Total interest-earning assets                499,728       6,349      5.08          439,239       6,098      5.55
Non-interest-earning assets                   38,332                                 41,714
                                              ------                                 ------
Total assets                            $    538,060                            $   480,953
                                             -------                                -------

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
     Savings deposits                   $    105,106         291      1.11      $    82,899         278      1.34
     NOW and money market deposits           117,874         236       .80          107,375         261       .97
     Certificates of deposit                  95,900         717      2.99          110,918         970      3.50
                                              ------         ---      ----          -------         ---      ----
Total interest-bearing deposits              318,880       1,244      1.56          301,192       1,509      2.00
     Borrowed funds                           84,155         766      3.64           63,135         678      4.30
     Subordinated debentures                   7,732         207     10.71            7,732         206     10.66
                                               -----         ---     -----            -----         ---     -----
Total interest-bearing liabilities           410,767       2,217      2.16          372,059       2,393      2.57
Other non-interest bearing liabilities        99,625                                 83,250
                                              ------                                 ------
Total liabilities                            510,392                                455,309
Stockholders' equity                          27,668                                 25,644
                                              ------                                 ------
Total liabilities and
     stockholders' equity                $   538,060                            $   480,953
                                             -------                                -------


Net interest income/
     interest rate spread (3)                          $   4,132      2.92 %                  $   3,705      2.98  %
                                                           -----      ----                        -----      ----

Net interest margin (4)                                               3.31 %                                 3.37  %
                                                                      ----                                   ----
Ratio of interest-earning assets to
     interest-bearing liabilities                                     1.22x                                 1.18x
                                                                      -----                                 -----


(1)      Unrealized appreciation / depreciation on available-for-sale securities
         are recorded in non-interest earning assets.
(2)      Amount excludes allowance for loan losses.
(3)      Interest rate spread represents the difference between the yield on
         interest-earning assets and the cost of interest-bearing liabilities.
(4)      Net interest margin represents net interest income divided by average
         interest-earning assets.
</TABLE>

                                       13
<PAGE>




Comparison  of  Operating  Results for the Three Months Ended March 31, 2004 and
2003

General

The Company reported net income of $921,000, or basic earnings per share of $.61
and diluted earnings per share of $.58 for the quarter ended March 31, 2004,
compared to $798,000, or basic earnings per share of $.55 and diluted earnings
per share of $.53 for the prior year period.

Interest Income

Interest income increased $251,000, or 4.1%, for the three months ended March
31, 2004, compared to the three months ended March 31, 2004. That increase was
attributable to the $60.5 million, or 13.8%, increase in the average balance of
interest-earning assets from $439.2 million for the three months ended March 31,
2003, to $499.7 million for the three months ended March 31, 2004. The increase
in income from the increase in the average balance of interest earning assets
was offset in part by a 47 basis point decrease in the average yield on
interest-earning assets from 5.55% for the three months ended March 31, 2003, to
5.08% for the comparable 2004 period. The decrease in average yield on
interest-earning assets was attributable to a 38 basis point decrease in yield
on securities which declined from 4.17% for the three months ended March 31,
2003, to 3.79% for the three months ended March 31, 2004, and a 45 basis point
decrease in the average yield on loans, net, from 7.06% for the three months
ended March 31, 2003, to 6.61% for the comparable 2004 period. Partially
offsetting the declines in yield from period to period was a $49.0 million, or
22.3% increase in the average balance of securities from $219.9 million for
three months ended March 31, 2003, to $268.9 million for the three months ended
March 31, 2004, and a $14.9 million, or 6.9% increase in the average balance of
loans, net, from $215.0 million for the three months ended March 31, 2003, to
$229.9 million for the comparable 2004 period.

Interest Expense

Interest expense for the three months ended March 31, 2004 was $2.2 million,
compared to $2.4 million for the three months ended March 31, 2003, a decrease
of $176,000, or 7.4%. The decrease was attributable to a 41 basis point decrease
in the average cost of interest-bearing liabilities from 2.57% for the three
months ended March 31, 2003 to 2.16% for the three months ended March 31, 2004.
The decrease in average cost was partially offset by a $38.7 million, or 10.4%,
increase in the average balance of total interest-bearing liabilities from
$372.1 million for the three months ended March 31, 2003 to $410.8 million for
the three months ended March 31, 2004. The increase in average interest-bearing
liabilities, when compared to the prior year period, reflects increases of $17.7
million in the average balance of interest-bearing deposits and $21.0 million in
the average balance of borrowed funds. There was no change in the average
balance of subordinated debentures from March 31, 2003, to March 31, 2004.

Interest expense on interest-bearing deposits decreased $265,000, or 17.6%, for
the three months ended March 31, 2004, from $1.5 million for the corresponding
2003 period to $1.2 million for the current period. That decrease was primarily
due to a 44 basis point decrease in the average rate paid on interest-bearing
deposits from 2.00% for three months ended March 31, 2003 to 1.56% for the
corresponding period in 2004. Offsetting, in part, the decrease in the average
rate paid was an increase in the average balance of interest-bearing deposits of
$17.7 million for the three months ended March 31, 2004 from the corresponding
period in 2003. The increase in the average balance of interest-bearing deposits
was the result of increases in the average balance of savings deposits of $22.2
million, or 26.8%, and in the average balances of NOW and money market deposits
of $10.5 million, or 9.8% from period to period.

                                       14
<PAGE>




Interest expense on borrowed funds increased  $88,000,  or 13.0%,  from $678,000
for the three  months  ended March 31,  2003,  to $766,000  for the three months
ended March 31, 2004.  The increase was primarily due to the average  balance of
borrowed  funds,  which  increased from $63.1 million for the three months ended
March 31, 2003 to $84.2  million  for the three  months  ended  March 31,  2004.
Offsetting  in part the cost from the  increase in the average  balance was a 66
basis point  decrease in the average  cost of borrowed  funds from 4.30% for the
2003 period, to 3.64% for the 2003 period.

Net Interest Income

Net interest income increased by $427,000, or 11.5%, from $3.7 million for the
three months ended March 31, 2003, to $4.1 million for the three months ended
March 31, 2004. The average cost of total interest-bearing liabilities for the
period decreased 41 basis points from 2.57% in the 2003 period to 2.16% in the
2004 period. The average yield on total interest-earning assets for the period
decreased 47 basis points from 5.55% in the 2003 period to 5.08% in the 2004
period. The net interest rate spread decreased 6 basis points, from 2.98% for
the three months ended March 31, 2003, to 2.92% for the period ended March 31,
2004.

Provision for Loan Losses

The Company made a $500,000 provision for loan losses for the three months ended
March 31, 2004, compared to a $60,000 provision for loan losses made for the
three months ended March 31, 2003. The determination to increase the provision
for loan losses for the three months ended March 31, 2004 reflects management's
qualitative and quantitative assessment of the loan portfolio, net charge-offs
and collection of delinquent loans. The allowance for loan losses amounted to
$2.4 million and $2.3 million at March 31, 2004 and December 31, 2003,
respectively. The allowance for loan losses as a percentage of loans was 1.04%
and 1.01% at March 31, 2004 and December 31, 2003, respectively.

The following table sets forth information regarding non-accrual loans and loans
delinquent 90 days or more and still accruing interest at the dates indicated.
It is the Company's general policy to discontinue accruing interest on all
loans, which are past-due more than 90 days or when, in the opinion of
management, such suspension is warranted. When a loan is placed on non-accrual
status, the Company ceases the accrual of interest owed and previously accrued
interest is charged against interest income. Loans are generally returned to
accrual status when principal and interest payments are current, there is
reasonable assurance that the loan is fully collectible and a consistent record
of performance has been demonstrated.
<TABLE>
<S>                                                                <C>                    <C>
                                                                March 31, 2004         December 31, 2003
                                                                         (Dollars in thousands)
Non-accrual loans:
     Commercial and industrial loans                               $       49            $      -
     Commercial real estate loans                                          82                   -
     Automobile loans                                                      73                   -
                                                                           --                  --
         Total non-accrual loans                                          204                   -
                                                                          ---                 ---
Loans accruing - over 90 days:
     Commercial and industrial loans                                       50                   -
                                                                           --                  --
         Total loans accruing-over 90 days                                 50                   -
                                                                           --                  --
Total non-performing loans                                         $      254            $      -
                                                                          ---                 ---
Allowance for loan losses as a percentage of loans (1)                   1.04   %            1.01   %
Allowance for loan losses as a percentage
     of total non-performing loans                                     962.20                   -
Non-performing loans as a percentage of loans (1)                         .11   %               -   %

(1) Loans include loans, net of unearned income and deferred fees.
</TABLE>

                                       15
<PAGE>




Other Operating Income

Other operating income increased $723,000, or 76.3%, to $1.7 million for the
three months ended March 31, 2004, as compared to the three months ended March
31, 2003. That increase was primarily attributable to an increase in net gain on
sales of securities of $308,000, an increase in income relating to earnings on
bank owned life insurance which resulted in proceeds of $192,000 received in
conjunction with the death of the Company's Chairman, and an increase from
service charges on deposit accounts. The latter increased $190,000, or 41.1%,
reflecting an increased fee structure and overall growth in the depositor base.

Other Operating Expenses

Other operating expenses increased $634,000, or 18.9%, from $3.3 million for the
three months  ended March 31,  2003,  to $4.0 million for the three months ended
March 31,  2004.  The  increase in  operating  expenses  stemmed from the Bank's
continued planned branch expansion and included an expense recorded in "salaries
and  employee  benefits"  of $143,000 as a result of the death of the  Company's
Chairman in January, 2004.

Income Taxes

Income taxes decreased $47,000, or 10.5%, from $446,000 for the three months
ended March 31, 2003, to $399,000 for the three months ended March 31, 2004, as
a result of a nontaxable death benefit received in conjunction with the death of
the Company's Chairman. The effective tax rates for the three months ended March
31, 2004 and those ended March 31, 2003 were 30.2% and 35.9%, respectively.

Liquidity

Liquidity management for the Company requires that funds be available to pay all
deposit withdrawal and maturing financial obligations and meet credit funding
requirements promptly and fully in accordance with their terms. For most banks,
including the Bank, maturing assets provide only a limited portion of the funds
required to pay maturing liabilities over a short time frame. The balance of the
funds required is provided by liquid assets and the acquisition of additional
liabilities, making liability management integral to liquidity management in the
short term.

The Company 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 sales of investment securities. When cash
requirements increase faster than cash is generated, either through increased
loan demand or withdrawal of deposited funds, the Company can arrange for the
sale of loans or liquidate available-for-sale securities. It can also access its
lines of credit, totaling $9.5 million, with unaffiliated financial
institutions, which enable it to borrow federal funds on an unsecured basis. In
addition, the Company has available lines of credit with the Federal Home Loan
Bank of New York equal to 13.1% of the Company's assets at March 31, 2004, which
enable it to borrow funds on a secured basis. The Company could also engage in
other forms of borrowings, including repurchase agreements.



                                       16
<PAGE>


At March 31, 2004, the Company's other borrowings consisted of convertible and
medium term advances from the FHLB. The convertible feature of these advances
allows the FHLB, at a specified call date and quarterly thereafter, to convert
those advances into replacement funding for the same or a lesser principal
amount, based on any advance then offered by the FHLB, at then current market
rates. If the FHLB elects to convert those advances, the Bank may repay any
portion of the advances without penalty. The convertible advances are secured by
various mortgage-backed, callable U.S. agency securities, and certain other
qualifying commercial real-estate collateral.

At March 31, 2004, convertible and medium term advances outstanding were as
follows:
<TABLE>
<S>                                       <C>              <C>                <C>                      <C>
                                                                              Call                  Contractual
                                          Amount           Rate               Date                   Maturity
                                          ------           ----               ----                   --------

Convertible advance             $       14,000,000         5.49%            5/19/2004                2/19/2008
Convertible advance                     15,000,000         4.59%            4/21/2004                1/21/2009
Convertible advance                      5,000,000         2.24%            2/03/2006                 2/3/2009
Convertible advance                     14,000,000         4.97%            4/19/2004                1/19/2011
Convertible advance                      3,000,000         4.11%           12/11/2005               12/12/2011
Convertible advance                     10,000,000         2.64%            5/28/2008                5/28/2013
Medium term advance                      5,000,000         3.99%                    -               12/13/2004
                                         ---------
                                $       66,000,000
</TABLE>


The primary investing activities of the Company are the purchase of securities
available-for-sale and the origination of loans. During the three months ended
March 31, 2004, and 2003, the Company's purchases of securities that were
classified available-for-sale totaled $441.0 million and $268.8 million,
respectively. Loan originations, net of principal repayments on loans, totaled
$8.9 million and ($2.8) million for the three months ended March 31, 2004, and
2003, respectively. Borrowings, principal repayments and maturities of
securities were used primarily to fund those activities.

Capital Resources

The Bank is subject to the risk based capital guidelines administered by the
banking regulatory agencies. The guidelines currently require all banks to
maintain a minimum ratio of total risk based capital to total risk weighted
assets of 8%, including a minimum ratio of Tier 1 capital to total risk weighted
assets of 4% and a Tier 1 capital to average adjusted assets of 4%. Failure to
meet minimum capital requirements can initiate certain mandatory, and possibly
additional discretionary actions by the FDIC, the Bank's primary federal
regulator that, if undertaken, could have a direct material effect on the Bank's
financial statements. As of December 31, 2003, the most recent notification from
the FDIC categorized the Bank as well capitalized under the regulatory framework
for prompt corrective action.

In accordance with the requirements of the FDIC and the New York State Banking
Department, the Bank must meet certain measures of capital adequacy with respect
to leverage and risk-based capital. As of March 31, 2004, the Bank exceeded
those requirements with a leverage capital ratio, risk-based capital ratio and
total-risk based capital ratio of 5.69%, 9.87%, and 10.66%, respectively.

                                       17
<PAGE>

The Company achieves what it considers "capital adequacy" through the continuous
monitoring of its financial performance and plans for expansion. Sources of the
Company's capital are generated primarily through current period earnings and
the issuance of common stock via the dividend reinvestment plan or the exercise
of stock options. Uses of capital currently result from the payment of dividends
on common stock or the repurchase of common stock through a stock repurchase
program. In February 2004, the Board of Directors, approved a 5% stock
repurchase program that would enable the Company to repurchase approximately
74,000 shares of its outstanding common stock. There have been no repurchases
made under that stock purchase program since its announcement. In determining
the extent and timing of stock repurchase programs, the Company considers, in
addition to capital adequacy, the effect on the Company's financial condition,
average daily trading volume, and listing requirements applicable to the NASDAQ
National Market System. At March 31, 2004, the Company held 336,900 shares of
treasury stock at an average cost of $12.40 per share.


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 its
operations to changes in interest rates. The Board has directed the Investment
Committee to review the Company's interest rate risk position on a quarterly
basis.

Funds management is the process by which the Company seeks to maximize the
profit potential which is derived from the spread between the rates earned on
interest-earning assets and the rates paid on interest-bearing liabilities
through the management of various balance sheet components. It involves
virtually every aspect of the Company's management and decision-making process.
Accordingly, the Company's results of operations and financial condition are
largely dependent on the movements in market interest rates and the Company's
ability to manage its assets and liabilities in response to such movements.

At March 31, 2004,  77.1% of the Company's  gross loans had adjustable  interest
rates and its loan portfolio had an average  weighted  maturity of 8.8 years. At
that date, $55.8 million,  or 20.5%, of the Company's  securities had adjustable
interest rates, and its securities  portfolio had a weighted average contractual
maturity of 9.8 years.  At March 31,  2004,  the  Company  had $54.4  million of
certificates of deposit with maturities of one year or less and $13.1 million of
deposits  over  $100,000,  which tend to be less stable  sources of funding when
compared  to  core  deposits,  and  which  represented  16.7%  of the  Company's
interest-bearing   liabilities.  In  a  rising  interest  rate  environment  the
Company's interest-bearing liabilities may adjust upwardly more rapidly than the
yield on its adjustable-rate assets. Thus, due to the Company's level of shorter
term  certificates  of deposit,  the  Company's  cost of funds may increase at a
greater  rate in a rising rate  environment  than if it had a greater  amount of
core deposits which,  in turn, may adversely  affect net interest income and net
income.

The Company's interest rate sensitivity is monitored by management through the
use of a quarterly interest rate risk analysis model which evaluates (i) the
potential change in the net interest income over the succeeding four quarter
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
instantaneous and sustained interest rate change of zero and plus or minus 200
basis points in 100 basis point increments.

                                       18
<PAGE>




At March 31, 2004, 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:
<TABLE>
<S>             <C>                  <C>               <C>                   <C>                  <C>
             Change in                   Potential Change in                       Potential Change in
           Interest Rates                Net Interest Income                  Net Economic Value of Equity
           in Basis Points             $ Change      % Change                  $ Change          % Change
           ---------------             --------      --------                  --------          --------
                                                               (Dollars in thousands)

                200                 $ (2,036)          (10.73)%                $ (7,556)          (23.82)%
                100                     (926)           (4.88)                   (4,285)          (13.51)
              Static                      --               --                        --               --
               (100)                    (695)           (3.66)                     (682)           (2.15)
               (200)                  (1,204)           (6.35)                      229              .72
</TABLE>


Item 4. Controls and Procedures

     1.   Evaluation  of  disclosure   controls  and  procedures.   The  Company
          maintains controls and procedures  designed to ensure that information
          required  to be  disclosed  in the reports  that the Company  files or
          submits  under  the  Securities  Exchange  Act of  1934  is  recorded,
          processed,  summarized and reported within the time periods  specified
          in the rules  and forms of the  Securities  and  Exchange  Commission.
          Based upon their evaluation of those controls and procedures as of the
          end of the period  covered by the report  required by paragraph (b) of
          Section  240.13a-15 or Section  240.15d-15 of this chapter,  the Chief
          Executive and Chief Financial  officers of the Company  concluded that
          the Company's disclosure controls and procedures were adequate.

     2.   Changes in internal controls.  The Company made no significant changes
          in its internal controls or in other factors that could  significantly
          affect these  controls  subsequent  to the date of the  evaluation  of
          those controls by the Chief Executive and Chief Financial officers.


PART II - OTHER INFORMATION
---------------------------


Item 1. Legal Proceedings
------- -----------------
          Not applicable.

Item 2. Changes in Securities,  Use of Proceeds,  and Issuer Purchases of Equity
------- ------------------------------------------------------------------------
        Securities
        ----------

          In February 2004, the Board of Directors approved a 5% stock
          repurchase program that would enable the Company to repurchase
          approximately 74,000 shares of its outstanding common stock. There
          have been no repurchases made under that stock purchase program since
          its announcement.

                                       19
<PAGE>

Item 3. Defaults Upon Senior Securities
------- -------------------------------
        Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders
------- ---------------------------------------------------
        Not applicable.

Item 5. Other Information
------- -----------------
        Not applicable.

Item 6. Exhibits and Reports on Form 8-K
------- --------------------------------

          a. Exhibits
             --------
               11.0 Statement Re: Computation of Per Share Earnings
               31.1 Certification of Chief Executive Officer pursuant to Section
                    302 of Sarbanes- Oxley Act of 2003
               31.2 Certification of Chief Financial Officer pursuant to Section
                    302 of Sarbanes- Oxley Act of 2003
               32.1 Certification of Chief Executive Officer pursuant to Section
                    906 of Sarbanes- Oxley Act of 2003
               32.2 Certification of Chief Financial Officer pursuant to Section
                    906 of Sarbanes- Oxley Act of 2003

          b. Reports on Form 8-K
             -------------------

               On January 7, 2004, the Company filed a Form 8-K to disclose that
               the Company had issued a press release to announce the retirement
               of Roy M. Kern as a director, the election of Director Harvey
               Auerbach to succeed Mr. Kern, and the election of John R. McAteer
               to the Boards of Directors of the Company and its subsidiary,
               Long Island Commercial Bank. In addition, Mr. McAteer was
               designated as the Financial Expert on the Company's Board.

               On January 16, 2004 the Company filed a Form 8-K to disclose that
               the Company had issued a press  release to announce the Company's
               financial  results for the quarter and year ending  December  31,
               2003.

               On February 26, 2004 the Company filed a Form 8-K to disclose
               that the Company had issued a press release to announce the
               election of Harvey Auerbach as Chairman of the Board of
               Directors, the declaration of a quarterly dividend and the
               institution of a 5% stock repurchase program.

               On April 27, 2004 the Company filed a Form 8-K to disclose that
               the Company had issued a press release to announce the Company's
               financial  results for the quarter ended March 31, 2004.



                                       20
<PAGE>


                                   SIGNATURES

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



                                          LONG ISLAND FINANCIAL CORP.
                                          (Registrant)


Date:    May 17, 2004              By: /s/ Douglas C. Manditch
                                   ------------------------
                                           Douglas C. Manditch
                                           President and Chief Executive Officer


Date:    May 17, 2004              By: /s/ Thomas Buonaiuto
                                   ------------------------
                                           Thomas Buonaiuto
                                           Vice President and Treasurer


                                       21
<PAGE>