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, 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)


  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 1,511,634  shares of
Common Stock outstanding as of November 5, 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 September 30, 2004
              and December 31, 2003                                                                       2
        Consolidated Statements of Earnings for the Three Months and
              Nine Months Ended September 30, 2004 and 2003                                               3
        Consolidated Statement of Changes in Stockholders' Equity
              and Other Comprehensive Loss for the Nine Months
                   Ended September 30, 2004                                                               4
        Consolidated Statements of Cash Flows for the Nine Months
              Ended September 30, 2004 and 2003                                                           5
        Notes to Consolidated Financial Statements                                                        6

ITEM 2. Management's  Discussion and Analysis of Financial Condition and Results
              of Operations                                                                              11

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk                                       22

ITEM 4. Controls and Procedures                                                                          23


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

ITEM 1. Legal Proceedings                                                                                24

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds                                      24

ITEM 3. Defaults Upon Senior Securities                                                                  24

ITEM 4. Submission of Matters to a Vote of Security Holders                                              24

ITEM 5. Other Information                                                                                24

ITEM 6. Exhibits                                                                                         24

SIGNATURES                                                                                               25

</TABLE>


                                       1
<PAGE>





PART I - FINANCIAL INFORMATION
------------------------------

Item 1.       Consolidated Financial Statements
-----------------------------------------------
<TABLE>
<S>                                                                                <C>                 <C>

                           LONG ISLAND FINANCIAL CORP.
                           Consolidated Balance Sheets
                                   (Unaudited)
                        (In thousands, except share data)
                                                                                   September 30,       December 31,
                                                                                        2004               2003
                                                                                        ----               ----
Assets:

Cash and due from banks                                                            $   11,547          $  21,447
Interest earning deposits                                                                  45                 98
Federal funds sold                                                                          -             25,200
                                                                                       ------             ------
              Total cash and cash equivalents                                          11,592             46,745
Securities held-to-maturity (fair value $14,438 at December 31, 2003)                       -             12,474
Securities available-for-sale, at fair value                                          258,821            216,967
Federal Home Loan Bank stock                                                            6,372              3,050
Loans, held for sale                                                                      786              2,360
Loans, net of unearned income and deferred fees                                       244,768            226,128
Less allowance for loan losses                                                         (5,794)            (2,290)
                                                                                        -----              -----
              Loans, net                                                              238,974            223,838
Premises and equipment, net                                                             5,504              5,756
Accrued interest receivable                                                             2,957              2,401
Bank owned life insurance                                                               7,712              8,213
Deferred tax asset                                                                      2,588              1,466
Prepaid expenses and other assets                                                       2,580              1,401
                                                                                        -----              -----
              Total assets                                                         $  537,886          $ 524,671
                                                                                      -------            -------

Liabilities and Stockholders' Equity:

Deposits:
    Demand deposits                                                                $  105,324          $  98,693
    Savings deposits                                                                  109,950            104,231
    NOW and money market deposits                                                      85,769            123,732
    Other time deposits                                                                61,436             85,515
    Time certificates issued in excess of $100,000                                     10,860             13,272
                                                                                       ------             ------
              Total deposits                                                          373,339            425,443
Federal funds purchased and securities sold under agreements to repurchase             50,430                  -
Other borrowings                                                                       76,000             61,000
Subordinated debentures                                                                 7,732              7,732
Accrued expenses and other liabilities                                                  2,976              4,078
                                                                                        -----              -----
              Total liabilities                                                       510,477            498,253
                                                                                      -------            -------
Stockholders' equity:
    Common stock (par value $.01 per share; 10,000,000 shares authorized;
      1,846,589 and 1,825,211 shares issued; 1,509,689 and
      1,488,311 shares outstanding, respectively)                                          18                 18
    Surplus                                                                            21,500             20,973
    Accumulated surplus                                                                10,967             10,333
    Accumulated other comprehensive loss                                                 (898)              (728)
    Treasury stock at cost, (336,900 shares)                                           (4,178)            (4,178)
                                                                                        -----              -----
              Total stockholders' equity                                               27,409             26,418
                                                                                       ------             ------
              Total liabilities and stockholders' equity                           $  537,886          $ 524,671
                                                                                      -------            -------

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

                                       2
<PAGE>


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

                           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,
                                                                         2004        2003              2004         2003
                                                                         ----        ----              ----         ----
Interest income:
     Loans                                                            $ 4,091   $   3,762          $ 11,762     $ 11,355
     Securities                                                         2,803       2,071             8,107        6,458
     Federal funds sold and earning deposits                                1          15                 6           65
                                                                         ----         ---               ---        -----
         Total interest income                                          6,895       5,848            19,875       17,878
                                                                        -----       -----            ------       ------

Interest expense:
     Savings deposits                                                     309         272               872          849
     NOW and money market deposits                                        124          96               583          569
     Other time deposits                                                  529         757             1,770        2,489
     Time certificates issued in excess of $100,000                        51          95               180          257
     Borrowed funds                                                     1,141         746             2,778        2,144
     Subordinated debentures                                              208         209               621          620
                                                                          ---         ---               ---          ---
         Total interest expense                                         2,362       2,175             6,804        6,928
                                                                        -----       -----             -----        -----

         Net interest income                                            4,533       3,673            13,071       10,950
                                                                        -----       -----            ------       ------

Provision for loan losses                                                  75           -             5,575           60
                                                                           --        ----             -----           --

Net interest income after provision for loan losses                     4,458       3,673            7,496        10,890
                                                                        -----       -----            -----        ------

Other operating income:
     Service charges on deposit accounts                                  572         550             1,842        1,530
     Net (loss)gain on sales and calls of securities                      (11)        158             2,869          400
     Net gain on sale of residential loans                                208         185               604          512
     Earnings on bank-owned life insurance                                 85         102               480          306
     Other                                                                141         141               404          399
                                                                          ---         ---               ---          ---
         Total other operating income                                     995       1,136             6,199        3,147
                                                                          ---       -----             -----        -----

Other operating expenses:
     Salaries and employee benefits                                     1,771       1,918             5,772        5,533
     Occupancy expense                                                    335         296               964          787
     Premises and equipment expense                                       354         346             1,120          993
     Automobile loan expense                                              206           -             1,061            -
     Other                                                                972       1,015             3,132        3,030
                                                                          ---       -----             -----        -----
         Total other operating expenses                                 3,638       3,575            12,049       10,343
                                                                        -----       -----            ------       ------

         Income before income taxes                                     1,815       1,234             1,646        3,694

Income taxes                                                              664         440               471        1,320
                                                                          ---         ---               ---        -----
         Net income                                                   $ 1,151   $     794          $  1,175    $   2,374
                                                                        -----         ---             -----        -----

Basic earnings per share                                              $   .76   $     .54          $    .78    $    1.62
                                                                          ---         ---               ---         ----
Diluted earnings per share                                            $   .73   $     .51          $    .74    $    1.54
                                                                          ---         ---               ---         ----
Weighted average shares outstanding                                 1,508,636   1,481,347         1,503,608    1,467,496
                                                                    ---------   ---------         ---------    ---------
Diluted weighted average shares outstanding                         1,580,404   1,555,731         1,583,682    1,537,465
                                                                    ---------   ---------         ---------    ---------

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

                                       3
<PAGE>


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

                           LONG ISLAND FINANCIAL CORP.
            Consolidated Statement of Changes in Stockholders' Equity
                          and Other Comprehensive Loss
                  For the Nine Months Ended September 30, 2004
                                   (Unaudited)

                                                              (In thousands,except share data)
                                                                                  Accumulated
                                                                                     other
                                            Common                 Accumulated   comprehensive   Treasury
                                             stock       Surplus     surplus         loss         stock      Total
                                             ---------------------------------------------------------------------

Balance at December 31, 2003               $   18        20,973     10,333           (728)        (4,178)    26,418

Comprehensive income:
    Net income                                  -             -      1,175              -              -      1,175
      Other comprehensive loss,
        net of tax:
         Unrealized depreciation in
         available-for-sale securities,
         net of reclassification adjustment     -             -          -           (170)             -       (170)
                                                                                                                ---
Total comprehensive income                                                                                    1,005
                                                                                                              -----

Exercise of stock options and related
     tax benefit, issued 17,835 shares          -           389          -              -              -        389

Dividend reinvestment and stock purchase
     plan, issued 3,543 shares                  -           138          -              -              -        138

Dividends declared on common stock
     ($.36 per common share)                    -             -       (541)             -              -       (541)
                                             ----------------------------------------------------------------------

Balance at September 30, 2004              $   18        21,500     10,967           (898)        (4,178)    27,409
                                             ----------------------------------------------------------------------

</TABLE>


                                                             Nine Months Ended
                                                                September 30,
                                                                     2004
                                                                     ----
(In thousands)
Net unrealized depreciation
  arising during the year, net of tax                            $ (1,977)
Less: Reclassification adjustment for net
  gains included in net income, net of tax                          1,807
                                                                    -----

Net unrealized loss on securities, net of tax                      $ (170)


                                       4
<PAGE>



See accompanying notes to consolidated financial statements.




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

                           LONG ISLAND FINANCIAL CORP.
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
                                                                                                       For the Nine Months
                                                                                                       Ended September 30,
(In thousands)                                                                                     2004         2003
                                                                                                   ----         ----
Cash flows from operating activities:
    Net income                                                                                 $    1,175   $   2,374
    Adjustments to reconcile net income to net cash provided by operating activities:
     Provision for loan losses                                                                      5,575          60
     Depreciation and amortization                                                                    806         727
     Amortization of premiums, net of discount accretion                                              198       1,463
     Net gain on sales and calls of securities, held-to-maturity                                     (335)          -
     Net gain on sales and calls of securities, available-for-sale                                 (2,534)       (400)
     Loans originated for sale, net of proceeds from sales and gains                                1,574      (1,682)
     Net deferred loan origination fees                                                                88         126
     Earnings on bank owned life insurance                                                           (288)       (306)
     Bank owned life insurance benefit                                                               (192)          -
     Deferred income taxes                                                                         (1,009)          -
     Change in other assets and liabilities:
         Accrued interest receivable                                                                 (556)        309
         Prepaid expenses and other assets                                                         (1,120)        222
         Accrued expenses and other liabilities                                                    (1,102)       (107)
                                                                                                    -----         ---
         Net cash provided by operating activities                                                  2,280       2,786
                                                                                                    -----       -----
Cash flows from investing activities:
     Purchases of securities available-for-sale                                                  (577,925)   (565,050)
     Net purchase of Federal Home Loan Bank stock                                                  (3,322)       (912)
     Proceeds from sales of securities available-for-sale                                          67,161      30,607
     Proceeds from maturities and calls of securities held-to-maturity                              1,347           -
     Proceeds from maturities and calls of securities available-for-sale                          472,822     514,181
     Principal repayments on securities                                                             9,603      29,634
     Loan originations, net of principal repayments                                               (20,799)     (5,931)
     Redemption of bank owned life insurance                                                          922           -
     Purchase of premises and equipment                                                              (554)     (2,372)
                                                                                                      ---       -----
         Net cash (used in) provided by investing activities                                      (50,745)        157
                                                                                                   ------         ---
Cash flows from financing activities:
     Net decrease in demand deposit, savings, NOW, and money market accounts                      (25,613)    (28,782)
     Net decrease in certificates of deposit                                                      (26,491)    (17,105)
     Net increase in federal funds purchased and securities sold under agreements to repurchase    50,430      18,000
     Net increase in other borrowings                                                              15,000      10,000
     Shares issued under the dividend reinvestment and stock purchase plan                            138         118
     Exercise of stock options                                                                        389         489
     Payments for cash dividends                                                                     (541)       (441)
                                                                                                      ---         ---
         Net cash provided by (used in) financing activities                                       13,312     (17,721)
                                                                                                   ------      -------
         Net decrease increase in cash and cash equivalents                                       (35,153)    (14,778)
Cash and cash equivalents at beginning of period                                                   46,745      25,790
                                                                                                   ------      ------
Cash and cash equivalents at end of period                                                     $   11,592   $  11,012
                                                                                                   ------      ------
Supplemental disclosure of cash flow information:
-------------------------------------------------
Cash paid during the period for:
     Interest                                                                                  $    7,473   $   6,945
                                                                                                    -----       -----
     Income taxes                                                                              $    2,171   $   1,107
                                                                                                    -----       -----
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.
</TABLE>


                                       5
<PAGE>



                           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  nine-month  period ended
September 30, 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 report 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  materials  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>

                                                               September 30, 2004           December 31, 2003
                                                               ------------------           -----------------
                                                             Amortized        Fair       Amortized         Fair
                                                                Cost          Value         Cost           Value
                                                                                (In thousands)
    Held-to-maturity:
    Corporate debt                                         $        -             -    $   12,474         14,438
                                                                -----         -----        ------         ------
         Total securities held-to-maturity                 $        -             -    $   12,474         14,438
                                                                -----         -----        ------         ------

    Available-for-sale:
    U.S. Government and Agency obligations                 $  232,439       231,213    $  176,141        175,194
    Mortgage-backed securities:
       GNMA                                                    23,909        23,683        33,669         33,283
       FHLMC                                                    2,089         2,078         3,743          3,757
       FNMA                                                     1,611         1,647         2,547          2,595
    Municipal obligation                                          200           200             -              -
    Corporate debt                                                  -             -         2,010          2,138
                                                                 ----           ---         -----          -----
        Total securities available-for-sale                $  260,248       258,821    $  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."  On April 1, 2004,  the Company sold the entire  corporate
debt securities portfolio recognizing a gain of $2.5 million,  which is recorded
in other  operating  income  in the  caption  "net  gain on sales  and  calls of
securities."

3.   LOANS, NET

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

Loans, net, are summarized as follows:
                                                             September 30, 2004                December 31, 2003
                                                             ------------------                -----------------
                                                                            (Dollars in thousands)
    Loans held-for-sale:
       Residential real estate loans                       $       786   100.0   %           $     2,360  100.0   %
                                                                   ---   -----                     -----  -----
    Loans, net:
       Commercial and industrial loans                     $    45,992    18.6   %           $    42,723   18.5   %
       Commercial real estate loans                            166,599    67.3                   145,084   63.0
       Automobile loans                                         29,892    12.1                    41,158   17.9
       Residential mortgage loans                                3,240     1.3                         -    0.0
       Consumer loans                                            1,836     0.7                     1,381    0.6
                                                                 -----     ---                     -----    ---
                                                               247,559   100.0                   230,346  100.0
       Less:
             Unearned income                                     1,813                             3,328
             Deferred fees, net                                    978                               890
             Allowance for loan losses                           5,794                             2,290
                                                                 -----                             -----
    Total loans, net                                       $   238,974                       $   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  terminates.  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.

During  the  third  quarter  of 2004,  the  Company  continued  to  monitor  the
performance  of its  automobile  loan  portfolio.  The Company  continues to act
collectively with other banks,  which have loans outstanding to the third party.
The Company believes that the course of action taken during the second and third
quarter,  along with the  cooperation  of the other banks,  has  stabilized  the
portfolio  and  will  ultimately  lead  to  maximizing  the  value  of  disposed
collateral.

At September 30, 2004,  the automobile  loan portfolio  consisted of 1,367 loans
with balances  aggregating $28.1 million.  Automobile loans represented 11.5% of
the  Bank's  loan   portfolio,   net  of  unearned  income  and  deferred  fees.
Approximately  83.8% of the automobile  loan balances  mature through  September
2006.  Delinquencies  at September 30, 2004,  consisted of fifteen loans,  30-89
days past due, representing $460,420, or 1.6 % of the portfolio, and five loans,
aggregating  $68,974,  or .2% of the  portfolio,  greater than 90 days past due.
Those five loans are  classified  non-accrual  at September 30, 2004.  Since the
portfolio was underwritten to lessees of high credit quality,  those delinquency
statistics remain favorable and are in line with the Company's expectations.

The  Company  incurred  operating  expenses  relating  to  the  automobile  loan
portfolio of $206,000 for the quarter ended September 30, 2004, and $1.1 million
for the nine months ended September 30, 2004.  Those expenses  include,  but are
not  limited  to,   expenses  for  legal  services,   portfolio   servicing  and
administration,  collateral verification and disposition services, and audit and
accounting  services.  At September 30, 2004,  63.8% of the  operating  expenses
incurred  related to the  automobile  loan portfolio  were  attributable  to the
satisfaction  of certain  liabilities  of the third party and are not recurring.
While the Company  expects to incur  future  operating  expenses  related to the
automobile  loan  portfolio,  it  expects  those  expenses  to  decrease  as the
portfolio matures.  Recurring  operating costs for the automobile loan portfolio
are expensed  when  incurred and recorded in  "automobile  loan  expense" in the
consolidated statement of earnings.

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

The Company has continued to recognize  losses in the automobile  loan portfolio
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 future  market
conditions for used  automobiles  combined with the success of the third party's
national remarketing  servicer's efforts. Based upon the Company's assessment of
the loan portfolio and a review of recent collateral  disposition activity,  the
Company  made a  provision  for loan  losses of $75,000  for the  quarter  ended
September 30, 2004. Total provision for loan losses and charge-offs  relating to
the   automobile   portfolio   amounted  to  $5.6  million  and  $1.9   million,
respectively, for the nine months ended September 30, 2004.


                                       8
<PAGE>


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:

<TABLE>
<S>                                                              <C>          <C>                <C>         <C>
                                                                 For the Three Months            For the Nine Months
                                                                  Ended September 30,             Ended September 30,
                                                                   2004       2003                 2004        2003
                                                                --------------------------------------------------

                                                                   (Dollars in thousands, except per share data)

       Net income as reported                                    $ 1,151      $ 794              $ 1,175     $ 2,374
       Deduct total stock-based employee compensation
                expense determined under fair-value-based
                method for all awards, net of tax                     45         53                  189         241
                                                                      --         --                  ---         ---
       Pro forma net income                                      $ 1,106      $ 741                $ 983     $ 2,133
                                                                   -----        ---                  ---       -----

       Earnings per share:
       Basic                                   As Reported         $ .76      $ .54                $ .78      $ 1.62
                                               Pro forma             .73        .50                  .66        1.45
       Diluted                                 As Reported           .73        .51                  .74        1.54
                                               Pro forma           $ .70      $ .48                $ .62      $ 1.39

</TABLE>

5.   RECENT DEVELOPMENTS

On August 25, 2004,  the Board of Directors of the Company  declared a quarterly
dividend of $.12 per common  share.  The dividend  was paid October 1, 2004,  to
shareholders of record as of September 17, 2004.

6.   OTHER COMMITMENTS AND CONTINGENT LIABILITIES

In the normal course of business,  the Bank enters into  commitments to purchase
investment  securities.  At  September  30,  2004,  the Bank had no  outstanding
commitments to purchase investment securities.


                                       9
<PAGE>


7.   RECENT ACCOUNTING PRONOUNCEMENTS

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.

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  September 30, 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. The adoption of SFAS No.
149 on April 1,  2004,  did not have any  impact on the  Company's  consolidated
financial  statements,  as the Company has determined that the loan  commitments
relating to the origination of the mortgage loans  held-for-sale  outstanding as
of September 30, 2004 do not constitute a derivative instrument and therefore do
not fall  under the  scope of SFAS  149.  Such  loans  are  originated  and sold
simultaneously  to an  institutional  investor  and  therefore  do not carry any
inherent interest rate risk.

In March 2004, the FASB ratified Emerging Issues Task Force Issue No. 03-1, "The
Meaning  of  Other-Than-Temporary  Impairment  and Its  Application  to  Certain
Investments,"   ("EITF   03-1"),   which   provides   guidance  on   recognizing
other-than-temporary  impairments on certain investments. EITF 03-1 is effective
for  other-than-temporary  impairment  evaluations for investments accounted for
under SFAS No.  115,  "Accounting  for  Certain  Investments  in Debt and Equity
Securities," as well as non-marketable equity securities accounted for under the
cost method for reporting  periods  beginning  after June 15, 2004. On September
30, 2004,  the FASB directed the FASB staff to delay the effective  date for the
measurement  and  recognition  guidance  contained in  paragraphs  10-20 of EITF
03-01. This delay will be superseded  concurrent with the final issuance of FASB
Staff Position EITF 03-01a. During the period of delay, the Company continues to
apply  the  relevant   "other-than-temporary"   guidance  under  SFAS  No.  115,
"Accounting for Certain Investments in Debt and Equity Securities."


                                       10
<PAGE>

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.

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  loans and
commercial  and  industrial  loans.   Management  believes  that  the  Company's
allowance  for loan  losses at  September  30,  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.



                                       11
<PAGE>


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 the
Company's net income will be reduced.

Financial Condition

Total assets were $537.9  million as of September 30, 2004, an increase of $13.2
million,  or 2.5%,  from  $524.7  million at December  31,  2003.  The  increase
primarily was due to an increase in the securities available-for-sale portfolio,
offset in part by decreases in cash and due from banks,  federal funds sold, and
the  securities   held-to-maturity  portfolio.   Securities   available-for-sale
increased  $41.8  million,  or 19.3%,  to $258.8  million at September 30, 2004,
compared to $217.0  million at December  31, 2003.  The  increase in  securities
available-for-sale  was due to increased  purchase  activity.  The decrease from
period to period in  federal  funds sold and cash and due from  banks,  of $25.2
million and $9.9  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  $18.7  million,  from $226.1  million at
December 31, 2003, to $244.8 million at September 30, 2004, reflecting increases
primarily in commercial  real estate loans and commercial and industrial  loans.
Deferred  tax assets  increased  $1.1  million,  or 76.5%,  from $1.5 million at
December 31, 2003, to $2.6 million at September 30, 2004,  which,  in turn,  was
directly   related  to  both  the  $170,000   increase  in   accumulated   other
comprehensive  loss at September  30, 2004,  and the $5.6 million  provision for
loan losses for the nine months ended September 30, 2004.

Total  liabilities  increased  $12.2  million,  or 2.5%,  from $498.3 million at
December 31, 2003,  to $510.5  million at  September  30, 2004.  The increase in
total  liabilities was due  principally to an increase in borrowings,  partially
offset by a decrease in total deposits. The Company utilizes overnight and short
term borrowings,  primarily in the form of overnight federal funds purchased and
securities  sold under  agreements to  repurchase,  and other  borrowings  which
primarily  consist of 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.  There were $50.4 million of federal funds purchased and securities sold
under agreements to repurchase at September 30, 2004. Other borrowings increased
$15.0 million, or 24.6%, to $76.0 million at September 30, 2004. The decrease in
total  deposits is  primarily  the result of a decrease in NOW and money  market
deposits of $37.9 million, or 30.7%, from $123.7 million at December 31, 2003 to
$85.8 million at September 30, 2004,  attributable to the withdrawal of seasonal
municipal funds on deposit at December 31, 2003.  Other time deposits  decreased
$24.1  million,  or 28.2%,  from $85.5  million at December 31,  2003,  to $61.4
million at September 30, 2004 as the Bank strives to substitute low cost demand,
savings, NOW and money market deposits for time deposits.

Stockholders'  equity  increased  $1.0 million,  or 3.8%,  from $26.4 million at
December  31, 2003,  to $27.4  million at  September  30, 2004.  The increase in
stockholders  equity was attributable to $1.2 million of net income for the nine
months  ended  September  30, 2004,  and  $527,000 of stock  issued  through the
exercise of stock options and the dividend reinvestment and stock purchase plan.
Offsetting  in part those  increases,  were a $170,000  increase in  accumulated
other   comprehensive   loss  relating  to  the  securities   available-for-sale
portfolio, and dividends declared of $541,000.


                                       12
<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 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 and nine months ended September 30, 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.


                                       13
<PAGE>


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


                                                                Three Months Ended September 30,
                                                -----------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      $        427   $       1       .94 %    $      6,613   $      15     .91  %
     Securities, net (1)                     280,398       2,803      4.00           202,043       2,071    4.10
     Loans, net of unearned income and
         deferred fees (2)                   245,147       4,091      6.68           217,488       3,762    6.92
                                             -------       -----      ----           -------       -----    ----
Total interest-earning assets                525,972       6,895      5.24           426,144       5,848    5.49
Non-interest-earning assets                   24,890                                  33,909
                                              ------                                  ------
Total assets                            $    550,862                            $    460,053
                                             -------                                 -------

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
     Savings deposits                   $    109,212         309      1.13      $     96,123         272    1.13
     NOW and money market deposits            61,171         124       .81            56,515          96     .68
     Certificates of deposit                  78,642         580      2.95           106,554         852    3.20
                                              ------         ---      ----           -------         ---    ----
Total interest-bearing deposits              249,025       1,013      1.63           259,192       1,220    1.88
     Borrowed funds                          165,307       1,141      2.76            69,713         746    4.28
     Subordinated debentures                   7,732         208     10.76             7,732         209   10.81
                                               -----         ---     -----             -----         ---   -----
Total interest-bearing liabilities           422,064       2,362      2.24           336,637       2,175    2.58
Other non-interest-bearing liabilities       104,273                                  98,058
                                             -------                                  ------
Total liabilities                            526,337                                 434,695
Stockholders' equity                          24,525                                  25,358
                                              ------                                  ------
Total liabilities and
     stockholders' equity               $    550,862                            $    460,053
                                             -------                                 -------


Net interest income/
     interest rate spread (3)                          $   4,533      3.00%                    $   3,673    2.91  %
                                                           -----      ----                         -----    ----

Net interest margin (4)                                               3.45%                                 3.45  %
                                                                      ----                                  ----

Ratio of interest-earning assets to
     interest-bearing liabilities                                    1.25x                                 1.27x
                                                                     -----                                 -----


(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>

                                       14
<PAGE>

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


                                                                  Nine Months Ended September 30,
                                                -----------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      $        872   $       6       .92 %    $      8,249   $      65    1.05  %
     Securities, net (1)                     276,719       8,107      3.91           210,155       6,458    4.10
     Loans, net of unearned income and
         deferred fees (2)                   237,176      11,762      6.61           215,966      11,355    7.01
                                             -------      ------      ----           -------      ------    ----
Total interest-earning assets                514,767      19,875      5.15           434,370      17,878    5.49
Non-interest-earning assets                   32,667                                  38,259
                                              ------                                  ------
Total assets                            $    547,434                            $    472,629
                                             -------                                 -------

Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
     Savings deposits                   $    105,200         872      1.11      $     89,109         849    1.27
     NOW and money market deposits            98,496         583       .79            84,292         569     .90
     Certificates of deposit                  88,023       1,950      2.95           107,930       2,746    3.39
                                              ------       -----      ----           -------       -----    ----
Total interest-bearing deposits              291,719       3,405      1.56           281,331       4,164    1.97
     Borrowed funds                          119,645       2,778      3.10            67,601       2,144    4.23
     Subordinated debentures                   7,732         621     10.71             7,732         620   10.69
                                               -----         ---     -----             -----         ---   -----
Total interest-bearing liabilities           419,096       6,804      2.16           356,664       6,928    2.59
Other non-interest-bearing liabilities       101,539                                  90,232
                                             -------                                  ------
Total liabilities                            520,635                                 446,896
Stockholders' equity                          26,799                                  25,733
                                              ------                                  ------
Total liabilities and
     stockholders' equity               $    547,434                             $   472,629
                                             -------                                 -------


Net interest income/
     interest rate spread (3)                          $  13,071     2.99 %                    $  10,950    2.90  %
                                                          ------     ----                         ------    ----

Net interest margin (4)                                               3.39%                                 3.36  %
                                                                      ----                                  ----

Ratio of interest-earning assets to
     interest-bearing liabilities                                    1.23x                                 1.22x
                                                                     -----                                 -----


(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>

                                       15
<PAGE>


Comparison  of Operating  Results for the Three Months Ended  September 30, 2004
and 2003

General

The Company  reported net income of $1.2 million,  or diluted earnings per share
of $.73 for the three months ended September 30, 2004, compared to $794,000,  or
diluted  earnings  per share of $.51 for the three months  ended  September  30,
2003.

Interest Income

Interest  income  increased $1.0 million,  or 17.9%,  for the three months ended
September 30, 2004,  compared to the three months ended September 30, 2003. That
increase  was  attributable  to the $99.9  million,  or 23.4%,  increase  in the
average  balance of  interest-earning  assets from $426.1  million for the three
months ended  September 30, 2003,  to $526.0  million for the three months ended
September  30,  2004.  The  increase in income from the  increase in the average
balance  of  interest  earning  assets  was  offset in part by a 25 basis  point
decrease  in the  average  yield on  interest-earning  assets from 5.49% for the
three  months  ended  September  30,  2003,  to 5.24% for the three months ended
September 30, 2004. The decrease in average yield on interest-earning assets was
attributable to a 10 basis point decrease in yield on securities  which declined
from 4.10% for the three months ended September 30, 2003, to 4.00% for the three
months ended  September 30, 2004,  and a 24 basis point  decrease in the average
yield on loans,  net, from 6.92% for the three months ended  September 30, 2003,
to 6.68% for the the three months ended September 30, 2004. Partially offsetting
the  declines  in yield  from  period to period  was a $78.4  million,  or 38.8%
increase  in the average  balance of  securities  from $202.0  million for three
months ended  September 30, 2003,  to $280.4  million for the three months ended
September  30,  2004,  and a $27.6  million,  or 12.7%  increase  in the average
balance of loans,  net, from $217.5 million for the three months ended September
30, 2003, to $245.1 million for the three months ended September 30, 2004.

Interest Expense

Interest expense for the three months ended September 30, 2004 was $2.4 million,
compared to $2.2  million for the three  months ended  September  30,  2003,  an
increase of $187,000, or 8.6%. The increase was attributable to an $85.5 million
increase  in the average  balance of  interest-bearing  liabilities  from $336.6
million for the three months ended September 30, 2003, to $422.1 million for the
three months ended  September 30, 2004.  The increase in the average  balance of
interest  bearing  liabilities was partially offset by a 34 basis point decrease
in the average  cost of  interest-bearing  liabilities  from 2.58% for the three
months ended  September  30, 2003 to 2.24% for the three months ended  September
30,  2004.  The  increase  in the  average  interest-bearing  liabilities,  when
compared to the prior year period,  reflects  decreases of $10.2  million in the
average balance of interest-bearing deposits and an increase of $95.6 million in
the  average  balance  of  borrowed  funds.  There was no change in the  average
balance of  subordinated  debentures  from  September 30, 2003, to September 30,
2004.

Interest expense on interest-bearing  deposits decreased $207,000, or 17.0%, for
the three  months  ended  September  30,  2004,  from $1.2 million for the three
months  ended  September  30,  2003,  to $1.0 million for the three months ended
September 30, 2004.  That decrease was due to a decrease of $10.2 million in the
average  balance  of  interest   bearing  deposits  from  period  to  period  in
conjunction  with a 25 basis point  decrease in the average rate paid from 1.88%
for three  months ended  September  30, 2003 to 1.63% for the three months ended
September  30,  2004.  The decrease in the average  balance of interest  bearing
deposits was the result of a decrease in the average  balance of certificates of
deposits.

                                       16
<PAGE>

From time to time, the Company employs  various  funding  strategies to minimize
its overall  costs of funds.  Offsetting,  in part,  the decrease in the average
balance of  certificates  of deposit,  was an increase in the average balance of
savings  deposits of $13.1 million,  or 13.6%, and in the average balance of NOW
and money market deposits of $4.7 million, or 8.2% from period to period.

Interest expense on borrowed funds increased  $395,000,  or 52.9%, from $746,000
for the three months  ended  September  30, 2003,  to $1.1 million for the three
months ended  September 30, 2004.  The increase was primarily due to the average
balance of borrowed  funds,  which  increased  from $69.7  million for the three
months  ended  September  30, 2003 to $165.3  million for the three months ended
September 30, 2004.  Offsetting in part the cost  resulting from the increase in
the  average  balance was a 152 basis  point  decrease  in the  average  cost of
borrowed funds from 4.28% for the 2003 period, to 2.76% for the 2004 period.

Net Interest Income

Net interest income increased by $860,000,  or 23.4%,  from $3.7 million for the
three months  ended  September  30,  2003,  to $4.5 million for the three months
ended  September  30,  2004.  The average cost of  interest-bearing  liabilities
decreased 34 basis points from 2.58% for the three  months ended  September  30,
2003, to 2.24% for the three months ended  September 30, 2004. The average yield
on  interest-earning  assets  decreased 25 basis points from 5.49% for the three
months ended  September  30, 2003 to 5.24% for the three months ended  September
30, 2004. The net interest rate spread increased 9 basis points,  from 2.91% for
the three months ended  September  30, 2003, to 3.00% for the three months ended
September 30, 2004.

Provision for Loan Losses

The Company made a $75,000  provision for loan losses for the three months ended
September  30, 2004.  No provision for loan losses was made for the three months
ended  September  30, 2003.  The  determination  to make the  provision for loan
losses for the three  months  ended  September  30, 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
$5.8  million at September  30, 2004 and $2.3 million at December 31, 2003.  The
allowance  for loan losses as a percentage  of loans was 2.37% at September  30,
2004, and 1.01% at December 31, 2003.

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.


                                       17
<PAGE>

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

                                                                September 30, 2004       December 31, 2003
                                                                           (Dollars in thousands)
Non-accrual loans:
     Commercial and industrial loans                               $        -             $      -
     Commercial real estate loans                                           -                    -
     Automobile loans                                                      69                    -
                                                                          ---                  ---
         Total non-accrual loans                                           69                    -
                                                                          ---                  ---
Loans accruing - over 90 days:
     Commercial and industrial loans                                        -                    -
                                                                            -                  ---
         Total loans accruing-over 90 days                                  -                    -
                                                                            -                  ---
Total non-performing loans                                         $       69             $      -
                                                                           --                  ---
Allowance for loan losses as a percentage of loans (1)                   2.37   %             1.01   %
Allowance for loan losses as a percentage
     of total non-performing loans                                   8,397.10                    -
Non-performing loans as a percentage of loans (1)                         .03   %                -   %

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


Other Operating Income

Other operating income decreased $141,000,  to $1.0 million for the three months
ended  September 30, 2004,  as compared to the three months ended  September 30,
2003. That decrease was primarily  attributable to a net gain on sales and calls
of  securities  of $158,000  for the three  months  ended  September  30,  2003,
compared to an $11,000  loss for the three  months  ended  September  30,  2004.
Offsetting that decrease,  in part, was a $22,000,  or 4.0%, increase in service
charges on deposit  accounts  reflecting  an increased fee structure and overall
growth in the  depositor  base and a $23,000,  or 12.4%  increase in net gain on
sale of residential loans.

Other Operating Expenses

Other  operating  expenses  increased  $63,000 or 1.8%,  to $3.6 million for the
three  months ended  September  30,  2004.  The  increase in operating  expenses
stemmed from expenses  associated  with the  automobile  loan  portfolio for the
three months ended September 30, 2004 of $206,000.  Offsetting this increase, in
part,  were  reductions in salaries and employee  benefits and other expenses as
the Company  implemented certain cost controls and modified its branch expansion
plan.

Income Taxes

Income taxes increased  $224,000,  or 50.9%,  from $440,000 for the three months
ended  September 30, 2003, to $664,000 for the three months ended  September 30,
2004, as a result of the increase in income  before income taxes.  The effective
tax rates for each of the three months ended  September 30, 2004,  and September
30, 2003, were 36.6% and 35.7%, respectively.

Comparison of Operating Results for the Nine Months Ended September 30, 2004 and
2003

General

The Company  reported net income of $1.2 million,  or diluted earnings per share
of $.74 for the nine months ended September 30, 2004,  compared to $2.4 million,
or diluted  earnings per share of $1.54 for the nine months ended  September 30,
2003. The decrease in net income for the nine months ended September 30, 2004 as
compared to the prior year period is  attributable  primarily  to a $5.5 million
increase  in the  Company's  provision  for loan losses and  operating  expenses
relating to its automobile loan portfolio.

                                       18
<PAGE>

Interest Income

Interest  income  increased  $2.0 million,  or 11.2%,  for the nine months ended
September 30, 2004,  compared to the nine months ended  September 30, 2003. That
increase  was  attributable  to the $80.4  million,  or 18.5%,  increase  in the
average  balance of  interest-earning  assets from  $434.4  million for the nine
months ended  September  30, 2003,  to $514.8  million for the nine months ended
September  30,  2004.  The  increase in income from the  increase in the average
balance  of  interest  earning  assets  was  offset in part by a 34 basis  point
decrease in the average yield on interest-earning assets from 5.49% for the nine
months ended  September 30, 2003,  to 5.15% for the nine months ended  September
30,  2004 . The  decrease  in  average  yield  on  interest-earning  assets  was
attributable to a 19 basis point decrease in yield on securities  which declined
from 4.10% for the nine months ended  September  30, 2003, to 3.91% for the nine
months ended  September 30, 2004,  and a 40 basis point  decrease in the average
yield on loans, net, from 7.01% for the nine months ended September 30, 2003, to
6.61% for the nine months ended  September 30, 2004.  Partially  offsetting  the
declines in yield from period to period was a $66.5  million,  or 31.7% increase
in the average  balance of  securities  from $210.2  million for the nine months
ended  September 30, 2003, to $276.7 million for the nine months ended September
30, 2004, and a $21.2 million, or 9.8% increase in the average balance of loans,
net of unearned  income and  deferred  fees,  from  $216.0  million for the nine
months ended  September  30, 2003,  to $237.2  million for the nine months ended
September 30, 2004.

Interest Expense

Interest  expense for the nine months ended September 30, 2004 was $6.8 million,
compared  to $6.9  million for the nine  months  ended  September  30,  2003,  a
decrease of $124,000, or 1.8%. The decrease was attributable to a 43 basis point
decrease in the average cost of interest-bearing  liabilities from 2.59% for the
nine  months  ended  September  30,  2003 to  2.16%  for the nine  months  ended
September 30, 2004.  The decrease in the average cost was partially  offset by a
$62.4 million,  or 17.5%,  increase in the average  balance of  interest-bearing
liabilities from $356.7 million for the nine months ended September 30, 2003, to
$419.1  million for the nine months ended  September  30, 2004.  The increase in
average  interest-bearing  liabilities,  when  compared to the nine months ended
September 30, 2003,  reflects  increases of $10.4 million in the average balance
of  interest-bearing  deposits  and $52.0  million  in the  average  balance  of
borrowed  funds.  There was no change in the  average  balance  of  subordinated
debentures from September 30, 2003, to September 30, 2004.

Interest expense on interest-bearing  deposits decreased $759,000, or 18.2%, for
the nine months ended  September 30, 2004, from $4.2 million for the nine months
ended September 30, 2003 to $3.4 million for the nine months ended September 30,
2004.  That  decrease  was  primarily  due to a 41 basis  point  decrease in the
average rate paid on interest-bearing  deposits from 1.97% for nine months ended
September  30,  2003 to 1.56% for the nine  months  ended  September  30,  2004.
Offsetting,  in part,  the  decrease in the average rate paid was an increase in
the average balance of  interest-bearing  deposits of $10.4 million for the nine
months ended  September 30, 2004 from the nine months ended  September 30, 2003.
The increase in the average balance of interest-bearing  deposits was the result
of increases in the average  balance of savings  deposits of $16.1  million,  or
18.1%,  and in the average  balances of NOW and money  market  deposits of $14.2
million, or 16.9% from period to period.

                                       19
<PAGE>

Interest  expense on borrowed  funds  increased  $634,000,  or 29.6%,  from $2.1
million for the nine months ended  September  30, 2003,  to $2.8 million for the
nine months ended  September  30, 2004.  The increase was  primarily  due to the
average  balance of borrowed  funds,  which increased from $67.6 million for the
nine months ended September 30, 2003 to $119.6 million for the nine months ended
September 30, 2004. Offsetting in part the cost from the increase in the average
balance was a 113 basis point  decrease  in the average  cost of borrowed  funds
from 4.23% for the nine  months  ended  September  30,  2003,  to 3.10% for nine
months ended September 30, 2004.

Net Interest Income

Net interest income increased by $2.1 million,  or 19.4%, from $11.0 million for
the nine months ended  September  30, 2003, to $13.1 million for the nine months
ended September 30, 2004. The average cost of total interest-bearing liabilities
for the period  decreased 43 basis points from 2.59% in the 2003 period to 2.16%
in the 2004 period. The average yield on total  interest-earning  assets for the
period  decreased  34 basis points from 5.49% in the 2003 period to 5.15% in the
2004 period.  The net interest rate spread increased 9 basis points,  from 2.90%
for the nine months ended September 30, 2003, to 2.99% for the nine months ended
September 30, 2004.

Provision for Loan Losses

The Company  made a $5.6 million  provision  for loan losses for the nine months
ended September 30, 2004,  compared to a $60,000  provision for loan losses made
for the nine months ended September 30, 2003. The  determination to increase the
provision for loan losses for the nine months ended  September 30, 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 $5.8 million at September 30, 2004, and $2.3 million at December 31,
2003.  The  allowance  for loan  losses  as a  percentage  of loans was 2.37% at
September 30, 2004, and 1.01% at December 31, 2003.

Other Operating Income

Other  operating  income  increased  $3.1 million,  to $6.2 million for the nine
months ended  September 30, 2004, as compared to the nine months ended September
30, 2003. That increase was primarily attributable to an increase in net gain on
sales and calls of securities of $2.5 million, 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
$312,000, or 20.4%,  reflecting an increased fee structure and overall growth in
the depositor base.

Other Operating Expenses

Other operating  expenses  increased $1.7 million,  or 16.5%, from $10.3 million
for the nine months  ended  September  30, 2003,  to $12.0  million for the nine
months ended  September  30, 2004.  The increase in operating  expenses  stemmed
primarily from expenses  associated  with the automobile  loan portfolio of $1.1
million.

Income Taxes

For the nine months ended September 30, 2004, income tax expense of $471,000 was
recorded for the nine months ended  September  30, 2004,  compared to income tax
expense of $1.3 million for the nine months ended  September  30, 2003.

                                       20
<PAGE>

For the nine months ended September 30, 2004, the Company recorded income before
income taxes of $1.6 million,  inclusive of a nontaxable  death benefit received
in  conjunction  with the death of the  Company's  Chairman,  compared to income
before  income  taxes of $3.7 million for the nine months  ended  September  30,
2003.  The effective  tax rates for each of the nine months ended  September 30,
2004, and September 30, 2003, were 28.6% and 35.7%, 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  sales  of
investment  securities,  repayment  of loans and  incoming  deposits.  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 11.8% of the Company's  assets at September 30, 2004,
which  enable it to borrow  funds on a secured  basis.  The  Company  could also
engage in other forms of borrowings, including repurchase agreements.

At September 30, 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.

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

At September 30, 2004, convertible and medium term advances outstanding were as
follows:
                                                                              Call                  Contractual
                                        Amount            Rate                Date                   Maturity
                                        ------            ----                ----                   --------
Convertible advance                 $   14,000,000         5.49%           11/19/2004                2/19/2008
Convertible advance                     15,000,000         4.59%           10/21/2004                1/21/2009
Convertible advance                      5,000,000         2.24%             2/3/2006                 2/3/2009
Convertible advance                     14,000,000         4.97%           10/19/2004                1/19/2011
Convertible advance                      3,000,000         4.11%           12/12/2005               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
Medium term advance                     10,000,000         2.37%                -                    4/14/2006
                                        ----------
                                    $   76,000,000
</TABLE>


The primary  investing  activities of the Company are the purchase of securities
available-for-sale  and the  origination of loans.  During the nine months ended
September 30, 2004,  and 2003, the Company's  purchases of securities  that were
classified   available-for-sale  totaled  $577.9  million  and  $565.1  million,
respectively.  Loan originations,  net of principal repayments on loans, totaled
$20.8 million and $5.9 million for the nine months ended September 30, 2004, and
2003,   respectively.   Borrowings,   principal  repayments  and  maturities  of
securities were used primarily to fund those activities.

                                       21
<PAGE>

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 September 30, 2004, the Bank exceeded
those  requirements with a leverage capital ratio,  risk-based capital ratio and
total-risk based capital ratio of 5.66%, 10.02%, and 11.27%, respectively.

The Company achieves what it considers "capital adequacy" through the continuous
monitoring of its financial performance and plans for expansion.  Sources of the
Company's  capital are generated  primarily  through current period earnings and
the issuance of common stock via the dividend  reinvestment plan or the exercise
of stock options. Uses of capital currently result from the payment of dividends
on common stock or the  repurchase  of common stock  through a stock  repurchase
program.  In  February  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,  in  addition  to capital
adequacy,  the  Company  considers,   the  effect  on  the  Company's  financial
condition,  average daily trading volume, and listing requirements applicable to
the NASDAQ  National  Market  System.  At September  30, 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.

                                       22
<PAGE>

At  September  30,  2004,  79.3% of the  Company's  gross  loans had  adjustable
interest rates and its loan portfolio had an average  weighted  maturity of 10.4
years. At that date,  $42.0 million,  or 15.9%, of the Company's  securities had
adjustable  interest rates, and its securities  portfolio had a weighted average
contractual  maturity of 7.8 years. At September 30, 2004, the Company had $37.2
million of certificates of deposit with maturities of one year or less and $10.9
million of  deposits  over  $100,000,  which tend to be less  stable  sources of
funding  when  compared to core  deposits,  and which  represented  12.0% 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,  federal funds  purchased and securities
sold under agreements to repurchase, 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 net interest  income over the succeeding  four quarters and
(ii) the potential  change in the fair market value of the equity of the Company
("Net Economic Value of Equity"),  which would result from an instantaneous  and
sustained interest rate change of zero and plus or minus 200 basis points in 100
basis point increments.

At September 30, 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)          (10.87) %             $   (6,164)          (19.05)  %
                100                     (956)           (5.11)                   (2,453)           (7.58)
              Static                      --               --                        --               --
               (100)                    (891)           (4.76)                   (1,320)           (4.08)
               (200)                  (2,329)          (12.44)                   (4,477)          (13.83)
</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.


                                       23
<PAGE>

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

Item 1.  Legal Proceedings
-------  -----------------

          None.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
-------  -----------------------------------------------------------

          None.

Item 3.  Defaults Upon Senior Securities
-------  -------------------------------

          None.

Item 4.  Submission of Matters to a Vote of Security Holders
-------  ---------------------------------------------------

          None.

Item 5.  Other Information
-------  -----------------

          None.

Item 6.  Exhibits
-------  --------

          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


                                       24
<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:    November 15, 2004              By: /s/ Douglas C. Manditch
                                            -----------------------
                                        Douglas C. Manditch
                                        President and Chief Executive Officer


Date:    November 15, 2004              By: /s/ Thomas Buonaiuto
                                            --------------------
                                        Thomas Buonaiuto
                                        Vice President and Treasurer



                                       25
<PAGE>