Long Island Financial Corp. (LICB)
Interview with:
Douglas Manditch, President and CEO
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their Long Island Commercial Bank (LICB) (the Bank), an independent New York State chartered bank focused on serving small and medium-size businesses and consumers throughout Long Island and Brooklyn.


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Long Island Financial’s strategy of old-fashioned banking with automation is helping to drive shareholder value

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Community Banks

Long Island Financial Corp.

One Suffolk Square
1601 Veterans Memorial Highway
Phone: 631-348-0888

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Douglas Manditch
President and CEO

Interview conducted by:
Walter Banks, Publisher
December, 30 2004

Douglas C. Manditch is President and Chief Executive Officer of Long Island Commercial Bank and the banks parent Long Island Financial Corp., with its headquarters located in Islandia, Long Island, New York, and is a founding director of the Bank.

Doug is a thirty-nine (39) year veteran of the banking industry.  Prior to joining Long Island Commercial Bank, in its formation stage in 1987, Doug held senior management positions with National Bank of New York City, North Fork Bank and Trust Company and the First National Bank of Long Island.  He started his career in 1965 at Security National Bank.

He also serves as a Trustee of The Long Island Museum of American Art, History & Carriages at Stony Brook, and an Advisory Board Member of Transitional Services of New York for Long Island, Inc., and is Vice Chairman of the Board of Trustees of St. Charles Hospital.  He also serves as Vice Chairman of the Honorary Board of the Suffolk County Coalition Against Domestic Violence, an Honorary Member of The Friends of Sagamore Hill, and serves on the Leadership Council of Long Island Masterworks, Inc.

Doug is past Chairman of the Advancement for Commerce, Industry and Technology, is past Chairman of the New York Bankers Association, Long Island Division and a past State Chairman for New York of the American Bankers Association.

He has also served various other agencies and not for profit organizations during his career.

Long Island Commercial Bank opened in January 1990, and has a staff of approximately 110 employees with banking offices in Islandia, Babylon, Hauppauge, Smithtown, Westbury, Jericho, Shirley, Ronkonkoma, Melville, Central Islip, Deer Park and Bay Ridge, Brooklyn.

Company Profile:
Long Island Financial Corp. (NASDAQ: LICB) (the company) and its subsidiary, Long Island Commercial Bank (LICB) (the Bank) is an independent New York State chartered bank, founded in 1990. is focused on serving small and medium-size businesses and consumers throughout Long Island and Brooklyn. In addition to the banks Islandia headquarters, they also offer eleven branch locations throughout the counties of Nassau, Suffolk and Brooklyn, as well as Online Banking to serve customers needs. Long Island Commercial Bank strives to make business and consumer banking a personal experience by offering a broad selection of products, convenient services, and a responsive, knowledgeable staff.

CEOCFOinterviews: Mr. Manditch, will you give us a brief history of the Long Island Financial Corp, and how long have you been with the bank?
Mr. Manditch: “In late January of 2005, we will be celebrating our fifteenth anniversary. We were chartered by a group of businessmen from both Nassau and Suffolk counties. Primarily Long Island is made-up of the two counties; Suffolk County is in the east end of Long Island and Nassau is on the west end of Long Island. Long Island also encompasses Queens and Brooklyn, which many people do not realize and both are part of New York City but when Long Island is referenced, it is mostly Nassau and Suffolk County. We established our headquarters in the middle of Long Island; right off the Long Island Expressway. I was part of the founding group; I filed the applications and it took a little over two years to get the bank opened and the bank’s name is Long Island Commercial Bank. We are somewhat of a hybrid community bank in the sense that there was not a local community interest in starting this bank. It was an Island-wide interest in starting the bank; as you may know, Long Island is approximately 120 miles long and has a population of about 2.8 million people.  Most community banks start in a central community, like a village or small town, so it was a little different for us. We cater and concentrate to privately owned businesses and professionals. A number of years ago, we started doing municipal business. We have twelve branches; eight in Suffolk County, two in Nassau and one in Brooklyn, which we opened in 2003. In a few of our branches we do some consumer business but for the most part, our branches are located in industrial and commercial areas so we can concentrate on the business we want to do.”

CEOCFOinterviews: Why did you decide to open a branch in Brooklyn?
Mr. Manditch: “In community banking, the thing is people. We had an opportunity to attract the service of the President of a local bank that was sold.  He is a mainstay in the community and has been a friend of mine for many years.  Attracting someone like him lends immediate credibility when a bank opens in a new area.   From a community point-of-view, we thought it was a great opportunity to be able to enter a community with that strength and that has been a plus for us.”

CEOCFOinterviews: When you look at expansion, do you focus on building branches?
Mr. Manditch: “Unfortunately, all of our branches have been de novo. We have not had an opportunity to buy another institution. Although we continue to look, it is difficult today because the banks that are still around, that we could buy, don’t really want to sell. We are off the scope path of the mega banks that you read about. Even North Fork Bank is now a $50 to $55 billion bank with 350 branches when you include the recent Green Point merger. We are not a target of that group. It has been a de novo strategy and we have it down pretty well. Most of our branches are in office buildings in commercial and industrial areas. We have two branches that we have built over the last two years. One was a relocation of our most easterly branch is Shirley, which we opened about six years ago. It has done very well for us and they needed bigger quarters and we were finally able to find property.   We have a new branch in Deer Park in an industrial area."

CEOCFOinterviews: What goes into deciding where you are going to start a new branch; is your research done internally or by an outside agency?
Mr. Manditch: “We do it internally. I have been in this business for 39 years on Long Island and I know the Island pretty well. I have other staff people that know the Island. We look for an area where we want to be and we see if can find a couple of locations from which to choose. It is tough to find people in Long Island. Long Island’s economy has been strong and unemployment is somewhere under four percent. It is great except it is sometimes hard finding the people you need to continually expand. We gather information and once we are convinced about an area, then we attempt to find a property and for the most part, we look to lease.”

CEOCFOinterviews: How much competition is there on Long Island?
Mr. Manditch: “Tons of it! We have CitiBank, Bank of America, Chase and Washington Mutual. There are a few of us that are in the $500 to $600 million range, such as us, Bank of Smithtown, BridgeHampton National Bank, and three banks that are probably about a billion.”

CEOCFOinterviews: What separates you and encourages customers to use your bank over another bank?
Mr. Manditch: “Primarily it is service that separates us from the other banks. We have the luxury of doing pretty much what we want to do for a customer. We have products that we can streamline to a customer’s needs; we can do what we want for a customer. We have been very progressive with automation. We have just about any product that the money-centered banks or super regional banks have. We provide personal service at the highest level; a person always answers the phone during the business day.”

CEOCFOinterviews: How many days a week are you open?
Mr. Manditch: “We are open five days a week in most of our branches. Some of our branches that have consumer business are open six days. For the most part our branches don’t warrant weekend business because they are in commercial and industrial areas. We have three branches that are open of Saturdays. When you call us a person will answer and that is different from a lot of places. That is something we feel dedicated to. We provide a sense of urgency for making decisions for our customers. Many times, we become our own competition because we are able to turn around loan decisions quickly, sometimes that works against us in that customers will go back and negotiate the terms that we provided, with their own bank. The competition is huge. We have seen some mergers recently but the banks haven’t gone away, just the names have changed on the buildings.”

CEOCFOinterviews: Do you generate most of your income through loans? Mr. Manditch: “We have a significant security portfolio but most of our income is through loans.”

CEOCFOinterviews: So you feel that if somebody walks through your door, you can get them a loan quickly?
Mr. Manditch: “We think we can service our customers any way they need whether it be loans or deposit products or whatever it is.”

CEOCFOinterviews: Don’t most of the other banks say the same thing?
Mr. Manditch: “Many banks do but I think that the best thing to do is show customers that we can do it. When we do advertising, we don’t talk about service so much, because as you have indicated, anyone can say it, but it is the customers experience that really counts.”

CEOCFOinterviews: How else does providing good service help in bring new customers in?
Mr. Manditch: “We receive referrals from our customers because of the service that they experience at our bank. It is old-fashioned banking with automation. We certainly value our customers and realize that without our customers, our shareholder value will not increase. Obviously that is the whole purpose of this, to drive shareholder value.”

CEOCFOinterviews: Will your future growth come through expansion or internal growth?
Mr. Manditch: “Our future growth will come from expansion. We have a plan to have twenty branches by the end of 2008. It is an aggressive plan and we are looking to restart branching again in the latter part of next year. It has been a challenging time for us. We opened a number of branches in 2001-2003 and of course, we have had compliance requirements that took up a lot of time this year. We have had to comply with FDICIA and also with Sarbanes-Oxley, which has been a huge and costly undertaking, so we did not expand this year. We are back on-tract to get to that twenty-branch level.  On Long Island you need to have brick and mortar. Most of our branches are from just a little under 2000 feet to maybe 2,500 feet. We have learned to open branches rather economically over the years.”  Branch expansion is needed to gain market share due to the vast size of Long Island."

CEOCFOinterviews: Will you tell us about the current financial condition of the company?
Mr. Manditch: “The Company is in sound shape. The third quarter of this year was a record-setting quarter for us; we made $1.2 million dollars; seventy-three cents a share. That may be challenged a little bit by higher interest rates at this point, but I do believe that the strength of the company is just starting to blossom. We have spent a lot of money reinvesting in the company by opening branches and in automated services. I believe that as we let the branches mature a little bit and as we add new branches, we should be in a powerful position going forward.”

CEOCFOinterviews: How are you positioned with your management team?
Mr. Manditch: “We have a strong senior management. My CFO has been with me for about twelve years; he is a CPA and is very strong. Our controller is also a CPA and he has been with us for nine years. My chief lending officer has been with us for fourteen years and he is a thirty-five year veteran of lending on the Island. I have a strong branch administration staff and our sales staff is very good. We are positioned very well.”

CEOCFOinterviews: Are you managed through the main office?
Mr. Manditch: “We are pretty much managed through the main office. There is some empowerment in the branches but the key is in how we have structured the bank. We like to keep the branch managers free to go out and cultivate new business and not tie them down with a lot of detail. We have set the bank up so that we have business development officers that work in tandem with branch managers and get involved with gathering more of the details, and then they bring the information into the bank and we have others that do the underwriting. On the deposit side, it is different; the branches can handle all requirements. We have operation support for cash management services, lock box, rent security, escrows and all of that. For the most part, the branches are there to care for the customers and provide the best service that we can.”

CEOCFOinterviews: If someone was looking at your company and said, ‘the area you are in looks like it is going to be growing’; would that be accurate?
Mr. Manditch: “Yes, Long Island is constantly growing. Ninety percent of the employment on Long Island is through small business and small business in that case is classified as businesses with less than twenty employees. There is something like ninety thousand small businesses on Long Island. There are some bigger companies on Long Island such as Symbol Technologies and Computer Associates. Healthcare is very big on Long Island. For the most part, most people are employed by small business and it is very vibrant at this point.”

CEOCFOinterviews: Do customers tend to carry their loans to term?
Mr. Manditch: “We do a lot of commercial real estate mortgage lending. “Our Commercial lending products are primarily lines of credit.   Some customers go to term, others renegotiate, or refinance, as their needs require.”

CEOCFOinterviews: Are you looking to attract investors?
Mr. Manditch: “I am always looking to attract investors to our company and trying to get the name of Long Island Commercial Bank and Long Island Financial Corp. out in the investor market. It is not a brand that is recognizable so it is important to have these kinds of conversations so that we can be published in different areas. We are always looking to have awareness made of the company and to attract new shareholders. I think that keeps the stock vibrant. We are not hugely traded, obviously, and it is great to have new interest in the company."

CEOCFOinterviews: In closing, if potential investors were looking at your company, what would you say to them?
Mr. Manditch: “I think that someone that wants to invest in our company is someone that is a longer-term holder. It is somebody that is willing to hold on for a number of years and see the investment appreciate over that time based on earnings and delivering shareholder value. We do pay a dividend at this point; it is 48 cents a share annually. We pay it quarterly. Our board likes to pay a dividend, although we have not set a specific percentage of dividend payout. The board is cognizant of a dividend and of appreciation so it is a mix that we hope satisfies our shareholders. We have a dividend reinvestment program if an investor wants to do that with its dividends. So we look for an investor that is a longer-term equity holder.”


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“Primarily it is service that separates us from the other banks. We have the luxury of doing pretty much what we want to do for a customer. We have products that we can streamline to a customer’s needs; we can do what we want for a customer. We have been very progressive with automation. We have just about any product that the money-centered banks or super regional banks have. We provide personal service at the highest level; a person always answers the phone during the business day.” - Douglas Manditch


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