<PAGE>
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
------------------------
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 COMMISSION FILE NUMBER 0-12220
THE FIRST OF LONG ISLAND CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
NEW YORK 11-2672906
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
10 GLEN HEAD ROAD 11545
GLEN HEAD, NEW YORK (Zip Code)
(Address of principal executive offices)
</TABLE>
Registrant's telephone number, including area code: (516) 671-4900
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $.10 a share
(Title of class)
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 periods 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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this form 10-K or any amendment to this
form 10-K. /X/
The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of March 4, 1996:
COMMON STOCK, $.10 PAR VALUE -- $63,606,222
The number of shares outstanding of the issuer's classes of common stock as
of March 4, 1996:
COMMON STOCK, $.10 PAR VALUE -- 2,094,032 SHARES
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual report to shareholders for the year ended December
31, 1995 are incorporated by reference into Parts I and II.
Portions of the proxy statement for the annual shareholders meeting to be
held April 16, 1996 are incorporated by reference into Part III.
THIS REPORT CONTAINS 78 PAGES
AND THE EXHIBIT INDEX IS ON PAGE 16.
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<PAGE>
PART I
ITEM 1. BUSINESS
THE FIRST OF LONG ISLAND CORPORATION ("REGISTRANT")
Registrant was incorporated on February 7, 1984 for the purpose of becoming
a bank holding company with respect to The First National Bank of Long Island,
Glen Head, New York. On April 30, 1984, Registrant acquired, and owns, all of
the outstanding capital stock of The First National Bank of Long Island. The
business of Registrant consists primarily of the ownership, supervision and
control of its bank subsidiary.
Registrant's competition comes from other bank holding companies and banking
institutions having main or branch offices located throughout the Registrant's
banking area.
Registrant and its bank subsidiary had 121 full-time employees and 70
part-time employees as of December 31, 1995.
THE FIRST NATIONAL BANK OF LONG ISLAND ("BANK")
The Bank was organized as a national banking association under the laws of
the United States of America in 1927 under the name of The First National Bank
of Glen Head. On July 1, 1978 its name was changed to The First National Bank of
Long Island.
The Bank is a full service retail commercial bank, conducting business in
the counties of Nassau and Suffolk. The Bank provides a broad range of services
to individuals, professionals, partnerships, corporations, public bodies, and
other organizations. Included in its services are demand and time deposits, a
wide variety of loans, investment and trust services and other customer services
such as safe deposit facilities. The Bank has branch offices in Roslyn Heights,
Greenvale, Old Brookville, Woodbury, Northport, Lake Success, Huntington,
Hicksville, Mineola, Rockville Centre, New Hyde Park, Locust Valley, Valley
Stream, and Great Neck. The offices in Lake Success, Hicksville, Mineola,
Rockville Centre, New Hyde Park, Valley Stream, and Great Neck are commercial
banking facilities.
The Bank encounters substantial competition in its banking business from
numerous other banking facilities which have offices located in one or more of
the communities served by the Bank. Principal competitors are large New York
City banks such as Citibank, Chemical Bank, Chase Manhattan Bank, Bank of New
York, and National Westminster Bank USA.
The primary banking agency responsible for regulating the Bank is the
Comptroller of the Currency. The Bank is also subject to regulation and
supervision by the Federal Reserve Board and the Federal Deposit Insurance
Corporation. Among the specified regulations are certain capital adequacy
requirements that banks and bank holding companies must adhere to. Failure to
comply could result in regulatory action ranging from the implementation of a
mandatory capital restoration plan to being placed in receivership. The Bank and
the Corporation substantially exceed the risk-based capital adequacy levels
required by these regulatory authorities.
The First of Long Island Agency, Inc. was organized in 1994 under the laws
of the State of New York, as a subsidiary of the Bank to conduct business as a
licensed insurance agency engaged in the sale of insurance, primarily fixed
annuity products.
STATISTICAL DISCLOSURE
Pages (i) , and 4 through 11 inclusive, of Registrant's Annual Report to
Shareholders for the year ended December 31, 1995 are incorporated herein by
reference.
2
<PAGE>
DISTRIBUTION OF AVERAGE ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY; INTEREST
RATES AND INTEREST DIFFERENTIAL
The following table sets forth for the periods indicated a summary of the
distribution of average assets, liabilities and stockholders' equity:
<TABLE>
<CAPTION>
1995 1994 1993
------------------------------- ------------------------------- -------------------------------
AVERAGE YIELD/ AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST RATE BALANCE INTEREST RATE BALANCE INTEREST RATE
--------- --------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning
assets:
Federal funds
sold............... $ 33,140 $ 1,927 5.81% $ 13,730 $ 601 4.38% $ 10,995 $ 329 2.99%
Investment
Securities
Available for
Sale............. 47,096 2,948 6.26 43,771 2,988 6.83
Held to
Maturity......... 161,305 10,011 6.21 167,576 9,669 5.77 208,801 12,986 6.22
Loans (1)........... 143,677 13,132 9.14 141,399 11,603 8.21 132,480 10,682 8.06
--------- --------- --------- --------- --------- ---------
Total
interest-earning
assets............. 385,218 28,018 7.27 366,476 24,861 6.78 352,276 23,997 6.81
Noninterest-earning
assets:
Cash and due from
banks.............. 19,297 17,290 16,545
Premises and
equipment, net..... 5,007 5,128 5,378
Other assets........ 5,802 5,251 4,526
Less: allowance for
loan losses........ (3,607) (3,602) (3,554)
--------- --------- ---------
TOTAL........... $ 411,717 $ 390,543 $ 375,171
--------- --------- ---------
--------- --------- ---------
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Interest-bearing
liabilities:
Savings, NOW, and
money market
deposits........... $ 213,250 $ 7,171 3.36 $ 216,043 $ 5,237 2.42 $ 215,520 $ 4,978 2.31
Time deposits....... 35,416 1,728 4.88 27,302 938 3.44 27,698 890 3.21
--------- --------- --------- --------- --------- ---------
Total
interest-bearing
liabilities........ 248,666 8,899 3.58 243,345 6,175 2.54 243,218 5,868 2.41
Noninterest-bearing
liabilities:
Demand deposits..... 115,010 104,329 93,071
Other............... 2,133 1,864 1,804
--------- --------- ---------
365,809 349,538 338,093
Stockholders'
equity............. 45,908 41,005 37,078
--------- --------- ---------
TOTAL........... $ 411,717 $ 390,543 $ 375,171
--------- --------- ---------
--------- --------- ---------
Net interest
earnings........... $ 19,119 $ 18,686 $ 18,129
--------- --------- ---------
--------- --------- ---------
Net yield on
interest-earning
assets............. 4.96% 5.10% 5.15%
</TABLE>
- ------------------------------
(1) For the purpose of these computations, nonaccruing loans are included in
the daily average loan amounts outstanding.
3
<PAGE>
ANALYSIS OF CHANGES IN NET INTEREST INCOME
The following table sets forth for the periods indicated a summary of the
changes in interest earned and interest paid resulting from changes in volume
and changes in rates:
<TABLE>
<CAPTION>
1995 COMPARED TO 1994 1994 COMPARED TO 1993
INCREASE (DECREASE) DUE TO: INCREASE (DECREASE) DUE TO:
------------------------------- -------------------------------
VOLUME RATE NET VOLUME RATE NET
--------- --------- --------- --------- --------- ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
INTEREST EARNED ON:
Federal funds sold....................... $ 1,076 $ 250 $ 1,326 $ 95 $ 177 $ 272
Investment Securities
Available for Sale..................... 218 (258) (40) 2,988 2,988
Held to Maturity....................... (371) 713 342 (2,428) (889) (3,317)
Loans.................................... 190 1,339 1,529 729 192 921
--------- --------- --------- --------- --------- ---------
Total interest-earning assets........ $ 1,113 $ 2,044 $ 3,157 $ 1,384 $ (520) $ 864
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
INTEREST PAID ON:
Demand deposits
Savings, NOW, and money market deposits.. $ (69) $ 2,003 $ 1,934 $ 12 $ 247 $ 259
Time Deposits............................ 327 463 790 (13) 61 48
--------- --------- --------- --------- --------- ---------
Total interest-bearing liabilities... $ 258 $ 2,466 $ 2,724 $ (1) $ 308 $ 307
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
</TABLE>
The change in interest due to both rate and volume has been allocated to
volume and rate changes in proportion to the relationship of the absolute dollar
amounts of the change in each.
4
<PAGE>
INVESTMENT PORTFOLIO
Effective January 1, 1994, the Corporation adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investment in Debt and
Equity Securities" (SFAS No. 115). The following table sets forth the carrying
amount of investment securities at the dates indicated:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1995 1994 1993
----------- ------------ -----------
<S> <C> <C> <C>
(IN THOUSANDS OF DOLLARS)
SECURITIES HELD TO MATURITY:
U.S. Treasury.......................................................... $ 80,861 $ 67,781 $ 97,522
U.S. Government Agencies............................................... 36,238 42,924 54,133
State and Municipals................................................... 33,975 37,117 39,326
Collateralized Mortgage Obligations.................................... 8,604 9,956 22,317
Commercial Paper....................................................... 9,981 2,997
Other.................................................................. 1,121
----------- ------------ -----------
Total................................................................ $ 159,678 $ 167,759 $ 217,416
----------- ------------ -----------
----------- ------------ -----------
SECURITIES AVAILABLE FOR SALE:
U.S. Treasury.......................................................... $ 39,293 $ 35,227
State and Municipals................................................... 6,864 4,355
Collateralized Mortgage Obligations.................................... 11,272 5,164
Other.................................................................. 127 127
----------- ------------
Total................................................................ $ 57,556 $ 44,873
----------- ------------
----------- ------------
</TABLE>
The following tables set forth, at carrying amount, the maturities of
investment securities at December 31, 1995 and the weighted average yields of
such securities (calculated on the basis of the cost and effective yields
weighted for the scheduled maturity of each security). Tax-equivalent
adjustments (using a 34 percent rate) have been made in calculating yields on
State and Municipal obligations.
<TABLE>
<CAPTION>
MATURING
--------------------------------------------------------------------------------------
WITHIN AFTER ONE BUT AFTER FIVE BUT AFTER
ONE YEAR WITHIN FIVE YEARS WITHIN TEN YEARS TEN YEARS
-------------------- -------------------- -------------------- --------------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
--------- --------- --------- --------- --------- --------- --------- ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SECURITIES HELD TO MATURITY:
U.S. Treasury................ $ 30,416 6.36% $ 50,445 6.26%
*U.S. Government
Agencies.................... 9,410 $ 9,083 8.10% $ 17,745 6.83%
State and Municipals......... 5,965 6.08 9,525 6.75 18,420 7.27 65 7.50
*Collateralized
Mortgage Obligations........ 8,604 7.32
Commercial Paper.............
--------- --------- --------- ---------
Total..................... $ 36,381 6.31% $ 69,380 6.34% $ 27,503 7.54% $ 26,414 6.99%
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
MATURING
--------------------------------------------------------------------------------------
WITHIN AFTER ONE BUT AFTER FIVE BUT AFTER
ONE YEAR WITHIN FIVE YEARS WITHIN TEN YEARS TEN YEARS
-------------------- -------------------- -------------------- --------------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
--------- --------- --------- --------- --------- --------- --------- ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SECURITIES AVAILABLE FOR SALE:
U.S. Treasury................ $ 6,583 6.22% $ 32,710 6.23%
State and Municipals......... 763 10.97 2,399 6.19 $ 3,473 7.31% $ 229 8.02%
*Collateralized
Mortgage Obligations........ 11,272 6.37
Other........................ 127 6.56
--------- --------- --------- ---------
Total..................... $ 7,346 6.71% $ 35,109 6.23% $ 3,473 7.31% $ 11,628 6.40%
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
- ------------------------
* Maturity dates are specified pursuant to regulatory requirements. The total of
all securities backed by mortgages are expected to have substantial periodic
repayments resulting in a weighted average life for the above two securities
categories which is considerably shorter than would be surmised from the above
tables.
5
<PAGE>
LOAN PORTFOLIO
The following table shows the Registrant's loan distribution at the end of
each of the last five years indicated:
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
Commercial, financial and
agricultural.......................... $ 21,708 $ 19,482 $ 19,514 $ 20,990 $ 18,434
Real estate -- construction............ -- -- -- -- --
Real estate -- mortgage................ 115,098 115,855 108,025 100,410 94,008
Installment............................ 9,671 8,961 9,337 9,386 11,194
All other loans (including
overdrafts)........................... 193 174 113 304 82
--------- --------- --------- --------- ---------
Total Loans........................ $ 146,670 $ 144,472 $ 136,989 $ 131,090 $ 123,718
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>
The following table shows the maturity of loans (excluding real estate
mortgages and installment loans) outstanding as of December 31, 1995. Also
provided are the amounts due after one year classified according to the
sensitivity to changes in interest rates.
<TABLE>
<CAPTION>
MATURING
--------------------------------------------------
AFTER ONE BUT
WITHIN WITHIN FIVE AFTER FIVE
ONE YEAR YEARS YEARS TOTAL
--------- --------------- ----------- ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
Commercial, financial and agricultural (and all
other loans, including overdrafts)............. $ 12,622 $ 8,363 $ 916 $ 21,901
Real estate -- construction..................... -- -- -- --
--------- ------- ----- ---------
Total....................................... $ 12,622 $ 8,363 $ 916 $ 21,901
--------- ------- ----- ---------
--------- ------- ----- ---------
Loans maturing after one year with:
Fixed interest rates.......................... $ 2,415 $ 1
Variable interest rates....................... 5,948 915
------- -----
Total....................................... $ 8,363 $ 916
------- -----
------- -----
</TABLE>
6
<PAGE>
PAST DUE, NONACCRUAL, AND RESTRUCTURED LOANS
The following table summarizes the Registrant's past due, nonaccrual, and
restructured loans:
<TABLE>
<CAPTION>
DECEMBER 31
-------------------------------------------------------
1995 1994 1993 1992 1991
--------- --------- ----------- --------- ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
Past Due for 90 Days or more....................... $ 251 $ 3 $ 183 $ 15 $ 26
Nonaccrual loans................................... 843 516 448 1,017 971
Restructured Loans................................. 816 824 1,022 133 106
Gross interest income which would have been
recorded during the year under original terms:
Nonaccrual loans................................... 97 36 43 137 131
Restructured loans................................. 96 86 105 18 14
Gross interest income recorded during the year:
Nonaccrual loans................................... 36 1 1 36 33
Restructured loans................................. 82 61 78 15 13
Commitments for additional funds................... None None None None None
</TABLE>
The Registrant has no foreign loans outstanding nor has it any significant
loan concentrations in any one industry.
7
<PAGE>
SUMMARY OF LOAN LOSS EXPERIENCE
This table summarizes the Registrant's loan loss experience for each of the
five years ended indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------------------
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
Balance at January 1.............................. $ 3,600 $ 3,590 $ 3,503 $ 3,105 $ 2,571
Charge-offs:
Commercial, financial, and agricultural......... 3 13 3
Real estate -- mortgage......................... 121 568 718
Installment and other........................... 21 35 24 86 71
--------- --------- --------- --------- ---------
24 48 145 654 792
Recoveries:
Commercial, financial, and agricultural......... 6 5 5 4
Real estate -- mortgage......................... 16 36 28 426 9
Installment and other........................... 8 16 24 21 13
--------- --------- --------- --------- ---------
24 58 57 452 26
--------- --------- --------- --------- ---------
Net recoveries (charge-offs)...................... 0 10 (88) (202) (766)
Additions charged to operations (1)............... 175 600 1,300
--------- --------- --------- --------- ---------
Balance at December 31............................ $ 3,600 $ 3,600 $ 3,590 $ 3,503 $ 3,105
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Ratio of net charge-offs to average loans
outstanding...................................... -- -- .07% .16% .62%
</TABLE>
- ------------------------
(1) The amount charged to operations and the related balance in the allowance
for loan losses is based upon periodic evaluations of the loan portfolio by
management. These evaluations consider several factors including, but not
limited to, general economic conditions, loan portfolio composition, prior
loan loss experience, management's estimation of future potential losses,
and regulatory agencies' recommendations based on their reviews.
The standard loan to value policy for residential mortgage products
originated for our portfolio is a maximum of 75% of appraised value or purchase
price, whichever is less and for commercial mortgages that policy is two-thirds
of appraised value.
As a result of the continued slow growing Long Island economy, charge-off
experience could rise in the future. Management feels that the current allowance
for loan losses at December 31, 1995 is adequate. This matter is discussed
further in Management's Discussion and Analysis of Financial Condition and
Results of Operations (under "Financial Condition -- Allowance for Loan Losses")
and in Note A (under "Allowance for Loan Losses"); and in Note I (under
"Concentrations of Credit Risk"). All three items are incorporated herein by
reference.
8
<PAGE>
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
This table shows an allocation of the allowance for loan losses as of the
end of each of the last five years.
<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994 DECEMBER 31, 1993
-------------------- -------------------- --------------------
PERCENT PERCENT PERCENT
OF LOANS OF LOANS OF LOANS
IN EACH IN EACH IN EACH
CATEGORY CATEGORY CATEGORY
TO TOTAL TO TOTAL TO TOTAL
AMOUNT LOANS AMOUNT LOANS AMOUNT LOANS
---------- -------- ---------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Commercial, financial, and
agricultural................. $ 562,653 15% $ 574,197 13% $ 651,803 14%
Real estate-construction......
Real estate-mortgage.......... 2,240,660 78 2,325,443 80 2,095,416 79
Installment and other......... 196,613 7 148,224 7 217,041 7
Unallocated................... 600,104 552,298 625,379
---------- ---------- ----------
$3,600,030 100% $3,600,162 100% $3,589,639 100%
---------- ---------- ----------
---------- ---------- ----------
<CAPTION>
DECEMBER 31, 1992 DECEMBER 31, 1991
-------------------- --------------------
PERCENT PERCENT
OF LOANS OF LOANS
IN EACH IN EACH
CATEGORY CATEGORY
TO TOTAL TO TOTAL
AMOUNT LOANS AMOUNT LOANS
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Commercial, financial, and
agricultural................. $ 849,080 16% $ 456,082 15%
Real estate-construction......
Real estate-mortgage.......... 1,510,986 77 1,154,374 76
Installment and other......... 252,504 7 290,157 9
Unallocated................... 889,948 1,204,700
---------- ----------
$3,502,518 100% $3,105,313 100%
---------- ----------
---------- ----------
</TABLE>
9
<PAGE>
DEPOSITS
Maturities of time certificates of deposit of $100,000 or more outstanding
at December 31, 1995, are summarized as follows:
<TABLE>
<CAPTION>
AMOUNT
------------------------
(IN THOUSANDS OF
DOLLARS)
<S> <C>
3 months or less................................................ $3,414
Over 3 through 6 months......................................... 3,609
Over 6 through 12 months........................................ 538
Over 12 months.................................................. 404
-------
Total....................................................... $7,965
-------
-------
</TABLE>
The Corporation has no interest-bearing demand deposits.
RETURN ON EQUITY AND ASSETS
The following table shows consolidated operating and capital ratios of the
Registrant for each of the last three years:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Return on average total assets before cumulative effect of accounting change........... 1.51% 1.54% 1.48%
Return on average total assets......................................................... 1.51 1.54 1.65
Return on average stockholders' equity before cumulative effect of accounting change... 13.52 14.70 15.16
Return on average stockholders' equity................................................. 13.52 14.70 16.72
Dividend payout ratio before cumulative effect of accounting change.................... 18.91 17.88 17.78
Dividend payout ratio.................................................................. 18.91 17.88 15.90
Average equity to average assets ratio................................................. 11.15 10.50 9.88
</TABLE>
ITEM 2. PROPERTIES
REGISTRANT
Registrant as such owns no materially important physical properties. Office
facilities of the Registrant are located at 10 Glen Head Road, Glen Head, New
York, in a building owned by the Bank.
BANK
The Bank's main offices are also at 10 Glen Head Road, Glen Head, New York,
which Bank owns in fee. The Bank owns a total of 10 buildings in fee and
occupies seven other facilities under lease arrangements, all in Nassau County
and Suffolk County, New York.
In the opinion of management of Registrant, all facilities of the Bank are
suitable and adequate, and are being fully utilized.
10
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
There are no material legal proceedings, individually or in the aggregate,
to which the Registrant or the Bank is a party or of which any of their property
is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
11
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
Common stock market prices, dividends, and number of shareholders on page
(i) of Registrant's Annual Report to Stockholders for the year ended December
31, 1995 are incorporated herein by reference.
During 1995 and 1994, cash dividends were paid on a semiannual basis.
ITEM 6. SELECTED FINANCIAL DATA
Selected Financial Data on page (i) of Registrant's Annual Report to
Stockholders for the year ended December 31, 1995 is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of
Operations on pages 4 through 11, and the President's Letter to Stockholders on
pages 2 and 3 of the Registrant's Annual Report to Stockholders for the year
ended December 31, 1995 are incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements and the report of independent auditors
included on pages 14 through 31 of Registrant's Annual Report to Stockholders
for the year ended December 31, 1995 are incorporated herein by reference.
ITEM 9. CHANGES IN OR DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
12
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Pages 2 through 7 of Registrant's Proxy Statement for its Annual Meeting of
Stockholders to be held April 16, 1996 are hereby incorporated by reference.
ITEM 11. EXECUTIVE COMPENSATION
Page 5 "Compensation of Directors", and pages 7 through 12 of the
Registrant's Proxy Statement for its Annual Meeting of Stockholders to be held
April 16, 1996 are hereby incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Pages 1 through 3 "Voting Securities and Principal Stockholders" of
Registrant's Proxy Statement for its Annual Meeting of Stockholders to be held
April 16, 1996 are hereby incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Pages 13 and 14 "Transactions With Management And Others", of Registrant's
Proxy Statement for its Annual Meeting of Stockholders to be held April 16, 1996
is hereby incorporated by reference.
13
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
The following consolidated financial statements of The First of Long Island
Corporation and Subsidiary and the report of independent auditors included on
pages 14 through 31 of Registrant's Annual Report to Shareholders for the year
ended December 31, 1995 required by Item 8 are incorporated herein by reference:
Financial Statements (Consolidated)
Consolidated Balance Sheets -- December 31, 1995 and 1994
Consolidated Statements of Income -- Years ended December 31, 1995, 1994 and
1993
Consolidated Statements of Changes in Stockholders' Equity --
Years ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows -- Years ended December 31, 1995, 1994
and 1993
Notes to Consolidated Financial Statements
Report of Independent Auditors
Schedules to the consolidated financial statements required by Article 9 of
Regulation S-X are not required under the related instructions or are
inapplicable and therefore have been omitted.
The following exhibits are incorporated herein by reference:
Exhibit 3(i) -- Certificate of Incorporation, as amended
Exhibit 3(ii) -- By-laws, as amended
Exhibit 10(a) -- Incentive Plan
Exhibit 99 -- Notice of Annual Meeting and Proxy Statement
The following exhibits are submitted herewith:
Exhibit 10(b) -- Stock Option and Appreciation Rights Plan.
Exhibit 10(c) -- Employment Agreement Between Registrant and J. William
Johnson,
dated January 31, 1996.
Exhibit 13 -- Registrant's Annual Report to Shareholders for the year
ended
December 31, 1995.
Exhibit 21 -- Subsidiaries of Registrant
Exhibit 23(a) -- Consent of Independent Auditors
Exhibit 27 -- Financial Data Schedule
No reports on Form 8-K were filed for the three months ended December 31,
1995.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
<TABLE>
<S> <C>
THE FIRST OF LONG ISLAND CORPORATION
--------------------------------------------
(REGISTRANT)
Dated: March 19, 1996 By: /s/ J. WILLIAM JOHNSON
----------------------------------------
J. William Johnson
PRESIDENT
(PRINCIPAL EXECUTIVE OFFICER)
By: /s/ WILLIAM J. WHITE
----------------------------------------
William J. White
VICE PRESIDENT AND TREASURER,
(PRINCIPAL FINANCIAL OFFICER AND
PRINCIPAL ACCOUNTING OFFICER)
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
<TABLE>
<C> <S> <C>
SIGNATURES TITLES DATES
- ------------------------------------------------------ ------------------------------------- ------------------
/s/ J. WILLIAM JOHNSON
------------------------------------------- President, Chairman of the Board, March 19, 1996
J. William Johnson Chief Executive Officer
/s/ PAUL T. CANARICK
------------------------------------------- Director March 19, 1996
Paul T. Canarick
/S/ WILLIAM J. CATACOSINOS
------------------------------------------- Director March 19, 1996
William J. Catacosinos
/s/ BEVERLY ANN GEHLMEYER
------------------------------------------- Director March 19, 1996
Beverly Ann Gehlmeyer
/s/ HOWARD THOMAS HOGAN, JR.
------------------------------------------- Director March 19, 1996
Howard Thomas Hogan, Jr.
/s/ J. DOUGLAS MAXWELL, JR.
------------------------------------------- Director March 19, 1996
J. Douglas Maxwell, Jr.
/s/ JOHN R. MILLER III
------------------------------------------- Director March 19, 1996
John R. Miller III
</TABLE>
15
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ------------- -------------------------------------------------------------------------------------------------- -----
<C> <S> <C>
3(i) Certificate of Incorporation, as amended (Filed as Exhibit 3 (a) to the Registrant's 1991 Annual
Report on Form 10-K and incorporated herein by reference.)
3(ii) By-laws, as amended (Filed as Exhibit 3(ii)(b) to the Registrant's September 30, 1995 Quarterly
Report on Form 10-Q and incorporated herein by reference.)
10(a) Incentive plan.................................................................................... *
10(b) Stock Option and Appreciation Rights Plan......................................................... 17
10(c) Employment Agreement Between Registrant and J. William Johnson, dated January 31, 1996............ 30
13 Annual Report to Shareholders for the Year Ended December 31, 1995................................ 37
21 Subsidiaries of Registrant........................................................................ 76
23(a) Consent of Independent Auditors................................................................... 77
27 Financial Data Schedule........................................................................... 78
99 Notice of Annual Meeting and Proxy Statement...................................................... **
</TABLE>
- ------------------------
* Page 12 of Registrant's Proxy Statement for its Annual Meeting of
shareholders to be held April 16, 1996 filed under Form TH dated March 4,
1996, and submitted in electronic format on March 8, 1996, is incorporated
herein by reference.
** Registrant's Proxy Statement for its Annual Meeting of shareholders to be
held April 16, 1996 filed under Form TH dated March 4, 1996 and submitted in
electronic format on March 8, 1996, is incorporated herein by reference.
16
<PAGE>
EXHIBIT 10(b)
THE FIRST OF LONG ISLAND CORPORATION
Stock Option and Appreciation Rights Plan
1. PURPOSES OF THE PLAN
This Stock Option and Appreciation Rights Plan is intended to provide a
method whereby certain officers of The First of Long Island Corporation and its
Subsidiaries who are largely responsible for the management, growth and
protection of the business, and who are making and can continue to make
substantial contributions to the success of the business, may be encouraged to
acquire a larger stock ownership in the Corporation, thus increasing their
proprietary interest in the business, providing them with greater Incentive for
their continued employment, and promoting the interests of the Corporation and
all its stockholders. Accordingly, the Corporation will from time to time
during the term of the Plan grant, to such officers as may be selected in the
manner hereinafter provided, options to purchase shares of Common stock of the
Corporation and appreciation rights on the Common Stock of the corporation,
subject to the conditions hereinafter provided.
2. DEFINITIONS
Unless the context clearly indicates otherwise, the following terms have
the meanings set forth below:
"Appreciation Right" means a right that entitles the holder to the
appreciation in value, if any, of one share of Common Stock, as defined below,
and granted according to Section 7 of the Plan.
"Bank" means The First National Bank of Long Island.
"Board" means the Board of Directors of the Corporation.
A "Change in Control" shall be deemed to have occurred if 20% of the
Corporation's Common Stock is acquired by a person or group or if a majority of
the Corporation's Board changes within a two-year period without the approval of
the Directors incumbent at the beginning of such two-year period or if there is
a stockholder approved sale of substantially all of the Corporation's assets.
"Code" means the Internal Revenue Code of 1986, as the same may be amended
from time to time and the then current regulations thereunder.
<PAGE>
"Committee" means the Stock Option and Appreciation Rights Committee of the
Board which Committee shall be established in accordance with Section 3 hereof.
"Common Stock" means the common stock of the Corporation, $0.10 par value,
per share.
"Corporation" means the First of Long Island Corporation and its
Subsidiaries.
"Grant Date," as used with respect to a particular Option or Appreciation
Right, means the date as of which such Option or Appreciation Right is granted
by the Committee pursuant to the Plan.
"Grantees" means the individuals to whom an Incentive Stock Option,
Nonqualified Stock Option, or Appreciation Right is granted by the Committee
pursuant to the Plan.
"Incentive Stock Option" means an option that qualifies as an Incentive
Stock option as described in Section 422 of the Code.
"Key Employees" shall be those employees who are officers of the
Corporation and its Subsidiaries who have the rank of at least Vice President
and above.
"Nonqualified Stock Option" means any option granted under this Plan, other
than an Incentive Stock Option.
"Option" means an option, granted by the Committee pursuant to Section 5 of
the Plan, to purchase shares of Common Stock and which shall be designated as
either an "Incentive Stock Option" or a "Nonqualified Stock Option."
"Option or Appreciation Right Period" means the period beginning on the
Grant Date and ending the day up to and including the tenth anniversary of the
Grant Date, as determined by the Committee.
"Plan" means the Stock Option and Appreciation Rights Plan as set forth
herein and as may be amended from time to time.
"Retirement," as applied to a Grantee, means the Grantee's termination of
employment at a time when the Grantee is entitled to receive retirement benefits
under the Bank's Retirement Plan or under any similar retirement plan that is
maintained by a Subsidiary.
"Subsidiary" means any corporation or association of which a majority of
the voting common or capital stock is owned directly or indirectly by the
Corporation, including, without limitation, the Bank.
2
<PAGE>
"Total and Permanent Disability," as applied to a Grantee, means the
Grantee's termination of employment under or as a result of (i) the Bank's Long
Term Disability Plan, (ii) any other similar disability plan that is maintained
by a Subsidiary, or (iii) any disability that is determined by the Committee to
be similar in nature to disability under the Bank's Long Term Disability Plan.
3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee composed of three or more
members who are appointed by the Board and selected from those directors who are
not employees of the Corporation or of a Subsidiary and who have not been
eligible to receive an award under the Plan at any time within a period of one
year immediately preceding the date of their appointment to such Committee. The
Board may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by the
Board. The Committee shall select one of its members as Chairman and shall hold
meetings at such times and places as it may determine, subject to such rules as
to procedures not inconsistent with the provisions of the Plan as are prescribed
by the Board, set forth in the By-laws of the Corporation and as prescribed by
the Committee itself. A majority of the authorized number of members of the
Committee shall constitute a quorum for the transaction of business, and the
vote of the majority of such quorum shall be necessary for the transaction of
any business. Acts approved by a majority of the members of the Committee then
serving shall be the valid acts of the Committee. No member of the Committee
shall be eligible to be granted Options or Appreciation Rights under the Plan
while he or she is a member of the Committee.
The Committee shall be vested with full authority to make such rules and
regulations as it deems necessary or desirable to administer the Plan and to
interpret the provisions of the Plan. Any determination, decision, or action of
the Committee in connection with the construction, interpretation,
administration, or application of the Plan shall be final, conclusive, and
binding upon all Grantees and any person claiming under or through a Grantee.
4. STOCK SUBJECT TO THE PLAN
(a) Shares of stock which may be issued under the Plan upon exercise
of Options or Appreciation Rights shall be authorized and
unissued or shares of Common Stock reacquired by the Corporation,
including shares purchased in the open market. The maximum
number of shares of Common Stock which may be issued under the
Plan shall be 240,000. The limitation established by the
preceding sentence shall be subject to adjustment as provided in
Section 16 of the Plan.
(b) In the event that any outstanding Option or Appreciation Right
under the Plan for any reason expires or is terminated, the
shares of Common Stock allocatable to the unexercised portion of
such Option or Appreciation Right
3
<PAGE>
may again be made subject to Option or Appreciation Right under
the Plan. Shares subject to an Option which are not issued as a
result of the exercise of Appreciation Rights (which are
"Attached," as described below) shall not again be available for
issuance under the Plan.
(c) The aggregate fair market value (determined as of the date an
Option is granted) of the stock with respect to which Incentive
Stock Options are exercisable for the first time by an optionee
during any calendar year under the Plan and all other plans
maintained by the Corporation, its parent, or any Subsidiary,
shall not exceed $100,000.
5. GRANT OF OPTIONS
The Committee may from time to time, subject to the provisions of the Plan,
grant Options to Key Employees to purchase shares of Common Stock allotted in
accordance with Section 4 of the Plan. The Committee may designate any Option
granted as either an Incentive Stock Option or a Nonqualified Stock Option, or
the Committee may designate a portion of the Option as an "Incentive Stock
Option" and the remaining portion as a "Nonqualified Stock Option." Any portion
of an Option that is not designated as an "Incentive Stock Option" shall be a
"Nonqualified Stock Option." The Options may or may not have Appreciation
Rights attached to them.
6. VALUATION
(a) OPTION PRICE. The Option purchase price per share shall be 100
percent of the fair market value of one share of Common Stock on
the date the Option is granted, except that the purchase price
per share shall be 110 percent of such fair market value or any
other price prescribed by the Code in the case of an Incentive
Stock Option granted to an individual described in Section 8(c)
of the Plan. During such time as Common Stock is not listed on
an established stock exchange, fair market value per share shall
be the mean between the closing dealer "bid" and "ask" prices for
Common Stock, as quoted by NASDAQ for the day of the grant, and
if no "bid" and "ask" prices are quoted for the day of the grant,
the fair market value shall be determined by reference to such
prices on the next preceding day on which such prices were
quoted. If Common Stock is listed on an established stock
exchange or exchanges, the fair market value shall be deemed to
be the highest closing price of Common Stock on such stock
exchange or exchanges on the day the Option is granted or, if no
sale of Common Stock has been made on any stock exchange on that
day, the fair market value shall be determined by reference to
such price for the next preceding day on which a sale occurred.
In the event that Common Stock is not traded on an established
stock exchange, and no closing dealer "bid"
4
<PAGE>
and "ask" prices are available, then the purchase price shall be
100 percent of the fair market value of one share of Common Stock
on the day the Option is granted, as determined by the Committee
in good faith. The purchase price shall be subject to adjustment
only as provided in Section 16 of the Plan.
(b) APPRECIATION RIGHT. The Appreciation Right value at grant shall
be 100% of the fair market value of one share of Common Stock on
the date the Appreciation Right is granted either attached to an
Option or alone. As in the case of Options, during such time as
Common Stock is not listed on an established stock exchange, fair
market value per share shall be the mean between the closing
dealer "bid" and "ask" prices for Common Stock, as, quoted by
NASDAQ for the day of the grant, and if no "bid" and "ask" prices
are quoted for the day of the grant, the fair market value shall
be determined by reference to such prices on the next preceding
day on which such prices were quoted. If Common Stock is listed
on an established stock exchange or exchanges, the fair market
value shall be deemed to be the highest closing price of Common
Stock on such stock exchange or exchanges on the day the
Appreciation Right is granted or, if no sale of Common Stock has
been made on any stock exchange on that day, the fair market
value shall be determined by reference to such price for the next
preceding day on which a sale occurred. In the event that Common
Stock is not traded on an established stock exchange, and no
closing dealer "bid" and "ask" prices are available, then the
value shall be 100 percent of the fair market value of one share
of Common Stock on the day the Appreciation Right is granted, as
determined by the Committee in good faith. The value shall be
subject to adjustment only as provided in Section 16 of the Plan.
(c) EXERCISE VALUE. The exercise value of Options or Appreciation
Rights per share shall be 100 percent of the fair market value of
one share of Common Stock on the date the Option or Appreciation
Right is exercised. During such time as Common Stock is not
listed on an established stock exchange, fair market value per
share shall be the mean between the closing dealer "bid" and
"ask" prices for Common Stock, as quoted by NASDAQ for the day of
the exercise, and if no "bid" and "ask" prices are quoted for the
day of the exercise, the fair market value shall be determined by
reference to such prices on the next preceding day on which such
prices were quoted. If Common Stock is listed on an established
stock exchange or exchanges, the fair market value shall be
deemed to be the highest closing price of Common Stock on such
stock exchange or exchanges on the day of exercise or, if no sale
of Common Stock has been made on any stock exchange on that day,
the fair market value shall be determined by reference to such
price for the next preceding day on which a sale
5
<PAGE>
occurred. In the event that Common Stock is not traded on an
established stock exchange, and no closing dealer "bid" and "ask"
prices are available, then the purchase price shall be 100
percent of the fair market value of one share of Common Stock on
the date of exercise, as determined by the Committee in good
faith.
7. APPRECIATION RIGHTS
The Committee may from time to time grant Appreciation Rights to Key
Employees of the Corporation. The Committee may issue Appreciation Rights
either attached to Options or independent of Options ("Attached" or
"Standalone," respectively), and are subject to the provisions described in
other Plan sections, given the following:
(a) Concurrent with the grant of any Option under the Plan to
purchase one or more shares of Common Stock, the Committee may
grant an Attached Appreciation Right with respect to each share
of Common Stock. The participant may elect to exercise either
the Option or underlying Appreciation Right at which point the
related Option or Appreciation Right shall be deemed to have been
cancelled.
(b) In addition, the Committee, at its discretion, may grant
Standalone Appreciation Rights. The participant's exercise of
Standalone Appreciation Rights will not affect the individual's
outstanding Options.
(c) Any election by a participant to exercise Appreciation Rights
granted pursuant to this Plan shall be made during the period
beginning on the third business day following the date of release
for publication of the Corporation's quarterly or annual
financial information and ending on the twelfth business day
following such date.
(d) The amount of payment to which a participant shall be entitled
upon the exercise of each Appreciation Right granted pursuant to
the Plan shall be equal to 100 percent of the amount, if any, by
which the fair market value of a share of Common Stock on the
exercise date exceeds the fair market value of a share of Common
Stock on the Grant Date, as specified in Section 6.
(e) Payment to the participant shall be made in cash.
6
<PAGE>
8. ELIGIBILITY
(a) Options and Appreciation Rights shall be granted only to those
Key Employees who are selected by the Committee.
(b) Neither the members of the Committee nor any member of the Board
who is not an employee of the Corporation or of a Subsidiary
shall be eligible to receive an Option or Appreciation Right
under the Plan.
(c) Any other provision of the Plan notwithstanding, as prescribed in
the Code, an individual who owns more than 10 percent of the
total combined voting power of all classes of outstanding stock
of the Corporation, its parent, or any Subsidiary shall not be
eligible for the grant of an Incentive Stock Option unless the
special requirements set forth in Sections 6 and 9(a) of the Plan
are satisfied. For purposes of this subsection (c), in
determining stock ownership, an individual shall be considered as
owning the stock owned, directly or indirectly, by or for his or
her brothers and sisters, spouse, ancestors, and lineal
descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust shall be considered as
being owned proportionately by or for its shareholders, partners,
or beneficiaries. Stock with respect to which such individual
holds an option or Appreciation Right shall not be counted.
"Outstanding Stock" shall include all stock actually issued and
outstanding immediately after the grant of the Option or
Appreciation Right. "Outstanding Stock" shall not include shares
authorized for issue under outstanding Options or Appreciation
Rights held by the Grantee or by any other person.
(d) Subject to the applicable provisions of the Code and to the
terms, provisions, and conditions of the Plan and subject to
review by the Board, the Committee shall have exclusive
jurisdiction, (i) to select the Key Employees to be granted
Options and Appreciation Rights (it being understood that more
than one Option may be granted to the same person), (ii) to
determine the number of shares subject to each Option or
Appreciation Right, (iii) to determine the date or dates when the
Options and Appreciation Rights will be granted, (iv) to
determine the purchase price of the shares subject to each Option
or Appreciation Right in accordance with Section 6 of the Plan,
(v) to determine the date or dates when each Option or
Appreciation Right may be exercised within the term of the Option
or Appreciation Right specified pursuant to Section 10 of the
Plan, (vi) to determine whether or not an Option constitutes an
Incentive Stock Option, and, (vii) to prescribe the form, which
shall be consistent with the Plan, of the instruments evidencing
any Options or Appreciation Rights granted under the Plan.
7
<PAGE>
(e) Neither anything contained in the Plan or in any instrument under
the Plan nor the grant of any Option or Appreciation Right
hereunder shall confer upon any Grantee any right to continue in
the employ of the Corporation or of any Subsidiary or limit in
any respect the right of the Corporation or of any Subsidiary to
terminate the Grantee's employment at any time and for any
reason.
9. NONTRANSFERABILITY
During the lifetime of a Grantee, the Option or Appreciation Right shall be
exercisable only by such Grantee. No Option or Appreciation Right granted under
the Plan shall be assignable or transferable by the Grantee other than, in the
event of the death of a Grantee, by will, the laws of descent and distribution,
or specific designation by the Grantee of the person or persons who may exercise
the Option or Appreciation Right upon the Grantee's death.
10. TERM AND EXERCISE
(a) Each option or Appreciation Right granted under the Plan shall
terminate on the date determined by the Committee and specified
in the Option and Appreciation Right agreement, provided that
each Incentive Stock Option and Appreciation Right granted to an
individual described in Section 8(c) of the Plan shall terminate
no later than five years after the date of grant or other term
prescribed by the Code, and each other Option and Appreciation
Right shall terminate no later than 10 years after the date of
grant. The Committee at its discretion may provide further
limitations on the exercisability of Options and Appreciation
Rights granted under the Plan. An Option or Appreciation Right
may be exercised only during the continuance of the Grantee's
employment, except as provided in Sections 11 and 12 of the Plan.
(b) A person electing to exercise an Option or Appreciation Right
shall give written notice to the Corporation of such election and
of the number of shares, in such form as the Committee shall have
prescribed or approved. The purchase price shall be paid in full
in cash or Stock at the election of the participant.
(c) A Grantee or a permitted transferee of an Option or Appreciation
Right shall have no rights as a stockholder with respect to any
shares covered by his or her Option or Appreciation Right unless
the Option or Appreciation Right is exercised, and then not until
the date the stock certificate is issued evidencing ownership of
the shares. No adjustments shall be made for dividends (ordinary
or extraordinary), whether in cash, securities, or other
property, or distributions or other rights, for which the record
date is prior
8
<PAGE>
to the date such stock certificate is issued, except as provided
in Section 16 hereof.
(d) A person may, in accordance with the other provisions of the
Plan, elect to exercise Options with or without Attached
Appreciation Rights in any order, notwithstanding the fact that
the Options granted to him or her prior to the grant of the
Options selected for exercise are unexpired.
11. TERMINATION OF EMPLOYMENT
If a Grantee severs from all employment with the Corporation and its
Subsidiaries for any reason other than death, any Option or Appreciation Right
granted to him or her under the Plan shall terminate, and all rights under the
Option or Appreciation Right shall cease, in accordance with rules adopted by
the Committee. However:
(a) If the termination is for Total and Permanent Disability, any
outstanding Incentive Stock Options and Attached Appreciation
Right shall terminate no more than 12 months after such
termination of employment. A Nonqualified Stock Option and
Attached or Stand-alone Appreciation Right will terminate no more
than 15 months from termination of employment.
(b) If termination is for Retirement, an Incentive Stock Option and
Attached Appreciation Right shall terminate no more than three
months after termination of employment and a Nonqualified Stock
Option and Attached or Stand-alone Appreciation Right will
terminate no more than 15 months after termination of employment.
(c) If the termination is within one year following a Change in
Control and is for any reason other than gross and substantial
dishonesty, an Incentive Stock Option and Attached Appreciation
Right shall terminate no more than three months after termination
of employment. A Nonqualified Stock Option and Attached or
Stand-alone Appreciation Right will terminate no more than three
months from termination of employment.
(d) The foregoing notwithstanding, no Option or Appreciation Right
shall be exercisable after its expiration date.
Whether an authorized leave of absence or an absence for military or
governmental service shall constitute termination of employment, for the
purposes of the Plan, shall be determined by the Committee, which determination
shall be final, conclusive, and binding upon the affected GRANTEE and any person
claiming under or through such GRANTEE.
9
<PAGE>
12. DEATH OF GRANTEE
If a Grantee dies while in the employ of the Corporation or of any
Subsidiary, or after cessation of such employment but within the period during
which he or she could have exercised the Option or Appreciation Right under
Section 11 of the Plan, then the Option or Appreciation Right may be exercised
(to the extent that the Grantee shall have been entitled to do so at the date of
his death) by the executors or administrators of the Grantee's estate or by any
person or persons who have acquired the Option or Appreciation Right directly
from the Grantee by bequest, inheritance or specific designation, within 12
months after the termination of the Grantee's employment for Incentive Stock
Options and Attached Appreciation Rights and within 15 months thereafter for
Nonqualified Stock Options and Attached or Stand-alone Appreciation Rights,
provided, however, that no Option or Appreciation Right shall be exercisable
after its expiration date. As provided above, the Grantee may designate the
person or persons who may exercise the Option or Appreciation Right after the
Grantee's death by completing and signing the beneficiary form prescribed by the
Committee for such purpose. Such beneficiary designation may include any Option
or Appreciation Right outstanding as of the date of such designation as well as
any Option or Appreciation Right thereafter granted.
13. MODIFICATION, EXTENSION, AND RENEWAL
Subject to the continued qualification of the Incentive Stock Options under
the Code and the terms and conditions of the Plan, the Committee may modify,
extend, or renew outstanding Options and Appreciation Rights granted under the
Plan or accept the surrender of outstanding Options and Appreciation Rights (to
the extent not theretofore exercised) and authorize the granting of new Options
and Appreciation Rights in substitution therefore. Without limiting the
generality of the foregoing, the Committee may grant a new or modified Option or
Appreciation Right in lieu of an outstanding Option or Appreciation Right for a
number of shares, set an exercise price and for a term which are greater or
lesser than under the earlier Option or Appreciation Right, or may do so by
cancellation and regrant, amendment, substitution, or otherwise, subject only to
the general limitations and conditions of the Plan and the applicable provisions
of the Code. The foregoing notwithstanding, no modification of an Option or
Appreciation Right shall, without the consent of the Grantee alter or impair any
rights or obligations under any Option or Appreciation Right theretofore granted
under the Plan.
14. PERIOD IN WHICH OPTIONS MAY BE GRANTED
Options and Appreciation Rights may be granted pursuant to the Plan at any
time on or before January 15, 2006.
15. AMENDMENT OR TERMINATION OF THE PLAN
Subject to the continued qualification of any outstanding Incentive Stock
Options under the Code, the Board may at any time terminate, amend, modify, or
suspend the Plan, provided
10
<PAGE>
that, without the approval of the stockholders of the Corporation, no amendment
or modification shall be made by the Board which:
(a) increases the maximum number of shares as to which Options or
Appreciation Rights may be granted under the Plan,
(b) alters the method by which the Option price or appreciation right
value is determined,
(c) extends any Option or Appreciation Right for a period longer than
10 years after the date of grant,
(d) materially modifies the requirements as to eligibility for
participation in the Plan, or,
(e) alters this Section 15 so as to defeat its purpose.
Further, no amendment, modification, suspension, or termination of the Plan
shall in any manner affect any Option or Appreciation Right theretofore granted
under the Plan without the consent of the Grantee or any person validly claiming
under or through the Grantee.
16. CHANGES IN CAPITALIZATION, ETC.
(a) In the event that the shares of the Corporation, as presently
constituted, shall be changed into or exchanged for a different
number or kind of shares of stock or other securities of the
Corporation or of another corporation (whether by reason of
merger, consolidation, recapitalization, reclassification, split-
up, combination of shares, or otherwise) or if the number of such
shares of stock shall be increased through the payment of a stock
dividend, then, subject to the provisions of Subsection (c),
below, there shall be substituted for or added to each share of
stock of the Corporation which was theretofore appropriated, or
which thereafter may become subject to an Option or Appreciation
Right under the Plan, the number and kind of shares of stock or
other securities into which each outstanding share of the stock
of the Corporation shall be so changed or for which each such
share shall be exchanged or to which each such share shall be
entitled, as the case may be. Outstanding Options and
Appreciation Rights shall also be appropriately amended as to
price and other terms, as may be necessary to reflect the
foregoing events.
(b) If there shall be any other change in the number or kind of the
outstanding shares of the stock of the Corporation, or of any
stock or other securities into which such stock shall have been
changed, or for which it shall have
11
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been exchanged, and if the Board or the Committee (as the case
may be) shall, in its sole discretion, determine that such change
equitably requires an adjustment in any Option or Appreciation
Right which was theretofore granted or which may thereafter be
granted under the Plan, then such adjustment shall be made in
accordance with such determination.
(c) In the case of a Change in Control, any outstanding Options or
Appreciation Rights will become immediately exercisable,
regardless of any previously stated vesting or waiting period
requirements.
(d) Fractional shares resulting from any adjustment in Options or
Appreciation Rights pursuant to this Section 16 may be settled as
the Board or the Committee (as the case may be) shall determine.
(e) To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by
the Committee, whose determination in that respect shall be
final, binding, and conclusive. Notice of any adjustment shall
be given by the Corporation to each holder of an Option or
Appreciation Right which shall have been so adjusted.
(f) The grant of an Option or Appreciation Right pursuant to the Plan
shall not affect in any way the right or power of the Corporation
to make adjustments, reclassification, reorganizations, or
changes of its capital or business structure, to merge, to
consolidate, to dissolve, to liquidate, or to sell or transfer
all or any part of its business or assets.
17. LISTING AND REGISTRATION OF SHARES
(a) No Option or Appreciation Right granted pursuant to the Plan
shall be exercisable in whole or in part if at any time the Board
or the Committee (as the case may be) shall determine in its
discretion that the listing, registration, or qualification of
the shares of Common Stock subject to such Option or Appreciation
Right on any securities exchange or under any applicable law, or
the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with,
the granting of such Option or the issue of shares thereunder or
the granting of Appreciation Right or the issue of shares
thereunder, unless such listing, registration, qualification,
consent, or approval shall have been effected or obtained free of
any conditions not acceptable to the Board.
(b) If a registration statement under the Securities Act of 1933 with
respect to the shares issuable upon exercise of any Option or
Appreciation Right granted under the Plan is not in effect at the
time of exercise, as a condition
12
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of the issuance of the shares, the person exercising such Option
or Appreciation Right shall give the Committee a written
statement, satisfactory in form and substance to the Committee,
that he or she is acquiring the shares for his or her own account
for investment and not with a view to their distribution and that
the shares will only be disposed of in accordance with the
applicable provisions of the federal securities laws. The
Corporation may place upon any stock certificate for shares
issuable upon exercise of such Option or Appreciation Right the
following legend or such other legend as the Committee may
prescribe to prevent disposition of the shares in violation of
the Securities Act of 1933 or other applicable law:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 ('ACT') AND MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED OR OFFERED FOR SALE IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THEM UNDER THE ACT,
AND/OR COMPLIANCE WITH RULE 144 OF THE ACT OR A WRITTEN OPINION OF COUNSEL
FOR THE FIRST OF LONG ISLAND CORPORATION THAT SUCH REGISTRATION OR
COMPLIANCE IS NOT REQUIRED."
13
<PAGE>
EXHIBIT 10(c)
[LOGO]
January 31, 1996
Mr. J. William Johnson
Dear Mr. Johnson:
This letter employment agreement (the "Agreement") supersedes and replaces
your Employment Agreement of June 10, 1991, as amended. The terms and conditions
of your employment by The First of Long Island Corporation ("FLIC"), and its
subsidiary, The First National Bank of Long Island (the "Bank"), are as follows:
1. TERM; RENEWAL
The Initial Term of the Agreement shall run from January 1, 1996 through
and including December 31, 1998, and if not terminated as described below, the
Agreement shall each year automatically be extended for an additional year,
resulting in a new three-year term (the "Renewal Terms"), with such
modifications hereto as the parties shall agree in writing; PROVIDED, HOWEVER,
that the Agreement shall not be so extended in the event that you or FLIC
provides written notice of non-extension to the other party no later than sixty
(60) days prior to the end of any calendar year.
2. CAPACITY
(a) You shall be employed in the capacity of President and Chief Executive
Officer of FLIC and such other senior executive title or titles of FLIC or the
Bank as may from time to time be determined by the Boards of Directors of the
Bank and FLIC. You shall be proposed for election to the Boards of Directors of
the Bank and FLIC at each annual meeting of shareholders of the Bank and of
FLIC, respectively, at which you must stand for election in order to continue as
a director.
(b) You agree to devote your full time and attention and best efforts to
the faithful and diligent performance of your duties to FLIC and the Bank and
shall serve and further the best interests and enhance the reputation of FLIC
and the Bank to the best of your
<PAGE>
ability. Nothing herein shall be construed as preventing you from being a member
of the board of directors of any non-profit organization or of any for-profit
organization consistent with applicable laws. You shall also provide services to
the Boards of Directors of the Bank and FLIC. Your responsibilities and duties
shall include the following:
(i) You shall be the chief executive and administrative officer of FLIC
responsible for the operation and management of FLIC, the Bank and any other
direct or indirect subsidiary of FLIC. All employees of FLIC, the Bank and any
other direct or indirect subsidiary of FLIC shall report or be ultimately
responsible to you. FLIC agrees that, without your express consent, it will not,
and will not permit the Bank or any other direct or indirect subsidiary to
appoint anyone to a position with responsibilities and authorities senior to
those of you.
(ii) You shall also act on and chair, where you deem appropriate, the
following committees of the Bank, FLIC, the Board of Directors of the Bank or
the Board of Directors of FLIC:
A. Executive;
B. Investment;
C. Appraisal;
D. Salary;
E. Loan;
F. Management Trust Committee; and
G. Such other committees as you shall determine, except
Auditing and Examining committees.
3. COMPENSATION
As full compensation for your services, you shall receive the following
from FLIC or, in the discretion of FLIC, it shall cause the following to be paid
by the Bank:
(a) A Base Annual Salary of not less than Two Hundred Eighty Thousand
Dollars ($280,000.00), payable semimonthly, inclusive of fees for services on
the Boards of Directors of the Bank and FLIC; PROVIDED, HOWEVER, that pursuant
to Section 1 hereof, no later than January 15 of each year that the Agreement
shall remain in effect, the Board of Directors of FLIC shall review your
compensation, without any commitment, to determine whether to increase your Base
Annual Salary hereunder. In the event that the Board of Directors of FLIC does,
from time to time, increase your Base Annual Salary, the increased amount shall
be your Base Annual Salary for all purposes of this Agreement, and such
increased amount shall be the minimum amount payable under this paragraph (a) of
Section 3;
2
<PAGE>
(b) Participation in the Bank's pension and profit sharing plans;
(c) A group term life insurance policy insuring your life, the beneficiary
of which shall be designated by you, with a face amount of not less than two
times the Base Annual Salary, provided that you meet the insurance company's
physical qualifications;
(d) Such other benefits as are consistent with the personnel benefits
provided by the Bank and FLIC to its officers and employees; PROVIDED, HOWEVER,
that your vacation shall be for a period of no less than five (5) weeks;
(e) The use of an appropriate new automobile furnished by the Bank;
(f) Reimbursement for the country club dues and for expenses incurred by
you at the club that are necessary and proper in the conduct of the business of
FLIC or the Bank; and
(g) The funding and payment of the Bank's obligations under The First
National Bank of Long Island Supplemental Executive Retirement Program through
the related Trust Agreement.
4. SEVERANCE BENEFIT
(a) TERMINATION. In the event of termination of your employment for any
reason whatsoever other than (i) your resignation (except for termination of the
Agreement by you as provided in Paragraph (b) of this Section 4), or (ii)
termination of your employment as provided in paragraph (b) of this Section 4,
you shall be entitled to receive from FLIC in cash within ten (10) days of such
termination a sum equivalent to the Termination Amount (as hereinafter defined);
PROVIDED, HOWEVER, that you shall not be entitled to receive such payment if
such termination is due to gross and substantial dishonesty on your part. A
resignation by you which follows any default by FLIC in complying with the
provisions of this Agreement shall be deemed a termination of your employment by
FLIC and shall thereby entitle you to receive the Termination Amount as provided
hereunder.
(b) TERMINATION OR RESIGNATION FOLLOWING CHANGE OF CONTROL EVENT. In the
event of termination of your employment for any reason whatsoever following a
change of Control Event (as hereinafter defined), you shall be entitled to
receive from FLIC in cash within ten (10) days of such termination (subject to
Paragraph (d) of this Section 4) a sum equivalent to the Termination Amount;
PROVIDED, HOWEVER, that you shall not be entitled to receive such
3
<PAGE>
payment if such termination is due to gross and substantial dishonesty on your
part. In addition, if a Change of Control Event shall occur, you shall have the
option, by notice within one hundred and twenty (120) days after the
consummation of such Change of Control Event, to terminate this Agreement, and
thereupon receive (subject to Paragraph (d) of this Section 4) a sum equivalent
to the Termination Amount.
(c) HEALTH INSURANCE. FLIC shall, at no cost to you, continue to cover you
under, or provide you with, family medical and dental coverage subsequent to the
date of termination of your employment pursuant to paragraph (a) or (b) of this
Section 4. Such coverage shall be continued until May 31, 2005 and shall be no
less favorable than that provided by your medical and dental coverage in effect
on January 1, 1996.
(d) ADDITIONAL INSURANCE. FLIC shall also continue to cover you under, or
provide you with insurance coverage no less favorable than that provided by,
your disability, group term life and any other insurance policies in effect on
the date of termination of your employment pursuant to paragraph (a) or (b) of
this Section 4 for a period ending on the earlier of (i) the third anniversary
of such termination or (ii) the date on which you are provided by another
employer with benefits substantially comparable to those provided for under this
paragraph.
(e) LIMITATION ON PAYMENT. In no event shall any amounts payable pursuant
to Paragraph (b) of this Section 4 which are deemed to be Parachute Payments (as
hereinafter defined), when added to any other payments made to you or for your
benefit which are deemed to be Parachute Payments, equal or exceed three (3)
times your Base Amount (as hereinafter defined), and any amount payable under
Paragraph (b) of this Section 4 shall be reduced by the smallest amount
necessary to reduce the aggregate amount of all such payments to one dollar
($1.00) less than three (3) times such Base Amount.
(f) NO MITIGATION. All payments and benefits to which you are entitled
under this Section 4 shall be made and provided without offset, deduction or
mitigation on account of income or benefits you may receive from other
employment or otherwise, except as provided in Paragraphs (c) and (d) of this
Section 4.
(g) DEATH. In the event of your death subsequent to termination of your
employment pursuant to Paragraph (a) or (b) of this Section 4, all payments and
benefits required by this Section
4
<PAGE>
4 shall be paid to your designated beneficiary or beneficiaries or, if you have
not designated a beneficiary or beneficiaries, to your estate.
(h) MISCELLANEOUS.
(i) CONFLICT IN BENEFITS. This Section 4 is not intended to and shall not
affect, limit or terminate any other provision of this Agreement or other
arrangement between you and us presently in effect or hereafter entered into.
(ii) LEGAL EXPENSES. FLIC shall pay all costs and expenses incurred by you
or us, including attorneys' fees and disbursements (at least monthly in the case
of costs and expenses incurred by you), in connection with any legal proceedings
(including, but not limited to, arbitration), whether or not instituted by you
or us, relating to the interpretation or enforcement of any provision of this
Agreement in connection with the termination of your employment pursuant to this
Section 4. FLIC also agrees to pay prejudgment interest on any money judgment
obtained by you as a result of such proceedings, calculated at the prime
interest rate of the Bank as in effect from time to time from the date that
payment should have been made to you under this Section 4. Notwithstanding the
foregoing, in the event that any legal proceedings referred to above result in a
Final Determination (as hereinafter defined) that your employment was terminated
because of gross and substantial dishonesty on your part, FLIC shall have no
further obligation to you under this Section 4(g) (ii) and you shall refund to
FLIC all amounts previously paid to you pursuant to this Section 4(g)(ii).
(iii) BINDING EFFECT; SUCCESSORS. This Section 4 shall be binding upon,
inure to the benefit of and be enforceable by you and us, your heirs and your
and our respective legal representatives, successors and assigns. If FLIC shall
be merged into or consolidated with another entity, the provisions of this
Section 4 shall be binding upon and inure to the benefit of the entity surviving
such merger or resulting from such consolidation. We shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of FLIC, by agreement in form
and substance satisfactory to you, to expressly assume and agree to perform
under this Section 4 in the same manner and to the same extent that we would be
required to perform hereunder if no such succession had taken place. The
provisions of this Section 4 shall continue to apply to each subsequent merger,
consolidation or transfer of assets of such subsequent employer.
5
<PAGE>
(h) CERTAIN DEFINITIONS. As used in this Section 4, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"BASE AMOUNT" means, with respect to you, the amount which is deemed to
constitute your "base amount" pursuant to Section 280G of the Internal Revenue
Code, as amended by the Tax Reform Act of 1986, and as thereafter amended.
"CHANGE OF CONTROL EVENT" means any one of the following: (a) Continuing
Outside Directors (as hereinafter defined) no longer constitute at least two-
thirds (2/3) of Outside Directors (as hereinafter defined) of FLIC; (b) any
entity, person or group acquires more than twenty percent (20%) of FLIC's voting
shares; (c) stockholders approve the merger or consolidation of FLIC unless at
least two-thirds (2/3) of Continuing Outside Directors are to continue to
constitute at least two-thirds (2/3) of Continuing Directors; (d) at least two-
thirds (2/3) of Continuing Outside Directors determine that action proposed to
be taken by stockholders will constitute a Change of Control Event; or (e) the
Bank is no longer a wholly-owned subsidiary of FLIC.
"CONTINUING OUTSIDE DIRECTOR" means any individual who is not an employee
of FLIC and who (a) is a director of FLIC as of the date hereof, (b) prior to
election as a director is nominated by at least two-thirds (2/3) of Continuing
Outside Directors, or (c) following election as a director is designated a
Continuing Outside Director by at least two-thirds (2/3) of Continuing Outside
Directors.
"FINAL DETERMINATION" means a finding of fact by an arbitrator or court of
competent jurisdiction from which finding all possible appeals have been
exhausted.
"OUTSIDE DIRECTOR" means an individual who is not an employee of FLIC who
is a director of FLIC.
"PARACHUTE PAYMENT" means any payment deemed to constitute a "parachute
payment" as defined in Section 280G of the Internal Revenue Code, as amended by
the Tax Reform Act of 1986, and as thereafter amended.
"TERMINATION AMOUNT" means an amount equal to three hundred (300%) percent
of your Base Annual Salary then in effect.
6
<PAGE>
5. MISCELLANEOUS
(a) NOTICES. Any notices required to be given under this Agreement shall,
unless otherwise agreed to by you and us, be in writing and shall be sent by
certified mail, return receipt requested, to FLIC at 10 Glen Head Road, Glen
Head, New York 11545, Attention: Board of Directors, and to you at the home
address which you have designated in writing; or at such other address as you or
we may designate in writing, respectively.
(b) WAIVER; MODIFICATION. No waiver or modification in whole or in part of
this Agreement, or any term or condition hereof, shall be effective against any
party unless in writing and duly signed by the party sought to be bound. Any
waiver of any breach of any provision hereof or any right or power by any party
on one occasion shall not be construed as a waiver of, or a bar to, the exercise
of such right or power on any other occasion or as a waiver of any subsequent
breach.
(c) SEPARABILITY. Any provision of this Agreement which is unenforceable or
invalid in any respect in any jurisdiction shall be ineffective in such
jurisdiction to the extent that it is unenforceable or invalid without affecting
the remaining provisions hereof, which shall continue in full force and effect.
The enforceability or invalidity of a provision of the Agreement in one
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
(d) CONTROLLING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed therein.
If this Agreement is satisfactory to you, would you kindly indicate your
acceptance by signing and returning the enclosed copy thereof to the Bank.
Very truly yours,
THE FIRST OF LONG ISLAND
CORPORATION
By:
---------------------------
Director
ACCEPTED AND AGREED TO THIS
31ST DAY OF JANUARY, 1996.
/s/ J. William Johnson
- --------------------------------
J. William Johnson
7
<PAGE>
EXHIBIT 13
1995 ANNUAL REPORT
[Graphic]
OUR FOCUS CONTINUES TO BE
ON PRIVATELY OWNED BUSINESSES,
SERVICE CONSCIOUS CONSUMERS
AND PROFESSIONALS.
[LOGO -THE FIRST OF LONG ISLAND]
THE FIRST OF LONG ISLAND CORPORATION
<PAGE>
[LOGO -THE FIRST OF LONG ISLAND]
<PAGE>
SELECTED FINANCIAL DATA
- --------------------------------------------------------------------------------
The following table sets forth selected financial data for the last five years.
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT SUMMARY:
Total Interest Income . . . . . . . . . . . . . $ 28,017,478 $ 24,860,866 $ 23,997,016 $ 25,096,841 $ 27,796,177
Total Interest Expense . . . . . . . . . . . . . 8,898,700 6,174,676 5,868,266 7,881,478 12,165,539
------------ ------------ ------------ ------------ ------------
Net Interest Income . . . . . . . . . . . . . . 19,118,778 18,686,190 18,128,750 17,215,363 15,630,638
Provision for Loan Losses . . . . . . . . . . . -- -- 175,000 600,000 1,300,000
Income Before Cumulative Effect
of Accounting Change . . . . . . . . . . . . . 6,208,492 6,027,648 5,547,941 4,955,156 4,171,652
Net Income . . . . . . . . . . . . . . . . . . . 6,208,492 6,027,648 6,197,941 4,955,156 4,171,652
PER SHARE DATA: (NOTE 1)
Income Before Cumulative Effect
of Accounting Change . . . . . . . . . . . . . $2.91 $2.83 $2.59 $2.33 $1.94
Cumulative Effect of Accounting
Change (NOTE 2). . . . . . . . . . . . . . . . -- -- .30 -- --
Net Income . . . . . . . . . . . . . . . . . . . 2.91 2.83 2.89 2.33 1.94
Cash Dividends Declared . . . . . . . . . . . . .56 .51 .46 .42 .38
STOCK DIVIDENDS DECLARED
(NOTE 1) . . . . . . . . . . . . . . . . . . . . 50% -- -- -- --
BALANCE SHEET ITEMS AT PERIOD END:
Total Assets . . . . . . . . . . . . . . . . . . $425,654,548 $396,054,889 $381,160,535 $366,809,476 $348,464,135
Total Loans . . . . . . . . . . . . . . . . . . 146,670,041 144,472,344 136,989,446 131,089,659 123,718,367
Allowance for Loan Losses . . . . . . . . . . . 3,600,030 3,600,162 3,589,639 3,502,518 3,105,313
Total Deposits . . . . . . . . . . . . . . . . . 373,954,707 351,526,475 339,873,630 331,013,323 315,844,277
Stockholders' Equity (NOTE 3). . . . . . . . . . 49,340,664 42,607,605 39,402,925 34,447,298 30,539,672
AVERAGE BALANCE SHEET ITEMS:
Total Assets . . . . . . . . . . . . . . . . . . $411,717,000 $390,543,000 $375,171,000 $355,372,000 $337,874,000
Total Loans . . . . . . . . . . . . . . . . . . 143,677,000 141,399,000 132,480,000 126,048,000 123,420,000
Allowance for Loan Losses . . . . . . . . . . . 3,607,000 3,602,000 3,554,000 3,242,000 2,794,000
Total Deposits . . . . . . . . . . . . . . . . . 363,676,000 347,674,000 336,289,000 321,303,000 306,646,000
Stockholders' Equity (NOTE 3). . . . . . . . . . 45,908,000 41,005,000 37,078,000 32,526,000 29,326,000
FINANCIAL RATIOS:
Return on Average Total Assets
Before Cumulative Effect
of Accounting Change . . . . . . . . . . . . . 1.51% 1.54% 1.48% 1.39% 1.23%
Return on Average Total Assets . . . . . . . . 1.51 1.54 1.65 1.39 1.23
Return on Average Stockholders'
Equity Before Cumulative Effect
of Accounting Change (NOTE 3). . . . . . . . . 13.52 14.70 15.16 15.23 14.23
Return on Average
Stockholders' Equity (NOTE 3). . . . . . . . . 13.52 14.70 16.72 15.23 14.23
Average Equity to Average Assets . . . . . . . . 11.15 10.50 9.88 9.15 8.68
BOOK VALUE (NOTES 1, 4) . . . . . . . . . . . . . $23.54 $20.28 $18.67 $16.31 $14.39
</TABLE>
NOTE 1--PER SHARE AND BOOK VALUE AMOUNTS HAVE BEEN ADJUSTED TO REFLECT A STOCK
SPLIT (EFFECTED THROUGH A 50% STOCK DIVIDEND) DECLARED IN DECEMBER 1995.
NOTE 2--SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, NOTE A (INCOME TAXES)
FOR DISCUSSION OF ACCOUNTING CHANGE.
NOTE 3--INCLUDES UNREALIZED APPRECIATION/DEPRECIATION ON INVESTMENT SECURITIES
AVAILABLE FOR SALE IN 1995 AND 1994.
NOTE 4--BOOK VALUE REPRESENTS STOCKHOLDERS' EQUITY DIVIDED BY SHARES OUTSTANDING
AT END OF PERIOD.
STOCK PRICES
- --------------------------------------------------------------------------------
Shares of the Corporation's Common Stock are traded in the over-the-counter
market and are quoted in the NASDAQ System. The high and low bid prices as
quoted for the years ended December 31, 1995 and 1994 were:
1995 1994
------------- -------------
Quarter High Low High Low
- ------- ---- --- ---- ---
First 28 1/4 25 23 1/2 22 1/2
Second 28 1/4 28 24 23
Third 28 3/4 28 25 1/2 23 1/2
Fourth 29 28 1/2 26 24 1/2
At December 31, 1995, there were 821 stockholders of record of the Corporation's
Common Stock. All prices have been adjusted to reflect a 3 for 2 stock split
paid by means of a 50% stock dividend.
The First of Long Island Corporation (i)
<PAGE>
[Photo]
"What differentiates The First of Long Island from other banks is the personal
relationship they offer. During the three years we've been banking with them,
they've treated us as individuals and shown that they truly understand small
business."
Paul G. Malvese, President
George Malvese & Co., Inc., Hicksville
[Photo]
"The First of Long Island is not only there for us day-to-day, but for special
financing which enables us to access state of the art equipment required for
complex home health care. We're a not-for-profit organization and they're very
sensitive to our mission and place in the community."
Linda M. Taylor, Executive Director
Visiting Nurse Service Inc., Northport
[Photo]
"The First of Long Island provides our school district with the sophisticated
financial services of a money center bank and the personal touch of a local
bank. For us, it's the best of both worlds."
Dr. Harry H. Sturge,
Assistant Superintendent For Business
North Shore Central School District, Sea Cliff
(ii) The First of Long Island Corporation
<PAGE>
CONTENTS
- --------------------------------------------------------------------------------
Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . (i)
Letter to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . .2
Management's Discussion and Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . . . . . . . . . . . . . . .4
Management's Responsibility for Financial Reporting. . . . . . . . . . . 12
Consolidated Financial Statements and Notes. . . . . . . . . . . . . . . 13
Report of Independent Public Accountants . . . . . . . . . . . . . . . . 31
Directors--The First of Long Island Corporation, The First National
Bank of Long Island. . . . . . . . . . . . . . . . . . . . . . . . . . 32
Officers--The First of Long Island Corporation, The First National
Bank of Long Island. . . . . . . . . . . . . . . . . . . . . . . . . . 33
BUSINESS OF THE CORPORATION
- --------------------------------------------------------------------------------
The First of Long Island Corporation ("Corporation") is a one-bank holding
company organized under the laws of the State of New York. Its primary business
is the operation of its sole subsidiary, The First National Bank of Long Island
("Bank").
The Bank was organized in 1927 under national banking laws and became the
sole subsidiary of the Corporation under a plan of reorganization effected April
30, 1984.
The Bank is a full service commercial bank which provides a broad range of
financial services to individual, professional, corporate, institutional, and
government customers through its fifteen branch system on Long Island.
The First of Long Island Agency, Inc. was organized in 1994 under the laws
of the State of New York, as a subsidiary of the Bank to conduct business as a
licensed insurance agency engaged in the sale of insurance, primarily fixed
annuity products.
The Bank is subject to regulation and supervision of the Federal Reserve
Board, the Comptroller of the Currency, and the Federal Deposit Insurance
Corporation which also insures its deposits. The Comptroller of the Currency is
the primary banking agency responsible for regulating the subsidiary Bank. In
addition, the Corporation is subject to the regulations and supervision of the
Securities and Exchange Commission.
ANNUAL MEETING NOTICE
- --------------------------------------------------------------------------------
The Annual Meeting of the stockholders will be held at the Old Brookville
office of The First National Bank of Long Island, 209 Glen Head Road, Glen Head,
New York 11545 on Tuesday, April 16, 1996 at 3:30 P.M.
EXECUTIVE OFFICE
The First of Long Island Corporation
10 Glen Head Road
Glen Head, New York 11545
(516) 671-4900
TRANSFER AGENT AND REGISTRAR
The First National Bank of Long Island
10 Glen Head Road
Glen Head, New York 11545
(516) 671-4900
<PAGE>
TO OUR SHAREHOLDERS
- --------------------------------------------------------------------------------
I am pleased to report on the year 1995 for The First of Long Island.
After giving effect to the stock split discussed below, earnings per share were
$2.91 in 1995 compared to $2.83 in 1994. Total net income was $6,208,500 for
1995 versus $6,027,600 in the previous year, and total assets were $425,700,000
at December 31, 1995. For the seventeenth consecutive year, The First of Long
Island increased cash dividends. The dividend was enhanced to 29.3 cents (after
the stock split) from 26.7 cents that was declared in June, an increase of 10
percent. For all of 1995, total cash dividends declared were 56 cents, a growth
of 10 1/2 percent over 1994. In addition, as mentioned above, the Board of
Directors declared a 3-for-2 stock split to shareholders of record January 8,
1996. The split was effectuated by means of a 50 percent stock dividend. The
additional shares were mailed to shareholders on February 2, 1996.
We were again exceptionally gratified by the growth in checking balances.
On average, the balances were $10,700,000 greater in 1995 than in 1994. The
principal reason for this increase was the successful sales results from our
commercial account solicitation efforts. As our shareholders know, our most
important marketing strategy is the solicitation of checking account
relationships from privately owned businesses and professionals. The growth in
our checking balances was the major contributor to increased earnings in 1995.
Earnings also were favorably impacted by a substantial reduction in FDIC
insurance premiums and the lack of security losses in this most recent year.
Total loans increased slightly in 1995 over 1994, with good growth in our
consumer loans. However, we were disappointed in the results for the commercial
mortgage area, as we fell short of plan. It was a particularly difficult
climate to successfully solicit these mortgages where both quality and quantity
seemed to decline. Our money market savings showed favorable results over the
year, more than offsetting the decline in traditional savings balances.
Historically, we have offered a premium money market rate compared to our bank
competitors. Of course, money market savings balances do not have the same
advantage in interest rate spread that traditional savings balances do.
The interest rate environment for us in 1995 was a difficult one as
interest rates declined to lower levels. The axioms which we believed governed
the Bank's interest rate spreads a few years ago no longer seem true. After
holding relatively steady for some years, our net interest margin declined from
5.34% in 1994 to 5.18% in 1995. There is a reasonable likelihood, at this
writing, that the trend will continue in 1996. Despite the frustration of a
declining margin, 1995, however, was the third consecutive year our return on
assets equaled or exceeded 1.50 percent.
In February 1995, we opened our fourteenth branch office in Valley Stream.
So far, we are very pleased with the growth of this commercial banking office
which is exceeding expectations. In January 1996, we opened another commercial
banking office. This latest addition is on Northern Boulevard in Great Neck and
brings our total number of offices to fifteen. It is our present expectation
that new offices in the foreseeable future will be of the commercial banking
type. As our shareholders might recall, we had planned to open a full service
office in Garden City. After approximately two
EARNINGS PER SHARE
[Bar Graph]
(ADJUSTED FOR 50% STOCK DIVIDEND DECLARED 12/95)
* BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE
CASH DIVIDENDS DECLARED PER SHARE
[Bar Graph]
(ADJUSTED FOR 50% STOCK DIVIDEND DECLARED 12/95)
2 The First of Long Island Corporation
<PAGE>
frustrating years and a considerable amount of work, we decided to forego this
location. A major factor was our inability to obtain a satisfactory license
agreement from the Village to use a small piece of their property for a drive-
in.
During the year, as we announced, we were pleased to add Dr. William J.
Catacosinos to our Board of Directors, whose name is submitted to you in the
proxy statement for a full term. We were sorry to lose the services of Stephen
V. Murphy as a director who resigned during the year. We will particularly miss
his financial acumen. It is our present intention to add an additional member
to our Board during 1996.
As we have all read and heard, banking is undergoing enormous changes,
especially in our marketplace. Significant mergers have already taken place and
more are planned. We have always believed that it is difficult for a very large
institution to provide the privately owned business, service conscious consumer
and professional with a consistent high level of service. We provide a quality
of service that we believe is not approached by our competition. Although we
will always face the vagaries of interest rates and the economy, our confidence
in the future of our Bank, and the particular market we serve, continues
unabated. Our efforts will remain directed to the consistent solicitation of
commercial checking relationships, commercial mortgages, selected consumer
loans, and trust and investment management services. We also expect to open
additional commercial banking offices, perhaps at a faster pace then in past
years.
We are steadfast in our commitment to "Excellence" and we will continue to
work diligently to ensure that it pervades every part of our organization--from
the quality of products offered, to the look of our branches, and most
importantly, where it all begins and ends: with our people. As a shareholder
of The First of Long Island, we hope you will take advantage of all the services
of your Bank, whether it be account and loan services or the sophisticated
assistance of our Trust and Investment Services Department.
[Photo]
/S/ J. WILLIAM JOHNSON
J. William Johnson
Chairman and Chief Executive Officer
The First of Long Island Corporation 3
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
The following discussion and analysis should be read in conjunction with
the financial statements and supplementary data appearing elsewhere in this
report. The purpose of this narrative is to provide a better understanding of
the Corporation's financial performance.
FINANCIAL CONDITION
At December 31, 1995 total assets amounted to $425.7 million compared to
$396.1 million in 1994. Average assets rose from $390.5 million in 1994 to
$411.7 million in 1995, an increase of 5.4%. The following table, along with
the succeeding narrative, presents the average daily balances of assets,
liabilities, and equity and how these sources and uses of funds were managed
during the periods presented:
<TABLE>
<CAPTION>
1995 1994 1993
---------------------------------- --------------------------------- --------
INCREASE/(DECREASE) Increase/(Decrease)
AVERAGE ------------------- Average ------------------- Average
SOURCES AND USES OF FUNDS BALANCE AMOUNT % Balance Amount % Balance
------- ------ ------- ------- ------- ------ -------
(In thousands of dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
FUNDING SOURCES:
Demand Deposits . . . . . . . $115,010 $10,681 10.2 $104,329 $11,258 12.1 $ 93,071
Savings, NOW, and
Money Market Deposits . . . 213,250 (2,793) (1.3) 216,043 523 .2 215,520
Time Deposits . . . . . . . . 35,416 8,114 29.7 27,302 (396) (1.4) 27,698
Other Liabilities . . . . . . 2,133 269 14.4 1,864 60 3.3 1,804
Stockholders' Equity . . . . . 45,908 4,903 12.0 41,005 3,927 10.6 37,078
-------- ------- -------- ------- --------
TOTAL SOURCES. . . . . . . $411,717 $21,174 5.4 $390,543 $15,372 4.1 $375,171
-------- ------- -------- ------- --------
-------- ------- -------- ------- --------
FUNDING USES:
Cash and Due From Banks . . . $ 19,297 $ 2,007 11.6 $ 17,290 $ 745 4.5 $ 16,545
Federal Funds Sold . . . . . . 33,140 19,410 141.4 13,730 2,735 24.9 10,995
Taxable Investment
Securities . . . . . . . . . 168,163 (2,805) (1.6) 170,968 (5,322) (3.0) 176,290
Municipal Securities . . . . . 40,238 (141) (0.3) 40,379 7,868 24.2 32,511
Loans, Net . . . . . . . . . . 140,070 2,273 1.6 137,797 8,871 6.9 128,926
Premises and Equipment . . . . 5,007 (121) (2.4) 5,128 (250) (4.6) 5,378
Other Assets . . . . . . . . . 5,802 551 10.5 5,251 725 16.0 4,526
-------- ------- -------- ------- --------
TOTAL USES . . . . . . . . $411,717 $21,174 5.4 $390,543 $15,372 4.1 $375,171
-------- ------- -------- ------- --------
-------- ------- -------- ------- --------
</TABLE>
DEPOSITS
Deposits continue as the Corporation's largest and most important source of
funds. Average total deposits increased by $16,002,000 in 1995 and $11,385,000
in 1994, or 4.6% and 3.4%, respectively.
Demand deposits are looked upon as the Corporation's most important source
of income, the increase of which is a constant major goal. During the past
year, demand deposit balances showed a good increase, largely the result of
marketing solicitation. Management is gratified by the results attained.
Demand deposit averages rose by $10,681,000 or 10.2% over 1994, accounting for
most of the total deposit growth. The Corporation's ability to hold and
increase its demand deposit base has contributed substantially to its
profitability over the years. For the years 1995, 1994, and 1993, average
demand deposits were 28%, 27%, and 25%, respectively, of average assets.
Savings, NOW, money market and other time deposits, in aggregate, also showed
growth in average as well as year end balances. The overall year end balances
of all deposit categories reflect an increase of $22,428,000 or 6.4% over 1994.
The composition of the various deposit categories are presented in the
Consolidated Balance Sheets and in Note F to Consolidated Financial Statements.
The retention of earnings also played an important role as a contributing
factor as a source of funds. This contribution is reflected in an average
increase of $4,903,000 or 12.0% in stockholders' equity.
4 The First of Long Island Corporation
<PAGE>
A substantial deposit base coupled with increased capital resources allowed
the Corporation to maintain its long-standing, non-reliant position on purchased
funds or borrowed money as sources of funds. Brokered deposits are neither
maintained nor solicited.
The Corporation has no demand deposits on which interest is paid. Interest
is paid, however, on NOW Accounts (Negotiable Orders of Withdrawal) which are
carried in the Savings, NOW, and Money Market category of deposits and perform a
similar function to checking accounts.
INVESTMENT SECURITIES
The primary use of funds by the Corporation is through its investment
portfolio. For the calendar year just ended, the portfolio was 51.0% of total
assets.
On average, investment securities balances decreased $2,946,000 or 1.4%
during 1995. U.S. Treasuries make up the bulk of taxable securities, followed
by U.S. Government Agencies, and collateralized mortgage obligations. U.S.
Government Agencies consist solely of modified pass-through, mortgage-backed
securities of federal agencies at year end 1995. Collateralized mortgage
obligations, commonly referred to as CMO's or REMIC's, are backed by federal
agency pass-throughs, virtually all from the Government National Mortgage
Association. The Corporation does not own any "interest only, principal only,
or high risk mortgage-backed securities" as defined in the 1991 Federal
Financial Institutions Examination Council Supervisory Policy Statement on
Securities Activities. Municipal securities are comprised of various "bank-
qualified" issues.
Investment securities are further categorized internally into two
segments--short term and intermediate term. Short term securities are those
investments purchased to mature approximately within one year. Intermediate
term securities, except for municipals, are usually purchased with a maturity of
about five years or less for U.S. Treasuries and a maximum expected average life
for mortgage-backed securities of usually no more than six years. Municipals, in
almost all cases, are purchased with maturities not exceeding twelve years.
Both short term and intermediate term segments generally consist of the
categories mentioned above, with short term investments including overnight
federal funds sold and commercial paper and, occasionally, bankers acceptances.
For the current year, overnight federal funds sold averaged $33,140,000. Levels
of short term investments are maintained relative to operational needs and
interest rate sensitivity. For 1995, average balances of short term investments
were $57,495,000 versus $39,816,000 in 1994. The investment securities
portfolio is further detailed in Note B to Consolidated Financial Statements.
Yields on investment securities originally purchased for intermediate terms
remained relatively level at a 6.77% tax equivalent yield for 1995 as compared
to 6.78% for 1994. In general during 1995, investment yields in the market
declined with regard to the entire yield curve from levels available in 1994.
The Corporation generally adheres to a "laddered structure" in its intermediate
investment portfolio. A brief discussion of rate changes is included in the
Liquidity/Sensitivity Analysis/Interest Rate Risk section.
At December 31, 1995, the aggregate market value of the investment
securities portfolio was $2,551,000 or 1.2%, above the amortized cost. Of this
amount, $3,194,000 represented gross unrealized gains while $643,000 represented
gross unrealized losses. A year earlier, the market value was $8,858,000 or
4.1% below the amortized cost. The swing from a position of depreciation of a
year ago to the current position of appreciation is attributable to the
decreasing interest rates during the year with an attendant increase in market
value.
Adhering to its long-standing policy, the Corporation has not maintained
nor has any present intention of maintaining a trading account. Further, the
Corporation does not purchase any noninvestment grade securities other than
occasionally from local municipal issuers.
LOANS
The second major use of funds by the Corporation is for the support of
lending activities. Loans at year end 1995 were 34% of total assets. Loans are
granted to diverse borrowers within the Corporation's market area. Loan growth
during the year was less than goal, presumably the result largely of a slow-to-
recover local economy. Average outstandings as well as year end outstandings
showed modest growth over 1994. Average net outstandings exceeded the previous
year by $2,273,000 or 1.6%, compared with the previous year's growth of
$8,871,000 or 6.9%. Current year end outstandings totaled $146,670,000,
reflecting an increase of $2,198,000 or 1.5% over the similar previous period.
Changes at year end were comprised of the following: commercial loans increased
$2,244,000 or 11.4%; real estate loans decreased slightly by $757,000 or 0.7%;
and installment loans showed an increase of $710,000 or 7.9%. The decline in
real estate loans was attributable to a decline in the commercial mortgage
portfolio. Real estate loans are made up of mortgage loans and equity lines of
credit, with commercial mortgages accounting for the largest part. For the
years 1995, 1994, and 1993, average net loans represented approximately 39%,
40%, and 38%, respectively, of average total deposits.
As has been its policy, the Corporation refrains from participation in any
high yield financings or foreign loans. Additionally, there are no significant
loan concentrations in
The First of Long Island Corporation 5
<PAGE>
specific industries. Commercial mortgage loans make up the largest category of
loans and represent 16.0% of total assets. The primary market for commercial
loans is to privately owned businesses and professionals in Nassau and Suffolk
Counties. The Corporation does not engage in transactions commonly known as
leveraged buy-outs of publicly held companies. In 1996, the Corporation will
continue its strategy of emphasizing the solicitation of mortgage loans, more
specifically in the commercial end.
In May 1993, the Financial Accounting Standards Board issued Statement No.
114, "Accounting by Creditors for Impairment of a Loan" (SFAS No. 114). In
October 1994, this Statement was amended by Statement No. 118, "Accounting by
Creditors for Impairment of a Loan--Income Recognition and Disclosures" (SFAS
No. 118), as described in Note A to Consolidated Financial Statements. Both
pronouncements were adopted by the Corporation on January 1, 1995. In
management's opinion, the adoption of both pronouncements was immaterial.
Nothing from the composition of the portfolio would cause the Corporation to
take any action with regard to SFAS No. 114 as amended by SFAS No. 118. There
has been no adverse effect on the Corporation's financial position or results of
operations.
ALLOWANCE FOR LOAN LOSSES
Maintenance of the allowance for loan losses is through provisions which
are based on management's evaluation of risks inherent in its loan portfolio.
Mostly because of the current level of the allowance for loan losses, as well as
current satisfactory credit quality, and low levels of nonperforming and
charged-off loans, the Corporation's view was that no provision was necessary
during 1995. This position parallels that of 1994 where no provision was made,
and compares with a $175,000 provision in 1993.
Management continually evaluates allowance levels. In determining the
necessity of provisions, consideration is given to recent loan charge-offs,
concerns for any other loans requiring special attention (whether or not such
other loans were 90 days past due, nonaccrual, or restructured), and information
available through which management estimates potential losses. In evaluating the
allowance account, management considers numerous factors: historical losses; a
borrower's ability to repay; the value of any related collateral; levels of and
trends in delinquencies and nonaccruals; trends in volume and terms of loans;
changes in lending policies and procedures; experience ability and depth of
lending staff; national and local economic conditions; concentrations of credit;
and environmental risks. Especially in evaluating real estate mortgage
collateral, principally for classified loans, the Corporation considers present
real estate values, the condition of the real estate, and the possibility of
such real estate being affected by environmental contamination on or near the
mortgaged property. Since 1987, environmental audits have been instituted, and
the scope of these audits have been increased over the succeeding years. Under
the Corporation's current policy, an environmental audit is required on
practically all commercial-type properties that are considered for a mortgage
loan. At the present time, the Corporation is not aware of any existing loans
in the portfolio where there is environmental pollution originating on the
mortgaged properties that would materially affect the value of the portfolio.
At December 31, 1995, the allowance for loan losses account was $3,600,000
compared to similar amounts for both 1994 and 1993. The ratios between the
allowance for loan losses and total outstanding loans at those same periods were
2.45%, 2.49%, and 2.62%, respectively. For the year just ended, the Corporation
recorded net charge-offs of a very nominal $132 compared with net recoveries of
$10,523 for 1994, and net charge-offs of $87,879 for 1993. Other real estate
owned (OREO) at year end was comprised of one property and amounted to $153,041
net of reserves. Nonaccrual loans at year end 1995 were $842,991 which is 0.6%
of total loans; nonaccrual loans at year end 1994 were $515,803 which is 0.4% of
total loans. Note C to Consolidated Financial Statements provides, among other
things, additional disclosure concerning 90 days past due, nonaccrual, and
restructured loans.
Except for the loans disclosed above, management is not aware of any loans
classified for regulatory purposes that presently represent or result from
trends or uncertainties which management reasonably expects will materially
alter future operating results, liquidity, or capital resources. Management
continues to maintain caution, however, over general economic conditions. Since
there is the possibility of adverse changes in economic conditions and loan
quality, delinquencies and losses in the loan portfolio could require future
provisions, thus adversely affecting results of operations.
6 The First of Long Island Corporation
<PAGE>
RESULTS OF OPERATIONS
The First of Long Island Corporation's net income for 1995 was $6,208,492
or $2.91 per share compared to net income of $6,027,648 or $2.83 per share for
1994.
The Corporation's income for 1993 was $5,547,941 or $2.59 per share before
the cumulative effect of changes in accounting principles (SFAS No. 109 as
mentioned in Note A to Consolidated Financial Statements). This change
increased net income by $650,000 or $.30 per share to $6,197,941 or $2.89 per
share.
Major factors contributing to the favorable earnings performance for 1995
were increases in checking deposit balances, decrease in losses on securities
sold, and a refund and reduction in the Federal Deposit Insurance Corporation
(FDIC) premium. The following table presents the major components of net income
with period-to-period comparisons:
<TABLE>
<CAPTION>
Increase (Decrease)
-----------------------
1995 1994
Year Ended December 31, Compared Compared
1995 1994 1993 to 1994 to 1993
------ ------ ------ -------- --------
(In thousands of dollars)
<S> <C> <C> <C> <C> <C>
Net Interest Income. . . . . . . . . . . . . $19,119 $18,686 $18,129 2.3% 3.1%
Provision for Loan Losses. . . . . . . . . . - - 175 (100.0)
------- ------- -------
Net Interest Income After Provision
for Loan Losses. . . . . . . . . . . . . . 19,119 18,686 17,954 2.3 4.1
Other Income . . . . . . . . . . . . . . . . 3,655 3,122 2,611 17.1 19.6
Other Expenses . . . . . . . . . . . . . . . 13,321 12,818 12,314 3.9 4.1
------- ------- -------
Income Before Taxes. . . . . . . . . . . . . 9,453 8,990 8,251 5.2 9.0
Provision for Income Taxes . . . . . . . . . 3,245 2,962 2,703 9.6 9.6
Income Before Cumulative Effect of
Accounting Change. . . . . . . . . . . . . 6,208 6,028 5,548 3.0 8.7
Cumulative Effect to January 1, 1993
of Change in Accounting for
Income Taxes . . . . . . . . . . . . . . . 650 (100.0)
------- ------- -------
NET INCOME . . . . . . . . . . . . . . . $ 6,208 $ 6,028 $ 6,198 3.0 (2.7)
------- ------- -------
------- ------- -------
</TABLE>
Net earning assets increased on average by $18.7 million or 5.2% from
$362.9 million in 1994 to $381.6 million in 1995. Funding for this asset growth
was largely the result of a $10.6 million average increase in checking deposits
which, in effect, benefited net interest income. Net interest income is the
most significant contributing factor to operating results. It is the difference
between interest and origination fees collected on interest earning assets less
interest paid on interest bearing liabilities, and is affected mostly by the
volume and mix of those assets and liabilities along with the respective yields
and rates paid. In 1995, net interest income amounted to $19.1 million, an
increase of 2.3% over 1994. The following table presents the components of net
interest income for the years 1995, 1994, and 1993:
<TABLE>
<CAPTION>
Increase (Decrease)
-----------------------
1995 1994
Year Ended December 31, Compared Compared
1995 1994 1993 to 1994 to 1993
------ ------ ------ -------- --------
(In thousands of dollars)
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
Loans. . . . . . . . . . . . . . . . . . . $13,132 $11,603 $10,682 13.2% 8.6%
Federal Funds Sold . . . . . . . . . . . . 1,927 601 329 220.6 82.7
Investment Securities. . . . . . . . . . . 12,959 12,657 12,986 2.4 (2.5)
------- ------- -------
TOTAL INTEREST INCOME. . . . . . . . . . 28,018 24,861 23,997 12.7 3.6
INTEREST EXPENSE
Savings, NOW, and Money Market
Deposits . . . . . . . . . . . . . . . . 7,171 5,237 4,978 36.9 5.2
Time Deposits. . . . . . . . . . . . . . . 1,728 938 890 84.2 5.4
------- ------- -------
TOTAL INTEREST EXPENSE . . . . . . . . . 8,899 6,175 5,868 44.1 5.2
------- ------- -------
NET INTEREST INCOME. . . . . . . . . . . $19,119 $18,686 $18,129 2.3 3.1
------- ------- -------
------- ------- -------
</TABLE>
The First of Long Island Corporation 7
<PAGE>
The net interest margin for 1995 was 5.18% compared with 5.34% in 1994.
The net interest margin is net interest income expressed as a percentage of
total average earning assets. The decline occurred throughout 1995 as the
interest rate paid on deposits in total increased more than the yield on earning
assets.
As mentioned previously, no provision for loan losses was made in 1995, nor
was any provision made in 1994.
Results of operations are measured by various ratios. Two highly
recognized ratios are the return on average assets (ROA) and the return on
average stockholders' equity (ROE). Return on average assets was 1.51% in 1995,
1.54% in 1994, and 1.65% in 1993. Return on average stockholders' equity was
13.52% in 1995, 14.70% in 1994, and 16.72% in 1993. For 1993, however, the
ratios include the benefit of $650,000 from the adoption of SFAS No. 109,
previously mentioned. Without regard to this change, the ratios for 1993 were
1.48% and 15.16%, respectively. Both the ROA and ROE ratios of the Corporation
compare favorably with industry averages and the performance of peer groups.
Other income consists of noninterest income and gains and losses on
securities transactions. This category reflected an overall net increase of
$533,000 or 17.1% in 1995. A significant component of the change was an
increase in service charges on deposit accounts of $143,000 or 7.6%, due
largely to price changes. Another significant component of the change was a
gain on securities transactions of $3,800 in 1995 compared with $290,000 in
losses for 1994.
Other expenses, which consist of noninterest expenses, showed an increase
of $502,000 or 3.9%. The largest components of the net change was an increase
in salaries and employee benefits of $695,000 or 9.2%, and a decrease in FDIC
insurance expense of $344,000 or 46.2%. The latter factor was a result of the
Federal Deposit Insurance Corporation reaching its full-funded status and
reducing the rate of insurance for the Corporation from 23 cents to 4 cents per
hundred dollars of deposits from June l, through December 31, 1995.
Income tax expense as a percentage of pretax income (the effective rate)
was 34.3% in 1995 compared with 32.9% in 1994.
CAPITAL RESOURCES
At year end 1995, total stockholders' equity was $49,340,664 compared with
$42,607,605 at year end 1994, an increase of $6,733,059 or 15.8%. Most of the
increase was accounted for through net earnings retained. Included in the net
change were the declaration of cash dividends totaling $1,173,723, repurchases
and retirement of Corporate common stock totaling $420,503, and the resultant
after-tax effect of an increase in the market value of the securities available
for sale portfolio of $1,951,801. This latter factor is due to increases in the
market value of securities available for sale that resulted from the general
decrease in interest rates in the financial markets. The inclusion of such
market changes was mandated under the required adoption of SFAS No. 115
explained more fully in Note A to Consolidated Financial Statements. Despite
the positive effects of increasing equity by including the appreciation in the
investment securities available for sale portfolio, the capital position of the
Corporation remained strong. Net unrealized appreciation or depreciation of
securities available for sale will continue to be subject to change in future
periods due to fluctuations in market value.
Increases in capital have been accomplished through retained earnings
without recourse to debt creation or issuance of additional stock. Employee
stock options totaling $166,992 were exercised during 1995. Total stockholders'
equity represented 11.6% of total assets at year end 1995 versus 10.8% at year
end 1994. (The ratio for 1995 includes the net after-tax appreciation of
$585,232 on the Corporation's $57,556,000 available for sale investment
securities portfolio.) In June 1995, a 26.7 cent dividend was declared and in
December 1995, a 29.3 cent dividend was declared representing an increase of 10%
in the semiannual dividend. Cash dividends have been paid, and increased, over
the past seventeen consecutive years. Total cash dividends of 56 cents per
share declared in 1995 represented an increase of 10 1/2% over total cash
dividends of 50.7 cents per share declared in 1994.
At its December 1995 meeting, the Board of Directors of the Corporation
declared a three for two stock split to be paid by means of a 50% stock dividend
to shareholders of record on January 8, 1996, payable on February 2, 1996. All
applicable shares and per share amounts have been retroactively adjusted to
reflect the effects of such dividend.
The following table compares average asset growth to average equity growth
over the past three years:
1995 1994 1993
----- ---- ----
Growth in Average Assets . . . . . . . . . . 5% 4% 6%
Growth in Average Equity . . . . . . . . . . 12% 11% 14%
8 The First of Long Island Corporation
<PAGE>
Standards established by the regulatory authorities for measuring capital
adequacy require banks and bank holding companies to maintain capital based on
risk-adjusted assets. Under these requirements, categories of assets with
potentially higher credit risk require more capital backing than assets with
lower risk. Further, banks must maintain an adequate ratio of total capital to
total assets which is referred to as the leverage ratio. Failure to maintain
these requirements can result in severe penalties. The Corporation and the Bank
substantially exceed the capital adequacy ratio levels required by the
regulatory authorities. The following table sets forth the current requirements
and the ratios maintained by the Corporation, which are substantially the same
as the Bank, at December 31, 1995 and 1994:
Corporation's Corporation's
Maintained Maintained
Minimum Rate at Rate at
Required Rate 12/31/95 12/31/94
------------- ------------- -------------
Total Risk-Based Capital Ratio . . . 8.00% 31.50% 27.81%
Tier I Risk-Based Capital Ratio. . . 4.00 30.24 26.55
Leverage Capital Ratio . . . . . . . 4.00 11.59 10.76
The Federal Deposit Insurance Corporation Improvement Act ("Act") was
enacted in 1991. The Act affects all federally insured depository institutions.
The Act contains a $70 billion recapitalization of the Bank Insurance Fund
("BIF") by significantly increasing the amount that the FDIC can borrow from the
Treasury. The FDIC must assess premiums that are sufficient to give the BIF
reserves of $1.25 for each $100 of insured deposits. Additional significant
provisions of the Act include: requiring prompt corrective action by regulators
if minimum capital standards are not met; establishing early intervention
procedures for "significantly" undercapitalized institutions; limiting FDIC
reimbursement of uninsured deposits when large banks fail; requiring an annual
regulatory examination; and imposing new auditing and accounting requirements,
effective for fiscal years beginning on or after January 1, 1993, including
management and auditor reporting on internal controls over financial reporting
and on compliance with laws and regulations.
Effective for fiscal years beginning on or after January 1, 1993, the Act
requires federally insured depository institutions with assets in excess of $500
million to file an "annual report" with the federal regulatory agencies that
will be available for public inspection. This requirement can be satisfied for
subsidiaries of a bank holding company by an audit of the consolidated financial
statements of the holding company. In addition, the Act requires that the
annual report must include an auditor's report on management's assertions
regarding the effectiveness of internal controls pertaining to financial
reporting and on agreed upon procedures concerning compliance with specific laws
and regulations designated by federal regulatory agencies.
During 1995, the Federal Deposit Insurance Corporation reached its full-
funded status. As a result of this occurrence, the rate of insurance for the
Corporation was reduced from twenty-three cents to four cents per hundred
dollars of deposits commencing June 1, 1995 through December 31, 1995.
Effective January 1, 1996, the Corporation has since been notified that its
assessment will be the minimum amount of $2,000 for the calendar year 1996.
There are many other accounting and auditing provisions and various other
provisions of the Act that are not discussed above.
The First of Long Island Corporation 9
<PAGE>
LIQUIDITY/SENSITIVITY ANALYSIS/INTEREST RATE RISK
Liquidity is the ability of the Corporation to generate and maintain
sufficient cash flows promptly to fund operations and to meet financial
obligations to its customers. The principal sources of liquidity are cash and
short term money market investments. Management believes that its current
policies of controlling liquidity and sensitivity analysis and dealing with
interest rate risk are adequate to carry out the needs, objectives, and goals in
this area for the coming year. At year end 1995, total short term and
intermediate term investments that are expected to mature within one year is
approximately $85,352,000 or 20.1% of total assets. The overall liquidity of
the Corporation is further enhanced by its historical stable deposit base of
checking accounts, savings accounts, NOW accounts, and money market accounts.
These core deposits, not including large certificates of deposit, averaged
$358,782,000 for the year 1995 which is 87.0% of total average assets. At
December 31, 1995, the total excess of interest bearing liabilities over
interest earning assets (based on assets and liabilities adjusting within a one
year time period) was $3,891,000 or 2.10% of such earning assets.
The following table, also referred to as the gap report, sets forth, as of
the dates shown, information regarding the interest sensitive assets and
interest sensitive liabilities of the Corporation:
<TABLE>
<CAPTION>
(In thousands of dollars)
OVER OVER
THREE THREE SIX TOTAL OVER
MONTHS MONTHS MONTHS SENSITIVE ONE YEAR OVER
OR THROUGH THROUGH (WITHIN THROUGH FIVE
LESS SIX MONTHS ONE YEAR ONE YEAR) FIVE YEARS YEARS TOTAL
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INTEREST EARNING ASSETS:
Federal funds sold . . . . . . $ 31,400 $ 31,400 $ 31,400
Investment securities
(NOTE 1, 2) . . . . . . . . 12,557 $ 19,095 $22,300 53,952 $132,046 $ 31,362 217,360
Total loans . . . . . . . . . 54,256 14,227 32,351 100,834 32,285 13,551 146,670
---------------------------------------------------------------------------------------------
TOTAL INTEREST EARNING
ASSETS . . . . . . . . . . $ 98,213 $ 33,322 $54,651 $186,186 $164,331 $ 44,913 $ 395,430
INTEREST BEARING LIABILITIES:
Savings accounts . . . . . . . $ 4,649 $ 4,649 $ 9,297 $ 18,595 $ 13,340 $ 24,412 $ 56,347
NOW and Money Market
accounts . . . . . . . . . . 133,990 1,661 1,661 137,312 8,860 9,965 156,137
Other time . . . . . . . . . . 17,668 11,048 5,454 34,170 3,134 526 37,830
---------------------------------------------------------------------------------------------
TOTAL INTEREST BEARING
LIABILITIES . . . . . . . $156,307 $ 17,358 $16,412 $190,077 $ 25,334 $ 34,903 $ 250,314
GAP. . . . . . . . . . . . . . . $(58,094) $ 15,964 $38,239 $ (3,891) $138,997 $ 10,010 $ 145,116
CUMULATIVE GAP . . . . . . . . . $(58,094) $(42,130) $(3,891) $ (3,891) $135,106 $145,116 $ 145,116
CUMULATIVE DIFFERENCE AS
A PERCENT OF TOTAL
EARNING ASSETS . . . . . . . . (2.09)%
</TABLE>
NOTE 1--EXCLUDES UNREALIZED NET APPRECIATION ON INVESTMENT SECURITIES AVAILABLE
FOR SALE OF $874,000.
NOTE 2--INCLUDES A $1,000,000 U.S. TREASURY NOTE WHICH MATURED ON 12/31/95
(SUNDAY) AND FOR PURPOSES OF SENSITIVITY ANALYSIS SHOULD BE INCLUDED IN
THIS TABLE.
With reference to the above table, sensitive assets and sensitive
liabilities include those assets and liabilities which may be repriced as to
rate within one year. For purposes of the table, $18,600,000 of all savings
accounts were assumed to reprice within one year, $13,300,000 within five years,
and the remaining savings accounts after five years. Also for purposes of this
table, $3,300,000 of all NOW accounts are assumed to reprice within one year,
$8,900,000 within five years, and the remaining NOW accounts after five years.
While the gap report details the repricing differences for assets and
liabilities for given periods, it has some limitations in that the report is
static by nature. Because of this limitation, and to further aid in quantifying
and controlling the earnings that may be at risk as a result of interest rate
fluctuations, the Corporation has enhanced its interest rate risk management
program by the adoption of simulation modeling. Under this process various
growth and interest rate scenarios can be run as a matter of test.
10 The First of Long Island Corporation
<PAGE>
Because of the Corporation's significant base of demand deposits, equity,
and NOW accounts, sustained higher interest rates should have a beneficial
effect on earnings by increasing the net interest margin while sustained lower
rates should have the opposite effect. During the actual time of declining
interest rates, it had been believed that the Corporation should incur a short
term benefit to earnings and the converse should be true. This proved not
necessarily the case, a principal reason being that rates on traditional savings
accounts were not changed in tandem with money market rates in general.
The Corporation regularly monitors the relationship between interest
sensitive assets and interest sensitive liabilities in order to lessen the
effect of interest rate fluctuations and to meet cash flow requirements. As a
further measure to mitigate potential impact on earnings caused by changes in
interest rates, the Corporation has imposed upon itself, as a general rule, a
cumulative asset or liability gap out to one year that should remain within
15.0% of earning assets.
As mentioned earlier, but also relative to this area of discussion, funding
of the Corporation continues to be through its deposits and, to a lesser degree,
through its retained earnings, with no recourse to purchased funds, borrowed
money, nor brokered deposits transactions.
STOCK PURCHASE PLANS
In February of 1988, the Board of Directors approved a stock repurchase
plan which authorized the Corporation to repurchase shares of its own common
stock in market or private transactions. Since that time, ten such plans have
been initiated involving the repurchase of 20,000 to 25,000 shares per plan.
The tenth plan, which is also the most current one, was approved in November
1995 for 25,000 shares (adjusted to 37,500 shares). Under this plan, the
authorization approximates one and three quarters percent of the Corporation's
then outstanding shares of 1,397,495 (adjusted to 2,096,242). At year end, in
addition to the most recent plan, 10,745 shares (adjusted to 16,117) could still
be repurchased on the immediately preceding plan. It is the Corporation's
belief that the repurchase of shares will better maximize shareholder value.
The stock purchases are financed through available Corporate cash. Note:
adjusted amounts appearing in parentheses are after the recent 3 for 2 stock
split.
OTHER INFORMATION
Within the past twelve months, the Corporation opened two new commercial
banking offices, one in Valley Stream in February 1995, and the other in Great
Neck in January 1996. Plans to open a full service office in Garden City, with
such office to be designated as the Bank's legal head office, were canceled due
to site complications. It is management's present expectation that new offices
in the foreseeable future will be commercial banking offices.
Capital expenditures for the year 1995 amounted to $666,705. This amount
included renovations and expansions to present banking facilities and normal
replacement costs. Long range plans could include expenditures, beyond normal
replacement costs, involved in the continued establishment of new branch
offices.
The Corporation is not involved in any acquisitions or mergers.
The subsidiary Bank underwent a routine safety and soundness and Bank
Information Systems (BIS) examination during the third quarter of 1995 by the
Office of the Comptroller of the Currency. The examination also evaluated the
Corporation's compliance with various consumer laws and regulations. The same
regulatory agency conducted its separately scheduled examination of the
subsidiary Bank's Trust and Investment Services Department during the first half
of 1994. The Corporation was examined by the Federal Reserve Bank of New York
examiners during the first quarter of 1993. Management is not aware, nor has it
been it apprised, of any recommendations by regulatory authorities which if they
were implemented would have a material effect on the Corporation's liquidity,
capital resources, and operations.
Commercial checking accounts and commercial mortgages continue as the
Corporation's primary marketing strategies. However, the Corporation regularly
markets and seeks to develop other loan products as well. While there may be
reason for a somewhat optimistic outlook regarding the national economy,
management maintains its previously stated concerns over a lackluster local
economy and the possible negative effects such an economy can have on
profitability. Management also maintains its belief that the strength of the
Corporation's liquidity and capital resources are more than adequate to meet
reasonably foreseeable events.
The First of Long Island Corporation 11
<PAGE>
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
- --------------------------------------------------------------------------------
The management of The First of Long Island Corporation is responsible for
the preparation of the financial statements, related financial data and other
information in this annual report. The financial statements are prepared in
accordance with generally accepted accounting principles and include amounts
based on management's estimates and judgment where appropriate. Financial
information appearing throughout this annual report is consistent with the
financial statements.
In meeting its responsibility both for the reliability and integrity of
these statements and information, management depends on its accounting system
and related internal control structures. These systems and controls have been
designed to provide reasonable assurances that assets are safeguarded and that
transactions are authorized and recorded in accordance with established
procedures and that reliable records are maintained. As an integral part of the
internal control structure, the Corporation maintains a professional staff of
internal auditors who monitor compliance with and assess the effectiveness of
the internal control structure and coordinate audit coverage with the
independent auditors.
The Corporation's Examining Committee of the Board of Directors, composed
solely of outside directors, meets regularly with the Corporation's management,
internal auditors, independent auditors and regulatory examiners to review
matters relating to financial reporting, internal control structure and the
nature, extent and results of the audit effort. The independent auditors,
internal auditors and banking regulators have direct access to the Examining
Committee with or without management present.
The financial statements for each of the three years in the period ended
December 31, 1995, have been audited by Arthur Andersen LLP, independent public
accountants, who render an independent professional opinion on management's
financial statements. Their appointment was approved by the Board of Directors.
The examinations provide an objective assessment of the degree to which the
Corporation's management meets its responsibility for financial reporting. Their
opinions on the financial statements are based on auditing procedures which
include reviewing internal control structures and performing selected tests of
transactions and records as deemed appropriate. These auditing procedures are
designed to provide a reasonable level of assurance that the financial
statements are fairly presented in all material respects.
12 The First of Long Island Corporation
<PAGE>
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
- --------------------------------------------------------------------------------
"WE'VE BEEN WITH THE FIRST OF LONG ISLAND SINCE THE BEGINNING. THEY'VE ALWAYS
PROVIDED PERSONAL, HANDS-ON SERVICE. WHEN WE EXPANDED IN 1980, THEY NOT ONLY
HELPED US WITH FINANCING BUT GAVE US BUSINESS ADVICE AS WELL. THEY ARE MORE THAN
BANKERS, THEY'RE GOOD PARTNERS."
Patricia Petersen, Licensed Real Estate Broker
President and CEO, Daniel Gale Agency Inc., Huntington
[Photo]
"THE FIRST OF LONG ISLAND GETS THINGS DONE FOR MY BUSINESS
AS WELL AS ME PERSONALLY. THERE ARE NO LONG LINES, NO HASSLES.
I TRUST THE PEOPLE WHO WORK THERE. FROM THE BRANCH MANAGER TO THE TELLERS, THEY
MAKE ME FEEL COMFORTABLE AND CONFIDENT THAT THEY'LL TAKE CARE OF EVERYTHING."
Douglas A. Byrnes, M.D., P.C., F.A.C.C.
Smithtown
[Photo]
"THE FIRST OF LONG ISLAND PROVIDES THE BEST QUALITY BANKING SERVICES. FROM
ATTENTION TO DETAIL TO FULFILLING A VARIETY OF BANKING NEEDS, THEY HAVE ALWAYS
BEEN HIGHLY COOPERATIVE AND INSTANTLY AVAILABLE."
Richard P. Skodnek, Partner
Skodnek Properties, Inc., Roslyn Heights
[Photo]
(left to right) Jack Skodnek, Partner;
Richard P. Skodnek, Partner; Scott Skodnek, Partner
The First of Long Island Corporation 13
<PAGE>
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31,
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Cash and Due from Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22,884,445 $ 20,512,716
Federal Funds Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,400,000 11,500,000
Investment Securities--Note B:
Available for Sale, at market value. . . . . . . . . . . . . . . . . . . . . . . 57,556,137 44,872,959
Held to Maturity (Market value $161,355,000 in 1995 and
$160,941,000 in 1994). . . . . . . . . . . . . . . . . . . . . . . . . . 159,677,530 167,758,845
------------ ------------
TOTAL INVESTMENT SECURITIES (Market value $218,911,000 in 1995 and
$205,814,000 in 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . 217,233,667 212,631,804
Loans--Note C:
Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,900,667 19,656,219
Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,098,688 115,855,485
Installment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,670,686 8,960,640
------------ ------------
Total Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,670,041 144,472,344
Less: Unearned Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (795,925) (859,057)
Allowance for Loan Losses--Note D . . . . . . . . . . . . . . . . . . . . . (3,600,030) (3,600,162)
------------ ------------
NET LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142,274,086 140,013,125
Premises and Equipment, Net--Note E . . . . . . . . . . . . . . . . . . . . . . . 5,092,380 4,961,547
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,769,970 6,435,697
------------ ------------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $425,654,548 $396,054,889
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits--Note F:
Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $123,640,360 $109,473,146
Savings, NOW, and Money Market . . . . . . . . . . . . . . . . . . . . . . . . . 215,536,599 211,068,894
Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,777,748 30,984,435
------------ ------------
TOTAL DEPOSITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373,954,707 351,526,475
Accrued Taxes, Expenses and Other Liabilities . . . . . . . . . . . . . . . . . . 2,359,177 1,920,809
------------ ------------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376,313,884 353,447,284
STOCKHOLDERS' EQUITY--Note I:
Common Stock, $.10 Par Value; 5,000,000 Shares Authorized;
Shares Issued and Outstanding:
1995-2,096,467, 1994-1,400,384 . . . . . . . . . . . . . . . . . . . . . . . . 209,647 140,038
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,366,485 7,619,723
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,179,300 36,214,413
Unrealized Appreciation (Depreciation)
on Securities Available for Sale, Net. . . . . . . . . . . . . . . . . . . . . . 585,232 (1,366,569)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . 49,340,664 42,607,605
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . $425,654,548 $396,054,889
------------ ------------
------------ ------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
14 The First of Long Island Corporation
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
INTEREST INCOME
Loans, Including Fees on Loans . . . . . . . . . . . . . . . . . . . . . . . . $13,132,054 $11,603,481 $10,681,563
Federal Funds Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,926,537 600,942 329,411
Investment Securities:
Available for Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,947,569 2,987,725
Held to Maturity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,011,318 9,668,718 12,986,042
----------- ----------- -----------
TOTAL INTEREST INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . 28,017,478 24,860,866 23,997,016
INTEREST EXPENSE
Savings, NOW, and Money Market Deposits . . . . . . . . . . . . . . . . . . . 7,170,866 5,236,729 4,977,824
Time Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,727,834 937,947 890,442
----------- ----------- -----------
TOTAL INTEREST EXPENSE . . . . . . . . . . . . . . . . . . . . . . . . . . 8,898,700 6,174,676 5,868,266
----------- ----------- -----------
NET INTEREST INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,118,778 18,686,190 18,128,750
Provision for Loan Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,000
----------- ----------- -----------
Net Interest Income After Provision for Loan Losses . . . . . . . . . . . 19,118,778 18,686,190 17,953,750
NONINTEREST INCOME
Trust Department Income . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,126,763 1,068,156 922,497
Service Charges on Deposit Accounts . . . . . . . . . . . . . . . . . . . . . 2,016,113 1,873,614 1,379,633
Net Securities Gains (Losses) . . . . . . . . . . . . . . . . . . . . . . . . 3,765 (290,056) (92,029)
Other Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508,563 470,148 401,378
----------- ----------- -----------
TOTAL NONINTEREST INCOME . . . . . . . . . . . . . . . . . . . . . . . . . 3,655,204 3,121,862 2,611,479
OTHER OPERATING EXPENSES
Salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,038,394 5,580,713 5,247,303
Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,232,556 1,994,839 1,975,344
Net Occupancy Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,053,096 1,024,798 885,910
Equipment Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 680,477 730,560 755,825
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,316,167 3,487,694 3,450,006
----------- ----------- -----------
TOTAL OTHER OPERATING EXPENSES . . . . . . . . . . . . . . . . . . . . . . 13,320,690 12,818,604 12,314,388
----------- ----------- -----------
Income Before Income Taxes and
Cumulative Effect of Accounting Change . . . . . . . . . . . . . . . . . 9,453,292 8,989,448 8,250,841
Provision for Income Taxes--Note H . . . . . . . . . . . . . . . . . . . . . . . 3,244,800 2,961,800 2,702,900
----------- ----------- -----------
INCOME BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,208,492 6,027,648 5,547,941
Cumulative Effect to January 1, 1993 of Change in
Accounting for Income Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 650,000
----------- ----------- -----------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,208,492 $ 6,027,648 $ 6,197,941
----------- ----------- -----------
----------- ----------- -----------
INCOME PER SHARE BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . $2.91 $2.83 $2.59
----------- ----------- -----------
----------- ----------- -----------
NET INCOME PER SHARE . . . . . . . . . . . . . . . . . . . . . . . . . . . $2.91 $2.83 $2.89
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
The First of Long Island Corporation 15
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Unrealized
Appreciation/
(Depreciation)
Common Stock on Securities
--------------------- Retained Available
Shares Amount Surplus Earnings for Sale, Net Total
--------- -------- ---------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Balance January 1, 1993 . . . . . . . . 1,408,233 $140,823 $8,282,753 $26,023,722 $34,447,298
Net Income . . . . . . . . . . . . . . 6,197,941 6,197,941
Repurchase and Retirement
of Common Stock . . . . . . . . . . (23,433) (2,343) (799,916) (802,259)
Exercise of Stock Options . . . . . . 21,901 2,190 452,288 454,478
Cash Dividends Declared,
$.22 per share . . . . . . . . . . . (465,413) (465,413)
$.24 per share . . . . . . . . . . . (506,398) (506,398)
Tax Benefit on Stock Options . . . . . 77,278 -- 77,278
--------- -------- ---------- ----------- ---------- -----------
Balance December 31, 1993 . . . . . . . 1,406,701 140,670 8,012,403 31,249,852 39,402,925
Net Income . . . . . . . . . . . . . . 6,027,648 6,027,648
Change in Accounting for
Investments Effective
January 1, 1994. . . . . . . . . $ 835,000 835,000
Repurchase and Retirement
of Common Stock . . . . . . . . . . (19,401) (1,940) (685,357) (687,297)
Exercise of Stock Options . . . . . . 13,084 1,308 292,677 293,985
Unrealized Depreciation
on Securities Available
for Sale, Net. . . . . . . . . . (2,201,569) (2,201,569)
Cash Dividends Declared,
$.24 per share (502,934) (502,934)
$.27 per share (560,153) (560,153)
--------- -------- ---------- ----------- ---------- -----------
Balance December 31, 1994 . . . . . . . 1,400,384 140,038 7,619,723 36,214,413 (1,366,569) 42,607,605
Net Income . . . . . . . . . . . . . . 6,208,492 6,208,492
Repurchase and Retirement
of Common Stock . . . . . . . . . . (10,000) (1,000) (419,503) (420,503)
Exercise of Stock Options . . . . . . 7,261 727 166,265 166,992
Unrealized Appreciation
on Securities Available
for Sale, Net. . . . . . . . . . . . 1,951,801 1,951,801
Effect of Stock Split (in the form
of a 50% stock dividend) . . . . . . 698,822 69,882 (69,882)
Cash Dividends Declared,
$.27 per share (558,759) (558,759)
$.29 per share (614,964) (614,964)
--------- -------- ---------- ----------- ---------- -----------
Balance December 31, 1995 . . . . . . . 2,096,467 $209,647 $7,366,485 $41,179,300 $ 585,232 $49,340,664
--------- -------- ---------- ----------- ---------- -----------
--------- -------- ---------- ----------- ---------- -----------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
16 The First of Long Island Corporation
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,208,492 $ 6,027,648 $ 6,197,941
Adjustments to reconcile net income to net
cash provided by operating activities:
Cumulative effect of change in accounting. . . . . . . . . . . . . . . . . (650,000)
Provision for loan losses . . . . . . . . . . . . . . . . . . . . . . . . 175,000
Provision for depreciation and amortization . . . . . . . . . . . . . . . 535,873 609,214 620,999
(Accretion) amortization of investment securities, net . . . . . . . . . . (1,639,272) (973,403) 586,186
Deferred income taxes (credit) . . . . . . . . . . . . . . . . . . . . . . (4,990) (66,789) 21,201
Gain on sale of equipment. . . . . . . . . . . . . . . . . . . . . . . . . (6,483)
Realized (gain) losses on investment securities . . . . . . . . . . . . . (3,765) 290,056 92,029
Decrease (increase) in other assets . . . . . . . . . . . . . . . . . . . 744,047 (472,403) (912,320)
Increase in accrued taxes, expenses,
and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 388,547 49,863 472,176
------------ ------------- -------------
NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . . . 6,228,932 5,464,186 6,596,729
INVESTING ACTIVITIES
Proceeds from sales of investment securities available for sale . . . . . . . 265,000 4,424,453 7,333,508
Proceeds from maturities of investment securities held to maturity . . . . . . 65,995,001 156,983,472 269,467,173
Proceeds from maturities of investment securities available for sale . . . . . 8,015,000 6,085,850
Purchase of investment securities available for sale . . . . . . . . . . . . . (19,689,531) (12,202,918)
Purchase of investment securities held to maturity . . . . . . . . . . . . . . (56,670,815) (151,862,489) (285,537,777)
Net increase in loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,260,961) (7,425,477) (5,761,863)
Purchases of premises and equipment . . . . . . . . . . . . . . . . . . . . . (666,705) (301,523) (472,844)
Proceeds from sale of equipment . . . . . . . . . . . . . . . . . . . . . . . 13,750
------------ ------------- -------------
NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . . . . (5,013,011) (4,298,632) (14,958,053)
FINANCING ACTIVITIES
Net increase in total deposits . . . . . . . . . . . . . . . . . . . . . . . . 22,428,231 11,652,845 8,860,307
Cash dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,118,912) (1,009,332) (930,063)
Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . (420,503) (687,297) (802,259)
Proceeds from exercise of stock options . . . . . . . . . . . . . . . . . . . 166,992 293,985 454,478
Tax benefit on stock options . . . . . . . . . . . . . . . . . . . . . . . . . 77,278
------------ ------------- -------------
NET CASH PROVIDED BY FINANCING ACTIVITIES . . . . . . . . . . . . . . . 21,055,808 10,250,201 7,659,741
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . 22,271,729 11,415,755 (701,583)
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . 32,012,716 20,596,961 21,298,544
------------ ------------- -------------
CASH AND CASH EQUIVALENTS AT END OF YEAR . . . . . . . . . . . . . . . . $ 54,284,445 $ 32,012,716 $ 20,596,961
------------ ------------- ------------
------------ ------------- ------------
</TABLE>
The Corporation made interest payments of $8,878,558, $6,148,118, and
$5,935,037, in 1995, 1994, and 1993, respectively, and tax payments of
$3,037,033, $3,082,509, and $2,589,509, in 1995, 1994, and 1993, respectively.
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
The First of Long Island Corporation 17
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
The accounting and reporting policies of the Corporation and its subsidiary
Bank conform to general practices within the banking industry. The following
footnotes describe the most significant of these policies.
In preparing the consolidated financial statements, management is required
to make estimates and assumptions that affect the reported assets and
liabilities as of the date of the consolidated balance sheets. The same is true
of revenues and expenses reported for the period. Actual results could differ
significantly from those estimates.
PRINCIPLES OF CONSOLIDATION
The Corporation and its subsidiary Bank provide banking services to
domestic markets. The consolidated financial statements include the accounts of
the Corporation and the Bank. All intercompany balances and transactions have
been eliminated.
CASH FLOWS INFORMATION
For purposes of the statement of cash flows, the Corporation considers cash
and due from banks and federal funds sold as cash and cash equivalents.
INVESTMENT SECURITIES
AVAILABLE FOR SALE--Effective January 1, 1994, the Corporation adopted
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" (SFAS No. 115). In connection with
the adoption of this pronouncement, securities used as part of the Corporation's
asset/liability management that may be sold in response to changes in interest
rates, prepayments, and other factors have been classified as available for
sale. Such securities are reported at fair value, with unrealized gains and
losses excluded from earnings and reported in a separate component of
stockholders' equity (on an after tax basis). Gains and losses on the
disposition of securities are recognized on the specific identification method
in the period in which they occur.
HELD TO MATURITY--Held to maturity investment securities are stated at cost
adjusted for accretion of discount or amortization of premium. The Corporation
feels confident that it has the ability to hold such securities until maturity.
On November 15, 1995, the Financial Accounting Standards Board issued a
special report entitled, "A Guide to Implementation of Statement No. 115 on
Accounting for Certain Investments in Debt and Equity Securities, Questions
and Answers" ("the Guide"). The Guide permitted a one-time reassessment and
related reclassifications from the held to maturity category (no later than
December 31, 1995) that will not call into question the intent of the
enterprise to hold other debt securities at maturity in the future. In
December 1995, the Corporation performed a reassessment of its investment and
mortgage-backed securities which resulted in the decision not to make any
further adjustments to the classification of its investment portfolio.
REVENUE RECOGNITION ON LOANS
Interest on loans is credited to income based on the principal amount
outstanding. Loan fees and related direct costs of originating loans are
deferred and amortized by the interest method over the estimated average life of
the loans.
The accrual of interest income is generally discontinued when a loan
becomes 90 days past due as to principal or interest. When interest accruals
are discontinued, interest credited to income in the current year is reversed,
and interest accrued in the prior year is charged to the allowance for loan
losses.
Effective January 1, 1995, the Corporation adopted the accounting and
disclosure guidance in Statement of Financial Accounting Standards No. 114,
"Accounting by Creditors for Impairment of a Loan," as amended by Statement No.
118, "Accounting by Creditors for Impairment of a Loan-Income Recognition and
Disclosures." Both pronouncements establish the accounting by creditors for
impairment of certain loans with the latter adding as to how a creditor
recognizes interest income related to those impaired loans. Pursuant to this
accounting guidance, a valuation allowance is recorded on impaired loans to
reflect the difference, if any, between the loan face and the present value of
projected cash flows, observable fair value or collateral value. This valuation
allowance is reported within the overall allowance for loan losses. Such change
in accounting was not material to the consolidated financial statements.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is an amount estimated by management to
provide for potential loan losses. The allowance is increased by loan
recoveries and provisions charged to income and reduced by loan charge-offs.
Management believes that the allowance for loan losses is adequate. While
management uses available information to estimate potential losses on loans, the
allowance may have to be increased in future years because of changed
conditions. In addition, various regulatory agencies, as an integral part of
their examination process, periodically review the Corporation's allowance for
loan losses. Such agencies can
18 The First of Long Island Corporation
<PAGE>
require the Corporation to recognize additions to the allowance based on their
judgments of information available to them at the time of their examination.
PREMISES AND EQUIPMENT
Premises and equipment are stated at cost, less accumulated depreciation
and amortization computed by using the straight line method (for assets acquired
prior to 1987) and 150% declining balance method (for assets acquired after
1986). Rates are based on the estimated useful lives of the related asset as
follows:
Asset Estimated
Classification Useful Life
- ---------------------- -------------------------------------------------
Premises 5 to 50 years
Furniture & Equipment 3 to 40 years
Leasehold Improvements Amortized over the lease term or estimated useful
life of the improvements, whichever is shorter.
INCOME TAXES
Effective January 1, 1993, the Corporation changed its method of accounting
for income taxes and adopted the accounting standards contained in Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS No.
109). It requires the use of an asset and liability approach for financial
accounting and reporting for income taxes. The cumulative effect to January 1,
1993 of this change in accounting for income taxes increased the Corporation's
net earnings in 1993 by $650,000 and resulted in a corresponding increase in the
deferred income tax asset.
PER SHARE AMOUNTS/STOCKHOLDERS' EQUITY
Per share amounts are based on the weighted average number of common shares
outstanding (2,130,790 in 1995, 2,126,572 in 1994, and 2,144,482 in 1993) and
include common stock equivalents. Per share data for all years presented, on a
fully diluted basis, is the same as primary earnings per share.
All applicable shares and per share amounts have been retroactively
adjusted to reflect the effects of the three for two stock split (paid by means
of a 50% stock dividend) which was declared by the Board of Directors on
December 19, 1995 to shareholders of record January 8, 1996 payable on
February 2, 1996.
FAIR VALUES OF FINANCIAL INSTRUMENTS
CASH AND CASH EQUIVALENTS --The carrying amounts reported in the balance
sheet for cash and short term instruments approximate those assets' fair values.
INVESTMENT SECURITIES (INCLUDING COLLATERALIZED MORTGAGE OBLIGATIONS) --
Fair values for investment securities are based on quoted market prices, where
available. If quoted market prices are not available, fair values are based on
quoted market prices of comparable instruments.
LOANS--For variable-rate loans that reprice frequently and with no
significant change in credit risk, fair values are based on carrying values. The
fair values for certain mortgage loans (e.g., fixed rate one-to-four family
residential), credit card loans, and other consumer loans are based on quoted
market prices of similar loans sold in conjunction with securitization
transactions, adjusted for differences in loan characteristics. The fair value
for other loans are estimated using discounted cash flow analyses, using
interest rates currently being offered for loans with similar terms to borrowers
of similar credit quality. The carrying amount of accrued interest approximates
its fair value.
OFF-BALANCE SHEET INSTRUMENTS--Fair values for the Corporation's off-
balance sheet instruments (lending commitments) are based on fees currently
charged to enter into similar agreements, taking into account the remaining
terms of the agreements and the counterparties' credit standing.
DEPOSITS--The fair values disclosed for demand deposits, NOW accounts,
savings accounts, and certain types of money market accounts, are equal to their
carrying amounts at the reporting date. Fair values for fixed-rate certificates
of deposit are estimated using a discounted cash flow calculation that applies
interest rates currently being offered on certificates to a schedule of
aggregated expected monthly maturities on time deposits.
NEW ACCOUNTING PRONOUNCEMENTS
In March 1995, the Financial Accounting Standards Board issued SFAS No.
121, "Accounting for the Impairment of Long-lived Assets to be Disposed Of."
This Statement requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. The pronouncement is effective for fiscal years
beginning after December 15, 1995, although earlier implementation is permitted.
In May 1995, the Financial Accounting Standards Board issued SFAS No. 122,
"Accounting for Mortgage Servicing Rights," which is an amendment to SFAS No.
65, "Accounting for Certain Mortgage Banking Activities." This Statement
requires the recognition as separate assets rights to service mortgage loans for
others, however those servicing rights are acquired. The pronouncement is
effective for fiscal years beginning after December 15, 1995, although earlier
implementation is permitted.
In October 1995, the Financial Accounting Standards Board issued SFAS
No. 123, "Accounting for Stock-Based Compensation." This Statement establishes
financial accounting and reporting standards for stock-based employee
compensation plans. The pronouncement is effective for fiscal years beginning
after December 15, 1995, although earlier implementation is permitted.
The First of Long Island Corporation 19
<PAGE>
In management's opinion, when adopted, the aforementioned pronouncements
will not have a material effect on the Corporation's financial position or
results of operations.
In December 1994, the AICPA issued Statement of Position No. 94-6,
entitiled, "Disclosure of Certain Significant Risks and Uncertainties" ("SOP 94-
6") which is effective for fiscal years ending after December 15, 1995. SOP 94-6
requires disclosure in the financial statements about certain risks and
uncertainties that could significantly affect the amounts reported in the
financial statements in the near term and relate to: (i) the nature of
operations; (ii) the necessary use of estimates in the preparation of financial
statements; and (iii) significant concentrations in certain aspects of
operations.
NOTE B - INVESTMENT SECURITIES
- --------------------------------------------------------------------------------
The amortized cost and estimated market values of investment securities at
December 31, were as follows (in thousands of dollars):
<TABLE>
<CAPTION>
1995
-----------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
--------- ---------- ---------- -------
<S> <C> <C> <C> <C>
SECURITIES HELD TO MATURITY:
U.S. Treasury. . . . . . . . . . . . . . . . . . . . . . . . . . $ 80,861 $1,201 $ (49) $ 82,013
U.S. Government Agencies . . . . . . . . . . . . . . . . . . . . 36,238 405 (396) 36,247
State and Municipals . . . . . . . . . . . . . . . . . . . . . . 33,975 564 (91) 34,448
Collateralized Mortgage Obligations. . . . . . . . . . . . . . . 8,604 78 (35) 8,647
-------- ------ ------- --------
TOTALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . $159,678 $2,248 $ (571) $161,355
-------- ------ ------- --------
-------- ------ ------- --------
SECURITIES AVAILABLE FOR SALE:
U.S. Treasury . . . . . . . . . . . . . . . . . . . . . . . . . $ 38,495 $ 821 $ (23) $ 39,293
State and Municipals . . . . . . . . . . . . . . . . . . . . . . 6,779 92 (7) 6,864
Collateralized Mortgage Obligations. . . . . . . . . . . . . . . 11,281 33 (42) 11,272
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 127
-------- ------ ------- --------
TOTALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 56,682 $ 946 $ (72) $ 57,556
-------- ------ ------- --------
-------- ------ ------- --------
<CAPTION>
1994
-----------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- -------
<S> <C> <C> <C> <C>
SECURITIES HELD TO MATURITY:
U.S. Treasury. . . . . . . . . . . . . . . . . . . . . . . . . . $ 67,781 $ 43 $(2,386) $ 65,438
U.S. Government Agencies . . . . . . . . . . . . . . . . . . . . 42,924 128 (2,871) 40,181
State and Municipals . . . . . . . . . . . . . . . . . . . . . . 37,117 109 (1,416) 35,810
Collateralized Mortgage Obligations. . . . . . . . . . . . . . . 9,956 21 (396) 9,581
Commercial Paper . . . . . . . . . . . . . . . . . . . . . . . . 9,981 (50) 9,931
-------- ------ ------- --------
TOTALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . $167,759 $301 $(7,119) $160,941
-------- ------ ------- --------
-------- ------ ------- --------
SECURITIES AVAILABLE FOR SALE:
U.S. Treasury . . . . . . . . . . . . . . . . . . . . . . . . . $ 36,445 $ 23 $(1,241) $ 35,227
State and Municipals . . . . . . . . . . . . . . . . . . . . . . 4,406 37 (88) 4,355
Collateralized Mortgage Obligations. . . . . . . . . . . . . . . 5,935 (771) 5,164
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 127
-------- ------ ------- --------
TOTALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 46,913 $ 60 $(2,100) $ 44,873
-------- ------ ------- --------
-------- ------ ------- --------
</TABLE>
At December 31, 1995 and 1994, investment securities carried at approximately
$44,236,000 and $40,305,000, respectively, were pledged as collateral to secure
public deposits and for other purposes.
20 The First of Long Island Corporation
<PAGE>
The amortized cost and estimated market values of debt securities at
December 31, 1995 are shown below by contractual final maturities. For U.S.
Government Agencies, since these are "modified" pass-through mortgage-backed
securities, actual principal payments are received throughout the life of these
securities as mortgage debtors routinely pay (and prepay) their obligations.
<TABLE>
<CAPTION>
Amortized Cost
--------------------------------------
U.S. State and Percentages of
Government Municipals Amortized Cost
SECURITIES HELD TO MATURITY: and its and Market at December 31,
Maturities Agencies Other Total Value 1995
- -------------------------------------------- ---------- ---------- ----- ------ ---------------
(In thousands of dollars)
<S> <C> <C> <C> <C> <C>
Within 1 year. . . . . . . . . . . . . . . . $ 30,416 $ 5,965 $ 36,381 $ 36,534 22.8%
Over 1 year to 2 years . . . . . . . . . . . 12,683 1,080 13,763 14,059 8.6
Over 2 years to 5 years. . . . . . . . . . . 47,172 8,445 55,617 56,420 34.8
Over 5 years to 10 years . . . . . . . . . . 9,083 18,420 27,503 28,000 17.2
Over 10 years. . . . . . . . . . . . . . . . 17,745 65 17,810 17,695 11.2
-------- ------- -------- ---------
117,099 33,975 151,074 152,708
Collateralized Mortgage Obligations. . . . . 8,604 8,647 5.4
-------- -------- -----
TOTALS . . . . . . . . . . . . . . . . . . $159,678 $161,355 100.0%
-------- -------- -----
-------- -------- -----
<CAPTION>
Amortized Cost
--------------------------------------
U.S. State and Percentages of
Government Municipals Amortized Cost
SECURITIES AVAILABLE FOR SALE: and its and Market at December 31,
Maturities Agencies Other Total Value 1995
- -------------------------------------------- ---------- ---------- ----- ------ ---------------
(In thousands of dollars)
<S> <C> <C> <C> <C> <C>
Within 1 year. . . . . . . . . . . . . . . . $ 6,538 $ 750 $ 7,288 $ 7,346 12.9%
Over 1 year to 2 years . . . . . . . . . . . 5,643 161 5,804 5,940 10.2
Over 2 years to 5 years. . . . . . . . . . . 26,314 2,228 28,542 29,169 50.4
Over 5 years to 10 years . . . . . . . . . . 3,415 3,415 3,473 6.0
Over 10 years. . . . . . . . . . . . . . . . 352 352 356 .6
-------- ------- -------- ---------
$38,495 $6,906 45,401 46,284
Collateralized Mortgage Obligations. . . . . 11,281 11,272 19.9
-------- -------- -----
TOTALS . . . . . . . . . . . . . . . . . . $56,682 $57,556 100.0%
-------- -------- -----
-------- -------- -----
</TABLE>
Proceeds from sales of investment securities available for sale during 1995
were $265,000. Gross gains of $3,765 were realized on these sales.
Proceeds from sales of investment securities available for sale during 1994
were $4,424,453. Gross gains of $2,009 and gross losses of $292,065 were
realized on these sales.
Proceeds from sales of investment securities during 1993 were $7,333,508.
Gross gains of $8,000 and gross losses of $100,029 were realized on these sales.
The First of Long Island Corporation 21
<PAGE>
NOTE C -- LOANS
- --------------------------------------------------------------------------------
The following is a summary of loans at December 31:
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Commercial, financial and agricultural . . . $ 21,707,709 $ 19,481,973
Real Estate-mortgage . . . . . . . . . . . . 115,098,688 115,855,485
Installment. . . . . . . . . . . . . . . . . 9,670,686 8,960,640
All other loans (including overdrafts) . . . 192,958 174,246
------------ ------------
146,670,041 144,472,344
Less: Unearned income. . . . . . . . . . . . (795,925) (859,057)
Allowance for loan losses. . . . . . . (3,600,030) (3,600,162)
------------ ------------
$142,274,086 $140,013,125
------------ ------------
------------ ------------
</TABLE>
Certain directors, including their immediate families and companies in
which they are principal owners, were loan customers of the Bank during 1995 and
1994. Such loans are in the ordinary course of business at normal credit terms,
including interest rate and security, and do not
represent more than a normal risk of collection. The aggregate amount of these
loans was approximately $1,540,000 and $1,317,000 at December 31, 1995 and 1994,
respectively. During 1995, $421,000 of new loans to such persons were made and
repayments totaled $198,000.
Nonaccrual loans are loans on which either principal or interest payments
are past due 90 days or more. Restructured loans have been restructured to
provide a reduction or deferral of interest or principal for reasons
related to the debtors' financial difficulties. Accruing loans which are past
due 90 days or more amounted to $251,000 and $3,237 at December 31, 1995 and
1994, respectively. Information concerning nonaccrual and restructured loans,
both of which are included in loans, at December 31, is as follows:
<TABLE>
<CAPTION>
RESTRUCTURED NONACCRUAL
----------------------- -----------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Amount outstanding . . . . . . . . . . . . . . . . . . . . . . . $815,864 $823,870 $842,991 $515,803
Gross interest income which would have been
recorded during the year under original terms. . . . . . . . . 96,316 85,693 96,500 36,054
Gross interest income recorded during the year . . . . . . . . . 81,676 61,381 36,215 525
Commitments for additional funds . . . . . . . . . . . . . . . . NONE None NONE None
</TABLE>
The carrying amounts (net of unearned income and allowance for loan losses)
and fair values of loans consisted of the following at December 31:
<TABLE>
<CAPTION>
1995
------------------------------
CARRYING AMOUNT FAIR VALUE
--------------- ------------
<S> <C> <C>
Commercial . . . . . . . . . . . . . . . . . $ 21,196,017 $ 21,159,251
Real Estate. . . . . . . . . . . . . . . . . 111,657,204 112,110,335
Installment. . . . . . . . . . . . . . . . . 9,420,865 9,405,611
------------ ------------
$142,274,086 $142,675,197
------------ ------------
------------ ------------
<CAPTION>
1994
------------------------------
Carrying Amount Fair Value
--------------- ------------
<S> <C> <C>
Commercial . . . . . . . . . . . . . . . . . $ 18,939,428 $ 18,686,822
Real Estate. . . . . . . . . . . . . . . . . 112,292,080 111,165,045
Installment. . . . . . . . . . . . . . . . . 8,781,617 8,799,321
------------ ------------
$140,013,125 $138,651,188
------------ ------------
------------ ------------
</TABLE>
The Corporation adopted Statement of Financial Accounting Standards No. 114,
"Accounting by Creditors for Impairment of a Loan" (SFAS No. 114), and Statement
of Financial Accounting Standards No. 118, "Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures" (SFAS No. 118), as of
January 1, 1995. Both pronouncements require that certain impaired loans be
measured based on the present value of expected future
22 The First of Long Island Corporation
<PAGE>
cash flows discounted at the loan's original effective interest rate. As a
practical expedient, impairment may be measured based on the loan's observable
market price or the fair value of the collateral if the loan is collateral
dependent. When the measure of the impaired loan is less than the recorded
investment in the loan, the impairment is recorded through a valuation
allowance.
The Corporation previously measured the allowance for credit losses on
impaired loans using methods similar to those prescribed in SFAS No. 114 and
SFAS No. 118. As a result of adopting these statements, no additional allowance
for loan losses was required as of January 1, 1995.
As of December 31, 1995, the Corporation did not have any impaired loans
in accordance with SFAS No. 114 and SFAS No. 118.
NOTE D - ALLOWANCE FOR LOAN LOSSES
- --------------------------------------------------------------------------------
Changes in the allowance for loan losses for the years ended December 31,
were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Balance at January 1 . . . . . $3,600,162 $3,589,639 $3,502,518
Loans charged off. . . . . . . (24,650) (47,869) (144,878)
Recoveries . . . . . . . . . . 24,518 58,392 56,999
---------- ---------- ----------
Net. . . . . . . . . . . . . (132) 10,523 (87,879)
Provision. . . . . . . . . . . 175,000
---------- ---------- ----------
Balance at December 31 . . . . $3,600,030 $3,600,162 $3,589,639
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
NOTE E - PREMISES AND EQUIPMENT
- --------------------------------------------------------------------------------
The following is a summary of the Corporation's premises and equipment at
December 31:
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Land . . . . . . . . . . . . . . . . . . . . $ 1,274,349 $ 1,274,349
Premises . . . . . . . . . . . . . . . . . . 4,422,165 4,392,095
Leasehold improvements . . . . . . . . . . . 724,981 539,873
Furniture and equipment. . . . . . . . . . . 6,249,928 5,798,400
----------- -----------
12,671,423 12,004,717
Accumulated depreciation and amortization. . (7,579,043) (7,043,170)
----------- -----------
$ 5,092,380 $ 4,961,547
----------- -----------
----------- -----------
</TABLE>
The First of Long Island Corporation 23
<PAGE>
NOTE F - DEPOSITS
- --------------------------------------------------------------------------------
The detail of deposits at December 31, is as follows:
<TABLE>
<CAPTION>
1995
-----------------------------------------------------
(IN THOUSANDS OF DOLLARS)
DEMAND SAVINGS TIME TOTAL
-------- -------- ------- --------
<S> <C> <C> <C> <C>
Deposits of individuals, partnerships, and corporations:
Individuals and nonprofit organizations . . . . . . . . . . . $ 34,010 $158,966 $30,840 $223,816
Corporations and other profit organizations . . . . . . . . . 84,102 37,636 3,767 125,505
-------- -------- ------- --------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,112 196,602 34,607 349,321
Deposits of:
U.S. Government . . . . . . . . . . . . . . . . . . . . . . . 1,068 1,068
States and political subdivisions . . . . . . . . . . . . . . 851 18,935 171 19,957
Official checks . . . . . . . . . . . . . . . . . . . . . . . . 3,609 3,609
-------- -------- ------- --------
TOTAL DEPOSITS . . . . . . . . . . . . . . . . . . . . . . . $123,640 $215,537 $34,778 $373,955
-------- -------- ------- --------
-------- -------- ------- --------
<CAPTION>
1994
-----------------------------------------------------
(In thousands of dollars)
DEMAND SAVINGS TIME TOTAL
-------- -------- ------- --------
<S> <C> <C> <C> <C>
Deposits of individuals, partnerships, and corporations:
Individuals and nonprofit organizations . . . . . . . . . . . $ 28,380 $156,628 $27,247 $212,255
Corporations and other profit organizations . . . . . . . . . 75,784 34,631 2,609 113,024
-------- -------- ------- --------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,164 191,259 29,856 325,279
Deposits of:
U.S. Government . . . . . . . . . . . . . . . . . . . . . . . 1,116 1,116
States and political subdivisions . . . . . . . . . . . . . . 812 19,810 1,128 21,750
Official checks . . . . . . . . . . . . . . . . . . . . . . . . 3,381 3,381
-------- -------- ------- --------
TOTAL DEPOSITS . . . . . . . . . . . . . . . . . . . . . . . $109,473 $211,069 $30,984 $351,526
-------- -------- ------- --------
-------- -------- ------- --------
</TABLE>
Time deposits include $7,965,000 and $6,715,000 of certificates of deposit of
$100,000 or more at December 31, 1995 and
1994, respectively.
The carrying amounts and fair values of deposits consisted of the following
at December 31:
<TABLE>
<CAPTION>
1995
------------------------------
CARRYING AMOUNT FAIR VALUE
--------------- ------------
<S> <C> <C>
Demand Deposits. . . . . . . . . . . . . . . $123,640,360 $123,640,360
Savings, NOW, and Money Market . . . . . . . 215,536,599 215,536,599
Time Deposits. . . . . . . . . . . . . . . . 34,777,748 34,859,809
------------ ------------
$373,954,707 $374,036,768
------------ ------------
------------ ------------
<CAPTION>
1994
------------------------------
Carrying Amount Fair Value
--------------- ------------
<S> <C> <C>
Demand Deposits. . . . . . . . . . . . . . . $109,473,146 $109,473,146
Savings, NOW, and Money Market . . . . . . . 211,068,894 211,068,894
Time Deposits. . . . . . . . . . . . . . . . 30,984,435 30,861,024
------------ ------------
$351,526,475 $351,403,064
------------ ------------
------------ ------------
</TABLE>
24 The First of Long Island Corporation
<PAGE>
NOTE G - PENSION PLANS AND OTHER POSTEMPLOYMENT BENEFITS
- --------------------------------------------------------------------------------
The Corporation is a participant in the New York State Bankers Retirement
System ("Plan"). Employees who are over 21 years of age and have been employed
for over one year are eligible to be covered. The Corporation's policy is to
fund pension costs accrued. Employees also make contributions of 2% of their
compensation. Assets of the Plan are invested in various debt and equity
securities.
Costs of the Corporation's Plan are accounted for in accordance with FASB
Statement No. 87, "Employers' Accounting for Pensions." The following table
sets forth the Plan's funded status and amounts recognized in the consolidated
statements of income at October 1 (the dates of the most recent actuarial
valuations):
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested benefits
of $2,715,056 in 1995 and $2,350,555 in 1994 . . . . . . . . . . . . . . . . $2,743,144 $2,372,778
---------- ----------
---------- ----------
Projected benefit obligation for service rendered to date . . . . . . . . . . $3,623,573 $3,169,734
Plan assets at fair value, primarily marketable securities . . . . . . . . . . . 4,778,508 3,966,098
---------- ----------
Plan assets in excess of projected benefit obligation . . . . . . . . . . . . . 1,154,935 796,364
Unrecognized net gain (loss) from past experience different from that
assumed and effects of changes in assumptions . . . . . . . . . . . . . . . . (178,929) 48,886
Prior service cost not yet recognized in net periodic pension cost . . . . . . . (49,546) (52,371)
Unrecognized net asset at October 1 . . . . . . . . . . . . . . . . . . . . . . (328,790) (369,126)
---------- ----------
Prepaid pension cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 597,670 $ 423,753
---------- ----------
---------- ----------
<CAPTION>
1995 1994 1993
---------- ---------- --------
<S> <C> <C> <C>
Net pension cost included the following components:
Service cost benefits earned during the period . . . . . . . . . . . . . . . . . $ 213,240 $ 249,847 $ 191,519
Interest cost on projected benefit obligation . . . . . . . . . . . . . . . . . 250,170 235,130 214,108
Actual return on Plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . (340,695) (326,671) (281,085)
Net amortization and deferral . . . . . . . . . . . . . . . . . . . . . . . . . (44,045) (31,220) (32,625)
---------- ---------- ---------
Net periodic pension cost . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 78,670 $ 127,086 $ 91,917
---------- ---------- ---------
---------- ---------- ---------
</TABLE>
The weighted-average discount rate and rate of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligation were 7.75% and 5.0% per annum at December 31, 1995,
respectively, and 8.0% and 5.5% per annum at December 31, 1994, respectively.
The expected long term rate of return on Plan assets was 8.5% in 1995, 1994, and
1993.
The Corporation also has a trusteed contributory profit sharing plan.
Employees become eligible for participation after reaching age 21 and completing
one year of service. Contributions are fixed annually by the Board of Directors
and totaled $361,669, $338,193, and $318,743 in 1995, 1994, and 1993,
respectively.
The Profit Sharing Plan allows additional contributions under a "401(k)"
arrangement. Salary reduction contributions are matched by the Corporation
according to the Plan limitations. The Plan expense was approximately $82,000,
$81,000, and $70,000 in 1995, 1994, and 1993, respectively.
The Corporation provides postretirement benefits, including health care and
life insurance, which is primarily limited to current retirees, in accordance
with FASB Statement No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions." This method of accounting for postretirement benefits
accrues the actuarially determined costs ratably to the date an employee becomes
eligible for such benefits. The Corporation has previously charged to expense
these costs as cash payments were made. The effect of this Statement for the
years ended December 31, 1995, 1994, and 1993 was not material.
On August 3, 1995, the Corporation adopted The First National Bank of Long
Island Supplemental Executive Retirement Program (SERP). The SERP provides
benefits to certain employees, designated by the Compensation Committee of the
Board of Directors, whose benefits under the pension plan and profit sharing
plan are limited by the applicable provisions of the Internal Revenue Code. The
benefit under the SERP is equal to the excess of the amount to which the
employee would be entitled under the pension and profit sharing plans in the
absence of such Internal Revenue Code limitations. The effective date of the
SERP, which superseded the Corporation's previous supplemental retirement
benefit plan, was January 1, 1994. Plan expenses were $101,249 in 1995 and
$35,066 in 1994.
On June 18, 1991, the Corporation adopted a retirement plan for Directors.
In order to be eligible to receive benefits under the Retirement Plan, a retired
director must meet certain age and length of service requirements. The benefits
paid under this plan were $30,825, $24,750, and $15,750 in 1995, 1994, and 1993,
respectively.
The First of Long Island Corporation 25
<PAGE>
NOTE H - INCOME TAXES
Federal and state income taxes payable (receivable) as of December 31 were
as follows:
<TABLE>
<CAPTION>
1995 1994
---------- -----------
<S> <C> <C>
Current. . . . . . . . . . . . . $ 189,155 $ (13,308)
Deferred . . . . . . . . . . . . (892,785) (1,834,891)
---------- -----------
$ (703,630) $(1,848,199)
---------- -----------
---------- -----------
</TABLE>
The components of the net deferred tax asset as of December 31 are as
follows:
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Gross deferred tax asset . . . $(1,455,480) $(2,118,538)
Valuation allowance. . . . . .
----------- -----------
(1,455,480) (2,118,538)
Gross deferred tax liability . 562,695 283,647
----------- -----------
$ (892,785) $(1,834,891)
----------- -----------
----------- -----------
</TABLE>
The components of the provision for income taxes for the years ended
December 31 are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Current:
Federal. . . . . . . . . . . $2,375,248 $2,149,174 $1,869,384
State. . . . . . . . . . . . 874,542 879,415 812,315
---------- ---------- ----------
3,249,790 3,028,589 2,681,699
Deferred:
Federal. . . . . . . . . . . (5,548) (46,274) 15,116
State. . . . . . . . . . . . 558 (20,515) 6,085
---------- ---------- ----------
(4,990) (66,789) 21,201
---------- ---------- ----------
$3,244,800 $2,961,800 $2,702,900
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
A reconciliation of the amount computed by applying the statutory Federal
income tax rate (34%) to income before income taxes to the recorded provision
for income taxes for the years ended December 31 is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Tax at statutory rate on
income. . . . . . . . . . . . $ 3,214,119 $ 3,056,412 $2,805,286
State income taxes, net of
Federal tax benefit . . . . . 576,829 567,234 540,430
Tax exempt investment income . (638,064) (710,166) (690,595)
Other. . . . . . . . . . . . . 19,709 2,474 11,475
Nondeductible interest
expense . . . . . . . . . . . 72,207 45,846 36,304
---------- ---------- ----------
$ 3,244,800 $2,961,800 $2,702,900
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
Deferred tax asset is included in other assets in the accompanying
consolidated financial statements. Income taxes are deferred as a result of
differences in the timing of the recognition of certain income and expenses for
income tax and financial reporting purposes. The primary sources of these
differences are bad debt deductions, unrealized depreciation on securities
available for sale, compensation, and depreciation.
26 The First of Long Island Corporation
<PAGE>
NOTE I - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK, CONCENTRATIONS OF
CREDIT RISK, AND OTHER MATTERS
- --------------------------------------------------------------------------------
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
The Corporation is a party to financial instruments with off-balance sheet
risk in the normal course of business to meet the financing needs of its
customers. The Corporation uses the same credit policies in making commitments
as it does for on-balance sheet instruments.
Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. At December 31, 1995, the Corporation's total
commitments to extend credit were $19,568,000. Outstanding standby and
commercial letters of credit for which the Corporation is contingently liable
amounted to $1,893,000 at December 31, 1995 and $1,340,000 at December 31, 1994.
In addition, there were $127,000 of Acceptances outstanding as of December 31,
1995. The Corporation evaluates each customer's creditworthiness on a case-by-
case basis. The amount of collateral obtained by the Corporation upon extension
of credit is based on management's credit evaluation of the counterparty.
Collateral held varies but generally includes residential and income-producing
properties.
CONCENTRATIONS OF CREDIT RISK
Virtually all of the Corporation's loans, personal and commercial, are to
borrowers who are domiciled on Long Island. The income of many of those
customers is dependent on the Long Island economy. In addition, virtually all of
the Corporation's real estate loans involve mortgages on Long Island properties.
Thus, the Corporation's loan portfolio is susceptible to the economy of Long
Island which is its market place.
OTHER MATTERS
The Corporation is required to maintain average reserve balances with the
Federal Reserve Bank. The average amount of those reserve balances for the year
ended December 31, 1995 was approximately $6,708,000.
At December 31, 1995, $13,381,000 of undistributed earnings of the Bank,
included in consolidated retained earnings, was available for distribution to
the Corporation as dividends without prior regulatory approval.
The fair values for the Corporation's off-balance sheet financial
instruments at December 31, are as follows:
Fair Value
---------------------
1995 1994
------ -------
Commitments to
Extend Credit. . . . . . . . . . . . . . . NONE None
Standby and Commercial
Letters of Credit. . . . . . . . . . . . . $8,000 $6,000
Under national banking laws and related statutes, the Bank also is limited
as to the amount it may loan to the Corporation, unless such loans are
collateralized by specified obligations. At December 31, 1995, the maximum
amount available for transfer from the Bank to the Corporation in the form of
loans approximated $7,126,000.
OTHER EXPENSES
Other expenses which exceed one percent of aggregate interest and other
income are as follows for the years ended December 31:
1995 1994 1993
-------- -------- --------
FDIC Insurance . . . . . . . $400,700 $745,100 $729,700
Computer Services. . . . . . 397,700 375,700 381,700
Insurance. . . . . . . . . . 400,800 404,000 406,100
Marketing. . . . . . . . . . . 245,500 293,900 282,900
LEASE COMMITMENTS
The Corporation leases the premises for its Woodbury, Lake Success,
Rockville Centre, New Hyde Park, Locust Valley, Valley Stream, and Great Neck
offices. Minimum annual rental payments, exclusive of real estate taxes, under
noncancellable operating leases are summarized as follows:
Minimum
Year Ended December 31, Rentals
- ----------------------- ----------
1996 $ 230,230
1997 232,704
1998 219,897
1999 198,275
2000 166,929
Thereafter 402,386
----------
$1,450,421
----------
----------
In addition, the Corporation has various renewal options on the above
leases. Rental expense charged to operations amounted to $220,000, $221,000, and
$188,000 in 1995, 1994, and 1993, respectively.
The First of Long Island Corporation 27
<PAGE>
STOCK OPTION PLAN
On January 21, 1986, the Board of Directors approved and adopted The First
of Long Island Corporation Stock Option Plan (as amended), subsequently approved
by the stockholders. Pursuant to the Plan, a total of 258,450 shares of Common
Stock were made available for grant of stock options and stock appreciation
rights to certain officers of the Corporation and its subsidiaries over the ten
year period ending January 21, 1996. In addition, on May 17, 1988 and December
19, 1989, the Corporation issued Stock Appreciation Rights to certain officers,
pursuant to the plan amendment. At December 31, 1995, 14,662 Rights were
exercisable. Under the Corporation's stock option plan, options have been
granted to key personnel for terms of up to ten years at not less than the fair
value of the shares at the dates of grant and are exercisable in whole or in
part at stated times commencing six months after the date of grant. At
December 31, 1995, options to purchase 100,957 shares of Common Stock were
exercisable. Option activity during the three years ended December 31, 1995 is
summarized as follows:
<TABLE>
<CAPTION>
Shares Under Option (NOTE 1)
-----------------------------
Option Price Number of
Per Share Shares
--------------- ---------
<S> <C> <C>
Balance at January 1, 1993 . . . . . . . $10.60 to 16.33 113,958
YEAR ENDED DECEMBER 31, 1993
Granted. . . . . . . . . . . . . . . . $20.33 14,325
Canceled . . . . . . . . . . . . . . . 20.33 (300)
Exercised. . . . . . . . . . . . . . . 10.60 to 20.33 (32,856)
-------
Balance. . . . . . . . . . . . . . . 10.60 to 20.33 95,127
YEAR ENDED DECEMBER 31, 1994
Granted. . . . . . . . . . . . . . . . $23.83 15,525
Canceled . . . . . . . . . . . . . . . 10.60 to 23.83 (402)
Exercised. . . . . . . . . . . . . . . 10.60 to 20.33 (19,626)
-------
Balance. . . . . . . . . . . . . . . 10.60 to 23.83 90,624
YEAR ENDED DECEMBER 31, 1995
Granted. . . . . . . . . . . . . . . . $26.09 to 29.00 21,225
Exercised. . . . . . . . . . . . . . . 10.60 to 26.09 (10,892)
-------
Balance. . . . . . . . . . . . . . . $10.60 to 29.00 100,957
</TABLE>
NOTE 1--ABOVE FIGURES HAVE BEEN RETROACTIVELY ADJUSTED TO REFLECT THE 3 FOR 2
STOCK SPLIT PAID BY MEANS OF A 50% STOCK DIVIDEND WHICH WAS DECLARED
DECEMBER 19, 1995.
On January 16, 1996, the Board of Directors approved the adoption of a new
stock option and appreciation rights plan (the "1996 Plan") and directed that it
be submitted for approval by the stockholders at the annual meeting of
stockholders to be held on April 16, 1996. Pursuant to the 1996 Plan, a total
of 240,000 shares of Common Stock would be made available, after the date of
distribution of the shares pursuant to the stock split described herein, for
grant of stock options and stock appreciation rights to certain officers of the
Corporation and its subsidiary over the ten year period ending January 15, 2006.
The other terms of the 1996 Plan will be substantially the same as the terms of
the prior plan.
28 The First of Long Island Corporation
<PAGE>
NOTE J - THE FIRST OF LONG ISLAND CORPORATION (PARENT COMPANY ONLY)
- --------------------------------------------------------------------------------
FINANCIAL INFORMATION (In thousands of dollars)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
1995 1994
------- -------
<S> <C> <C>
ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,658 $ 2,034
Investment in Subsidiary Bank. . . . . . . . . . . . . . . . . . . . . . . . . 47,460 41,228
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 50
------- -------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50,168 $43,312
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Dividends Payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 615 $ 560
Other Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 144
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 140
Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,367 7,620
Retained Earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,179 36,215
Unrealized Appreciation (Depreciation) on Securities
Available for Sale of Subsidiary Bank, Net . . . . . . . . . . . . . . . . . 585 (1,367)
------- -------
TOTAL STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . 49,341 42,608
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . . $50,168 $43,312
------- -------
------- -------
</TABLE>
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
INCOME
Dividends From Subsidiary Bank . . . . . . . . . . . . . . . . . . . . . . . . $ 1,950 $ 1,800 $ 1,450
Interest on Deposits with Subsidiary Bank. . . . . . . . . . . . . . . . . . . 73 34 30
------- ------- -------
2,023 1,834 1,480
EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 49 149
------- ------- -------
Income Before Income Taxes and Equity in Undistributed
Net Income of Subsidiary Bank. . . . . . . . . . . . . . . . . . . . . . . . 1,928 1,785 1,331
Equity in Undistributed Net Income of Subsidiary Bank . . . . . . . . . . . . 4,280 4,243 4,867
------- ------- -------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,208 $ 6,028 $ 6,198
------- ------- -------
------- ------- -------
</TABLE>
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,208 $ 6,028 $ 6,198
Adjustments to reconcile net income to net
cash provided by operating activities:
Undistributed earnings of Subsidiary Bank. . . . . . . . . . . . . . . . . (4,280) (4,243) (4,867)
Decrease (Increase) in Other Assets. . . . . . . . . . . . . . . . . . . . 77 (77)
Increase in Other Liabilities. . . . . . . . . . . . . . . . . . . . . . . 69 19
------- ------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES. . . . . . . . . . . . . . . . . 1,997 1,881 1,254
FINANCING ACTIVITIES
Repurchased Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . (421) (687) (802)
Proceeds from exercise of stock options. . . . . . . . . . . . . . . . . . . . 167 294 454
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,119) (1,009) (930)
Tax benefit on stock options . . . . . . . . . . . . . . . . . . . . . . . . . 77
------- ------- -------
NET CASH USED IN FINANCING ACTIVITIES. . . . . . . . . . . . . . . . . . . (1,373) (1,402) (1,201)
------- ------- -------
INCREASE IN CASH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624 479 53
Cash at beginning of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,034 1,555 1,502
------- ------- -------
CASH AT END OF YEAR. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,658 $ 2,034 $1,555
------- ------- -------
------- ------- -------
</TABLE>
The First of Long Island Corporation 29
<PAGE>
NOTE K - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a summary of the quarterly results of operations for the
years ended December 31, 1995 and 1994.
<TABLE>
<CAPTION>
Three Months Ended
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
(In thousands of dollars, except per share data)
<S> <C> <C> <C> <C>
1995
- ----
Interest Income. . . . . . . . . . . . . . . . . . . . . . . . . $6,803 $6,986 $7,101 $7,128
Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . 2,100 2,282 2,279 2,238
Net Interest Income. . . . . . . . . . . . . . . . . . . . . . . 4,703 4,704 4,822 4,890
Provision for Loan Losses. . . . . . . . . . . . . . . . . . . . -- -- -- --
Other Income . . . . . . . . . . . . . . . . . . . . . . . . . . 823 860 958 1,010
Net Securities Gains (Losses). . . . . . . . . . . . . . . . . . 4 -- -- --
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 3,518 3,447 3,275 3,081
Income Before Income Taxes . . . . . . . . . . . . . . . . . . . 2,012 2,117 2,505 2,819
Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 652 700 854 1,039
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,360 1,417 1,651 1,780
Net Income per Share . . . . . . . . . . . . . . . . . . . . . . .64 .66 .77 .84
1994
- ----
Interest Income. . . . . . . . . . . . . . . . . . . . . . . . . $5,718 $6,114 $6,421 $6,608
Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . 1,328 1,422 1,620 1,805
Net Interest Income. . . . . . . . . . . . . . . . . . . . . . . 4,390 4,692 4,801 4,803
Provision for Loan Losses. . . . . . . . . . . . . . . . . . . . -- -- -- --
Other Income . . . . . . . . . . . . . . . . . . . . . . . . . . 951 792 834 835
Net Securities Gains (Losses). . . . . . . . . . . . . . . . . . -- (23) (173) (94)
Other Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 3,203 3,238 3,162 3,215
Income Before Income Taxes . . . . . . . . . . . . . . . . . . . 2,138 2,223 2,300 2,329
Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 704 722 764 772
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,434 1,501 1,536 1,557
Net Income per Share . . . . . . . . . . . . . . . . . . . . . . .67 .71 .72 .73
</TABLE>
(Net Income per Share amounts have been adjusted to reflect the results of a 50%
stock dividend declared December 19, 1995.)
30 The First of Long Island Corporation
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
Stockholders and Board of Directors of
The First of Long Island Corporation:
We have audited the accompanying consolidated balance sheets of The First
of Long Island Corporation and subsidiary as of December 31, 1995 and 1994 and
the related consolidated statements of income, changes in stockholders' equity,
and cash flows for each of the three years in the period ended December 31,
1995. These financial statements are the responsibility of the Corporation's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The First of Long Island
Corporation and subsidiary as of December 31, 1995 and 1994 and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1995 in conformity with generally accepted accounting
principles.
As explained in Note A to the consolidated financial statements, effective
January 1, 1993, the Corporation changed its method of accounting for income
taxes. Also, as explained in Note A to the consolidated financial statements,
effective January 1, 1994, the Corporation changed its method of accounting for
investments in debt and equity securities.
New York, New York
January 18, 1996
ARTHUR ANDERSEN LLP
The First of Long Island Corporation 31
<PAGE>
DIRECTORS
THE FIRST OF LONG ISLAND CORPORTION
THE FIRST NATIONAL BANK OF LONG ISLAND
- --------------------------------------------------------------------------------
[Photo]
J. WILLIAM JOHNSON
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
[Photo]
JOHN R. MILLER, III
PRESIDENT AND PUBLISHER,
EQUAL OPPORTUNITY PUBLICATIONS, INC.
(PUBLISHING)
[Photo]
HOWARD THOMAS HOGAN, JR.
PARTNER, HOGAN & HOGAN
(LAWYER, PRIVATE PRACTICE)
[Photo]
BEVERLY ANN GEHLMEYER
TAX MANAGER AND PRINCIPAL,
GEHLMEYER & GEHLMEYER, P.C.
(CERTIFIED PUBLIC ACCOUNTING FIRM)
[Photo]
PAUL T. CANARICK
PRESIDENT AND PRINCIPAL,
PAUL TODD, INC.
(CONSTRUCTION COMPANY)
[Photo]
DR. WILLIAM J. CATACOSINOS
CHAIRMAN, PRESIDENT, AND CHIEF EXECUTIVE OFFICER,
LONG ISLAND LIGHTING COMPANY, INC.
(GAS AND ELECTRIC UTILITY)
[Photo]
J. DOUGLAS MAXWELL, JR.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER, EMPOWER, INC.
(MEDICAL IMAGING DISTRIBUTOR)
32 The First of Long Island Corporation
<PAGE>
OFFICERS
THE FIRST OF LONG ISLAND CORPORATION
J. WILLIAM JOHNSON
Chairman and Chief Executive Officer
ARTHUR J. LUPINACCI, JR.
Senior Vice President and Secretary
WILLIAM J. WHITE
Vice President and Treasurer
RICHARD KICK
Vice President
DONALD L. MANFREDONIA
Vice President
JOSEPH G. PERRI
Vice President
JOHN C. SANSONE
Vice President
WAYNE B. DRAKE
Assistant Treasurer
- --------------------------------------------------------------------------------
EXECUTIVE OFFICERS
THE FIRST NATIONAL BANK OF LONG ISLAND
Chairman and Chief Executive Officer
J. WILLIAM JOHNSON
Executive Vice President
ARTHUR J. LUPINACCI, JR.
Senior Operating Officer
Senior Vice Presidents
RICHARD KICK
Senior Operations and Senior Retail Loan Officer
DONALD L. MANFREDONIA
Senior Lending Officer
JOSEPH G. PERRI
Senior Commercial Marketing Officer
JOHN C. SANSONE
Senior Trust Officer
WILLIAM J. WHITE
Cashier and Controller
The First of Long Island Corporation 33
<PAGE>
BUSINESS DEVELOPMENT BOARD
[Photo]
KENNETH R. LATHAM
CHAIRMAN OF THE BOARD
LATHAM BROTHERS LUMBER COMPANY, INC.
[Photo]
HERBERT HABER, CPA
CERTIFIED PUBLIC ACCOUNTANT
[Photo]
THOMAS N. DUFEK, CPA, PARTNER
KILGANNON, FUREY, DUFEK & PICCIRRILLO
[Photo]
ROBERT L. ISRAELOFF, CPA
CHAIRMAN OF THE BOARD
ISRAELOFF, TRATTNER & CO., CPA'S, P.C.
[Photo]
HERBERT KOTLER, ESQ., PARTNER
SOBEL, KELLY AND KOTLER, P.C.
[Photo]
HAROLD GOLDMAN
CHIEF EXECUTIVE OFFICER
DRYOLIN CORPORATION
[Photo]
DUNLAP FULTON, PRESIDENT
HUNTINGTON PENNYSAVER, INC.
[Photo]
ARTHUR C. SCHUPBACH, ESQ., PARTNER
SCHUPBACH, WILLIAMS & PAVONE LLP
[Photo]
H. CRAIG TREIBER, PRESIDENT/CEO
THE TREIBER GROUP
[Photo]
DAVID BLACK, CPA
DAVID BLACK & ASSOCIATES, INC.
[Photo]
LAWRENCE F. STEINER, PRESIDENT
UNIVERSAL UNLIMITED, INC.
[Photo]
ROBERT A. GOODWIN, ESQ., PARTNER
GOODWIN, SCHULT & GOODWIN
[Photo]
ZACHARY LEVY, ESQ.
ATTORNEY
[Photo]
BERNARD ESQUENET
CHIEF EXECUTIVE OFFICER, THE RUHOFF CORP.
[Photo]
QUENTIN SAMMIS, PRESIDENT
COLDWELL BANKER SAMMIS
[Photo]
WILLIAM L. EDWARDS
REAL ESTATE INVESTOR
[Photo]
HOWARD S. COHEN, PRESIDENT
MOUNT CARMEL CEMETERY
[Photo]
ARTHUR VENTURA, PRESIDENT
BADGE AGENCY
[Photo]
MARK WURZEL, PRESIDENT
CALICO COTTAGE CANDIES, INC.
[Photo]
JOHN A. BURNS, JR., ESQ., PARTNER
FLETCHER, SIBELL, MIGATZ, BURNS & MULRY, P.C.
34 The First of Long Island Corporation
<PAGE>
OFFICIAL STAFF
VICE PRESIDENTS
ALBERT ARENA
Commercial Banking
ARCHIE J. ARRINGTON
Manager, Roslyn Heights
LESTER J. BACH
Manager, Great Neck
JONATHAN P. BOSTWICK
Controller's Department
JAMES CLAVELL
Branch Administration
JOSEPH DIOGUARDI
Manager, Old Brookville
WAYNE B. DRAKE
Controller's Department
JOHN G. FITZPATRICK
Compliance - CRA Officer
THOMAS N. GILMARTIN
Commercial Banking
BETSY GUSTAFSON
Deposit Operations
CHARLES E. HABERKORN, JR.
Commercial Banking
PETER J. HOEY
Data Center
GEORGE P. KNOTT
Manager, Woodbury
HENRY A. KRAMER
Commercial Banking
CONCEPCION L. LARREA
Manager, Greenvale
JOHN J. MULDER, JR.
Manager, Glen Head
PATRICK J. MULLIGAN
Trust and Investment Services
WILLIAM PYSZCZYMUKA
Manager, Huntington
HENRY P. SIEWERS
Manager, Locust Valley
DEBBIE J. SORACE
Marketing Department
HENRY C. SUHR
Manager, Northport
BARBARA WHITEBOOK
Human Resources
ASSISTANT VICE PRESIDENTS
PETER J. AREBALO
Manager, Valley Stream
MARION M. BORNKAMP
Auditing Department
DAVID LIPPA
Glen Head
DOROTHY MILLER
Manager, Hicksville
LEE NUNEZ
Manager, Lake Success
RONALD PIMENTAL
Manager, Rockville Centre
CHERYL C. REGAN
Manager, New Hyde Park
FREDERICK G. RUFF
General Services Department
LORRAINE STIDD
Human Resources
TINA A. SWEENEY
Loan Center
ANN MARIE TARANTINO
Compliance and Procedures
HERTA TSCHERNE
Manager, Mineola
TRUST OFFICERS
SUSAN P. CONTINO
Trust and Investment Services
ANDREW G. DRENICK
Trust and Investment Services
SUSAN J. HEMPTON
Trust and Investment Services
SENIOR MORTGAGE ADVISORS
ARTHUR J. CONTRERAS
Loan Center
JOHN F. DARCY
Loan Center
ASSISTANT CASHIERS
MONICA T. BAKER
Branch Administration
JEAN B. HOGGAN
Loan Center
MIRIAM J. KLEIN
Old Brookville
MARY LOU MARTIN
Locust Valley
CAROLINE V. MCINTYRE
Greenvale
GRETCHEN B. NESKY
Commercial Banking
FRANK PLESCHE
Huntington
JUNE E. PIPITO
Woodbury
CAROLE ANN SNAYD
Roslyn Heights
MICHAEL J. SPOLARICH
Commercial Banking
ELISSA TOUSSAINT
Northport
ASSISTANT AUDITOR
KEVIN W. LONG
Auditing Department
ASSISTANT MANAGERS
ANN J. CRISTODERO
Loan Center
PARI GLAZER
Lake Success
ARLYNE H. KRAMER
Hicksville
ELEANOR MILLWATER
Old Brookville
DIANE C. POHLMANN
Compliance and Procedures
LAURA TUOMEY
Branch Administration
ALISON A. ZABIELSKI
Data Center
ADMINISTRATIVE ASSISTANTS, EXECUTIVE ASSISTANTS, AND SERVICE ASSISTANTS
ELAINE BALLINGER
Glen Head
ANDREA L. GLAVIANO
Roslyn Heights
BETTY HEBRON
Locust Valley
MARGUERITE F. HIRSCHMANN
Trust and Investment Services
CATHERINE IRVIN
Controller's Department
ROBERT B. JACOBS
Loan Center
CARMELA LALONDE
Deposit Operations
FRANCINE MCDONALD
Trust and Investment Services
CONSTANCE MILLER
Administration
COLLEEN M. MURPHY
Human Resources
EVELINE RATTE
Loan Center
CHERYL A. ROMANSKI
Controller's Department
ERIC H. SCHWARZ
Data Center
ALLISON C. TUMA
Northport
NIMESH V. UDESHI
Controller's Department
CATHY A. VANATTA
Marketing Department
ANNE J. VIRGADAMO
Huntington
BRETT J. VOLO
Data Center
ANNE T. WOODS
Deposit Operations
MAUREEN ZEBROWSKI
Commercial Banking
Counsel
SCHUPBACH, WILLIAMS & PAVONE
Independent Auditors
ARTHUR ANDERSEN LLP
FORM 10-K REPORT
A copy of the Corporation's annual report on Form 10-K for 1995, filed with
the Securities and Exchange Commission, may be obtained without charge upon
written request to William J. White, Vice President and Treasurer, The First of
Long Island Corporation, 10 Glen Head Road, PO Box 67, Glen Head, New York
11545-0067.
The First of Long Island Corporation 35
<PAGE>
FULL SERVICE OFFICES
10 Glen Head Road
Glen Head, NY 11545
(516) 671-4900
7 Glen Cove Road
Greenvale, NY 11548
(516) 621-8811
253 New York Avenue
Huntington, NY 11743
(516) 427-4143
108 Forest Avenue
Locust Valley, NY 11560
(516) 671-2299
711 Fort Salonga Road
Northport, NY 11768
(516) 261-4000
209 Glen Head Road
Old Brookville, NY 11545
(516) 759-9002
130 Mineola Avenue
Roslyn Heights, NY 11577
(516) 621-1900
800 Woodbury Road
Woodbury, NY 11707
(516) 364-3434
COMMERCIAL BANKING OFFICES
536 Northern Boulevard
Great Neck, NY 11021
(516) 482-6666
106 Old Country Road
Hicksville, NY 11801
(516) 932-7150
3000 Marcus Avenue
Lake Success, NY 11042
(516) 775-3133
194 First Street
Mineola, NY 11501
(516) 742-1144
200 Jericho Turnpike
New Hyde Park, NY 11040
(516) 328-3100
100 Merrick Road
Rockville Centre, NY 11570
(516) 763-5533
133 E. Merrick Road
Valley Stream, NY 11580
(516) 825-0202
TRUST AND INVESTMENT SERVICES
800 Woodbury Road
Woodbury, NY 11797
(516) 364-3436
[LOGO]
THE FIRST OF LONG ISLAND CORPORATION
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF REGISTRANT
The First National Bank of Long Island
(INCORPORATED UNDER THE NATIONAL BANKING LAWS OF THE UNITED STATES)
is a wholly owned subsidiary of The First of Long Island Corporation
10 Glen Head Road
Glen Head, New York 11545
The First of Long Island Agency, Inc.
(INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK)
is a wholly owned subsidiary of The First National Bank of Long Island
10 Glen Head Road
Glen Head, New York 11545
<PAGE>
EXHIBIT 23(a)
[ARTHUR ANDERSEN LETTERHEAD]
___________________________
Arthur Andersen LLP
___________________________
1345 Avenue of the Americas
New York NY 10105
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report dated January 18, 1996, incorporated by reference in this Form 10-K, into
the Company's previously filed Registration Statement No. 33-44393.
/S/ ARTHUR ANDERSEN LLP
March 26, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial information incorporated by reference to the 1995 Annual
Report which is filed herewith as Exhibit 13 and is qualified in its entirety by
reference to such financial information.
</LEGEND>
<CIK> 0000740663
<NAME> THE FIRST OF LONG ISLAND CORPORATION
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 22,884,445
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 31,400,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 57,556,137
<INVESTMENTS-CARRYING> 159,677,530
<INVESTMENTS-MARKET> 161,355,000
<LOANS> 146,670,041
<ALLOWANCE> (3,600,030)
<TOTAL-ASSETS> 425,654,548
<DEPOSITS> 373,954,707
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,359,177
<LONG-TERM> 0
0
0
<COMMON> 209,647
<OTHER-SE> 49,131,017
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<INTEREST-EXPENSE> 8,898,700
<INTEREST-INCOME-NET> 19,118,778
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<EXPENSE-OTHER> 13,320,690
<INCOME-PRETAX> 9,453,292
<INCOME-PRE-EXTRAORDINARY> 9,453,292
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,208,492
<EPS-PRIMARY> 2.91
<EPS-DILUTED> 2.91
<YIELD-ACTUAL> 0
<LOANS-NON> 842,991
<LOANS-PAST> 251,000
<LOANS-TROUBLED> 815,864
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<ALLOWANCE-OPEN> 3,600,162
<CHARGE-OFFS> 24,650
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<ALLOWANCE-CLOSE> 3,600,030
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</TABLE>
