TOWNSHIP OF WASHINGTON, N.J., July 31, 2009 (GLOBE NEWSWIRE) -- Oritani Financial Corp. (the "Company" or "OFC") (Nasdaq:ORIT), the holding company for Oritani Bank (the "Bank") reported net income of $1.5 million, or $0.04 per basic and fully diluted share, for the three months ended June 30, 2009, as compared to net income of $1.4 million, or $0.04 per basic share, for the corresponding 2008 period. The Company also reported net income of $5.6 million, or $0.15 per basic and fully diluted share, for the twelve months ended June 30, 2009, as compared to net income of $9.0 million, or $0.23 per basic and fully diluted share, for the corresponding 2008 period.
The 2009 three month period included increased FDIC insurance expense as well as the FDIC special assessment. These charges totaled $1.7 million. Results for the 2008 three month period were boosted by a $1.1 million gain on the sale of a multifamily property that had been held and operated as a real estate investment. This gain was partially offset by a $646,000 impairment charge taken on the Bank's investment in a mutual fund investment. The provision for loan losses significantly impacted both quarterly periods, however, provision expense was $495,000 less in the 2009 period. The provision for loan losses totaled $2.1 million for the three months ended June 30, 2009, versus $2.6 million for the comparable 2008 period.
The decreased results for the 2009 twelve month period were primarily due to increased provision for loan losses, increased writedowns of securities and increased compensation related expenses; partially offset by increased net interest income. The twelve month comparison was also impacted by the FDIC expenses and gain on sale mentioned above.
"The economic environment has negatively impacted virtually every financial institution, including Oritani," said Kevin J. Lynch, the Company's Chairman, President and CEO. "Over the year we have focused on minimizing the impact and sowing the seeds for more profitable times ahead. Resolution of our nonaccrual loans continues to be our focal point. We have made significant progress through our efforts in the courts and negotiations, and I believe we are on the cusp of resolution of a sizeable portion of our delinquencies." Mr. Lynch continued, "Our balance sheet growth has us well positioned for the future. Our assets are now nearly $2.0 billion. Just two years ago, we were barely over $1.0 billion. We are far ahead of our strategic targets for organic deposit and loan growth. Our deposits increased over 60% during the past 12 months. Our net interest income is at record levels for us, and will increase further if we can resolve our problem assets."
Comparison of Operating Results
Interest Income
Total interest income increased by $4.8 million, or 25.9%, to $23.3 million for the three months ended June 30, 2009, from $18.5 million for the three months ended June 30, 2008. The majority of the increase was in interest on mortgage loans. The average balance of loans, net increased to $1.3 billion for the 3 months ended June 30, 2009 from $943.0 million for the corresponding 2008 period. Interest on mortgage loans increased by $4.3 million, or 29.5%, to $19.0 million for the three months ended June 30, 2009, from $14.6 million for the three months ended June 30, 2008. Interest on federal funds sold and short term investments decreased to $56,000 for the three months ended June 30, 2009, from $303,000 for the three months ended June 30, 2008. Returns on this investment have decreased dramatically. The Federal Open Market Committee has significantly decreased the federal funds target rate over the period. While the Company seeks to prudently deploy cash inflows as quickly as possible, the significant growth in deposits has increased liquidity above an optimal level. Excess liquidity is typically invested in fed funds sold. Interest on securities available for sale ("AFS") increased by $824,000 to $1.1 million for the three months ended June 30, 2009, from $298,000 for the three months ended June 30, 2008. The average balance increased over the period to $138.8 million from $27.9 million. Investments over the 2009 quarter were typically made in this caption as management felt such investments provided the best risk/reward profile considering the current and projected cash needs of the Company.
For the twelve months ended June 30, 2009, total interest income increased by $16.8 million, or 23.5%, to $88.4 million, from $71.6 million for the twelve months ended June 30, 2008. The majority of the increase was in interest on mortgage loans. The average balance of loans, net increased to $1.2 billion for the 12 months ended June 30, 2009 from $858.2 million for the corresponding 2008 period. Interest on mortgage loans increased by $17.1 million, or 31.1%, to $72.2 million for the twelve months ended June 30, 2009, from $55.1 million for the twelve months ended June 30, 2008. Interest on federal funds sold and short term investments decreased to $73,000 for the twelve months ended June 30, 2009, from $1.7 million for the twelve months ended June 30, 2008. Interest on mortgage backed securities ("MBS") AFS increased by $2.3 million to $7.0 million for the twelve months ended June 30, 2009, from $4.7 million for the twelve months ended June 30, 2008. Interest on MBS held to maturity ("HTM") decreased by $1.8 million to $5.6 million for the twelve months ended June 30, 2009, from $7.4 million for the twelve months ended June 30, 2008. The Company's primary asset investment has always been loans. Excess cash flows were initially invested in MBS AFS. Over the course of the year, as the risk/reward profiles of the investment options changed, and the current and projected cash needs of the Company changed, the primary investment vehicle for the excess cash became securities AFS.
Interest Expense
Total interest expense increased by $2.1 million, or 22.2%, to $11.6 million for the three months ended June 30, 2009, from $9.5 million for the three months ended June 30, 2008. Interest expense on deposits increased by $1.1 million and interest expense on borrowings increased by $1.0 million. The average balance of deposits increased 49.9% to $1.06 billion for the three months ended June 30, 2009 from $704.8 million for the three months ended June 30, 2008. The cost of deposits decreased to 2.45% for the three months ended June 30, 2009 from 3.07% for the three months ended June 30, 2008. The average balance of borrowings increased to $509.2 million for the three months ended June 30, 2009 from $400.4 million for the three months ended June 30, 2008. The cost of borrowings decreased to 4.07% for the three months ended June 30, 2009 from 4.13% for the three months ended June 30, 2008.
Total interest expense increased by $7.3 million, or 19.6%, to $44.5 million for the twelve months ended June 30, 2009, from $37.2 million for the twelve months ended June 30, 2008. The vast majority of the increase was due to borrowings as interest expense on deposits increased by $397,000 while interest expense on borrowings increased by $6.9 million. The average balance of deposits increased 27.0% to $880.8 million for the twelve months ended June 30, 2009 from $693.3 million for the twelve months ended June 30, 2008. The cost of deposits decreased to 2.75% for the twelve months ended June 30, 2009 from 3.44% for the twelve months ended June 30, 2008. The average balance of borrowings increased to $505.6 million for the twelve months ended June 30, 2009 from $310.2 million for the twelve months ended June 30, 2008. The cost of borrowings decreased to 4.00% for the twelve months ended June 30, 2009 from 4.30% for the twelve months ended June 30, 2008.
Net Interest Income
Net interest income increased by $2.7 million, or 29.8%, to $11.7 million for the three months ended June 30, 2009, from $9.0 million for the three months ended June 30, 2008. On a trailing quarter basis, net interest income increased by $846,000, or 7.8%, from $10.8 million for the three months ended March 31, 2009. The Company's net interest rate spreads for the three months ended June 30, 2009, March 31, 2009 and June 30, 2008 were 2.33%, 2.37% and 2.05%, respectively. Net interest income increased by $9.5 million, or 27.8%, to $43.9 million for the twelve months ended June 30, 2009, from $34.4 million for the twelve months ended June 30, 2008. The Company's net interest income and net interest rate spread were both negatively impacted in the three and twelve month periods ended June 30, 2009 due to the reversal of accrued interest income on loans delinquent more than 90 days. The total of such income reversed was $1.1 million and $3.7 million for the three and twelve month periods ended June 30, 2009, respectively. The Company's net interest rate spreads for the twelve months ended June 30, 2009 and June 30, 2008 were 2.36% and 2.06%, respectively.
Provision for Loan Losses
The Company recorded provisions for loan losses of $2.1 million for the three months ended June 30, 2009 as compared to $2.6 million for the three months ended June 30, 2008. The Company recorded provisions for loan losses of $9.9 million for the twelve months ended June 30, 2009 as compared to $4.7 million for the twelve months ended June 30, 2008. The Company charged off a total of $2.7 million in loans during the quarter ended June 30, 2009. There were no recoveries in any of the periods. A rollforward of the allowance for loan losses for the twelve months ended June 30, 2009 is presented below:
Balance at June 30, 2008 $13,532
Provisions charged to operations 9,880
Recoveries of loans previously charged off --
Loans charged off (2,732)
---------
Balance at June 30, 2009 $20,680
=========
The Company's allowance for loan losses is analyzed quarterly and many factors are considered, including comparison to peer reserve levels. As in prior periods, loan growth was a component of the provision for loan losses in the 2009 periods. The delinquency and nonaccrual totals, however, were the primary contributors to the increased level of provision for loan losses.
Delinquency information is provided below:
Delinquency Totals
6/30/2009 3/31/2009 12/31/2008 9/30/2008 6/30/2008
--------- --------- ---------- --------- ---------
(in thousands)
30 - 59 days
past due $ 6,727 $ 4,897 $ 4,979 $ 16,624 $ 25,367
60 - 89 days
past due 17,825 2,130 5,942 1,381 18
nonaccrual 52,465 52,260 44,067 25,337 14,211
--------------------------------------------------------
Total $ 77,017 $ 59,287 $ 54,988 $ 43,342 $ 39,596
========================================================
Nonaccrual and total delinquent loan totals have been at an elevated level for the majority of the fiscal year. The Company has continued its aggressive posture toward delinquent borrowers. The Company has commenced legal action against virtually all borrowers who are more than 45 days delinquent. The Company has refused to extend the maturity date of any construction loan, even if the interest payments are current, unless the borrower agrees to reduce the Company's exposure through additional principal payments and/or additional collateral, and agrees to an additional fee if the loan is not paid in full on or before the new maturity date. The Company realizes that such actions contribute to the high level of delinquencies but believes this is the most prudent path to addressing problem loans.
The nonaccrual total of $52.5 million at June 30, 2009 includes all of the loans ($52.3 million) that were classified as nonaccrual at March 31, 2009. The loans that comprise a significant portion of this total have been discussed in prior public releases. A current summary of these loans follows:
* Two of these loans are to one borrower and totaled $18.0 million
at June 30, 2009. The loans are secured by a condominium
construction project and raw land with all building approvals,
both of which are in Northern New Jersey. The borrower declared
bankruptcy and Oritani has provided debtor in possession financing
for the completion of the condominium construction project.
While the construction is primarily completed, delays have been
encountered in finalizing the project and obtaining certificates
of occupancy. The individual unit sales process has commenced
and several units are currently under contract. Closings are not
expected until late September, 2009. Oritani charged off $2.0
million of the construction loan as of June 30, 2009, as this
portion has been determined to be an incurred loss. Both loans
are classified as impaired as of June 30, 2009. In accordance
with the results of the Company's Statement of Financial Accounting
Standards #114 ("FAS 114") impairment analyses, a specific reserve
of $2.8 million has been recorded against these loans.
* There are three loans to another borrower. One of these loans is
a $7.9 million loan secured by a retail mall in Northern New
Jersey. The other two loans total $10.2 million and are secured
by a golf course in Bergen County, New Jersey. All three of
these loans are classified as nonaccrual and impaired, in
accordance with FAS#114, at June 30, 2009. Oritani is in
litigation with this borrower, foreclosure proceedings are
progressing and a rent receiver has been placed in control of
the operations of these properties. The guarantor has declared
bankruptcy. Net cash generated from the operation of these
properties is being forwarded from the rent receiver to Oritani.
In accordance with the results of the impairment analyses, no
reserve was required for these loans as they were considered to
be well collateralized. Oritani is in negotiations to sell the
notes that are secured by these properties prior to foreclosure.
Oritani expects to realize amounts sufficient to satisfy all
principal plus delinquent interest and other amounts due on any
disposal. Management is cautiously optimistic that these
transactions will be completed and finalized during the quarter
ended September 30, 2009, although there can be no assurances as
to the timing or successful completion of such matters.
* Another significant portion of the nonaccrual total at June 30,
2009, were three loans to one borrower that totaled $6.6 million.
These loans were secured by various warehouse properties in
Rockland, Nassau and Westchester counties, New York. All three
of these loans are classified as nonaccrual and impaired, in
accordance with FAS 114, at June 30, 2009. Oritani is in
litigation with this borrower and foreclosure proceedings are
progressing. A rent receiver has been appointed on all three of
the properties. Two of the three entities that were formed by the
borrower to hold the assets that secure the borrowings, as well as
the related operating company, have been placed in bankruptcy.
Oritani is moving for the appointment of a trustee. In accordance
with the results of the impairment analyses, a specific reserves
totaling $426,000 have been recorded against these loans.
* Included in the nonaccrual total at June 30, 2009 was a $5.9
million mixed use property loan located in Bergen County, New
Jersey. The borrower on this loan has declared bankruptcy, a
rent receiver is in place, net cash flows from the operation of
the property are being forwarded to Oritani, and the bankruptcy
trustee has secured a contract for the cash sale of the property.
Oritani expects to realize amounts sufficient to satisfy all
principal plus delinquent interest and other amounts due on the
sale. Management expects the transaction to close during the
quarter ended September 30, 2009. In accordance with the results
of the impairment analysis for this loan, no reserve was required
as the loan is considered to be well collateralized.
* The nonaccrual total at June 30, 2009 also includes the following:
-- A $1.1 million multifamily loan located in Hudson County, New
Jersey. Foreclosure proceedings have commenced. Oritani is
in negotiations with the borrower regarding resolution.
-- A $1.1 million construction loan of a single family residence
in Bergen County, New Jersey. This loan was paid in full in
July, 2009, inclusive of all delinquent interest.
-- An $877,000 loan on an improved, approved parcel of land in
Morris County, New Jersey. Oritani charged off $250,000 of
this loan as of June 30, 2009. The loan is classified as
impaired and, in accordance with the results of the
impairment analysis; a specific reserve totaling $65,000 has
been recorded against this loan. Oritani expects to obtain
title to this property during the quarter ended September 30,
2009.
-- A $349,000 multifamily loan located in Middlesex County, New
Jersey. Oritani charged off $260,000 of this loan as of June
30, 2009. The loan is classified as impaired and, in
accordance with the results of the impairment analysis; a
specific reserve totaling $57,000 has been recorded against
this loan. Oritani is in negotiations to arrange a short sale
of this property which it expects to close during the quarter
ended September 30, 2009.
-- A $417,000 single family construction loan in Essex County,
New Jersey. Oritani modified this loan during the quarter
ended June 30, 2009 and it is now current. It will remain
on nonaccrual until a satisfactory payment history is
demonstrated.
There is one additional large loan in the 60-89 day past due total at June 30, 2009. This is a $14.0 million loan secured by a commercial property in Hudson County, New Jersey. The borrower has experienced cash flow difficulties. Foreclosure proceedings have not commenced as Oritani has been in negotiations with the borrower regarding potential resolution. It is presently unknown whether these negotiations will be successful, or whether legal remedies will be necessary.
Other Income
Other income decreased by $352,000, or 21.4%, to $1.3 million for the three months ended June 30, 2009, from $1.6 million for the three months ended June 30, 2008. The primary reason for the decrease is due to activity that occurred in the 2008 period. The three months ended June 30, 2008 included a $1.1 million gain on the sale of a multifamily property that had been held and operated as a real estate investment. This gain was partially offset by a $646,000 impairment charge taken on the Bank's investment in a mutual fund investment. There was minimal similar activity during the three months ended June 30, 2009. The only such activity during the three months ended June 30, 2009 was an impairment charge of $8,000.
Other income decreased by $2.2 million to $2.8 million for the twelve months ended June 30, 2009, from $4.9 million for the twelve months ended June 30, 2008. As in the quarterly period, the primary differences again pertained to impairment charges and gain on sale of assets. Net gain on sale of assets decreased $1.1 million for the twelve months ended June 30, 2009, due to the sale described above. Writedowns due to investment impairments increased by $1.0 million to $2.0 million for the twelve months ended June 30, 2009, from $1.0 million for the twelve months ended June 30, 2008. The writedowns in the 2009 period primarily pertain to impairment charges recorded in relation to equity securities in the Company's AFS portfolio.
Operating Expenses
Operating expenses increased by $2.6 million, or 46.1%, to $8.2 million for the three months ended June 30, 2009, from $5.6 million for the three months ended June 30, 2008. Federal insurance premiums increased significantly over the quarter due to an increase in FDIC insurance rates, an increase in insurable deposits, the depletion of a credit against FDIC insurance charges and a FDIC special assessment. Federal insurance premiums increased to $1.7 million for the three months ended June 30, 2009, from $20,000 for the three months ended June 30, 2008. Compensation, payroll taxes and fringe benefits increased by $964,000 to $5.1 million for the three months ended June 30, 2009, from $4.1 million for the three months ended June 30, 2008. In May, 2008, stock and options grants that had been approved in the Company's 2008 Equity Incentive Plan were awarded. The amortization of the cost of this plan began in May, 2008. Related expenses totaled $1.2 million for the three months ended June 30, 2009, versus $610,000 for the three months ended June 30, 2008. Another significant component of the increase was increased compensation costs of $199,000 as the Company has increased personnel to assist with implementing the organic growth strategy. The balance of the increase is primarily due to expenses and accruals related to retirement benefits ($69,000); increased payroll taxes ($74,000) and increased health insurance costs ($57,000).
Operating expenses increased by $7.8 million, or 39.8%, to $27.3 million for the twelve months ended June 30, 2009, from $19.5 million for the twelve months ended June 30, 2008. Compensation, payroll taxes and fringe benefits increased by $4.7 million to $18.7 million for the twelve months ended June 30, 2009, from $13.9 million for the twelve months ended June 30, 2008. The factors described above for the three month period also affected the twelve month period. The increase in the amortization of the costs of Equity Incentive Plan costs are greater as an entire 12 months worth of expense is included in the 2009 period. Such expenses totaled $3.8 million for the twelve months ended June 30, 2009, versus $610,000 for the twelve months ended June 30, 2008. Other significant factors contributing to the 2009 increase (versus 2008) were an increase in compensation costs of $1.0 million; accruals related to retirement benefits of $258,000; payroll tax expenses of $103,000 and employee health insurance expenses of $142,000.
Income Taxes
Income tax expense of $1.2 million was recognized for the three months ended June 30, 2009 against pre-tax income of $2.7 million. Income tax expense of $992,000 was recognized for the three months ended June 30, 2008 against pre-tax income of $2.4 million. For the twelve months ended June 30, 2009, income tax expense of $4.0 million was recognized against pre-tax income of $9.6 million. For the twelve months ended June 30, 2008, income tax expense of $6.2 million was recognized against pre-tax income of $15.2 million.
Comparison of Financial Condition at June 30, 2009 and June 30, 2008
Total Assets. Total assets increased $470.2 million, or 32.6%, to $1.91 billion at June 30, 2009, from $1.44 billion at June 30, 2008. The increases were primarily in the captions of loans, cash and securities available for sale ("AFS"), and were primarily funded through increased deposits and borrowings.
Cash and Cash Equivalents. Cash and cash equivalents (which includes fed funds and short term investments) increased $126.5 million to $135.4 million at June 30, 2009, from $8.9 million at June 30, 2008. The increase is primarily a result of deposit inflows and proceeds from repayments of loans and securities.
Net Loans. Loans, net increased $271.5 million, or 27.0%, to $1.28 billion at June 30, 2009, from $1.01 billion at June 30, 2008. The Company continued its emphasis on loan originations, particularly multifamily and commercial real estate loans. Loan originations and purchases totaled $459.3 million for the twelve months ended June 30, 2009.
Deposits. Deposits increased $428.7 million, or 61.3%, to $1.13 billion at June 30, 2009, from $698.9 million at June 30, 2008. Deposits increased $125.6 million during the quarter ended June 30, 2009. The Bank has implemented several initiatives designed to achieve deposit growth. Two new branch locations were opened during the year and another one is in development. Strong deposit growth remains a strategic objective of the Company.
Borrowings. Borrowings increased $75.3 million, or 17.4%, to $509.0 million at June 30, 2009, from $433.7 million at June 30, 2008. The Company committed to various long term advances from the FHLB-NY over the period.
Stockholders' Equity. Stockholders' equity decreased $38.9 million, or 13.9%, to $240.1 million at June 30, 2009, from $279.0 million at June 30, 2008. On March 18, 2009, the Company announced the completion of its third 10% repurchase program as well as the commencement of a fourth (967,828 shares) 10% repurchase program. As of June 30, 2009, the Company had repurchased a total of 3,577,437 shares at a total cost of $55.9 million and an average cost of $15.63 per share. Through July 22, 2009, the Company had repurchased a total of 3,644,837 shares at a total cost of $56.8 million and an average cost of $15.59 per share.
About the Company
Oritani Financial Corp. is the holding company for Oritani Bank, a savings bank offering a full range of retail and commercial loan and deposit products. The Bank currently operates its main office and 20 full service branches in the New Jersey Counties of Bergen, Hudson and Passaic.
Forward Looking Statements
Certain statements contained herein are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of those terms. Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those related to the economic environment, particularly in the market areas in which the Company operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.
The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the result of any revisions, which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
Oritani Financial Corp. and Subsidiaries
Township of Washington, New Jersey
Consolidated Balance Sheets
June 30, 2009 and June 30, 2008
(in thousands, except share data)
June 30, June 30,
Assets 2009 2008
---------- ----------
(unaudited)
Cash on hand and in banks $ 7,729 $ 7,332
Federal funds sold and short term
investments 127,640 1,558
---------- ----------
Cash and cash equivalents 135,369 8,890
Loans, net 1,278,623 1,007,077
Securities available for sale, at market value 144,419 22,285
Mortgage-backed securities held to maturity,
estimated market value of $120,381 and
$162,671 at June 30, 2009 and June 30, 2008,
respectively 118,817 163,950
Mortgage-backed securities available for sale,
at market value 128,603 149,209
Bank Owned Life Insurance (at cash surrender
value) 29,385 26,425
Federal Home Loan Bank of New York stock
("FHLB"), at cost 25,549 21,547
Accrued interest receivable 7,967 5,646
Investments in real estate joint ventures,
net 5,767 5,564
Real estate held for investment 1,338 3,681
Office properties and equipment, net 13,777 9,287
Other assets 23,907 19,733
---------- ----------
Total Assets $1,913,521 $1,443,294
========== ==========
Liabilities
Deposits $1,127,630 $ 698,932
Borrowings 508,991 433,672
Advance payments by borrowers for taxes and
insurance 8,301 7,024
Official checks outstanding 2,699 4,143
Other liabilities 25,802 20,548
---------- ----------
Total liabilities 1,673,423 1,164,319
---------- ----------
Stockholders' Equity
Commonstock, $0.01 par value; 80,000,000
shares authorized; 40,552,162 issued at
June 30, 2009 and 2008 37,133,684
outstanding at June 30, 2009 and
40,187,062 outstanding at June 30, 2008 130 130
Additional paid-in capital 130,375 128,656
Unallocated common stock held by the employee
stock ownership plan (13,909) (14,704)
Treasury stock, at cost; 3,418,478 shares
at June 30, 2009 and 365,100 shares at
June 30, 2008 (53,418) (5,926)
Retained income 176,199 171,160
Accumulated other comprehensive loss,
net of tax 721 (341)
---------- ----------
Total stockholders' equity 240,098 278,975
---------- ----------
Total Liabilities and Stockholders' Equity $1,913,521 $1,443,294
========== ==========
Oritani Financial Corp. and Subsidiaries
Township of Washington, New Jersey
Consolidated Statements of Income
Three and Twelve Months Ended June 30, 2009 and 2008
Three months ended Twelve months ended
June 30, June 30,
------------------- -------------------
2009 2008 2009 2008
--------- --------- --------- ---------
unaudited unaudited unaudited
(in thousands, except per share data)
Interest income:
Interest on mortgage loans $ 18,960 $ 14,636 $ 72,158 $ 55,053
Interest on securities held
to maturity and dividends on
FHLB stock 344 65 1,069 999
Interest on securities
available for sale 1,122 298 2,468 1,716
Interest on mortgage-backed
securities held to maturity 1,210 1,643 5,615 7,409
Interest on mortgage-backed
securities available for
sale 1,610 1,563 7,046 4,710
Interest on federal funds
sold and short term
investments 56 303 73 1,704
--------- --------- --------- ---------
Total interest income 23,302 18,508 88,429 71,591
--------- --------- --------- ---------
Interest expense:
Deposits 6,466 5,401 24,262 23,865
Borrowings 5,180 4,130 20,238 13,343
--------- --------- --------- ---------
Total interest expense 11,646 9,531 44,500 37,208
--------- --------- --------- ---------
Net interest income before
provision for loan losses l11,656 8,977 43,929 34,383
Provision for loan losses 2,105 2,600 9,880 4,650
--------- --------- --------- ---------
Net interest income 9,551 6,377 34,049 29,733
--------- --------- --------- ---------
Other income:
Service charges 259 290 1,122 1,126
Real estate operations, net 312 278 1,294 1,314
Income from investments in
real estate joint ventures 385 313 1,124 1,192
Bank-owned life insurance 290 273 1,127 1,060
Net gain on sale of assets -- 1,096 -- 1,096
Net loss on sales and write
down of securities (8) (646) (2,045) (998)
Other income 52 38 158 146
--------- --------- --------- ---------
Total other income 1,290 1,642 2,780 4,936
--------- --------- --------- ---------
Operating expenses:
Compensation, payroll taxes
and fringe benefits 5,072 4,108 18,670 13,923
Advertising 221 94 635 470
Office occupancy and
equipment expense 522 372 2,088 1,595
Data processing service fees 270 266 1,069 1,058
Federal insurance premiums 1,668 20 1,774 92
Other expenses 426 740 3,021 2,353
--------- --------- --------- ---------
Total operating expenses 8,179 5,600 27,257 19,491
--------- --------- --------- ---------
Income before income tax
expense 2,662 2,419 9,572 15,178
Income tax expense 1,158 992 4,020 6,218
--------- --------- --------- ---------
Net income $ 1,504 $ 1,427 $ 5,552 $ 8,960
========= ========= ========= =========
Basic and fully diluted income
per common share $ 0.04 $ 0.04 $ 0.15 0.23
========= ========= ========= =========
Average Balance Sheet and Yield/Rate Information
For the Three Months Ended (unaudited)
---------------------------------------------------------
June 30, 2009 June 30, 2008
---------------------------- ----------------------------
Average Interest Average Average Interest Average
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Paid Rate Balance Paid Rate
----------- -------- ------- ----------- -------- -------
(Dollars in thousands)
Interest-
earning
assets:
Loans (1) $ 1,258,272 $ 18,960 6.03% $ 942,991 $ 14,636 6.21%
Securities
held to
maturity 25,548 344 5.39% 20,507 65 1.27%
Securities
available
for sale 138,821 1,122 3.23% 27,932 298 4.27%
Mortgage
backed
securities
held to
maturity 124,271 1,210 3.89% 170,354 1,643 3.86%
Mortgage
backed
securities
available
for sale 137,563 1,610 4.68% 126,752 1,563 4.93%
Federal
funds sold
and short
term
investments 72,336 56 0.31% 56,306 303 2.15%
----------- -------- ----------- --------
Total
interest-
earning
assets 1,756,811 23,302 5.31% 1,344,842 18,508 5.50%
-------- --------
Non-
interest-
earning
assets 85,757 72,169
----------- -----------
Total
assets $ 1,842,568 $ 1,417,011
=========== ===========
Interest-
bearing
liabilities:
Savings
deposits 146,499 443 1.21% 149,382 542 1.45%
Money market 165,521 872 2.11% 56,699 413 2.91%
NOW accounts 78,081 160 0.82% 75,687 172 0.91%
Time
deposits 666,012 4,991 3.00% 422,982 4,274 4.04%
----------- -------- ----------- --------
Total
deposits 1,056,113 6,466 2.45% 704,750 5,401 3.07%
Borrowings 509,242 5,180 4.07% 400,381 4,130 4.13%
----------- -------- ----------- --------
Total
interest-
bearing
liabil-
ities 1,565,355 11,646 2.98% 1,105,131 9,531 3.45%
-------- --------
Non-
interest-
bearing
liabilities 35,471 28,681
----------- -----------
Total
liabil-
ities 1,600,826 1,133,812
Stock-
holders'
equity 241,742 283,199
----------- -----------
Total
liabil-
ities
and
stock-
holders'
equity $ 1,842,568 $ 1,417,011
=========== ===========
Net interest
income $ 11,656 $ 8,977
========= ========
Net interest
rate
spread (2) 2.33% 2.05%
======= =======
Net
interest-
earning
assets (3) $ 191,456 $ 239,711
=========== ===========
Net interest
margin (4) 2.65% 2.67%
======= =======
Average of
interest-
earning
assets to
interest-
bearing
liabil
ities 112.23% 121.69%
======= =======
(1) Includes nonaccrual loans.
(2) Net interest rate spread represents the difference between the
yield on average interest-earning assets and the cost of average
interest-bearing liabilities.
(3) Net interest-earning assets represents total interest-earning
assets less total interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by
average total interest-earning assets.
Average Balance Sheet and Yield/Rate Information
For the Twelve Months Ended (unaudited)
---------------------------------------------------------
June 30, 2009 June 30, 2008
---------------------------- ----------------------------
Average Interest Average Average Interest Average
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Paid Rate Balance Paid Rate
----------- -------- ------- ----------- -------- -------
(Dollars in thousands)
Interest-
earning
assets:
Loans (1) $ 1,181,385 $ 72,158 6.11% $ 858,223 $ 55,053 6.41%
Securities
held to
maturity 24,937 1,069 4.29% 19,192 999 5.21%
Securities
available
for sale 67,479 2,468 3.66% 34,464 1,716 4.98%
Mortgage
backed
securities
held to
maturity 142,484 5,615 3.94% 192,007 7,409 3.86%
Mortgage
backed
securities
available
for sale 145,713 7,046 4.84% 91,060 4,710 5.17%
Federal
funds sold
and short
term
investments 25,021 73 0.29% 45,292 1,704 3.76%
----------- -------- ----------- --------
Total
interest-
earning
assets 1,587,019 88,429 5.57% 1,240,238 71,591 5.77%
-------- -------
Non-
interest-
earning
assets 84,535 69,806
-------- --------
Total
assets $ 1,671,554 $ 1,310,044
=========== ===========
Interest-
bearing
liabilities:
Savings
deposits 144,810 1,979 1.37% 151,068 2,427 1.61%
Money market 103,932 2,626 2.53% 50,263 1,730 3.44%
NOW accounts 75,324 628 0.83% 71,176 812 1.14%
Time
deposits 556,730 19,029 3.42% 420,787 18,896 4.49%
----------- -------- ----------- --------
Total
deposits 880,796 24,262 2.75% 693,294 23,865 3.44%
Borrowings 505,599 20,238 4.00% 310,231 13,343 4.30%
----------- -------- ----------- --------
Total
interest-
bearing
liabil-
ities 1,386,395 44,500 3.21% 1,003,525 37,208 3.71%
-------- --------
Non-
interest-
bearing
liabilities 33,071 27,438
----------- -----------
Total
liabilities 1,419,466 1,030,963
Stock-
holders'
equity 252,088 279,081
----------- -----------
Total
liabil-
ities and
stock-
holder's
equity $ 1,671,554 $ 1,310,044
=========== ===========
Net interest
income $ 43,929 $ 34,383
======== ========
Net interest
rate
spread (2) 2.36% 2.06%
======= =======
Net
interest-
earning
assets (3) $ 200,624 $ 236,713
=========== ===========
Net interest
margin (4) 2.77% 2.77%
======= =======
Average of
interest-
earning
assets to
interest-
bearing
liabilities 114.47% 123.59%
======= =======
(1) Includes nonaccrual loans.
(2) Net interest rate spread represents the difference between the
yield on average interest-earning assets and the cost of average
interest-bearing liabilities.
(3) Net interest-earning assets represents total interest-earning
assets less total interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by
average total interest-earning assets.
CONTACT: Oritani Financial Corp.
Kevin J. Lynch, Chairman, President and
Chief Executive Officer
(201) 664-5400
