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Oritani Financial Corp. Reports Fiscal Year Earnings And Dividend

Stocks in this article: ORIT

TOWNSHIP OF WASHINGTON, N.J., July 24, 2014 (GLOBE NEWSWIRE) -- Oritani Financial Corp. (the "Company" or "Oritani") (Nasdaq:ORIT), the holding company for Oritani Bank (the "Bank"), reported net income of $10.0 million, or $0.23 per basic and diluted common share, for the three months ended June 30, 2014, and $41.1 million, or $0.96 per basic (and $0.94 diluted) common share, for the fiscal year ended June 30, 2014. This compares to net income of $11.7 million, or $0.28 per basic (and $0.27 diluted) common share for three months ended June 30, 2013 and net income of $39.5 million, or $0.94 per basic (and $0.92 diluted) common share for the twelve month period ended June 30, 2013.

The Company also reported that its Board of Directors has declared a $0.175 quarterly cash dividend on the Company's common stock. The record date for the dividend will be August 8, 2014 and the payment date will be August 22, 2014. Based on the recent trading range of the Company's common stock, the dividend yield on the regular dividend is approximately 4.50%.

"I am very pleased to report the close of another successful fiscal year for Oritani," said Kevin J. Lynch, the Company's Chairman, President and CEO. "The year was highlighted by strong profitability." Mr. Lynch continued, "In addition, we achieved many of our strategic objectives including double digit growth in loans, deposits and assets. Our credit quality continues to improve and we are poised to tackle the challenges of the coming year."

Comparison of Operating Results for the Periods Ended June 30, 2014 and 2013

Net Income. Net income decreased $1.7 million to $10.0 million for the quarter ended June 30, 2014, from $11.7 million for the corresponding 2013 quarter. Net income increased $1.5 million to $41.1 million for the fiscal year ended June 30, 2014, from $39.5 million for the corresponding 2013 period. The primary cause of the decreased net income in the quarterly period was the receipt of $1.5 million of nonrecurring bank-owned life insurance proceeds that were not subject to income taxes in the 2013 period. The primary cause of the increased net income in the twelve month period was decreased provision for loan losses partially offset by increased expenses.

Total Interest Income.

The components of interest income for the three months ended June 30, 2014 and 2013, changed as follows:

  Three Months Ended June 30, Increase / (decrease)
  2014   2013   Average  
  $ Yield $ Yield $ Balance Yield
  (Dollars in thousands)        
Interest on mortgage loans $ 29,185 4.79% $ 29,028 5.20% $ 157 $ 203,433 -0.41%
Dividends on FHLB stock 431 3.65% 436 3.96% (5) 3,190 -0.31%
Interest on securities AFS 28 1.59% 52 1.74% (24) (4,923) -0.15%
Interest on MBS HTM 199 2.46% 253 2.36% (54) (10,475) 0.10%
Interest on MBS AFS 1,911 2.02% 1,449 1.73% 462 44,985 0.29%
Interest on federal funds sold and short term investments 3 0.25% 1 0.25% 2 2,989 0.00%
Total interest income $ 31,757 4.37% $ 31,219 4.68% $ 538 $ 239,199 -0.31%

The Company's primary strategic business focus is organic growth of multifamily and commercial real estate loans. The average balance of loans increased $203.4 million for the three month period ended June 30, 2014 versus the comparable 2013 period. On a linked quarter basis (June 30, 2014 versus March 31, 2014), the average balance of loans grew $50.2 million. The growth was primarily achieved through originations. Loan originations totaled $195.9 million for the three months ended June 30, 2014. On a linked quarter basis, there is an inconsistency between the growth in the average balance of loans ($50.2 million) versus the growth in the period end balance ($115.3 million). This offsets a situation reported with the March 31, 2014 financial results that occurred due to the timing of originations and prepayments. The yield on the loan portfolio decreased 41 basis points for the quarter ended June 30, 2014 versus the comparable 2013 period. This decrease continued a trend of decreased yield on loans and was primarily due to the impact of current market rates on new originations as well as refinancings, prepayments and repricings. The market rates on new originations are below the average yield of the loan portfolio. A portion of the decrease in yield is also attributable to prepayment penalties, which significantly impacted both periods. Prepayment penalties totaled $885,000 in the 2014 period versus $1,025,000 in the 2013 period. Prepayment penalties boosted annualized loan yield by 14 basis points in the 2014 period and 18 basis points in the 2013 period. 

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