Oritani Financial Posts a Solid Quarter

Three banks I follow, Oritani Financial, Oneida Financial and Eagle Bancorp or Montana reported earnings in the last couple days.  I want to look at each, and I will start here with Oritani.

I don’t own Oritani but it is a reasonably priced and well run regional that I follow closely.  Their CEO, Kevin Lynch, has an extremely low tolerance for non-performing loans, which is why non-performing assets are down to 0.50%.

With earnings of 0.52/share the bank is trading at  26x earnings, which isn’t particularly cheap on that metric.

Book value of the stock is $11.45, meaning the bank is trading at 1.13x book.  But not reflected in book is around $50M, or $1/share, in REO (real estate owned).  Now this isn’t foreclosed real estate owned, but instead its JV real estate that the company bought in the past for the purposes of capital appreciation.

The company is showing extremely strong loan and deposit growth.  The loan growth is particularly impressive because so few companies are growing their loan book right now.