Oritani Bank: Back To The Future For A 6.6% Yield?

$4.1 billion-asset Oritani Financial Corporation (ORIT) is the holding company for Oritani Bank, community bank headquartered in Washington Township, NJ with 26 branches in Bergen, Essex, Hudson, and Passaic Counties. The bank, named after Oratam or Oritani, a remarkable sagamore of the Hackensack Indians, is 107 years old. What differentiates ORIT from literally thousands of other small banks is a huge 6.6% dividend yield.

Source: yelp.com
The picture above is the bank's headquarters at 370 Pascack Road, Township of Washington, New Jersey.
Let's see if we can bank on the bank with one of the more unusual names in banking to help fund our retirement.
2013 - 2014: Hitting the Wall We have to go back five years to understand ORIT today.
ORIT hit a very solid earnings wall at the end of fiscal 2014. Net interest income before the provision for loan losses was going nowhere; $97.4 million in 2013 and $97.1 million in 2014. The bank was historically an "old school" spread-based institution that relied on the spread between loans and deposits for earnings. Noninterest income consisted of fees and charges related to its loans and deposits. There were no ancillary businesses; no trust department, stock brokerage, insurance sales or mortgage banking, with one notable and very important exception - more on that later. Without these sources of noninterest income, the ongoing margin compression that was shrinking the net interest margin from 19 bps... Read more

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