UPDATE: FIG Partners Initiates Oritani Financial at Market Perform on Multiple Positive Factors

In a report published Monday, FIG Partners analyst Christopher Marinac initiated coverage on Oritani Financial ORIT with a Market Perform rating and $17.50 price target.

In the report, FIG Partners noted, “We are initiating coverage on ORIT at a “Market Perform” rating & $17.50 Price Target. Our EPS estimates are $1.01 in Calendar 2014 & $1.06 in 2015. The company utilizes a different business model than most community banks with a high Loans-to-Deposits ratio and larger-than-average use of Borrowings to fund its balance sheet (see Page 2). Offsetting this is a high 18% TCE Ratio which is worth over $5.80 per share (i.e., amount above a 9% TCE ratio). ORIT's management is composed of seasoned bankers with deep knowledge of the Northern NJ markets supported by long-standing pristine credit quality (NPAs are less than 1.0% and management continues to further reduce). The funding mix is evolving towards a lower cost of funds. Over the past 5 years Core Deposits vs. CDs and Brokered funds have climbed from 22% to 68%. We believe this trend can continue as interest-bearing deposits should still reprice lower than the current level of 62bps.”

Oritani Financial closed on Friday at $16.14.