My previous article on Oritani Financial Corp. (NASDAQ:ORIT) was far too bullish. New information suggests a more neutral stance is in order. The New Jersey financial faces enormous challenges. During the KBW Community Bank Investor Bank Conference, management noted fierce competition. In Oritani's opinion, rival institutions are making dangerously low-margin loans as too many banks chase too few borrowers. In addition, Oritani has not been able to tilt away from costly borrowings to fund its loan portfolio. While the bank is well-run (efficiency ratio a spectacular 37%), Oritani's reliance on expensive borrowings creates a drag on net interest income, by far its largest earnings contributor. Originally, I was optimistic that management could shift toward deposit funding. Those high...
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