Edgar Filing: Oritani Financial Corp.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to ______________________

Commission File No. 001-33223

Oritani Financial Corp.

(Exact name of registrant as specified in its charter)

United States		22-3617996
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

370 Pascack Road, Township of Washington, New Jersey 07676

(Address of Principal Executive Offices)

(201) 664-5400

(Registrant’s telephone number)

N/A

(Former name or former address, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such requirements for the past 90 days.

YES x NO ¨.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES ¨ NO ¨.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer x
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller Reporting company ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ¨ NO x

As of October 31, 2009, there were 40,552,162 shares of the Registrant’s common stock, par value $0.01 per share issued, and 37,060,584 outstanding, of which 27,575,476, or 74.4%, were held by Oritani Financial Corp., MHC, the Registrant’s mutual holding company parent.

Oritani Financial Corp.

FORM 10-Q

Index

		Page

Part I. Financial Information

Item 1.	Financial Statements	3

	Consolidated Balance Sheets as of September 30, 2009 (unaudited) and June 30, 2009	3

	Consolidated Statements of Income for the Three Months Ended September 30, 2009 and 2008 (unaudited)	4

	Consolidated Statements of Stockholders’ Equity for the Three Months Ended September 30, 2009 and 2008 (unaudited)	5

	Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2009 and 2008 (unaudited)	6

	Notes to unaudited Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4.	Controls and Procedures	31

Part II. Other Information

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 3.	Defaults upon Senior Securities	33

Item 4.	Submission of Matters to a Vote of Security Holders	33

Item 5.	Other Information	33

Item 6.	Exhibits	34

	Signature Page	35

Part I. Financial Information

Item 1. Financial Statements

Oritani Financial Corp. and Subsidiaries

Township of Washington, New Jersey

Consolidated Balance Sheets

(in thousands, except share data)

	September 30,			June 30,
	2009			2009
	(unaudited)
Assets
Cash on hand and in banks	$	18,282		$	7,729
Federal funds sold and short term investments		14,691			127,640
Cash and cash equivalents		32,973			135,369

Loans, net		1,344,442			1,278,623
Securities available for sale, at market value		277,133			144,419
Mortgage-backed securities held to maturity, estimated market value of $108,085 and $120,381 at September 30, 2009 and June 30, 2009, respectively		105,975			118,817
Mortgage-backed securities available for sale, at market value		115,633			128,603
Bank Owned Life Insurance (at cash surrender value)		29,679			29,385
Federal Home Loan Bank of New York stock ("FHLB"), at cost		25,515			25,549
Accrued interest receivable		8,070			7,967
Investments in real estate joint ventures, net		6,072			5,767
Real estate held for investment		1,203			1,338
Real estate owned		812			—
Office properties and equipment, net		14,199			13,777
Other assets		23,927			23,907
Total Assets	$	1,985,633		$	1,913,521

Liabilities
Deposits	$	1,187,867		$	1,127,630
Borrowings		508,203			508,991
Advance payments by borrowers for taxes and insurance		8,637			8,301
Accrued taxes payable		3,876			—
Official checks outstanding		5,416			2,699
Other liabilities		25,992			25,802
Total liabilities		1,739,991			1,673,423

Stockholders' Equity
Common stock, $0.01 par value; 80,000,000 shares authorized; 40,552,162 issued at September 30, 2009 and June 30, 2009 37,062,484 outstanding at September 30, 2009 and 37,133,684 outstanding at June 30, 2009		130			130
Additional paid-in capital		131,350			130,375
Unallocated common stock held by the employee stock ownership plan		(13,711	)		(13,909	)
Treasury stock, at cost; 3,489,678 shares at September 30, 2009 and 3,418,478 shares at June 30, 2009		(54,376	)		(53,418	)
Retained income		180,248			176,199
Accumulated other comprehensive income, net of tax		2,001			721
Total stockholders' equity		245,642			240,098

Total Liabilities and Stockholders' Equity	$	1,985,633		$	1,913,521

See accompanying notes to unaudited consolidated financial statements.

Oritani Financial Corp. and Subsidiaries

Township of Washington, New Jersey

Consolidated Statements of Income

Three Months Ended September 30, 2009 and 2008

	Three months ended
	September (unaudited)
	2009		2008
	(in thousands, except per share data)
Interest income:
Interest on mortgage loans	$	21,290	$	16,689
Interest on securities held to maturity and dividends on FHLB stock		357		324
Interest on securities available for sale		1,602		229
Interest on mortgage-backed securities held to maturity		1,031		1,557
Interest on mortgage-backed securities available for sale		1,437		1,857
Interest on federal funds sold and short term investments		62		1
Total interest income		25,779		20,657

Interest expense:
Deposits		6,313		5,039
Borrowings		5,247		4,848
Total interest expense		11,560		9,887

Net interest income before provision for loan losses		14,219		10,770

Provision for loan losses		2,550		1,875
Net interest income		11,669		8,895

Other income:
Service charges		428		285
Real estate operations, net		389		380
Income from investments in real estate joint ventures		352		254
Bank-owned life insurance		294		278
Net gain on sale of assets		1,043		—
Net gain on sales of securities		1		—
Other income		39		36
Total other income		2,546		1,233

Other expenses:
Compensation, payroll taxes and fringe benefits		4,758		4,351
Advertising		160		122
Office occupancy and equipment expense		529		409
Data processing service fees		267		268
Federal insurance premiums		574		29
Other expenses		540		695
Total other expenses		6,828		5,874

Income before income tax expense		7,387		4,254
Income tax expense		2,904		1,748
Net income	$	4,483	$	2,506

Net income available to common stockholders	$	4,382	$	2,506

Basic and diluted income per common share	$	0.12	$	0.07

See accompanying notes to unaudited consolidated financial statements.

Oritani Financial Corp. and Subsidiaries

Township of Washington, New Jersey

Consolidated Statements of Stockholders' Equity

Three Months ended September, 2009 and 2008 (unaudited)

(In thousands)

														Accumu-
														lated
								Un-						other
								allocated						compre-
								common						hensive			Total
			Additional					stock						income			stock-
	Common		paid-in		Treasury			held by			Retained			(loss),			holders'
	Stock		capital		Stock			ESOP			income			net of tax			equity
Balance at June 30, 2008	$	130	$	128,656	$	(5,926	)	$	(14,704	)	$	171,160		$	(341	)	$	278,975
Comprehensive income:
Net income		—		—		—			—			2,506			—			2,506
Unrealized holding gain on securities available for sale arising during year, net of tax benefit		—		—		—			—			—			(170	)		(170	)
Amortization related to post- retirement obligations, net of tax		—		—		—			—			—			237			237
Total comprehensive income																		2,573
Cumulative effect of change in accounting for split-dollar life insurance, net of tax		—		—		—			—			(79	)		—			(79	)
Purchase of treasury stock		—		—		(14,452	)		—			—			—			(14,452	)
Compensation cost for stock options and restricted stock		—		866		—			—			—			—			866
ESOP shares allocated or committed to be released		—		132		—			198			—			—			330

Balance at September 30, 2008	$	130	$	129,654	$	(20,378	)	$	(14,506	)	$	173,587		$	(274	)	$	268,213

Balance at June 30, 2009	$	130	$	130,375	$	(53,418	)	$	(13,909	)	$	176,199		$	721		$	240,098
Comprehensive income:
Net income		—		—		—			—			4,483			—			4,483
Unrealized holding gain on securities available for sale arising during year, net of tax		—		—		—			—			—			1,244			1,244
Reclassification adjustment for losses included in net income, net of tax		—		—		—			—			—			1			1
Amortization related to post- retirement obligations, net of tax		—		—		—			—			—			35			35
Total comprehensive income																		5,763
Cash dividend declared		—		—		—			—			(434	)		—			(434	)
Purchase of treasury stock		—		—		(958	)		—			—			—			(958	)
Compensation cost for stock options and restricted stock		—		891		—			—			—			—			891
ESOP shares allocated or committed to be released		—		72		—			198			—			—			270
Tax benefit from stock-based compensation		—		12		—			—			—			—			12

Balance at September 30, 2009	$	130	$	131,350	$	(54,376	)	$	(13,711	)	$	180,248		$	2,001		$	245,642

See accompanying notes to unaudited consolidated financial statements.

Oritani Financial Corp. and Subsidiaries

Township of Washington, New Jersey

Consolidated Statements of Cash Flows

(unaudited)

	Three months ended
	September 30,
	2009			2008
	(in thousands)
Cash flows from operating activities:
Net income	$	4,483		$	2,506
Adjustments to reconcile net income to net cash provided by operating activities:
ESOP and stock-based compensation expense		1,161			1,196
Depreciation of premises and equipment		192			148
Amortization and accretion of premiums and discounts, net		28			28
Provision for losses on loans		2,550			1,875
Amortization and accretion of deferred loan fees, net		(311	)		(197	)
Increase in deferred taxes		(917	)		(885	)
Gain on sale of securities		(1	)		-
Gain on sale of assets		(1,043	)		-
Increase in cash surrender value of bank owned life insurance		(294	)		(278	)
Income from real estate held for investment		(244	)		(254	)
Income from real estate joint ventures		(352	)		(254	)
Increase in accrued interest receivable		(103	)		(628	)
Decrease in other assets		79			1,405
Increase in other liabilities		6,907			1,514
Net cash provided by operating activities		12,135			6,176

Cash flows from investing activities:
Net increase in loans receivable		(69,481	)		(100,210	)
Purchase of mortgage loans		(3,389	)		(25,811	)
Proceeeds from sales of mortgage loans		4,000			-
Purchase of securities available for sale		(146,328	)		-
Purchase of mortgage-backed securities available for sale		-			(5,102	)
Purchase (redemption) of Federal Home Loan Bank of New York stock		34			(3,305	)
Principal payments on mortgage-backed securities held to maturity		12,796			10,564
Principal payments on mortgage-backed securities available for sale		13,451			6,199
Proceeds from calls and maturities of securities available for sale		15,000			-
Proceeds from sales of mortgage-backed securities available for sale		250			-
Proceeds from sale of real estate held for investment		1,182			-
Additional investment in real estate held for investment		-			(912	)
Distributions received from real estate held for investment		191			165
Additional investment in real estate joint ventures		(387	)		(30	)
Distributions received from real estate joint ventures		432			306
Purchase of fixed assets		(614	)		(326	)
Net cash used in investing activities		(172,863	)		(118,462	)

Cash flows from financing activities:
Net increase in deposits		60,237			54,326
Purchase of treasury stock		(958	)		(14,452	)
Dividends paid to shareholders		(507	)
Tax benefit from stock-based compensation		12			-
Increase in advance payments by borrowers for taxes and insurance		336			417
Proceeds from borrowed funds		-			74,875
Repayment of borrowed funds		(788	)		(1,438	)
Net cash provided by financing activities		58,332			113,728

Net increase (decrease) in cash and cash equivalents		(102,396	)		1,442
Cash and cash equivalents at beginning of period		135,369			8,890
Cash and cash equivalents at end of period	$	32,973		$	10,332

Supplemental cash flow information:
Cash paid during the period for:
Interest	$	11,322		$	9,762
Income taxes	$	30		$	2,221
Noncash transfer
Loans receivable transferred to Real estate owned	$	812		$	-

See accompanying notes to unaudited consolidated financial statements.

Oritani Financial Corp. and Subsidiaries

1. Basis of Presentation

The consolidated financial statements are composed of the accounts of Oritani Financial Corp., its wholly owned subsidiaries, Oritani Bank (the Bank), Hampshire Financial, LLC, and Oritani, LLC, and the wholly owned subsidiaries of Oritani Bank, Ormon LLC (Ormon), and Oritani Asset Corporation (a real estate investment trust), collectively, the “Company.”

In the opinion of management, all of the adjustments (consisting of normal and recurring adjustments) necessary for the fair presentation of the consolidated financial condition and the consolidated results of operations for the unaudited periods presented have been included. The results of operations and other data presented for the three month period ended September 30, 2009 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending June 30, 2010.

Certain information and note disclosures usually included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for the preparation of the Form 10-Q. The consolidated financial statements presented should be read in conjunction with the Company’s audited consolidated financial statements and notes to consolidated financial statements included in the Company’s June 30, 2009 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September 11, 2009.

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In June 2009, the Financial Accounting Standards Board (“FASB”) issued an update to Accounting Standard Codification 105-10, “Generally Accepted Accounting Principles”. This standard establishes the FASB Accounting Standard Codification (“Codification” or “ASC”) as the source of authoritative U.S. GAAP recognized by the FASB for nongovernmental entities. The Codification is effective for interim and annual periods ending after September 15, 2009. The Codification is a reorganization of existing U.S. GAAP and does not change existing U.S. GAAP. The Company adopted this standard for our financial statements for periods ending after September 15, 2009. As a result, the Company’s disclosures in its consolidated financial statements and all future references to authoritative accounting literature will be referenced in accordance with FASB ASC 105-10. The adoption had no impact on the Company’s financial position, results of operations, and earnings per share.

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statements of financial condition and revenues and expenses for the periods then ended. Actual results could differ significantly from those estimates.

A material estimate that is particularly susceptible to significant changes relates to the determination of the allowance for loan losses. The allowance for loan losses represents management’s best estimate of losses known and inherent in the portfolio that are both probable and reasonable to estimate. While management uses the most current information available to estimate losses on loans, actual losses are dependent on future events and, as such, increases in the allowance for loan losses may be necessary.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance for loan losses. Such agencies may require the Bank to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

Oritani Financial Corp. and Subsidiaries

2. Subsequent Events

Subsequent events have been evaluated through November 5, 2009.

3. Earnings Per Share

Basic earnings per share are computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. ASC 260, “Earnings Per Share”, provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. We determined that our outstanding nonvested restricted stock awards are participating securities. Accordingly, earnings per common share is computed using the two-class method. The weighted average common shares outstanding includes the average number of shares of common stock outstanding, including shares held by Oritani Financial Corp., MHC and allocated or committed to be released Employee Stock Ownership Plan shares.

Diluted earnings per share is computed using the same method as basic earnings per share, but reflects the potential dilution that could occur if stock options were exercised and converted into common stock and unvested shares of restricted stock were to vest. These potentially dilutive shares would then be included in the weighted average number of shares outstanding for the period using the treasury stock method. When applying the treasury stock method, we add: (1) the assumed proceeds from option exercises; (2) the tax benefit that would have been credited to additional paid-in capital assuming exercise of non-qualified stock options and vesting of shares of restricted stock; and (3) the average unamortized compensation costs related to unvested shares of restricted stock and stock options. We then divide this sum by our average stock price to calculate shares repurchased. The excess of the number of shares issuable over the number of shares assumed to be repurchased is added to basic weighted average common shares to calculate diluted EPS.

The following is a summary of the Company’s earnings per share calculations and reconciliations of net income to net income available to common shareholders and basic to diluted earnings per share.

	For the Three Months Ended September 30,
	2009			2008
	(in thousands, except earnings per share data)
Net income	$	4,483		$	2,506
Undistributed earnings allocated to unvested restricted awards		(101	)		-
Net income available to common shareholders	$	4,382		$	2,506

Weighted average common shares outstanding - basic		35,686			38,124
Effect of dilutive non-vested shares and stock options outstanding		-			-

Weighted average common shares outstanding - diluted		35,686			38,124
Earnings per share-basic and diluted	$	0.12		$	0.07

Oritani Financial Corp. and Subsidiaries

4. Stock Repurchase Program

On June 2, 2008, the Company announced a stock repurchase plan to acquire up to 10% of its publicly-held outstanding shares of common stock, or 1,297,668 shares. Additional stock repurchase plans were announced on: September 18, 2008, for 10% of the publicly-held outstanding shares, or 1,173,008 shares, on November 21, 2008 for 10% of the publicly-held outstanding shares, or 1,061,098 shares, and on March 18, 2009, for 10% of the publicly-held outstanding shares, or 967,828 shares. Under the stock repurchase program, shares of the Company’s common stock may be purchased in the open market and through privately negotiated transactions, from time to time, depending on market conditions and prices, the Company's liquidity requirements and alternative uses of capital. At September 30, 2009, a total of 3,648,637 shares were acquired under these repurchase plans at a weighted average cost of $15.59 per share. Repurchased shares are held as treasury stock and are available for general corporate purposes. At November 3, 2009, a total of 3,656,437 shares were acquired under these repurchase plans at a weighted average cost of $15.58 per share. This program has no expiration date and has 609,791 shares yet to be purchased as of November 3, 2009.

5. Equity Incentive Plan

At the Special Meeting of Stockholders of the Company (the “Meeting”) held on April 22, 2008, the stockholders of the Company approved the Oritani Financial Corp. 2007 Equity Incentive Plan. On May 7, 2008, certain officers and employees of the Company were granted in aggregate 1,311,457 stock options and 588,171 shares of restricted stock, and non-employee directors received in aggregate 476,892 stock options and 206,652 shares of restricted stock. On November 21, 2008, 70,000 stock options were granted at an exercise price equal to the market price of our common stock on the grant date, based on quoted market prices. All option grants have a vesting period of five years and an expiration period of ten years. The fair values of all options grants were estimated using the Black Scholes option-pricing model using the following assumptions: an expected life of 6.5 years, risk-free rate of 3.37%, volatility of 28.22% and a dividend yield of 3.55%. The Company adopted ASC 718, “Compensation-Stock Compensation”, upon approval of the Plan, and began to expense the fair value of all share-based compensation granted over the requisite service periods.

Stock-based compensation expense of $891,000 and $865,000 were recognized for the three months ended September 30, 2009 and 2008, respectively.

The following is a summary of the status of the Company’s non-vested options as of September 30, 2009 and changes therein during the three months then ended:

	Number of Stock Options		Weighted Average Grant Date Fair Value		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)
Outstanding at June 30, 2009		1,848,349	$	3.44	$	15.65		9.0
Granted		-		-		-		-
Exercised		-		-		-
Forfeited		-		-		-		-
Outstanding at September 30, 2009		1,848,349	$	3.44	$	15.65		8.6
Exercisable at September 30, 2009		355,670			$	15.65

Expected future compensation expense related to the non-vested options outstanding as of September 30, 2009 is $4.1 million over a weighted average period of 3.6 years.

Oritani Financial Corp. and Subsidiaries

Upon exercise of vested options, management expects to draw on treasury stock as the source of the shares.

The following is a summary of the status of the Company’s restricted shares as of September 30, 2009 and changes therein during the nine months then ended:


	Number of Shares Awarded		Weighted Average Grant Date Fair Value
Non-vested at June 30, 2009		635,859	$	15.65
Granted		-		-
Vested		-		-
Forfeited		-		-
Non-vested at September 30, 2009		635,859	$	15.65

Expected future compensation expense relating to the non-vested restricted shares as of September 30, 2009 is $8.7 million over a weighted average period of 3.6 years.

6. Net Loans and Allowance for Loan Loss

Net Loans are summarized as follows:

	September 30, 2009			June 30, 2009
	(In thousands)
Residential	$	263,290		$	265,962
Multi-family		299,032			277,589
Commercial real estate		610,304			562,138
Second mortgage and equity loans		51,941			54,769
Construction loans		126,177			130,831
Other loans		17,988			10,993
Total loans		1,368,732			1,302,282
Deferred loan fees, net		(3,125	)		(2,979	)
Loans, net of deferred loan fees		1,365,607			1,299,303
Allowance for loan losses		(21,165	)		(20,680	)
Net loans	$	1,344,442		$	1,278,623

Oritani Financial Corp. and Subsidiaries

The activity in the allowance for loan losses is summarized as follows:

	Three months ended
	September 30,
	(In thousands)
	2009			2008
Balance at beginning of period	$	20,680		$	13,532
Provisions charged to operations		2,550			1,875
Recoveries of loans previously charged off		—			—
Loans charged off		(2,065	)		—
Balance at end of period	$	21,165		$	15,407

The Company's allowance for loan losses is analyzed quarterly and many factors are considered, including growth in the portfolio, delinquencies, nonaccrual loan levels, and other environmental factors. See discussion of the allowance for loan losses in “Comparison of Financial Condition at September 30, 2009 and June 30, 2009.”

7. Mortgage-backed Securities Held to Maturity

The following is a comparative summary of mortgage-backed securities held to maturity at September 30, 2009 and June 30, 2009:

	September 30, 2009
				Gross		Gross		Estimated
	Amortized			unrealized		unrealized		fair
	cost			gains		losses		value
		(In thousands)
Mortgage-backed securities:
FHLMC		$	16,943		459		4		17,398
FNMA			28,627		751		—		29,378
GNMA			4,851		19		6		4,864
CMO			55,554		1,003		112		56,445
		$	105,975		2,232		122		108,085

Oritani Financial Corp. and Subsidiaries

	June 30, 2009
				Gross		Gross		Estimated
	Amortized			unrealized		unrealized		fair
	cost			gains		losses		value
		(In thousands)
Mortgage-backed securities:
FHLMC		$	18,783		287		7		19,063
FNMA			31,329		616		2		31,943
GNMA			5,161		16		20		5,157
CMO			63,544		913		239		64,218
		$	118,817		1,832		268		120,381

The Company did not sell any mortgage-backed securities held to maturity during the three months ended September 30, 2009 and 2008. Mortgage-backed securities with fair values of $108.1 million and $120.4 million at September 30, 2009 and June 30, 2009, respectively, were pledged to FHLB of New York (FHLBNY) as collateral for advances. The Company did not record other than temporary impairment charges during the three months ended September 30, 2009, or 2008.

The contractual maturities of mortgage-backed securities held-to-maturity generally exceed 20 years; however, the effective lives are expected to be shorter due to anticipated prepayments. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.

Gross unrealized losses on mortgage-backed securities held to maturity and the estimated fair value of the related securities, aggregated by security category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2009 and June 30, 2009, were as follows:

	September 30, 2009 Unrealized Losses
	Less than 12 months					Greater than 12 months				Total
	(In thousands)
				Gross				Gross				Gross
	Estimated			unrealized		Estimated		unrealized		Estimated		unrealized
	fair value			losses		fair value		losses		fair value		losses
Mortgage-backed securities:
FHLMC		$	917		4		—		—		917		4
FNMA			—		—		—		—		—		—
GNMA			—		—		1,962		6		1,962		6
CMO			—		—		2,195		112		2,195		112
		$	917		4		4,157		118		5,074		122

Oritani Financial Corp. and Subsidiaries

	June 30, 2009 Unrealized Losses
	Less than 12 months					Greater than 12 months				Total
	(In thousands)
				Gross				Gross				Gross
	Estimated			unrealized		Estimated		unrealized		Estimated		unrealized
	fair value			losses		fair value		losses		fair value		losses
Mortgage-backed securities:
FHLMC		$	805		2		1,012		5		1,817		7
FNMA			845		2		—		—		845		2
GNMA			—		—		2,009		20		2,009		20
CMO			8,214		43		2,284		196		10,498		239
		$	9,864		47		5,305		221		15,169		268

The unrealized losses on investments in mortgage-backed securities were caused by interest rate changes. The contractual cash flows of these securities are guaranteed by Fannie Mae, Ginnie Mae and Freddie Mac. The majority of the contractual cash flows of the CMO’s are guaranteed by these agencies as well. The Company has one AAA rated private label CMO investment with an amortized cost of $990,000 and a fair value of $896,000. The security was issued in 2003 and is performing in accordance with contractual terms. It is expected that the security would not be settled at a price less than the amortized cost of the investment. Because the decline in fair value is attributable to changes in interest rates and not credit quality, and because the Company has no intent to sell and believes it is not more likely than not that it will be required to sell these investments until a market price recovery or maturity, these investments are not considered other than temporarily impaired.

8. Securities and Mortgage-Backed Securities Available for Sale

The following is a comparative summary of securities and mortgage-backed securities available for sale at September 30, 2009 and June 30, 2009:

	September 30, 2009
			Gross		Gross		Estimated
	Amortized		unrealized		unrealized		market
	cost		gains		losses		value
	(In thousands)
Securities available for sale
U.S. Government and
federal agency obligations	$	266,047		1,613		25		267,635
Corporate bonds		2,000		87		—		2,087
Mutual funds		5,387		223		—		5,610
Equity securities		1,965		28		192		1,801
	$	275,399		1,951		217		277,133
Mortgage-backed securities:
FHLMC	$	24,525		1,178		34		25,669
FNMA		25,359		1,276		—		26,635
GNMA		2,415		12		1		2,426
CMO		59,413		1,490		—		60,903
	$	111,712		3,956		35		115,633

Oritani Financial Corp. and Subsidiaries

	June 30, 2009
			Gross		Gross		Estimated
	Amortized		unrealized		unrealized		fair
	cost		gains		losses		value
	(In thousands)
Securities available for sale
U.S. Government and federal agency obligations	$	134,754		532		449		134,837
Corporate bonds		2,000		156		—		2,156
Mutual funds		5,636		40		—		5,676
Equity securities		1,965		15		230		1,750
	$	144,355		743		679		144,419
Mortgage-backed securities:
FHLMC	$	26,979		945		49		27,875
FNMA		27,023		889		1		27,911
GNMA		2,537		21		1		2,557
CMO		68,571		1,689		—		70,260
	$	125,110		3,544		51		128,603

The amortized cost and estimated fair value of securities available for sale other than mutual funds, equity securities and mortgage-backed securities at September 30, 2009, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.

				Estimated
	Amortized			fair
	cost			value
	(In thousands)

Due in one year through five years		$	248,047		249,598
Due after five years through ten years			20,000		20,124
Mutual funds and equity securities			7,352		7,411
		$	275,399		277,133

Mortgage-backed securities		$	111,712		115,633

The Company did not sell any available for sale securities during the three months ended September 30, 2009 and 2008. Available for sale securities with fair values of $246.2 million and $127.5 million at September 30, 2009 and June 30, 2009, respectively, were pledged to FHLB of New York (FHLBNY) as collateral for advances. The Company did not record other than temporary impairment charges during the three months ended September 30, 2009, or 2008.

Gross unrealized losses on securities and mortgage-backed securities available for sale and the estimated fair value of the related securities, aggregated by security category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2009 and June 30, 2009 were as follows:

Oritani Financial Corp. and Subsidiaries

	September 30, 2009
	Less than 12 months				Greater than 12 months				Total
			Gross				Gross				Gross
	Estimated		unrealized		Estimated		unrealized		Estimated		unrealized
	market value		losses		market value		losses		market value		losses
	(In thousands)
Securities available for sale:
U.S. Government and federal agency obligations	$	29,841		25		—		—		29,841		25
Equity securities		510		129		137		63		647		192
	$	30,351		154		137		63		30,488		217

Mortgage-backed securities:
FHLMC	$	3,839		34		—		—		3,839		34
FNMA		—		—		—		—		—		—
GNMA		474		1		—		—		474		1
CMO		—		—		—		—		—		—
	$	4,313		35		—		—		4,313		35

	June 30, 2009
	Less than 12 months				Greater than 12 months				Total
			Gross				Gross				Gross
	Estimated		unrealized		Estimated		unrealized		Estimated		unrealized
	market value		losses		market value		losses		market value		losses
	(In thousands)
Securities available for sale:
U.S. Government and federal agency obligations	$	79,202		449		—		—		79,202		449
Equity securities		654		230		—		—		654		230
	$	79,856		679		—		—		79,856		679

Mortgage-backed securities:
FHLMC	$	4,501		49		—		—		4,501		49
FNMA		1,801		1		—		—		1,801		1
GNMA		501		1		—		—		501		1
CMO		—		—		—		—		—		—
	$	6,803		51		—		—		6,803		51

Management has evaluated the securities in the above table and has concluded that, with the exceptions of the equity and mutual fund securities discussed below, none of the securities with losses has impairments that are other-than-temporary. The securities that have been in an unrealized loss position for 12 months or longer include US government agency securities and mortgage backed securities whose market values are sensitive to interest rates.

The Equity securities caption relates to holdings of shares in financial industry common stock. The Mutual Fund caption relates to holdings of shares in an Asset Management Fund with underlying investments in adjustable rate mortgages. Management evaluated its portfolio of equity and mutual fund securities and, based on its evaluation of the financial condition and near-term prospects of an issuer, management believed that it could recover its investment in the security.

Oritani Financial Corp. and Subsidiaries

9. Fair Value Measurements

The Company adopted ASC 820, "Fair Value Measurements and Disclosures", on July 1, 2008. Under ASC 820, fair value measurements are not adjusted for transaction costs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under FASB ASC 820 are described below:

Basis of Fair Value Measurement:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Price or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported with little or no market activity).

A financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The Company's cash instruments are generally classified within Level 1 or Level 2 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.

The types of instruments whose values are based on quoted market prices in active markets include most U.S. government and agency securities, mortgage-backed securities, many other sovereign government obligations, and active listed securities. Such instruments are generally classified within Level 1 or Level 2 of the fair value hierarchy. As required by ASC 820, the Company does not adjust the quoted price for such instruments.

The following table sets forth the Company's financial assets that were accounted for at fair values on a recurring basis as of September 30, 2009 by level within the fair value hierarchy. As required by ASC 820, financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurements (in thousands):

	Fair Value as of September 30,			Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs			Unobservable Inputs
		2009		(Level 1)			(Level 2)			(Level 3)
Assets:
Securities available for sale		$	277,133		$	22,411		$	254,722		$	-
Mortgage-backed securities available for sale			115,633			-			115,633			-
		$	392,766		$	22,411		$	370,355		$	-

Oritani Financial Corp. and Subsidiaries

Also, the Company may be required, from time to time, to measure the fair value of certain other financial assets on a nonrecurring basis in accordance with U.S. generally accepted accounting principles. The adjustments to fair value usually result from the application of lower-of-cost-or-market accounting or write downs of individual assets.

The Company had impaired loans with outstanding principal balances of $17.2 million and $20.0 million at September 30, 2009 and June 30, 2009, respectively, that were recorded at their estimated fair value (less cost to sell) of $14.7 million and $16.7 million at September 30, 2009 and June 30, 2009, respectively. Specific reserves for impaired loans totaled $2.5 million at September 30, 2009 and $3.3 million at June 30, 2009. The Company recorded impairment charges of $1.2 million and $740,000 for the three months ended September 30, 2009 and 2008, respectively, utilizing Level 3 inputs. Impaired loans are valued utilizing current appraisals adjusted downward by management, as necessary, for changes in relevant valuation factors subsequent to the appraisal date.

10. Fair Value of Financial Instruments

ASC 825, “Financial Instruments”, requires that the Company disclose estimated fair values for its financial instruments. Fair value estimates, methods and assumptions are set forth below for the Company’s financial instruments.

Cash and Cash Equivalents

For cash on hand and due from banks and federal funds sold and short-term investments, the carrying amount approximates fair value.

Securities

The fair value of securities is estimated based on bid quotations received from securities dealers, if available. If a quoted market price is not available, fair value is estimated using quoted market prices of similar instruments, adjusted for differences between the quoted instruments and the instruments being valued.

FHLB of New York Stock

The fair value for FHLB stock is its carrying value, since this is the amount for which it could be redeemed. There is no active market for this stock and the Bank is required to maintain a minimum balance based upon the unpaid principal of home mortgage loans.

Loans

Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as residential mortgage, construction, land and consumer. Each loan category is further segmented into fixed and adjustable rate interest terms and by performing and nonperforming categories.

Fair value of performing loans is estimated by discounting cash flows using estimated market discount rates at which similar loans would be made to borrowers and reflect similar credit ratings and interest rate risk for the same remaining maturities.

Fair value for significant nonperforming loans is based on recent external appraisals of collateral securing such loans, adjusted for the timing of anticipated cash flows.

Oritani Financial Corp. and Subsidiaries

Deposit Liabilities

The fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, savings, and NOW and money market accounts, is equal to the amount payable on demand as of September 30, 2009 and June 30, 2009. The fair value of certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities.

Borrowings

The fair value of borrowings due in six months or less is equal to the amount payable. The fair value of all other borrowings is calculated based on the discounted cash flow of contractual amounts due, using market rates currently available for borrowings of similar amount and remaining maturity.

Commitments to Extend Credit and to Purchase or Sell Securities

The fair value of commitments to extend credit is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of commitments to purchase or sell securities is estimated based on bid quotations received from securities dealers.

The estimated fair values of the Company’s financial instruments are presented in the following table. Since the fair value of off-balance-sheet commitments approximates book value, these disclosures are not included.

	September 30, 2009				June 30, 2009
	Carrying		Fair		Carrying		Fair
	value		value		value		value
	(In thousands)
Financial assets:
Cash and cash equivalents	$	32,973		32,973		135,369		135,369
Securities available for sale		277,133		277,133		144,419		144,419
Mortgage-backed securities held to maturity		105,975		108,085		118,817		120,381
Mortgage-backed securities available for sale		115,633		115,633		128,603		128,603
Federal Home Loan Bank of New York stock		25,515		25,515		25,549		25,549
Loans		1,344,442		1,352,300		1,278,623		1,292,394
Financial liabilities – deposits		1,187,867		1,191,629		1,127,630		1,106,212
Financial liabilities – borrowings		508,203		552,195		508,991		547,202

Limitations

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Oritani Financial Corp. and Subsidiaries

Fair value estimates are based on existing on- and off-balance-sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial assets or liabilities include the mortgage banking operation, deferred tax assets, and premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

11. Deposits

Deposits are summarized as follows:

	September 30, 2009		June 30, 2009
	(In thousands)

Demand deposit accounts	$	97,715	$	88,759
Money market accounts		235,005		199,965
Savings accounts		146,233		147,669
Time deposits		708,914		691,237
Total deposits	$	1,187,867	$	1,127,630

12. Income Taxes

In June 2006, the FASB issued ASC 740, “Income Taxes”, which establishes a recognition threshold and measurement for income tax positions recognized in an enterprise’s financial statements. ASC 740 also prescribes a two-step evaluation process for tax positions. The first step is recognition and the second is measurement. For recognition, an enterprise judgmentally determines whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of related appeals or litigation processes, based on the technical merits of the position. If the tax position meets the more-likely-than-not recognition threshold it is measured and recognized in the financial statements as the largest amount of tax benefit that is greater than 50% likely of being realized. If a tax position does not meet the more-likely-than-not recognition threshold, the benefit of that position is not recognized in the financial statements. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, where applicable, in income tax expense.

Tax positions that meet the more-likely-than-not recognition threshold at the effective date of ASC 740 may be recognized or, continue to be recognized, upon adoption of this standard. The cumulative effect of applying the provisions of ASC 740 shall be reported as an adjustment to the opening balance of retained earnings for that fiscal year. The Company adopted ASC 740 on July 1, 2007. The adoption of ASC 740 resulted in a $900,000 transition adjustment which increased retained income at July 1, 2007. The Company, through its various wholly owned subsidiaries, deploys several tax strategies. Based on the facts surrounding these strategies and applicable laws, the Company believes these strategies are more likely than not of being sustained under examination. The Company believes it will receive 100% of the benefit of the tax positions and has recognized the effects of the tax positions in the financial statements.

The Company files income tax returns in the United States federal jurisdiction and in New Jersey and Pennsylvania state jurisdictions. The Company is no longer subject to federal and state income tax examinations by tax authorities for years prior to 2004. Currently, the Company is not under examination by any taxing authority.

Oritani Financial Corp. and Subsidiaries

13. Recent Accounting Pronouncements

In September 2009, the FASB issued ASU 2009-12, “Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent).” The update provides guidance on estimating the fair value of a company’s investments in investment companies when the investment does not have a readily determinable fair value. It amends topic 820 to permit the use of the investment’s net asset value as a practical expedient to determine fair value. This guidance also requires additional disclosure of the attributes of these investments such as; (i) the nature of any restrictions on the reporting entity’s ability to redeem its investment; (ii) unfunded commitments; and (iii) investment strategies of the investees. This ASU is effective for the first reporting period ending after December 15, 2009, with earlier application permitted. The Company does not expect the adoption of the ASU to have a material impact on its consolidated financial statements.

In August 2009, the FASB issued a proposed ASU, “Improving Disclosures about Fair Value Measurements.” The proposed ASU would amend topic 820 to clarify existing requirements regarding disclosures of inputs and valuation techniques and levels of disaggregation. The additional disclosures would include: information about the sensitivity of alternative Level 3 inputs and their effects on fair value; significant transfers in and out of Levels 1 and 2; and additional disclosures of Level 3 activity. If adopted, the proposed ASU would be effective for interim and annual reporting periods ending after December 15, 2009. The sensitivity disclosures for Level 3 measurements would be effective for reporting periods ending after March 15, 2010. The Company does not expect the adoption of the proposed ASU to have a material impact on its consolidated financial statements.

In August 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-05, “Measuring Liabilities at Fair Value”, which updates topic 820, “Fair Value Measurements and Disclosures”. The updated guidance clarifies that the fair value of a liability can be measured in relation to the quoted price of the liability when it trades as an asset in an active market, without adjusting the price for restrictions that prevent the sale of the liability. This guidance is effective for the first interim or annual reporting period after issuance. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

In June 2009, the FASB issued guidance which amends the derecognition guidance in topic 860, “Transfer and Servicing, to enhance reporting about transfers of financial assets, including securitizations, and where companies having continuing exposure to the risks related to transferred financial assets. The guidance eliminates the concept of “qualifying special-purpose entity”, changes the requirements for derecognizing financial assets and requires additional disclosures about all continuing involvements with transferred financial assets including information about gains and losses resulting from transfers during the period. This guidance is effective for financial asset transfers occurring in fiscal years beginning after November 15, 2009. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

In May 2009, the FASB issued guidance now included in topic 855, “Subsequent Events” was issued which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued. The guidance sets forth (i) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (iii) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. This guidance was effective for the period ended June 30, 2009, and the required disclosure is included in the footnotes to the financial statements.

Oritani Financial Corp. and Subsidiaries

In April 2009, the FASB issued guidance now included in topic 820, “Fair Value Measurements and Disclosures”, which provides additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased and includes guidance on identifying circumstances that indicate a transaction is not orderly. Under topic 820, if the reporting entity concludes there has been a significant decrease in the volume and level of activity for the asset or liability, transactions or quoted prices may not be determinative of fair value. Further analysis is required and significant adjustments to the transactions or quoted prices may be necessary. The guidance is effective for interim and annual reporting periods ending after June 15, 2009 and was adopted by the Company on April 1, 2009. The Company’s adoption of the guidance had an immaterial effect on its fair value estimates.

In April 2009, the FASB issued guidance now included in topic 320, “Investments-Debt and Equity Securities”. The guidance changes the amount of an other-than-temporary impairment that is recognized in earnings when there are non-credit losses on a debt security which management does not intend to sell and for which it is more-likely-than-not that the entity will not be required to sell the security prior to the recovery of the non-credit impairment. In those situations, the portion of the total impairment that is attributable to the credit loss would be recognized in earnings, and the remaining difference between the debt security’s amortized cost basis and its fair value would be included in other comprehensive income. The guidance also requires additional disclosures about investments in an unrealized loss position and the methodology and significant inputs used in determining the recognition of other-than-temporary impairment. The guidance is effective for interim and annual reporting periods ending after June 15, 2009 and was adopted by the Company on April 1, 2009. The Company’s adoption of the guidance had an immaterial effect on its fair value estimates.

In April 2009, the FASB issued guidance now included in topic 825, “Financial Instruments” requiring disclosures about fair value of financial instruments for interim reporting periods of publicly traded company as well as in annual financial statements. The disclosure requirements are effective for interim reporting periods ending after June 15, 2009 and are included in the footnotes to the financial statements.

In December 2007, the FASB issued guidance under topic 810, “Consolidation”, requiring noncontrolling interests (previously referred to as minority interests) to be treated as a separate component of equity, not as a liability or other item outside of permanent equity. The guidance applies to the accounting for noncontrolling interests and transactions with noncontrolling interest holders in consolidated financial statements. SFAS No. 160 is effective for periods beginning on or after December 15,2008. The Company adopted the guidance on July 1, 2009 with no material impact on its consolidated financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This Quarterly Report contains certain “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward looking statements may be identified by reference to a future period or periods, or by use of forward looking terminology, such as “may,” “will,” “believe,” ‘expect,” “estimate,” ‘anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Forward looking statements are subject to numerous risks and uncertainties, including, but not limited to, those related to the economic environment, particularly in the market areas in which Oritani Financial Corp. (the “Company”) operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.

Oritani Financial Corp. and Subsidiaries

The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions, which may be made to any forward looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Overview

Oritani Financial Corp. is the federally chartered mid-tier stock holding company of Oritani Bank. Oritani Financial Corp. owns 100% of the outstanding shares of common stock of Oritani Bank. Since being formed in 1998, Oritani Financial Corp. has engaged primarily in the business of holding the common stock of Oritani Bank and two limited liability companies that own a variety of real estate investments. In addition, Oritani Financial Corp. has engaged in limited lending to the real estate investment properties in which (either directly or through one of its subsidiaries) Oritani Financial Corp. has an ownership interest. Oritani Bank’s principal business consists of attracting retail and commercial bank deposits from the general public and investing those deposits, together with funds generated from operations, in multi-family and commercial real estate loans, one- to four-family residential mortgage loans as well as in second mortgage and equity loans, construction loans, business loans, other consumer loans, and investment securities. We originate loans primarily for investment and hold such loans in our portfolio. Occasionally, we will also enter into loan participations. Our primary sources of funds are deposits, borrowings and principal and interest payments on loans and securities. Our revenues are derived principally from interest on loans and securities as well as our investments in real estate and real estate joint ventures. We also generate revenues from fees and service charges and other income. Our results of operations depend primarily on our net interest income which is the difference between the interest we earn on interest-earning assets and the interest paid on our interest-bearing liabilities. Our net interest income is primarily affected by the market interest rate environment, the shape of the U.S. Treasury yield curve, the timing of the placement of interest-earning assets and interest-bearing liabilities, and the prepayment rate on our mortgage-related assets. Provisions for loan losses and asset impairment charges can also have a significant impact on our results of operations. Other factors that may affect our results of operations are general and local economic and competitive conditions, government policies and actions of regulatory authorities.

Our business strategy is to operate as a well-capitalized and profitable financial institution dedicated to providing exceptional personal service to our individual and business customers. Our primary focus has been, and will continue to be, growth in multi-family and commercial real estate lending. We do not originate or purchase sub-prime loans, and our loan portfolio does not include any such loans.

Oritani Financial Corp. and Subsidiaries

Comparison of Financial Condition at September 30, 2009 and June 30, 2009

Balance Sheet Summary

Total Assets. Total assets increased $72.1 million, or 3.8%, to $1.99 billion at September 30, 2009, from $1.91 billion at June 30, 2009. The increases were primarily in the captions of loans and securities available for sale (“AFS”).

Cash and Cash Equivalents. Cash and cash equivalents (which includes fed funds and short term investments) decreased $102.4 million to $33.0 million at September 30, 2009, from $135.4 million at June 30, 2009. The decrease in cash and cash equivalents is primarily attributable to the increase in loans and securities available for sale (“AFS”).

Loans, net. Loans, net increased $65.8 million, or 5.1%, to $1.34 billion at September 30, 2009, from $1.28 billion at June 30, 2009. The Company continued its emphasis on loan originations, particularly multifamily and commercial real estate loans. Loan originations totaled $132.3 million for the three months ended September 30, 2009.

The allowance for loan losses increased $485,000 to $21.2 million at September 30, 2009, from $20.7 million at June 30, 2009. The Company charged off a total of $2.1 million in loans during the quarter ended September 30, 2009. There were no recoveries in either of the periods. See discussion of the allowance for loan losses in “Comparison of Operating Results for the Three Months Ended September 30, 2009 and 2008”.

Securities Available for Sale. Securities available for sale increased $132.7 million to $277.1 million at September 30, 2009 from $144.4 million at June 30, 2009. This increase was due to purchases during the period partially offset by maturities. The purchases made over the period were primarily to deploy excess liquid funds in invetsments that are likely to return the funds to the Company within one year. The Company felt the returns for longer term investments were insufficient to compensate for the additional interest rate risk.

Mortgage-Backed Securities Held to Maturity. Mortgage-backed securities held to maturity decreased $12.8 million, or 10.8%, to $106.0 million at September 30, 2009, from $118.8 million at June 30, 2009. This decreased was primarily due to principal repayments received.

Mortgage-Backed Securities Available for Sale. Mortgage-backed securities available for sale decreased $13.0 million, or 10.1%, to $115.6 million at September 30, 2009, from $128.6 million at June 30, 2009. This decreased was primarily due to principal repayments received.

Deposits. Deposits increased $60.2 million, or 5.3%, to $1.19 billion at September 30, 2009, from $1.13 billion at June 30, 2009. The Bank has implemented several initiatives designed to achieve deposit growth. A new branch location is expected to open in late 2009. Strong deposit growth remains a strategic objective of the Company.

Stockholders’ Equity. Stockholders’ equity increased $5.4 million, or 2.3%, to $245.6 million at September 30, 2009, from $240.1 million at June 30, 2009. On March 18, 2009, the Company announced the commencement of a fourth (967,828 shares) 10% repurchase program. As of September 30, 2009, the Company had repurchased a total of 3,648,637 shares at a total cost of $56.9 million and an average cost of $15.59 per share. Through November 3, 2009, the Company had repurchased a total of 3,656,437 shares at a total cost of $57.0 million and an average cost of $15.58 per share.

Oritani Financial Corp. and Subsidiaries

Average Balance Sheet for the Three Months Ended September 30, 2009 and 2008

The following table presents certain information regarding Oritani Financial Corp.’s financial condition and net interest income for the three months ended September 30, 2009 and 2008. The table presents the annualized average yield on interest-earning assets and the annualized average cost of interest-bearing liabilities. We derived the yields and costs by dividing annualized income or expense by the average balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown. We derived average balances from daily balances over the periods indicated. Interest income includes fees that we consider adjustments to yields.

	Average Balance Sheet and Yield/Rate Information
	For the Three Months Ended (unaudited)
	September 30, 2009							September 30, 2008
	Average Outstanding Balance		Interest Earned/ Paid		Average Yield/ Rate			Average Outstanding Balance		Interest Earned/ Paid		Average Yield/ Rate
	(Dollars in thousands)

Interest-earning assets:
Loans (1)	$	1,322,362	$	21,290		6.44	%	$	1,069,121	$	16,689		6.24	%
Securities held to maturity (2)		25,527		357		5.59	%		24,027		324		5.39	%
Securities available for sale		224,416		1,602		2.86	%		22,187		229		4.13	%
Mortgage backed securities held to maturity		110,157		1,031		3.74	%		158,782		1,557		3.92	%
Mortgage backed securities available for sale		123,498		1,437		4.65	%		150,362		1,857		4.94	%
Federal funds sold and short term investments		69,273		62		0.36	%		232		1		1.72	%
Total interest-earning assets		1,875,233		25,779		5.50	%		1,424,711		20,657		5.80	%
Non-interest-earning assets		84,042							74,640
Total assets	$	1,959,275						$	1,499,351

Interest-bearing liabilities:
Savings deposits		146,718		350		0.95	%		146,720		546		1.49	%
Money market		221,345		1,014		1.83	%		63,595		474		2.98	%
NOW accounts		98,464		197		0.80	%		73,679		163		0.88	%
Time deposits		706,731		4,752		2.69	%		424,485		3,856		3.63	%
Total deposits		1,173,258		6,313		2.15	%		708,479		5,039		2.84	%
Borrowings		508,472		5,247		4.13	%		488,747		4,848		3.97	%
Total interest-bearing liabilities		1,681,730		11,560		2.75	%		1,197,226		9,887		3.30	%
Non-interest-bearing liabilities		36,818							32,134
Total liabilities		1,718,548							1,229,360
Stockholders' equity		240,727							269,991
Total liabilities and stockholders' equity	$	1,959,275						$	1,499,351

Net interest income			$	14,219						$	10,770
Net interest rate spread (3)						2.75	%						2.50	%
Net interest-earning assets (4)	$	193,503						$	227,485
Net interest margin (5)						3.03	%						3.02	%
Average of interest-earning assets to interest-bearing liabilities						111.51	%						119.00	%

(1)

Includes nonaccrual loans.

(2)

Includes Federal Home Loan Bank Stock

(3)

Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(4)

Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(5)

Net interest margin represents net interest income divided by average total interest-earning assets.

Oritani Financial Corp. and Subsidiaries

Comparison of Operating Results for the Three Months Ended September 30, 2009 and 2008.

Net Income. Net income increased $2.0 million to $4.5 million for the quarter ended September 30, 2009, from $2.5 million for the corresponding 2008 quarter. Net interest income before provision for loan losses increased $3.4 million. We also recognized a $1.0 million gain on sale of assets in the three months ended September 30, 2009. These items were partially offset by a $954,000 increase in other expenses and an increase in the provision for loan losses of $675,000. These changes are discussed in greater detail below. Our annualized return on average assets was .92% for the quarter ended September 30, 2009, and .67% for the corresponding 2008 quarter. Our annualized return on average equity was 7.45% for the quarter ended September 30, 2009, and 3.71% for the corresponding 2008 quarter.

Total Interest Income. Total interest income increased by $5.1 million, or 24.8%, to $25.8 million for the three months ended September 30, 2009, from $20.7 million for the three months ended September 30, 2008. The majority of the increase was in interest on mortgage loans. Included in total interest income for the 2009 period is $1.5 million in interest income, prepayment penalties, default interest and deferred fees recovered on the resolution of three classified loans. Interest on mortgage loans increased by $4.6 million, or 27.6%, to $21.3 million for the three months ended September 30, 2009, from $16.7 million for the three months ended September 30, 2008. The average balance of loans, net increased to $1.32 billion for the three months ended September 30, 2009 from $1.07 billion for the corresponding 2008 period. Interest on securities available for sale (“AFS”) increased by $1.4 million to $1.6 million for the three months ended September 30, 2009, from $229,000 for the three months ended September 30, 2008. The average balance of securities AFS increased over the period to $224.4 million from $22.2 million. Continuing a trend that began in the quarter ended June 30, 2009, excess liquidity was generally deployed in securities classified as AFS as management felt such investments provided the best risk/reward profile considering the current and projected cash needs of the Company. Such investments were typically callable notes of government sponsored agencies with limited optionality and call features that made the note likely to be called when the liquidity would be needed by the Company. Management classified the investments as AFS so they could be sold should unexpected liquidity needs develop. Interest on federal funds sold and short term investments increased to $62,000 for the three months ended September 30, 2009, from $1,000 for the three months ended September 30, 2008. Although interest in this caption has increased on a year to year comparison, September 30, 2009 federal fund balances decreased significantly as compared to the balance at June 30, 2009. Federal fund balances grew significantly over the year but are now being reduced as returns on this investment have decreased dramatically. The Company seeks to prudently deploy cash inflows as quickly as possible and excess liquidity is typically invested in federal funds sold.

Total Interest Expense. Total interest expense increased by $1.7 million, or 16.9%, to $11.6 million for the three months ended September 30, 2009, from $9.9 million for the three months ended September 30, 2008. Interest expense on deposits increased by $1.3 million and interest expense on borrowings increased $399,000. The average balance of deposits increased $464.8 million, or 65.6%, to $1.17 billion for the three months ended September 30, 2009 from $708.5 million for the three months ended September 30, 2008. The growth primarily occurred in money market and time deposits. The cost of deposits decreased to 2.15% for the three months ended September 30, 2009 from 2.84% for the three months ended September 30, 2008. The average balance of borrowings increased to $508.5 million for the three months ended September 30, 2009 from $488.7 million for the three months ended September 30, 2008. The cost of borrowings increased to 4.13% for the three months ended September 30, 2009 from 3.97% for the three months ended September 30, 2008.

Oritani Financial Corp. and Subsidiaries

Net Interest Income Before Provision for Loan Losses. Net interest income before provision for loan losses increased by $3.4 million, or 32.0%, to $14.2 million for the three months ended September 30, 2009, from $10.8 million for the three months ended September 30, 2008. On a trailing quarter basis, net interest income increased by $2.6 million, or 22.0%, from $11.7 million for the three months ended June 30, 2009. The Company’s net interest rate spreads for the three months ended September 30, 2009, June 30, 2009 and September 30, 2008 were 2.75%, 2.33% and 2.50%, respectively. The Company’s net interest income and net interest rate spread were both positively impacted in the three months ended September 30, 2009 due to the recovery of nonaccrual interest income and default interest on loans delinquent more than 90 days. The total of such income recovered was $1.5 million for the three months ended September 30, 2009. Absent these recoveries, the Company’s net interest income and net interest rate spread for the three months ended September 30, 2009 would have been $12.7 million and 2.47%, respectively.

Provision for Loan Losses. The Company recorded a provision for loan losses of $2.6 million for the three months ended September 30, 2009 as compared to $1.9 million for the three months ended September 30, 2008. As in prior periods, loan growth was a component of the provision for loan losses in the 2009 period. The delinquency and nonaccrual totals, however, remain the primary contributors to the increased level of provision for loan losses.

Delinquency information is provided below:

Delinquency Totals (in thousands)
	09/30/09		06/30/09		03/31/09		12/31/08		09/30/08
30 - 59 days past due	$	14,318	$	6,727	$	4,897	$	4,979	$	16,624
60 - 89 days past due		1,049		17,825		2,130		5,942		1,381
90+ days past due and accruing		-		-		-		-		-
Nonaccrual		52,557		52,465		52,260		44,067		25,337
Total	$	67,924	$	77,017	$	59,287	$	54,988	$	43,342

Total delinquent loans decreased by $9.1 million to $67.9 million at September 30, 2009, from $77.0 million at June 30, 2009. While the total decreased over the quarter, nonaccrual and total delinquent loan totals remain at an elevated level. There was significant activity within the delinquency captions over the quarter. Four loans, totaling $17.6 million, moved from the 60-90 days past due category at June 30, 2009, to the nonaccrual category at September 30, 2009. Resolution of these new nonaccrual loans has been a focus of management, and management is cautiously optimistic that the vast majority of these new matters can be resolved shortly. Three of the June 30, 2009 nonaccrual loans, totaling $17.2 million, were resolved as of September 30, 2009. One of the loans was paid in full by the borrower; another was paid in full via proceeds from a bankruptcy court sale and another was resolved through sale of the note. An additional component of the June 30, 2009 nonaccrual total was transferred to REO as title was obtained for this property. As discussed earlier, the Company realized $1.5 million of nonaccrual and default interest associated with the collection of the three nonaccrual loans. An additional $500,000 of late fee income and legal expense reimbursement was also obtained in conjunction with these collections. As discussed in prior releases, the Company has continued its aggressive posture toward delinquent borrowers. The Company realizes that such actions contribute to the high level of delinquencies but believes this is the most prudent path to addressing problem loans.

Oritani Financial Corp. and Subsidiaries

Nonaccrual loans totaled $52.6 million at September 30, 2009. Several of the loans that comprise this total have been discussed in prior public releases. A current summary of the significant nonaccrual loans follows:

• Two of these loans are to one borrower and totaled $16.1 million at September 30, 2009. The loans are secured by a condominium construction project and raw land with all building approvals, both of which are in Northern New Jersey. The borrower declared bankruptcy and Oritani has provided debtor in possession financing for the completion of the condominium construction project. While one commercial unit in the project was sold over the quarter, delays continue to be encountered in finalizing the project and obtaining certificates of occupancy for the residential units. Numerous residential units are under contract providing a clear indicator of current value. Oritani charged off $2.0 million of the construction loan during the quarter ended September 30, 2009, as this portion has been determined to be an incurred loss. Combined with prior charge offs, a total of $4.0 million of this loan had been charged off as of September 30, 2009. Both loans are classified as impaired as of September 30, 2009. Specific reserves totaling $1.8 million have been recorded against these loans.

• A $7.9 million loan secured by a retail mall in Northern New Jersey. This loan is classified as nonaccrual and impaired at September 30, 2009. Oritani is in litigation with this borrower, foreclosure proceedings are progressing and a rent receiver has been placed in control of the operations of this property. The borrower has declared bankruptcy. Net cash generated from the operation of this property is being forwarded from the rent receiver to Oritani. In accordance with the results of the impairment analyses, no reserve was required for this loan as it was considered to be well collateralized. Management is cautiously optimistic this loan can be resolved shortly.

• Three loans to one borrower that total $6.6 million. These loans are secured by various warehouse properties in Rockland, Nassau and Westchester counties, New York. All three of these loans are classified as nonaccrual and impaired at September 30, 2009. Oritani is in litigation with the borrower and the guarantor, and foreclosure proceedings are progressing. A rent receiver has been appointed on all three of the properties. Two of the three entities that were formed by the borrower to hold the assets that secure the borrowings, as well as the related operating company, have been placed in bankruptcy. A trustee has been appointed for these two properties and the trustee has converted the cases to a liquidation. The bankruptcy court sale of these properties is currently scheduled for December, 2009. In accordance with the results of the impairment analyses, specific reserves totaling $600,000 have been recorded against these loans.

• A $14.1 million loan secured by a multi-tenant commercial property in Hudson County, New Jersey. The borrower has experienced cash flow difficulties. Oritani is in litigation with this borrower, foreclosure proceedings are progressing and all tenant rent payments are being made directly to Oritani. In accordance with the results of the impairment analysis for this loan, no reserve was required as the loan is considered to be well collateralized. This loan was classified as 60-89 days past due at June 30, 2009.

• A $3.1 million commercial property located in Bergen County, New Jersey. The borrower and guarantor on this loan have declared bankruptcy. They have submitted a contract for sale of the property (with a December, 2009 closing) to the bankruptcy court in an amount sufficient to fully repay the amount due to Oritani. In accordance with the results of the impairment analysis for this loan, no reserve was required as the loan is considered to be well collateralized. This loan was classified as 60-89 days past due at June 30, 2009.

Oritani Financial Corp. and Subsidiaries

• A $1.1 million multifamily loan located in Hudson County, New Jersey. The Bank and the borrower have signed a forbearance agreement and the borrower is making payments in accordance with the agreement. The loan will remain classified as nonaccrual until a greater history of satisfactory payment under the forbearance agreement is demonstrated.

• A $2.3 million residential construction loan for two luxury homes and an improved lot located in Essex County, New Jersey. The borrower encountered cash flow difficulties due to an extended construction and marketing period. The borrower requested an extension of the loan but Oritani declined the request, and we are now pursuing legal remedies. This loan was less than 30 days past due at June 30, 2009.

Other Income. Other income increased by $1.3 million to $2.5 million for the three months ended September 30, 2009, from $1.2 million for the three months ended September 30, 2008. The primary reason for the increase is a $1.0 million gain on the sale of a commercial office property that had been held and operated as a real estate investment. Service charges increased by $143,000 to $428,000 for the three months ended September 30, 2009, from $285,000 for the three months ended September 30, 2008, primarily due to payment of late charges on the resolution of delinquent loans described above.

Other Expense. Operating expenses increased by $954,000, or 16.2%, to $6.8 million for the three months ended September 30, 2009, from $5.9 million for the three months ended September 30, 2008. FDIC insurance premiums increased significantly over the quarter due to an increase in FDIC insurance rates, an increase in insurable deposits and the depletion of a credit against FDIC insurance charges. FDIC insurance premiums increased to $574,000 for the three months ended September 30, 2009, from $29,000 for the three months ended September 30, 2008. Compensation, payroll taxes and fringe benefits increased by $407,000 to $4.8 million for the three months ended September 30, 2009, from $4.4 million for the three months ended September 30, 2008. The increase was primarily due to increased compensation costs of $279,000, increased health insurance costs of $52,000 and increased payroll taxes of $29,000 as the Company has increased personnel to assist with implementing the organic growth strategy.

Income Tax Expense. Income tax expense for the three months ended September 30, 2009, was $2.9 million, due to pre-tax income of $7.4 million, resulting in an effective tax rate of 39.3%. For the three months ended September 30, 2008, income tax expense was $1.7 million, due to pre-tax income of $4.3 million, resulting in an effective tax rate of 41.1%. The change in the effective tax rate in the three months ended September 30, 2009 compared with the same period for the prior year reflects the impact of tax planning strategies and increased pre-tax earnings in relation to permanent tax items.

Liquidity and Capital Resources

The Company’s primary sources of funds are deposits, principal and interest payments on loans and mortgage-backed securities, Federal Home Loan Bank (“FHLB”) borrowings and investment maturities. While scheduled amortization of loans is a predictable source of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition. The Company has other sources of liquidity if a need for additional funds arises, including an overnight line of credit and advances from the FHLB.

Oritani Financial Corp. and Subsidiaries

At September 30, 2009, the Company had no overnight borrowings from the FHLB. The Company utilizes the overnight line from time to time to fund short-term liquidity needs. The Company had total borrowings of $508.2 million at September 30, 2009 and $509.0 million at June 30, 2009. The Company’s total borrowings at September 30, 2009, consisted of the $508.2 million in longer term borrowings with the FHLB and minor amounts due to Oritani Financial Corp., MHC. In the normal course of business, the Company routinely enters into various commitments, primarily relating to the origination of loans. At September 30, 2009, outstanding commitments to originate loans totaled $41.1 million and outstanding commitments to extend credit totaled $67.3 million. The Company expects to have sufficient funds available to meet current commitments in the normal course of business.

Time deposits scheduled to mature in one year or less totaled $623.4 million at September 30, 2009. Based upon historical experience, management estimates that a significant portion of such deposits will remain with the Company.

As of September 30, 2009, the Company exceeded all regulatory capital requirements as follows:

	Actual					Required
	Amount		Ratio			Amount		Ratio
			(Dollars in thousands)
Total capital (to risk-weighted assets)	$	261,487		18.4	%	$	113,949		8.0	%
Tier I capital (to risk-weighted assets)		243,641		17.1			56,974		4.0
Tier I capital (to average assets)		243,641		12.4			78,371		4.0

On October 14, 2008, the Treasury announced a voluntary Capital Purchase Program to encourage U.S. financial institutions to build capital and increase financing. Oritani is not participating in this program. Oritani currently supports very strong capital ratios and capital levels have not been, and are not anticipated to be, a hindrance on our ability to lend. In addition, participation in the program could limit our flexibility regarding capital management strategies such as dividends and repurchases. The Treasury and the FDIC have also announced an insurance guarantee program, whereby all funds in non-interest bearing transaction deposit account, regardless of their balance, would be covered by FDIC insurance through June 30, 2010. Oritani is a participant in this program.

Critical Accounting Policies

Note 1 to the Company’s Audited Consolidated Financial Statements for the year ended June 30, 2009, included in the Company’s Annual Report on Form 10-K, as supplemented by this report, contains a summary of significant accounting policies. Various elements of these accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments. Certain assets are carried in the consolidated Balance Sheets at estimated fair value or the lower of cost or estimated fair value. Policies with respect to the methodologies used to determine the allowance for loan losses and judgments regarding the valuation of intangible assets and securities as well as the valuation allowance against deferred tax assets are the most critical accounting policies because they are important to the presentation of the Company’s financial condition and results of operations, involve a higher degree of complexity, and require management to make difficult and subjective judgments which often require assumptions or estimates about highly uncertain matters. The use of different judgments, assumptions, and estimates could result in material differences in the results of operations or financial condition. These critical accounting policies and their application are reviewed periodically and, at least annually, with the Audit Committee of the Board of Directors. For a further discussion of the critical accounting policies of the Company, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K, for the year ended June 30, 2009.

Oritani Financial Corp. and Subsidiaries

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The majority of our assets and liabilities are monetary in nature. Consequently, our most significant form of market risk is interest rate risk. Our assets, consisting primarily of mortgage loans, have longer maturities than our liabilities, consisting primarily of deposits. As a result, a principal part of our business strategy is to manage interest rate risk and reduce the exposure of our net interest income to changes in market interest rates. Accordingly, our Board of Directors has the authority and responsibility for managing interest rate risk. Oritani Bank has established an Asset/Liability Management Committee, comprised of various members of its senior management, which is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for recommending to the Board the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors. The Asset/Liability Management Committee reports its activities to the Board on a monthly basis. An interest rate risk analysis is presented to the Board on a quarterly basis.

We have sought to manage our interest rate risk in order to minimize the exposure of our earnings and capital to changes in interest rates. As part of our ongoing asset-liability management, we currently use the following strategies to manage our interest rate risk:

(i)

originating multi-family and commercial real estate loans that generally tend to have shorter interest duration and generally reset at five years;

(ii)

originating certain construction and commercial real estate loans that have short maturities and/or monthly interest resets.

(iii)

investing in shorter duration mortgage-backed securities and securities with call provisions that are considered likely to be invoked; and

(iv)

obtaining general financing through longer-term Federal Home Loan Bank advances.

Shortening the average maturity of our interest-earning assets by increasing our investments in shorter-term loans and securities, as well as loans and securities with variable rates of interest, helps to better match the maturities and interest rates of our assets and liabilities, thereby reducing the exposure of our net interest income to changes in market interest rates. By following these strategies, we believe that we are well-positioned to react to increases in market interest rates.

Net Portfolio Value. We compute the amounts by which the net present value of cash flow from assets, liabilities and off balance sheet items (the institution’s net portfolio value or “NPV”) would change in the event of a range of assumed changes in market interest rates. A basis point equals one-hundredth of one percent, and 100 basis points equals one percent. An increase in interest rates from 3% to 4% would mean, for example, a 100 basis point increase in the “Change in Interest Rates” column below.

Oritani Financial Corp. and Subsidiaries

The table below sets forth, as of September 30, 2009, the estimated changes in our net portfolio value that would result from the designated instantaneous changes in the United States Treasury yield curve. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates and loan prepayment and deposit decay rates, and should not be relied upon as indicative of actual results.

										NPV as a Percentage of Present
				Estimated Increase (Decrease) in						Value of Assets (3)
Change in Interest				NPV								Increase
Rates (basis		Estimated										(Decrease)
points) (1)		NPV (2)		Amount			Percent			NPV Ratio (4)		(basis points)
		(Dollars in thousands)
	+200		147,190		(83,808	)		(36.3	)%		7.9		(364	)
	0		230,998		—			—			11.6		—
	-100		267,080		36,082			15.6			12.9		136

(1)

Assumes an instantaneous uniform change in interest rates at all maturities.

(2)

NPV is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.

(3)

Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.

(4)

NPV Ratio represents NPV divided by the present value of assets.

The table above indicates that at September 30, 2009, in the event of a 100 basis point decrease in interest rates, we would experience a 15.6% increase in net portfolio value. In the event of a 200 basis point increase in interest rates, we would experience a 36.3% decrease in net portfolio value. These changes in net portfolio value are within the limitations established in our asset and liability management policies.

Certain shortcomings are inherent in the methodology used in the above interest rate risk measurement. Modeling changes in net portfolio value require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the net portfolio value table presented assumes that the composition of our interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the net portfolio value table provides an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and will differ from actual results.

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There were no significant changes made in the Company’s internal controls over financial reporting or in other factors that could significantly affect the Company’s internal controls over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Oritani Financial Corp. and Subsidiaries

Part II – Other Information

Item 1. Legal Proceedings

The Company and its subsidiaries are subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s financial condition or results of operations.

Item 1A. Risk Factors

The risks set forth below, in addition to the other risks described in this quarterly report, represent material changes from those risk factors previously disclosed in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September 11, 2009, and may adversely affect our business, financial condition and operating results. In addition to the risks set forth below and the other risks described in this quarterly report, there may also be additional risks and uncertainties that are not currently known to us or that we currently deem to be immaterial that could materially and adversely affect our business, financial condition or operating results. As a result, past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. Further, to the extent that any of the information contained in this Quarterly Report on Form 10-Q constitutes forward-looking statements, the risk factors set forth below also are cautionary statements identifying important factors that could cause our actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of us.

The FDIC Has Proposed A Rule That Would Require Us To Prepay Insurance Premiums

On September 29, 2009, the Federal Deposit Insurance Corporation issued a proposed rule pursuant to which all insured depository institutions would be required to prepay their estimated assessments for the fourth quarter of 2009, and for all of 2010, 2011 and 2012. Under the proposed rule, this pre-payment would be due on December 30, 2009. Under the proposed rule, the assessment rate for the fourth quarter of 2009 and for 2010 would be based on each institution’s total base assessment rate for the third quarter of 2009, modified to assume that the assessment rate in effect on September 30, 2009 had been in effect for the entire third quarter, and the assessment rate for 2011 and 2012 would be equal to the modified third quarter assessment rate plus an additional 3 basis points. In addition, each institution’s base assessment rate for each period would be calculated using its third quarter assessment base, adjusted quarterly for an estimated 5% annual growth rate in the assessment base through the end of 2012. Based on our deposits and assessment rate at September 30, 2009, we estimate that our prepayment amount will be approximately $8.2 million. We expect that we will be able to make the prepayment from available cash on hand.

A Legislative Proposal Has Been Introduced That Would Eliminate Oritani Financial Corp.’s Primary Federal Regulator And Subject Oritani Financial Corp. To Be Treated As A Bank Holding Company Regulated By The Federal Reserve Board

The House Financial Services Committee has released a draft of proposed restructuring legislation that would implement sweeping changes to the current bank regulatory structure. The proposed legislation, developed in conjunction with the U.S. Treasury Department, would establish a Financial Services Oversight Council and merge Oritani Financial Corp.’s primary regulator, the Office of Thrift Supervision, into the Office of the Comptroller of the Currency, the primary federal regulator for national banks. The proposal, if adopted, also would subject Oritani Financial Corp. to regulation by the Federal Reserve to be regulated as a bank holding company.

Oritani Financial Corp. and Subsidiaries

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table shows Company repurchases of its common stock for each calendar month in the quarter ended September 30, 2009 and the stock repurchase plan approved by our Board of Directors.

				Total Number of	Maximum Number of
	Total Number	Average		Shares Purchased	Shares That May Yet
	of Shares	Price Paid		as part of Publicly	Be Purchased Under
Period	Repurchased	Per Share		Announced Plans	the Plans (1)
July	69,600		13.47	69,600	619,191
August	1,600		13.08	1,600	617,591
September	-		-	-	617,591
	71,200	$	13.46	71,200

(1)

On March 18, 2009, the Company announced its fourth Share Repurchase Program, which authorized the purchase of an additional 10% of its publicly-held outstanding shares of common stock, or 967,828 shares. This stock repurchase program commenced upon the completion of the third repurchase program on March 18, 2009. This program has no expiration date and has 617,591 shares yet to be purchased as of September 30, 2009.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

During the period covered by this report, the Company did not submit any matters to the vote of security holders.

Item 5. Other Information

Not applicable

Oritani Financial Corp. and Subsidiaries

Item 6. Exhibits

The following exhibits are either filed as part of this report or are incorporated herein by reference:

3.1		Charter of Oritani Financial Corp. *
3.2		Bylaws of Oritani Financial Corp. *
4		Form of Common Stock Certificate of Oritani Financial Corp. *
10.1		Employment Agreement between Oritani Financial Corp. and Kevin J. Lynch, **
10.2		Form of Employment Agreement between Oritani Financial Corp. and executive officers, **
10.3		Oritani Bank Director Retirement Plan, **
10.4		Oritani Bank Benefit Equalization Plan, **
10.5		Oritani Bank Executive Supplemental Retirement Income Agreement, **
10.6		Form of Employee Stock Ownership Plan, **
10.7		Director Deferred Fee Plan, **
10.8		Oritani Financial Corp. 2007 Equity Incentive Plan, *
14		Code of Ethics**
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*		Filed as exhibits to the Company’s Registration Statement on Form S-1, and any amendments thereto, with the Securities and Exchange Commission (Registration No. 333-137309).
**		Available on our website www.oritani.com
***		Management contract, compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ORITANI FINANCIAL CORP.

Date: November 6, 2009	/s/ Kevin J. Lynch
	Kevin J. Lynch
	President and Chief Executive Officer

Date: November 6, 2009	/s/ John M. Fields, Jr.
	John M. Fields, Jr.
	Executive Vice President and Chief Financial Officer