May 20, 2009
David Lyon, Senior Financial Analyst
United States Securities and Exchange Commission
Division of Corporate Finance
100 F Street, N.E.
Washington, DC 20549-4561
Re: Oritani Financial Corp. / File No. 001-33223
Dear Mr. Lyon,
This letter responds to the issues raised in your letter of April 17, 2009. This
letter contains the pertinent responses from our March 30, 2009 letter along
with additional proposed disclosures. The additional proposed disclosures are
formatted in bold. Please note that such proposed disclosure may need to be
revised as circumstances warrant in the future. All headings below correlate to
the headings in your correspondence of April 17, 2009.
Form 10-K for the fiscal year ended June 30, 2008
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Market Area, page 4.
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1. The draft pro forma disclosure would still include the statement: Please
see additional information regarding our Market Area under Item 1A "Risk
Factors." We would still consider the disclosure of the additional Risk
Factor detailed in our March 30, 2009 letter. We would now also include the
following information when describing the Market Area:
Housing market conditions in the New York metro area, where most of
our lending activity occurs, have deteriorated as evidenced by reduced
levels of sales, increasing inventories of houses on the market,
declining house prices and an increase in the length of time houses
remain on the market. The S&P/Case-Shiller Home Price Indices, the
leading measure of U.S. home prices, showed that the price of existing
single family homes in the New York metro area as of December, 2008,
suffered a 9.2% decline versus the prior year. RealtyTrac, a leading
online marketplace for foreclosure properties, noted in its 2008 U.S.
Foreclosure Market Report that New Jersey foreclosures in 2008 had
increased 101.2% from 2007, and that the overall foreclosure rate in
New Jersey for 2008 was 1.80%.
First Mortgage Loans, page 6.
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2. The draft pro forma disclosure to address this issue would be to strike the
sentence on page 12 of the Definitive Proxy Statement that reads "Oritani
Bank makes loans to its directors, officers and employees on the same rates
Mr. David Lyon
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and terms it offers to the general public." This statement would be
replaced with the following sentences:
Oritani Bank makes loans to its directors, officers and employees in
accordance with the federal laws and regulations described above. As
described in our Form 10-K, Oritani Bank offers its directors,
officers and employees, a 25 basis point discount off of current
Oritani rates on residential first mortgages loans secured by the
borrower's primary residence. All such loans are approved by Oritani's
Board of Directors.
Definitive Proxy Statement on Schedule 14A
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3. As described in our March 30, 2009 letter, we would include a new draft pro
forma paragraph titled Methodology. We are not proposing any changes to
that paragraph, so we are not repeating it in this letter.
We would now also reword and enhance the 4th paragraph of the Equity
Incentives section. While the emphasis of the paragraph remains the same,
the entire updated paragraph would be:
The grants were made in accordance with the terms of the Equity Plan.
The Committee initially consulted with counsel for regulatory
restrictions regarding allocations pertinent to the Equity Plan. The
Committee then contemplated the specific allocations to be made under
the Equity Plan. The Committee considered the executive's past
contributions, their individual role in completing the conversion to a
public company in 2007 and the role that the executive would play in
the Company's future. The Committee sought to grant restricted stock
awards and stock options to the named executive officers at levels
that would closely align the executive's compensation with his/her
impact in creating value for stockholders. The executive officers'
individual performance, leadership, operational effectiveness, tenure
and experience, and employment market conditions in the Company's
market were additional factors which the committee considered. The
Committee also reviewed survey data regarding awards made to executive
officers of other companies that had undertaken a mutual-to-stock
public offering. The Committee weighed all these factors and made
their initial recommendations for specific allocations to be made
under the Equity Plan. The Committee then measured their
recommendations against regulatory restrictions. No adjustments were
necessary due to regulatory restrictions. The Committee had engaged GK
Partners, an independent compensation consultant. The role of GK
Partners was to assess the committee's recommendations for grants of
stock options and restricted stock awards to the named executive
officers. GK Partners felt the allocations were appropriate, and such
allocations were finalized and approved by the Committee.
We also would now add the following sentences to the end of the Elements of
the Compensation Package section, on page17 (after the sentence that begins
"Additionally, the Company..."):
The Committee considered these items when contemplating the overall
compensation package awarded to the named executive officers. The
Committee felt that these items were appropriate given the level of
responsibility for each named executive officer and that no change to
the programs was warranted at the time.
4. In accordance with your request for disclosure of the specific peers
utilized, we would further enhance the new language in the paragraph titled
"Use of Outsiders and Survey Data." The three independent sources of
industry survey data were the executive compensation reports prepared by
the New Jersey League of Community Bankers and The Webber Survey, as well
as data contained in the report of the consulting firm, GK Partners.
The specific peers included in the GK Partners report were: Clifton
Savings Bank; Dime Community Bancshares; Greater Community Bancorp;
Investors Bancorp Inc.; Kearny Financial Corp.; Lakeland Bancorp; NBT
Bancorp Inc.; OceanFirst Financial Corp.; Partners Trust Financial;
Mr. David Lyon
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PennFed Financial Services, Inc.; Provident Financial Services, Inc.;
Provident New York; Roma Financial Corp. and Synergy Financial Corp.
5. We propose a further enhancement of the new language proposed in our
response of March 30, 2009. In the new paragraph titled Methodology
(Response item #10 in the March 30, 2009 letter), we would add the
following sentence after the sentence that reads "These amounts were then
compared to the median and average compensation detailed in the Report for
the executive's title and responsibilities."
The peer median and average compensation became a target range
considered by the Committee when contemplating the executive's salary
and cash incentive (described in the procedures below).
6. We propose adding the following table to our disclosures:
GK Partners Peer Report Information
Base Applicable Average Median
Name Salary Title Salary Salary
---- ------ ----- ------ ------
Kevin Lynch $ 500,000 CEO $ 515,700 $ 482,500
John Fields $ 200,000 CFO $ 214,000 $ 202,000
Thomas Guinan $ 200,000 4th Highest Officer $ 215,600 $ 216,500
Philip Wyks $ 189,000 5th Highest Officer $ 176,800 $ 180,500
Leonard Carlucci $ 142,420 n/a n/a n/a
7. We propose enhancing the second paragraph under Annual Cash Incentives
(page 15) as detailed below. The entire paragraph is repeated here with
only the proposed language in bold.
The payments for Messrs Lynch, Fields, and Wyks were based on the
achievement of certain goals on a Bank-wide basis as well as individual
performance goals. Bank-wide goals included financial performance of the
Company on an ROE and ROA basis as compared to a peer group.
The peer group consisted of Kearney Savings Bank; Investors Savings
Bank; Clifton Savings Bank; Roma Bank and Northfield Bank. Peer group
results were determined using the FDIC website for Statistics on
Depository Institutions. Peer data regarding ROE and ROA was obtained
for the quarterly periods ending September 30, 2007; June 30, 2007;
March 31, 2007 and December 31, 2006. The peer results were averaged
and compared to the results for Oritani Bank (from the same source)
for the same period. Oritani's ROE was 8.82%, or 2.79 times the
comparable peer result of 3.16%. Oritani's ROA was 1.16%, or 2.39
times the comparable peer result of 0.49%. The twelve month period
ended September 30, 2007 was utilized as this was the most recent
period of data available when the cash incentives were being
determined. The other bank-wide goals used for measurement were loan
portfolio growth, delinquency levels, completion of the Company's
initial public offering, staffing changes, facility renovations, and
dispositions of surplus property on favorable terms. The FDIC website
for Statistics on Depository Institutions indicated loan portfolio
growth of $124.4 million, or 19.2%, over the twelve month period ended
September 30, 2007 for Oritani Bank. Delinquency ratios over the
period were low. Noncurrent loans as a percentage of total loans were
0.07% at September 30, 2007 versus 0.06% at September 30, 2006. In the
opinion of the Committee, all the Bank-wide goals had been attained.
Mr. David Lyon
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I can be reached at (201) 497-1203, or jfields@oritani.com, if you have any
questions regarding the responses above.
Sincerely,
/s/ John M. Fields, Jr.
John M. Fields, Jr.
EVP / CFO
CC: Kevin J. Lynch, President - Oritani Financial Corp.
Nicholas Antonaccio, Director/Chairman of Audit Committee - Oritani
Financial Corp.
John J. Gorman, Esq. - Luse Gorman Pomerenk & Schick
Marc Levy, Esq. - Luse Gorman Pomerenk & Schick
Liliana Bocxe, Partner - KPMG