Income is a big part of investors' returns. Stocks, mutual funds and fixed income ideas in this column are featured because they are relatively solid in their ability to pay dividends or interest. We're giving income investors a resource to start their research for investments that give better yields with lower risk.

Its loan portfolio consists of one-to-four family mortgage loans; multi-family and commercial real estate loans; construction loans for various residential properties and certain commercial real estate properties; and consumer and other loans, including home equity lines of credit, as well as overdraft protection, commercial loans, and passbook loans.

The company, through its other subsidiaries, also operates as a life insurance agency. As of December 31, 2009, it operated 85 full-service banking offices. The company was founded in 1888 and is headquartered in Lake Success, New York.

Yes, this is in the financial sector, one of the most shunned sectors of the market, at the moment. This will change. As investors begin to see a hint of stronger loan demand and fewer loan write-offs by banks, they'll come back to the financials. In most major rallies, it's the financials that lead the way. We're not there yet.

Earnings were a bit of a disappointment recently. On July 21, second quarter results came out 5 cents shy of expectations (18 cents instead of 23 cents). Further, management warned that the interest margin will shrink for the full year which hurts profitability. On the positive side, there were fewer delinquencies, improved tanglible common equity and tier-1 capital ratios. In other words, even with lower profitability, the bank is stronger based on a healthier capital base. With the latest results, Raymond James lowered their rating on the stock to Market Perform from Out Perform.

The dividend is 52 cents a share for a yield of 4.5%. That pay out is the same as last year and in 2009. However, in 2007, it was $1.02, then $1.04 in 2008. Current dividend takes about 50% of earnings. Expect an increase in the payout as earnings grow.

First quarter eanrings were more than double last year's first period (29 cents vs 14 cents). One of the earnings' drivers: lower loan loss reserves. As fewer loans are made, and better ones, fewer loan loss reserves are required. This year, analysts think loan loss reserve will shrink by $50 million, adding about 45 cents per share to earnings. In 2009, total loan loss reserve was $200 million. To further help the bottom line, the cost of deposits continues to go lower. Interest rates to attract checking, savings and money market accounts dropped, widening the spread between what the bank pays for money and what it receives for lending it.

The loan portfolio is looking better. Early stage delinquencies (those loans that are past due on their payments by 30 to 59 days) are down almost 20% from last year. Non-performing loans, ones that haven't paid for more than 90 days, are down over 10%.

Look for the bank to do more lending in the second half as the economy, hopefully, begins to show some strength. If it doesn't, the interest rate cycle may be a factor as rates begin to rise. That would slow refinances and help the bank retain the loans it already has on its books, keeping its assets from shrinking. The bank wants to focus on multifamily (apartment) and commercial real estate loans for the rest of the year.

Essential numbers: Market Cap is $1.06 billion. Trailing P/E is 12.13. Price to sales ratio is 2.48. Price to book is .83. Opearting margin for the last 12 months was 41.72% and Profit margin was 20.92%. Return on equity was 7.14% and Return on assets was .49%. Book value per share is $13.76. Beta is 1.18. There are 92.95 million shares Outstanding with a Float of 77.67 million. Insiders own 15.67% of the stock and Institutions have 71% of the Float.

While the second quarter results were a disappointment and the stock was hit after their release, this good yielding bank deserves a closer look by Income Investors. The bank is in good financial strength, pays a solid dividend, and is looking to add more assets in areas that have shown better demand than single family housing.

One more point of interest. The stock is selling at less than 85 cents on the dollar. That is the Book value is $13.76 and you can buy the stock for $11.38. If the bank were to go out of business, theoretically, you'd make money instantly since you'd be paid $13.76 for every $11.38 you spend. Again, that's only in theory.