Exhibit 99
 | Puerto Rico Contact: Juan C. Cruz, Oriental Financial Group (787) 771-6820 | |
| U.S. Contact: Steven Anreder and Gary Fishman, Anreder & Company (212) 532-3232 |
ORIENTAL FINANCIAL GROUP REPORTS RESULTS FOR THE QUARTER
AND YEAR ENDED DECEMBER 31, 2007
AND YEAR ENDED DECEMBER 31, 2007
Continued Strong Profit Growth on Year over Year and Sequential Quarter Basis
SAN JUAN, Puerto Rico, February 7, 2008 – Oriental Financial Group Inc. (NYSE: OFG) today announced results for the fourth quarter and year ended December 31, 2007.
For the fourth quarter, the Group reported income available to common shareholders of $14.2 million, or $0.59 per common share (basic and diluted), compared to a loss of $19.3 million, or ($0.78) per share (basic and diluted), in the corresponding year ago quarter.
| • | Returns on assets (ROA) and common equity (ROE) for the fourth quarter were 1.04% and 20.08%, respectively, a significant improvement from 0.59% and 11.17%, respectively, in the preceding quarter. | |
| • | Net interest margin for the fourth quarter increased to 1.61%, up 89 basis points from the corresponding year-ago period and 15 basis points from the preceding quarter. This is the fourth consecutive quarter in which net interest margin has grown. | |
| • | Book value per common share of $12.08 as of December 31, 2007, represents an increase of 9.5% from a year ago and 6.5% from the preceding quarter. |
For the year, Oriental reported income available to common shareholders of $36.5 million, or $1.50 per common share (basic and diluted), compared to a loss of $9.9 million, or ($0.40) per share (basic and diluted), in 2006. ROA and ROE for 2007 were 0.76% and 13.52%, respectively, compared with negative returns of (0.11%) and (3.59%) for 2006, respectively.
Results for the fourth quarter of 2006 and year included $20.7 million, or $0.87 per share, in losses and write-offs, the majority of which related to the sale of lower yielding securities stemming from the repositioning of the available-for-sale securities portfolio that led to a sizeable increase in net interest income in 2007.
Commentary and Outlook
José Rafael Fernández, President and Chief Executive Officer, commented, “The favorable results achieved in the 2007 fourth quarter and year continue to reflect the success of strategies we have been pursuing.” These strategies included:
| 1. | The decision to adopt conservative lending policies starting several years ago in light of weakening economic conditions in Puerto Rico and, in our opinion, excessively aggressive interest rates and other terms being offered by other banks on commercial and mortgage loans. | |
| 2. | The repositioning of Oriental’s investment portfolio and related funding to improve margins, in line with what the Group correctly anticipated would be a more positively sloped yield curve. | |
| 3. | Growing Oriental’s franchise with the objective of integrating the delivery of banking and financial services to mid- and high-net worth clients, building recurring non-interest revenues, closely monitoring non-interest expenses, and strengthening the Group’s management team. |
“Oriental remains very well positioned, and we expect to continue to benefit from these strategies in 2008,” Mr. Fernández said, specifically citing:
| 1. | Maintaining the current profile of the investment securities portfolio while remaining attentive to market opportunities that could further improve net interest margin. | |
| 2. | Continued success in the delivery of integrated financial services. | |
| 3. | Expanded distribution of Oriental’s mortgage banking capabilities through a recently announced exclusive relationship in Puerto Rico with Primerica, a wholly owned subsidiary of Citigroup; increased market penetration in the Western and Southern parts of the Island; the Group’s relationships with realtors; and its wholesale mortgage purchasing unit. | |
| 4. | Enhancements to Oriental’s commercial lending operation, including new cash management products and an exclusive relationship with The Sage Group plc, which markets point of sale solutions in Puerto Rico. | |
| 5. | Leveraging the Group’s highly efficient, state of the art technological infrastructure, based on world class providers Metavante Corporation (for banking services), Fidelity’s National Financial Services (for wealth management), and S1 Corporation (for customer internet access). |
“With our strong capital structure, we also believe we will be able to take advantage of any good quality strategic growth opportunities that may arise,” Mr. Fernández added.
Analysis of Fourth Quarter 2007 Results of Operations
Interest income of $82.1 million increased 40.3% year over year and 9.6% quarter over quarter, primarily as a result of a higher overall yield and higher average balances of interest-earning assets. At the same time, total interest expense of $59.1 million increased only 19.9% year over year and 7.0% quarter over quarter, reflecting lower average borrowing rates, resulting in net interest income of $23.0 million, an increase of 148.6% year over year and 17.1% quarter over quarter.
Core non-interest revenue from banking and financial service sources totaled $7.7 million, approximately even with the year ago quarter, but up 14.5% from the preceding quarter. Key drivers were increased revenues from financial services and mortgage banking activities. Mortgage banking benefited from the Group’s ability to securitize and sell conforming loans in the secondary market on a more consistent basis.
Financial services’ recent performance reflects the Group’s success in expanding its business in corporate trust and retirement (including 401Ks and Caribbean Pension Consultants, the Group’s subsidiary that manages the administration of private pension plans and has an exclusive alliance with Transamerica); personal trust and retirement (including Keoghs and Individual Retirement Accounts); and wealth management and asset protection services for mid- and high-net worth customers. As a result, trust assets managed of almost $2.0 billion at December 31, 2007 represents an increase of 6.1% year over year and 1.8% quarter over quarter; and broker-dealer assets managed of $1.3 billion grew 12.0% year over year and 17.5% quarter over quarter.
Non-core non-interest income, mainly from the sale of securities and derivative activities, in the fourth quarter totaled $4.7 million compared to a loss of $16.9 million in the year ago quarter and a profit of $0.4 million in the preceding quarter.
Non-interest expenses totaled $17.0 million for the fourth quarter, 9.9% lower than the year ago quarter and 3.1% higher than the preceding quarter. Effective cost control has enabled the Group to restrain the growth of overhead costs.
December 31, 2007 Balance Sheet Analysis
Total interest earning assets of approximately $5.7 billion increased 37.2% from December 31, 2006 and 2.8% from September 30, 2007. The quarter over quarter increase reflects a 4.0%, or $177.5 million, increase in the investment securities portfolio, despite a slight 1.5%, or $18.0 million, decline in the loan portfolio. These changes are in line with management’s strategy of supplementing the generally lower level of loan originations with the purchase of high-quality investments with a favorable spread. The Group primarily invests in U.S. and Puerto Rico government agency debt obligations to emphasize safety and liquidity.
Additional funding for the new investments was provided through repurchase agreements, which also enabled the Group to continue to reduce its balance of higher cost wholesale certificates of deposit to less than $190 million as of December 31, 2007, down 26.1% year over year and down 20.2% quarter over quarter. At the same time, retail deposits increased to more than $1.0 billion as of December 31, 2007, up 8.2% year over year and up 2.4% quarter over quarter.
Residential mortgage and commercial loan production, while down year over year due to the current slowdown of the Puerto Rico economy, was up quarter over quarter. Mortgage production grew 38.1% to $35.2 million quarter over quarter, while commercial production rose more than three-fold, to $21.8 million, reflecting Oriental’s increased effectiveness in the market.
Credit Quality
Net credit losses in the fourth quarter remained relatively low at $1.4 million, or 0.47% of average loans outstanding, and $4.4 million, or 0.37%, for the year. At December 31, 2007, non-performing loans were $66.1 million (5.56% of total loans), compared to $61.5 million (5.10% of total loans) at September 30, 2007 and $38.3 million (3.14% of total loans) at December 31, 2006. The current level reflects an increase of $4.2 million quarter over quarter in non-performing residential mortgage loans, attributable to local economic conditions. As a result, in the fourth quarter the Group increased its provision for loan losses to $2.5 million (180.1% of net credit losses), compared to $1.6 million in the preceding quarter (162.9% of net credit losses), and $1.5 million in the fourth quarter of 2006 (133.8% of net credit losses).
“As previously reported, in early July we regained control of all the servicing for our outstanding mortgage loans and subcontracted it out to a leading third party servicer,” said Mr. Fernández. “This has enabled us to better monitor performance and implement aggressive loss mitigation measures which, we believe, will help stabilize our level of non-performing residential mortgage loans in the near future. Ultimately, we do not expect the increase in non-performing residential mortgage loans to translate into significantly higher losses as these loans are generally well collateralized with adequate loan-to-value ratios.”
The Group follows a conservative residential mortgage lending policy, with more than 90% of its residential mortgage portfolio consisting of fixed-rate, fully amortizing, fully documented loans that do not have the level of risk associated with subprime loans offered by certain major US mortgage loan originators. Furthermore, Oriental has never been active in negative amortization loans or adjustable rate mortgage loans, including those with teaser rates, and does not originate construction and development loans.
Capital
Stockholders’ equity amounted to $359.5 million at December 31, 2007, an increase of 5.2% compared to $341.8 million at September 30, 2007. The Group maintains capital ratios comfortably in excess of the regulatory requirements. At December 31, 2007, the Leverage Capital Ratio was 6.76% (1.7 times the minimum of 4.00%), Tier I Risk-Based Capital Ratio was 18.77% (4.7 times the minimum of 4.00%), and Total Risk-Based Capital Ratio was 19.25% (2.4 times the minimum of 8.00%).
About Oriental Financial Group
Oriental Financial Group Inc. is a diversified financial holding company operating under U.S. and Puerto Rico banking laws and regulations. Now in its 44th year in business, Oriental provides a full range of mortgage, commercial and consumer banking services through 24 financial centers in Puerto Rico, as well as financial planning, trust, insurance, investment brokerage and investment banking services. Investor information about Oriental can be found atwww.orientalfg.com.
Forward-Looking Statements
This news release may contain forward-looking statements that reflect management’s beliefs and expectations and are subject to risks and uncertainties inherent to the Group’s business, including, without limitation, the effect of economic and market conditions, the level and volatility of interest rates, and other risks and considerations detailed in the Group’s filings with the Securities and Exchange Commission. These or other factors could cause actual results to differ materially from forward-looking statements. The Group also disclaims any obligations to update information contained in this news release as a result of developments occurring after the date of issuance.
# # #
 | ORIENTAL FINANCIAL GROUP Financial Summary (NYSE: OFG) |
| QUARTER ENDED | YEAR ENDED | |||||||||||||||||||||||||||
| Summary of Operations (Dollars in thousands, except per share data): | 31-Dec-07 | 31-Dec-06 | % | 30-Sep-07 | 31-Dec-07 | 31-Dec-06 | % | |||||||||||||||||||||
Interest Income: | ||||||||||||||||||||||||||||
| Loans | $ | 19,940 | $ | 21,431 | -7.0 | % | $ | 21,699 | $ | 85,802 | $ | 76,815 | 11.7 | % | ||||||||||||||
| Investment securities | 62,198 | 37,129 | 67.5 | % | 53,227 | 203,562 | 155,496 | 30.9 | % | |||||||||||||||||||
Total interest income | 82,138 | 58,560 | 40.3 | % | 74,926 | 289,364 | 232,311 | 24.6 | % | |||||||||||||||||||
Interest Expense: | ||||||||||||||||||||||||||||
| Deposits | 13,385 | 13,126 | 2.0 | % | 13,561 | 52,794 | 46,701 | 13.0 | % | |||||||||||||||||||
| Securities sold under agreements to repurchase | 40,950 | 32,189 | 27.2 | % | 37,405 | 147,690 | 125,714 | 17.5 | % | |||||||||||||||||||
| Other borrowed funds | 4,800 | 3,992 | 20.2 | % | 4,310 | 15,150 | 15,770 | -3.9 | % | |||||||||||||||||||
Total interest expense | 59,135 | 49,307 | 19.9 | % | 55,276 | 215,634 | 188,185 | 14.6 | % | |||||||||||||||||||
Net interest income | 23,003 | 9,253 | 148.6 | % | 19,650 | 73,730 | 44,126 | 67.1 | % | |||||||||||||||||||
| Provision for loan losses | 2,486 | 1,470 | 69.1 | % | 1,614 | 6,550 | 4,388 | 49.3 | % | |||||||||||||||||||
Net interest income after provision for loan losses | 20,517 | 7,783 | 163.6 | % | 18,036 | 67,180 | 39,738 | 69.1 | % | |||||||||||||||||||
Non-Interest Income: | ||||||||||||||||||||||||||||
| Financial service revenues | 4,666 | 4,725 | -1.2 | % | 3,737 | 17,295 | 16,029 | 7.9 | % | |||||||||||||||||||
| Banking service revenues | 1,861 | 2,294 | -18.9 | % | 1,862 | 7,862 | 9,006 | -12.7 | % | |||||||||||||||||||
| Investment banking revenues | 13 | (452 | ) | 102.9 | % | 113 | 126 | 2,701 | -95.3 | % | ||||||||||||||||||
| Mortgage banking activities | 1,160 | 1,178 | -1.5 | % | 1,010 | 2,401 | 3,368 | -28.7 | % | |||||||||||||||||||
Total banking and financial service revenues | 7,700 | 7,745 | -0.6 | % | 6,722 | 27,684 | 31,104 | -11.0 | % | |||||||||||||||||||
| Net gain (loss) on sale of securities | 2,617 | (20,106 | ) | 113.0 | % | 836 | 3,822 | (17,609 | ) | 121.7 | % | |||||||||||||||||
| Net gain on derivatives | 2,459 | 3,931 | -37.4 | % | 154 | 10,997 | 3,218 | 241.7 | % | |||||||||||||||||||
| Income (loss) from other investments | 0 | 0 | — | (541 | ) | 236 | 828 | -71.5 | % | |||||||||||||||||||
| Other | (334 | ) | (691 | ) | 51.7 | % | (37 | ) | (237 | ) | (303 | ) | 21.8 | % | ||||||||||||||
Total non-interest income (loss) | 12,442 | (9,121 | ) | 236.4 | % | 7,134 | 42,502 | 17,238 | 146.6 | % | ||||||||||||||||||
Non-Interest Expenses: | ||||||||||||||||||||||||||||
| Compensation and employees’ benefits | 7,154 | 6,588 | 8.6 | % | 7,561 | 28,376 | 24,630 | 15.2 | % | |||||||||||||||||||
| Occupancy and equipment | 3,243 | 3,024 | 7.2 | % | 3,045 | 12,624 | 11,573 | 9.1 | % | |||||||||||||||||||
| Professional and service fees | 1,845 | 1,792 | 3.0 | % | 1,543 | 7,161 | 6,821 | 5.0 | % | |||||||||||||||||||
| Advertising and business promotion | 1,492 | 1,502 | -0.7 | % | 1,069 | 4,472 | 4,466 | 0.1 | % | |||||||||||||||||||
| Directors and investor relations expenses | 495 | 1,729 | -71.4 | % | 308 | 2,103 | 2,323 | -9.5 | % | |||||||||||||||||||
| Loan servicing expenses | 328 | 527 | -37.8 | % | 349 | 1,740 | 2,017 | -13.7 | % | |||||||||||||||||||
| Taxes, other than payroll and income taxes | 608 | 792 | -23.2 | % | 607 | 2,151 | 2,405 | -10.6 | % | |||||||||||||||||||
| Electronic banking charges | 479 | 463 | 3.5 | % | 431 | 1,826 | 1,914 | -4.6 | % | |||||||||||||||||||
| Clearing and wrap fees expenses | 74 | 283 | -73.9 | % | 321 | 1,070 | 1,383 | -22.6 | % | |||||||||||||||||||
| Communication | 301 | 337 | -10.7 | % | 354 | 1,302 | 1,598 | -18.5 | % | |||||||||||||||||||
| Insurance | 210 | 209 | 0.5 | % | 210 | 848 | 861 | -1.5 | % | |||||||||||||||||||
| Printing, postage, stationery and supplies | 274 | 192 | 42.7 | % | 177 | 842 | 995 | -15.4 | % | |||||||||||||||||||
| Other | 529 | 1,463 | -63.9 | % | 547 | 2,344 | 2,727 | -14.1 | % | |||||||||||||||||||
Total non-interest expenses | 17,032 | 18,901 | -9.9 | % | 16,522 | 66,859 | 63,713 | 4.9 | % | |||||||||||||||||||
Income (loss) before income taxes | 15,927 | (20,239 | ) | 178.7 | % | 8,648 | 42,823 | (6,737 | ) | 735.6 | % | |||||||||||||||||
| Income tax expense (benefit) | 551 | (2,187 | ) | 125.2 | % | 196 | 1,558 | (1,631 | ) | 195.5 | % | |||||||||||||||||
Net income (loss) | 15,376 | (18,052 | ) | 185.2 | % | 8,452 | 41,265 | (5,106 | ) | 908.2 | % | |||||||||||||||||
| Less: Dividends on preferred stock | (1,201 | ) | (1,201 | ) | 0.0 | % | (1,200 | ) | (4,802 | ) | (4,802 | ) | — | |||||||||||||||
Income available (loss) to common shareholders | $ | 14,175 | $ | (19,253 | ) | 173.6 | % | $ | 7,252 | $ | 36,463 | $ | (9,908 | ) | 468.0 | % | ||||||||||||
Page 1 of 5
| ORIENTAL FINANCIAL GROUP Financial Summary (NYSE: OFG) |
| QUARTER ENDED | YEAR ENDED | |||||||||||||||||||||||||||
| (Dollars in thousands, except per share data): | 31-Dec-07 | 31-Dec-06 | % | 30-Sep-07 | 31-Dec-07 | 31-Dec-06 | % | |||||||||||||||||||||
EARNINGS (LOSS) PER SHARE | ||||||||||||||||||||||||||||
| Basic | $ | 0.59 | $ | (0.78 | ) | 175.6 | % | $ | 0.30 | $ | 1.50 | $ | (0.40 | ) | 475.0 | % | ||||||||||||
| Diluted | $ | 0.59 | $ | (0.78 | ) | 175.6 | % | $ | 0.30 | $ | 1.50 | $ | (0.40 | ) | 475.0 | % | ||||||||||||
COMMON STOCK DATA | ||||||||||||||||||||||||||||
| Average common shares outstanding | 24,120 | 24,455 | -1.4 | % | 24,230 | 24,326 | 24,562 | -1.0 | % | |||||||||||||||||||
| Average potential common shares-options | 34 | 82 | -58.5 | % | 22 | 41 | 101 | -59.4 | % | |||||||||||||||||||
Total average shares outstanding and equivalents | 24,154 | 24,537 | -1.6 | % | 24,252 | 24,367 | 24,663 | -1.2 | % | |||||||||||||||||||
| Common shares outstanding at end of period | 24,119 | 24,121 | 24,453 | -1.4 | % | |||||||||||||||||||||||
| Book value per common share | $ | 11.35 | $ | 12.08 | $ | 11.04 | 9.5 | % | ||||||||||||||||||||
| Cash dividends per share of common stock | $ | 0.14 | $ | 0.14 | — | $ | 0.14 | $ | 0.56 | $ | 0.56 | — | ||||||||||||||||
| Cash dividends declared on common shares | $ | 3,377 | $ | 3,432 | -1.6 | % | $ | 3,377 | $ | 13,612 | $ | 13,753 | -1.0 | % | ||||||||||||||
| Pay-out ratio | 23.73 | % | -17.95 | % | 232.2 | % | 46.67 | % | 37.33 | % | -140.00 | % | 126.7 | % | ||||||||||||||
SELECTED FINANCIAL DATA | ||||||||||||||||||||||||||||
PERFORMANCE RATIOS: | ||||||||||||||||||||||||||||
| Return on average assets | 1.04 | % | -1.62 | % | 164.2 | % | 0.59 | % | 0.76 | % | -0.11 | % | 790.9 | % | ||||||||||||||
| Return on average common equity | 20.08 | % | -27.46 | % | 173.2 | % | 11.17 | % | 13.52 | % | -3.59 | % | 476.6 | % | ||||||||||||||
| Efficiency ratio | 55.47 | % | 122.44 | % | -54.7 | % | 62.65 | % | 65.93 | % | 84.69 | % | -22.2 | % | ||||||||||||||
TAX EQUIVALENT SPREAD | ||||||||||||||||||||||||||||
| Interest-earning assets | 5.74 | % | 5.25 | % | 9.3 | % | 5.59 | % | 5.91 | % | 5.18 | % | 14.1 | % | ||||||||||||||
| Tax equivalent adjustment | 1.15 | % | 1.24 | % | -7.3 | % | 1.07 | % | 1.30 | % | 1.29 | % | 0.8 | % | ||||||||||||||
| Interest-earning assets — tax equivalent | 6.89 | % | 6.49 | % | 6.2 | % | 6.66 | % | 7.21 | % | 6.47 | % | 11.4 | % | ||||||||||||||
| Interest-bearing liabilities | 4.42 | % | 4.85 | % | -8.9 | % | 4.40 | % | 4.64 | % | 4.48 | % | 3.6 | % | ||||||||||||||
| Tax equivalent interest rate spread | 2.47 | % | 1.64 | % | 50.6 | % | 2.26 | % | 2.57 | % | 1.99 | % | 29.1 | % | ||||||||||||||
| Tax equivalent interest rate margin | 2.76 | % | 1.96 | % | 40.8 | % | 2.53 | % | 2.81 | % | 2.27 | % | 23.8 | % | ||||||||||||||
NORMAL SPREAD | ||||||||||||||||||||||||||||
| Investments | 5.47 | % | 4.54 | % | 20.5 | % | 5.19 | % | 5.47 | % | 4.54 | % | 20.5 | % | ||||||||||||||
| Loans | 6.74 | % | 7.10 | % | -5.1 | % | 6.92 | % | 7.27 | % | 7.28 | % | -0.1 | % | ||||||||||||||
| Interest-earning assets | 5.74 | % | 5.25 | % | 9.3 | % | 5.59 | % | 5.91 | % | 5.18 | % | 14.1 | % | ||||||||||||||
| Deposits | 4.77 | % | 4.18 | % | 14.1 | % | 4.29 | % | 4.34 | % | 3.78 | % | 14.8 | % | ||||||||||||||
| Borrowings | 4.32 | % | 5.15 | % | -16.1 | % | 4.43 | % | 4.75 | % | 4.77 | % | -0.4 | % | ||||||||||||||
| Interest-bearing liabilities | 4.42 | % | 4.85 | % | -8.9 | % | 4.40 | % | 4.64 | % | 4.48 | % | 3.6 | % | ||||||||||||||
| Interest rate spread | 1.32 | % | 0.40 | % | 230.0 | % | 1.19 | % | 1.27 | % | 0.70 | % | 81.4 | % | ||||||||||||||
| Interest rate margin | 1.61 | % | 0.72 | % | 123.6 | % | 1.46 | % | 1.51 | % | 0.98 | % | 54.1 | % | ||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||||||||
| Investments | $ | 4,545,878 | $ | 3,150,855 | 44.3 | % | $ | 4,104,277 | $ | 3,719,368 | $ | 3,425,738 | 8.6 | % | ||||||||||||||
| Loans | 1,182,800 | 1,207,075 | -2.0 | % | 1,253,760 | 1,180,542 | 1,054,991 | 11.9 | % | |||||||||||||||||||
| Interest-earning assets | $ | 5,728,678 | $ | 4,357,930 | 31.5 | % | $ | 5,358,037 | $ | 4,899,910 | $ | 4,480,729 | 9.4 | % | ||||||||||||||
| Deposits | $ | 1,121,800 | $ | 1,256,371 | -10.7 | % | $ | 1,264,282 | $ | 1,217,476 | $ | 1,233,947 | -1.3 | % | ||||||||||||||
| Borrowings | 4,232,917 | 2,812,384 | 50.5 | % | 3,763,340 | 3,425,413 | 2,964,454 | 15.5 | % | |||||||||||||||||||
| Interest-bearing liabilities | $ | 5,354,717 | $ | 4,068,755 | 31.6 | % | $ | 5,027,622 | $ | 4,642,889 | $ | 4,198,401 | 10.6 | % | ||||||||||||||
Page 2 of 5
| ORIENTAL FINANCIAL GROUP Financial Summary (NYSE: OFG) |
| AS OF | ||||||||||||||||
| (Dollars in thousands) | 31-Dec-07 | 31-Dec-06 | % | 30-Sep-07 | ||||||||||||
BALANCE SHEET | ||||||||||||||||
Cash and cash equivalents | ||||||||||||||||
| Cash and due from banks | $ | 22,858 | $ | 15,341 | 49.0 | % | $ | 12,331 | ||||||||
| Money market investments | 61,125 | 18,729 | 226.4 | % | 57,554 | |||||||||||
Total Cash and cash equivalents | 83,983 | 34,070 | 146.5 | % | 69,885 | |||||||||||
Interest-earning assets: | ||||||||||||||||
Investments: | ||||||||||||||||
| Short term investments | 5,000 | 5,000 | 0.0 | % | 5,000 | |||||||||||
| Trading securities | 1,122 | 243 | 361.7 | % | 240 | |||||||||||
| Investment securities available-for-sale, at fair value with amortized cost of $3,063,750 (September 30, 2007 - $2,832,329; December 31, 2006 -$984,060) | 3,069,268 | 974,960 | 214.8 | % | 2,829,171 | |||||||||||
| Investment securities held-to-maturity, at amortized cost with fair value of $1,478,112 (September 30, 2007 - $1,526,876; December 31, 2006 - $1,931,720) | 1,492,887 | 1,967,477 | -24.1 | % | 1,555,671 | |||||||||||
| Other investments | 1,675 | 30,949 | -94.6 | % | 1,613 | |||||||||||
| Federal Home Loan Bank (FHLB) stock, at cost | 20,658 | 13,607 | 51.8 | % | 21,387 | |||||||||||
Total investments | 4,590,610 | 2,992,236 | 53.4 | % | 4,413,082 | |||||||||||
Loans: | ||||||||||||||||
| Mortgage loans | 989,486 | 935,432 | 5.8 | % | 998,393 | |||||||||||
| Commercial loans, mainly secured by real estate | 157,198 | 241,702 | -35.0 | % | 159,477 | |||||||||||
| Consumer loans | 29,245 | 35,772 | -18.2 | % | 30,008 | |||||||||||
Loans receivable, gross | 1,175,929 | 1,212,906 | -3.0 | % | 1,187,878 | |||||||||||
| Less: Deferred loan fees, net | (2,875 | ) | (3,123 | ) | 7.9 | % | (2,927 | ) | ||||||||
Loans receivable | 1,173,054 | 1,209,783 | -3.0 | % | 1,184,951 | |||||||||||
| Allowance for loan losses | (10,161 | ) | (8,016 | ) | -26.8 | % | (9,055 | ) | ||||||||
Loans receivable, net | 1,162,893 | 1,201,767 | -3.2 | % | 1,175,896 | |||||||||||
| Mortgage loans held for sale | 16,672 | 10,603 | 57.2 | % | 21,607 | |||||||||||
Total loans, net | 1,179,565 | 1,212,370 | -2.7 | % | 1,197,503 | |||||||||||
Total interest-earning assets | 5,770,175 | 4,204,606 | 37.2 | % | 5,610,585 | |||||||||||
| Securities and loans sold but not yet delivered | — | 6,430 | -100.0 | % | 45,866 | |||||||||||
| Accrued interest receivable | 52,315 | 27,940 | 87.2 | % | 33,162 | |||||||||||
| Premises and equipment, net | 21,779 | 20,153 | 8.1 | % | 20,124 | |||||||||||
| Deferred tax asset, net | 10,362 | 14,150 | -26.8 | % | 14,136 | |||||||||||
| Foreclosed real estate | 4,207 | 4,864 | -13.5 | % | 4,349 | |||||||||||
| Investment in equity indexed options | 40,709 | 34,216 | 19.0 | % | 36,738 | |||||||||||
| Investment in limited partnership | — | 11,913 | -100.0 | % | — | |||||||||||
| Prepaid expenses | 2,701 | 2,152 | 25.5 | % | 3,214 | |||||||||||
| Investment in Statutory Trusts | 1,086 | 1,086 | 0.0 | % | 1,086 | |||||||||||
| Goodwill | 2,006 | 2,006 | 0.0 | % | 2,006 | |||||||||||
| Servicing asset | 2,526 | 1,507 | 67.6 | % | 2,213 | |||||||||||
| Accounts receivable and other assets | 8,006 | 6,893 | 16.1 | % | 13,825 | |||||||||||
Total assets | $ | 5,999,855 | $ | 4,371,986 | 37.2 | % | $ | 5,857,189 | ||||||||
Interest-bearing liabilities: | ||||||||||||||||
Deposits: | ||||||||||||||||
| Demand deposits | $ | 119,152 | $ | 132,434 | -10.0 | % | $ | 110,172 | ||||||||
| Savings accounts | 387,790 | 266,184 | 45.7 | % | 338,128 | |||||||||||
| Individual retirement accounts | 317,744 | 322,873 | -1.6 | % | 314,851 | |||||||||||
| Retail certificates of deposit | 232,239 | 255,239 | -9.0 | % | 268,982 | |||||||||||
| Total Retail Deposits | 1,056,925 | 976,730 | 8.2 | % | 1,032,133 | |||||||||||
| Wholesale certificates of deposit | 189,495 | 256,258 | -26.1 | % | 237,572 | |||||||||||
Total deposits | 1,246,420 | 1,232,988 | 1.1 | % | 1,269,705 | |||||||||||
| ORIENTAL FINANCIAL GROUP Financial Summary (NYSE: OFG) |
| AS OF | ||||||||||||||||
| (Dollars in thousands) | 31-Dec-07 | 31-Dec-06 | % | 30-Sep-07 | ||||||||||||
Borrowings: | ||||||||||||||||
| Federal funds purchased and other short term borrowings | 27,460 | 13,568 | 102.4 | % | 27,246 | |||||||||||
| Securities sold under agreements to repurchase | 3,861,411 | 2,535,923 | 52.3 | % | 3,809,709 | |||||||||||
| Advances from FHLB | 331,898 | 182,489 | 81.9 | % | 348,114 | |||||||||||
| Subordinated capital notes | 36,083 | 36,083 | — | 36,083 | ||||||||||||
| Term notes | — | 15,000 | -100.0 | % | — | |||||||||||
Total borrowings | 4,256,852 | 2,783,063 | 53.0 | % | 4,221,152 | |||||||||||
Total interest-bearing liabilities | 5,503,272 | 4,016,051 | 37.0 | % | 5,490,857 | |||||||||||
Securities and loans purchased but not yet received | 111,431 | — | 100.0 | % | — | |||||||||||
Accrued expenses and other liabilities | 25,691 | 19,509 | 31.7 | % | 24,537 | |||||||||||
Total liabilities | 5,640,394 | 4,035,560 | 39.8 | % | 5,515,394 | |||||||||||
Preferred Equity | 68,000 | 68,000 | — | 68,000 | ||||||||||||
Common Equity: | ||||||||||||||||
| Common stock | 25,557 | 25,431 | 0.5 | % | 25,556 | |||||||||||
| Additional paid-in capital | 210,073 | 209,033 | 0.5 | % | 210,006 | |||||||||||
| Legal surplus | 40,573 | 36,245 | 11.9 | % | 39,298 | |||||||||||
| Retained earnings | 45,296 | 26,772 | 69.2 | % | 35,773 | |||||||||||
| Treasury stock, at cost | (17,023 | ) | (12,956 | ) | -31.4 | % | (17,042 | ) | ||||||||
| Accumulated other comprehensive loss | (13,015 | ) | (16,099 | ) | 19.2 | % | (19,796 | ) | ||||||||
Total common equity | 291,461 | 268,426 | 8.6 | % | 273,795 | |||||||||||
Stockholders’ equity | 359,461 | 336,426 | 6.8 | % | 341,795 | |||||||||||
Total liabilities and stockholders’ equity | $ | 5,999,855 | $ | 4,371,986 | 37.2 | % | $ | 5,857,189 | ||||||||
CAPITAL RATIOS | ||||||||||||||||
| Leverage Capital Ratio | 6.76 | % | 8.42 | % | -19.7 | % | 6.79 | % | ||||||||
| Minimum Leverage Capital Ratio Required | 4.00 | % | 4.00 | % | 4.00 | % | ||||||||||
| Actual Tier 1 Capital | $ | 400,321 | $ | 372,558 | 7.5 | % | $ | 385,661 | ||||||||
| Minimum Tier 1 Capital Required | $ | 236,847 | $ | 176,987 | 33.8 | % | $ | 227,342 | ||||||||
| Tier 1 Risk-Based Capital Ratio | 18.77 | % | 21.57 | % | -13.0 | % | 17.77 | % | ||||||||
| Minimum Tier 1 Risk-Based Capital Ratio Required | 4.00 | % | 4.00 | % | 4.00 | % | ||||||||||
| Actual Tier 1 Risk-Based Capital | $ | 400,321 | $ | 372,558 | 7.5 | % | $ | 385,661 | ||||||||
| Minimum Tier 1 Risk-Based Capital Required | $ | 85,292 | $ | 67,830 | 25.7 | % | $ | 86,817 | ||||||||
| Total Risk-Based Capital Ratio | 19.25 | % | 22.04 | % | -12.7 | % | 18.19 | % | ||||||||
| Minimum Total Risk-Based Capital Ratio Required | 8.00 | % | 8.00 | % | 8.00 | % | ||||||||||
| Actual Total Risk-Based Capital | $ | 410,482 | $ | 380,574 | 7.9 | % | $ | 394,716 | ||||||||
| Minimum Total Risk-Based Capital Required | $ | 170,583 | $ | 135,677 | 25.7 | % | $ | 173,634 | ||||||||
| Tangible Common Equity to Total Assets | 4.82 | % | 6.09 | % | -20.9 | % | 4.64 | % | ||||||||
SELECTED FINANCIAL DATA AT PERIOD-END | ||||||||||||||||
| Trust Assets Managed | $ | 1,962,226 | $ | 1,848,596 | 6.10 | % | $ | 1,927,409 | ||||||||
| Broker-Dealer Assets Gathered | 1,281,168 | 1,143,668 | 12.0 | % | 1,090,255 | |||||||||||
Total Assets Managed | 3,243,394 | 2,992,264 | 8.4 | % | 3,017,664 | |||||||||||
| Assets owned | 5,999,855 | 4,371,986 | 37.2 | % | 5,857,189 | |||||||||||
Total financial assets managed and owned | $ | 9,243,249 | $ | 7,364,250 | 25.5 | % | $ | 8,874,853 | ||||||||
Number of financial centers | 24 | 25 | -4.0 | % | 24 | |||||||||||
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| ORIENTAL FINANCIAL GROUP Financial Summary (NYSE: OFG) |
| QUARTER ENDED | YEAR ENDED | |||||||||||||||||||||||||||
| (Dollars in thousands) | 31-Dec-07 | 31-Dec-06 | % | 30-Sep-07 | 31-Dec-07 | 31-Dec-06 | % | |||||||||||||||||||||
Loan Production and Purchases Summary: | ||||||||||||||||||||||||||||
| Mortgage loans production | $ | 35,154 | $ | 75,041 | -53.2 | % | $ | 25,461 | $ | 146,919 | $ | 277,311 | -47.0 | % | ||||||||||||||
| Mortgage loans purchased | 389 | 10,099 | -96.1 | % | 52,563 | 101,630 | 201,177 | -49.5 | % | |||||||||||||||||||
| Total mortgage | 35,543 | 85,140 | -58.3 | % | 78,024 | 248,549 | 478,488 | -48.1 | % | |||||||||||||||||||
| Commercial | 21,758 | 15,558 | 39.9 | % | 6,454 | 48,745 | 58,095 | -16.1 | % | |||||||||||||||||||
| Consumer | 1,470 | 2,302 | -36.1 | % | 2,597 | 7,201 | 16,634 | -56.7 | % | |||||||||||||||||||
| Total loan production and purchases | $ | 58,771 | $ | 103,000 | -42.9 | % | $ | 87,075 | $ | 304,495 | $ | 553,217 | -45.0 | % | ||||||||||||||
CREDIT DATA | ||||||||||||||||||||||||||||
Net credit losses: | ||||||||||||||||||||||||||||
| Mortgage | $ | 740 | $ | 502 | 47.4 | % | $ | 248 | $ | 2,014 | $ | 855 | 135.6 | % | ||||||||||||||
| Commercial | 12 | 40 | -70.0 | % | 248 | 253 | 161 | 57.1 | % | |||||||||||||||||||
| Consumer | 628 | 557 | 12.7 | % | 495 | 2,138 | 1,985 | 7.7 | % | |||||||||||||||||||
| Total net credit losses | $ | 1,380 | $ | 1,099 | 25.6 | % | $ | 991 | $ | 4,405 | $ | 3,001 | 46.8 | % | ||||||||||||||
| Net credit losses to average loans outstanding | 0.47 | % | 0.36 | % | 30.6 | % | 0.32 | % | 0.37 | % | 0.28 | % | 32.10 | % | ||||||||||||||
| AS OF | ||||||||||||||||
| 30-Sep-07 | 31-Dec-07 | 31-Dec-06 | % | |||||||||||||
| Allowance for loan losses | $ | 9,055 | $ | 10,161 | $ | 8,016 | 26.8 | % | ||||||||
| Allowance coverage ratios: | ||||||||||||||||
| Allowance for loan losses to total loans | 0.75 | % | 0.85 | % | 0.66 | % | 28.8 | % | ||||||||
| Allowance for loan losses to non-performing loans | 14.72 | % | 15.37 | % | 20.93 | % | -26.6 | % | ||||||||
| Allowance for loan losses to non-residential non-performing loans | 316.28 | % | 314.39 | % | 205.86 | % | 52.7 | % | ||||||||
| Non-performing assets summary: | ||||||||||||||||
| Mortgage | $ | 58,664 | $ | 62,878 | $ | 34,404 | 82.8 | % | ||||||||
| Commercial, mainly real estate | 2,257 | 2,414 | 3,167 | -23.8 | % | |||||||||||
| Consumer | 606 | 818 | 727 | 12.6 | % | |||||||||||
| Non-performing loans | 61,527 | 66,110 | 38,298 | 72.6 | % | |||||||||||
| Foreclosed properties | 4,349 | 4,207 | 4,864 | -13.5 | % | |||||||||||
| Non-performing assets | $ | 65,876 | $ | 70,317 | $ | 43,162 | 62.9 | % | ||||||||
| Non-performing loans to total loans | 5.10 | % | 5.56 | % | 3.14 | % | 77.1 | % | ||||||||
| Non-performing loans to total assets | 1.05 | % | 1.10 | % | 0.88 | % | 25.8 | % | ||||||||
| Non-performing assets to total assets | 1.12 | % | 1.17 | % | 0.99 | % | 18.7 | % | ||||||||
| Non-performing assets to total capital | 19.27 | % | 19.56 | % | 12.83 | % | 52.5 | % | ||||||||
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