Exhibit 99
 | Puerto Rico Contact: | |
| Marilyn Santiago-Colón, | ||
| Oriental Financial Group Inc. | ||
| (787) 993-4648 | ||
| U.S. Contact: | ||
| Steven Anreder and Gary Fishman, | ||
| Anreder & Company | ||
| (212) 532-3232 |
ORIENTAL FINANCIAL GROUP REPORTS STRONG RESULTS FOR THE
FOURTH QUARTER ENDED DECEMBER 31, 2008
FOURTH QUARTER ENDED DECEMBER 31, 2008
SAN JUAN, Puerto Rico, March 10, 2009 – Oriental Financial Group Inc. (NYSE: OFG) today announced results for the fourth quarter and year ended December 31, 2008.
For the quarter, the Group reported income available to common shareholders of $39.2 million, an increase of 176.7% over the year ago quarter’s $14.2 million. Income per common share (basic and diluted) of $1.61 was 172.9% greater than the $0.59 reported in the year ago quarter. Fourth quarter 2008 highlights included:
| • | Strong performance in core revenues, with net interest income of $29.8 million or 6.2% higher than in the previous quarter, and banking and financial service revenues of $6.6 million or 5.3% higher than in the previous quarter. |
| • | Gain of $25.2 million on the sale of securities, as Oriental took advantage of the sharp increase in fair values, the result of the U.S. Treasury’s plan to purchase such securities in the secondary market, combined with reductions in the federal funds target rate, twice in October and once in December. This gain included $14.4 million from the sale on December 31, 2008 of $820.6 million of held-to-maturity (HTM) agency-issued securities. The proceeds from such sale were reinvested after year-end in similar quality agency-issued securities at a higher average yield. The remaining securities in the HTM portfolio were transferred to the available-for-sale (AFS) portfolio on that date. |
| • | Loss of $2.5 million, representing a provision for mortgage loan tax credits for new homeowners. The credits were instituted by the Commonwealth of Puerto Rico in 2008, but it is now doubtful whether these will be granted. |
| • | Income tax benefit of $3.2 million, primarily reflecting an increase in the deferred tax asset. |
As a result of Oriental’s strong performance, regulatory capital and total common equity improved on a sequential quarter basis, with tier-1 regulatory capital increasing 8.4% to $389.2 million at December 31, 2008, book value per common share increasing 9.8% to $7.86, and Tangible Common Equity to Total Assets increasing to 3.05% from 2.91%.
Commentary and Outlook
Commenting on fourth quarter results and Oriental’s 2009 outlook, José Rafael Fernández, President and Chief Executive Officer, said, “We remain well positioned to benefit from our strategies in the foreseeable future, recognizing the fact that our investment securities portfolio will continue to be affected by conditions in financial markets around the world.”
“Despite the recession in Puerto Rico, we are successfully making inroads with our target clientele, resulting in satisfactory levels of loan production and banking and financial service revenues, considering today’s environment. For the year, total loan production of $290.1 million was up 43% compared to 2007, with increases in originations of 56.5% in residential mortgages and 14.5% in commercial loans, most of which are collateralized by real estate properties.”
“While Puerto Rico also continues to be challenging from a credit point of view, our conservative strategies have minimized our exposure, placing us in a good position going forward. Because of favorable average FICO scores, loan to value ratios and sufficient reserves, even if non-performing loans increase, we expect to continue providing credit to homeowners and businesses in Puerto Rico, while experiencing low net credit losses.”
Fourth Quarter 2008 Income Statement
Net interest income of $29.8 million increased 29.5% from the year ago quarter, reflecting higher overall yield (5.78% versus 5.73%) and average interest-earning assets (up 5.1%) combined with lower average rates paid on deposits and borrowings (4.01% versus 4.42%). Net interest margin increased to 1.98% compared to 1.61% in the year ago quarter. On a tax-equivalent basis, the net interest margin increased to 3.90% as compared to 3.49% in the year ago quarter.
While down from a year ago, total banking and financial service revenues of $6.6 million were up 5.3% sequentially. Recent growth reflects increased mortgage banking revenues due to the securitization and sale of conventional mortgages into the secondary market and increased financial services revenues from brokerage activity. Banking service fees remained relatively stable on a sequential basis as growth in commercial activity offset declines in consumer activity.
Assets under management, which generate recurring fees for the Group’s financial service businesses, stood at $2.9 billion at December 31, 2008, down 5.7% from September 30, 2008. A relatively high proportion of fixed income investments in the mix helped to offset the general decline in equity markets.
Non-interest expenses of $18.7 million increased 10.0% from the year ago quarter and 3.0% sequentially. The efficiency ratio improved to 51.49% from 55.48% in the year ago quarter and 53.03% in the previous quarter.
December 31, 2008 Balance Sheet Highlights
The average balance of the investment securities portfolio was $4.8 billion during the fourth quarter, up 5.4% from the year ago quarter and up slightly from the previous quarter. Approximately 84% of the portfolio consists of fixed-rate mortgage-backed securities or notes, guaranteed or issued by FNMA, FHLMC, or GNMA and U.S. agency senior debt obligations, and thus backed by a U.S. government sponsored entity or the full faith and credit of the U.S. government (82%), and Puerto Rico Government and agency obligations (2%). The remaining 16% consists of non-agency collateralized mortgage obligations (13%), the majority of which are backed by prime fixed-rate residential mortgage collateral, and structured credit investments (3%).
The average balance of the loan portfolio was $1.2 billion during the quarter, up 4.1% from the December 2007 quarter and up slightly from the preceding quarter. Loan production of $68.5 million was up 17.3% from the year ago quarter, as Oriental’s capital levels and low credit losses enabled it to continue prudent lending. Mortgage originations of $55.5 million increased 56.2% year over year and were level quarter over quarter. The average FICO score was 727 and the average loan to value ratio was 80% on the mortgage loans originated in the fourth quarter. While down from a year ago, commercial originations rebounded to the $14.0 million level, up from $10.9 million in the September 2008 quarter, and were in line with the $15 million quarterly range in the first half of 2008.
Total deposits of $1.8 billion increased 43.2% from the year ago quarter and 17.7% from the previous quarter, representing 30.2% of interest bearing liabilities, versus 22.6% at December 31, 2007 and 26.9% at September 30, 2008.
Credit Quality
Non-performing loans of $77.5 million at December 31, 2008 increased 17.2% from the year ago quarter and 12.9% on a sequential basis. Foreclosed properties increased to $9.2 million from $8.2 million at September 30, 2008. Net credit losses for the year rose $323,000, to $4.7 million, representing 0.39% of average loans outstanding versus 0.37% in 2007. The allowance for loan losses stood at $14.3 million (1.16% of total loans) at December 31, 2008, compared to $12.5 million (1.01% of total loans) at September 30, 2008.
Based on historical performance, the Group does not expect non-performing loans to result in significantly higher losses as most are well-collateralized with adequate loan-to-value ratios. The Group follows a sound residential mortgage lending policy, with more than 90% of its residential mortgage loan portfolio consisting of fixed-rate, fully amortizing, fully documented loans that do not have the level of risk generally associated with subprime loans.
Capital
Stockholders’ equity of $259.1 million and total common equity of $191.1 million at December 31, 2008 were $17.1 million higher than September 30, 2008 levels, representing increases of 7.0% and 9.8%, respectively, mainly as a result of the net income for the quarter (less the dividends declared), partially offset by a net decrease in the fair value of the AFS securities portfolio.
The Group maintains capital ratios in excess of regulatory requirements. At December 31, 2008, the Leverage Capital Ratio was 6.38% (1.6 times the minimum of 4.00% and up 40 bps from September 30, 2008); Tier I Risk-Based Capital Ratio was 17.11% (4.3 times the minimum of 4.00% and up 118 bps), and the Total Risk-Based Capital Ratio was 17.73% (2.2 times the minimum of 8.00% and up 124 bps). In dollars, Leverage Capital and Tier I Risk-Based Capital of $389.2 million increased $30.1 million, or 8.4% from September 30, 2008, and Total Risk-Based Capital of $403.5 million increased $31.9 million or 8.6%.
2008 Results
For the year ended December 31, 2008, the Group reported income available to common shareholders of $22.0 million compared to $36.5 million in 2007, with income per common share (diluted) of $0.90 compared to $1.50. Excluding the other than temporarily impairment loss of $55.8 million, net of tax ($2.29 per diluted share), reported in the third quarter of 2008, the Group had income available to common shareholders of $77.8 million, or $3.19 per common share (basic and diluted).
Non-GAAP Financial Measures
From time to time, the Group uses certain non-GAAP measures of financial performance to supplement the financial statements presented in accordance with GAAP. The Group presents non-GAAP measurements when we believe that the additional information is useful and meaningful to investors. Non-GAAP measurements do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. The presentation of non-GAAP measurements is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP.
We have reported and discussed our results of operations for 2008 herein both with and without the effect of OTTI charges in the September 2008 quarter. We believe that, given the nature of these items, it is useful to state what our results of operations would have been without them so that investors can see the financial trends for our continuing business.
 | ORIENTAL FINANCIAL GROUP Financial Summary (NYSE: OFG) |
| QUARTER ENDED | YEAR ENDED | |||||||||||||||||||||||||||
| Summary of Operations (Dollars in thousands, except per share data): | 31-Dec-08 | 31-Dec-07 | % | 30-Sep-08 | 31-Dec-08 | 31-Dec-07 | % | |||||||||||||||||||||
Interest Income: | ||||||||||||||||||||||||||||
| Loans | $ | 19,684 | $ | 19,940 | -1.3 | % | $ | 19,971 | $ | 79,165 | $ | 85,802 | -7.7 | % | ||||||||||||||
| Investment securities and other | 67,352 | 62,198 | 8.3 | % | 64,773 | 259,874 | 203,562 | 27.7 | % | |||||||||||||||||||
Total interest income | 87,036 | 82,138 | 6.0 | % | 84,744 | 339,039 | 289,364 | 17.2 | % | |||||||||||||||||||
Interest Expense: | ||||||||||||||||||||||||||||
| Deposits | 13,035 | 13,385 | -2.6 | % | 12,202 | 49,781 | 52,794 | -5.7 | % | |||||||||||||||||||
| Securities sold under agreements to repurchase | 40,459 | 40,951 | -1.2 | % | 40,456 | 161,363 | 147,690 | 9.3 | % | |||||||||||||||||||
| Other borrowed funds | 3,766 | 4,800 | -21.5 | % | 4,045 | 16,584 | 15,150 | 9.5 | % | |||||||||||||||||||
Total interest expense | 57,260 | 59,136 | -3.2 | % | 56,703 | 227,728 | 215,634 | 5.6 | % | |||||||||||||||||||
Net interest income | 29,776 | 23,002 | 29.4 | % | 28,041 | 111,311 | 73,730 | 51.0 | % | |||||||||||||||||||
| Provision for loan losses | 3,280 | 2,486 | 31.9 | % | 1,950 | 8,860 | 6,550 | 35.3 | % | |||||||||||||||||||
Net interest income after provision for loan losses | 26,496 | 20,516 | 29.1 | % | 26,091 | 102,451 | 67,180 | 52.5 | % | |||||||||||||||||||
Non-Interest Income: | ||||||||||||||||||||||||||||
| Financial service revenues | 3,985 | 4,666 | -14.6 | % | 3,756 | 16,481 | 17,295 | -4.7 | % | |||||||||||||||||||
| Banking service revenues | 1,398 | 1,861 | -24.9 | % | 1,406 | 5,726 | 7,862 | -27.2 | % | |||||||||||||||||||
| Investment banking revenues | — | 13 | 0.0 | % | 200 | 950 | 126 | 654.0 | % | |||||||||||||||||||
| Mortgage banking activities | 1,224 | 1,159 | 5.6 | % | 910 | 3,685 | 2,401 | 53.5 | % | |||||||||||||||||||
Total banking and financial service revenues | 6,607 | 7,699 | -14.2 | % | 6,272 | 26,842 | 27,684 | -3.0 | % | |||||||||||||||||||
| Net gain (loss) on: | ||||||||||||||||||||||||||||
| Sales of securities | 25,162 | 2,594 | 870.0 | % | 386 | 35,070 | 2,953 | 1087.6 | % | |||||||||||||||||||
| Other than temporary impairments | — | — | 0.0 | % | (58,804 | ) | (58,804 | ) | — | -100.0 | % | |||||||||||||||||
| Derivatives | 304 | 2,459 | -87.6 | % | (5,522 | ) | (12,943 | ) | 10,997 | -217.7 | % | |||||||||||||||||
| Mortgage tax credits | (2,480 | ) | — | -100.0 | % | — | (2,480 | ) | — | -100.0 | % | |||||||||||||||||
| Other investments | 16 | 24 | -33.3 | % | 16 | 148 | 1,174 | -87.4 | % | |||||||||||||||||||
| Trading securities | 19 | 23 | -17.4 | % | (31 | ) | (13 | ) | 23 | -156.2 | % | |||||||||||||||||
| Foreclosed real estate | (218 | ) | (358 | ) | 39.1 | % | 58 | (670 | ) | (349 | ) | -92.0 | % | |||||||||||||||
| Other | 1 | — | 100.0 | % | 609 | 608 | 20 | 2940.0 | % | |||||||||||||||||||
Total non-interest income (loss), net | 29,411 | 12,441 | 136.4 | % | (57,016 | ) | (12,242 | ) | 42,502 | -128.8 | % | |||||||||||||||||
Non-Interest Expenses: | ||||||||||||||||||||||||||||
| Compensation and employee benefits | 7,291 | 7,154 | 1.9 | % | 7,742 | 30,572 | 28,376 | 7.7 | % | |||||||||||||||||||
| Occupancy and equipment | 3,630 | 3,243 | 11.9 | % | 3,561 | 13,843 | 12,624 | 9.7 | % | |||||||||||||||||||
| Professional and service fees | 2,599 | 1,845 | 40.9 | % | 2,457 | 9,203 | 7,161 | 28.5 | % | |||||||||||||||||||
| Advertising and business promotion | 1,213 | 1,492 | -18.7 | % | 847 | 3,970 | 4,472 | -11.2 | % | |||||||||||||||||||
| Taxes, other than payroll and income taxes | 652 | 608 | 7.2 | % | 644 | 2,514 | 2,151 | 16.9 | % | |||||||||||||||||||
| Insurance | 622 | 210 | 196.2 | % | 618 | 2,421 | 848 | 185.5 | % | |||||||||||||||||||
| Electronic banking charges | 484 | 479 | 1.0 | % | 428 | 1,726 | 1,826 | -5.5 | % | |||||||||||||||||||
| Loan servicing expenses | 361 | 328 | 10.1 | % | 352 | 1,383 | 1,740 | -20.5 | % | |||||||||||||||||||
| Clearing and wrap fees expenses | 349 | 73 | 378.1 | % | 294 | 1,250 | 1,070 | 16.8 | % | |||||||||||||||||||
| Communication | 328 | 301 | 9.0 | % | 314 | 1,292 | 1,302 | -0.8 | % | |||||||||||||||||||
| Directors and investor relations | 305 | 495 | -38.4 | % | 273 | 1,159 | 2,103 | -44.9 | % | |||||||||||||||||||
| Other | 901 | 804 | 12.1 | % | 667 | 3,409 | 3,187 | 7.0 | % | |||||||||||||||||||
Total non-interest expenses | 18,735 | 17,032 | 10.0 | % | 18,197 | 72,742 | 66,860 | 8.8 | % | |||||||||||||||||||
Income (loss) before income taxes | 37,172 | 15,925 | 133.4 | % | (49,122 | ) | 17,467 | 42,822 | -59.2 | % | ||||||||||||||||||
| Income tax expense (benefit) | (3,240 | ) | 551 | -688.0 | % | (4,226 | ) | (9,323 | ) | 1,558 | -698.4 | % | ||||||||||||||||
Net income (loss) | 40,412 | 15,374 | 162.9 | % | (44,896 | ) | 26,790 | 41,264 | -35.1 | % | ||||||||||||||||||
| Less: Dividends on preferred stock | (1,201 | ) | (1,201 | ) | — | (1,200 | ) | (4,802 | ) | (4,802 | ) | — | ||||||||||||||||
Income available (loss) to common shareholders | $ | 39,211 | $ | 14,173 | 176.7 | % | $ | (46,096 | ) | $ | 21,988 | $ | 36,462 | -39.7 | % | |||||||||||||
Page 1
| ORIENTAL FINANCIAL GROUP Financial Summary (NYSE: OFG) |
| QUARTER ENDED | YEAR ENDED | |||||||||||||||||||||||||||
| (Dollars in thousands, except per share data): | 31-Dec-08 | 31-Dec-07 | % | 30-Sep-08 | 31-Dec-08 | 31-Dec-07 | % | |||||||||||||||||||||
INCOME (LOSS) PER COMMON SHARE | ||||||||||||||||||||||||||||
| Basic | $ | 1.61 | $ | 0.59 | 172.9 | % | ($1.90 | ) | $ | 0.91 | $ | 1.50 | -39.3 | % | ||||||||||||||
| Diluted | $ | 1.61 | $ | 0.59 | 172.9 | % | ($1.89 | ) | $ | 0.90 | $ | 1.50 | -40.0 | % | ||||||||||||||
COMMON STOCK DATA | ||||||||||||||||||||||||||||
| Average common shares outstanding | 24,295 | 24,120 | 0.7 | % | 24,292 | 24,260 | 24,326 | -0.3 | % | |||||||||||||||||||
| Average potential common shares-options | 16 | 34 | -52.9 | % | 82 | 67 | 41 | 63.4 | % | |||||||||||||||||||
Total average shares outstanding and equivalents | 24,311 | 24,154 | 0.6 | % | 24,384 | 24,327 | 24,367 | -0.2 | % | |||||||||||||||||||
| Cash dividends per share of common stock | $ | 0.14 | $ | 0.14 | — | $ | 0.14 | $ | 0.56 | $ | 0.56 | — | ||||||||||||||||
| Cash dividends declared on common shares | $ | 3,402 | $ | 3,377 | 0.7 | % | $ | 3,404 | $ | 13,608 | $ | 13,612 | 0.0 | % | ||||||||||||||
| Pay-out ratio | 8.70 | % | 23.73 | % | -63.3 | % | -7.37 | % | 61.54 | % | 37.33 | % | 64.9 | % | ||||||||||||||
SELECTED FINANCIAL DATA | ||||||||||||||||||||||||||||
PERFORMANCE RATIOS: | ||||||||||||||||||||||||||||
| Return on average assets | 2.57 | % | 1.04 | % | 147.10 | % | -2.99 | % | 0.43 | % | 0.76 | % | -43.4 | % | ||||||||||||||
| Return on average common equity | 99.67 | % | 20.07 | % | 396.6 | % | -88.58 | % | 9.51 | % | 13.52 | % | -29.7 | % | ||||||||||||||
| Efficiency ratio | 51.49 | % | 55.48 | % | -7.2 | % | 53.03 | % | 52.65 | % | 65.93 | % | -20.1 | % | ||||||||||||||
TAX EQUIVALENT SPREAD | ||||||||||||||||||||||||||||
| Interest-earning assets | 5.78 | % | 5.73 | % | 0.9 | % | 5.67 | % | 5.68 | % | 5.66 | % | 0.4 | % | ||||||||||||||
| Tax equivalent adjustment | 1.92 | % | 1.89 | % | 1.6 | % | 1.87 | % | 1.88 | % | 1.89 | % | -0.5 | % | ||||||||||||||
| Interest-earning assets — tax equivalent | 7.70 | % | 7.62 | % | 1.0 | % | 7.54 | % | 7.56 | % | 7.55 | % | 0.1 | % | ||||||||||||||
| Interest-bearing liabilities | 4.01 | % | 4.42 | % | -9.3 | % | 4.04 | % | 4.06 | % | 4.47 | % | -9.2 | % | ||||||||||||||
| Tax equivalent interest rate spread | 3.69 | % | 3.20 | % | 15.3 | % | 3.50 | % | 3.50 | % | 3.08 | % | 13.6 | % | ||||||||||||||
| Tax equivalent interest rate margin | 3.90 | % | 3.49 | % | 11.7 | % | 3.74 | % | 3.74 | % | 3.33 | % | 12.3 | % | ||||||||||||||
NORMAL SPREAD | ||||||||||||||||||||||||||||
| Investments | 5.62 | % | 5.47 | % | 2.7 | % | 5.45 | % | 5.46 | % | 5.18 | % | 5.4 | % | ||||||||||||||
| Loans | 6.39 | % | 6.74 | % | -5.2 | % | 6.52 | % | 6.52 | % | 7.26 | % | -10.2 | % | ||||||||||||||
| Interest-earning assets | 5.78 | % | 5.73 | % | 0.9 | % | 5.67 | % | 5.68 | % | 5.66 | % | 0.4 | % | ||||||||||||||
| Deposits | 3.35 | % | 4.77 | % | -29.8 | % | 3.41 | % | 3.54 | % | 4.42 | % | -19.9 | % | ||||||||||||||
| Borrowings | 4.25 | % | 4.32 | % | -1.6 | % | 4.26 | % | 4.24 | % | 4.49 | % | -5.6 | % | ||||||||||||||
| Interest-bearing liabilities | 4.01 | % | 4.42 | % | -9.3 | % | 4.04 | % | 4.06 | % | 4.47 | % | -9.2 | % | ||||||||||||||
| Interest rate spread | 1.77 | % | 1.31 | % | 35.1 | % | 1.63 | % | 1.62 | % | 1.19 | % | 36.1 | % | ||||||||||||||
| Interest rate margin | 1.98 | % | 1.61 | % | 23.0 | % | 1.88 | % | 1.86 | % | 1.44 | % | 29.2 | % | ||||||||||||||
AVERAGE BALANCES | ||||||||||||||||||||||||||||
| Investments | $ | 4,791,032 | $ | 4,546,758 | 5.4 | % | $ | 4,756,244 | $ | 4,759,824 | $ | 3,927,849 | 21.2 | % | ||||||||||||||
| Loans | 1,231,864 | 1,182,799 | 4.1 | % | 1,224,318 | 1,213,401 | 1,181,061 | 2.7 | % | |||||||||||||||||||
| Interest-earning assets | $ | 6,022,896 | $ | 5,729,557 | 5.1 | % | $ | 5,980,562 | $ | 5,973,225 | $ | 5,108,910 | 16.9 | % | ||||||||||||||
| Deposits | $ | 1,554,648 | $ | 1,121,800 | 38.6 | % | $ | 1,433,129 | $ | 1,405,929 | $ | 1,193,121 | 17.8 | % | ||||||||||||||
| Borrowings | 4,159,521 | 4,232,917 | -1.7 | % | 4,179,005 | 4,196,693 | 3,628,937 | 15.6 | % | |||||||||||||||||||
| Interest-bearing liabilities | $ | 5,714,169 | $ | 5,354,717 | 6.7 | % | $ | 5,612,134 | $ | 5,602,622 | $ | 4,822,058 | 16.2 | % | ||||||||||||||
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| ORIENTAL FINANCIAL GROUP Financial Summary (NYSE: OFG) |
| AS OF | ||||||||||||||||
| (Dollars in thousands) | 31-Dec-08 | 31-Dec-07 | % | 30-Sep-08 | ||||||||||||
BALANCE SHEET | ||||||||||||||||
Cash and due from banks | $ | 66,372 | $ | 88,983 | -25.4 | % | $ | 40,382 | ||||||||
Interest-earning assets: | ||||||||||||||||
Investments: | ||||||||||||||||
| Trading securities | 256 | 1,122 | -77.2 | % | 1,061 | |||||||||||
| Investment securities available-for-sale, at fair value with amortized cost of $4,052,574 (December 31, 2007-$3,063,763; September 30, 2008-$3,403,608) | 3,921,958 | 3,069,282 | 27.8 | % | 3,307,820 | |||||||||||
| Investment securities held-to-maturity, at amortized cost with fair value at December 31, 2007-$1,478,112 and September 30, 2008-$1,171,853 | — | 1,492,887 | -100.0 | % | 1,191,671 | |||||||||||
| Federal Home Loan Bank (FHLB) stock, at cost | 21,013 | 20,658 | 1.7 | % | 19,812 | |||||||||||
| Other investments | 150 | 1,662 | -91.0 | % | 150 | |||||||||||
Total investments | 3,943,377 | 4,585,610 | -14.0 | % | 4,520,514 | |||||||||||
Loans: | ||||||||||||||||
| Mortgage loans | 1,000,076 | 989,487 | 1.1 | % | 1,003,022 | |||||||||||
| Commercial loans | 187,077 | 157,198 | 19.0 | % | 177,687 | |||||||||||
| Consumer loans | 23,054 | 29,245 | -21.2 | % | 23,832 | |||||||||||
Loans receivable, gross | 1,210,207 | 1,175,930 | 2.9 | % | 1,204,541 | |||||||||||
| Less: Deferred loan fees, net | (3,364 | ) | (2,875 | ) | -17.0 | % | (3,389 | ) | ||||||||
Loans receivable | 1,206,843 | 1,173,055 | 2.9 | % | 1,201,152 | |||||||||||
| Allowance for loan losses | (14,293 | ) | (10,161 | ) | -40.7 | % | (12,466 | ) | ||||||||
Loans receivable, net | 1,192,550 | 1,162,894 | 2.6 | % | 1,188,686 | |||||||||||
| Mortgage loans held for sale | 26,562 | 16,672 | 59.3 | % | 31,152 | |||||||||||
Total loans, net | 1,219,112 | 1,179,566 | 3.4 | % | 1,219,838 | |||||||||||
Total interest-earning assets | 5,162,489 | 5,765,176 | -10.5 | % | 5,740,352 | |||||||||||
| Securities sold but not yet delivered | 834,976 | — | 100.0 | % | 4,857 | |||||||||||
| Accrued interest receivable | 43,914 | 52,315 | -16.1 | % | 38,104 | |||||||||||
| Deferred tax asset, net | 28,463 | 10,362 | 174.7 | % | 22,577 | |||||||||||
| Premises and equipment, net | 21,184 | 21,779 | -2.7 | % | 20,911 | |||||||||||
| Investment in equity indexed options | 12,801 | 40,709 | -68.6 | % | 13,548 | |||||||||||
| Foreclosed real estate | 9,162 | 4,207 | 117.8 | % | 8,220 | |||||||||||
| Mortgage tax credits | 5,047 | 69 | 7214.5 | % | 6,439 | |||||||||||
| Prepaid expenses | 3,433 | 2,645 | 29.8 | % | 4,516 | |||||||||||
| Servicing asset | 2,819 | 2,526 | 11.6 | % | 3,004 | |||||||||||
| Goodwill | 2,006 | 2,006 | — | 2,006 | ||||||||||||
| Investment in statutory trust | 1,086 | 1,086 | — | 1,086 | ||||||||||||
| Accounts receivable and other assets | 9,535 | 7,992 | 19.3 | % | 8,664 | |||||||||||
Total assets | $ | 6,203,287 | $ | 5,999,855 | 3.4 | % | $ | 5,914,666 | ||||||||
Interest-bearing liabilities: | ||||||||||||||||
Deposits: | ||||||||||||||||
| Non-interest bearing demand deposits | $ | 53,165 | $ | 49,998 | 6.3 | % | $ | 56,883 | ||||||||
| Interest-bearing demand deposits | 400,633 | 69,154 | 479.3 | % | 395,188 | |||||||||||
| Savings accounts | 50,152 | 387,790 | -87.1 | % | 59,250 | |||||||||||
| Individual retirement accounts | 286,691 | 317,744 | -9.8 | % | 285,635 | |||||||||||
| Retail certificates of deposit | 296,937 | 232,239 | 27.9 | % | 272,383 | |||||||||||
| Total Retail Deposits | 1,087,578 | 1,056,925 | 2.9 | % | 1,069,339 | |||||||||||
| Wholesale certificates of deposit | 697,722 | 189,495 | 268.2 | % | 448,450 | |||||||||||
Total deposits | 1,785,300 | 1,246,420 | 43.2 | % | 1,517,789 | |||||||||||
Page 3
| ORIENTAL FINANCIAL GROUP Financial Summary (NYSE: OFG) |
| AS OF | ||||||||||||||||
| (Dollars in thousands) | 31-Dec-08 | 31-Dec-07 | % | 30-Sep-08 | ||||||||||||
Borrowings: | ||||||||||||||||
| Federal funds purchased and other short term borrowings | 29,193 | 27,460 | 6.3 | % | 41,026 | |||||||||||
| Securities sold under agreements to repurchase | 3,761,121 | 3,861,411 | -2.6 | % | 3,770,755 | |||||||||||
| Advances from FHLB | 308,442 | 331,898 | -7.1 | % | 281,724 | |||||||||||
| Subordinated capital notes | 36,083 | 36,083 | — | 36,083 | ||||||||||||
Total borrowings | 4,134,839 | 4,256,852 | -2.9 | % | 4,129,588 | |||||||||||
Total interest-bearing liabilities | 5,920,139 | 5,503,272 | 7.6 | % | 5,647,377 | |||||||||||
Securities purchased but not yet received | 398 | 111,431 | -99.6 | % | — | |||||||||||
Accrued expenses and other liabilities | 23,682 | 25,691 | -7.8 | % | 25,271 | |||||||||||
Total liabilities | 5,944,219 | 5,640,394 | 5.4 | % | 5,672,648 | |||||||||||
Preferred Equity | 68,000 | 68,000 | — | 68,000 | ||||||||||||
Common Equity: | ||||||||||||||||
| Common stock | 25,738 | 25,557 | 0.7 | % | 25,738 | |||||||||||
| Additional paid-in capital | 212,626 | 210,073 | 1.2 | % | 212,511 | |||||||||||
| Legal surplus | 43,016 | 40,573 | 6.0 | % | 40,573 | |||||||||||
| Retained earnings | 51,233 | 45,296 | 13.1 | % | 17,868 | |||||||||||
| Treasury stock, at cost | (17,109 | ) | (17,023 | ) | -0.5 | % | (17,142 | ) | ||||||||
| Accumulated other comprehensive loss | (124,436 | ) | (13,015 | ) | -856.1 | % | (105,530 | ) | ||||||||
Total common equity | 191,068 | 291,461 | -34.4 | % | 174,018 | |||||||||||
Stockholders’ equity | 259,068 | 359,461 | -27.9 | % | 242,018 | |||||||||||
Total liabilities and stockholders’ equity | $ | 6,203,287 | $ | 5,999,855 | 3.4 | % | $ | 5,914,666 | ||||||||
CAPITAL RATIOS | ||||||||||||||||
| Leverage Capital Ratio | 6.38 | % | 6.69 | % | -4.60 | % | 5.98 | % | ||||||||
| Minimum Leverage Capital Ratio Required | 4.00 | % | 4.00 | % | 4.00 | % | ||||||||||
| Actual Tier 1 Capital | $ | 389,235 | $ | 396,309 | -1.8 | % | $ | 359,165 | ||||||||
| Minimum Tier 1 Capital Required | $ | 244,101 | $ | 236,847 | 3.1 | % | $ | 240,281 | ||||||||
| Tier 1 Risk-Based Capital Ratio | 17.11 | % | 18.59 | % | -8.0 | % | 15.93 | % | ||||||||
| Minimum Tier 1 Risk-Based Capital Ratio Required | 4.00 | % | 4.00 | % | 4.00 | % | ||||||||||
| Actual Tier 1 Risk-Based Capital | $ | 389,235 | $ | 396,309 | -1.8 | % | $ | 359,165 | ||||||||
| Minimum Tier 1 Risk-Based Capital Required | $ | 91,022 | $ | 85,292 | 6.7 | % | $ | 90,168 | ||||||||
| Total Risk-Based Capital Ratio | 17.73 | % | 19.06 | % | -7.0 | % | 16.49 | % | ||||||||
| Minimum Total Risk-Based Capital Ratio Required | 8.00 | % | 8.00 | % | 8.00 | % | ||||||||||
| Actual Total Risk-Based Capital | $ | 403,528 | $ | 406,470 | -0.7 | % | $ | 371,631 | ||||||||
| Minimum Total Risk-Based Capital Required | $ | 182,044 | $ | 170,583 | 6.7 | % | $ | 180,336 | ||||||||
| Tangible Total Equity to Total Assets | 4.14 | % | 5.96 | % | -30.5 | % | 4.06 | % | ||||||||
| Tangible Common Equity to Total Assets | 3.05 | % | 4.82 | % | -36.7 | % | 2.91 | % | ||||||||
SELECTED FINANCIAL DATA AT PERIOD-END | ||||||||||||||||
| Common shares outstanding at end of period | 24,296 | 24,121 | 0.7 | % | 24,292 | |||||||||||
| Book value per common share | $ | 7.86 | $ | 12.08 | -34.9 | % | $ | 7.16 | ||||||||
| Trust Assets Managed | $ | 1,706,286 | $ | 1,962,226 | -13.0 | % | $ | 1,839,702 | ||||||||
| Broker-Dealer Assets Gathered | 1,195,739 | 1,281,168 | -6.7 | % | 1,236,760 | |||||||||||
Total Assets Managed | 2,902,025 | 3,243,394 | -10.5 | % | 3,076,462 | |||||||||||
| Assets owned | 6,203,287 | 5,999,855 | 3.4 | % | 5,914,666 | |||||||||||
Total financial assets managed and owned | $ | 9,105,312 | $ | 9,243,249 | -1.5 | % | $ | 8,991,128 | ||||||||
Number of financial centers | 23 | 24 | -4.2 | % | 24 | |||||||||||
Page 4
| ORIENTAL FINANCIAL GROUP Financial Summary (NYSE: OFG) |
| QUARTER ENDED | YEARENDED | |||||||||||||||||||||||||||||
| 31-Dec-08 | 31-Dec-07 | % | 30-Sep-08 | 31-Dec-08 | 31-Dec-07 | % | ||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||
Loan Production and Purchases Summary: | ||||||||||||||||||||||||||||||
| Mortgage loans production | $ | 53,658 | $ | 35,154 | 52.6 | % | $ | 56,109 | $ | 229,895 | $ | 146,920 | 56.5 | % | ||||||||||||||||
| Mortgage loans purchased | 1,858 | 389 | 377.6 | % | — | 7,031 | 101,630 | -93.1 | % | |||||||||||||||||||||
| Total mortgage | 55,516 | 35,543 | 56.2 | % | 56,109 | 236,926 | 248,550 | -4.7 | % | |||||||||||||||||||||
| Commercial | 14,000 | 21,758 | -35.7 | % | 10,894 | 55,802 | 48,745 | 14.5 | % | |||||||||||||||||||||
| Consumer | 814 | 1,470 | -44.6 | % | 947 | 4,415 | 7,201 | -38.7 | % | |||||||||||||||||||||
| Total loan production and purchases | $ | 70,330 | $ | 58,771 | 19.7 | % | $ | 67,950 | $ | 297,143 | $ | 304,496 | -2.4 | % | ||||||||||||||||
CREDIT DATA | ||||||||||||||||||||||||||||||
Net credit losses: | ||||||||||||||||||||||||||||||
| Mortgage | $ | 850 | $ | 740 | 14.9 | % | $ | 648 | $ | 1,977 | $ | 2,014 | -1.8 | % | ||||||||||||||||
| Commercial | 225 | 12 | 1775.0 | % | 54 | 407 | 253 | 60.9 | % | |||||||||||||||||||||
| Consumer | 379 | 628 | -39.6 | % | 667 | 2,344 | 2,138 | 9.6 | % | |||||||||||||||||||||
| Total net credit losses | $ | 1,454 | $ | 1,380 | 5.4 | % | $ | 1,369 | $ | 4,728 | $ | 4,405 | 7.3 | % | ||||||||||||||||
| Net credit losses to average loans outstanding | 0.47 | % | 0.47 | % | 0.0 | % | 0.45 | % | 0.39 | % | 0.37 | % | 5.40 | % | ||||||||||||||||
| AS OF | ||||||||||||||||
| 31-Dec-08 | 31-Dec-07 | % | 30-Sep-08 | |||||||||||||
| Allowance for loan losses | $ | 14,293 | $ | 10,161 | 40.70 | % | $ | 12,466 | ||||||||
| Allowance coverage ratios: | ||||||||||||||||
| Allowance for loan losses to total loans | 1.16 | % | 0.85 | % | 36.47 | % | 1.01 | % | ||||||||
| Allowance for loan losses to non-performing loans | 18.45 | % | 15.37 | % | 20.00 | % | 18.16 | % | ||||||||
| Allowance for loan losses to non-residential non-performing loans | 239.90 | % | 314.39 | % | -23.70 | % | 301.99 | % | ||||||||
| Non-performing assets summary: | ||||||||||||||||
| Mortgage | $ | 71,531 | $ | 62,878 | 13.80 | % | $ | 64,513 | ||||||||
| Commercial | 5,186 | 2,413 | 114.90 | % | 3,308 | |||||||||||
| Consumer | 772 | 818 | -5.60 | % | 820 | |||||||||||
| Non-performing loans | 77,489 | 66,109 | 17.20 | % | 68,641 | |||||||||||
| Foreclosed real estate | 9,162 | 4,207 | 117.80 | % | 8,220 | |||||||||||
| Non-performing assets | $ | 86,651 | $ | 70,316 | 23.20 | % | $ | 76,861 | ||||||||
| Non-performing loans to total loans | 6.28 | % | 5.56 | % | 12.90 | % | 5.57 | % | ||||||||
| Non-performing loans to total assets | 1.25 | % | 1.10 | % | 13.60 | % | 1.16 | % | ||||||||
| Non-performing assets to total assets | 1.40 | % | 1.17 | % | 19.70 | % | 1.30 | % | ||||||||
| Non-performing assets to total capital | 33.45 | % | 19.56 | % | 71.00 | % | 31.76 | % | ||||||||
Page 5
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 45th year in business, Oriental provides a full range of mortgage, commercial and consumer banking services through 23 Oriental Group 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 at www.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 because of developments occurring after the date of issuance.
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