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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: May 1, 2001
ORIENTAL FINANCIAL GROUP INC.
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(Exact Name of Registrant as Specified in its Charter)
Commonwealth of Puerto Rico 001-12647 66-0538893
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(State or other Jurisdiction of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
Monacillos 1000
San Roberto Street
Rio Piedras, Puerto Rico 00926
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (787) 771-6800
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ITEM 5. OTHER EVENTS.
On May 1, 2001, Oriental Financial Group Inc. (the "Company") announced
that it revised its consolidated financial statements; primarily, the statement
of income for the quarter ended September 30, 2000, and the statements of
stockholder's equity and comprehensive income for the quarter and six-month
period ended September 30 and December 31, 2000, respectively, to reflect
revisions made to the application of Statement of Financial Accounting Standards
No. 133. This accounting standard requires the recognition of derivatives on
balance sheet at fair value and that changes in their fair value must be
recognized in the statement of income or comprehensive income depending on the
type of hedging relationship.
The Company explained that certain differences were recently found in
the classification of data used and methodology applied to calculate the fair
value of derivatives tied to stock indexes; therefore, requiring a revision of
the transition adjustment recognized upon adoption of the new standard on July
1, 2000. In addition, the transition adjustment for certain hedging strategies
should have been reported in the statement of comprehensive income instead of
the statement of income. Finally, the change in fair value of certain
derivatives recorded through other comprehensive income during the quarter ended
December 31, 2000 was also revised.
The effect of the revisions on the consolidated statements of income,
comprehensive income and stockholder's equity follows:
QUARTER ENDED
(IN THOUSANDS, EXCEPT PER SHARE DATA) SEPTEMBER 30, 2000
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AS PREVIOUSLY
REPORTED REVISED
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STATEMENT OF INCOME:
Total interest income $ 30,369 $ 30,369
Total interest expense 23,884 23,884
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Net interest income 6,485 6,485
Provision for losses 1,400 1,400
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Net credit income 5,085 5,085
Non-interest income (charges):
Trust, brokerage, mortgage banking
activities, banking fees and other 5,443 5,443
Net loss on sale of securities (3,705) (3,705)
Trading activities (12) (12)
Derivatives activities (2,072) (1,619)
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Total non-interest (charges) income (346) 107
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Non-interest expenses 8,187 8,187
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Loss before income taxes (3,448) (2,995)
Income taxes credit 1,457 1,279
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LOSS BEFORE CUMULATIVE EFFECT OF A CHANGE
IN ACCOUNTING PRINCIPLE (1,991) (1,716)
Cumulative effect of change in accounting
principle, net of taxes 1,930 (164)
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NET LOSS (61) (1,880)
Less: dividends on preferred stock (597) (597)
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Net loss available to common shareholders $ (658) $ (2,477)
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QUARTER ENDED SIX MONTHS ENDED
(IN THOUSANDS, EXCEPT PER SHARE DATA) SEPTEMBER 30, 2000 DECEMBER 31, 2000
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AS PREVIOUSLY AS PREVIOUSLY
REPORTED REVISED REPORTED REVISED
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Loss per common share:
Basic before cumulative effect of change in GAAP $ (0.20) $ (0.18)
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Diluted before cumulative effect of change in GAAP $ (0.20) $ (0.18)
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Basic after cumulative effect of change in GAAP $ (0.05) $ (0.20)
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Diluted after cumulative effect of change in GAAP $ (0.05) $ (0.20)
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COMPREHENSIVE INCOME:
Net (loss) income $ (61) $ (1,880) $ 2,656(1) $ 838(1)
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Other comprehensive loss, net of tax:
Unrealized gain (loss) on securities transferred from
held-to-maturity to available-for-sale (26,633) (26,633) -- --
Unrealized gain on securities arising during
the period 22,151 22,151 13,563 13,563
Realized loss on securities included in net income (3,705) (3,705) (3,195) (3,195)
Unrealized loss on derivatives designated as cash flows
hedges arising during the period -- -- (12,428) (10,190)
Amount reclassified into earnings during the period -- 94 -- 188
Income tax credit (expense) related to items of
other comprehensive income 1,068 1,031 (1,337) (1,411)
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(7,119) (7,062) (3,397) (1,045)
Cumulative effect of change in accounting
principle, net of taxes -- (534) -- (534)
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Other comprehensive loss for the period (7,119) (7,596) (3,397) (1,579)
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COMPREHENSIVE LOSS $ (7,180) $ (9,476) $ (741) $ (741)
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STOCKHOLDERS' EQUITY (AT END OF PERIOD) $ 106,561 $ 104,265 $ 110,105 $ 110,105
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(1) The consolidated statement of income for the quarter ended December 31,
2000 was not revised; therefore, the revised net income for the
six-month period ended December 31, 2000 only reflects the revision
made to the net income for the quarter ended September 30, 2000.
The Company further announced that it would submit revised quarterly
reports on Form 10-Q for the quarters ended September 30 and December 31, 2000,
in accordance with regulatory requirements
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ORIENTAL FINANCIAL GROUP INC.
Date: May 1, 2001 By: /s/ Rafael Valladares
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Rafael Valladares
Senior Vice President
and Comptroller