Doral Financial reports $7.5M loss for 3Q13

Written by  //  November 5, 2013  //  Banking, Financial District  //  No comments

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Doral released third quarter results this morning. (Credit: © Mauricio Pascual)

Doral released third quarter results this morning. (Credit: © Mauricio Pascual)

Doral Financial Corp. today reported a net loss for the third quarter ended Sept. 30, 2013 of $7.5 million, closing the gap from net losses of $10.4 million and $32.5 million for the second quarter ended June 30, 2013 and the year ago quarter ended Sept. 30, 2012, respectively.

Doral’s net loss attributable to common shareholders for the three months ended Sept. 30, 2013 was $9.9 million. For the second quarter of 2013, the net loss attributable was $12.8 million and for the third quarter of 2012 the net loss was $35 million.

“The third quarter demonstrated continued progress for Doral as we work toward building a profitable and stronger bank,” said Glen Wakeman, CEO of Doral Financial Corporation. “Our decision to divide operations into Doral Growth, a profitable mortgage and commercial bank, and Doral Recovery, a special servicing portfolio, have allowed us to weather the continued economic recession in Puerto Rico.”

“We continue to take advantage of significant opportunities in our U.S. mainland operation and remain committed to creating affordable mortgage solutions for our customers and local communities in Puerto Rico,” he said.

The bank’s loan production for the quarter ended Sept. 30, 2013 was $583.1 million, a decrease of $47.6 million and $188 million, when compared to $630.7 million and $771.1 million for the three months ended June 30, 2013 and Sept. 30, 2012, respectively.

Commercial loan production in the U.S. totaled $438.7 million, or 75.2 percent of total loan production, for the third quarter of 2013. Residential mortgage loan production in Puerto Rico, most of which is sold, was $143.5 million for the third quarter of 2013, a decrease of $110.8 million compared to loan production of $254.3 million for the third quarter of 2012.

As with the 2013 second quarter, retail deposits and loans for the 2013 third quarter were up over the preceding quarter. Reflecting Doral’s development of U.S. mainland opportunities, as of Sept. 30, 2013, $2.6 billion, or 42 percent of loans, are to U.S. commercial borrowers. At the same time, Doral continues to strengthen its business in Puerto Rico as a provider of fixed-rate, affordable residential mortgages.

Meanwhile, the bank reported that its capital ratios exceed the standards established by the federal banking agencies, with ratios of Tier 1 Leverage of 8.67 percent, Tier 1 Risk-based Capital of 10.72 percent, and Total Risk-based Capital of 12.07 percent.

The company had total assets of $8.6 billion as of Sept. 30, 2013, compared to $8.5 billion as of June 30, 2013, resulting in an increase of $48.4 million, or 0.6 percent, from the second quarter of 2013. This increase was mainly due to an increase in total net loans of $45 million, the bank said.

Total deposits were $5.0 billion as of September 30, 2013 and June 30, 2013, with an increase of $8.3 million, or 0.2%. The Company’s brokered deposits decreased $188.5 million, while retail deposits increased $196.8 million, during the third quarter of 2013.

However, the bank continues to address its non-performing loan portfolio, which, excluding FHA/VA loans guaranteed by the US government, as of Sept. 30, 2013 reached $717.4 million, reflecting an increase of $4.1 million from the $713.4 million in NPLs as of June 30, 2013.

The increase in NPLs resulted mostly from a $21.3 million increase in non-performing residential mortgage loans partially offset by decreases of $9.3 million, $6.6 million and $1.3 million in non-performing construction and land, commercial real estate and commercial and industrial loans, respectively.

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