Oriental reports solid 1Q ’12 results

Written by  //  April 24, 2012  //  Banking/Insurance  //  No comments

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Oriental Financial Group reported favorable first quarter results. (Credit: © Mauricio Pascual)

Oriental Financial Group Inc.’s conversion into a more traditional bank following the April 2010 acquisition of the defunct EuroBank seems to be going in the right direction, as on Monday the financial institution announced $9.5 million in income for the first quarter ended Mar. 31.

That represented 0.23 per diluted share and a significant jump from the $1.9 million, or $0.04 per share, reported for the same year-ago quarter and a loss of $13.1 million, or $0.31 per share, in the fourth quarter of 2011.

The financial institution also reported pre-tax operating income of $11.3 million compared to $12.4 million in the year-ago quarter and $6.1 million in the fourth quarter.

“Our excellent first quarter performance shows our great progress so far towards achieving our goals for 2012,” said OFG President José Rafael Fernández. “The investments we’re making in our commercial banking capabilities, active management of our risk exposures, and transforming our financial model have resulted in a growing franchise with a very strong capital position.

For the quarter, OFG reported a net interest rate margin of 2.59 percent, versus 2.26 percent in the year ago quarter and 1.76 percent in the last quarter of 2011.

“Net interest margin increased to 2.59 percent sequentially due to higher yields on both loans and investment securities and lower cost of deposits and wholesale borrowings,” Fernández said. “We had strong year over year growth in banking and wealth management fee revenues, and record commercial loan production and assets under management levels.”

Loan production totaled $110.2 million, up 41.3 percent year-over-year and 2.7 percent quarter-over-quarter. The strategically significant commercial category hit a record $55.4 million in production, a more than three-fold increase from the same year-ago quarter and 16.7 percent greater than in the preceding quarter.

“We continued to move away from our reliance on our investment securities portfolio by improving interest income from our loan portfolio,” the banking executive added. “We also continued to effectively manage our non-interest expenses and share buy back program.”

Using available cash, Oriental paid off in mid-March 2012 $105 million in maturing FDIC Temporary Liquidity Guarantee Program Notes with a cost of 3.75 percent.

“Complementary to our focus in growing our commercial business, we achieved a noticeable improvement in asset quality, resulting in a reduction in non-performing, non-covered loans,” said Fernández about the line item that was down 9.2 percent from the preceding quarter.

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