The problems at Doral Financial Corp. continued Tuesday, when it informed the Securities and Exchange Commission that it will be unable to file its first quarter results report for the period ended Mar. 31 this week, a day after the deadline passed.
In its communication with the regulator, Doral attributed its reason for the delay to the work it has been required to do to respond to a joint Report of Examination of Doral Bank issued by the Federal Deposit Insurance Corporation and the Puerto Rico Office of the Commissioner of Financial Institutions, received May 1, addressing its liquidity issues.
In the document, Doral Bank was notified that it may no longer include in its calculation of Tier 1 Capital certain tax receivables from the Treasury Department amounting to about $232 million. Late last week, the bank sent the agency a letter demanding payment of the funds.
“The report also instructs the company to recognize certain charges related to loans and non-performing assets, and to evaluate certain assumptions in the Allowance for Loan Losses and for modified loans,” Doral told the SEC. “The company cannot finalize the preparation of its quarterly financial statements as of and for the three months ended March 31, 2014 until it has fully assessed the impact of the report on its business, engaged in additional discussions with the regulators, including reviewing whether to appeal certain findings set forth in the report and has reviewed certain valuation methodologies and estimates as requested by Doral Bank’s regulators.”
The company informed the SEC that as a result, it will not be able to complete the quarterly report within the prescribed five-day grace period, which would conclude May 17.