Oriental reports $25.3M in 2Q income
Oriental Financial Group Inc. released results for the second quarter ended June 30 that reflected income of $25.3 million, a significant increase from the $4.2 million loss reported for the same quarter in 2010 and a profit of $1.9 million for the first quarter that ended in March.
The results respond to Oriental’s strategy of growing its commercial banking business, returning capital to investors through increased share buy backs, and continuing to evaluate strategic opportunities in Puerto Rico,” said Oriental CEO José Rafael Fernández.
The most recent reporte showed income per common share increased to $0.56, compared to a loss of $0.13 in the year ago quarter and income of $0.04 in the March 2011 quarter. There were approximately 45.1 million average common shares outstanding in the quarter ended June 30, 2011, up 36.6 percent from the year ago quarter due to the 2010 equity offerings, and 2.3 percent below the March 2011 quarter as a result of share buybacks.
Meanwhile, pre-tax operating income of $18.5 million increased 23.1 percent from the year ago quarter and 42 percent from the March 2011 quarter.
“Net interest income continues to rebound, while our core banking and wealth management operations continue to perform well, the cost of retail deposits continues to decline, and we maintain strong asset quality,” said Fernández.
“Our value-added, client-centric, advisory model enables Oriental to gather assets and quality deposits through our branch network, trust department and brokerage business,” the executive added. “Over the last 12 months, we have successfully expanded that model to our commercial banking business, enabling us to capture market share by attracting quality corporate and small commercial clients.”
Other second quarter highlights include a total loan production of $116.7 million, up 30.6 percent from a year ago and 49.6 percent on a sequential quarter basis. Commercial loan production of $45.6 million increased 125.5 percent year-over-year and 174.2 percent sequentially.
Meanwhile, Oriental’s net interest income reached $42.7 million, up 15.6 percent from a year ago and 14.9 percent quarter-to-quarter. The increase on a sequential quarter basis primarily reflects a 16.7 percent increase in interest income on mortgage-backed securities, mainly as a result of lower premium amortization based on a slowdown in pre-payments during the quarter.
Oriental’s result reflect the outcome of its acquisition last year of Eurobank last year, as part of a Federal Deposit Insurance Company-assisted transaction.
On June 29, 2011, Oriental announced completion of its $30 million common stock repurchase program and the adoption of a new program to purchase an additional $70 million in shares in the open market. In that sense, Oriental continues to maintain regulatory capital ratios well above the requirements for a well-capitalized institution.