(Source: Business Wire)
Oriental Financial Group Inc. (NYSE: OFG) today reported income available to common shareholders of $49.7 million for the second quarter ended June 30, 2009. This represented higher returns on average assets of 3.05% and average common equity of 80.89%, compared with 0.95% and 20.65%, respectively, in the second quarter of 2008. Diluted earnings per common share increased to $2.04 from $0.54 in the year ago quarter.
Highlights
Pre-tax operating income (net interest income, core non-interest income from banking and financial service revenues, less non-interest expenses) of approximately $17.3 million -- an increase when compared to the $13.0 million-to-$14.8 million range the Group has generated since the first quarter of 2008.
Strong increase in net interest income of 24.8% and 15.7% compared to the year-ago quarter and the previous quarter, respectively, and a corresponding improvement in the net interest margin to 2.29% (compared to 1.90% and 1.98% in the year-ago and previous quarter, respectively), mainly reflecting the reduction in the cost of funds.
Growth in core banking and financial service revenues of 19.4% and 15.8% compared to the year-ago and previous quarter, respectively. On a sequential quarter basis, the Group saw increases in mortgage banking activities of 30.3%, banking service revenues of 15.0%, and financial service revenues of 5.5%.
Benefitting from the strategic positioning of its investment securities portfolio, the Group took advantage of market conditions during the quarter to realize gains on: (i) sales of securities of $10.5 million, (ii) derivative activities of $19.4 million, and (iii) trading activities of $13.0 million. These gains more than offset credit-related other than temporary impairment charges of $4.4 million on securities.
Sustained growth in retail deposits of $110.4 million (9.3%) on a sequential quarter basis and $220.7 million (20.4%) on a year-to-date basis.
Stockholders' equity increased $40.3 million during the quarter and $98.3 million since December 31, 2008, representing an increase of 37.6% on a year-to-date basis.
Book value per common share increased to $12.04, from $10.38 at March 31, 2009 and $7.96 at December 31, 2008.
Non-interest expenses were negatively affected by approximately $2.9 million, representing the increase in the Group's insurance expense corresponding to the industry-wide FDIC special assessment on insured depository institutions and payable on September 30, 2009.
"We had an excellent quarter as we continued to implement our plan, focusing on mid and high net worth customers, which is yielding solid results for Oriental's banking-financial services franchise," said José Rafael Fernández, President and Chief Executive Officer.
"We are seeing consistent improvement in the deposit base, while also reducing our cost of funds. New customers are recognizing our service offerings. Approximately 20% more clients than a year ago are utilizing their accounts for ATM, debit card, online and telephone transactions. We also are generating more fees from commercial accounts using Oriental's new cash management and point of sale services."
"At the same time, the significant non-interest gains we generated highlight our opportunistic approach to market developments in a challenging environment."
Capital
At June 30, 2009, stockholders' equity totaled $359.6 million, 19.4% and 12.6% higher than the year ago quarter and the previous quarter, respectively. Tangible common equity to risk-weighted assets was 8.86% compared to 9.69% in the previous quarter.
The Group maintains capital ratios in excess of regulatory requirements. At June 30, 2009, the Leverage Capital Ratio was 7.31% (1.83 times the minimum of 4.00%); Tier I Risk-Based Capital Ratio was 14.62% (3.66 times the minimum of 4.00%), and the Total Risk-Based Capital Ratio was 15.13% (1.89 times the minimum of 8.00%). In dollars, Leverage Capital and Tier 1 Risk-Based Capital was $477.9 million, and Total Risk-Based Capital was $494.6 million, an increase from the previous quarter of $61.0 million and $62.5 million, respectively.
The Financial Service-Banking Franchise
The Group's niche market approach to the integrated delivery of services to mid and high net worth clients performed well, as it expanded market share based on its service proposition and capital strength, as opposed to using rates to attract loans or deposits.
Lending
Total loan production and purchases of $73.5 million remained strong, as the Group's capital levels and low credit losses, compared to most banking institutions, enabled it to continue prudent lending. The average FICO score was 722 and the average loan to value ratio was 81% on residential mortgage loans originated in the quarter.
The Group sells most of its conforming mortgages into the secondary market, but retains servicing rights. Mortgage banking activities on a sequential quarter basis reflect the continued high level of originations as well as its growing servicing portfolio, a source of recurring revenue.
Deposits
Growth in retail deposits during the quarter primarily reflects a $121.1 million increase in savings and demand deposits. At the same time, Oriental also reduced brokered deposits by $42.7 million
Assets Under Management
Assets under management, which generate recurring fees, increased 5.23% from March 31, 2009, to $2.85 billion. This growth, plus the Group's participation in the underwriting of Puerto Rico's COFINA II bond sale, resulted in the sequential increase in financial service revenues. The Group also was awarded the business of two new large trust accounts that will add approximately $75 million in assets under management.
Credit Quality
Net credit losses declined by 11.42%, to $2.1 million (0.70% of average loans outstanding), from $2.3 million (0.78%), in the previous quarter. The Group increased its provision for loan losses to $3.7 million (176% of net credit losses), from $3.2 million in the previous quarter, resulting in a $16.7 million allowance at June 30, 2009, up 10.37% from the previous quarter.
Non-performing loans (NPLs) increased $3.3 million in the quarter, a significantly lower rate than in the previous quarter. The Group's NPLs generally reflect the economic environment in Puerto Rico. Based on historical performance, however, the Group does not expect non-performing loans to result in significantly higher losses as most are well-collateralized with adequate loan-to-value ratios. In residential mortgage lending, more than 90% of the Group's portfolio consists of fixed-rate, fully amortizing, fully documented loans that do not have the level of risk generally associated with subprime loans. In commercial lending, more than 90% of its loans are collateralized by real estate.
The Investment Securities Portfolio
The average balance of the investment securities portfolio was $5.00 billion, up 4.7% from the year ago quarter and up 0.38% from the previous quarter. Yield declined slightly due to higher prepayments in the first half of the quarter.
Approximately 87% of the portfolio consists of fixed-rate mortgage-backed securities or notes, guaranteed or issued by FNMA, FHLMC, or GNMA and U.S. agency senior debt obligations, backed by a U.S. government sponsored entity or the full faith and credit of the U.S. government (86%), and Puerto Rico Government and agency obligations (1%). The remaining balance consists of non-agency collateralized mortgage obligations (10%), the majority of which are backed by prime fixed-rate residential mortgage collateral, and structured credit investments (3%).
Subsequent Event
Subsequent to June 30, 2009, as part of its general banking and asset and liability management strategies, the Group executed a $200 million deleverage of its balance sheet by terminating certain repurchase agreements at a cost of approximately $17.5 million (before income taxes). This transaction increases the Group's financial flexibility, creates additional liquidity, and helps to offset the Group's income tax liability.
Non-GAAP Financial Measures
From time to time, the Group uses certain non-GAAP measures of financial performance to supplement the financial statements presented in accordance with GAAP. The Group presents non-GAAP measures when we believe that the additional information is useful and meaningful to investors. Non-GAAP measures do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. The presentation of non-GAAP measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP.
We have reported and discussed our results of operations herein both on a GAAP basis and on a pre-tax operating income basis (as defined on page 1 of this release). We believe that, given the nature of the items excluded from the definition of pre-tax operating income, it is useful to state what our results of operations would have been without them so that investors can see the financial trends from our continuing business.
Conference Call
A conference call to discuss the Group's results, outlook and related matters will be held on Wednesday, July 22, 2009 at 10:00 am (ET). The call will be accessible live via a webcast on the Group's Investor Relations website at www.orientalfg.com. A webcast replay will be available shortly thereafter. Access the webcast link in advance to download any necessary software.
About Oriental Financial Group
Oriental Financial Group Inc. is a diversified financial holding company operating under U.S. and Puerto Rico banking laws and regulations. Now in its 45th year in business, Oriental provides a full range of mortgage, commercial and consumer banking services through 23 Oriental Group financial centers in Puerto Rico, as well as financial planning, trust, insurance, investment brokerage and investment banking services. Investor information about Oriental can be found at www.orientalfg.com.
Forward-Looking Statements
This news release may contain forward-looking statements that reflect management's beliefs and expectations and are subject to risks and uncertainties inherent to the Group's business, including, without limitation, the effect of economic and market conditions, the level and volatility of interest rates, and other risks and considerations detailed in the Group's filings with the Securities and Exchange Commission. These or other factors could cause actual results to differ materially from forward-looking statements. The Group also disclaims any obligations to update information contained in this news release because of developments occurring after the date of issuance.
ORIENTAL FINANCIAL GROUP Financial Summary QUARTER ENDED SIX-MONTH PERIOD ENDED (NYSE: OFG) 30-Jun-09 30-Jun-08 % 31-Mar-09 30-Jun-09 30-Jun-08 % Summary of Operations (Dollars in thousands, except per share data): Interest Income: Loans $ 18,707 $ 19,682 -5.0 % $ 18,320 $ 37,027 $ 39,510 -6.3 % Investment securities and other 63,344 65,476 -3.3 % 65,611 128,955 127,749 0.9 % Total interest income 82,051 85,158 -3.6 % 83,931 165,982 167,259 -0.8 % Interest Expense: Deposits 14,149 12,265 15.4 % 13,823 27,972 24,694 13.3 % Securities sold under agreements to repurchase 27,929 40,208 -30.5 % 35,799 63,728 80,448 -20.8 % Other borrowed funds 4,485 4,250 5.5 % 3,644 8,129 8,773 -7.3 % Total interest expense 46,563 56,723 -17.9 % 53,266 99,829 113,915 -12.4 % Net interest income 35,488 28,435 24.8 % 30,665 66,153 53,344 24.0 % Provision for loan losses 3,650 1,980 84.3 % 3,200 6,850 3,630 88.7 % Net interest income after provision for loan losses 31,838 26,455 20.3 % 27,465 59,303 49,714 19.3 % Non-Interest Income: Financial service revenues 3,285 4,500 -27.0 % 3,114 6,399 8,740 -26.8 % Banking service revenues 1,602 1,395 14.8 % 1,393 2,995 2,922 2.5 % Investment banking revenues (losses) 8 12 -33.3 % (12 ) (4 ) 750 -100.5 % Mortgage banking activities 2,806 545 414.9 % 2,153 4,959 1,551 219.7 % Total banking and financial service revenues 7,701 6,452 19.4 % 6,648 14,349 13,963 2.8 % Net gain (loss) on: Sales of securities 10,520 198 5213.1 % 10,340 20,860 9,522 119.1 % Credit-related other than temporary impairments on securities (4,416 ) - -100.0 % - (4,416 ) - -100.0 % Derivatives 19,408 228 8412.3 % 434 19,842 (7,575 ) 361.9 % Trading securities 12,959 16 80893.8 % (27 ) 12,932 (1 ) 1293300.0 % Foreclosed real estate (136 ) (260 ) 47.7 % (162 ) (298 ) (510 ) 41.6 % Other investments 11 16 -31.3 % 13 24 116 -79.3 % Other 4 - 100.0 % - 4 (1 ) 500.0 % Total non-interest income 46,051 6,650 592.5 % 17,246 63,297 15,514 308.0 % Non-Interest Expenses: Compensation and employee benefits 8,020 7,824 2.5 % 7,724 15,744 15,539 1.3 % Occupancy and equipment 3,758 3,365 11.7 % 3,489 7,247 6,652 8.9 % Insurance 3,472 579 499.7 % 815 4,287 1,181 263.0 % Professional and service fees 2,394 2,267 5.6 % 2,608 5,002 4,147 20.6 % Advertising and business promotion 1,028 836 23.0 % 1,204 2,232 1,910 16.9 % Taxes, other than payroll and income taxes 649 607 6.9 % 646 1,295 1,218 6.3 % Electronic banking charges 596 396 50.5 % 540 1,136 814 39.6 % Communication 402 325 23.7 % 379 781 650 20.2 % Loan servicing expenses 388 339 14.5 % 383 771 670 15.1 % Directors and investor relations 332 303 9.6 % 349 681 581 17.2 % Other 1,175 1,239 -5.2 % 1,136 2,311 2,448 -5.6 % Total non-interest expenses 22,214 18,080 22.9 % 19,273 41,487 35,810 15.9 % Income before income taxes 55,675 15,025 270.5 % 25,438 81,113 29,418 175.7 % Income tax expense (benefit) 4,761 598 696.2 % 690 5,451 (1,857 ) 393.5 % Net income 50,914 14,427 252.9 % 24,748 75,662 31,275 141.9 % Less: Dividends on preferred stock (1,200 ) (1,200 ) 0.0 % (1,201 ) (2,401 ) (2,401 ) 0.0 % Income available to common shareholders $ 49,714 $ 13,227 275.9 % $ 23,547 $ 73,261 $ 28,874 153.7 % -------------------------------------------------------------------------------
ORIENTAL FINANCIAL GROUP Financial Summary QUARTER ENDED SIX-MONTH PERIOD ENDED (NYSE: OFG) 30-Jun-09 30-Jun-08 % 31-Mar-09 30-Jun-09 30-Jun-08 % (Dollars in thousands, except per share data): INCOME PER COMMON SHARE Basic $ 2.05 $ 0.54 279.6 % $ 0.97 $ 3.02 $ 1.19 153.8 % Diluted $ 2.04 $ 0.54 277.8 % $ 0.97 $ 3.02 $ 1.19 153.8 % COMMON STOCK DATA Average common shares outstanding 24,303 24,290 0.1 % 24,245 24,274 24,227 0.2 % Average potential common shares-options 15 94 -83.8 % 3 6 110 -94.6 % Total average shares outstanding and equivalents 24,318 24,384 -0.3 % 24,248 24,280 24,337 -0.2 % Cash dividends per share of common stock $ 0.04 $ 0.14 -71.4 % $ 0.04 $ 0.08 $ 0.28 -71.4 % Cash dividends declared on common shares $ 972 $ 3,405 -71.5 % $ 972 $ 1,944 $ 6,804 -71.4 % Pay-out ratio 1.96 % 25.93 % -92.4 % 4.12 % 2.65 % 23.53 % -88.7 % SELECTED FINANCIAL DATA PERFORMANCE RATIOS: Return on average assets 3.05 % 0.95 % 221.1 % 1.53 % 2.30 % 1.01 % 127.7 % Return on average common equity 80.89 % 20.65 % 291.7 % 49.14 % 66.98 % 20.64 % 224.5 % Efficiency ratio 57.29 % 51.82 % 10.5 % 51.65 % 54.53 % 53.20 % 2.5 % TAX EQUIVALENT SPREAD Interest-earning assets 5.30 % 5.69 % -6.9 % 5.43 % 5.36 % 5.65 % -5.1 % Tax equivalent adjustment 1.75 % 1.88 % -6.9 % 1.68 % 1.77 % 1.87 % -5.3 % Interest-earning assets - tax equivalent 7.05 % 7.57 % -6.9 % 7.11 % 7.13 % 7.52 % -5.2 % Interest-bearing liabilities 3.13 % 4.01 % -21.9 % 3.64 % 3.38 % 4.12 % -18.0 % Tax equivalent interest rate spread 3.92 % 3.56 % 10.1 % 3.47 % 3.75 % 3.40 % 10.3 % Tax equivalent interest rate margin 4.04 % 3.78 % 6.9 % 3.66 % 3.90 % 3.67 % 6.3 % NORMAL SPREAD Investments 5.07 % 5.48 % -7.5 % 5.27 % 5.17 % 5.38 % -3.9 % Loans 6.27 % 6.52 % -3.8 % 6.09 % 6.18 % 6.74 % -8.3 % Interest-earning assets 5.30 % 5.69 % -6.9 % 5.43 % 5.36 % 5.65 % -5.1 % Deposits 3.25 % 3.44 % -5.5 % 3.27 % 3.26 % 3.82 % -14.7 % Borrowings 3.08 % 4.20 % -26.7 % 3.79 % 3.43 % 4.21 % -18.5 % Interest-bearing liabilities 3.13 % 4.01 % -21.9 % 3.64 % 3.38 % 4.12 % -18.0 % Interest rate spread 2.17 % 1.68 % 29.2 % 1.79 % 1.98 % 1.53 % 29.4 % Interest rate margin 2.29 % 1.90 % 20.5 % 1.98 % 2.13 % 1.80 % 18.3 % AVERAGE BALANCES Investments $ 4,998,921 $ 4,776,560 4.7 % $ 4,980,245 $ 4,989,635 $ 4,749,050 5.1 % Loans 1,193,396 1,208,098 -1.2 % 1,203,736 1,198,537 1,172,878 2.2 % Interest-earning assets $ 6,192,317 $ 5,984,658 3.5 % $ 6,183,981 $ 6,188,172 $ 5,921,928 4.5 % Deposits $ 1,743,799 $ 1,427,904 22.1 % $ 1,689,300 $ 1,716,700 $ 1,293,979 32.7 % Borrowings 4,215,544 4,236,568 -0.5 % 4,159,397 4,187,626 4,234,872 -1.1 % Interest-bearing liabilities $ 5,959,343 $ 5,664,472 5.2 % $ 5,848,697 $ 5,904,326 $ 5,528,851 6.8 % -------------------------------------------------------------------------------
ORIENTAL FINANCIAL GROUP Financial Summary AS OF (NYSE: OFG) 30-Jun-09 30-Jun-08 % 31-Mar-09 31-Dec-08 (Dollars in thousands) BALANCE SHEET Cash and due from banks $ 307,062 $ 56,486 443.6 % $ 293,750 $ 66,372 Interest-earning assets: Investments: Trading securities 904 1,311 -31.0 % 608 256 Investment securities available-for-sale, at fair value with amortized cost of $5,064,700 (June 30, 2008 - $3,467,005, March 31, 2009 - $4,648,495, December 31, 2008 - $4,052,574 ) FNMA and FHLMC certificates 2,768,465 1,506,975 83.7 % 2,191,097 1,546,750 CMO's issued by US Government sponsored agencies 319,091 326,291 -2.2 % 677,555 351,026 Obligations of US Government sponsored agencies 921,247 757,587 21.6 % 669,543 941,916 Non-agency collateralized mortgage obligations 476,192 656,666 -27.5 % 501,243 529,664 GNMA certificates 258,721 49,809 419.4 % 309,886 335,781 Structured credit investments 143,823 69,108 108.1 % 133,815 136,181 Puerto Rico Government and agency obligations 62,981 15,871 296.8 % 72,394 82,889 Total investment securities available-for-sale 4,950,520 3,382,307 46.4 % 4,555,533 3,924,207 Investment securities held-to-maturity, at amortized cost with fair value of $1,198,736 at June 30, 2008 FNMA and FHLMC certificates - 583,107 0.0 % - - CMO's issued by US Government sponsored agencies - 126,585 0.0 % - - Obligations of US Government sponsored agencies - 224,860 0.0 % - - GNMA certificates - 152,260 0.0 % - - Structured credit investments - 96,171 0.0 % - - Puerto Rico Government and agency obligations - 55,164 0.0 % - - Total investment securities held-to-maturity - 1,238,147 0.0 % - - Federal Home Loan Bank (FHLB) stock, at cost 19,937 22,062 -9.6 % 19,812 21,013 Other investments 150 150 0.0 % 150 150 Total investments 4,971,511 4,643,977 7.1 % 4,576,103 3,945,626 Loans: Mortgage loans 946,439 995,085 -4.9 % 968,334 1,000,076 Commercial loans 199,136 170,844 16.6 % 194,145 187,077 Consumer loans 20,982 25,479 -17.6 % 21,330 23,054 Loans receivable, gross 1,166,557 1,191,408 -2.1 % 1,183,809 1,210,207 Less: Deferred loan fees, net (3,651 ) (3,488 ) -4.7 % (3,509 ) (3,364 ) Loans receivable 1,162,906 1,187,920 -2.1 % 1,180,300 1,206,843 Allowance for loan losses (16,718 ) (11,885 ) -40.7 % (15,147 ) (14,293 ) Loans receivable, net 1,146,188 1,176,035 -2.5 % 1,165,153 1,192,550 Mortgage loans held for sale 40,886 42,122 -2.9 % 34,278 26,562 Total loans, net 1,187,074 1,218,157 -2.6 % 1,199,431 1,219,112 Total interest-earning assets 6,158,585 5,862,134 5.1 % 5,775,534 5,164,738 Securities sold but not yet delivered 360,764 - 100.0 % 289,565 834,976 Accrued interest receivable 37,785 42,842 -11.8 % 38,585 43,914 Deferred tax asset, net 25,756 17,249 49.3 % 23,422 28,463 Premises and equipment, net 20,706 21,378 -3.1 % 21,540 21,184 Foreclosed real estate 9,174 4,906 87.0 % 9,681 9,162 Prepaid expenses 7,605 5,004 52.0 % 2,817 3,433 Servicing asset 5,242 2,934 78.7 % 3,467 2,819 Debt issuance costs 4,146 893 364.3 % 4,381 900 Mortgage tax credits 3,819 4,992 -23.5 % 5,047 5,047 Investment in equity indexed options 2,412 27,641 -91.3 % 3,052 12,801 Goodwill 2,006 2,006 0.0 % 2,006 2,006 Investment in statutory trust 1,086 1,086 0.0 % 1,086 1,086 Accounts receivable and other assets 4,156 10,628 -60.9 % 12,013 8,635 Total assets $ 6,950,304 $ 6,060,179 14.7 % $ 6,485,946 $ 6,205,536 Interest-bearing liabilities: Deposits: Non-interest bearing demand deposits $ 61,878 $ 55,383 11.7 % $ 72,533 $ 53,056 Interest-bearing savings and demand deposits 683,124 476,115 43.5 % 551,354 450,786 Individual retirement accounts 298,925 293,354 1.9 % 286,043 286,691 Retail certificates of deposit 259,326 272,107 -4.7 % 282,901 292,046 Total Retail Deposits 1,303,253 1,096,959 18.8 % 1,192,831 1,082,579 Institutional deposits 139,684 150,174 -7.0 % 161,168 184,283 Brokered deposits 409,509 245,286 67.0 % 452,247 518,438 Total deposits 1,852,446 1,492,419 24.1 % 1,806,246 1,785,300 -------------------------------------------------------------------------------
ORIENTAL FINANCIAL GROUP Financial Summary AS OF (NYSE: OFG) 30-Jun-09 30-Jun-08 % 31-Mar-09 31-Dec-08 (Dollars in thousands) Borrowings: Federal funds purchased and other short term borrowings 27,748 41,583 -33.3 % 44,310 29,193 Securities sold under agreements to repurchase 3,757,510 3,810,752 -1.4 % 3,757,411 3,761,121 Advances from FHLB 281,718 331,895 -15.1 % 281,675 308,442 FDIC-guaranteed term notes 105,834 - 100.0 % 105,112 - Subordinated capital notes 36,083 36,083 - 36,083 36,083 Total borrowings 4,208,893 4,220,313 -0.3 % 4,224,591 4,134,839 Total interest-bearing liabilities 6,061,339 5,712,732 6.1 % 6,030,837 5,920,139 Securities purchased but not yet received 497,360 23,103 2052.8 % 112,628 398 Accrued expenses and other liabilities 31,971 23,177 37.9 % 23,130 23,682 Total liabilities 6,590,670 5,759,012 14.4 % 6,166,595 5,944,219 Preferred Equity 68,000 68,000 - 68,000 68,000 Common Equity: Common stock 25,739 25,736 0.0 % 25,739 25,739 Additional paid-in capital 212,962 212,282 0.3 % 212,784 212,625 Legal surplus 48,771 43,533 12.0 % 45,471 43,016 Retained earnings 131,154 64,406 103.6 % 71,353 51,233 Treasury stock, at cost (17,152 ) (17,136 ) -0.1 % (17,164 ) (17,109 ) Accumulated other comprehensive loss (109,840 ) (95,654 ) -14.8 % (86,832 ) (122,187 ) Total common equity 291,634 233,167 25.1 % 251,351 193,317 Stockholders' equity 359,634 301,167 19.4 % 319,351 261,317 Total liabilities and stockholders' equity $ 6,950,304 $ 6,060,179 14.7 % $ 6,485,946 $ 6,205,536 CAPITAL RATIOS Leverage Capital Ratio 7.31 % 6.80 % 7.5 % 6.54 % 6.38 % Minimum Leverage Capital Ratio Required 4.00 % 4.00 % 4.00 % 4.00 % Actual Tier 1 Capital $ 477,913 $ 413,767 15.5 % $ 416,955 $ 389,235 Minimum Tier 1 Capital Required $ 261,547 $ 243,414 7.4 % $ 254,836 $ 244,101 Tier 1 Risk-Based Capital Ratio 14.62 % 17.26 % -15.3 % 16.20 % 17.11 % Minimum Tier 1 Risk-Based Capital Ratio Required 4.00 % 4.00 % 4.00 % 4.00 % Actual Tier 1 Risk-Based Capital $ 477,913 $ 413,767 15.5 % $ 416,955 $ 389,235 Minimum Tier 1 Risk-Based Capital Required $ 130,774 $ 95,867 36.4 % $ 102,926 $ 91,022 Total Risk-Based Capital Ratio 15.13 % 17.76 % -14.8 % 16.79 % 17.73 % Minimum Total Risk-Based Capital Ratio Required 8.00 % 8.00 % 8.00 % 8.00 % Actual Total Risk-Based Capital $ 494,631 $ 425,652 16.2 % $ 432,102 $ 403,523 Minimum Total Risk-Based Capital Required $ 261,548 $ 191,735 36.4 % $ 205,852 $ 182,044 Tangible common equity to total assets 4.17 % 3.81 % 9.4 % 3.84 % 3.08 % Tangible common equity to risk-weighted assets 8.86 % 9.65 % -8.2 % 9.69 % 8.40 % Total equity to total assets 5.17 % 4.97 % 4.0 % 4.92 % 4.21 % Total equity to risk-weighted assets 11.00 % 12.57 % -12.5 % 12.41 % 11.47 % SELECTED FINANCIAL DATA AT PERIOD-END Common shares outstanding at end of period 24,230 24,292 -0.3 % 24,223 24,297 Book value per common share $ 12.04 $ 9.60 25.4 % $ 10.38 $ 7.96 Trust Assets Managed 1,677,344 1,936,804 -13.40 % $ 1,617,855 $ 1,706,286 Broker-Dealer Assets Gathered 1,169,775 1,294,010 -9.6 % 1,087,781 1,195,739 Total Assets Managed 2,847,119 3,230,814 -11.9 % 2,705,636 2,902,025 Assets owned 6,950,304 6,060,179 14.7 % 6,485,946 6,205,536 Total financial assets managed and owned $ 9,797,423 $ 9,290,993 5.5 % $ 9,191,582 $ 9,107,561 Number of financial centers 23 24 -4.2 % 23 23 -------------------------------------------------------------------------------
ORIENTAL FINANCIAL GROUP Financial Summary QUARTER ENDED SIX-MONTH PERIOD ENDED (NYSE: OFG) 30-Jun-09 30-Jun-08 % 31-Mar-09 30-Jun-09 30-Jun-08 % (Dollars in thousands) Loan Production and Purchases Summary: Mortgage loans production $ 60,276 $ 75,549 -20.2 % $ 65,731 $ 126,007 $ 120,127 4.9 % Mortgage loans purchased 3,651 482 657.5 % 2,176 5,827 5,173 12.6 % Total mortgage 63,927 76,031 -15.9 % 67,907 131,834 125,300 5.2 % Commercial 7,519 15,171 -50.4 % 18,067 25,586 30,908 -17.2 % Consumer 2,075 1,421 46.0 % 1,305 3,380 2,654 27.4 % Total loan production and purchases $ 73,521 $ 92,623 -20.6 % $ 87,279 $ 160,800 $ 158,862 1.2 % CREDIT DATA Net credit losses: Mortgage $ 535 $ 314 70.4 % $ 1,396 $ 1,931 $ 480 302.3 % Commercial 1,330 141 843.3 % 598 1,928 128 1406.3 % Consumer 213 732 -70.9 % 352 565 1,298 -56.5 % Total net credit losses $ 2,078 $ 1,187 75.1 % $ 2,346 $ 4,424 $ 1,906 132.1 % Net credit losses to average loans outstanding 0.70 % 0.39 % 79.5 % 0.78 % 0.74 % 0.33 % 124.2 % AS OF 30-Jun-09 30-Jun-08 % 31-Mar-09 Allowance for loan losses $ 16,718 $ 11,885 40.70 % $ 15,147 Allowance coverage ratios: Allowance for loan losses to total loans 1.39 % 0.97 % 43.30 % 1.25 % Allowance for loan losses to non-performing loans 18.60 % 17.27 % 7.70 % 17.50 % Allowance for loan losses to non-residential non-performing loans 216.69 % 299.67 % -27.70 % 157.29 % Non-performing assets summary: Mortgage $ 82,162 $ 64,867 26.70 % $ 76,911 Commercial, mainly real estate 6,868 3,026 127.00 % 8,847 Consumer 847 940 -9.90 % 783 Non-performing loans 89,877 68,833 30.60 % 86,541 Foreclosed properties 9,174 4,906 87.00 % 9,681 Non-performing assets $ 99,051 $ 73,739 34.30 % $ 96,222 Non-performing loans to total loans 7.47 % 5.60 % 33.40 % 7.13 % Non-performing loans to total assets 1.29 % 1.14 % 13.20 % 1.33 % Non-performing assets to total assets 1.43 % 1.22 % 17.20 % 1.48 % Non-performing assets to total capital 27.54 % 24.48 % 12.50 % 30.13 % -------------------------------------------------------------------------------
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