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Doral, Santander, And R&G Report Gains In 3Q
All three financial institutions faring well in their core businesses
By LUIS A. RAMOS
October 30, 2003
Doral Financial Corp., Santander BanCorp, and R&G Financial Corp. all reported positive earnings results for the third quarter of 2003 (3Q03), ended on Sept. 30.
Doral Financial Corp.
Doral Financial Corp., the largest residential-mortgage lender in Puerto Rico, reported net income for 3Q03 of $81.7 million, an increase of 40% over the $58.3 million generated in 3Q02. Doral earned $226.6 million from January through September (year-to-date), a record for the period and 45% higher than year-to-date 2002.
Third-quarter 2003 earnings per diluted share were $1.05, compared with $0.74 for 3Q02, reflecting a 42% gain. For the first nine months of 2003, Doral had earnings per diluted share of $2.91, up 44% from $2.02 in the same period last year, and a 3.3% return on assets.
Loan production for 3Q03 was a record-breaking $1.7 billion, or 31% greater than 3Q02s $1.3 billion. The increase was principally driven by the continued high demand for new housing in Puerto Rico and for mortgage refinancing.
Doral reflected a 63% increase in noninterest income, from $68 million in 3Q02 to $110.9 million in 3Q03. Noninterest income for the first nine months of the year increased 72% to $301.5 million.
Chairman & CEO Salomon Levis said Dorals recent performance and the continued strength of the residential-mortgage market in Puerto Rico make him optimistic about Dorals prospects.
Doral Bank Puerto Rico finished the first nine months of 2003 with $6.7 billion in assets and $2.6 billion in deposits, an increase of 56% and 37%, respectively, compared with the same period in 2002. Doral Bank New York had assets of $495.5 million and deposits of $327.9 million, up 63% and 37%.
Santander BanCorp, holding company for Banco Santander Puerto Rico and part of Grupo Santander Central Hispano, reported net income for third-quarter 2003 of $8.2 million, reflecting a 254% improvement over the $2.3 million achieved in 3Q02 and 54% higher than in the second quarter of this year. Net income for the first nine months of 2003 reached $16.7 million, compared with $23.6 million in the same period last year.
Earnings per common share for 3Q03 amounted to $0.17, a 467% gain over 3Q02s $0.03. A cash dividend of $0.11 per common share was declared in the third quarter of 2003, resulting in an annualized dividend yield of 2.34%.
Total assets for 3Q03 stood at $7.2 billion, a $100 million increase over the $7.1 billion reported in the fourth quarter of 2002. There was a $268 million decrease in cash and cash equivalents, a $197 million increase in investment securities, and a $242 million increase in net loans, including loans held for sale. Deposits fell by $828 million, while borrowings swelled by $910 million.
Grupo Santander launched a brand-awareness campaign to recover market share and re-establish its position as a financial services leader on the island. It has also promoted the transfer of Santander Securities, the second-largest securities broker dealer in Puerto Rico, to Grupo Santander Puerto Rico.
R&G Financial Corp.
The holding company for R-G Premier Bank and U.S. mainland-based R-G Crown Bank, R&G Financial Corp. reported net income of $34.3 million for the third quarter of 2003, compared with $25 million for 3Q02, representing a 37% gain. Net income for the first nine months (year-to-date) also increased 37% from $69.2 million in 2002 to $94.9 million this year.
Earnings per diluted share rose to $0.89 in 3Q03, a gain of 41% over the 3Q02 high of $0.63. Earnings per diluted share increased by 34% year-to-date from $1.81 in 2002 to $2.43 this year. R&G Financials return on equity during the third quarter of 2003 was 24.26%, while return on assets was 1.82%. The efficiency ratio for the quarter was 49%.
For the first nine months of 2003, R&Gs origination and sale of loans increased 87% to $108 million. Other fee income, mostly from insurance and brokerage subsidiaries, amounted to $20.9 million, for an increase of 68%.
Despite the rates increase in the third quarter, total loan production gained 69% over 3Q02 to $1.3 billion. Total loan production in 3Q03 was the highest in any quarter in R&Gs history.
"While a decrease in the volume of mortgage loan refinancing is expected because of higher interest rates, it shouldnt have a substantial impact on the overall performance of R&G because of the continued strength of the Puerto Rico and Central Florida lending markets," said R&G Financial Chairman & CEO Victor Galan.
This Caribbean Business article appears courtesy of Casiano Communications.