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Doral, Santander, W Holding Report Outstanding 4Q
All three financial institutions confirm their commitment to growing in pursuit of profitability
By LUIS A. RAMOS
January 29, 2004
Doral Financial Corp., W Holding Co., and Santander BanCorp reported positive earnings for the fourth quarter of 2003 (4Q03), ended Dec. 31, 2003.
Doral Financial Corp.
The last quarter of 2003 was Doral Financial Corp.s 24th consecutive quarter of record earnings. Net income in 4Q03 amounted to $94.7 million, compared with $64.2 million in 4Q02, a gain of 48%. Doral earned $321.3 million in 2003, up 45% from $221 million in 2002.
Consolidated earnings per diluted share in 4Q03 were $0.78, an increase of 42% compared with $0.55 in 4Q02. Consolidated earnings per diluted share rose 44% from $1.89 in 2002 to $2.72 last year.
Dorals return on assets increased from 2.97% in 4Q02 to 3.46% in 4Q03. The volume of its loan production was $1.7 billion in 4Q03, an increase of 21% over the $1.4 billion reported in 4Q02. The volume for all of 2003 was $6.5 billion, up 25% from $5.2 billion the previous year. Mortgage loans helped to expand the servicing portfolio from $11.2 billion in 2002 to $12.7 billion in 2003.
Total noninterest income went from $80 million in 4Q02 to $110.3 million in 4Q03, a gain of 38%. For 2003, Dorals total noninterest income stood at $411.8 million, up 61% from the previous year.
Doral reported a loss on trading activities of $9.7 million in 4Q03, compared with a gain of $2.6 million in 4Q02, reflecting net costs incurred on options, futures contracts, and other derivative instruments used for interest-rate management.
The companys net servicing loss for 4Q03 was approximately $3.6 million, compared with a loss of approximately $355,000 for 4Q02. Its net servicing loss for 2003 was $15.1 million, higher than the $6.7 million lost in 2002. The company recorded impairment charges of $15.9 million in 2003, compared with $9.2 million the year before. Doral Bank finished 2003 with $6.7 billion in assets and $2.7 billion in deposits, an increase of 33% and 38%, respectively, from 2002. Doral Bank N.Y. had assets of $506.7 million and deposits of $333.9 million as of Dec. 31, 2003, representing gains of 21% and 31%, respectively, over Dec. 31, 2002.
"We remain optimistic that 2004 will be another strong year for the company. Even with the anticipation of higher interest rates, we expect greater profitability in 2004. We are committed to working hard and delivering enhanced value to shareholders on a consistent basis," said Salomon Levis, chairman, president & CEO of Doral Financial Corp.
Doral Financial Corp. is a diversified financial holding company with banking operations on the U.S. mainland and in Puerto Rico. It is the largest residential mortgage lender on the island.
Santander BanCorp is the holding company of Banco Santander Puerto Rico and part of the international Grupo Santander Central Hispano. The companys net income for 4Q03 amounted to $15.7 million, an improvement on the $1.4 million net loss in 4Q02. Net income for all of 2003 was $39.4 million, up 53% or $13.6 million from the year before.
Earnings per common share in 4Q03 amounted to $0.28, compared with a net loss of $0.06 in 4Q02. For 2003, earnings per common share amounted to $0.76, a 55% increase over the previous years $0.49 per share. Return on equity (ROE) and return on assets (ROA) were 8.89% and 0.87%, respectively, in 4Q03, compared with -1.94% and -0.09% in 4Q02.
The provision for loan losses reflected a decrease from $18.1 million in 4Q02 to $15 million in 4Q03. The allowance for loan losses to nonperforming loans improved from 46.95% as of Dec. 31, 2002 to 71.74% as of Dec. 31, 2003. Net loans, including loans held for sale, reached $4.1 billion in 4Q03, reflecting an increase of 8% from $3.8 billion in 4Q02.
Santander had total assets of $7.4 billion on Dec. 31, 2003, compared with $7.1 billion on Dec. 31, 2002. There was a $245 million decrease in cash and cash equivalents, a $130 million increase in investment securities, and a $349 million gain in net loans.
In 3Q03, the company sold its software developed for internal use to an affiliate at book value, approximately $42 million. As a result, Santanders expenses related to the use of this software will be reduced by approximately $4.1 million annually.
Santander redeemed its 7% Noncumulative Series A Preferred Stock at a price of $26 per share, including a premium of $2.6 million, which represents a reduction in earnings per common share of $0.06 for the year and the quarter ended Dec. 31, 2003.
The acquisition of Santander Securities Corp. and Santander Asset Management was completed in 4Q03 at a cost of $62 million.
As of Dec. 31, 2003, Santander BanCorp had over $10.1 billion in customer financial assets under control, $896 million more than on that date in 2002.
During 2003, the price of Santander BanCorps common stock increased from $12.67 per share to $24.35, representing a $495 million increase in aggregate shareholder value.
W Holding Co.
W Holding Co., the financial holding company of Westernbank Puerto Rico, reported net income of $38.1 million and earnings per share of $0.30 in 4Q03, compared with $25.3 million and $0.21 in 4Q02. For 2003, W Holding reported net income of $113.3 million and earnings per share of $0.87, up from $86 million and $0.73 the previous year.
W Holdings increase in earnings reflects a total charge of $22.7 million ($17 million net of tax) related to the liquidation of its portfolio of corporate bonds and loan obligations, which was finalized June 6, 2003.
ROA and ROE for 4Q03 were 1.37% and 29.44%, respectively, compared with 1.26% and 24.41% in 4Q02. Stockholders equity had increased to $828.5 million as of Dec. 31, 2003, compared with $584.7 million as of Dec. 31, 2002.
Total assets stood at $11.5 billion in 4Q03, growing 40% from $8.2 billion in 4Q02. Net loans receivable increased by $928.8 million or 24.74%. The investment portfolio expanded by $2.3 billion or 55%, from $4.2 billion on Dec. 31, 2002 to $6.5 billion a year later.
"The most important aspect of our companys strong core stream of earnings is that they are operational and, in laymans terms, are ordinary recurring income. This means it isnt dependent on the forced sale of assets, trading or secondary-market activities, or the interest-rate environment to make its numbers," said Frank C. Stipes, chairman & CEO of W Holding Co.
W Holdings net interest income was $71.3 million in 4Q03, an increase of $23.2 million or 48% from $48.1 million in 4Q02. Net interest income for all of 2003 reached $239.3 million, gaining 44% from $166.3 million in 2002. The provision for possible loan losses amounted to $6.3 million in 4Q03, an increase of 50% over the $4.2 million provision in 4Q02.
Expresso of Westernbanks loan portfolio had grown to $155.6 million on Dec. 31, 2003, $37.7 million more than on that date in 2002. Net loans receivable increased by 24% to $4.7 billion, compared with $3.8 billion on Dec. 31, 2002. Commercial real-estate loans secured by first mortgages increased from $1.6 billion on Dec. 31, 2002 to $2.3 billion a year later, for a gain of some $700 million.
Total deposits had reached $5.4 billion on Dec. 31, 2003, up 26% from $4.3 billion on Dec. 31, 2002. Fed funds bought and securities sold under agreements to repurchase went from $3.1 billion to $5 billion, increasing 61%.
Doral Financial Corp.
4th Quarter (48% Increase)
Year (45% Increase)
Source: Doral Financial Corp.
4th Quarter (1,221% Increase)
Year (53% Increase)
Source: Santander BanCorp
W Holding Co.
4th Quarter (51% Increase)
Year (32% Increase)
Source: W Holding Co.
This Caribbean Business article appears courtesy of Casiano Communications.