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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13
or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): January 21, 1998
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Doral Financial Corporation
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(Exact name of registrant as specified in this charter)
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Puerto Rico 0-17224 66-0312162
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<S> <C> <C>
(State or other jurisdiction of (Commission File No.) (IRS Employer Identification No.)
incorporation)
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1159 Franklin D. Roosevelt Avenue, San Juan, Puerto Rico 00920
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (787) 749-7100
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ITEM 5. OTHER EVENTS
Doral Financial Corporation (the "Company"), on January 21, 1998, released
its unaudited earnings for the quarter and year ended December 31, 1997. The
Company's press release also included certain unaudited balance sheet and
operational data as of December 31, 1997. A copy of the press release
disclosing the Company's unaudited earnings for such periods is attached as an
exhibit to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA, FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99 Press Release dated January 21, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant had duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
DORAL FINANCIAL CORPORATION
By: /s/ Richard F. Bonini
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Richard F. Bonini
Senior Executive Vice President
and Chief Financial Officer
Date: January 23, 1998
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EXHIBIT INDEX
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EXHIBIT NUMBER DESCRIPTION
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99 Press Release dated January 21, 1998
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EXHIBIT 99
[LOGO]
DORAL FINANCIAL
CORPORATION
January 21, 1998
For: Doral Financial Corporation
Contact: Richard F. Bonini
Senior Executive Vice President
And Chief Financial Officer
Telephone: (212) 508-0340
(787) 749-7100
DORAL FINANCIAL CORPORATION REPORTS RECORD
INCREASE IN EARNINGS FROM OPERATIONS OF 43% FOR THE
FOURTH QUARTER OF 1997 AND 20% FOR THE YEAR ENDED DECEMBER 31, 1997
San Juan, Puerto Rico (January 21, 1998). Doral Financial
Corporation (NASDAQ:DORL), a diversified financial services company and the
leading mortgage banker in Puerto Rico today reported results for the year and
fourth quarter ended December 31, 1997.
Income before a non-cash extraordinary charge for 1997 was a
record $32.5 million, or $1.70 per diluted share, compared to $27.0 million, or
$1.42 per diluted share a year ago. Revenues for the year ended December 31,
1997 increased to $135.4 million from $107.8 million for the year ended December
31, 1996, an increase of 26%. The results for the year ended December 31, 1996
include pre-tax revenues of $1.8 million from sale of mortgage servicing rights.
There were no mortgage servicing rights sales during 1997.
For the quarter ended December 31, 1997, Doral Financial
reported income before non-cash extraordinary charge of $8.9 million, or $0.46
per diluted common share,
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compared to $6.2 million, or $0.33 per diluted share for the 1996 fourth
quarter, an increase of 40% on a per share basis.
As previously announced in the Company's press release of
November 14, 1997, the Company exchanged convertible debt for convertible
preferred stock during the fourth quarter of 1997, which resulted in an increase
in the Company's paid-in capital of $20.8 million. Simultaneously, the Company
recorded a non-cash extraordinary charge to earnings of $12.3 million resulting
in a net increase to the Company's stockholders' equity of $8.5 million. After
the extraordinary non-cash charge, the Company reported net income of $20.2
million, or $1.06 per diluted share, for the year ended December 31, 1997 and a
net loss after the extraordinary non-cash charge of $3.4 million, or $0.18 per
diluted share, for the quarter ended December 31, 1997.
Total revenues for the quarter were $41.1 million, an increase
of 49% over the $27.7 million reported for the fourth quarter of 1996. The
increase in revenues was primarily attributable to an increase in mortgage loan
sales and fees and an increase in interest income. The increase in mortgage loan
sales and fees was primarily due to an increase in the volume of loan
originations and the higher interest income reflects an increase in interest
earning assets at lower borrowing costs.
Total loan production and purchases for the 1997 fourth
quarter and year ended December 31, 1997 were $321 million and $1.04 billion,
compared to $208 million and $817 million for the comparable year ago periods,
an increase of 54% and 27%, respectively. Refinancings comprised 51% of
production for the year ended December 31, 1997 versus 47% for the year ended
December 31, 1996. Servicing income increased by 25% in the 1997 fourth quarter
to $4.1 million from $3.3 million in the comparable 1996 period. For the year
ended
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December 31, 1997, servicing income increased to $15 million from $11.7 million
a year ago, an increase of 29%. The increase in servicing income was primarily
due to an increase in the size of the Company's servicing portfolio. The
Company's servicing portfolio totaled $4.7 billion at December 31, 1997 compared
to $3.1 billion at the same date a year ago. The Company purchased approximately
$1.0 billion in servicing rights during the second half of 1997.
Loan origination, servicing, general and administrative
expenses for the fourth quarter and year ended December 31, 1997 were $11.9
million and $36.2 million versus $6.3 million and $30.1 million, respectively
for the comparable periods of 1996, reflecting additional costs associated with
expanding the Company's customer base and loan origination and servicing
capacity.
Salomon Levis, Chairman of the Board and Chief Executive
Officer of the Company commented that, "I am very pleased with these strong
results, which include reaching three important milestones during 1997: (1)
record operational earnings of $32.5 million (2) mortgage originations in excess
of $1 billion and (3) a mortgage servicing portfolio of $4.7 billion, that
attest to our prominent leadership of the mortgage banking industry in Puerto
Rico. These achievements, when added to the increasing contribution of Doral
Bank, Doral Securities' greater market share, combined with the Company's
expansion plans for the continental United States, should lay the foundation for
further growth and opportunities in 1998 and succeeding years".
Doral Financial Corporation, is a diversified consumer finance
company with assets in excess of $1.8 billion. Doral Financial Corporation
through its HF Mortgage Bankers Division, Doral Mortgage Corporation and Centro
Hipotecario, Inc., is the leading mortgage banker in Puerto Rico. The Company,
with 20 retail mortgage lending offices throughout Puerto
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Rico and two offices in Florida, engages in the origination, sale and servicing
of mortgage loans, as well as commercial banking through Doral Bank with 5
branches and broker-dealer services through Doral Securities.
-Tables to follow-
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Doral Financial Corporation
CONSOLIDATED STATEMENT OF OPERATIONS
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(NASDAQ:DORL)
STATEMENT OF INCOME
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(Dollars in thousands, except per share data)
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Quarter Ended Year Ended
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Dec. 31, 1997 Dec. 31, 1996 Dec. 31, 1997 Dec. 31, 1996
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Revenues
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Mortgage loan sales & fees $ 10,365 $ 6,139 $ 28,588 $ 26,610
Servicing income 4,133 3,317 14,996 11,659
Interest income 26,031 17,957 90,130 66,987
Sale of servicing rights -- -- -- --
Other income 575 252 1,703 764
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TOTAL REVENUES 41,104 27,665 135,417 107,833
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Costs and Expenses:
Interest expense 18,224 13,682 61,438 46,443
Loan origination, servicing, general &
administrative 11,905 6,305 36,182 30,111
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Total expenses 30,129 19,987 97,620 76,554
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Income before taxes 10,975 7,678 37,797 31,279
Income taxes 2,059 1,448 5,249 4,238
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Income before non-cash extraordinary charge 8,916 6,230 32,548 27,041
Non-cash extraordinary charge 12,317 -- 12,317 --
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Net (loss) income $ (3,401) $ 6,230 $ 20,231 $ 27,041
============ =========== ============ ===========
Earnings per share: (1)
BASIC:
Income before non-cash extraordinary charge $ 0.48 $ 0.34 $ 1.77 $ 1.49
Non-cash extraordinary charge (0.67) -- (0.67) --
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Net (loss) income) $ (0.19) $ 0.34 $ 1.10 $ 1.49
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DILUTED
Income before non-cash extraordinary charge $ 0.46 $ 0.33 $ 1.70 $ 1.42
Non-cash extraordinary charge (0.64) -- (0.64) --
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Net income $ (0.18) $ 0.33 $ 1.06 $ 1.42
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Weighted commons shares outstanding (1)(2)
Basic 18,397,460 18,222,184 18,340,079 18,133,122
Diluted 19,364,316 19,366,784 19,364,316 19,362,536
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Notes:
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(1) Adjusted to reflect a two-for-one stock split effective August 28, 1997.
(2) Basic earnings per share are calculated by dividing net income after
deducting preferred stock dividends by the weighted average number of
Common Stock outstanding during the period. On a diluted basis, both net
earnings and shares outstanding are adjusted to assume the conversion of
the Company's convertible securities that were outstanding during such
periods.
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DORAL FINANCIAL CORPORATION
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(NASDAQ:DORL)
SELECTED BALANCE SHEET AND OPERATING DATA
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(Dollars in thousands, except per share data)
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As Of
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BALANCE SHEET DATA Dec. 31, 1997 Dec. 31, 1996
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Mortgage loans held for sale, net $ 406,297 $ 261,608
Securities held to maturity 143,534 109,055
Securities available for sale 240,876 12,007
Securities held for trading 620,288 436,125
Loans receivable, net 133,055 128,766
Total Assets 1,857,789 1,106,996
Stockholders' Equity 186,956 150,531
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Year Ended
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OPERATING DATA Dec. 31, 1997 Dec. 31, 1996
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Mortgage Loan Originations and Purchases $1.037 billion $817 million
Loan Servicing Portfolio $ 4.7 billion $ 3.1 billion
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Three Months Ended Year Ended
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Per Share Data Dec. 31, 1997 Dec. 31, 1996 Dec. 31, 1997 Dec. 31, 1996
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BASIC:
Income before non-cash extraordinary charge $ 0.48 $ 0.34 $ 1.77 $ 1.49
Non-cash extraordinary charge (0.67) - (0.67) -
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Net (loss) income) $ (0.19) $ 0.34 $ 1.10 $ 1.49
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DILUTED
Income before non-cash extraordinary charge $ 0.46 $ 0.33 $ 1.70 $ 1.42
Non-cash extraordinary charge (0.64) - (0.64) -
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Net income $ (0.18) $ 0.33 $ 1.06 $ 1.42
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Cash Dividends
Common $ 0.10 $ 0.09 $ 0.39 $ 0.33
Preferred $ 15.33 (1) $ - $ 15.33 (1) $ 0.3825
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(1) Represents dividends on 8,460 outstanding shares of the Company's 8%
Convertible Cumulative Preferred Stock (Liquidation Preference $1,000
per share) which have been privately placed with a local financial
institution.
