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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): April 8, 1999
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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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(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 April 8, 1999, released
its unaudited earnings for the quarter ended March 31, 1999. The
Company's press release also included certain unaudited balance sheet and
operational data as of March 31, 1999. A copy of the press release
disclosing the Company's unaudited earnings for such period 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 April 8, 1999
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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/ Ricardo Melendez
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Ricardo Melendez
Vice President
and Chief Accounting Officer
Date: April 13, 1999
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EXHIBIT INDEX
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EXHIBIT NUMBER DESCRIPTION
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99 Press Release dated April 8, 1999
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EXHIBIT 99
[LOGO]
DORAL FINANCIAL
CORPORATION
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April 8, 1999
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Contact:
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Richard F. Bonini, Mario S. Levis, David J. Rochester
Senior Executive Vice President Executive Vice President, Senior Vice President
Tel: (212) 508 0340 Tel: (787) 749 7108 - Investor Relations
Tel: (212) 508 0349
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DORAL FINANCIAL CORPORATION REPORTS RECORD EARNINGS
FOR THE FIRST QUARTER ENDED MARCH 31, 1999
San Juan, Puerto Rico, April 8, 1999. Doral Financial Corporation
(NASDAQ: DORL), a diversified financial services company and the leading
mortgage banker in Puerto Rico, today reported record results for the first
quarter of 1999.
Net income for the quarter ended March 31, 1999, amounted to a record
$15.7 million, compared to $11.1 million for the 1998 first quarter, an increase
of 41%. Earnings per diluted share were $0.36 and $0.275 for the quarters ended
March 31, 1999 and 1998 respectively. No sales of mortgage servicing rights were
made during the first quarter of 1999 while net income for the quarter ended
March 31, 1998 included a pre-tax gain of $1.8 million on the sale of
approximately $100 million of mortgage servicing rights.
Net interest income for the first quarter of 1999 increased to $9.9
million from $7.8 million for the corresponding 1998 quarter, an increase of
26%. The increase in net interest income is due to a larger portfolio of
interest earning assets.
For the first quarter of 1999, net gain on mortgage loan sales
increased from $5.3 million to $16.6 million, an increase of 212% over the 1998
first quarter, principally due to higher volume of mortgage loan originations
and fees, which resulted in significantly higher sales with substantial gains.
The volume of mortgage loan production for the 1999 first quarter was
$702 million, compared to $387 million for the corresponding 1998 period, an
increase of 81%. Refinancing comprised 65% of production for the first quarter
of 1999 compared with 62% in the comparable 1998 period. Significantly, 83% of
Doral's mortgage production consisted of internal loan originations, the highest
ratio in Puerto Rico and one of the highest in the nation for any publicly
traded mortgage banking company. The sustained high level of originations
reflects the Company's efforts to continue to better serve the consumer, the
wider range of financial products and services offered, as well as a favorable
interest rate environment.
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For the first quarter of 1999, servicing income increased to $7.2
million, compared to $4.7 million for the corresponding 1998 period, an increase
of 53%. The increase in servicing income for the quarter reflects the growth of
the Company's mortgage servicing portfolio. Doral's servicing portfolio
increased to $6.6 billion at March 31, 1999, from $4.8 billion at March 31,
1998.
Non-interest expenses for the quarter ended March 31, 1999 were $21.6
million, compared to $11.5 million for the corresponding 1998 period, reflecting
the expansion of the Company's loan origination capacity and banking operations,
the resulting increase in employees and management, investment in technology,
and the increased costs associated with the substantial growth of the servicing
portfolio.
Salomon Levis, Chairman and Chief Executive Officer of Doral Financial
said, "We are delighted that the results for the first quarter ended March 31,
1999, were so strong. Our loan production was the highest in any first quarter
in the history of the Company, and net income was an all-time record for any
three-month period. We are especially pleased that, in contrast to the slowdown
in loan production that has been experienced in the mainland United States
mortgage banking industry during the first quarter of 1999, Doral Financial had
such strong results and substantial increases in production when compared to the
first quarter of 1998. At March 31, 1999, the total assets and servicing
portfolio of the Company also stood at record levels. Assets at Doral Bank
surpassed $1 billion for the first time and deposits reached $654 million,
another record high. Following the successful issue of approximately $75 million
of 7% non-cumulative preferred stock in February 1999, Doral Financial has
expanded its capital base to $348 million at March 31, 1999. The Company is
extremely well placed to pursue its expansion plans and continue its future
growth, and we look forward to the opportunities that lie ahead".
Currently in its 27th year of operations, Doral Financial Corporation is a
bank holding company and a diversified consumer finance company. Through Doral
Mortgage Corporation, H. F. Mortgage Bankers Division, and Centro Hipotecario,
Inc., Doral Financial is the leading mortgage banker in Puerto Rico.
The Company has forty five retail offices (twenty eight mortgage
offices in Puerto Rico, one mortgage office in each of New York, Chicago and
Miami, twelve bank branches in Puerto Rico, and two broker-dealer offices in
Puerto Rico), and engages in the origination, sale, and servicing of mortgage
loans, as well as commercial banking through Doral Bank, a Puerto Rico
commercial bank, and broker-dealer services through Doral Securities, Inc.
A telephone conference call will be held on Friday April 9 at 8:30am
EST to discuss these results. In order to participate in the telephone
conference, please call 1-800-451-7724 at least 10 minutes prior to the start of
the call. Ask for the Doral Financial conference call and give conference ID
number Q313.
A recorded version of the conference call will be available two hours
after completion of the conference until midnight on Saturday April 10, 1999 by
calling 1-800-753-4601.
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DORAL FINANCIAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(NASDAQ;DORL)
(UNAUDITED)
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Quarter Ended
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March 31,1999 March 31, 1998
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Interest income 41,738 31,044
Interest expense 31,876 23,202
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Net interest income 9,862 7,842
Provision for loan losses 295 218
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Net interest income after
provision for loan losses 9,567 7,624
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Non-interest income:
Net gain on mortgage loan sales 16,628 5,333
Trading account profit 5,136 2,546
Gain on sale of investment securities -- 1,515
Servicing income 7,213 4,721
Gain on sale of servicing assets -- 1,829
Commissions, fees and other income 815 526
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Total non-interest income 29,792 16,470
Non-interest expense:
Compensation and benefits 10,140 3,883
Taxes other than payroll
and income taxes 483 391
Professional services 1,236 878
Telephone 884 604
Rent 1,025 731
Amortization of servicing assets 2,715 1,403
Depreciation and amortization 931 843
Maintenance 455 227
Advertising 1,398 1,303
Other 2,288 1,241
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Total non-interest expense 21,555 11,504
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Income before income taxes 17,804 12,590
Income taxes 2,133 1,493
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Net income 15,671 11,097
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Earnings per share (1):
Basic: $ 0.37 $ 0.285
Diluted: $ 0.36 $ 0.275
Weighted common shares outstanding(1)
Basic: 40,428,920 38,450,408
Diluted 42,447,389 40,384,122
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(1) Adjusted to reflect a two-for-one stock split effective May 20, 1998
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DORAL FINANCIAL CORPORATION
(NASDAQ:DORL)
SELECTED BALANCE SHEET AND OPERATING DATA
(Dollars in thousands, except per share data)
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As of
Balance Sheet Data March 31, 1999 December 31, 1998
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(Unaudited) (Audited)
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Money market investments $ 298,104 $ 312,751
Mortgage loans held for sale,
at lower of cost or market 886,349 883,048
Trading securities at fair value 639,585 606,918
Securities held to maturity,
at amortized cost 192,743 190,778
Securities available for sale, at fair value 617,233 408,888
Loans receivable, net 175,073 166,987
Total assets 3,138,122 2,918,113
Stockholders' equity 348,060 269,559
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For the Quarter Ended
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Operating Data March 31, 1999 March 31, 1998
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Mortgage loan production $ 702,000 $ 387,000
Loan servicing portfolio $ 6,566,000 $ 4,810,000
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For the Quarter Ended
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Financial Ratios March 31, 1999 March 31, 1998
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Return on average assets 2.13% 2.16%
Return on average common equity 21.64% 20.97%
Common stock dividend payout ratio 16.67% 17.54%
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For the Quarter Ended
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Cash Dividends Per Share(1) March 31, 1999 March 31, 1998
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Common $ 0.06 $ 0.05
Cumulative Preferred (2) 20.00 20.00
Non-cumulative Preferred (3) 0.36 --
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(1) Adjusted to reflect the two-for-one stock split effective May 20, 1998
(2) 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.
(3) Represents dividends on 1,495,000 outstanding shares of the company's
7% Noncumulative Monthly Income Preferred Stock (Liquidation preference
$50 per share).
