Doral Financial Corporation Reports Financial Results for the Quarter Ended December 31, 2012

Doral Financial Corporation Reports Financial Results for the Quarter Ended 
December 31, 2012 
Reports Net Income of $28.3 Million for Quarter Ending December 31,
2012; Capital Ratios Continue to Exceed Well-Capitalized Standards 
SAN JUAN, PR -- (Marketwire) -- 03/13/13 --  Doral Financial
Corporation (NYSE: DRL) ("Doral", "Doral Financial" or the
"Company"), the holding company of Doral Bank, with operations in
Puerto Rico and the U.S., reported a net income of $28.3 million for
the quarter ended December 31, 2012, compared to a net loss of $32.5
million for the quarter ended September 30, 2012 and net income of
$11.7 million for the quarter ended December 31, 2011. For the year
ended December 31, 2012, Doral reported a net loss of $3.3 million
compared to a net loss of $10.7 million for the same period of 2011. 
"Over the past year, Doral improved revenue, capital and generated
substantial benefits from our tax assets while making significant
investments in credit and compliance. This year, we expect to be
managing a multi-market growing and profitable banking operation and
a newly created group focused on managing non-performing loans. In
all, we expect this structural change to improve both operating
results of our growing operations and transparency," said Glen
Wakeman, CEO of Doral Financial Corporation.  
Fourth Quarter Highlights: 


 
--  Grew retail deposits by $98.4 million from the third quarter of 2012
    to the fourth quarter of 2012.
    
    
--  Mortgage loan origination volume of $252 million in the fourth quarter
    2012 was up 60% from fourth quarter of 2011 volume of $159 million,
    and remained consistent with Q3 2012 volume of $254 million.
    
    
--  Preserved excess capital levels well above the standards established
    by the federal banking agencies, with ratios for Tier 1 Leverage of
    9.39%, Tier 1 Risk-based Capital of 11.93% and Total Risk-based
    Capital of 13.19%.
    
    
--  Recognized an income tax benefit of $50.2 million for the quarter
    ended December 31, 2012 compared to an income tax expense of $550
    thousand for the third quarter of 2012. The improvement of $50.8
    million is due mainly to the conversion of Doral Insurance Agency to a
    limited liability company and the related release of a portion of
    Doral Financial Corporation's valuation allowance.
    
    
--  Non-interest expense was $87.1 million for the fourth quarter of 2012,
    an increase of $13.3 million from the third quarter of 2012.
    
    
--  Provided $21.3 million for loan and lease losses as a result of
    redefaults on previously modified loans and new valuations received on
    defaulted residential mortgage loans.

  
The Company's financial results for the fourth quarter of 2012 are
being released at the same time as our filing of the Annual Report on
Form 10-K with the Securities and Exchange Commission. 
Conference Call 
Doral will be holding a conference call to discuss its financial
results on Thursday March 14th, 2013 at 10:00 a.m. EST. 
The call may be accessed through a dial-in telephone number at (800)
553-5275 or (612) 332-0725 for international callers.  
A telephone replay of the conference call will be available through
April 14, 2013 at (800) 475-6701 or (320) 365-3844 for international
callers. The replay access code is 284716. 
FINANCIAL HIGHLIGHTS  


 
--  Net income for the quarter ended December 31, 2012 totaled $28.3
    million, compared to a net loss of $32.5 million for the third quarter
    of 2012 and a net income of $11.7 million for the quarter ended
    December 31, 2011.
    
    
--  The Company reported net income attributable to common shareholders of
    $25.8 million for the fourth quarter of 2012 compared to a net loss
    attributable to common shareholders of $35.0 million for the third
    quarter of 2012, and net income attributable to common shareholders of
    $9.2 million for the quarter ended December 31, 2011.
    
    
--  Net interest income for the fourth quarter of 2012 was $56.8 million,
    an increase of $535 thousand compared to the third quarter of 2012,
    and an increase of $6.8 million when compared to the fourth quarter of
    2011. Net interest margin was 2.94% and 2.97% for the third and fourth
    quarters of 2012, respectively.
    
    
--  Provided $21.3 million for loan and lease losses as a result of
    redefaults on previously modified loans and new valuations received on
    defaulted residential mortgage loans compared to a $34.4 million
    provision in the third quarter of 2012 and a $9.9 million provision in
    the fourth quarter of 2011. The $21.3 million provision for loan and
    lease losses in the fourth quarter of 2012 resulted mainly from
    provisions of $11.7 million and $8.6 million for residential mortgage
    and commercial real estate portfolios respectively.
    
    
--  Non-interest income for the fourth quarter of 2012 of $29.7 million
    reflects increases of $9.7 million and $2.4 million, compared to
    non-interest income of $20.0 million for the third quarter of 2012 and
    $24.5 million for the fourth quarter of 2011, respectively. The
    increase in non-interest income when compared to the third quarter of
    2012 results from a decrease of $4.7 million in losses on hedge
    derivatives and the increase of $3.5 million of insurance agency
    commissions received during the fourth quarter of 2012, partially
    offset by $1.4 million in lower gains on economic hedges.
    
    
--  Non-interest expense for the fourth quarter of 2012 of $87.1 million
    increased by $13.3 million and $25.6 million from the quarters ended
    September 30, 2012 and December 31, 2011, respectively. The expense
    increase in the fourth quarter of 2012 compared to the third quarter
    of 2012 was mainly driven by increases of $6.6 million and $3.0
    million in compensation and benefits and professional services,
    respectively, as well as an increase in the provision for credit
    related expenses of $1.8 million and an additional $1.2 million of
    advertising expense.
    
    
--  Doral's loan production for the fourth quarter of 2012 was $633.2
    million, a decrease of $137.9 million and an increase of $188.6
    million, compared to $771.1 million and $444.6 million for the third
    quarter of 2012 and fourth quarter of 2011, respectively. Commercial
    loan production in the U.S. totaled $378.9 million or 59.8% of loan
    production for the fourth quarter of 2012. Residential mortgage loan
    production in Puerto Rico, most of which is sold, of $245.7 million in
    the fourth quarter of 2012 was up $93.3 million from fourth quarter
    2011 loan production of $152.4 million, showing growth of more than
    60%.
    
    
--  Doral saw an income tax benefit of $50.2 million for the quarter ended
    December 31, 2012 compared to income tax expense of $550 thousand for
    the third quarter of 2012. The improvement is due mainly to a $50.6
    million deferred tax benefit resulting from the conversion of Doral
    Insurance Agency to a limited liability company and the election to
    consolidate Doral Financial Corporation and Doral Insurance LLC for
    tax purposes, allowing the release of a portion of Doral Financial
    Corporation's tax valuation allowance.
    
    
--  Doral reported total assets as of December 31, 2012 of $8.5 billion
    compared to $8.0 billion as of December 31, 2011. The increase of
    $496.9 million is mainly due to an increase in net loans of $338.9
    million related to growth in the U.S. commercial loan portfolio.
    
    
--  Total deposits were $4.6 billion as of December 31, 2012, an increase
    of $216.7 million, or 4.9%, from deposits of $4.4 billion as of
    December 31, 2011. The Company's brokered deposits decreased $161.6
    million while retail deposits increased $378.3 million during the year
    ended December 31, 2012.
    
    
--  Non-performing loans ("NPLs"), excluding FHA/VA loans guaranteed by
    the US government, as of December 31, 2012 were $742.8 million, an
    increase of $179.1 million from December 31, 2011. The increase in
    NPLs resulted largely from the inclusion of certain residential
    mortgage TDR loans that meet the criteria for classification as NPLs
    based on a policy change effective January 1, 2012.
    
    
--  The Company's capital ratios continue to exceed the well-capitalized
    standards established by the federal banking agencies with ratios of
    Tier 1 Leverage of 9.39%, Tier 1 Risk-based Capital of 11.93% and
    Total Risk-based Capital of 13.19%. The Leverage, Tier 1 and Total
    Risk-based Capital Ratios exceeded the well-capitalized standards by
    $363.7 million, $386.8 million and $208.0 million, respectively.

  
FORWARD-LOOKING STATEMENTS 
This earnings release contains forward-looking statements within the
meaning of, and subject to the protection of, the Private Securities
Litigation Reform Act of 1995. In addition, Doral Financial
Corporation may make forward-looking statements in its other press
releases, filings with the Securities and Exchange Commission ("SEC")
or in other public or shareholder communications and its senior
management may make forward-looking statements orally to analysts,
investors, the media and others.  
These forward-looking statements may relate to the Company's
financial condition, results of operations, plans, objectives, future
performance and business, including, but not limited to, statements
with respect to the adequacy of the allowance for loan and lease
losses, delinquency trends, market risk and the impact of interest
rate changes, capital markets conditions, capital adequacy and
liquidity, and the effect of legal proceedings, tax legislation and
tax rules, compliance and regulatory matters and new accounting
standards and guidance on the Company's financial condition and
results of operations. Forward-looking statements can be identified
by the fact that they do not relate strictly to historical or current
facts, but instead represent Doral Financial's current expectations
regarding future events. Such forward-looking statements may be
generally identified by the use of words or phrases such as "would
be," "will allow," "intends to," "will likely result," "are expected
to," "will continue," "is anticipated," "estimate," "project,"
"believe," "expect," "predict," "forecast," "anticipate," "plan,"
"outlook," "target," "goal," and similar expressions and future
conditional verbs such as "would," "should," "could," "might," "can"
or "may" or similar expressions. 
Doral Financial cautions readers not to place undue reliance on any
of these forward-looking statements since they speak only as of the
date made and represent Doral Financial's expectations of future
conditions or results and are not guarantees of future performance.
The Company does not undertake and specifically disclaims any
obligations to update any forward-looking statements to reflect
occurrences or unanticipated events or circumstances after the date
of those statements other than as required by law, including the
requirements of applicable securities laws. 
Forward-looking statements are, by their nature, subject to risks and
uncertainties and changes in circumstances, many of which are beyond
Doral Financial's control. Risk factors and uncertainties that could
cause the Company's actual results to differ materially from those
described in forward-looking statements can be found in the Company's
Annual Report on Form 10-K for the year ended December 31, 2012 which
is available in the Company's website at www.doralfinancial.com, as
updated from time to time in the Company's periodic and other reports
filed and to be filed with the SEC. 
Institutional Background  
Doral Financial Corporation is a bank holding company engaged in
banking, mortgage banking and insurance agency activities through its
wholly-owned subsidiaries Doral Bank ("Doral Bank"), with operations
in the mainland U.S. (New York metropolitan area and northwest region
of Florida) and Puerto Rico, Doral Insurance Agency, LLC ("Doral
Insurance Agency"), and Doral Properties, Inc. ("Doral Properties").
Doral Bank in turn operates three wholly-owned subsidiaries: Doral
Mortgage LLC ("Doral Mortgage"), engaged in residential mortgage
lending in Puerto Rico, Doral Money, Inc. ("Doral Money"), engaged in
commercial and middle market lending primarily in the New York
metropolitan area, and CB, LLC, an entity formed to dispose of a real
estate project of which Doral Bank took possession during 2005. Doral
Money consolidates three variable interest entities created for the
purpose of entering into collateralized loan arrangements with third
parties.  
Doral Financial Corporation's common shares trade on the New York
Stock Exchange under the symbol DRL. Additional information about
Doral Financial Corporation may be found on the Company's website at
www.doralfinancial.com. 
For more information contact: 
Investor Relations: 
Christopher Poulton 
EVP
christopher.poulton@doralfinancial.com
212-329-3794 
Media:
Lucienne Gigante
SVP Public Relations & Marketing
Lucienne.Gigante@doralbank.com
787-474-6298 
 
 
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