SOURCE: Doral Financial Corporation

July 28, 2011 21:26 ET

Doral Financial Corporation Reports Financial Results for the Quarter Ended June 30, 2011

Reports Net Income of $4.5 Million for the Quarter; Continues to Exceed Well Capitalized Benchmarks

SAN JUAN, PR--(Marketwire - Jul 28, 2011) - Doral Financial Corporation (NYSE: DRL) ("Doral," "Doral Financial" or the "Company"), the holding company of Doral Bank and Doral Bank FSB, with operations in Puerto Rico and the U.S., reported net income of $4.5 million for the quarter ended June 30, 2011, compared to $3.3 million for the quarter ended March 31, 2011.

"Our second consecutive profitable quarter is a consequence of improving fundamentals. We increased revenues, reduced non-performing assets and strengthened our capital position by selling non-strategic assets at a gain. Our focus continues to be in repositioning our portfolios and sustaining our profitability," said Glen Wakeman, CEO and President of Doral Financial Corporation.

Second Quarter Highlights:

--  Reduced interest expense by $5.2 million resulting in an increase in
    net interest income to $45.5 million.

--  A net gain of $11.7 million from the sale of $679.2 million of
    non-strategic securities.

--  Non-performing assets fell by $33.4 million.

--  Tier 1 Leverage Ratio improved to 9.07%

--  The book value per share increased to $4.02

Conference Call

Doral will be hosting an earnings call for interested parties at 10:00 a.m. Monday, August 1, 2011.

Call-in information is:

U.S. Participant Dial-In Number: (800) 230-1096

International Participant Dial-In Number: (612) 288-0340

Conference identification number: 211811

FINANCIAL HIGHLIGHTS

--  Net income for the quarter ended June 30, 2011 totaled $4.5 million,
    compared to $3.3 million for the first quarter of 2011 and a net loss
    of $233.3 million for the quarter ended June 30, 2010.  Net income for
    the six month period ended June 30, 2011 totaled $7.8 million, compared
    to a net loss of $236.8 million for the same period in 2010.

--  The Company reported net income attributable to common shareholders of
    $2.1 million and earnings per common share of $0.02 for the second
    quarter of 2011 compared to net income attributable to common
    shareholders of $0.9 million and earnings per common share of $0.01 for
    the first quarter of 2011, and net loss attributable to common
    shareholders and loss per share of $235.7 million and $3.50,
    respectively, for the second quarter of 2010.  The Company reported net
    income attributable to common shareholders and earnings per share of
    $3.0 million and $0.02, respectively, for the six months ended June 30,
    2011 compared to losses of $214.5 million and $3.30, respectively,
    for the same period in 2010.

--  Net interest income for the second quarter of 2011 was $45.5 million,
    an increase of $2.3 million compared to the first quarter of 2011, and
    an increase of $5.4 million when compared to the second quarter of
    2010. Net interest margin increased 13 basis points to 2.36%, compared
    to 2.23% for the first quarter of 2011.  Interest expense decreased
    mainly due to (i) a decrease of $4.4 million on interest on deposits as
    the rates on the brokered deposits portfolio decreased as Doral
    completed its efforts to recall high cost callable CDs and lower rates
    of other interest bearing deposits, and (ii) a $2.9 million decrease in
    interest paid for securities sold under agreements to repurchase due to
    the substitution of $515.0 million of securities sold under agreements
    to repurchase with advances from the FHLB and the early retirement of
    $219.5 million of securities sold under agreements to repurchase with
    a portion of the proceeds from the sale of $679.2 investment
    securities. Interest income decreased net $2.9 million mainly due to
    decreases in interest on mortgage backed securities of $1.8 million
    related to the sale of $679.2 million of securities and a decrease in
    interest income on loans of $0.8 million. There was an increase in
    commercial and industrial loans in the U.S. of $246.0 million that had
    a positive impact on interest on loans, which was partially offset by
    lower early payment penalties recognized in interest income in the
    second quarter of 2011 compared to the first quarter of 2011.

--  Provision for loan and lease losses for the second quarter of 2011 was
    $13.3 million, an increase of $10.7 million over the first quarter 2011
    provision, and a decrease of $31.3 million from the provision recorded
    in the second quarter of 2010. The second quarter 2011 provision for
    loan and lease losses increased as a result of (i) new market
    information received increasing estimated losses on loans evaluated
    individually for impairment in the second quarter, (ii) first quarter
    refinements made to the loss reserving methodologies, and (iii)
    increased aging of the past due residential mortgage loans. The June
    2010 provision included a $12.6 million charge to reduce certain
    construction loans to lower of cost or market when transferred to loans
    held for sale and an $8.0 million charge due to increased severities on
    other real estate owned properties resulting from management's
    strategic decision to accelerate OREO dispositions, in addition to
    higher provisions driven by higher delinquencies in 2010 compared to
    2011. The provision for loan and lease losses for the six month period
    ended June 30, 2011 totaled $15.9 million compared to $58.5 million for
    the same period in 2010. The decrease of $42.6 million in the provision
    was mainly related to the previously mentioned charges of $12.6 million
    for loans reclassified to held for sale and $8.0 million for increased
    severities on OREO as well as higher delinquencies which drove higher
    provisions in 2010 compared to 2011.

--  Second quarter 2011 non-interest income of $38.8 million reflected an
    increase of $10.2 million and $159.0 million compared to non-interest
    income of $28.6 million for the first quarter of 2011 and a
    non-interest loss of $120.2 million for the second quarter of 2010,
    respectively. Non-interest income for the second quarter of 2011
    included a gain on sale of investment securities of $14.8 million less
    a $3.1 million early repayment penalty fee, compared to a $2.9 million
    gain for the first quarter 2011 and a $139.7 million loss for the
    second quarter of 2010, including an early repayment penalty fee of
    $2.5 million. The second quarter 2010 $139.7 million loss on securities
    sales was due to a loss of $136.7 million on the sale of certain
    non-agency CMO's with an amortized cost basis of $378.0 million.

--  Second quarter 2011 non-interest expense of $63.6 million increased
    $2.8 million and decreased $40.5 million from expenses for the quarters
    ended March 31, 2011 and June 30, 2010, respectively. The expense
    increase in the second quarter of 2011 compared to the first quarter of
    2011 was primarily due to severance expense of $2.3 million paid during
    the quarter as part the Company's efforts to properly size its work
    force. The decrease in expenses compared to the second quarter of 2010
    were due to certain non-recurring expenses incurred in the second
    quarter of 2010 including (i) an additional OREO provision of $17.0
    million due to management's decision to accelerate OREO dispositions,
    (ii) recognition of an additional reserve on the Lehman Brothers, Inc.
    ("LBI") claim receivable of $10.8, (iii) higher professional services
    incurred in the Company's capital raise, preferred stock exchange,
    participation in bids for FDIC assisted transactions, sale of
    non-performing assets and litigation defense of the Company's former
    officers, (iv) payment of $3.3 million pursuant to the Company's
    Retention Program, and (v) higher advertising expense as a result of
    campaigns to increase the Company's deposit and mortgage loan market
    share after the bank consolidations on the Island.

--  Second quarter 2011 income tax expense of $2.9 million decreased $2.2
    million and $1.6 million compared with income tax expense of $5.1
    million and $4.5 million in the first quarter of 2011 and the second
    quarter of 2010, respectively. The decrease in tax expense was due to
    the recognition in the first quarter of 2011 of a $2.3 million deferred
    tax adjustment resulting from the net effect on Doral's deferred tax
    asset of the Puerto Rico tax reform legislation approved in January
    2011 lowering the effective tax rate and the increased earnings
    expectation of profitable Puerto Rico entities. Income tax expense
    reflected a decrease of $1.6 million compared to the second quarter of
    2010 due to taxes recognized in 2010 related to U.S. source income, as
    well as the impact of tax rate change on the valuation allowance
    partially offset by realization of operational deferred tax assets.

--  Doral's loan production for the second quarter 2011 was $464.7 million,
    an increase of $114.6 million compared to $350.1 million for the first
    quarter of 2011, and of $84.5 million from $380.2 million for the
    second quarter of 2010. The running quarter production increase
    resulted mainly from the US loan production.

--  Doral reported total assets as of June 30, 2011 of $8.0 billion
    compared to $8.6 billion as of December 31, 2010 and $9.4 billion as of
    June 30, 2010. The decrease is mainly due to the sale of $870.0 million
    of mortgage backed securities in 2011. These sales were conducted
    pursuant to the Company's deleveraging of the balance sheet.

--  Total deposits of $4.3 billion as of June 30, 2011, decreased $315.7
    million, or 6.8%, from deposits of $4.6 billion as of December 31,
    2010. The Company's brokered deposits decreased $328.2 million (14.0%)
    while non-brokered deposits increased $12.5 million.

--  Non-performing loans ("NPLs"), excluding FHA/VA loans guaranteed by
    the US government, as of June 30, 2011 were $560.5 million, a decrease
    of $11.0 million and $65.9 million from March 31, 2011 and December 31,
    2010, respectively. The reduction in NPLs was a result of continued
    emphasis on collections and restructures to optimize performance of the
    loan portfolio as well as the effect of net charge-offs of $40.1
    million in the second quarter of 2011 compared to net charge-offs of
    $6.0 million in the first quarter of 2011.

--  Second quarter 2011 charge-offs totaled $40.4 million compared to the
    first quarter 2011 charge-offs of $6.4 million and second quarter 2010
    charge-offs of $57.5 million. Doral's charge-off policy has been to
    reduce the reported balance of a collateral dependent loan (a loan is
    collateral dependent when the liquidation of collateral is considered
    the likely source of repayment of a delinquent loan) by a charge to the
    allowance for loan and lease losses upon receipt of a current market
    appraised value. Due to long delays in receiving new market value
    appraisals of properties in Puerto Rico, Doral has adopted a method to
    estimate market values for all properties based upon the changes in
    market values in new appraisals it has received. Because of the long
    delay in the receipt of appraisals, in the second quarter of 2011 Doral
    adopted the practice of charging off the portion of the difference
    between the loan balance before charge-off and the estimated fair value
    of the property collateralizing the loan considered uncollectible. This
    new practice also reduces the reported allowance for loan and lease
    losses and the coverage ratios that exclude the amount previously
    charged-off.

--  The Company's capital ratios continue to exceed the published
    well-capitalized standards established by the federal banking agencies
    with ratios of Tier 1 Leverage of 9.07%, Tier 1 Risk-based Capital of
    13.41% and Total Risk-based Capital of 14.67%. The Leverage, Tier 1 and
    Total Risk-based Capital Ratios exceeded the well-capitalized standards
    by $335.9 million, $413.8 million and $260.7 million, respectively.



Selected Financial Data

                                               Quarters Ended
                                  ----------------------------------------
(In thousands, except for share     June 30,     March 31,      June 30,
 data)                                2011          2011          2010
                                  ------------  ------------  ------------
Selected Income Statement Data:
  Interest income                 $     91,117  $     93,991  $    101,077
  Interest expense                      45,662        50,821        61,012
                                  ------------  ------------  ------------
  Net interest income                   45,455        43,170        40,065
  Provision for loan and lease
   losses                               13,323         2,590        44,617
                                  ------------  ------------  ------------
  Net interest income after
   provision for loan and lease
   losses                               32,132        40,580        (4,552)
  Non-interest income (loss)            38,797        28,624      (120,190)
  Non-interest expenses                 63,581        60,784       104,082
                                  ------------  ------------  ------------
  Income (loss) before income
   taxes                                 7,348         8,420      (228,824)
  Income tax expense                     2,871         5,096         4,487
                                  ------------  ------------  ------------
  Net income (loss)               $      4,477  $      3,324  $   (233,311)
                                  ============  ============  ============
  Net income (loss) attributable
   to common shareholders (1)     $      2,061  $        909  $   (235,726)
                                  ============  ============  ============
  Net income (loss) per common
   share (2)                      $       0.02  $       0.01  $      (3.50)
                                  ============  ============  ============

Accrued dividends, preferred
 stock                            $      2,415  $      2,415  $      2,415
Preferred stock exchange premium,
 net                              $         --  $         --  $         --
Book value per common share       $       4.02  $       4.00  $       6.27
Preferred shares outstanding at
 end of period                       5,811,391     5,811,391     6,096,393
Weighted average common shares
 outstanding                       127,293,756   127,293,756    67,285,568
Common shares outstanding at end
 of period                         127,293,756   127,293,756    67,293,370

Selected Balance Sheet Data at
 Period End:
  Total investment securities (3) $    716,040  $  1,461,392  $  2,428,273
  Total loans, net (4)               5,897,060     5,724,271     5,768,728
  Allowance for loan and lease
   losses ("ALLL")                      93,472       120,204       134,913
  Servicing assets, net                115,785       116,299       113,005
  Total assets                       8,015,696     8,464,096     9,393,533
  Deposits                           4,302,792     4,486,248     4,940,569
  Total borrowings                   2,590,202     2,853,274     3,265,020
  Total liabilities                  7,151,436     7,603,391     8,448,561
  Preferred equity                     352,082       352,082       523,082
  Common equity                        512,178       508,623       421,890
  Total stockholders' equity           864,260       860,705       944,972

Selected Average Balance Sheet
 Data for Period End: (5)
  Total investment securities     $  1,258,527  $  1,588,310  $  2,284,672
  Total loans (4)                    5,890,682     5,865,592     5,876,723
  Total interest-earning assets      7,729,926     7,851,951     8,747,284
  Total assets                       8,381,285     8,530,595     9,427,981
  Deposits                           4,449,327     4,535,820     4,644,841
  Total borrowings                   2,814,985     2,848,369     3,449,652
  Total interest-bearing
   liabilities                       6,989,490     7,115,169     7,863,038
  Preferred equity                     352,082       352,082       486,191
  Common equity                        518,602       507,730       468,198
  Total stockholders' equity           870,684       859,812       954,389

Operating Data:
  Loan production                 $    464,653  $    350,091  $    380,170
  Loan servicing portfolio (6)       8,045,830     8,135,127     8,335,364


                                       Six Months Ended
                                  ---------------------------
(In thousands, except for share     June 30,      June 30,
 data)                                2011          2010
                                  ------------  ------------
Selected Income Statement Data:
  Interest income                 $    185,108  $    210,305
  Interest expense                      96,483       126,479
                                  ------------  ------------
  Net interest income                   88,625        83,826
  Provision for loan and lease
   losses                               15,914        58,538
                                  ------------  ------------
  Net interest income after
   provision for loan and lease
   losses                               72,711        25,288
  Non-interest income (loss)            67,422       (83,606)
  Non-interest expenses                124,365       171,480
                                  ------------  ------------
  Income (loss) before income
   taxes                                15,768      (229,798)
  Income tax expense                     7,968         7,016
                                  ------------  ------------
  Net income (loss)               $      7,800  $   (236,814)
                                  ============  ============
  Net income (loss) attributable
   to common shareholders (1)     $      2,970  $   (214,508)
                                  ============  ============
  Net income (loss) per common
   share (2)                      $       0.02  $      (3.30)
                                  ============  ============

Accrued dividends, preferred
 stock                            $      4,830  $      4,279
Preferred stock exchange premium,
 net                              $         --  $    (26,585)
Book value per common share       $       4.02  $       6.27
Preferred shares outstanding at
 end of period                       5,811,391     6,096,393
Weighted average common shares
 outstanding                       127,293,756    64,920,036
Common shares outstanding at end
 of period                         127,293,756    67,293,370

Selected Balance Sheet Data at
 Period End:
  Total investment securities (3) $    716,040  $  2,428,273
  Total loans, net (4)               5,897,060     5,768,728
  Allowance for loan and lease
   losses ("ALLL")                      93,472       134,913
  Servicing assets, net                115,785       113,005
  Total assets                       8,015,696     9,393,533
  Deposits                           4,302,792     4,940,569
  Total borrowings                   2,590,202     3,265,020
  Total liabilities                  7,151,436     8,448,561
  Preferred equity                     352,082       523,082
  Common equity                        512,178       421,890
  Total stockholders' equity           864,260       944,972

Selected Average Balance Sheet
 Data for Period End: (5)
  Total investment securities     $  1,422,522  $  2,603,284
  Total loans (4)                    5,878,310     5,858,009
  Total interest-earning assets      7,790,440     9,123,226
  Total assets                       8,455,507     9,808,502
  Deposits                           4,496,081     4,648,580
  Total borrowings                   2,831,581     3,876,960
  Total interest-bearing
   liabilities                       7,051,682     8,287,745
  Preferred equity                     352,082       448,205
  Common equity                        513,195       468,161
  Total stockholders' equity           865,277       916,366

Operating Data:
  Loan production                 $    814,744  $    669,225
  Loan servicing portfolio (6)       8,045,830     8,335,364






Selected Financial Data

                                                           Six Month
                             Quarters Ended              Periods Ended
                      -----------------------------   -------------------
(In thousands,        June 30,  March 31,  June 30,   June 30,   June 30,
except for share data)  2011      2011       2010       2011       2010
                      --------  --------  ---------   --------  ---------
Selected Financial
 Ratios:
  Performance:
    Net interest
     margin               2.36%     2.23%      1.84%      2.29%      1.85%
    Return on average
     assets               0.21%     0.16%     (9.93)%     0.19%     (4.87)%
    Return on average
     common equity        1.59%     0.73%   (201.94)%     1.17%   (103.85)%
    Efficiency ratio     87.58%    91.16%    161.79%     89.28%    129.60%
  Capital:
    Leverage ratio        9.07%     8.87%      8.52%      9.07%      8.52%
    Tier 1 risk-based
     capital ratio       13.41%    13.54%     13.99%     13.41%     13.99%
    Total risk-based
     capital ratio       14.67%    14.80%     15.26%     14.67%     15.26%
  Asset quality:
    Non-performing
     loans            $560,548  $571,548  $ 831,722   $560,548  $ 831,722
    Non-performing
     assets            744,541   777,952  1,050,116    744,541  1,050,116
    Total NPAs as
     percentage of the
     loan portfolio,
     net, and OREO
     (excluding GNMA
     defaulted loans)    12.73%    13.71%     18.26%     12.73%     18.26%
    Total NPAs as
     percentage of
     consolidated
     total assets         9.29%     9.19%     11.18%      9.29%     11.18%
    Non-performing
     loans to total
     loans (excluding
     GNMA defaulted
     loans and FHA/VA
     guaranteed loans)    9.85%    10.36%     15.03%      9.85%     15.03%
    ALLL to period-end
     loans receivable
     (excluding FHA/VA
     guaranteed loans
     and loans on
     savings deposits)    1.68%     2.24%      2.55%      1.68%      2.55%
    ALLL plus partial
     charge-offs and
     discounts to
     loans receivable
     (excluding FHA/VA
     guaranteed loans
     and loans on
     savings deposits)    3.70%     3.83%      2.47%      3.70%      2.47%
    ALLL to
     non-performing
     loans (excluding
     NPLs held for
     sale)               16.75%    21.11%     17.65%     16.75%     17.65%
    ALLL plus partial
     charge-offs and
     discounts to
     non-performing
     loans (excluding
     NPLs held for
     sale)               36.89%    36.09%     19.46%     36.89%     19.46%
    ALLL to net
     charge-offs on an
     annualized basis    58.18%   490.88%     58.82%    100.56%    103.89%
    Provision for loan
     and lease losses
     to net
     charge-offs         33.26%    42.89%     78.02%     34.53%     90.90%
    Net charge-offs
     to average loan
     receivable
     outstanding          0.71%     0.11%      1.03%      0.83%      1.16%
    Recoveries to
     charge-offs          0.95%     6.15%      0.55%      1.67%      1.15%
  Other ratios:
    Average common
     equity to average
     assets               6.19%     5.95%      4.97%      6.07%      4.77%
    Average total
     equity to average
     assets              10.39%    10.08%     10.12%     10.23%      9.34%

    Tier 1 common
     equity to
     risk-weighted
     assets               7.11%     7.15%      4.79%      7.11%      4.79%

(1) For the six month period ended June 30, 2010, includes $26.6 million
    related to the net effect of the conversion of preferred stock during
    the period indicated.
(2) For the quarters ended June 30, 2011, March 31, 2011 and June 30, 2010
    and the six month periods ended June 30, 2011 and 2010, net income
    (loss) per common share represents the basic and diluted income per
    common share, respectively.
(3) Excludes the FHLB stock, at cost amounting to $74.6 million, $77.4
    million and $99.5 million as of June 30, 2011, March 31, 2011 and
    June 30, 2010, respectively
(4) Includes loans held for sale.
(5) Average balances are computed on a daily basis.
(6) Represents the total portfolio of loans serviced for third parties.
    Excludes $4.5 billion, $4.3 billion and $4.5 billion of mortgage loans
    owned by Doral Financial at June 30, 2011, March 31, 2011 and
    June 30, 2010, respectively.

SECOND QUARTER PERFORMANCE DISCUSSION

Income Statement

Net Interest Income

Second quarter 2011 vs. First quarter2011 -- Net interest margin was up 13 basis points to 2.36%, compared to 2.23% for the first quarter of 2011 due to an improvement in net interest income of $2.3 million driven by a decrease in interest expense of $5.2 million and partially offset by a decrease in interest income of $2.9 million. The decrease in interest expense was mainly due to (i) a decrease of $4.4 million on interest expense on deposits as the brokered deposits portfolio continued to decrease due to lower levels of brokered CDs and lower interest rates as well as a reduction in rates on non-brokered deposits as Doral has reduced the rates paid on its retail deposits in Puerto Rico and diversified its sources of deposits by establishing US branches and other alternative deposits sources, and (ii) a decrease in interest expense on other borrowings of $0.8 million as Doral renegotiated $1.1 billion in FHLB advances and repurchase agreements in the first and second quarters, and retired $219.5 million of repurchase agreements upon the sale of $679.2 million of investment securities. The decrease in interest income resulted from a decrease in interest on mortgage backed securities of $1.8 million as Doral sold $679.2 million of securities and a decrease of $0.8 million of interest on other loans. The impact of the sale of mortgage backed securities was partially offset by an increase in commercial and industrial loans in the U.S. of $246.0 million that had a positive impact on interest on loans, which was partially offset by lower early payment penalties recognized in interest income in the second quarter of 2011 compared to the first quarter of 2011.

Second quarter 2011 vs. Second quarter2010 -- Net interest margin increased 52 basis points to 2.36% for the second quarter of 2011 from 1.84% for the quarter ended June 30, 2010. An increase of $5.4 million in net interest income was due to a decrease in interest expense of $15.4 million partially offset by a decrease in interest income of $10.0 million. The decrease in interest expense is attributed to decreases of $7.5 million in interest expense on securities sold under agreements to repurchase, $4.1 million in interest expense on advances from FHLB and $5.0 million on deposits, partially offset by an increase in interest expense of $1.5 million in notes payable primarily related to a $250.0 million debt issued under the CLO at a rate of 3-month LIBOR plus 1.85% in July 2010. The decrease in interest income was driven by a decrease in interest on mortgage backed securities of $9.3 million from the sale of securities to delever the bank and decrease the bank's sensitivity to increasing interest rates.

Six Months Ended June 30, 2011 vs. Six Months Ended June 30, 2010 -- Net interest margin increased 44 basis points to 2.29% for the six month period ended June 30, 2011, compared to 1.85% for the same period in 2010. An increase of $4.8 million in net interest income was driven by a decrease in interest expense of $30.0 million and partially offset by a decrease in interest income of $25.2 million. The decrease in interest expense was mainly due to (i) a decrease of $4.8 million on interest on deposits as the brokered deposits portfolio continued to decrease in size and interest rate as well as a reduction in interest rates of other interest bearing deposits, and (ii) a decrease in interest of securities sold under agreements to repurchase of $16.4 million due to the strategic restructuring of Doral's FHLB borrowings during Q1 and Q2 2011 to increase term to maturity and reduce rates. These decreases were partially offset by an increase in notes payable of $3.0 million related to the $250.0 million debt issued under the CLO in July 2010. The decrease in interest income was driven by an increase in interest income from growth of the US commercial loan portfolio more than offset by a decrease in interest on mortgage backed securities of $21.5 million related to the strategic delevering of the bank to reduce future interest income sensitivity.

Credit Quality and the Allowance for Loan and Lease Losses

Doral's investment securities and loans receivable are subject to credit risk. The Company's investment portfolio has been reduced significantly in size as a result of its strategic delevering program. The remaining securities are largely agency backed mortgage related securities or interests in securitizations executed by Doral prior to 2006. Doral's loan portfolio consists of residential mortgage loans largely related to Puerto Rico real estate, commercial real estate, and construction and land, and US commercial loans and commercial real estate. The Company has, and continues to, offer different loss mitigation products and delivery channels to be able to reach the delinquent borrowers that, coupled with (i) increased resources allocated to collections and (ii) charge-offs, resulted in a reduction in non-performing loans during the second quarter of 2011.

The following table summarizes the changes in the allowance for loan and lease losses for the periods indicated:

                             Quarters Ended             Six Months Ended
                      -----------------------------   -------------------
                      June 30,  March 31,  June 30,   June 30,   June 30,
(In thousands)          2011      2011       2010       2011       2010
                      --------  --------  ---------   --------  ---------
Balance at beginning
 of period            $120,204  $123,652  $ 147,481   $123,652  $ 140,774
Provision for loan
 and lease losses       13,323     2,590     44,617     15,914     58,538
Losses charged to
 the ALLL              (40,441)   (6,434)   (57,500)   (46,874)   (65,150)
Recoveries                 386       396        315        780        751
                      --------  --------  ---------   --------  ---------
Balance at end of
 period               $ 93,472  $120,204  $ 134,913   $ 93,472  $ 134,913  
                      ========  ========  =========   ========  =========

Recoveries to
 charge-offs              0.95%     6.15%      0.55%      1.67%      1.15%
Net charge-offs to
 average loans            0.71%     0.11%      1.03%      0.83%      1.16%
Provision to net
 charge-offs             33.26%    42.89%     78.02%     34.53%     90.90%

During the 2011 second quarter Doral changed its charge-off policy for collateral dependent loans. Previously Doral reduced the reported balance of collateral dependent commercial, construction, and land loans (a loan is collateral dependent when the loan collateral is considered the likely source of repayment of a delinquent loan) by a charge to the allowance for loan and lease losses upon receipt of a current market appraised value or an amount was classified as loss. Due to long delays in receiving new market value appraisals on Puerto Rico property, Doral has developed a method to estimate market values for all commercial real estate, construction and land properties, based upon the changes in market values in new appraisals received. Because of the long delay in receipt of appraisals, in the second quarter of 2011 Doral adopted the practice of charging off the portion of the difference between the loan balance before charge-offs and the estimated fair value of the property collateralizing the loan. Pursuant to this provision of Doral's charge-off policy, charge-offs totaled $30.1 million for the period.

The following table summarizes key credit quality information for the periods indicated:

        ALLL plus partial charge-offs and discounts as a % of: (1)

                        Loans (2) (5)         Non-performing Loans (3) (4)
                ----------------------------  ----------------------------
                 Jun.30.   Mar.31.   Dec.31.   Jun.30.   Mar.31.   Dec.31.
                  2011      2011      2010      2011      2011      2010
                --------  --------  --------  --------  --------  --------
Consumer:
  Residential
   mortgage         2.43%     2.37%     2.46%    29.70%    31.88%    31.77%
  Lease
   financing
   receivable      12.09%    11.49%    10.78%   167.84%   137.62%   124.82%
  Other consumer   11.91%    10.91%    11.22% 1,053.51% 2,163.33% 1,431.68%
                --------  --------  --------  --------  --------  --------
    Total
     consumer       2.55%     2.49%     2.60%    31.64%    34.03%    33.94%

Commercial:
  Commercial
   real estate      5.91%     6.43%     7.17%    24.45%    24.15%    26.33%
  Commercial and
   industrial       0.70%     0.90%     0.97%   233.06%   216.03%   243.97%
  Construction
   and land        15.66%    14.45%    12.79%    64.46%    53.95%    42.00%
                --------  --------  --------  --------  --------  --------
    Total
     commercial     5.73%     6.48%     6.55%    42.14%    37.75%    34.68%
                --------  --------  --------  --------  --------  --------
Total               3.70%     3.83%     3.92%    36.89%    36.09%    33.83%
                ========  ========  ========  ========  ========  ========


(1) NPL amounts are increased by the amount of partial charge-offs and
    discounts.
(2) Reflects partial charge-offs and credit related discounts on loans of
    $31.5 million, $30.6 million, and $32.0 million in the residential
    mortgage, $21.2 million, $25.3 million, and $21.2 million commercial
    real estate and $59.2 million, $37.4 million, and $38.6 million in
    construction and land portfolios as of June 30, 2011, March 31, 2011,
    and December 31, 2010, respectively, and $0.3 million in the commercial
    and industrial portfolio as of June 30, 2011.
(3) Reflects partial charge-offs and credit related discounts on loans of
    $27.5 million, $26.5 million, and $28.7 million in the residential
    mortgage as of June 30, 2011, March 31, 2011, and December 31, 2010.
(4) Excludes $2.5 million, $2.2 million, and $2.7 million of non-performing
    loans classified as held for sale as of June 30, 2011, March 31, 2011,
    and December 31, 2010, respectively.
(5) Excludes $132.7 million, $161.4 million, and $187.5 million of FHA/VA
    guaranteed loans and $2.2 million, $2.4 million, and $2.9 million of
    loans on saving deposits as of June 30, 2011, March 31, 2011, and
    December 31, 2010, respectively.

The loans receivable portfolio increased $149.6 million, or 2.7%, while NPLs decreased $11.0 million, or 1.9% and the allowance for loan and lease losses decreased $26.7 million or 22.2% as of June 30, 2011 compared to March 31, 2011. Accordingly, the loans receivable and NPL coverage ratios (ALLL plus partial charge-offs and discounts as a percentage of loans receivable and NPLs, respectively) decreased 13 basis points and increased 80 basis points, respectively over the same periods. Partial charge-offs of previously reserved loans was a significant contributor to the decrease in the ALLL and in NPLs, and has contributed to the improvement in the related coverage ratios.

The increase in the loans receivable portfolio was driven by an increase of $246.0 million in the commercial and industrial portfolio, primarily due to an increase in commercial loan production volume as a result of new lending by the Company's U.S. middle market syndicated lending unit, partially offset by decreases of $43.9 million in construction and land loans and $38.6 million in consumer loans.

Doral has made significant strides in reducing its credit risk. Doral discontinued new construction lending in Puerto Rico in 2007, new commercial real estate and commercial and industrial lending in Puerto Rico in 2008, and significantly tightened its residential underwriting standards in 2009. As the vintages are now seasoned, the performing loans require less provision. In 2010 Doral sold $138.0 million of unpaid principal balance of construction loans, further reducing our credit exposure. As Doral is able to improve its asset quality it reduces its costs to reserve, maintain and sell low quality assets.

Provision and Allowance for Loan and Lease Losses

The following tables summarize the effect of provisions and net charge-offs on the allowance for loan and lease losses by portfolio for the periods indicated:

                                          Quarters Ended
                        ---------------------------------------------------
                                          June 30, 2011
                        ---------------------------------------------------
                         Beginning    Provision       Net        Ending
(In thousands)            Balance    (Recovery)   Charge-offs    Balance
                        ------------ -----------  -----------  ------------
Residential mortgage    $     54,016 $     5,410  $    (4,271) $     55,155
Lease financing
 receivable                      428        (148)          54           334
Other consumer                 5,137       1,002         (927)        5,212
Commercial real estate        23,956       4,372      (12,755)       15,573
Commercial and
 industrial                    6,025         409         (388)        6,046
Construction and land         30,642       2,278      (21,769)       11,151
                        ------------ -----------  -----------  ------------
  Total                 $    120,204 $    13,323  $   (40,056) $     93,471
                        ============ ===========  ===========  ============



                                          Quarters Ended
                        ---------------------------------------------------
                                          March 31, 2011
                        ---------------------------------------------------
                         Beginning    Provision       Net        Ending
(In thousands)            Balance    (Recovery)   Charge-offs    Balance
                        ------------ -----------  -----------  ------------
Residential mortgage    $     56,487 $       755  $    (3,226) $     54,016
Lease financing
 receivable                      518        (282)         192           428
Other consumer                 5,756         776       (1,395)        5,137
Commercial real estate        29,712      (5,756)          --        23,956
Commercial and
 industrial                    6,153        (109)         (19)        6,025
Construction and land         25,026       7,206       (1,590)       30,642
                        ------------ -----------  -----------  ------------
  Total                 $    123,652 $     2,590  $    (6,038) $    120,204
                        ============ ===========  ===========  ============



                                          Quarters Ended
                        ---------------------------------------------------
                                          June 30, 2010
                        ---------------------------------------------------
                         Beginning    Provision       Net        Ending
(In thousands)            Balance    (Recovery)   Charge-offs    Balance
                        ------------ ------------ -----------  ------------
Residential mortgage    $     53,708 $     18,769 $   (14,497) $     57,980
Lease financing
 receivable                      845           63        (119)          789
Other consumer                 6,918        1,581      (1,715)        6,784
Commercial real estate        24,745        4,771        (430)       29,086
Commercial and
 industrial                    4,032        1,728        (935)        4,825
Construction and land         57,233       17,705     (39,489)       35,449
                        ------------ ------------ -----------  ------------
  Total                 $    147,481 $     44,617 $   (57,185) $    134,913
                        ============ ============ ===========  ============


                                        Six Months Ended:
                        ---------------------------------------------------
                                          June 30, 2011
                        ---------------------------------------------------
                         Beginning    Provision       Net        Ending
(In thousands)            Balance    (Recovery)   Charge-offs    Balance
                        ------------ -----------  -----------  ------------
Residential mortgage    $     56,487 $     6,165  $    (7,497) $     55,155
Lease financing
 receivable                      518        (446)         246           318
Other consumer                 5,756       1,778       (2,322)        5,212
Commercial real estate        29,712      (1,384)     (12,755)       15,573
Commercial and
 industrial                    6,153         300         (407)        6,046
Construction and land         25,026       9,484      (23,359)       11,151
                        ------------ -----------  -----------  ------------
  Total                 $    123,652 $    15,897  $   (46,094) $     93,455
                        ============ ===========  ===========  ============



                                        Six Months Ended:
                        ---------------------------------------------------
                                          June 30, 2010
                        ---------------------------------------------------
                         Beginning    Provision       Net        Ending
(In thousands)            Balance    (Recovery)   Charge-offs    Balance
                        ------------ -----------  -----------  ------------
Residential mortgage    $     51,814 $    25,378  $   (19,212) $     57,980
Lease financing
 receivable                    1,383        (191)        (403)          789
Other consumer                 6,955       3,468       (3,639)        6,784
Commercial real estate        21,883       7,839         (636)       29,086
Commercial and
 industrial                    4,281       1,654       (1,110)        4,825
Construction and land         54,458      20,390      (39,399)       35,449
                        ------------ -----------  -----------  ------------
  Total                 $    140,774 $    58,538  $   (64,399) $    134,913
                        ============ ===========  ===========  ============

The ALLL decreased $26.7 million compared to March 31, 2011 due to net charge-offs of previously reserved loans of $40.1 million partially offset by the $13.3 million provision. Doral's second quarter 2011 provision for loan and lease losses of $13.3 million increased $10.7 million from $2.6 million as of March 31, 2011, and decreased $31.3 million from $44.6 million as of June 30, 2010. In general, the increase in the provision for loan and lease losses in the second quarter of 2011 compared to the first quarter of 2011 resulted from increased term of delinquency of previously delinquent residential mortgage loans, increased delinquent residential mortgage loans, new market information received increasing estimated losses on loans evaluated individually for impairment in the second quarter, and refinements made to the loss reserving methodologies that decreased the first quarter reserve. The $13.3 million provision for loan and lease losses in the second quarter of 2011 resulted mainly from the following:

--  Residential mortgage loans provision of $5.4 million resulted from (i)
    $2.5 million from the aging of the past due loans, (ii) $1.1 million
    from the change in severity parameters, and (iii) $1.8 million due to
    charge-offs in excess of the general valuation reserve of loans
    reaching 180 days past due.

--  Commercial real estate loans provision of $4.5 million resulted from
    (i) $0.9 million impairment across the portfolio based on the second
    quarter CPI, (ii) $1.9 million for charge-offs in excess of reserves,
    (iii) $0.5 million additional provision on new loans, and (iv) $1.1
    million of emerging risk provision.

--  Construction and land provision of $2.2 million resulted mainly from
    (i) $0.9 million of loan charge offs that exceeded the reserve, and
    (ii) $1.1 million of emerging risk provision.

The provision for loan and lease losses for the second quarter of 2011, reflected a decrease of $31.3 million compared to the second quarter of 2010, primarily in all the Puerto Rico loan portfolios, and reflects specific provisions made in the second quarter of 2010 and lower level of non-performing loans in the second quarter of 2011.

Non-Performing Assets

The following table sets forth information with respect to Doral Financial's non-accrual loans, OREO and other NPA's as of the periods indicated:

                                    June 30,      March 31,   December 31,
(In thousands)                        2011          2011          2010
                                  ------------  ------------  ------------
Non-performing consumer,
 excluding FHA/VA
  Residential mortgage            $    279,529  $    253,172  $    278,675
  U.S. residential mortgage                820          1770         2,166
                                  ------------  ------------  ------------
  Subtotal Residential mortgage        280,349       254,942       280,841
  Lease financing receivables              199           311           415
  Other consumer                           500           240           404
                                  ------------  ------------  ------------
    Total non-performing consumer,
     excluding FHA/VA                  281,048       255,493       281,660

Non-performing commercial
  Commercial real estate               167,643       187,076       193,556
  Construction and land                107,516       124,580       147,127
  U.S. construction and land             1,610         1,610         1,610
                                  ------------  ------------  ------------
  Subtotal construction and land       276,769       313,266       342,293
  Commercial and industrial              2,731         2,789         2,522
                                  ------------  ------------  ------------
    Total non-performing
     commercial                        279,500       316,055       344,815
                                  ------------  ------------  ------------
Total non-performing loans,
 excluding FHA/VA                 $    560,548  $    571,548  $    626,475
                                  ------------  ------------  ------------

  OREO                                 100,960       103,117        99,623
  U.S. OREO                                650           650           650
                                  ------------  ------------  ------------
  Subtotal OREO                        101,610       103,767       100,273
  Non-performing FHA/VA guaranteed
   residential                    $     79,179  $     99,357  $    121,305
Other non-performing assets              3,204         3,280         3,767
                                  ------------  ------------  ------------
Total non-performing assets       $    744,541  $    777,952  $    851,820
                                  ============  ============  ============
Total NPAs as a percentage of the
 loan portfolio, net, and OREO
 (excluding GNMA defaulted loans)        12.73%        13.71%        14.85%
Total NPAs as a percentage of
 consolidated total assets                9.29%         9.19%         9.85%
Total non-performing loans to
 total loans (excluding GNMA
 defaulted loans and FHA/VA
 guaranteed loans)                        9.85%        10.36%        11.29%
Ratio of allowance for loan and
 lease losses plus partial
 charge-offs and discounts to
 total non-performing loans
 (excluding loans held for sale)
 at end of period                        37.70%        36.09%        33.83%
Ratio of allowance for loan and
 lease losses to total
 non-performing loans (excluding
 loans held for sale) at end of
 period                                  16.75%        21.11%        19.82%


Loans past due 90 days and still accruing

                                       June 30,    March 31,   December 31,
(In thousands)                           2011         2011         2010
                                     ------------ ------------ ------------
Consumer loans                       $      2,519 $      1,594 $      1,995
Commercial and industrial                   3,386          588          560
Residential morgages                           --           --           --
Government guaranteed residential
 mortgage loans                            16,831       21,599       31,508
                                     ------------ ------------ ------------
  Total loans past due 90 days and
   still accruing                    $     22,736 $     23,781 $     34,063
                                     ============ ============ ============

Non-performing loans (excluding FHA/VA loans guaranteed by the US government) as of June 30, 2011 were $560.5 million, a decrease of $11.0 million and $65.9 million from March 31, 2011 and December 31, 2010, respectively. During the second quarter of 2011, there was an increase in non-performing residential mortgage loans of $25.4 million compared to March 31, 2011 and a decrease of $0.5 million compared to December 31, 2010, respectively, due primarily to increased term of delinquency of previously delinquent residential mortgage loans. Non-performing commercial loans decreased $36.6 million and $65.3 million when compared to March 31, 2011 and December 31, 2010, respectively. The decrease when compared to March 31, 2011 is due primarily to $34.9 million in charge-offs complemented with continued workout efforts.

Non-performing assets, including non-performing loans previously discussed, decreased by $33.4 million, or 4.3%, as of June 30, 2011 compared to March 31, 2011, and $107.2 million, or 12.5%, compared to December 31, 2010. The decrease in non-performing loans during the second quarter of 2011 compared to March 31, 2011 was complemented by decreases in non-performing FHA/VA guaranteed loans of $20.2 million and in OREO of $2.2 million. Compared to December 31, 2010 the decrease in non-performing loans was complemented by a decrease in non-performing FHA/VA guaranteed loans of $42.1 million.

The improvement in non-performing assets quarter over quarter is due to the aforementioned charge-offs and the Company's continued emphasis on collections and loss mitigation strategies in order to optimize performance of its loan portfolio.

Non-Interest Income

                             Quarters Ended             Six Months Ended
                      -----------------------------   -------------------
                      June 30,  March 31,  June 30,   June 30,   June 30,
(In thousands)          2011      2011       2010       2011       2010
                      --------  --------  ---------   --------  ---------
Net other-than-
 temporary impairment
 losses               $    (86) $     --  $      --   $    (86) $ (13,259)
Net gain from
 capitalization of
 mortgage servicing
 and fees                2,011     2,520      1,811      4,531      4,377
Trading activities:
  Net gain on loans
   securitized and
   sold                  7,015     3,022      1,794     10,037      2,579
  Gain (loss) on IO
   valuation             4,079      (451)     3,857      3,628      4,516
  Gain (loss) on MSR
   economic hedge          582      (523)     4,656         59      6,484
  Loss on hedging
   derivatives          (1,288)     (113)    (1,411)    (1,401)    (2,909)
                      --------  --------  ---------   --------  ---------
Net gain on trading
 activities             10,388     1,935      8,896     12,323     10,670
Net gain (loss) on
 sale of investment
 securities             14,808     2,853   (137,204)    17,662   (110,790)
Net loss on early
 repayment of debt      (3,068)       --     (2,545)    (3,068)    (3,021)
Servicing income:
  Servicing income,
   net                   7,602     9,040      5,120     16,641     13,868
  Amortization and
   market valuation
   of servicing asset   (3,059)     (140)    (6,474)    (3,199)    (8,478)
                      --------  --------  ---------   --------  ---------
Total servicing
 income (loss)           4,543     8,900     (1,354)    13,442      5,390
Commissions, fees and
 other income:
  Retail banking fees    7,067     7,007      7,199     14,073     14,342
  Insurance agency
   commissions           2,439     2,223      2,436      4,661      4,778
  Other income             695     3,186        571      3,884      3,907
                      --------  --------  ---------   --------  ---------
      Total
       commissions,
       fees and other
       income           10,201    12,416     10,206     22,618     23,027
                      --------  --------  ---------   --------  ---------

Total non-interest
 income (loss)        $ 38,797  $ 28,624  $(120,190)  $ 67,422  $ (83,606)
                      ========  ========  =========   ========  =========

Second quarter 2011 vs. First quarter 2011 -- Non-interest income of $38.8 million for the second quarter of 2011, reflected an increase of $10.2 million when compared to non-interest income of $28.6 million for the first quarter of 2011, respectively. The increase in non-interest income when compared to March 31, 2011 was due to:

--  Gains from trading activities increased $8.5 million driven by higher
    gains on sales of originated GNMA securities and remarketing of cured
    and restructured FHA guaranteed loans of $4.0 million, a higher gain
    on the IO value of $4.5 million (a gain of $4.1 million in the second
    quarter compared to a loss of $0.5 million in the first quarter),
    higher gain on the MSR economic hedge of $1.1 million offset in part by
    higher losses on derivatives hedging mortgage loan originations of $1.2
    million. The gain in the IO value for the quarter was a result of lower
    prepayment speeds and a flattening of the forward interest rate curve.
    The flattening of the forward interest rate curve results in a spread
    widening for the IO strip, increasing cash flows over the life of the
    IO while the decrease in prepayment speeds slows the portfolio runoff,
    lengthening the life of the IO and resulting in more cash flows being
    generated.
--  A gain on sale of investment securities of $14.8 million in the second
    quarter of 2011 related to the sale of $679.2 million of mortgage
    backed securities, compared to a gain on sale of investment securities
    of $2.9 million in the first quarter of 2011 related to the sale of
    $190 million of mortgage backed securities. These sales were executed
    pursuant to the Company's strategic deleveraging of the balance sheet.
--  Net loss on early repayment of debt of $3.1 million recorded in the
    second quarter of 2011 related to the unwinding of borrowings related
    to the investments sold, while there were no early debt repayments in
    the first quarter of 2011.
--  Servicing income reflected a decrease of $4.4 million driven by a $2.9
    million increase in amortization and a lower mark-to-market adjustment
    of the MSR and a $1.4 million reduction in servicing income. The lower
    MSR value was due to a reduction in the loan servicing portfolio
    balance as well as a lower reduction in prepayment speeds in the second
    quarter compared to the first quarter of 2011. Lower servicing fees
    were driven by higher payments made on serial notes due to repayments
    on loans and interest lost on loan repurchases of $0.9 million as well
    as lower prepayment penalties of $0.5 million.
--  Commissions, fees and other income decreased $2.2 million due to the
    gain realized of $2.3 million on the redemption of shares of VISA, Inc.
    in the first quarter of 2011.

Second quarter 2011 vs. Second quarter 2010 -- The $159.0 million increase in non-interest income in the second quarter of 2011 compared to the second quarter of 2010 was due to:

--  An improvement in gain on sale of investment securities of $152.0
    million. During the second quarter of 2010 the Company recognized a
    loss on sale of securities of $137.2 million driven by a loss of $136.7
    million on the sale of $378.0 million of certain non-agency CMOs.
    During the second quarter of 2011 the Company had a gain on sale of
    investment securities of $14.8 million as a result of its deleveraging
    of the balance sheet.
--  Servicing income increased $5.9 million related to an improvement in
    the mark to market adjustment of the MSR of $3.4 million and higher
    servicing fees of $2.5 million. The improvement in the value of the MSR
    was primarily due to a reduction in prepayment speeds. The improvement
    in servicing fees was driven by lower interest losses of $3.5 million.
    During the second quarter of 2010 the Company recognized an interest
    loss of $4.2 million related to the repurchase of certain GNMA
    defaulted loans. This improvement was partially offset by lower
    servicing fees of $1.0 million.

Six Months ended June 30, 2011 vs. Six Months ended June 30, 2010 -- Non-interest income of $67.4 million for the six month period ended June 30, 2011 was up $151.0 million or 181.0% when compared to the same period in 2010. The increase in non-interest income was mainly due to:

--  An improvement in gain on sale of investment securities of $128.5
    million. During the second quarter of 2010 the Company recognized a
    loss on sale of securities of $137.2 million driven by a loss of $136.7
    million on the sale of $378.0 million of certain non-agency CMOs.
    During the first semester of 2011 the Company had a gain on sale of
    investment securities of $17.7 million as a result of its deleveraging
    of the balance sheet.
--  An improvement in OTTI of $13.2 million. During 2010, there was a
    deterioration in estimated future cash flows of non-agency CMOs
    resulting in an OTTI of $13.3 million. These securities were sold
    during the second quarter of 2010 and the unrealized loss in OCI was
    realized. OTTI of approximately $0.1 million recognized in 2011 was
    related to PR non-agency CMOs.
--  Servicing income increased $8.1 million related to an improvement in
    the mark to market adjustment of the MSR of $5.3 million and higher
    servicing fees of $2.8 million. The improvement in the value of the MSR
    was primarily due to a reduction in prepayment speeds. The improvement
    in servicing fees was driven by lower interest losses of $3.6 million.
    During the second quarter of 2010 the Company recognized an interest
    loss of $4.2 million related to the repurchase of certain GNMA
    defaulted loans. This improvement was partially offset by lower
    servicing fees of $0.9 million.

Non-Interest Expense

                             Quarters Ended             Six Months Ended
                      -----------------------------   -------------------
                      June 30,  March 31,  June 30,   June 30,   June 30,
(In thousands)          2011      2011       2010       2011       2010
                      --------  --------  ---------   --------  ---------
  Compensation and
   employee benefits  $ 21,081  $ 18,293  $  20,315   $ 39,375  $  36,750
  Professional
   services              9,339     8,637     15,420     17,976     29,212
  FDIC insurance
   expense               3,797     4,356      5,574      8,153     10,765
  Communication
   expenses              3,636     4,004      4,056      7,639      8,000
  Occupancy expenses     4,786     4,340      4,322      9,126      8,303
  EDP expenses           3,024     3,275      2,878      6,299      6,657
  Depreciation and
   amortization          3,463     3,203      3,110      6,666      6,257
  Taxes, other than
   payroll and income
   taxes                 2,923     2,876      2,591      5,799      5,155
  Corporate insurance    1,490     1,570      1,264      3,060      2,526
  Advertising            1,748       998      4,073      2,746      5,571
  Office expenses        1,042       990      1,112      2,032      2,397
  Other                  3,234     4,187      4,489      7,422      8,518
                      --------  --------  ---------   --------  ---------
                        59,563    56,729     69,204    116,293    130,111
  OREO expenses and
   other reserves:
  Other real estate
   owned expense         2,061     1,963     23,414      4,023     28,011
  Foreclosure expenses     625     1,370        173      1,995        622
  Reserve on claim
   receivable
   from LBI                  --         --     10,819          --
10,819
  Provisions for other
   credit related
   expenses              1,332       722        472      2,054      1,917
                      --------  --------  ---------   --------  ---------
                         4,018     4,055     34,878      8,072     41,369
                      --------  --------  ---------   --------  ---------
Total non-interest
   expense            $ 63,581  $ 60,784  $ 104,082   $124,365  $ 171,480
                      ========  ========  =========   ========  =========

Second quarter 2011 vs. First quarter 2011 -- second quarter 2011 non-interest expense of $63.6 million was up $2.8 million compared to the first quarter of 2011. The increase was mainly driven by an increase of $2.8 million in compensation and benefits composed of: (i) a decrease in salaries of $0.4 million related to a reduction in force of approximately 123 full time equivalent employees; (ii) an increase in severance expense of $1.4 million related to the reduction in force in the second quarter of 2011; (iii) an increase in production and performance bonuses of $0.6 million; (iv) a decrease in taxes and other benefits of $0.3 million; and (v) an increase in stock based compensation benefits of $1.4 million related to certain stock incentive bonuses and tax benefits thereon.

Other significant variances in non-interest expenses during the second quarter of 2011 compared to the first quarter of 2011 consisted of:

--  An increase in professional services of $0.7 million primarily due to
    higher advisory services related to the Company's large commercial and
    construction loan portfolio.
--  A decrease of $0.6 million in FDIC insurance due to the FDIC's change
    in the method of computing the assessment.
--  An increase of $0.8 million in advertising expense as a result of the
    Company's second quarter advertising campaign geared towards increasing
    mortgage loan originations.
--  A decrease of $0.9 million in other expenses composed of lower loan
    processing costs of $0.4 million, lower project construction costs on a
    project that Company took over in 2005 of $0.4 million, and a decrease
    of $0.2 million in credit card losses.

Second quarter 2011 vs. Second quarter 2010

The $40.5 million decrease in non-interest expense in the second quarter of 2011 compared to the same period in 2010 resulted from the following:

--  A decrease of $10.8 million in the reserve for the Company's claim on
    Lehman Brothers Inc. that was established in the second quarter of
    2010. The claim was subsequently sold to a third party.
--  OREO expenses were $2.1 million in the second quarter of 2011 compared
    to $23.4 million for the same period in 2010, a decrease of $21.4
    million. Higher OREO expenses in 2010 were related to an additional
    provision for OREO losses of $17.0 million established during the
    second quarter of 2010 to recognize the effect of management's
    strategic decision to reduce pricing to stimulate property sales,
    adjustments driven by lower values of certain OREO properties, and
    higher maintenance costs to maintain the properties in saleable
    condition.
--  A decrease of $6.1 million in professional services was driven by lower
    defense litigation costs of $4.2 million, lower advisory services of
    $0.5 million related to the dissolution of Doral Holdings and Doral
    Holdings L.P., and lower advisory services of $1.3 million in 2011
    compared to 2010 which were incurred in relation to the sale of certain
    construction loans.
--  There was a higher advertising expense in 2010 of $2.3 million compared
    to the second quarter of 2011, related to campaigns conducted to gain
    market share in deposits and mortgage originations subsequent to the
    local market bank failures and asset acquisition in April 2010.
--  Lower FDIC insurance expense of $1.8 million related to a lower deposit
    base and a change in the method of computing the assessment.
--  An increase of $1.6 million in credit related costs was due to an
    increase of $0.9 million in foreclosure expenses and $0.9 million in
    the provision for negative escrow.

Six Months ended June 30, 2011 vs. Six Months ended June 30, 2010 -- Non-interest expense of $124.4 million for the six month period ended June 30, 2011 was down $47.1 million or 27.5% when compared to the same period of 2010. The decrease in non-interest expense was mainly due to:

--  A decrease of $10.8 million in the reserve for the Company's claim on
    Lehman Brothers Inc. that was established in the second quarter of
    2010. The claim was subsequently sold to a third party.
--  OREO expenses were $4.0 million in 2011 compared to $28.0 million for
    the same period in 2010, a decrease of $24.0 million. Higher OREO
    expenses in 2010 were related to an additional provision for OREO
    losses of $17.0 million established during the second quarter of 2010
    to recognize the effect of management's strategic decision to reduce
    pricing to stimulate property sales, market value adjustments driven
    by lower values of certain OREO properties, and higher maintenance
    costs to maintain the properties in saleable condition.
--  A decrease of $11.2 million in professional services was driven by
    lower defense litigation costs of $8.1 million, lower advisory services
    of $0.5 million related to the dissolution of Doral Holdings and Doral
    Holdings L.P., and lower advisory services of $2.7 million in 2011
    compared to 2010 which were incurred in relation to the sale of certain
    construction loans as well as expenses incurred for the Company's
    participation in bidding for FDIC assisted transactions in 2010.
--  There was a higher advertising expense in 2010 of $2.8 million compared
    to 2011, related to campaigns conducted to gain market share in
    deposits and mortgage originations subsequent to the local market bank
    failures and asset acquisition in April 2010.
--  Lower FDIC insurance expense of $2.6 million related to a lower deposit
    base and a change in the method of computing the assessment.
--  An increase of $2.6 million in stock based compensation was related to
    certain stock incentive bonuses and tax benefits thereon.
--  An increase of $1.8 million in other credit related costs was due to an
    increase of $1.9 million in foreclosure expenses.

Income Tax Expense

The Puerto Rico income tax law does not provide for the filing of a consolidated tax return; therefore, income tax expense on the Company's consolidated statement of income is the aggregate income tax expense of Doral's individual subsidiaries. Doral Bank FSB and Doral Money, Inc. are U.S. corporations and are subject to U.S. income tax on their income derived from all sources. Except for Doral Bank FSB and Doral Money, Inc. substantially all of the Company's operations are conducted through subsidiaries in Puerto Rico.

Second quarter 2011 reflected an income tax expense of $2.9 million compared with a $5.1 million and $4.5 million income tax expense for the first quarter of 2011 and second quarter of 2010, respectively. The decrease in tax expense was due to the recognition in the first quarter of 2011 of a $2.3 million deferred tax adjustment resulting from the net effect on Doral's deferred tax asset of the Puerto Rico tax reform legislation approved in January 2011 lowering the effective tax rate and the increased earnings expectation of profitable Puerto Rico entities.

Income tax expense reflected a decrease of $1.6 million compared to the second quarter of 2010 due to taxes recognized in 2010 related to U.S. source income, as well as the impact of tax rate change on the valuation allowance partially offset by realization of operational deferred tax assets.

Balance Sheet

Doral's assets totaled $8.0 billion at June 30, 2011, compared to $8.5 billion at March 31, 2011 and $8.6 billion at December 31, 2010. Total assets at June 30, 2011, when compared to March 31, 2011 were affected by a (i) decrease of $747.2 million in available for sale securities as part of the Company's interest rate risk management strategies, offset by an increase in total net loans of $172.8 million from the continued growth of the US syndicated loans portfolio, and an increase in cash and due from banks and restricted cash of $75.9 million.

Total liabilities were $7.2 billion at June 30, 2011, compared to $7.6 billion at March 31, 2011 and $7.8 billion at December 31, 2010. Total liabilities as of June 30, 2011 were principally affected by (i) a decrease in brokered deposits of $206.0 million, (ii) a decrease in securities sold under agreements to repurchase of $734.5 million, offset by (iii) an increase in advances from FHLB of $477.4 million and (iv) an increase of $22.6 million in retail deposits.

Loan Portfolio

                                    June 30,      March 31,   December 31,
(In thousands)                        2011          2011          2010
                                  ------------  ------------  ------------
 Loans Held for sale
  Conventional single-family
   residential                (1) $    110,524  $    111,162  $    119,290
  FHA/VA guaranteed
   residential                         165,176       167,246       172,216
  Commercial real estate                26,234        27,063        27,763
                                  ------------  ------------  ------------
   Total loans held for sale           301,934       305,471       319,269
                                  ------------  ------------  ------------
 Loans held for investment
 Consumer
  Residential mortgage               3,537,904     3,543,208     3,560,536
  FHA/VA guaranteed
   residential mortgage                132,657       161,429       187,473
  Personal                              10,655        12,837        15,003
  Revolving lines of credit             16,227        16,954        17,810
  Credit cards                          16,253        16,780        17,719
  Lease financing receivables            2,762         3,724         4,807
  Loans on savings deposits              2,170         2,413         2,860
  Other consumer                         1,050           963           988
                                  ------------  ------------  ------------
   Total consumer                    3,719,678     3,758,308     3,807,196

 Commercial                   (3)
  Commercial real estate               666,580       680,582       688,946
  Commercial and industrial            912,420       666,352       633,695
  Construction and land                389,920       433,762       458,734
                                  ------------  ------------  ------------
   Total commercial                  1,968,920     1,780,696     1,781,375

    Loans receivable, gross          5,688,598     5,539,004     5,588,571
                                  ------------  ------------  ------------
 Less:
  Allowance for loan and
   lease losses               (2)      (93,472)     (120,204)     (123,652)
                                  ------------  ------------  ------------
 Loans receivable, net               5,595,126     5,418,800     5,464,919
                                  ------------  ------------  ------------
Total loan portfolio, net         $  5,897,060  $  5,724,271  $  5,784,188
                                  ============  ============  ============

--------------------------------------------------------------------------
(1) Includes $134.4 thousand, $106.5 thousand and $108.6 thousand held by
Doral's United States ("US") operations.
(2) Includes $5.9 million, $5.4 million and $5.8 million related to Doral's
US operations.
(3) Includes commercial loans held by the Corporation's US operations.  See
table below for portfolio composition.
---------------------------------------------------------------------------

US Operations - Commercial loans held for investment

                                    June 30,      March 31,   December 31,
(In thousands)                        2011          2011          2010
                                  ------------  ------------  ------------

  Commercial real estate          $     68,626  $     59,754  $     59,903
  Commercial and industrial            874,036       628,322       597,056
  Construction and land                 80,330        99,178       108,835
                                  ------------  ------------  ------------
    Total Commercial              $  1,022,992  $    787,254  $    765,794
                                  ============  ============  ============


Doral's loans held for investment, net portfolio consists primarily of residential mortgage loans (June 30, 2011 -- 65.6%, March 31, 2011 -- 67.8%, December 31, 2010 -- 68.6%). Approximately 85.3%, 88.9% and 89.6% of the total net loan portfolio is secured by real estate as of June 30, 2011, March 31, 2011 and December 31, 2010, respectively. The total net loan portfolio increased $172.8 million compared to March 31, 2011 and increased $112.9 million compared to December 31, 2010. The increase when compared to March 31, 2011 was mainly due to an increase of approximately $246.0 million in commercial and industrial loans, mainly related to participation in syndicated loans in the US operations, partially offset by decreases in construction and land of $43.9 million, FHA/VA guaranteed residential loans of approximately $28.8 million, and commercial real estate of $14.0. The increase when compared to December 31, 2010 is mostly related to participation in syndicated commercial loans in the U.S. mainland.

Capital

Doral Financial's stockholders' equity totaled $864.3 million at June 30, 2011, compared to $860.7 million and $862.2 million at March 31, 2011 and December 31, 2010, respectively. The Company reported accumulated other comprehensive income (net of tax) ("OCI") of $1.6 million, $1.1 million and $4.2 million as of June 30, 2011, March 31, 2011 and December 31, 2010, respectively.

The Company's regulatory prescribed capital ratios exceed the published well capitalized standards established in applicable banking regulations. As of June 30, 2011 the Tier 1 Leverage, Tier 1 Risk-based Capital and Total Risk-based Capital ratios were 9.07%, 13.41% and 14.67%, respectively which represents approximately $335.9 million, $413.8 million and $260.7 million of Tier 1 Leverage, Tier 1 Risk-based Capital and Total Risk-based Capital in excess of the published well-capitalized standards of 5%, 6% and 10%, respectively.

The following table provides the regulatory capital ratios for Doral Financial:

Regulatory Capital Ratios

                                    June 30,      March 31,   December 31,
                                      2011          2011          2010
                                  ------------  ------------  ------------
Total Capital Ratio (Total
 capital to risk-weighted assets)        14.67%        14.80%        14.51%
Tier 1 Capital Ratio (Tier 1
 capital to risk-weighted assets)        13.41%        13.54%        13.25%
Tier 1 Leverage Ratio                     9.07%         8.87%         8.56%
Tier 1 common equity                      7.11%         7.15%         6.95%

Refer to Non-Generally Accepted Accounting Principles in United States ("GAAP") section for a reconciliation of stockholders' equity (GAAP) to Tier 1 common equity (non-GAAP).

Non-GAAP Financial Measures

This earnings press release contains GAAP financial measures and non-GAAP financial measures. Non-GAAP financial measures are set forth when management believes they will be helpful to an understanding of the Company's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the text or in the attached tables of this earnings release.

Tier 1 common equity to risk-weighted assets ratio

The Federal Reserve began supplementing its assessment of the capital adequacy of bank holding companies based on a variation of Tier 1 capital known as Tier 1 common equity in connection with the Supervisory Capital Assessment Program. Tier 1 common equity is considered to be a non-GAAP financial measure since it is not formally defined by GAAP and, unlike Tier 1 capital, is not a federal banking regulatory requirement.

Ratios calculated based upon Tier 1 common equity have become a focus of regulators and investors, and management believes ratios based on Tier 1 common equity assist investors in analyzing Doral's capital position. This ratio is calculated by dividing Tier 1 capital less non-common equity items by risk weighted assets, which assets are calculated in accordance with applicable bank regulatory requirements.

Tier 1 Common Equity Reconciliation

                                    June 30,      March 31,   December 31,
(In thousands)                        2011          2011          2010
                                  ------------  ------------  ------------
Stockholders' equity              $    864,260  $    860,705  $    862,195
(Less) plus: net unrealized
 (gains) losses on available for
 sale securities, net of tax            (1,555)       (1,104)       (4,163)
Less: preferred stock                 (352,082)     (352,082)     (352,082)
Less: disallowed intangible
 assets                                (16,434)      (16,561)      (16,440)
Less: disallowed deferred tax
 assets                                (97,514)      (97,122)     (101,205)
                                  ------------  ------------  ------------
Total tier 1 common equity        $    396,675  $    393,836  $    388,305
                                  ============  ============  ============

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, market risk and the impact of interest rate changes, capital markets conditions, capital adequacy and liquidity, and the effect of legal proceedings, regulatory matters and new accounting standards 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 represents Doral Financial's current expectations regarding future events. Such 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," "target," "goal," "may" or words of similar meaning 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.

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, 2010 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 with the SEC.

Institutional Background

Doral Financial Corporation is a bank holding company engaged in banking (including thrift operations), mortgage banking and insurance agency activities through its wholly-owned subsidiaries Doral Bank ("Doral Bank PR"), Doral Bank, FSB ("Doral Bank US") with operations in the New York metropolitan area and since September 2010 in the northwest region of Florida, Doral Insurance Agency, Inc. ("Doral Insurance Agency"), and Doral Properties, Inc. ("Doral Properties"). Doral Bank PR in turn operates three wholly-owned subsidiaries Doral Mortgage LLC ("Doral Mortgage"), Doral Money, Inc. ("Doral Money"), engaged in commercial and middle market syndicated 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 PR took possession during 2005. Doral Money consolidates two variable interest entities created for the purpose of entering into a collateralized loan arrangement with a third party.

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.

                        DORAL FINANCIAL CORPORATION
                CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


                                    Unaudited     Unaudited     Audited
(Dollars in thousands, except for   June 30,      March 31,   December 31,
 share data)                          2011          2011          2010
                                  ------------  ------------  ------------
Assets
 Cash and due from banks          $    562,397  $    333,005  $    355,819

 Other interest-earning assets          43,967       153,520       156,607

 Securities held for trading, at
  fair value                            44,589        42,560        45,029
 Securities available for sale,
  at fair value                        671,451     1,418,832     1,505,065
 Federal Home Loan Bank of NY
  stock, at cost                        74,565        77,412        78,087
                                  ------------  ------------  ------------
    Total investment securities        790,605     1,538,804     1,628,181
 Loans:
  Loans held for sale, at lower
   of cost or market                   301,934       305,471       319,269
  Loans receivable                   5,688,730     5,539,182     5,588,812
   Less: Unearned interest                (132)         (178)         (241)
   Less: Allowance for loan and
    lease losses                       (93,472)     (120,204)     (123,652)
                                  ------------  ------------  ------------
     Total net loans receivable      5,595,126     5,418,800     5,464,919
                                  ------------  ------------  ------------
     Total loans, net                5,897,060     5,724,271     5,784,188

 Accounts receivable                    41,592        31,422        28,704
 Mortgage-servicing advances            54,011        48,127        51,462
 Accrued interest receivable            37,244        38,961        38,774
 Servicing assets, net                 115,785       116,299       114,342
 Premises and equipment, net           103,386       104,176       104,053
 Real estate held for sale, net        101,499       103,767       100,273
 Deferred tax asset                    103,958       103,701       105,712
 Other assets                          164,192       168,043       178,239
                                  ------------  ------------  ------------
    Total assets                  $  8,015,696  $  8,464,096  $  8,646,354
                                  ============  ============  ============

Liabilities
 Deposits:
   Non-interest-bearing deposits  $    285,582  $    265,214  $    258,230
   Other interest-bearing
    deposits                         1,986,102     1,983,913     2,000,991
   Brokered certificates of
    deposit                          2,031,108     2,237,121     2,359,254
                                  ------------  ------------  ------------
    Total deposits                   4,302,792     4,486,248     4,618,475
 Securities sold under agreements
  to repurchase                        442,300     1,176,800     1,176,800
 Advances from FHLB                  1,342,849       865,363       901,420
 Loans payable                         294,623       298,598       304,035
 Notes payable                         510,430       512,513       513,958
 Accrued expenses and other
  liabilities                          258,442       263,869       269,471
                                  ------------  ------------  ------------
    Total liabilities                7,151,436     7,603,391     7,784,159
 Commitments and contingencies

Stockholders' Equity
 Preferred stock
   Perpetual noncumulative
    nonconvertible preferred
    stock                              148,700       148,700       148,700
   Perpetual cumulative
    convertible preferred stock        203,382       203,382       203,382
 Common stock                            1,273         1,273         1,273
 Additional paid-in capital          1,220,983     1,219,940     1,219,280
 Legal surplus                          23,596        23,596        23,596
 Accumulated deficit                  (735,229)     (737,290)     (738,199)
 Accumulated other comprehensive
  income, net                            1,555         1,104         4,163
                                  ------------  ------------  ------------
    Total stockholders' equity         864,260       860,705       862,195
                                  ------------  ------------  ------------

    Total liabilities and
     stockholders' equity         $  8,015,696  $  8,464,096  $  8,646,354
                                  ============  ============  ============





                       DORAL FINANCIAL CORPORATION
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                               (UNAUDITED)


                             Quarters Ended             Six Months Ended
                      June 30,  March 31,  June 30,         June 30,
(In thousands,        -----------------------------   -------------------
 except for share data) 2011      2011       2010       2011       2010
                      --------  --------  ---------   --------  ---------
Interest income:
  Loans               $ 79,238  $ 80,065  $ 78,916    $159,303  $ 160,349
  Mortgage-backed
   securities            9,221    11,056     18,542     20,277     41,789
  Interest-only strips   1,508     1,470      1,491      2,979      3,034
  Investment
   securities              130        99        583        229      1,448
  Other interest-
   earning assets        1,020     1,301      1,545      2,320      3,685
                      --------  --------  ---------   --------  ---------
    Total interest
     income             91,117    93,991    101,077    185,108    210,305

Interest expense:
  Deposits              22,543    26,899     27,587     49,442     54,287
  Securities sold
   under agreements
   to repurchase         6,238     9,120     13,738     15,357     31,762
  Advances from FHLB     8,822     6,608     12,921     15,430     26,894
  Notes payable          6,561     6,652      5,086     13,214     10,196
  Loans payable          1,498     1,542      1,676      3,040      3,325
  Other short-term
   borrowings               --        --          4         --         15
                      --------  --------  ---------   --------  ---------
    Total interest
     expense            45,662    50,821     61,012     96,483    126,479
                      --------  --------  ---------   --------  ---------

    Net interest
     income             45,455    43,170     40,065     88,625     83,826

Provision for loan
 and lease losses       13,323     2,590     44,617     15,914     58,538
                      --------  --------  ---------   --------  ---------
    Net interest
     income after
     provision for
     loan and lease
     losses             32,132    40,580     (4,552)    72,711     25,288

Non-interest income:
  Net credit related
   other than
   temporary
   impairment losses       (86)       --         --        (86)   (13,259)
  Net gain on
   trading activities   10,388     1,935      8,896     12,323     10,670
  Net gain from
   capitalization of
   mortgage servicing
   and fees              2,011     2,520      1,811      4,531      4,377
  Servicing income
   (loss) (net of
   mark-to-market
   adjustments)          4,543     8,900     (1,354)    13,442      5,390
  Net loss on early
   repayment of debt    (3,068)       --     (2,545)    (3,068)    (3,021)
  Net gain (loss) on
   sale of investment
   securities           14,808     2,853   (137,204)    17,662   (110,790)
  Retail banking fees    7,067     7,007      7,199     14,073     14,342
  Insurance agency
   commissions           2,439     2,223      2,436      4,661      4,778
  Other income             695     3,186        571      3,884      3,907
                      --------  --------  ---------   --------  ---------
    Total non-interest
     income             38,797    28,624   (120,190)    67,422    (83,606)

Non-interest expenses:
  Compensation and
   benefits             21,081    18,293     20,315     39,375     36,750
  Professional
   services              9,339     8,637     15,420     17,976     29,212
  FDIC insurance
   expense               3,797     4,356      5,574      8,153     10,765
  Communication
   expenses              3,636     4,004      4,056      7,639      8,000
  Occupancy expenses     4,786     4,340      4,322      9,126      8,303
  EDP expenses           3,024     3,275      2,878      6,299      6,657
  Depreciation and
   amortization          3,463     3,203      3,110      6,666      6,257
  Taxes, other than
   payroll and income
   taxes                 2,923     2,876      2,591      5,799      5,155
  Corporate Insurance    1,490     1,570      1,264      3,060      2,526
  Other                  5,785     6,175      9,674     11,688     16,486
                      --------  --------  ---------   --------  ---------
                        59,324    56,729     69,204    115,781    130,111
  OREO expenses and
   other provisions:
    OREO expenses        2,061     1,963     23,414      4,023     28,011
    Foreclosure and
     other credit
     related expenses    2,196     2,092     11,464      4,561     13,358
                      --------  --------  ---------   --------  ---------
                         4,257     4,055     34,878      8,584     41,369
                      --------  --------  ---------   --------  ---------
    Total non-interest
     expenses           63,581    60,784    104,082    124,365    171,480
                      --------  --------  ---------   --------  ---------

    Income (loss)
     before income
     taxes               7,348     8,420   (228,824)    15,768   (229,798)
    Income tax
     expense             2,871     5,096      4,487      7,968      7,016
                      --------  --------  ---------   --------  ---------

    Net income (loss) $  4,477  $  3,324  $(233,311)  $  7,800  $(236,814)
                      ========  ========  =========   ========  =========

Net income (loss)
 attributable to
 common shareholders  $  2,061  $    909  $(235,726)  $  2,970  $(214,508)
                      ========  ========  =========   ========  =========

Net income per common
 share                $   0.02  $   0.01  $   (3.50)  $   0.02  $   (3.30)
                      ========  ========  =========   ========  =========

Contact Information

  • For more information contact:

    Investor Relations:
    Christopher Poulton
    EVP
    Email Contact
    212-329-3794

    Media:
    Lucienne Gigante
    VP Public Relations
    Email Contact
    787-474-6298