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Doral Financial Corporation Message Board

  • cavalier2015 cavalier2015 Jan 26, 2013 7:38 AM Flag

    4Q Report

    Was on 1-20 last year, should be an annoucement date very soon. Odd that other than 2011's, there are no 4Q reports on the company website. 2011's 4Q was solid, current NII has improved which is a major plus imo.It all comes down to bad loan provision levels...

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    • Cavalier, my bet is in. I have accumulated ~500,000 shares of the common and ~100,000 of the preferred. Let's see if I make a bundle in the next few days or will have to wait a while. Thus far I have done quite well with the Puerto Rican banks equity holdings.

    • This was Robert Wahlman (DRL CFO) in the earnings call. We will see in the 4Q results if they were telling the truth with respect to their comments that the majority of the TDR issues are behind them and they will retun to "normalized" earnings in 2013.

      "So I've covered a lot of detail in a compressed discussion. Let me step back and recap what I think are the significant provision matters. Of the loan population, provisions for nearly $3 billion of commercial loans totaled $5.2 million, of which $2 million was for growth in the U.S. portfolio, and performance of this portfolio appears stable at this point in time.

      Of the $3.2 billion residential loan portfolio, the $2.4 billion core portfolio provisions totaled just $1.2 million for delinquency deterioration and performance also appears stable. There was a $5.6 million charge for the new valuations received.

      Of the $629 million TDR portfolio, more specifically, the $374 million resetting portfolio, provisions totaled $22 million; $6.4 million for the new valuations, $8.1 million for increased defaults on reset loans, $7 million in anticipation of this particular -- of new defaults in this particular segment of that portfolio and a few -- and about $0.5 million of other charges.

      These facts lead me to the view that the high Q3 provision level is driven by the resetting modified loans. The number of resetting modified loans peaked in Q3 of 2012, driven by the high level of modifications from September of 2010 through February of 2011. And the effect of the resetting loans on the provision, I expect will ease in future quarters as the volume of resetting loans declines, and the amount of interest rate shock at reset declines because of the program changes made in February 2011.

      With that, I'll turn this over to Chris."

      • 1 Reply to im712
      • IMO it is an overstatement to say that he meant that the majority of TDR issues are behind them, he is just saying they "will ease in future quarters" .They could be only a million less for 4Q and technically his statement would be accurate. My take is that this TDR issue caught them a bit off guard and that this quarter and for 2013 there will still be significant provisions but not as bad as 3Q.

        Not sure what exactly it would be, but like crbc, IMO management needs to be more proactive in clearing these bad loans from the books even if it means a significant hit to BV.They have a growing US franchise whose profits are being sucked up by the PR mess.It's not just the loans alone but the costs of dealing with them per required frequent appraisals, etc. I think crbc sold off their crummy loans/mortages and took a BV hit, my assumption is drl has no buyers for theirs even at a big discount.

        Obviously, alot of these bad loan issues are discounted already in the current pps of 70c and it really comes down to whether they will have the time and capital to work their way through these provisions. Again, really feel they need to be more aggressive in taking the hit and moving on...

    • I would expect BV to continue it's steady decline which is ok as long as not a huge decrease. It's ok, not preferable, because the pps is 20% of BV and have a 2.60 DTA. Eventually BV should/must stabilize but will probably take some time and may settle at a level much less than current BV of 3.50.

      The key thing again is the provisions, I would choose a BV of 2$ share with little provisions and consistent earnings over current status..

 
DRL
6.650.00(0.00%)Sep 16 4:00 PMEDT

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