EX-99.1 3 g83869exv99w1.txt EX-99.1 PRESS RELEASE DATED JULY 16, 2003 EXHIBIT 99.1 [R&G LOGO] FOR RELEASE: Immediately CONTACT: Victor J. Galan Joseph R. Sandoval Chairman and CEO Executive Vice President & CFO (787) 766-8301 (787) 756-2801 R&G FINANCIAL REPORTS RECORD EARNINGS FOR SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2003 San Juan, Puerto Rico, July 16, 2003 -- R&G Financial Corporation ("the Company") (NYSE:RGF), the financial holding company of R-G Premier Bank, one of the fastest growing commercial banks in Puerto Rico, R-G Crown Bank, its federal savings bank with branches in the Orlando and Tampa/St. Petersburg Florida markets, and R&G Mortgage Corp, the second largest residential mortgage loan originator and servicer in Puerto Rico, today reported record earnings for the second quarter and first half of 2003. For the first six months of 2003, net income amounted to $60.6 million, compared to $44.2 million 2002, an improvement of 37%. For the second quarter of 2003, net income amounted to $31.4 million compared to $22.6 million for the second quarter of 2002, an increase of 39%. For the six months of 2003, consolidated earnings per diluted share were $1.54, compared to $1.17 for 2002, an increase of 32%; for the second quarter of 2003, consolidated earnings per diluted share were $0.80, compared to $0.59 per diluted share for the second quarter of 2002, an increase of 36%. R&G Financial Corporation Page 2 These strong earning results were achieved notwithstanding impairment charges of $27.5 million and $16.7 million (included in operating expenses) during the first half and second quarter of 2003, respectively, on the Company's servicing asset. These charges reflect additional increases in mortgage prepayment rates during the period as a result of the continued low levels of interest rates. The resulting decrease in earnings was more than offset by increases in gain on sale and fees from mortgage loans, which were attributable to record volumes of mortgage loan originations and sales. Total loan production during the first half of 2003 was $2.1 billion, a 61% increase over the first half in 2002; total loan production during the second quarter of 2003 was $1.1 billion, a 49% increase. In both periods, over 90% of the total loan production was internally generated. Total loan production during the second quarter was the highest amount for any given quarter in the Company's history, surpassing the amount for the first quarter this year. For the second quarter of 2003, gain on the origination and sale of loans increased 184% to $44.8 million, while the Company's net interest income increased by 24% to $44.6 million. For the first half of 2003, gain on the origination and sale of loans increased 133% to $77.8 million, while the Company's net interest income increased by 28% to $86.8 million. R&G Financial Corporation Page 3 Other fee income for the first half of 2003 was $12.9 million, representing a 63% increase over the comparative period in 2002. The increase reflects the added contributions made by the Company's insurance agency and its broker-dealer subsidiary. Commenting on the significant results for the second quarter and first half of 2003, Mr. Victor J. Galan, Chairman of the Board and CEO of the Company indicated: "We are pleased to report these excellent results during the quarter ended June 30, 2003. The increase in earnings reflects another strong quarter of loan production, surpassing the $1 billion mark for the second consecutive quarter. Our loan portfolio has grown by close to $250 million during the first half of 2003, due to strong loan demand both in Puerto Rico and Central Florida, which position R&G very well for the future. As a result of these strong results, together with the continuing strong demand we are experiencing both in commercial and residential lending, we remain optimistic about our future performance." R&G Financial currently in its 31st year of operations, is a diversified financial holding company with operations in Puerto Rico and the United States, providing banking, mortgage banking, investments, consumer finance and insurance through its wholly-owned subsidiaries: R-G Premier Bank of Puerto Rico, R-G Crown Bank, R&G Mortgage Corp., Mortgage Store of Puerto Rico, Inc., a subsidiary of R&G Mortgage, Continental Capital Corporation, R-G Crown's R&G Financial Corporation Page 4 New York, North Carolina and Central-Florida based mortgage banking subsidiary, Home and Property Insurance Corporation, its Puerto Rico insurance agency, and R-G Investments Corporation, its Puerto Rico broker-dealer. As of June 30, 2003 the Company, with total assets of $7.3 billion, operated 31 bank branches in Puerto Rico, 15 bank branches in the Orlando and Tampa/St. Petersburg Florida markets, 6 mortgage and 6 commercial lending offices in the United States, and 43 mortgage offices in Puerto Rico, including 24 facilities located with R-G Premier's branches. "SAFE HARBOR" STATEMENT UNDER THE PRIVACY SECURITIES LITIGATION REFORM ACT OF 1995 Statements made in this Press Release that relate to future events are made pursuant to the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon current expectations and R&G Financial assumes no obligation to update this information. Because actual results may differ materially from expectation, R&G Financial cautions readers not to place undue reliance on these statements. For a detailed discussion of the important factors affecting R&G Financial, please see the Company's Form 10-K for the year ended December 31, 2002 and Form 10-Q for the quarter ended March 31, 2003 filed with the Securities and Exchange Commission. Website:www.rgonline.com R&G Financial Corporation Page 5
At At At June 30, 2003 Dec. 31, 2002 June 30, 2002 ------------- ------------- ------------- (Dollars in Thousands, except for per share data) SELECTED BALANCE SHEET DATA (Unaudited) Total assets $ 7,256,149 $ 6,277,246 $ 5,874,153 Loans receivable, net 3,286,759 2,759,689 2,438,609 Mortgage loans held for sale 248,345 258,738 229,996 Mortgage-backed and investment securities held for trading 41,200 74,757 55,048 Mortgage-backed and investment securities available for sale 3,026,455 2,556,913 2,562,293 Mortgage-backed and investment securities held to maturity 69,119 75,591 78,306 Servicing asset 127,146 142,334 146,199 Cash and cash equivalents 215,883 197,643 90,680 Deposits 3,240,607 2,802,324 2,534,722 Securities sold under agreements to repurchase 1,845,488 1,489,758 1,602,394 Notes payable 206,009 194,607 178,802 Other borrowings 1,064,539 985,790 882,624 Stockholders' equity 700,835 662,218 571,364 Common stockholders' equity 487,835 449,218 358,364 Total # of common shares outstanding 34,043,620 33,993,262 31,377,609 Common Stockholders' equity per share $ 14.33 $ 13.21 $ 11.42 Servicing portfolio 11,318,506 10,991,944 10,852,536 Book value of servicing portfolio 1.12% 1.29% 1.35% Allowance for loan losses (ALL) 34,473 32,676 27,893 Non-performing loans (NPL's) 91,007 78,199 75,614 NPL's/Total loans 2.60% 2.71% 2.95% All/Total loans 0.98% 1.13% 1.09% All/Total Non-performing loans 37.88% 41.79% 36.89%
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THREE MONTHS FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, MARCH 31, (UNAUDITED) (UNAUDITED) (UNAUDITED) ------------------------------ ------------------------------ ----------- 2003 2002 2003 2002 2003 ------------ ------------ ------------ ------------ ------------ (Dollars in Thousands, except for per share data) SELECTED INCOME STATEMENT DATA REVENUES: Net interest income $ 44,569 $ 36,049 $ 86,790 $ 68,054 $ 42,221 Provision for loan losses (4,444) (4,550) (8,664) (9,550) (4,220) Net interest income after provision for loan losses 40,125 31,499 78,126 58,504 38,001 Loan administration and servicing fees 13,201 10,320 26,402 19,624 13,201 Net gain on origination and sale of loans 44,786 15,751 77,803 33,461 33,017 Other 7,226 4,060 12,947 7,932 5,721 TOTAL REVENUES 105,338 61,630 195,278 119,521 89,940 OPERATING EXPENSES: Employee compensation and benefits 14,506 9,544 29,653 19,552 15,147 Office occupancy and equipment 6,074 4,706 11,776 8,968 5,702 Other administrative and general 42,706 18,043 73,249 33,969 30,543 TOTAL EXPENSES 63,286 32,293 114,678 62,489 51,392 Income before income taxes 42,052 29,337 80,600 57,032 38,548 Income taxes (10,602) (6,718) (20,009) (12,880) (9,407) Net income $ 31,450 $ 22,619 $ 60,591 $ 44,152 $ 29,141 Less: Preferred stock dividends (3,971) (3,918) (7,942) (7,013) (3,971) Net income available to common stockholders 27,479 18,701 52,649 37,139 25,170 Net income per common share - Basic $ 0.81 $ 0.60 $ 1.55 $ 1.19 $ 0.74 Net income per common share - Diluted $ 0.80 $ 0.59 $ 1.54 $ 1.17 $ 0.74 Average shares outstanding - Basic 34,043,100 31,306,700 34,032,966 31,301,387 34,022,719 Average shares outstanding - Diluted 34,181,137 31,654,798 34,180,949 31,654,636 34,180,759 Return on common equity 22.99% 22.01% 22.47% 22.40% 21.94% Return on assets 1.78% 1.77% 1.78% 1.78% 1.77% Total Loan Production $ 1,094,680 $ 733,216 $ 2,113,077 $ 1,310,963 $ 1,018,397