EX-99.1 3 g86765exv99w1.txt EX-99.1 PRESS RELEASE [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 Website:www.rgonline.com R&G FINANCIAL REPORTS RECORD EARNINGS FOR FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2003 San Juan, Puerto Rico, January 20, 2004 -- R&G Financial Corporation ("the Company") (NYSE:RGF), the financial holding company of R-G Premier Bank, R-G Crown Bank and R&G Mortgage Corp., today reported record earnings for the fourth quarter and year ended December 31, 2003. For the year ended December 31, 2003, net income amounted to $131.0 million, compared to $96.3 million in 2002, an improvement of 36%. For the fourth quarter of 2003, net income amounted to $36.1 million compared to $27.1 million for the fourth quarter of 2002, an increase of 33%. For the year ended December 31, 2003, consolidated earnings per diluted share were $3.37, compared to $2.49 for 2002, an increase of 35%; for the fourth quarter of 2003, consolidated earnings per diluted share were $0.94, compared to $0.68 per diluted share for the fourth quarter of 2002, an increase of 38%. The Company's return on equity during the fourth quarter of 2003 was 24.52%, while its return on assets was 1.80%. R&G Financial Corporation Page 2 For the fourth quarter of 2003, gain on the origination and sale of loans increased 41% to $38.9 million, while the Company's net interest income increased by 22% to $53.4 million. For the year ended December 31, 2003, gain on the origination and sale of loans increased 72% to $146.9 million, while the Company's net interest income increased by 23% to $188.0 million. The increase in earnings during the fourth quarter of 2003 also reflects a significant decrease in servicing related impairment charges. Impairment charges (included in operating expenses) of the Company's servicing asset for the fourth quarter and year ended December 31, 2003 were $5.6 million and $37.7 million, respectively, compared to $7.3 million and $21.0 million during the 2002 respective periods. The lower charges during the quarter reflect lower mortgage prepayment rates as a result of recent increases in interest rates for mortgage loans. In spite of the increase in rates during the quarter, loan production remained strong. Total loan production during the fourth quarter of 2003 was $1.1 billion, a 23% increase over the same period in 2002; total loan production during the year ended December 31, 2003 was $4.5 billion, a 52% increase, driven principally by the Company's ongoing expansion in commercial and residential lending in Central Florida and Puerto Rico as well as increased refinancings during the year in its mortgage banking segment due to low interest rates. Total assets of R-G Crown Bank at the end of the fourth quarter were $1.3 billion, increasing 56.4% during the year. Total banking assets increased 34.6% during the year to $7.4 billion, which represented 90.3% of the Company's consolidated assets at December 31, 2003. R&G Financial Corporation Page 3 Commenting on the record results for the fourth quarter and year ended December 31, 2003, Mr. Victor J. Galan, Chairman of the Board and CEO of the Company indicated: "We are very pleased to report these excellent results during the quarter and year ended December 31, 2003. During the quarter, the Company continued to successfully expand its loan portfolio, which is attributable both to general market growth coupled with the Company's ongoing penetration in residential and commercial lending in Central Florida and Puerto Rico. The loan portfolio grew to a record $4.0 billion, or a 47% increase from the prior year-end, which positions the Company very well for its future performance. As a result, during the fourth quarter of 2003, the Company's net interest income alone grew an impressive 12% on a linked quarter basis (48% on an annual basis). We continue to believe that the impact of any decrease in the volume of mortgage loan refinancings that could occur in the future due to higher interest rates should not be significant to the overall financial performance of the Company due to the Company's ongoing expansion and the continued strength in Central Florida's lending markets and Puerto Rico's new construction sector. 2004 should be another strong year for R&G, with continued growth and greater profitability." R&G Financial Corporation Page 4 R&G Financial currently in its 32nd 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, one of the fastest growing commercial banks in Puerto Rico, R-G Crown Bank, the Company's Florida federal savings bank with branches in the Orlando and Tampa/St. Petersburg Florida markets, R&G Mortgage Corp., the second largest mortgage loan originator and servicer of mortgage loans in Puerto Rico, Mortgage Store of Puerto Rico, Inc., a subsidiary of R&G Mortgage, Continental Capital Corporation, R-G Crown's New York and North Carolina 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 December 31, 2003 the Company, with total assets of $8.2 billion, operated 32 bank branches in Puerto Rico, 14 bank branches in the Orlando and Tampa/St. Petersburg Florida markets, 5 mortgage and 7 commercial lending offices in the United States, and 45 mortgage offices in Puerto Rico, including 25 facilities located within 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 September 30, 2003 filed with the Securities and Exchange Commission. R&G Financial Corporation Page 5
At At At December 31, 2003 September 30, 2003 December 31, 2002 ----------------- ------------------ ----------------- (Dollars in Thousands, except for per share data) SELECTED BALANCE SHEET DATA (Unaudited) Total assets $ 8,198,880 $ 7,835,001 $ 6,277,246 Loans receivable, net 4,048,507 3,754,039 2,759,689 Mortgage loans held for sale 315,691 240,535 258,738 Mortgage-backed and investment securities held for 38,355 40,949 74,757 trading Mortgage-backed and investment securities available 3,121,108 3,175,601 2,556,913 for sale Mortgage-backed and investment securities held to 78,200 71,320 75,591 maturity Servicing asset 119,610 124,149 142,334 Cash and cash equivalents 234,318 176,778 197,643 Deposits 3,555,764 3,431,976 2,802,324 Securities sold under agreements to repurchase 2,220,795 2,112,382 1,489,758 Notes payable 192,259 194,632 194,607 Other borrowings 1,287,270 1,191,464 985,790 Stockholders' equity 750,353 725,132 662,218 Common stockholders' equity 537,353 512,132 449,218 Total # of common shares outstanding 34,044,222 34,043,944 33,993,262 Common Stockholders' equity per share $ 15.78 $ 15.04 $ 13.21 Servicing portfolio $10,942,821 $10,924,263 $10,991,944 Book value of servicing portfolio 1.09% 1.14% 1.29% Allowance for loan losses (ALL) 39,676 35,729 32,676 Non-performing loans (NPL's) 85,414 87,803 78,199 NPL's/Total loans 1.98% 2.21% 2.71% All/Total loans 0.92% 0.90% 1.13% All/Total Non-performing loans 46.45% 40.69% 41.79%
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FOR THE THREE MONTHS ENDED FOR THE YEAR THREE MONTHS DECEMBER 31, ENDED DECEMBER 31, ENDED (UNAUDITED) (UNAUDITED) SEPT.30, (Unaudited) --------------------------- ------------------------- ------------ 2003 2002 2003 2002 2003 -------- ------ ------- ------- ------------- (Dollars in Thousands, except for per share data) SELECTED INCOME STATEMENT DATA REVENUES: Net interest income 53,450 $ 43,725 $ 187,983 $ 153,089 $ 47,743 Provision for loan losses (5,600) (4,500) (18,556) (18,020) (4,292) Net interest income after provision for loan losses 47,850 39,225 169,427 135,069 43,451 Net gain on origination and sale of loans 38,923 27,697 146,893 85,538 30,167 Loan administration and other fee income 17,028 17,194 76,907 63,632 20,530 TOTAL REVENUES 103,801 84,116 393,227 284,239 94,148 OPERATING EXPENSES: Employee compensation and benefits 18,555 13,157 63,585 45,244 15,377 Office occupancy and equipment 6,496 5,525 24,761 19,631 6,489 Other administrative and general 31,599 29,532 131,486 94,363 26,638 TOTAL EXPENSES 56,650 48,214 219,832 159,238 48,504 Income before income taxes 47,151 35,902 173,395 125,001 45,644 Income taxes (11,011) (8,760) (42,372) (28,659) (11,352) Net income $ 36,140 $ 27,142 $ 131,023 $ 96,342 $ 34,292 Less: Preferred stock dividends (3,971) (3,971) (15,884) (14,955) (3,971) Net income available to common stockholders 32,169 23,171 115,139 81,387 30,321 Net income per common share - Basic $ 0.94 $ 0.68 $ 3.38 $ 2.51 $ 0.89 Net income per common share - Diluted $ 0.94 $ 0.68 $ 3.37 $ 2.49 $ 0.89 Average shares outstanding - Basic 34,043,986 33,990,538 34,038,434 32,420,877 34,043,641
Average shares outstanding - Diluted 34,194,286 34,180,444 34,187,586 32,706,465 34,193,941 Return on common equity 24.52% 21.19% 23.45% 21.77% 24.26% Return on assets 1.80% 1.74% 1.80% 1.76% 1.82% Total Loan Production $ 1,079,976 $ 880,936 $ 4,464,099 $ 2,942,684 $ 1,271,046 Pro-forma EPS (diluted) to give effect to 3 for 2 stock split to be effected on January 29, 2004 $ 0.63 $ 0.45 $ 2.25 $ 1.66 $ 0.59