8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 23, 2009

ORIENTAL FINANCIAL GROUP INC.

(Exact Name of Registrant as Specified in its Charter)

Commonwealth of Puerto Rico	001-12647	66-0538893
(State or other Jurisdiction of Incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)

Oriental Center Professional Offices Park 997 San Roberto Street, 10th Floor San Juan, Puerto Rico	00926
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (787) 771-6800

(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

     On April 23, 2009, Oriental Financial Group Inc. (the “Company”) announced the results for the quarter ended March 31, 2009. A copy of the Company’s press release is attached as an exhibit to this report.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits

Exhibit No.		Description of Document
	99	Press release by the Company dated April 23, 2009.

2

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ORIENTAL FINANCIAL GROUP INC.
Date: April 23, 2009	By:	/s/ Norberto González
		Norberto González
		Executive Vice President and Chief Financial Officer

EX-99

Exhibit 99

Puerto Rico Contact:
Marilyn Santiago-Colón,
Oriental Financial Group Inc.
(787) 993-4648

U.S. Contact:
Steven Anreder and Gary Fishman,
Anreder & Company
(212) 532-3232

ORIENTAL FINANCIAL GROUP REPORTS FIRST QUARTER
EARNINGS PER COMMON SHARE OF $0.97

SAN JUAN, April 23, 2009 — Oriental Financial Group Inc. (NYSE: OFG) today reported income available to common shareholders of $23.5 million for the first quarter ended March 31, 2009. This represented a return on average assets of 1.53% and a return on average common equity of 49.14%, compared with 1.06% and 20.63%, respectively, in the first quarter of 2008. Diluted earnings per common share of $0.97 were 51.6% greater than the $0.64 reported in the year ago quarter.

Highlights

• Strong sequential increases in residential mortgage and commercial loan production

• Retail deposits increased 10.73%, or $116.2 million, from December 31, 2008

• Sequential increase of 75.9% in mortgage banking activities

• Sequential increase of 3.0% in net interest income

• Stockholders’ equity increased $58.0 million during the quarter

• Book value per common share increased to $10.38 from $7.96 at December 31, 2008

• Gain of $10.3 million on the sale of securities

“We are pleased with the Group’s performance, considering the recession in Puerto Rico and the state of the financial markets,” said José Rafael Fernández, President and Chief Executive Officer. “These results reflect our effective investment securities strategy, the growing strength of our client franchise, our focus on credit quality, and the dedication of our people. We remain well positioned to benefit from our strategies in the foreseeable future.”

Revenues

Net interest income was $30.7 million, 23.1% and 3.0% higher than the year ago quarter and previous quarter, respectively. Growth reflects the significant reduction in cost of funds, which has declined more rapidly than the yield on interest-earning assets.

Non-interest income was $17.2 million, 94.6% higher than the first quarter of 2008. Growth reflects a gain on the sale of government securities from another sharp increase in market values, the result of the U.S. Treasury’s expanded plan to purchase such securities in the secondary market; increased mortgage banking activities from the sale of conforming residential mortgage production into the secondary market; and lower banking and financial service revenues, in line with first quarter industry trends; and continued de-emphasis of overdraft privilege program.

Non-Interest Expenses

Non-interest expenses of $19.3 million increased year over year at a lower rate than revenues, resulting in an improved efficiency ratio of 51.65% (compared to 54.69% in the year-ago quarter).

Income Taxes

The effective income tax rate was 2.7% for the first quarter of 2009, which includes Puerto Rico’s new taxes on the earnings of international banking entities and financial institutions, versus tax benefits in the first and fourth quarters of 2008.

Capital

At March 31, 2009, stockholders’ equity increased $58.0 million to $319.4 million, or 22.2% from December 31, 2008, reflecting increased values in the investment securities portfolio and the increase in retained earnings. Book value per common share increased 30.4% and tangible common equity to risk-weighted assets of 9.82% increased 141 basis points during the quarter.

The Group maintains capital ratios in excess of regulatory requirements. At March 31, 2009, the Leverage Capital Ratio was 6.71% (1.7 times the minimum of 4.00%); Tier I Risk-Based Capital Ratio was 16.41% (4.1 times the minimum of 4.00%), and the Total Risk-Based Capital Ratio was 17.01% (2.1 times the minimum of 8.00%). In dollars, Leverage Capital and Tier 1 Risk-Based Capital of $417.0 million increased $27.7 million from December 31, 2008, and Total Risk-Based Capital of $432.1 million increased $28.6 million.

The Financial Service-Banking Franchise

The Group’s niche market approach to the integrated delivery of services to mid and high net worth clients performed well, resulting in expanded market share.

Lending

Loan production of $85.1 million was up 38.3% from the year ago quarter and 24.3% from the previous quarter, as the Group’s capital levels and low credit losses compared to most banking institutions enabled it to continue prudent lending. The average FICO score was 720 and the average loan to value ratio was 82% on residential mortgage loans originated in the first quarter of 2009.

Deposits

Sequential growth in retail deposits from the fourth quarter of 2008 reflects a $115.1 million increase in demand deposits, primarily from new accounts.

Assets Under Management

Assets under management, which generate recurring fees, declined only 6.8% from December 31, 2008, as a high proportion of fixed income investments helped offset the 11.7% decline in equity markets, as measured by the S&P 500 index. Outflows were minimal.

Credit Quality

Net credit losses increased $0.9 million from the fourth quarter of 2008. The provision for loan losses for the first quarter of 2009 was $3.2 million (136.6% of net credit losses), increasing the allowance for loan losses by 6.0% to $15.1 million, as compared to the fourth quarter of 2008.

Non-performing loans increased $9.1 million from the fourth quarter, reflecting the economic environment in Puerto Rico. Based on historical performance, the Group does not expect non-performing loans to result in significantly higher losses as most are well-collateralized with adequate loan-to-value ratios. In residential mortgage lending, more than 90% of the Group’s portfolio consists of fixed-rate, fully amortizing, fully documented loans that do not have the level of risk generally associated with subprime loans. In commercial lending, more than 90% of its loans are collateralized by real estate.

The Investment Securities Portfolio

The average balance was $5.0 billion, up 5.5% from the first quarter of 2008 and up 3.9% from the fourth quarter of 2008.

Approximately 86% of the portfolio consists of fixed-rate mortgage-backed securities or notes, guaranteed or issued by FNMA, FHLMC, or GNMA and U.S. agency senior debt obligations, and thus backed by a U.S. government sponsored entity or the full faith and credit of the U.S. government (84%), and Puerto Rico Government and agency obligations (2%). The remaining balance consists of non-agency collateralized mortgage obligations (11%), the majority of which are backed by prime fixed-rate residential mortgage collateral, and structured credit investments (3%).

Conference Call

A conference call to discuss the firm’s results, outlook and related matters will be held on Friday, April 24, 2009 at 10:00 am (ET). The call will be accessible live via a webcast on the Group’s Investor Relations website at www.orientalfg.com. A webcast replay will be available shortly thereafter. Access the webcast link in advance to download any necessary software.

About Oriental Financial Group

Oriental Financial Group Inc. is a diversified financial holding company operating under U.S. and Puerto Rico banking laws and regulations. Now in its 45^th year in business, Oriental provides a full range of mortgage, commercial and consumer banking services through 23 Oriental Group financial centers in Puerto Rico, as well as financial planning, trust, insurance, investment brokerage and investment banking services. Investor information about Oriental can be found at www.orientalfg.com.

Forward-Looking Statements

This news release may contain forward-looking statements that reflect management’s beliefs and expectations and are subject to risks and uncertainties inherent to the Group’s business, including, without limitation, the effect of economic and market conditions, the level and volatility of interest rates, and other risks and considerations detailed in the Group’s filings with the Securities and Exchange Commission. These or other factors could cause actual results to differ materially from forward-looking statements. The Group also disclaims any obligations to update information contained in this news release because of developments occurring after the date of issuance.

# # #

ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)

	QUARTER ENDED
	31-Mar-09			31-Mar-08			%			31-Dec-08
Summary of Operations(Dollars in thousands, except per share data):
Interest Income:
Loans	$	18,320		$	19,828			-7.6	%	$	19,684
Investment securities and other		65,611			62,273			5.4	%		67,352
Total interest income		83,931			82,101			2.2	%		87,036
Interest Expense: Deposits		13,823			12,429			11.2	%		13,035
Securities sold under agreements to repurchase		35,799			40,240			-11.0	%		40,459
Other borrowed funds		3,644			4,523			-19.4	%		3,766
Total interest expense		53,266			57,192			-6.9	%		57,260
Net interest income		30,665			24,909			23.1	%		29,776
Provision for loan losses		3,200			1,650			93.9	%		3,280
Net interest income after provision for loan losses		27,465			23,259			18.1	%		26,496
Non-Interest Income:
Financial service revenues		3,114			4,240			-26.6	%		3,985
Banking service revenues		1,393			1,527			-8.8	%		1,398
Investment banking revenues (losses)		(12	)		738			-101.6	%		—
Mortgage banking activities		2,153			1,006			114.0	%		1,224
Total banking and financial service revenues		6,648			7,511			-11.5	%		6,607
Net gain (loss) on:
Sale of securities		10,340			9,314			11.0	%		25,162
Derivatives		434			(7,803	)		105.6	%		304
Mortgage tax credits		—			—			0.0	%		(2,480	)
Other investments		13			110			-88.2	%		16
Trading securities		(27	)		(17	)		-58.8	%		19
Sale of foreclosed real estate		(162	)		(250	)		35.2	%		(218	)
Other		—			(1	)		100.0	%		1
Total non-interest income		17,246			8,864			94.6	%		29,411
Non-Interest Expenses: Compensation and employees’ benefits		7,724			7,715			0.1	%		7,291
Occupancy and equipment		3,489			3,287			6.1	%		3,630
Professional and service fees		2,608			1,880			38.7	%		2,599
Advertising and business promotion		1,204			1,074			12.1	%		1,213
Insurance		815			602			35.4	%		622
Taxes, other than payroll and income taxes		646			611			5.7	%		652
Electronic banking charges		540			418			29.2	%		484
Loan servicing		383			331			15.7	%		361
Communication		379			325			16.6	%		328
Directors and investor relations		349			278			25.5	%		305
Clearing and wrap fees		330			294			12.2	%		349
Other		806			915			-11.9	%		901
Total non-interest expenses		19,273			17,730			8.7	%		18,735
Income before income taxes		25,438			14,393			76.7	%		37,172
Income tax expense (benefit)		690			(2,455	)		128.1	%		(3,240	)
Net income		24,748			16,848			46.9	%		40,412
Less: Dividends on preferred stock		(1,201	)		(1,201	)		0.0	%		(1,201	)
Income available to common shareholders	$	23,547		$	15,647			50.5	%	$	39,211

Page 1

ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)

	QUARTER ENDED
	31-Mar-09			31-Mar-08			%			31-Dec-08
(Dollars in thousands, except per share data):
EARNINGS PER SHARE
Basic	$	0.97		$	0.65			49.2	%	$	1.61
Diluted	$	0.97		$	0.64			51.6	%	$	1.61
COMMON STOCK DATA
Average common shares outstanding		24,245			24,164			0.3	%		24,295
Average potential common shares-options		3			125			-97.6	%		16
Total average shares outstanding and equivalents		24,248			24,289			-0.2	%		24,311
Common shares outstanding at end of period		24,223			24,285			-0.3	%		24,297
Book value per common share	$	10.38		$	11.15			-6.9	%	$	7.96
Cash dividends per share of common stock	$	0.04		$	0.14			-71.4	%	$	0.14
Cash dividends declared on common shares	$	972		$	3,399			-71.4	%	$	3,402
Pay-out ratio		4.12	%		21.88	%		-81.1	%		8.70	%
SELECTED FINANCIAL DATA
PERFORMANCE RATIOS:
Return on average assets		1.53	%		1.06	%		44.3	%		2.57	%
Return on average common equity		49.14	%		20.63	%		138.2	%		99.67	%
Efficiency ratio		51.65	%		54.69	%		-5.6	%		51.49	%
TAX EQUIVALENT SPREAD
Interest-earning assets		5.43	%		5.55	%		-2.2	%		5.78	%
Tax equivalent adjustment		1.68	%		1.84	%		-8.7	%		1.92	%
Interest-earning assets — tax equivalent		7.11	%		7.39	%		-3.8	%		7.70	%
Interest-bearing liabilities		3.64	%		4.21	%		-13.5	%		4.01	%
Tax equivalent interest rate spread		3.47	%		3.18	%		9.1	%		3.69	%
Tax equivalent interest rate margin		3.66	%		3.52	%		4.0	%		3.90	%
NORMAL SPREAD
Investments		5.27	%		5.28	%		-0.2	%		5.62	%
Loans		6.09	%		6.66	%		-8.6	%		6.39	%
Interest-earning assets		5.43	%		5.55	%		-2.2	%		5.78	%
Deposits		3.27	%		4.14	%		-21.0	%		3.35	%
Borrowings		3.79	%		4.23	%		-10.4	%		4.25	%
Interest-bearing liabilities		3.64	%		4.21	%		-13.5	%		4.01	%
Interest rate spread		1.79	%		1.34	%		33.6	%		1.77	%
Interest rate margin		1.98	%		1.68	%		17.9	%		1.98	%
AVERAGE BALANCES
Investments	$	4,980,245		$	4,721,542			5.5	%	$	4,791,032
Loans		1,203,736			1,191,305			1.0	%		1,231,864
Interest-earning assets	$	6,183,981		$	5,912,847			4.6	%	$	6,022,896
Deposits	$	1,689,300		$	1,200,361			40.7	%	$	1,554,648
Borrowings		4,159,397			4,233,176			-1.7	%		4,159,521
Interest-bearing liabilities	$	5,848,697		$	5,433,537			7.6	%	$	5,714,169

Page 2

ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)

	AS OF
	31-Mar-09			31-Mar-08			%			31-Dec-08
(Dollars in thousands)
BALANCE SHEET
Cash and due from banks	$	293,750		$	50,052			486.9	%	$	66,372
Interest-earning assets:
Investments:
Trading securities		608			93			553.8	%		256
Investment securities available-for-sale, at fair value with amortized cost of $4,648,495 (March 31, 2008 - $3,497,906, December 31, 2008 - $4,052,574)		4,555,533			3,465,741			31.4	%		3,924,207
Investment securities held-to-maturity, at amortized cost with fair value of $1,263,260 at March 31, 2008		—			1,277,171			-100.0	%		—
Other investments		150			150			0.0	%		150
Federal Home Loan Bank (FHLB) stock, at cost		19,812			20,658			-4.1	%		21,013
Total investments		4,576,103			4,763,813			-3.9	%		3,945,626
Loans:
Mortgage loans		968,334			989,284			-2.1	%		1,000,076
Commercial loans		194,145			156,508			24.0	%		187,077
Consumer loans		21,330			28,178			-24.3	%		23,054
Loans receivable, gross		1,183,809			1,173,970			0.8	%		1,210,207
Less: Deferred loan fees, net		(3,509	)		(3,022	)		-16.1	%		(3,364	)
Loans receivable		1,180,300			1,170,948			0.8	%		1,206,843
Allowance for loan losses		(15,147	)		(11,092	)		-36.6	%		(14,293	)
Loans receivable, net		1,165,153			1,159,856			0.5	%		1,192,550
Mortgage loans held for sale		34,278			25,577			34.0	%		26,562
Total loans, net		1,199,431			1,185,433			1.2	%		1,219,112
Total interest-earning assets		5,775,534			5,949,246			-2.9	%		5,164,738
Securities sold but not yet delivered		289,565			26,995			972.7	%		834,976
Accrued interest receivable		38,585			37,026			4.2	%		43,914
Premises and equipment, net		21,540			21,587			-0.2	%		21,184
Deferred tax asset, net		23,422			12,931			81.1	%		28,463
Foreclosed real estate		9,681			4,119			135.0	%		9,162
Investment in equity indexed options		8,991			34,475			-73.9	%		12,801
Mortgage tax credits		5,047			1,754			187.7	%		5,047
Prepaid expenses		2,817			2,778			1.4	%		3,433
Investment in Statutory Trust		1,086			1,086			0.0	%		1,086
Goodwill		2,006			2,006			0.0	%		2,006
Servicing asset		3,467			2,819			23.0	%		2,819
Debt issuance costs		4,381			901			386.3	%		900
Accounts receivable and other assets		12,013			10,344			16.1	%		8,635
Total assets	$	6,491,885		$	6,158,119			5.4	%	$	6,205,536
Interest-bearing liabilities:
Deposits:
Demand deposits	$	568,808		$	128,330			343.2	%	$	453,690
Savings accounts		55,079			453,711			-87.9	%		50,153
Individual retirement accounts		291,982			310,907			-6.1	%		286,691
Retail certificates of deposit		282,901			270,996			4.4	%		292,045
Total Retail Deposits		1,198,770			1,163,944			3.0	%		1,082,579
Institutional deposits		161,168			150,969			6.8	%		184,283
Brokered deposits		452,247			127,075			255.9	%		518,438
Total deposits		1,812,185			1,441,988			25.7	%		1,785,300

Page 3

ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)

	AS OF
	31-Mar-09			31-Mar-08			%			31-Dec-08
(Dollars in thousands)
Borrowings:
Federal funds purchased and other short term borrowings		44,310			36,517			21.3	%		29,193
Securities sold under agreements to repurchase		3,757,411			3,847,633			-2.3	%		3,761,121
Advances from FHLB		281,675			331,853			-15.1	%		308,442
FDIC-guaranteed term notes		105,112			—			100.0	%		—
Subordinated capital notes		36,083			36,083			—			36,083
Total borrowings		4,224,591			4,252,086			-0.6	%		4,134,839
Total interest-bearing liabilities		6,036,776			5,694,074			6.0	%		5,920,139
Securities purchased but not yet received		112,628			101,375			11.1	%		398
Accrued expenses and other liabilities		23,130			23,912			-3.3	%		23,682
Total liabilities		6,172,534			5,819,361			6.1	%		5,944,219
Preferred Equity		68,000			68,000			0.0	%		68,000
Common Equity:
Common stock		25,739			25,732			0.0	%		25,739
Additional paid-in capital		212,784			212,056			0.3	%		212,625
Legal surplus		45,471			42,140			7.9	%		43,016
Retained earnings		71,353			55,977			27.5	%		51,233
Treasury stock, at cost		(17,164	)		(17,184	)		0.1	%		(17,109	)
Accumulated other comprehensive loss		(86,832	)		(47,963	)		-81.0	%		(122,187	)
Total common equity		251,351			270,758			-7.2	%		193,317
Stockholders’ equity		319,351			338,758			-5.7	%		261,317
Total liabilities and stockholders’ equity	$	6,491,885		$	6,158,119			5.4	%	$	6,205,536
CAPITAL RATIOS
Leverage Capital Ratio		6.71	%		6.67	%		0.6	%		6.38	%
Minimum Leverage Capital Ratio Required		4.00	%		4.00	%					4.00	%
Actual Tier 1 Capital	$	416,955		$	407,984			2.2	%	$	389,235
Minimum Tier 1 Capital Required	$	248,534		$	244,590			1.6	%	$	244,101
Tier 1 Risk-Based Capital Ratio		16.41	%		17.02	%		-3.6	%		17.11	%
Minimum Tier 1 Risk-Based Capital Ratio Required		4.00	%		4.00	%					4.00	%
Actual Tier 1 Risk-Based Capital	$	416,955		$	407,984			2.2	%	$	389,235
Minimum Tier 1 Risk-Based Capital Required	$	101,609		$	95,864			6.0	%	$	91,022
Total Risk-Based Capital Ratio		17.01	%		17.49	%		-2.7	%		17.73	%
Minimum Total Risk-Based Capital Ratio Required		8.00	%		8.00	%					8.00	%
Actual Total Risk-Based Capital	$	432,102		$	419,075			3.1	%	$	403,528
Minimum Total Risk-Based Capital Required	$	203,219		$	191,728			6.0	%	$	182,044
Tangible common equity to total assets		3.84	%		4.36	%		-11.9	%		3.08	%
Tangible common equity to risk-weighted assets		9.82	%		11.21	%		-12.5	%		8.41	%
Total equity to total assets		4.92	%		5.50	%		-10.5	%		4.21	%
Total equity to risk-weighted assets		12.57	%		14.13	%		-11.1	%		11.48	%
SELECTED FINANCIAL DATA AT PERIOD-END
Trust Assets Managed	$	1,617,855		$	1,927,638			-16.07	%	$	1,706,286
Broker-Dealer Assets Gathered		1,087,781			1,290,973			-15.7	%		1,195,739
Total Assets Managed		2,705,636			3,218,611			-15.9	%		2,902,025
Assets owned		6,491,885			6,158,119			5.4	%		6,205,536
Total financial assets managed and owned	$	9,197,521		$	9,376,730			-1.9	%	$	9,107,561
Number of financial centers		23			24			-4.2	%		23

Page 4

ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)

	QUARTER ENDED
	31-Mar-09			31-Mar-08			%			31-Dec-08
(Dollars in thousands)
Loan Production and Purchases Summary:
Mortgage loans production	$	65,731		$	44,578			47.5	%	$	53,658
Mortgage loans purchased		2,176			4,691			-53.6	%		1,858
Total mortgage		67,907			49,269			37.8	%		55,516
Commercial		18,067			15,737			14.8	%		14,000
Consumer		1,305			1,233			5.8	%		814
Total loan production and purchases	$	87,279		$	66,239			31.8	%	$	70,330
CREDIT DATA
Net credit losses:
Mortgage	$	1,396		$	166			741.0	%	$	850
Commercial		598			(13	)		4700.0	%		225
Consumer		352			567			-37.9	%		379
Total net credit losses	$	2,346		$	720			225.8	%	$	1,454
Net credit losses to average loans outstanding		0.78	%		0.24	%		225.0	%		0.47	%

	AS OF
	31-Mar-09			31-Mar-08			%			31-Dec-08
Allowance for loan losses	$	15,147		$	11,092			36.60	%	$	14,293
Allowance coverage ratios:
Allowance for loan losses to total loans		1.25	%		0.93	%		34.41	%		1.16	%
Allowance for loan losses to non-performing loans		17.50	%		16.04	%		9.10	%		18.45	%
Allowance for loan losses to non-residential non-performing loans		157.29	%		289.16	%		-45.60	%		239.90	%
Non-performing assets summary:
Mortgage	$	76,911		$	65,332			17.70	%	$	71,531
Commercial, mainly real estate		8,847			2,754			221.20	%		5,186
Consumer		783			1,081			-27.60	%		772
Non-performing loans		86,541			69,167			25.10	%		77,489
Foreclosed properties		9,681			4,119			135.00	%		9,162
Non-performing assets	$	96,222		$	73,286			31.30	%	$	86,651
Non-performing loans to total loans		7.13	%		5.78	%		23.40	%		6.28	%
Non-performing loans to total assets		1.33	%		1.12	%		18.80	%		1.25	%
Non-performing assets to total assets		1.48	%		1.19	%		24.40	%		1.40	%
Non-performing assets to total capital		30.13	%		21.63	%		39.30	%		33.45	%

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