Doral Financial’s Glen Wakeman: ‘We’re making a lot of headway’
Although Doral Financial Corp. was not a winner in the Federal Deposit Insurance Corporation’s (FDIC) bidding process for two failed local banks back in April, banking subsidiary Doral Bank came out ahead anyway with double-digit growth in deposits and stronger capitalization levels.
“Post consolidation, interestingly we came out stronger because we did attract another $180 million of capital, and when you look at the key financial ratios that investors, analysts and regulators look at, we’re in great shape,” Doral Financial Corp. President and CEO Glen Wakeman told CARIBBEAN BUSINESS.
Wakeman said Doral made the choice to go out and get more capital and did so. In addition, the bank improved the quality of its capital by converting almost 41% of its preferred stock into common stock, a process started a year ago, and eliminated about $400 million in problem assets from its balance sheet this past April.
COMING OUT AHEAD DESPITE FAILED BIDS
Despite the unsuccessful bids for R-G Premier Bank and Westernbank after raising the capital, Wakeman said that Doral’s certification by the FDIC as a qualified bidder was a significant achievement, as the federal regulator assessed Doral and gave it the equivalent of a “Good Housekeeping” seal of approval.
Although Doral came out of the bidding empty-handed— the institution did not bid on a third failed bank, Eurobank—Wakeman said the FDIC process was fair.
“I would have to say it was a fair process by virtue of the fact the bidders that offered the highest prices won, and that’s what the process is designed to do. We had a good value and our price reflected that. We are happy with the prices that we bid in the consolidation process,” Wakeman said without providing specifics on Doral’s bid prices. “We had to deal with credit risk and we had to discipline and limit the credit risk we were willing to take, and that was reflected in our price. It wasn’t the winning price, but that’s OK.”
Wakeman said Doral is now well positioned to make a number of choices looking forward.
“What we’re really trying to do, and what community banks do, is pay attention to our customers,” he said. “Our mission is to try to give the people of Puerto Rico more choices, as many as we can, and that’s essentially the position we are in right now.”
Wakeman pointed out that Doral is also being rewarded through a 15% deposit growth during the second quarter of this year, which he called substantial, while products per household through cross-selling is now double what it was two years ago.
“It’s not smoke and mirrors,” Wakeman said, adding that Doral is doing its part to help the local economy by lending $1 billion a year. “We invested in the communities and they responded. And we’re not done yet, as there’s always more to do.”
In summarizing what the bank has achieved over the past year, Wakeman said Doral is making a lot of headway on different fronts, but primarily by investing in the communities it serves. Those communities in turn are returning the favor by investing in Doral, he said.
“We made the right choice by putting our community front and center and by focusing on investing in our communities,” he said. “We’re bowing a little bit out of the traditional model by trying to align ourselves and finding fantastic points of collaboration with our partners.
“When I think about community banking, it’s about putting our customers and the community at the center, and we’ve been acknowledged for doing that.”
As previously reported, Doral’s d museo, d parques, d hogares and Ruta Pink community-based programs won in four separate categories in the Communitas Awards for their excellence in community service and corporate social responsibility (CSR) during the first quarter of this year (CB, June 17, 2010).
The local financial institution itself won two awards in the Leadership in Community Service and CSR categories for its high-impact CSR program and proactive community service initiatives.
Wakeman in turn has been selected as a 2010 Corazón Award honoree during Comunilife’s 21st Anniversary Corporate Breakfast for Doral Bank’s exemplary record of corporate social responsibility.
The award event, to be held on Oct. 29 in New York, is attended by New York City business, civic, community, government and media influentials. Immediate past honorees include: Mayor Michael R. Bloomberg, U.S. Representative Nydia M. Velásquez, El Diario La Prensa President and CEO Rossana Rosado, Bronx Lebanon Medical Center President and CEO Miguel Fuentes and Mount Sinai Medical Hospital Cardiologist Eliscer Guzmán.
Through the d hogares program, Doral has been able to restructure 18,000 mortgage loans, thus helping these families keep their homes. In return, the families are rewarding the bank by making their payments and keeping their primary banking relationship with Doral, Wakeman said.