Doral reports $32.5M loss for 3Q

Doral Financials’ red ink grew deeper in the third quarter as it posted a net loss of $32.5 million.

That was wider than the $1.6 million loss posted in the second quarter and narrowly bigger than the $30.2 million it lost in the third quarter of 2011.

For the nine months through September, Doral has posted total losses of $31.6 million compared to a net loss of $22.4 million for the same period of 2011.

“Our results reflect the high credit costs as we continue to work with thousands of homeowners during this difficult economic time,” Doral CEO and President Glen Wakeman said. “Despite this, we have increased revenue, strengthened our mortgage and retail franchise in Puerto Rico, continued to successfully grow our U.S. operations, and preserved our high levels of capital.”

Doral hiked its provision for loan and lease losses for the third quarter to $34.4 million, an increase of $29.2 million over the second quarter 2012 provision, and a decrease of $7.3 million from the provision recorded in the third quarter of 2011.

The $34.4 million provision for loan and lease losses in the third quarter of 2012 resulted mainly from the residential mortgage portfolios ($28.8 million), and resulted from higher re-defaults of previously modified loans and new valuations of defaulted loans, all related to Puerto Rico loan exposures.

Doral’s shares (DRL) were trading down slightly at just under 73 cents on the New York Stock Exchange early Friday afternoon. The stock has ranged from 56 cents to $2 over than past 52 weeks.

Doral, the holding company of Doral Bank, with operations in Puerto Rico and the U.S. mainland has entered two consent orders with federal regulators in recent months.

Last month, Doral and the Federal Reserve Bank of New York entered into a new agreement to address “deficiencies” at the San Juan-based company relating to credit risk management and credit administration practices.

The written agreement replaces a 2006 cease-and-desist order tied to certain mortgage-related activities.

In August, Doral signed a consent order with the Federal Deposit Insurance Corp. and local regulators requiring it to maintain various capital levels and to undertake an assessment of its board and management among a range of other stipulations.