Doral Cuts $694M From Previous Earnings

Doral Financial Corp., San Juan, one of Puerto Rico's major mortgage lenders, has completed the restatement of its financial results, a process that shaved $694.4 million from the company's retained earnings through the end of 2004.In the restatement, Doral reduced earnings by $508.1 million for 2002 through 2004, with the remaining $186.3 million being subtracted from periods prior to 2002. The company now says it earned $214.8 million in 2004. As a result of the restatement, Doral Financial's stockholders' equity and Tier One capital each fell by 35%, the company said. However, Doral said the company "remains well capitalized for bank regulatory purposes." Doral said it has concluded that its internal control over financial reporting "was not effective" as of Dec. 31, 2004, and that it has "identified a number of material weaknesses, including but not limited to an ineffective control environment." Last August, Doral announced the termination of its chief financial officer and the resignation of several senior executives in connection with the restatement. It also named Antonio F. Faria, a former commissioner of financial institutions in Puerto Rico, chief executive officer of its subsidiary Doral Bank.