Oriental Financial Group Inc. announced a balance sheet repositioning Monday that will affect fourth-quarter earnings.
The $4.7 billion-asset San Juan, Puerto Rico, company said it swapped about $865 million of held-for-sale securities for $860 million of higher-yielding securities, restructured $900 million of short-term borrowings at lower rates, and terminated $475 million of swaps.
The move would not reduce the company's $1 billion held-for-sale securities portfolio but will cost it $16 million in the fourth quarter, or 67 cents per share. For the first three quarters, Oriental had reported $12.9 million of profit.
Thomson Financial said analysts expected fourth-quarter results in a range of a 5 cents per share loss to 7 cents a share of profit. They expect full-year earnings in a range of 33 to 44 cents.
The reshuffle will improve earnings going forward, and leave the company less liability-sensitive, Oriental chief executive Jose Rafael Fernandez said in a press release. "These transactions ... provide us with increased profitability to grow our loan portfolio," he said.
Analyst Thomas J. Monaco of Sterne, Agee & Leach Group Inc. said it is "a step in the right direction," but added he would have hoped the company would also reposition its $2.2 billion held-for-maturity portfolio.
