Doral Financial Corporation Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2010

SAN JUAN, PUERTO RICO, Mar 09 (MARKET WIRE) --
Doral Financial Corporation (NYSE: DRL) ("Doral" or the "Company"), the
holding company of Doral Bank, a leading community bank based in Puerto
Rico, and Doral Bank FSB, with operations in New York City and northwest
Florida, reported a net loss of $36.1 million for the quarter ended
December 31, 2010, and a net loss of $291.9 million for the year ended
December 31, 2010, compared to net losses of $21.1 million and $318.3
million for the years ended December 31, 2009 and 2008, respectively.

"During the year, Doral took actions that improved asset quality,
diversified our business and reduced interest rate risk. As a consequence
of these actions, Doral is well positioned for improved earnings in
2011," said Glen Wakeman, CEO and President of Doral Financial
Corporation.

Notable events that occurred during the year include:

-- Raised $171MM of new common equity: In April 2010, Doral raised $171.0
million of new capital. The capital raise enhanced Doral's capital
ratios, which had, previous to the raise, already exceeded the
regulatory well capitalized benchmarks.

-- Sold $559MM of low-quality assets and recognized a loss of $162MM:

-- On April 2010, Doral sold $378.0 million of non-agency
collateralized mortgage obligations ("CMO") at a loss of $136.8
million. $129.7 million of the loss had previously been reflected
as a reduction of common equity in other comprehensive income
(loss), resulting in an incremental charge to common equity from
the CMO sale of $7.1 million.

-- On July 29, 2010, the Company sold performing and non-performing
residential construction loans and foreclosed residential
construction properties with a book value of $114.6 million, and
unpaid principal balance of approximately $138.0 million, to a
third party for $102.0 million in cash and a note receivable.

-- During the fourth quarter of 2010, Doral sold for $9.3 million and
assigned to a third party all of Doral's rights, title, and
interest in and to its claims in the Lehman Brothers, Inc.
Securities Investor Protection Corporation proceeding, including
all of its rights to prosecute its claims. As a result, Doral
recognized a loss of $1.5 million on the net receivable in the
fourth quarter and $12.4 million for the full year.

-- Decreased Non-Performing Assets by $202MM: Non-performing assets,
excluding government guaranteed FHA / VA mortgages, as of December 31,
2010 were $730.5 million, a decrease of $201.8 million when compared
to December 31, 2009.

-- Diversified Operations: Expanded Mainland operations by expanding US
secured lending and opening four retail branches in northwest Florida
and New York.

-- Grew Core Banking Business: Average deposits increased 14.1% or $223.4
million while deposit prices fell 45 bps.

-- Expanded Community Programs: Helped tens of thousands of families
during this difficult economic environment keep their homes through d
hogares program, while donating 17 homes to families in need. Launched
Se Trata program in alliance with Ricky Martin Foundation, which is
the first massive effort in Puerto Rico to take action on human
trafficking by educating more than one million people. Strengthened 10
communities in low income areas by reforesting their parks through d
parques program.

FINANCIAL HIGHLIGHTS

-- Net loss attributable to common shareholders for the year ended
December 31, 2010 of $274.4 million, resulted in a diluted loss per
share of $2.96, compared to a net loss attributable to common
shareholders for the corresponding 2009 and 2008 periods of $45.6
million and $351.6 million, or a diluted loss per share of $0.81 and
$6.53, respectively.

-- Net interest income for the year ended December 31, 2010 was $160.6
million, compared to $167.6 million and $177.5 million for the
corresponding 2009 and 2008 periods, respectively. The decrease of
$7.0 million in net interest income during 2010, compared to 2009,
resulted from a reduction in interest income of $56.7 million,
partially offset by a reduction in interest expense of $49.7 million.
The reduction in interest income resulted from (i) a reduction of $2.8
million in interest income on loans primarily related to a decrease in
interest income on mortgage loans of $9.4 million driven by various
factors such as the level of non-accrual loans and yield concessions
on loan loss mitigation activities, a reduction of $3.3 million in
interest income on construction loans resulting from the sale of a
construction portfolio to a third party and run-off, a reduction of
$3.1 million in interest income on consumer portfolio due primarily to
charge-offs, partially offset by an increase of $13.0 million on
interest income on commercial loans due to increases in the U.S.
syndicated loan portfolio; (ii) a decrease of $45.8 million in
interest on MBS impacted by the sale of non-agency CMOs and other MBS
during the second and third quarter of 2010; and (iii) a decrease in
interest on other investment securities due to a reduction in the
average balance of other investment securities related to sales, calls
and/or maturities. The decrease in interest expense resulted
principally from (i) a reduction of $14.3 million in interest expense
on deposits driven by the rollover of maturing brokered CDs at lower
current market rates, as well as shifts in the composition of the
Company's retail deposits; (ii) a reduction of $18.1 million in
interest expense on securities sold under agreements to repurchase
driven by a decrease of $248.5 million in the average balance of
repurchase agreements and a general decline in interest rates; and
(iii) a decrease of $15.8 million in interest on advances from FHLB
resulted primarily from the decline in the average balance of FHLB of
$421.7 during 2010.

-- Doral Financial's provision for loan and lease losses for the year
ended December 31, 2010 amounted to $99.0 million, compared to $53.7
million and $48.9 million for the corresponding 2009 and 2008 periods,
respectively. The higher provision for loan and lease losses in 2010
was driven by increases in the provision for residential, commercial
real estate and construction and land portfolios. The $45.3 million
increase in the provision for loan and lease losses during 2010
compared to 2009 was due to higher commercial real estate
non-performing loans, the effect of charge-offs related to foreclosed
loans, and the transfer and subsequent sale of certain construction
loans to held for sale, higher loss mitigation volume and an increase
in severities (in the determination of the provision) due to strategic
decision to accelerate OREO dispositions.

-- Non-interest loss for the year ended December 31, 2010 was $14.1
million, compared to non-interest income of $87.2 million and $79.5
million for the corresponding 2009 and 2008 periods. The non-interest
loss of $14.1 during 2010 resulted from (i) an OTTI loss of $14.0
million recognized on eight of the Company's non-agency CMOs; (ii) a
net loss on investment securities of $101.5 million, net of cost to
terminate related borrowings, due to the sale of approximately $2.2
billion of mortgage-backed securities at a loss of $138.0 million
partially offset by other securities sold at a gain of $36.5 million;
(iii) a net gain on trading activities of $25.4 million driven
principally by gains on sale of securities held for trading, on the IO
valuation and on the MSR economic hedge; and (iv) an increase in other
income of $2.2 million due to a gain of $3.0 million on redemption of
shares of VISA, Inc.

-- Non-interest expense for the year ended December 31, 2010 was $324.6
million, compared to $243.8 million and $240.4 million for the years
ended December 31, 2009 and 2008, respectively. Non-interest expenses
for the year ended December 31, 2010 were impacted by (i) an increase
of $26.2 million in total OREO and other related expense due to the
recognition of an additional provision of $17.0 million to account for
the effect of management's strategic decision to reduce pricing in
order to accelerate OREO sales, adjustments driven by lower values of
certain of Doral's OREO properties, higher levels of repossessed units
and higher expenses to maintain the properties in saleable conditions;
(ii) an increase of $22.3 million in professional services expenses
driven by amounts advanced to cover legal expenses of the Company's
former officers, for the management of legacy portfolios and expenses
associated with non-recurring transactions that occurred during 2010;
(iii) an increase of $6.4 million in compensation and employee
benefits mainly related to bonuses and other compensation paid to
certain officers of the Company, (vi) an additional $12.3 million loss
on Lehman Brothers, Inc. and a subsequent loss on the sale of the
claim; and (v) other increases in occupancy and advertising expenses.

-- An income tax expense of $14.9 million for the year ended December 31,
2010 compared to an income tax benefit of $21.5 million and an income
tax expense of $286.0 million for the corresponding 2009 and 2008
periods. The recognition of an income tax expense for 2010 was related
to taxes on U.S. source income and to recognize additional deferred
tax assets, primarily NOLs, net of amortization of existing DTAs and a
net increase in the deferred tax asset valuation allowance. The income
tax benefit for 2009 was related to the effect on DTAs of certain tax
agreements.

-- The Company reported other comprehensive income of $115.6 million for
the year ended December 31, 2010, compared to other comprehensive
income of $11.7 million and other comprehensive loss of $90.1 million
for the corresponding 2009 and 2008 periods. The increase in other
comprehensive income for the year ended December 31, 2010 resulted
principally from sale of the Company's non-agency CMOs during the
second quarter of 2010, that drove the realization of a loss of
approximately $129.7 million at the time of the sale.

-- Doral Financial's loan production for the year ended December 31, 2010
was $1.4 billion, compared to $1.1 billion and $1.3 billion for the
comparable 2009 and 2008 periods. The increase in Doral Financial's
loan production during 2010 resulted from an increase in commercial
production of $286.8 million generated by the Company's U.S. based
middle market syndicated lending unit which is engaged in acquiring
participating interests in credit facilities in the syndicated loan
market and to an increase in construction loans largely due to the
issuance of a note receivable of $96.9 million related to the sale of
a construction loan portfolio to a third party.

-- Total assets as of December 31, 2010 totalled to $8.6 billion compared
to $10.2 billion as of December 31, 2009. The decrease in total assets
was due to a reduction of $1.3 billion in the Company's investment
securities portfolio that resulted from a combination of a sale of
$2.3 billion of MBS, primarily CMOs, and other securities, partially
offset by purchases totalling $1.6 billion, primarily of shorter
duration MBS, as part of interest rate risk management strategies.
There was also a decrease in cash and cash equivalents of $307.9
million used to finance the purchase of investments.

-- Non-performing loans ("NPLs") as of December 31, 2010 were $626.5
million, a decrease of $211.5 million from December 31, 2009. During
the third quarter of 2010, the Company sold certain construction loans
and OREO to a third party resulting in a reduction of $63.2 million in
construction and land loans that were non-performing. The remainder of
the decrease resulted from expanded collection activities and loss
mitigation efforts across all portfolios. Non-performing assets
("NPAs") as of December 31, 2010 were $851.8 million, a decrease of
$90.8 million compared to December 31, 2009. Non-performing FHA/VA
guaranteed loans, which are guaranteed by an agency of the United
States government and present little credit risk to Doral, were $121.3
million, an increase of $111.0 million from December 31, 2009.

CAPITAL RATIOS

Set forth below are Doral Financial Corporation, Doral Bank and Doral
Bank, FSB capital ratios at December 31, 2010, based on existing Federal
Reserve, FDIC and OTS guidelines.

Banking Subsidiaries
Well
Doral Doral Doral Capitalized
Financial Bank PR Bank, FSB Minimum
--------- --------- --------- ----------
Total capital ratio (total
capital to risk weighted
assets) 14.5% 15.6% 11.0% 10.0%
Tier 1 capital ratio (Tier 1
capital to risk weighted
assets) 13.3% 14.4% 10.7% 6.0%
Leverage ratio (1) 8.6% 8.0% 6.5% 5.0%

___________________

1. Tier 1 capital to average assets in the case of Doral Financial and
Doral Bank PR and Tier 1 Capital to adjusted total assets in the case of
Doral Bank US.

As of December 31, 2010, Doral Bank PR and Doral Bank, FSB were in
compliance with all the regulatory capital requirements that were
applicable to them as a state non-member bank and federal savings bank,
respectively.

As of December 31, 2010, both of the Company's banking subsidiaries were
considered well capitalized banks for purposes of prompt corrective
action regulations adopted by the FDIC pursuant to the Federal Deposit
Insurance Corporation Improvement Act of 1991.

ADDITIONAL FINANCIAL INFORMATION

Additional financial information, including the 10-K for the year ended
December 31, 2010 and the Investor Deck is available at
www.doralfinancial.com, under SEC Filings & Documents.

INVESTOR CALL

Doral will be hosting an earnings call for interested parties at 10 a.m.
EST, March 10, 2011.

Call-in information is:

United States Participant Number: (800) 230-1092
International
Participant Number: (612) 288-0337
Conference Identification Number:
195370

FORWARD-LOOKING STATEMENTS

This Press Release contains forward-looking statements within the meaning
of, and subject to the protections of, the Private Securities Litigation
Reform Act of 1995. In addition, Doral Financial may make forward-looking
statements in other press releases, other filings with the Securities and
Exchange Commission ("SEC") or in other public or shareholder
communications and its senior management may make forward-looking
statements orally to analysts, investors, the media and others.

These forward-looking statements may relate to the Company's financial
condition, results of operations, plans, objectives, future performance
and business, including, but not limited to, statements with respect to
the adequacy of the allowance for loan and lease losses, market risk and
the impact of interest rate changes, capital markets conditions, capital
adequacy and liquidity, and the effect of legal proceedings, regulatory
matters and new accounting standards on the Company's financial condition
and results of operations. Forward-looking statements can be identified
by the fact that they do not relate strictly to historical or current
facts, but instead represent Doral Financial's current expectations
regarding future events. Such statements may be generally identified by
the use of words or phrases such as "would be," "will allow," "intends
to," "will likely result," "are expected to," "will continue," "is
anticipated," "estimate," "project," "believe," "expect," "predict,"
"forecast," "anticipate," "target," "goal," "may" or words of similar
meaning or similar expressions.

Doral Financial cautions readers not to place undue reliance on any of
these forward-looking statements since they speak only as of the date
made and represent Doral Financial's current expectations of future
conditions or results and are not guarantees of future performance. The
Company does not undertake and specifically disclaims any obligations to
update any forward-looking statements to reflect occurrences or
unanticipated events or circumstances after the date of those statements.

Forward-looking statements are, by their nature, subject to risks and
uncertainties. Risk factors and uncertainties that could cause the
Company's actual results to differ materially from those described in
forward-looking statements can be found in the Company's Annual Report on
Form 10-K for the year ended December 31, 2010, which is available in the
Company's website at www.doralfinancial.com.

Institutional Background

Doral Financial Corporation ("Doral," "Doral Financial" or the "Company")
is a bank holding company engaged in banking (including thrift
operations), mortgage banking and insurance agency activities through its
wholly-owned subsidiaries Doral Bank ("Doral Bank PR"), Doral Bank, FSB,
Doral Insurance Agency, Inc. ("Doral Insurance Agency"), and Doral
Properties, Inc. ("Doral Properties"). Doral Bank PR operates three
wholly-owned subsidiaries, Doral Mortgage, LLC ("Doral Mortgage"), Doral
Money, Inc. ("Doral Money"), engaged in commercial and middle market
syndicated lending primarily in the New York metropolitan area and since
September 2010, in the northwest region of Florida, and CB, LLC, an
entity formed to dispose of a real estate project of which Doral Bank PR
took possession during 2005. Doral Money consolidates two variable
interest entities created for the purpose of entering into a
collateralized loan arrangement with a third party.

Doral Financial Corporation's common shares trade on the New York Stock
Exchange under the symbol DRL. Additional information about Doral
Financial Corporation may be found on the Company's website at
www.doralfinancial.com.

For more information contact:

Investor Relations:
Christopher Poulton
EVP
christopher.poulton@doralfinancial.com
212-329-3794

Media:
Lucienne Gigante
VP Public Relations & Community
Lucienne.Gigante@doralbank.com
787-474-6298

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