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Not all banks are created equal. Oriental Financial Group Inc. (OFG - Snapshot Report) recently raised its dividend by 20% due to an improving outlook for its Puerto Rico-based business. This Zacks #1 Rank (strong buy) also has attractive valuations with a forward P/E of just 8.4.

Oriental Financial Group is a diversified financial holding company headquartered in San Juan, Puerto Rico. It operates under U.S. and Puerto Rico banking laws and regulations. The bank provides a range of mortgage, commercial and consumer banking services from its 30 financial centers in Puerto Rico.

It also handles financial planning, trust, insurance, investment brokerage and investment banking services.

Dividend Raised Again

Oriental Financial Group bucked the trend of some of its fellow banks during the Great Recession. While it cut its quarterly dividend from 14 cents in 2008 to 4 cents in 2009 at the height of the crisis, it never got rid of the dividend completely.

Since the worst of it in 2009, the company has slowly been raising it again with an increase to 5 cents in 2011. On Nov 30, Oriental Financial Group announced it was raising the dividend by another penny to 6 cents per share. That is an increase of 20% over 2011.

The dividend is currently yielding 1.8%.

OFG Beat By 25% in the Third Quarter

On Oct 25, Oriental Financial Group reported its third quarter results and beat by 7 cents per share. Earnings per share were 35 cents compared to the consensus of 28 cents. This was the second consecutive earnings beat. It was a big improvement over the year ago quarter which saw a loss of 75 cents.

The bank saw continued growth in the commercial lending business and in lower-cost retail deposits. Total loan production, year to date, climbed 6.6% to $288.7 million with commercial production rising 38.5%.

One bright spot was the wealth management business where revenue rose 9.3% to $11.3 million due to increased brokerage and trust business. Mortgage banking activities were also up 7.7% in the quarter.

There was also better than anticipated credit performance in the quarter which resulted in increased interest income on covered loans.

Double Digit Earnings Growth Expected in 2012

The analysts have gotten a little jittery about 2011 in the last month. 2 estimates have actually fallen in that time, pushing the Zacks Consensus down by 4 cents to $1.19 per share.

However, given that the bank lost 49 cents a share in 2010, that would still be earnings growth of 343%.

The story is looking up in 2012. The 2012 Zacks Consensus Estimate has risen 2 cents to $1.44 in the last 60 days. That is continued earnings growth of 21%.

OFG Is a Value Stock

During the Great Recession, shares of Oriental Financial were slammed to new multi-year lows. They rebounded sharply in 2009 but in 2010 and 2011, they haven't gone anywhere.

But there's still value in the shares.

In addition to a P/E under 10, the company also has a price-to-book ratio of only 0.8. A P/B under 3.0 usually indicates a company has "value."

Oriental Financial Group is one of those regional banks that escaped the worst of the financial Armageddon. It has now returned to double digit earnings growth and investors are rewarded with a dividend yielding 1.8%.

Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Turnaround Trader and Insider Trader services. You can follow her on twitter at traceyryniec.

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