Banks in Puerto Rico, Three States Fail
WASHINGTON ( TheStreet) -- Regulators shut down three Puerto Rico banks Friday and four other banks in three states, bringing this year's total number of failed U.S. banks and thrifts to 64.
The Federal Deposit Insurance Corp. was appointed receiver and found buyers for all the failed banks, but it was a very expensive evening, with combined costs of $7.3 billion for the agency's deposit insurance fund.
Significant Consolidation in Puerto Rico
Three of Puerto Rico's 10 banks were closed by the commonwealth's Commissioner of Financial Institutions. The FDIC sold all three to other Puerto Rico institutions. The offices of all three failed banks were set to reopen during normal business hours as branches of the acquiring banks.
Eurobank of San JuanEurobank had $2.6 billion in total assets and was a subsidiary of EuroBancshares (EUBK). The failed bank's $2 billion in deposits were acquired by Oriental Bank and Trust of San Juan for a 1.25% premium. Oriental Bank and Trust, a subsidiary of Oriental Financial Group (OFG), also agreed to take over the failed bank's assets, with the FDIC agreeing to share in losses on $1.6 billion. The agency estimated the cost to its deposit insurance fund from Eurobank's failure would be $743.9 million.
R-G Premier Bank of Hato ReyR-G Premier was a subsidiary of R&G Financial (RGFC) and had $5.9 billion in total assets. Scotiabank de Puerto Rico (a subsidiary of The Bank of Nova Scotia (BNS)) acquired the failed bank, paying the FDIC a premium of 1.35% for $4.25 billion in deposits. The agency agreed to share in losses on $5.4 billion of the acquired assets and estimated the cost to the deposit insurance fund would be $1.23 billion. > > Bull or Bear? Vote in Our Poll
Westernbank Puerto Rico of MayaguezWesternbank Puerto Rico was a subsidiary of W. Holding (WHI) and was the largest institution to fail Friday, with $11.9 billion in total assets. The FDIC arranged for Banco Popular de Puerto Rico to assume the failed bank's deposits and $9.4 billion of its assets, with the agency agreeing to share in losses on $8.8 billion and estimating $3.31 billion in costs to its insurance fund. Banco Popular is a subsidiary of Popular (BPOP). Westernbank is the third-costliest failure during the wave of bank and thrift failures that began in 2008, after IndyMac, which cost the insurance fund $10.73 billion and BankUnited, which cost $4.9 billion.
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