Banking Giant Doral Bank Fails

While not in the league of a Wells Fargo or a J.P. Morgan Chase, Doral Bank of San Juan, Puerto Rico, is one of the largest banks to have been shut down in the 21st century. 23rd on the Bank Blog rankings, Doral Bank was closed today by the Office of the Commissioner of Financial Institutions of Puerto Rico. Doral is so large that no one bank could accommodate could acquire all of the assets and/or deposits. Banco Popular de Puerto Rico, of Hato Rey, Puerto Rico, has agreed to acquire the banking operations, including all the deposits, of Doral Bank.

However, Banco Popular will operate only eight of Doral Bank's 26 former branches. FirstBank Puerto Rico of Santurce, Puerto Rico, will operate and assume the deposits of 10 other branches in Puerto Rico. Banco Popular's affiliated bank, Banco Popular North America, will operate all three locations in New York City. Centennial Bank of Conway, Ark., will operate and assume the deposits of Doral Bank's five branches in the panhandle area of Florida.

In all Doral Bank had approximately $5.9 billion in total assets and $4.1 billion in total deposits as of their most recent regulatory filing. Banco Popular will purchase $3.25 billion of Doral Bank's assets. The FDIC entered into two separate agreements to sell $1.3 billion of Doral Bank's assets to other parties. Those sales are expected to close in 30 days. The FDIC will retain the remaining assets for later disposition. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $748.9 million.