Doral Bank closed by the Commissioner of Financial Institutions

Doral Bank, San Juan, Puerto Rico, was closed today by the Office of the Commissioner of Financial Institutions of Puerto Rico, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Banco Popular de Puerto Rico, Hato Rey, Puerto Rico, to acquire the banking operations, including all the deposits, of Doral Bank.

Doral Bank's 26 former branches will reopen under normal business hours beginning Saturday, February 28^th. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Depositors of Doral Bank can continue to access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

Banco Popular will operate eight of Doral Bank's 26 former branches. It entered into separate agreements with three banks to acquire 18 of the remaining locations. FirstBank Puerto Rico, Santurce, Puerto Rico, will operate and assume the deposits of Doral Bank's 10 other branches in Puerto Rico; Banco Popular's affiliated bank, Banco Popular North America, will operate all three locations in New York City; and Centennial Bank, Conway, Ark., will operate and assume the deposits of Doral Bank's five branches in the panhandle area of Florida.All depositors were fully protected.For more information about branch locations and ownership, click here.

As of December 31, 2014, Doral Bank had approximately $5.9 billion in total assets and $4.1 billion in total deposits. As part of the transaction with the FDIC, Banco Popular will purchase $3.25 billion of Doral Bank's assets. Banco Popular agreed to pay the FDIC a premium of 1.59 percent for the right to assume Doral Bank's deposits.

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.

Customers with questions about today's transaction should call the FDIC toll-free at 1-800-887-7340. The phone number will be operational continuously beginning this evening and throughout the weekend until 8:00 p.m. Atlantic Time on Monday. Thereafter, calls will be answered from 9:00 a.m. to 5:00 p.m. Atlantic Time, on weekdays. Interested parties also can visit the FDIC's Web site at https://www.fdic.gov/bank/individual/failed/doral.html to learn more.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $748.9 million. Compared to other alternatives, Banco Popular's acquisition was the least costly resolution for the FDIC's DIF. Doral Bank is the fourth FDIC-insured institution to fail this year, and the first in Puerto Rico. The last time an FDIC-insured institution was closed in Puerto Rico was on April 30, 2010.

Oriental to be included in S&P Small Cap 600

OFG Bancorp, parent company of Oriental Bank, will be added to the Standard & Poor’s Small Cap 600 after the market close on Tuesday, December 9, 2014. The announcement was made yesterday by S&P Dow Jones Indices.

The S&P SmallCap 600 measures the small-cap segment of the U.S. equity market and is designed to track companies that meet specific inclusion criteria to ensure that they are liquid and financially viable, according to S&P Dow Jones Indices.

The announcement follows one earlier this year that OFG was selected to be included in the 2014 Barron’s 400 Index, which measures the performance of the most fundamentally sound and attractively priced stocks.

In addition, the announcement follows the news that OFG Board of Director’s decided to increase the quarterly cash dividend per common share by 25%, to $0.10, and OFG this year repurchased in the open market a total of 2.52% of its common shares outstanding.

“We greatly appreciate S&P Dow Jones’s recognition of our accomplishments at OFG,” said José Rafael Fernández, President, CEO & Vice Chairman. “It continues to underscore the strength of our financial results and what we believe are our bright prospects.”

Evertec Appoints New President and CEO

EVERTEC, Inc. announced the appointment of Morgan "Mac" Schuessler as President and Chief Executive Officer, and Member of the Board of Directors, effective January 1, 2015. Mr. Schuessler will join EVERTEC after having served as President of International at Global Payments, Inc., overseeing businesses in 23 countries throughout Europe and Asia. Mr. Schuessler will succeed Peter Harrington, who will depart the Company at the end of the year for personal reasons.

Mr. Schuessler said his focus will be to build Evertec's position as a full-service transaction processor in Latin America and continue to grow the Company, while delivering increased value to customers and shareholders.

Schuessler has over 20 years of payment industry experience. He will join EVERTEC after having served as President of International for Global Payments, one of the world's leading payment processing providers, overseeing the company’s international businesses, which encompass more than a third of its employees. In his new role at EVERTEC, Schuessler and his family will be relocating to San Juan, Puerto Rico.

Prior to joining Global Payments, Mr. Schuessler served in several leadership positions with American Express, Inc. including Vice President, Global Purchasing Solutions with responsibility for managing the company's purchasing card business globally. Additionally, he served in various sales, marketing, strategy and product management positions.

Mr. Schuessler is a member of Visa's Senior Client Council and the UnionPay International Member Council, the international division of China UnionPay (CUP). He holds a bachelor's degree from New York University and an MBA from Emory University's Goizueta Business School where he currently serves on the Executive Committee of the Dean's Advisory Board.

Mr. Schuessler’s agreement with Global Payments contains certain restrictions on Mr. Schuessler for a two-year period after termination of his employment, including a restriction from competing with Global Payments within the United States. EVERTEC does not believe that this restriction prohibits Mr. Schuessler from joining the Company, which is based in Puerto Rico, or performing services under the employment agreement he has entered into with EVERTEC. EVERTEC intends to file today an action in the San Juan Superior Court seeking a declaratory judgment to that effect. EVERTEC has agreed to indemnify Mr. Schuessler for certain associated expenses and damages, including certain lost compensation.

OFG’s Oriental Bank Expands Online and Mobile Capabilities

 

OFG Bancorp announced that its Oriental Bank subsidiary is launching People Pay, which allows clients to open accounts online. The new services, along with last year’s launch of the highly successful FOTOdepósito, are being backed by a $2 million advertising marketing campaign inviting consumers to "Live the Difference" (“Vive la diferencia”) at Oriental.

BDE y Microfinanzas PR promueven desarrollo de microempresas

Como parte de una iniciativa para promover el desarrollo del microempresas y autoempleo en las personas de bajos recursos en la isla, el Banco de Desarrollo Económico (BDE), firmó una alianza con la Corporación para las Microfinanzas-Puerto Rico (Microfinanzas PR) para establecer un sistema de referido de casos entre ambas instituciones, a la vez que aumentó su inversión de capital en la institución financiera.

“Con esta alianza segmentamos nuestra cartera de clientes, maximizando nuestros recursos y garantizando un mejor servicio a nuestros empresarios, especialmente a aquellos de bajos ingresos”, indicó el presidente del BDE, Joey Cancel Planas.

Proyecto de Ley asignaría $15 millones para "Mi Casa Propia"

Con motivo de la celebración del “Día de la Banca Hipotecaria“, la Mortgage Bankers Association de Puerto Rico (MBA) celebró un almuerzo en el que figuró como orador invitado el Hon. Jaime Perelló, presidente de la Cámara Representantes.

Entre los anuncios realizados en dicha actividad, celebrada como preámbulo a la Convención Anual de la MBA, el Representante Perelló destacó la presentación del Proyecto de la Cámara 1056, de la autoría del Representante Carlos Vargas. La pieza legislativa dispone de una asignación recurrente de $15 millones para el Fondo denominado “Mi Casa Propia”, adscrito a la Autoridad para el Financiamiento de la Vivienda. El Fondo tiene el objetivo de apoyar a familias de escasos recursos económicos a sufragar gastos de cierre y pronto pago en la compra de unidades de vivienda de precios bajos o moderados.

El Presidente de la Cámara Baja destacó que el Fondo “Mi Casa Propia” ayudará a viabilizar a las familias menos aventajadas la adquisición de unidades de vivienda, ya sea existentes o de nueva construcción.

“No cabe duda de que “Mi Casa Propia” no solo es un programa de justicia social, sino también tiene un efecto multiplicador en la economía del País”, expresó Perelló. El Programa “Mi Casa Propia”, anteriormente denominado como “Mi Nuevo Hogar” ha beneficiado de forma directa a sobre 60,000 familias que hoy tienen un hogar propio gracias a éste programa y los incentivos anteriores con similar propósito.

Por su parte, Agustín Rojo, presidente de la Mortgage Bankers Association, destacó que Programas como este promueven en Puerto Rico una política pública de beneficencia social necesaria y positiva para miles de puertorriqueños que añoran convertirse en propietarios de su hogar.  “Además, resulta en una herramienta certera de desarrollo económico que impacta de forma positiva a la industria hipotecaria y a toda una cadena de renglones empresariales, tales como pero sin limitarse, a la industria de construcción, bienes raíces, tasadores, arquitectos, ingenieros, entre otros”, destacó Rojo.

Rojo explicó que en el año 2012 la industria de vivienda generó cerca de 8,000 empleos directos y 18,000 empleos directos, indirectos e inducidos y que el Programa fue un factor influyente en estas estadísticas. Según el ejecutivo, existe una demanda de construcción de vivienda a precios asequibles, dirigida a la población de recursos limitados. Ante tal realidad, la industria de vivienda está dándole prioridad al desarrollo de vivienda para familias con escasos y moderados recursos.  Puntualizó además, que este esfuerzo solo rendirá frutos si el Estado viabiliza la adquisición de vivienda, aportando la cantidad que las familias necesitan para completar la transacción de compraventa.

La Mortgage Bankers Association es una entidad sin fines de lucro, establecida para mantener y preservar la industria de la banca hipotecaria. Además, cuenta con su propia escuela, la Mortgage Bankers School, dedicada a educar a los profesionales del sector hipotecario.

Mall of San Juan secures financing from U.S. Bank

U.S. Bank, as joint lead arranger and administrative agent, closed on a $320 million loan for The Taubman Realty Group Limited Partnership to finance the development of The Mall of San Juan, a 650,000-square-foot shopping and entertainment complex. The mall will be the first Caribbean location for major U.S. retailers Nordstrom and Saks Fifth Avenue.

“The Mall of San Juan, our bank’s first commercial real estate deal in Puerto Rico, will be a tremendous asset for the San Juan tourism industry and overall economy,” said Joseph Hoesley, vice chairman of Commercial Real Estate at U.S. Bank. “As a Minneapolis-based company with the Mall of America right in our backyard, we’ve seen firsthand the economic and cultural impact a true shopping ‘destination’ can have on a region.”

Situated on the coast of the Caribbean Sea in San Juan, the mall will include over 400,000-square-feet of retail shops across two levels, anchored by Nordstrom and Saks Fifth Avenue. The mall is currently under construction and set to open in March 2015.

“The Mall of San Juan will be the premier, high-end shopping destination in the Caribbean,” said Simon Leopold, treasurer and capital markets senior vice president for Taubman. “With its ideal location and diverse mix of retail, dining and entertainment options, the mall will be a must-see attraction for tourists visiting from throughout the region.”

The Taubman Realty Group Limited Partnership is the majority-owned operating partnership of Taubman Centers, Inc.

The Mall of San Juan loan was originated out of U.S. Bank’s commercial real estate office in Chicago. J.P. Morgan is joint lead arranger and syndication agent on the loan.

Popular Inc. to divest branches in California, Illinois and Central Florida

Popular, Inc. will reorganize its U.S. operations to sharpen its focus on key markets to drive efficiencies and improve profitability. Its subsidiary Popular Community Bank (PCB) will divest its regional operations in California, Illinois and Central Florida and centralize certain back office operations in Puerto Rico and New York.

PCB says the transaction will strengthen its mainland U.S. presence by concentrating on New York and South Florida. With a more clearly defined geographical footprint and leaner operation, the new PCB will be better able to focus on its core competencies, providing a full range of financial services and products to its commercial and retail banking customers.

In 2011, Popular rebranded its branches to "Popular Community Bank" in California and Florida in order to counter the perception that the bank was for Hispanics only.

Popular will sell 41 branches, approximately $1.8 billion in related loan portfolios, and approximately $2.1 billion in deposits, to three different buyers. The transactions will result in net premium of approximately $25 million and an estimated noncash Goodwill write-down of approximately $160 million.

In Central Florida, PCB will sell 9 branches with loans of approximately $115 million and deposits of approximately $239 million to Harbor Community Bank, a bank of approximately $629 million in total assets.

In Illinois, PCB will sell 12 branches with loans totaling approximately $521 million and deposits of approximately $761 million to First Midwest Bank, a bank with approximately $8.3 billion in total assets.

In California, PCB will sell 20 branches with loans totaling approximately $1.2 billion and approximately $1.1 billion in deposits to Banc of California, a bank with approximately $3.6 billion in total assets.

The reorganization will have an estimated cost of approximately $53 million, consisting of severance and retention payments, operational set-up costs, and lease cancelations. Annual operating expenses are expected to be prospectively reduced by an estimated $45 million.

The transactions, which are subject to regulatory approval and other closing conditions, are expected to close before the end of the year.

“Popular remains deeply committed to serving mainland U.S. customers by building on PCB’s success in New York and South Florida. We believe there are significant opportunities for the growth of our franchise in these markets as the banking sector and overall economy continues in its recovery. Focusing our efforts on these markets will ultimately enable us to better serve and grow our customer base, while strengthening the capital position of both PCB and Popular," said Mr. Richard L. Carrión, Chairman of the Board, President and Chief Executive Officer.

Leaner, More Focused Bank

The new PCB will have 49 branches in the New York/New Jersey and South Florida regions. As a more focused bank operating in two regions on the east coast, PCB will continue to offer a broad array of financial services for businesses and consumers, from lending, cash management, and other services to our commercial clients, to a full offering of consumer finance and transactional products including mobile banking and mobile check deposit.

Centralized Back Office Operation

As part of the restructuring plan, PCB will reduce back-office expenses by closing its Rosemont, IL and Orlando, FL operations centers and transferring most of the support functions to Puerto Rico and New York. Of the 550 positions in the two current operations locations, 100 will be relocated to other offices in the U.S. and 200 will be moved to Puerto Rico for a net saving of approximately 250 positions. This transition is expected to be completed by the 1st quarter of 2015.

RBC Capital Markets, LLC acted as financial advisor to Popular. Sullivan & Cromwell LLP, New York, NY, acted as legal counsel.

Oriental Financial Group Declares Regular Quarterly Cash Dividends

Oriental Financial Group Inc. announced that its Board of Directors declared the following regular quarterly cash dividends for the first quarter ending March 31, 2013:

• $0.06 per share on its common stock

• $21.875 per share on its 8.750% Non-Cumulative Convertible Perpetual Preferred Stock, Series C (CUSIP: 68618W407)

• $0.4453125 per share on its 7.125% Non-Cumulative Perpetual Preferred Stock, Series D (CUSIP: 68618W605)

Dividends on the common stock are payable on April 15, 2013, to holders of record on March 28, 2013, with an ex-dividend date of March 26, 2013.

Dividends on the preferred stocks are payable on April 15, 2013, to holders of record on April 1, 2013, with an ex-dividend date of March 27, 2013.

The company also announced that José Rafael Fernández, President, Chief Executive Officer, and Vice Chairman of the Board, will present at the Keefe, Bruyette & Woods Boston Bank Conference on Wednesday, February 27, 2013, at 1:00 PM ET. KBW will webcast the presentation live at http://www.wsw.com/webcast/kbw9.