Eurobank, San Juan, Puerto Rico

The FDIC hit squad ventured to San Juan, Puerto Rico tonight as the agency shuttered ailing Eurobank, San Juan, Puerto Rico and fed the remains to Oriental Bank and Trust, San Juan, Puerto Rico. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $743.9 million. Eurobank is the 58th FDIC-insured institution to fail in the nation this year and is one of three closed in Puerto Rico tonight.

Eurobank, San Juan, Puerto Rico, was closed today by the Office of the Commissioner of Financial Institutions of the Commonwealth 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 Oriental Bank and Trust, San Juan, Puerto Rico, to assume all of the deposits of Eurobank.

The 22 branches of Eurobank will reopen during normal business hours as branches of Oriental Bank and Trust. Depositors of Eurobank will automatically become depositors of Oriental Bank and Trust. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their former Eurobank branch until they receive notice from Oriental Bank and Trust that it has completed systems changes to allow other Oriental Bank and Trust branches to process their accounts as well.

This evening and over the weekend, depositors of Eurobank can 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.

As of December 31, 2009, Eurobank had approximately $2.56 billion in total assets and $1.97 billion in total deposits. Oriental Bank and Trust paid the FDIC a premium of 1.25 percent to assume all of the deposits of Eurobank. In addition to assuming all of the deposits, Oriental Bank and Trust agreed to purchase essentially all of the failed bank’s assets.

The FDIC and Oriental Bank and Trust entered into a loss-share transaction on $1.58 billion of Eurobank’s assets. Oriental Bank and Trust will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-591-2903. The phone number will be operational this evening until 9:00 p.m., Atlantic Standard Time (AST); on Saturday from 9:00 a.m. to 6:00 p.m., AST; on Sunday from noon to 6:00 p.m. AST; and thereafter from 8:00 a.m. to 8:00 p.m., AST.

For more information please visit the FDIC’s Web site for Euro bank.