Popular Reports Adverse Arbitration Award in FDIC Dispute
December 14 2016 - 5:00PM
Business Wire
As previously disclosed, the commercial loss sharing agreement
between Banco Popular de Puerto Rico (“BPPR”) and the Federal
Deposit Insurance Corporation as a receiver of Westernbank (the
“FDIC”), provides that any disputes arising from such agreement are
to be submitted to arbitration before a review board. Popular, Inc.
(NASDAQ:BPOP) announced today that the review board hearing one of
the claims submitted by BPPR issued an arbitration award denying
BPPR’s request for damages of approximately $88.5 million plus
interest in connection with the FDIC’s refusal to concur in certain
of BPPR’s proposed portfolio sales under the commercial loss shared
agreement. As a result, for the quarter ended December 31, 2016,
Popular expects to recognize a pre-tax charge of approximately $115
million related to unreimbursed losses considered in the
arbitration, the related adjustment to the true-up obligation owed
to the FDIC at the end of the loss-share agreements in 2020 and
recoveries previously incorporated in the net damages claimed in
the arbitration.
Mr. Richard L. Carrión, Chairman of the Board and Chief
Executive Officer, said: “We believe today, as we did when we first
decided to pursue this claim, that it was in the best interest of
our shareholders to assert our rights under our loss sharing
arrangement with the FDIC by going forward with these bulk sales
and seeking reimbursement for the resulting losses. We are
obviously disappointed that a majority of the review board felt
otherwise, but we will move on.”
About Popular, Inc.
Founded in 1893, Popular, Inc. is the leading banking
institution by both assets and deposits in Puerto Rico and ranks
among the top 50 U.S. banks by assets. Popular provides retail,
mortgage and commercial banking services through its principal
banking subsidiary, Banco Popular de Puerto Rico, as well as auto
and equipment leasing and financing, investment banking,
broker-dealer and insurance services through specialized
subsidiaries. In the United States, Popular has established a
community-banking franchise providing a broad range of financial
services and products with branches in New York, New Jersey and
Florida under the name of Popular Community Bank.
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version on businesswire.com: http://www.businesswire.com/news/home/20161214006245/en/
Popular, Inc.Investor Relations:Brett Scheiner,
212-417-6721Investor Relations OfficerOrMedia Relations:Teruca
Rullán, 787-281-5170 or 917-679-3596 (mobile)
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