Popular, Inc. Assumes Deposits, Acquires Assets of Westernbank Puerto Rico from Federal Deposit Insurance Corporation
April 30 2010 - 4:49PM
Business Wire
Popular, Inc. (NASDAQ:BPOP) announced today that its banking
subsidiary, Banco Popular de Puerto Rico, has acquired assets and
assumed all retail deposit liabilities of Westernbank Puerto Rico
from the Federal Deposit Insurance Corporation (“the FDIC”).
Popular will receive approximately $9 billion in assets and
approximately $2.5 billion in non-brokered deposit liabilities from
the FDIC. Popular will enter into a loss-sharing agreement with the
FDIC on acquired loans. Banco Popular will also issue a five-year
note to the FDIC reflecting the difference between the purchase
price for the assets and the amount of deposits assumed. The note
will pay interest at an annual rate of 2.5 percent. In addition,
the FDIC will receive a value appreciation instrument, which grants
the FDIC a one-year right to receive a cash payment equal to 50
million multiplied by the difference between the stock price at the
time of exercise of the value appreciation instrument and $3.43,
which was Popular’s 20-day trailing average stock price on April
27. The FDIC may exercise this right at any time, in whole or in
part, during the one year period.
“Today’s events are difficult yet necessary to reestablish a
healthy banking sector in Puerto Rico, which is essential for an
economic recovery to take place on the island,” said Richard L.
Carrión, Chairman and Chief Executive Officer of Popular, Inc. “We
have a long-term commitment to our main market, Puerto Rico, which
we have serviced for 116 years, and to our clients, employees and
shareholders, whom we are grateful for their support.”
Customers of both banks should continue to bank as they normally
do at their existing branches. Depositors of Westernbank who have
ATM debit cards or checking accounts can continue to access their
money by using their cards or writing checks.
“Our top priorities are to assure Westernbank customers that
their deposits are safe, secure and readily accessible and to
deliver them excellent service,” said David H. Chafey, Jr.,
President and Chief Operating Officer of Popular, Inc. “We look
forward to building strong relationships with the uncompromising
dedication of all of our people and the best possible financial
services.”
Morgan Stanley acted as financial advisor to Popular and
Sullivan & Cromwell LLP acted as legal counsel.
Founded in 1893, Popular, Inc. is the leading banking
institution by both assets and deposits in Puerto Rico and ranks
38th by assets among U.S. banks. 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, Illinois, Florida and California. Popular provides offers
processing technology services through its subsidiary EVERTEC,
which processes approximately 1.1 billion transactions annually in
the Caribbean and Latin America.
An electronic version of this press release can be found at the
Corporation’s website, www.popular.com.
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