PANAMA CITY — Four Bay County branches of Doral Bank are scheduled to reopen Saturday after the Puerto Rico-based parent company was closed Friday by the Commissioner of Financial Institutions of Puerto Rico and Federal Deposit Insurance Corp. (FDIC), the latter organization named as receiver.
Centennial Bank of Conway, Ark., will operate the four Bay County branches and the branch in Pensacola, according to a press release from the FDIC, and the banks are scheduled to operate normal business hours Saturday.
“Basically this is business as usual,” FDIC public information officer Barbara Hagenbraugh said.
Doral Bank customers can continue to access their money by writing checks and using ATM and debit cards. Loan customers should continue making payments as usual.
All depositors are fully protected by the FDIC. Customers with questions about the transaction can call 1-800-887-7340.
Raymond Powell, who was instrumental in bringing Doral to Panama City, declined to comment late Friday, along with managers from the three branches in Panama City and the branch in Callaway. Doral’s Executive Vice President and Chief of U.S. Operations Chris Poulten could not be reached for comment.
FDIC estimates the cost to the Deposit Insurance Fund will be $748.9 million, the press release states.
“This is the biggest closure since April 30, 2010,” Hagenbraugh said. “Three banks closed that day.”
As of the end of 2014, Doral had $5.9 billion in total assets, $4.1 billion in total deposits.
Banco Popular will purchase $3.25 billion in assets while paying a premium of 1.59 percent to the FDIC to assume Doral’s deposits. The FDIC has entered into two separate agreements to sell $1.3 billion in Doral assets that are still pending.
Doral had been in hot financial water since at least May 2014, when the Wall Street Journal reported the FDIC was considering a move to force the bank to sell off assets.
“You look at a lot of their (FDIC) Exchange filings and they’re deemed undercapitalized,” Hagenbraugh said.
The decision to close Doral follows a ruling by the Puerto Rico appeals court that voided a deal with the Puerto Rican government to pay back $229 million in overpaid taxes. The $229 million was part of $600 million in Tier 1 assests, as described by Doral executives. On Friday, the island’s Supreme Court said it would not hear a further appeal by Doral.
Doral’s high-profile legal problems began in November 2010, when a federal grand jury indicted a former Doral employee and four associates on charges of fraud conspiracy. Then earlier this week, a federal grand jury indicted two people in a $2.3 million fraud case, including a former vice president of the bank’s property and facilities department.
The bank also was the target of an FBI raid in late December, with agents targeting its information technology offices. U.S. Attorney Rosa Emilia Rodriguez said at the time that it might be related to a probe into the June 2011 killing of Maurice Spagnoletti, an executive vice president in charge of Doral’s mortgage and banking operations.
Spagnoletti was fatally shot while driving home, and authorities said it seemed like a professional attack. The FBI is investigating; no arrests have been made.
The Associated Press contributed to this report.