Shares of Doral Financial Inc. plunged Friday amid investor
confusion after the Federal Deposit Insurance Corp. said Doral Bank
was closed by Puerto Rico regulators, though the agency later
retracted the message.
The FDIC said the banking operations were sold to Banco Popular
de Puerto Rico and then subsequently sent an email saying the
release was "sent in error."
The agency didn't immediately return a request for comment.
Shares closed down 46% at 72 cents after their decline triggered
two single-stock circuit breakers during the regular session.
The initial news release was sent at 3:03 p.m. EST. The timing
of the FDIC release was unusual, since the agency typically
releases news of a bank closure sometime after the bank's branches
close for the night. In Puerto Rico, branches typically don't close
until 6 p.m. local time, or 5 p.m. eastern.
In the release, the FDIC said Doral's 26 former branches would
reopen for normal business hours on Saturday. The FDIC will
continue to insure deposits and costumers can continue to access
their money by writing checks or using ATM and debit cards, the
news release said.
As of Dec. 31, Doral Bank had about $5.9 billion in total assets
and $4.1 billion in total deposits, the release said. Banco Popular
will purchase $3.25 billion of Doral's assets in the transaction
with the FDIC after agreeing to pay a premium of 1.59% for the
right to assume the bank's deposits.
Write to Aaron Kuriloff at aaron.kuriloff@wsj.com
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