R-G Premier Bank of Puerto Rico, Hato Rey, 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 Scotiabank de Puerto Rico, San Juan, Puerto Rico, to assume all of the deposits of R-G Premier Bank of Puerto Rico.
The 29 branches of R-G Premier Bank of Puerto Rico will reopen during normal business hours as branches of Scotiabank de Puerto Rico. Depositors of R-G Premier Bank of Puerto Rico will automatically become depositors of Scotiabank de Puerto Rico. 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 R-G Premier Bank of Puerto Rico branch until they receive notice from Scotiabank de Puerto Rico that it has completed systems changes to allow other Scotiabank de Puerto Rico branches to process their accounts as well.
This evening and over the weekend, depositors of R-G Premier Bank of Puerto Rico 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, R-G Premier Bank of Puerto Rico had approximately $5.92 billion in total assets and $4.25 billion in total deposits. Scotiabank de Puerto Rico paid the FDIC a premium of 1.35 percent to assume all of the deposits of R-G Premier Bank of Puerto Rico. In addition to assuming all of the deposits, Scotiabank de Puerto Rico agreed to purchase essentially all of the failed bank's assets.
The FDIC and Scotiabank de Puerto Rico entered into a loss-share transaction on $5.41 billion of R-G Premier Bank of Puerto Rico's assets. Scotiabank de Puerto Rico 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.
The FDIC encourages all bank customers to review more information about the transaction by visiting www.fdicseguro.gov.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $1.23 billion. Scotiabank de Puerto Rico's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to all alternatives. R-G Premier Bank of Puerto Rico is the 59th FDIC-insured institution to fail in the nation this year. R-G Premier Bank of Puerto Rico is one of three institutions closed in Puerto Rico today.
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Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,012 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-96-2010