Doral Financial Corp. (DRLCQ)

[Enterprising Investor]

Doral Bank Fails After Years of Tumult (2/27/15)

FDIC prematurely announced Puerto Rico lender’s failure

Doral Bank in Puerto Rico was closed by regulators Friday, with a botched announcement of its failure culminating years of turmoil that cost investors, including Goldman Sachs Group Inc. and Marathon Asset Management, hundreds of millions of dollars.

The failure of the bank, which had $5.9 billion in assets, was the largest in the U.S. since 2010. While many had anticipated the bank would be closed, as its market capitalization had shriveled to less than $10 million, its shares plummeted 46% on Friday afternoon after the Federal Deposit Insurance Corp. prematurely made the announcement during market hours.

The FDIC said the banking operations for parent Doral Financial Corp. were sold to Banco Popular de Puerto Rico. Doral’s 26 branches will reopen for normal business hours on Saturday. The FDIC will continue to insure deposits, and customers can continue to access their money by writing checks or using ATM and debit cards, the FDIC said.

http://www.wsj.com/articles/fdic-releases-doral-bank-failure-news-early-1425070689