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June 2, 2014
15:50 EDTDRLDoral Financial evaluating alternative strategic initiatives, working with banks
Doral Financial disclosed in a regulatory filing that the company is developing and evaluating alternative strategic initiatives to respond to the significant trends affecting the company’s business in order to maximize shareholder value. In particular, the company has engaged several investment banking firms to assist it in structuring its businesses so that the company addresses in a comprehensive way the adverse effects on its business from the continued economic problems in Puerto Rico while allowing the company to capitalize on its success in building its U.S.-based business. Although at this time the company has not determined to pursue any particular strategic transaction, the company expects during 2014 to transform its businesses which may include, among other actions, selling performing and non-performing assets and businesses, improving the company’s capital structure to allow the company to pursue new business opportunities and focusing the company’s future growth on the U.S. market or undertaking other strategic transactions to fully address the regulatory directives of the FRBNY, FDIC and/or the Office of the Commissioner.
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January 28, 2015
10:21 EDTDRLDoral Financial issued Prompt Corrective Action Directive from FDIC
Doral Financial disclosed in a filing earlier that on January 26, the board of the bank received a letter from the FDIC notifying the board that the FDIC issued against the bank a Prompt Corrective Action Directive, which became effective immediately upon its receipt by the bank. The Directive directs the Bank to promptly increase the amount of its Tier 1 capital to a level sufficient to restore the Bank to the capital category of “adequately capitalized” and/or accept an offer to combine with another insured depositary institution. "The Bank believes the inclusion of the payment obligations from Puerto Rico is appropriate as the Bank has a court order validating the obligation of Puerto Rico under the Closing Agreement. The Bank believes its previously submitted capital restoration plan, while not accepted by the FDIC, presents the best possible outcome for all constituencies," Doral said. Also, on Friday, January 23, the Federal Home Loan Bank of New York notified its wholly-owned subsidiary Doral Bank that the bank’s borrowing terms under its credit facility had been modified from 30 days to overnight and that, barring any significant and material events occurring that impact the financial condition of the bank, the bank is eligible to borrow from its available credit line on an overnight basis in a business as usual environment. The FHLB also notified the bank that as a safe and sound practice and in order to comply with the FHLB’s regulatory guidelines, the FHLB could not extend credit to a capital-deficient member that has positive tangible capital if it receives written notice from the Federal Deposit Insurance Corporation that the member’s use of the FHLB’s advances is prohibited. The bank is currently assessing the materiality and magnitude of the impact of these changes in its liquidity forecasts.

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