U.S. regulators have downgraded the financial condition of Doral Financial Corp. to “significantly undercapitalized” and ordered the embattled Puerto Rico bank to submit a capital restoration plan immediately.

doral1_bigDoral announced the downgrading in a regulatory filing Tuesday, disclosing that it had received a letter from the Federal Deposit Insurance Corp. last week demanding prompt corrective action. The FDIC had previously notified Doral that it was undercapitalized.

The bank’s stock tumbled more than 60% in May after the FDIC said Doral could no longer include a disputed Puerto Rican tax receivable in its calculation of Tier 1 capital. The receivable accounted for $289 million of Doral’s $679 million in Tier 1 capital.

Doral is awaiting a court ruling on whether it is entitled to the refund from the government of Puerto Rico.

In an August 2012 consent order with the FDIC, Doral agreed to increase capital or submit a contingency plan for a sale, merger or liquidation by July 7, 2014. Last week, the FDIC told the bank it had not received either the capital restoration plan or the contingency plan and that “both plans must be submitted immediately,” according to the Sept. 30 regulatory filing.

Doral is “updating its capital plan and contingency plan to reflect the recent series of asset sales and status of its litigation against the government of Puerto Rico,” the bank said in a statement.

Doral agreed in July to sell about $824 million in nonperforming loans to Abbey Finance Holdings. As part of an amendment to that deal, it announced Tuesday that Abbey had paid an additional $16.7 million for other Doral assets.

The sale of those assets will improve liquidity but adversely affect compliance with regulatory capital ratios, the company said.

Doral’s stock fell 24% percent to close at $5.02 Wednesday. In trading Thursday, it had rallied to $5.24.

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