Puerto Rico-based Eurobank has been closed by The Commissioner of Financial Institutions of the Commonwealth of Puerto Rico and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.

To protect the depositors, the FDIC entered into a purchase and assumption agreement with Oriental Bank and Trust to assume all of the deposits of Eurobank.

The 22 branches of Eurobank will reopen as branches of Oriental Bank and Trust. Depositors of Eurobank will automatically become depositors of Oriental Bank and Trust and the deposits will continue to be insured by the FDIC.

Customers can continue to use their former Eurobank branch until they receive notice from Oriental Bank and Trust that it has completed systems changes to allow other Oriental Bank and Trust branches to process their accounts as well.

As of December 31, 2009, Eurobank had approximately $2.56bn in total assets and $1.97bn in total deposits. Oriental Bank and Trust paid the FDIC a premium of 1.25% to assume all of the deposits of Eurobank. In addition to assuming all of the deposits, Oriental Bank and Trust agreed to purchase essentially all of the failed bank’s assets.

The FDIC and Oriental Bank and Trust entered into a loss-share transaction on $1.58bn of Eurobank’s assets. Oriental Bank and Trust will share in the losses on the asset pools covered under the loss-share agreement.