The coronavirus pandemic has slowed the regulatory review of First BanCorp’s upcoming purchase of Santander’s retail and commercial lending operations, First BanCorp said Thursday in an earnings report.
The deal will likely close in the fourth quarter, Joe Gladue, an analyst at Alden Securities, wrote in a note to clients, according to American Banker. The deal originally had been expected to close midyear, First BanCorp said.
First BanCorp incurred $800,000 in one-time costs related to the transaction in the first quarter, it said Thursday.
First BanCorp, Puerto Rico’s third-largest bank by deposit market share, agreed in October to a $1.1 billion deal to buy Santander branches and other assets on the island.
“We're working through requests from the different regulators that are looking at the deal … but the pace of the progress is different” because of the pandemic, Aurelio Aleman-Bermudez, president and CEO of First BanCorp, told investors Thursday, according to American Banker.
The transaction is hardly the first in the banking sector to be delayed by the outbreak. Memphis-based First Horizon Bank announced last week that its acquisition of 30 Truist branches — a condition of the BB&T-SunTrust merger that created Truist — won't be complete until the third quarter of 2020. However, First Horizon’s proposed merger with IberiaBank, which shareholders approved April 24, is expected to close this quarter.
Earlier in the week, CalWest and Bank of Southern California announced they were renegotiating the terms of their upcoming merger.
In that deal, Bank of Southern California reduced its all-cash offer to buy CalWest by 18% — from 43 cents a share to 35 — after shareholders adjourned their April 22 meeting without approving the deal. Shareholders are expected to be presented with the amended agreement mid-month, with the transaction set to close May 29, according to a Wednesday press release.