Under pressure from the Federal Deposit Insurance Corp. to increase its capital levels, Doral Financial (DRL) is selling its health care lending division to Triumph Bancorp in Dallas.
The recently announced transaction is expected to close this quarter and the lending platform will be rebranded as Triumph Healthcare Finance. Terms of the deal were not disclosed.
News of the sale comes just weeks after the FDIC told the San Juan, Puerto Rico, company that it could not count $289 million of receivables from the territory as Tier 1 capital under terms of a 2012 consent order. The receivables accounted for nearly 43% of Doral's Tier 1 capital as of Dec. 31.
Doral has been developing a revised capital plan to address the FDIC's concerns. The company recently said it could sell certain assets — performing and nonperforming — and businesses to meet the FDIC's requirements.
Doral requested a $230 million refund of overpaid taxes from Puerto Rico, but was denied. Therefore, the $8.5 billion-asset Doral is looking at possible legal action against Puerto Rico "to protect its legal rights," according to a regulatory filing the company disclosed on Thursday.
Doral Healthcare Financial was launched in January 2011 as an asset-based lender targeting the medical industry.
Houlihan Lokey served as Doral's financial adviser during this transaction.