Aug. 9, 2002 – With approval received from the V.I. Banking Board and anticipated from the Puerto Rican board and the Federal Deposit Insurance Corp., JPMorganChase expects to complete the sale of its Chase Bank operations in the Virgin Islands to FirstBank of Puerto Rico this fall, a Chase corporate spokesperson said Friday.
The transaction involves the seven Chase Bank branches in the U.S. Virgin Islands and one on Tortola, along with Chase Agency Services, an insurance agency on St. Thomas; and Chase Trade Inc., a Foreign Sales Corporation management company with offices on St. Thomas and in Barbados, local Chase spokeswoman Tynnetta McIntosh said. There are four branches on St. Thomas, two on St. Croix and one on St. John.
Officials of JPMorganChase, the parent company of Chase Bank, expect the sale "to close within the next few months," Kristen Batteria in the New York corporate communications office said Friday.
FirstBank and JPMorganChase reached agreement on the acquisition last February (see "Chase V.I. interests sold to FirstBank P.R."), a few months after two and a half years of negotiations by Jeffrey Prosser and his V.I. Community Bank to buy the Chase interests ended unsuccessfully. Chase and VICB ended up suing each other, then "amicably resolved" their dispute, a JPMorganChase official said, while mutually declaring the deal dead.
Figures have never been mentioned for the purchase of the Chase interests, either in the case of VICB or now with FirstBank.
Lt. Gov. Gerard Luz James II announced on Thursday that the V.I. Banking Board had approved the acquisition by FirstBank, calling it "certainly positive for the economy of the Virgin Islands."
Chase in the territory employs more than 280 people and has assets related to the transaction in excess of $500 million, Batteria said Friday.
According to its Web site (see FirstBank), FirstBank has assets of more than $7 billion and is the second-largest locally owned commercial bank in Puerto Rico, with 45 full-service branches in the commonwealth and four in the Virgin Islands — three on St. Thomas and one on St. Croix. It employs about 1,700 persons.
FirstBank was founded in 1948 as First Federal Savings Bank of Puerto Rico and has operated in the territory since 1962. Stockholder-owned since 1987, it became a Puerto Rico-chartered commercial bank in 1994, assuming the name FirstBank. In 1998, it reorganized, with FirstBank becoming a subsidiary of First BanCorp, which has a second-tier subsidiary, First Leasing and Rental Corp., in Puerto Rico.
First BanCorp had assets of $8.5 billion as of March 31, according to the Web site. It reported a $2.2 billion portfolio of commercial loans, commercial mortgages, construction loans and related commercial products; a $1.1 billion portfolio of residential mortgages; and $1.2 billion in consumer loans concentrated in auto loans and leases, personal loans and credit cards.
Its $3.9 billion investment portfolio consists mostly of U.S. government securities and mortgage-backed securities.
FirstBank in 1983 inaugurated the first telebanking service in Puerto Rico; it also was the first bank in Puerto Rico to open on weekends and the first to establish a presence on the Internet. Today, it provides brokerage services at its largest branches.
The Chase acquisition will add to the Puerto Rico bank's growing presence in the Virgin Islands. In 1999, FirstBank bought the Citibank branch at Port of $ale Mall on St. Thomas. In early 2000, it acquired First V.I. Federal Savings Bank, headquartered on St. Thomas with a branch on St. Croix. Last February, a joint release from Chase and First BanCorp said the proposed deal "continues FirstBank's diversification and expansion strategy."
Cassan Pancham, Chase V.I. general manager and vice president, said at that time that he was "happy and excited" about the acquisition and would be staying on to manage the combined operations. "An important element of this transaction will be a smooth transition for our customers and employees," Pancham, who also is president of the St. Thomas-St. John Chamber of Commerce, said.
James Crites, president and chief executive of First V.I. Federal Savings Bank when FirstBank took it over, became senior vice president and regional manager of the Puerto Rico bank's new Virgin Islands Region.
Prosser's V.I. Community Bank, which was founded in 1994 and operates only on St. Croix, received V.I. Banking Board approval to purchase Chase's seven branches in the territory in July of 1999 and FDIC approval in April of 2000. The V.I. bank employed 49 persons and listed assets of $78 million at the time. After getting two deadline extensions from the FDIC, VICB called off its bid to acquire the Chase properties last year.
VICB is the only bank in the territory that receives Economic Development Commission tax benefits; it was determined that the benefits, continuing into 2004, would extend to the Chase properties if and when they became a part of VICB.
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