Trouble between Doral Financial in San Juan, Puerto Rico, and the Federal Deposit Insurance Corp. has grown in recent days.

The FDIC sent a letter to Doral on Friday stating that the $7.8 billion-asset company's bank is "significantly undercapitalized," rather than "undercapitalized." The agency also noted that it had not received Doral's written capital restoration or contingency plans — demands made in prior communications — insisting the both be "submitted immediately."

The contingency plan, covering Doral's potential sale, merger or liquidation, was part of an Aug. 8, 2012, consent order with the FDIC and was due on June 7 of this year. Doral also had the option of increasing its capital levels. The written capital restoration plan was requested by the FDIC this summer.

Doral said in a regulatory filing Wednesday that it has been keeping the FDIC informed as to the development of written capital restoration and contingency plans, adding that it needs to complete certain transactions first. The company said that, once it has consummated the last of those transactions, it will provide the agency with a written plan that reflects "the then-operating size and business activities" of its bank.

The company is embroiled in a legal battle with Puerto Rico's Treasury Department over claims Doral is owed $230 million in overpaid taxes. A ruling on that issue is expected in coming weeks.

Doral has been selling some assets to shore up its Tier 1 capital levels after the FDIC said it could no longer count Puerto Rican tax receivables to that capital ratio. The company recently sold loans and real estate properties to Abbey Finance Holdings in a deal that lowered capital levels but improved Doral's liquidity.

The company also holds more than $150 million in municipal notes and bonds. Moody's Investors Service and Standard & Poor's have placed Doral Bank's ratings deep in speculative territory.

Doral said in its recent regulatory filing that it maintains about $1 billion of readily available liquidity sources, or adequate liquidity to continue to operate its business and serve its clients in the Puerto Rico and the mainland United States.

Though no one is suggesting that Doral will fail, its collapse wouldn't have a large impact on Puerto Rico since the company isn't one of the territory's biggest banks, Vicente Feliciano, president of Advantage Business Consulting, said in May. Still, he said the situation is "not to be taken lightly."

The April 2010 collapse of three Puerto Rican banks was more significant, Feliciano said. In those instances, the FDIC made sure all deposits were honored and not just the first $250,000, he said, adding that the agency would likely do the same for Doral's depositors.

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