WASHINGTON — Regulators in Puerto Rico closed three banks Friday – representing a third of the island's institutions and a quarter of its assets – in a move sure to change the face of banking in the commonwealth.

The coordinated failures of $12 billion-asset Westernbank, $6 billion-asset R-G Premier Bank and $2.6 billion-asset Eurobank were estimated to cost the government $5.3 billion. The closures brought this year's total to 60.

In one of the most complex regional bank cleanups ever, the Federal Deposit Insurance Corp. sold the institutions to three separate buyers. Banco Popular de Puerto Rico, the territory's largest bank, assumed all of Westernbank's $8.6 billion in deposits and acquired $9.4 billion of its assets. Oriental Bank and Trust, based in San Juan, acquired all of Eurobank's $2 billion in deposits and roughly all of its assets. Scotiabank de Puerto Rico, which is owned by Toronto-based Bank of Nova Scotia, agreed to assume all of R-G Premier's $4 billion in deposits and roughly all of its assets.

Closing the three banks in one day, observers said, allowed regulators to attempt to calm the customers of other institutions that could otherwise become uneasy if multiple failures in a region were spread out over time.

The FDIC's moving nimbly is "tremendously important, in the sense that if you screw it up you've got other banks operating on the island," said John Douglas, a former FDIC general counsel and now a partner at Davis Polk & Wardwell. "You don't want them to be affected by what you do with those that you think are a problem. It needed to be crisp and clean and seamless to the public."

The failures complete a long-anticipated consolidation of Puerto Rico's banking industry, which many analysts say grew too fast. The region's banks have suffered not only from a recession predating the U.S. mainland's downturn, spurred by the 2006 shutdown of the commonwealth's government, but also a wild competition for construction loans.

All three of the institutions closed Friday had been under regulatory enforcement actions imposed by federal agencies.

The failures came as another island institution, Firstbank of Puerto Rico, the $20 billion-asset subsidiary of First Bancorp and the territory's No. 2 bank behind Banco Popular, continues to sort through problems related to high credit losses. In a Securities and Exchange Commission filing dated Thursday, the parent reported a $107 million first-quarter loss, more than double its loss in the fourth quarter of 2009.

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