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R&G To Expand Into Florida
By Barry Flynn and Maria T. Padilla
DECEMBER 29, 2001
R&G Financial Corp. of Puerto Rico plans to buy Crown Bank, a Casselberry-based savings bank, for $100 million in cash and a $5 million note, the companies announced.
R&G Financial Corp. owns R-G Premier Bank, which has $3.6 billion in assets and 25 branches in Puerto Rico, as well as mortgage lending and other financial operations on the island and in New York.
The entrance of R&G into the Florida market makes four the number of Puerto Rican institutions that have followed its demographic group to this state.
The others include:
*Banco Popular de Puerto Rico, which is the island's largest bank and also the largest Hispanic-owned bank in the United States, entered the Central Florida market in 1996 with the buyout of Seminole National Bank in Sanford. Most of Banco Popular's branches are in Central Florida, although this year it also opened a branch in Miami. Other offices include New York and Los Angeles. The company's Orlando area operations reportedly have $200 million in assets.
*Unibank, owned by Empresas Fonalledas, one of Puerto Ricos largest private companies. Unibank is based in South Florida and has two branches in Central Florida, in southeast Orlando, which has a large Hispanic populaton.
*Doral Mortgage, the island's largest mortgage lender, established an affiliate in Central Florida in the late 1990s.
R&G Financial, though publicly traded, is almost 55 percent owned by Víctor J. Galán, a Puerto Rican businessman who is chairman and chief executive officer of the company. The company owns the second-largest mortgage broker on the island, behind Doral.
Both companies said that Crown's president and chief executive officer, John A. Koegel, will stay on to run the bank, which has five offices in Central Florida and nine elsewhere in the state.
Koegel said Crown, with $633.2 million in assets as of Sept. 30, will get back into the mortgage business, a specialty of R&G Financial. "We're not going back into the subprime business," Koegel said, a reference to the high-risk, high-return business of writing below-par mortgages, in which Crown has suffered significant losses in the past.
Galán plans to inject additional capital into the bank, Koegel said. And he expects to add six branches in the next two years, probably two in 2002 and four in 2003.
Crown earned more than $3 million during the first three quarters this year and had $54.9 million in equity capital as of Sept. 30.
R&G expects to retain the Crown name, operate separately from the Puerto Rico bank -- which is based in Hato Rey -- and continue its current strategy of raising low-cost deposits by locating in areas with large numbers of retired people, according to Koegel.
But Galán put more of an emphasis on his company's Puerto Rico connections.
"This acquisition allows us to replicate our successful Puerto Rico business model in Florida and positions R&G to gain significant market share in Orlando and Tampa Bay, cities that have large Hispanic populations," Galán said in a written statement.