8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 24, 2005

R&G Financial Corporation

(Exact name of registrant as specified in its charter)

Puerto Rico	0-22137	66-0532217
(State or other Jurisdiction of	(Commission File No.)	(I.R.S. Employer
Incorporation)		Identification No.)

280 Jesus T. Pinero Ave.
Hato Rey, San Juan, Puerto Rico	00918
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (787) 758-2424

(Former name or former address, if changed since last report)

Not applicable.

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o      Pre-commencement pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))

o      Pre-commencement pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

TABLE OF CONTENTS

	Item 2.02      Results of Operations and Financial Condition
	Item 9.01      Financial Statements and Exhibits
SIGNATURES
EX-99.1 PRESS RELEASE DATED 1/24/05

Item 2.02      Results of Operations and Financial Condition

     On January 24, 2005, R&G Financial Corporation (the “Company”) announced by press release its earnings for the fourth quarter and year ended December 31, 2004. A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01      Financial Statements and Exhibits

     (c) Exhibits.

     The following exhibits are being filed herewith:

     99.1      Press Release dated January 24, 2005.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	R&G FINANCIAL CORPORATION
Date: January 24, 2005
	By:	/s/Joseph R. Sandoval
		Joseph R. Sandoval Executive Vice President and Chief Financial Officer

EX-99.1

FOR RELEASE:	Immediately
CONTACT:	Víctor J. Galán	Joseph R. Sandoval
	Chairman and CEO	Executive Vice President & CFO
	(787) 766-8301	(787) 756-2802
WEBSITE:	www.rgonline.com

R&G FINANCIAL REPORTS RECORD EARNINGS FOR FOURTH
QUARTER AND YEAR ENDED DECEMBER 31, 2004

     San Juan, Puerto Rico, January 24, 2005 — R&G Financial Corporation (the “Company”) (NYSE:RGF), the financial holding company of R-G Premier Bank, R-G Crown Bank, and R&G Mortgage Corp, today reported record earnings for the fourth quarter and year ended December 31, 2004.

     For the year ended December 31, 2004, net income amounted to $160.2 million, compared to $131.0 million in 2003, an improvement of 22%. For the fourth quarter of 2004, net income amounted to $43.9 million compared to $36.1 million for the fourth quarter of 2003, an increase of 22%. For the year ended December 31, 2004, consolidated earnings per diluted share were $2.81, compared to $2.25 for 2003, an increase of 25%; for the fourth quarter of 2004, consolidated earnings per diluted share were $0.78, compared to $0.63 per diluted share for the fourth quarter of 2003, an increase of 24%.

     These excellent results for the year ended December 31, 2004 were achieved notwithstanding previously reported trading losses of $18.9 million during the year on

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derivative instruments held by the Company, including certain derivatives held for risk management purposes.

     The Company’s return on equity during the year ended December 31, 2004 and the fourth quarter of 2004 was 24.64% and 25.46%, while its return on assets was 1.78% and 1.81%, compared to a return on equity of 23.45% and 24.52% and a return of assets of 1.80% and 1.80% during the year ended December 31, 2003 and the fourth quarter of 2003.

     For the year ended December 31, 2004, the Company’s net interest income increased by 23% to $230.9 million, due primarily to an increase in earning assets during the period, while gain on sale of loans increased 19% to $175.5 million. For the fourth quarter of 2004, the Company’s net interest income increased 8% to $57.8 million, while gain on sale of loans increased 27% to $49.6 million.

     Total loan production during the year ended December 31, 2004 was $4.8 billion; total loan production during the fourth quarter was $1.5 billion, surpassing the amount for the third quarter this year. In both the third and fourth quarter, these amounts represent new all-time records for the Company. The amount of loan production for the fourth quarter of 2004 increased 37% compared to the corresponding period in 2003 in spite of higher interest rates in the 2004 period.

     The increase in earnings during the year ended December 31, 2004 also reflects a reduction in servicing related impairment charges (included in operating expenses) of $23.6 million. The reduction stems from decreases in mortgages prepayment rates in the Company’s loan servicing portfolio during 2004.

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     Total assets of R-G Crown Bank increased 46% during the year 2004 to $1.9 billion, contributing $14.7 million in profits during 2004. Total banking assets of the Company increased 27% during 2004 to $9.4 billion, representing 92% of consolidated assets at December 31, 2004.

     Commenting on the significant results for the fourth quarter and year ended December 31, 2004, Mr. Víctor J. Galán, Chairman of the Board and CEO of the Company indicated:

     “We are pleased to report another strong quarter of earning and loans production. We ended 2004 with record assets of $10.2 billion, resulting from continued strong demand in residential and commercial lending both in Puerto Rico and Central Florida, as evidenced by our $1.5 billion record loan production during the fourth quarter of 2004. One month from now, we expect to close the transaction with Wachovia Corporation in which we will obtain 18 additional branches in the states of Florida and Georgia. This transaction will strengthen our presence in Central Florida and expand our territory into very important markets for R&G in the future, as we continue our expansion in the Continental United States. Coupled with continued strong loan demand in Puerto Rico as well as other initiatives, we anticipate strong loan production through 2005, and remain optimistic about our future performance.”

     R&G Financial, currently in its 33rd year of operations, is a diversified financial holding company with operations in Puerto Rico and the United States, providing banking, mortgage banking, investments, consumer finance and insurance through its wholly-owned subsidiaries: R-G Premier Bank of Puerto Rico, one of Puerto Rico’s rapidly growing commercial banks, R-G Crown Bank, the Company’s Florida federal

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savings bank with branches in the Orlando and Tampa/St. Petersburg Florida markets, R&G Mortgage Corp., Puerto Rico’s second largest mortgage banker, Mortgage Store of Puerto Rico, Inc., a subsidiary of R&G Mortgage, Continental Capital Corporation, R-G Crown’s New York and North Carolina based mortgage banking subsidiary, Home and Property Insurance Corporation, its Puerto Rico insurance agency, and R-G Investments Corporation, its Puerto Rico broker-dealer. As of December 31, 2004 the Company, with total assets of $10.2 billion, operated 33 bank branches in Puerto Rico, 15 bank branches in the Orlando and Tampa/St. Petersburg Florida markets, 5 mortgage and 6 commercial lending offices in the United States, and 56 mortgage offices in Puerto Rico, including 27 facilities located with R-G Premier’s branches.

“SAFE HARBOR” STATEMENT UNDER THE PRIVACY SECURITIES LITIGATION REFORM ACT OF 1995

     Statements made in this Press Release that relate to future events are made pursuant to the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon current expectations and R&G Financial assumes no obligation to update this information. Because actual results may differ materially from expectation, R&G Financial cautions readers not to place undue reliance on these statements. For a detailed discussion of the important factors affecting R&G Financial, please see the Company’s Form 10-K for the year ended December 31, 2003 and Form 10-Q for the quarter ended September 30, 2004 filed with the Securities and Exchange Commission.

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	At			At			At
	December 31,			September 30,			December 31,
	2004			2004			2003
		(Dollars in Thousands, except for per share data)
SELECTED BALANCE SHEET DATA		(Unaudited)
Total assets		$	10,198,602		$	9,188,847		$	8,198,880
Loans receivable, net			5,191,455			4,827,955			4,048,507
Mortgage loans held for sale			259,219			240,963			315,691
Mortgage-backed and investment securities held for trading			104,553			40,263			38,355
Mortgage-backed and investment securities available for sale			3,649,444			3,098,637			2,977,580
FHLB Stock			116,486			94,408			100,461
Mortgage-backed and investment securities held to maturity			77,983			80,723			78,200
Servicing asset			117,704			118,569			119,610
Cash and cash equivalents			329,848			326,045			234,318
Deposits			4,238,863			4,143,938			3,555,764
Securities sold under agreements to repurchase			2,994,658			2,539,620			2,220,795
Notes payable			100,217			98,800			192,259
Other borrowings			1,736,646			1,390,828			1,308,270
Stockholders’ equity			855,513			825,753			750,353
Common stockholders’ equity			642,513			612,753			537,353
Total # of common shares outstanding			51,131,704			51,120,774			51,066,299
Common stockholders’ equity per share		$	12.57		$	11.99		$	10.52
Servicing portfolio			11,404,303			11,115,070			10,942,821
Book value of servicing portfolio			1.03%			1.07%			1.09%
Allowance for loan losses (ALL)			51,877			49,209			39,615
Non-performing loans (NPL’s)			108,302			101,046			85,414
NPL’s/Total loans			1.91%			1.93%			1.98%
All/Total loans			0.91%			0.94%			0.92%
All/Total Non-performing loans			47.90%			48.70%			46.38%

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	For the three months ended						For the year						Three months
	December 31,						Ended December 31,						Ended Sept. 30
	(Unaudited)						(Unaudited)						(Unaudited)
	2004			2003			2004			2003			2004
	(Dollars in Thousands, except for per share data)
SELECTED INCOME STATEMENT DATA
REVENUES:
Net interest income	$	57,840		$	53,450		$	230,931		$	187,983		$	61,371
Provision for loan losses		(6,395	)		(5,600	)		(25,395	)		(18,556	)		(6,265	)
Net interest income after provision for loan losses		51,445			47,850			205,536			169,427			55,106
Net gain on sale of loans		49,640			39,115			175,465			147,107			48,614
Trading gains (losses)		4,317			(246	)		(18,903	)		(1,099	)		(23,014	)
Gain (loss) on securities available for sale		149			54			(3,061	)		885			(3,280	)
Servicing income		9,391			9,177			37,099			48,166			8,602
Other fee income		11,742			7,851			37,154			28,741			8,404
Total revenues		126,684			103,801			433,290			393,227			94,432
OPERATING EXPENSES:
Employee compensation and benefits		22,684			18,555			76,309			63,585			18,086
Office occupancy and equipment		8,158			6,496			28,780			24,761			7,336
Impairment charges on servicing asset		6,247			5,577			14,058			37,690			1,868
Other administrative and general		33,031			26,022			102,496			93,796			19,028
Total expenses		70,120			56,650			221,643			219,832			46,318
Income before income taxes		56,564			47,151			211,647			173,395			48,114
Income taxes		(12,652	)		(11,011	)		(51,433	)		(42,372	)		(11,099	)
Net income	$	43,912		$	36,140		$	160,214		$	131,023		$	37,015
Less: Preferred stock dividends		(3,971	)		(3,971	)		(15,884	)		(15,884	)		(3,971	)
Net income available to common stockholders		39,941			32,169			144,330			115,139			33,044
Net income per common share — Basic	$	0.78		$	0.63		$	2.82		$	2.26		$	0.65
Net income per common share — Diluted	$	0.78		$	0.63		$	2.81		$	2.25		$	0.64
Average shares outstanding — Basic		51,130,860			51,065,979			51,107,275			51,057,651			51,107,120
Average shares outstanding — Diluted		51,377,900			51,291,429			51,364,805			51,281,379			51,377,508
Return on common equity		25.46%			24.52%			24.64%			23.45%			22.41%
Return on assets		1.81%			1.80%			1.78%			1.80%			1.63%
Total Loan Production	$	1,475,049		$	1,079,976		$	4,834,805		$	4,464,099		$	1,293,138