THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

R&G Financial Corporation (RGF)

4/11/2005 Proxy Information

Mr. Victor L. Galán is the son of Víctor J. Galán, the Chairman of the Board and Chief Executive Officer of the Company.

During the year ended December 31, 2004, VIG Leasing, S.E., a Puerto Rico real estate partnership which is 95.8% owned by the family of Víctor J. Galán, the Company’s Chairman of the Board and Chief Executive Officer, received lease payments from the Company of $3.7 million on properties owned. The Company believes that the lease terms are on terms substantially the same as they would have negotiated with a non-affiliated party.

Under applicable federal law, loans or extensions of credit to executive officers and directors must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with the general public and must not involve more than the normal risk of repayment or present other unfavorable features.

Premier Bank and Crown Bank have policies that provide that all loans made by either bank to directors and officers are made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons. These policies provide that such loans may not involve more than the normal risk of collectability or present other unfavorable features. As of December 31, 2004, mortgage and consumer loans to directors and executive officers of the Company in excess of $60,000 aggregated approximately $7,984,000 or 0.93% of the Company’s consolidated stockholders’ equity as of such date. All such loans were made in accordance with the aforementioned policies.

During the year ended December 31, 2004, Enrique Umpierre-Suárez, a director and Secretary of each of the Company and Premier Bank, provided legal services to borrowers of Premier Bank and R&G Mortgage in connection with the closing of consumer and commercial loans. During the year ended December 31, 2004, Mr. Umpierre-Suárez received $886,000 in fees for such legal services, all of which were paid for by customers of Premier Bank and R&G Mortgage in connection with loan closings.

R&G Mortgage originates first mortgage loans secured by single-family residential properties that are either insured by the Federal Housing Administration (“FHA”) or guaranteed by the Veterans’ Administration (“VA”). R&G Mortgage pools such FHA/VA loans into mortgage-backed securities that are guaranteed by the Government National Mortgage Association (“Ginnie Mae”), which securities are sold to securities broker dealers and other investors. During the year ended December 31, 2004, R&G Mortgage sold approximately $2.5 million of such Ginnie Mae securities to Mr. Víctor J. Galán, the Chairman of the Board and Chief Executive Officer of the Company, approximately $2.0 million to Mr. Ramón Prats, the President of the Company. In purchasing these securities, such persons receive a benefit on the purchase price equal to 20% of either the premium quoted above par or the discount quoted below par.