SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-Q/A
                                AMENDMENT NO. 1


[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999

                                       OR

[   ]    TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________________ TO
         _________________.

                        Commission file number: 000-21137


                            R&G FINANCIAL CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

   Puerto Rico                                                66-0532217
--------------------------------------------------------------------------------
(State of incorporation                                   (I.R.S. Employer
 or organization)                                        Identification No.)

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

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


Indicate by checkmark  whether  Registrant (a) has filed all reports required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  report(s)  and  (b) has  been  subject  to such  filing
requirements for at least 90 days.

                              YES [ X ]    NO [   ]

Number of  shares  of Class B Common  Stock  outstanding  as of March 31,  1999:
10,185,691.  (Does not include  18,440,556  Class A Shares of Common Stock which
are  exchangeable  into  Class B Shares  of  Common  Stock at the  option of the
holder.)
<PAGE>











Explanatory Note:
-----------------

The undersigned  registrant hereby amends and restates in its entirety Item 1 of
Part I -  Financial  Information  of its  quarterly  report on Form 10-Q for the
quarter ended March 31, 1999.














                                      -2-
<PAGE>
                         PART 1 - FINANCIAL INFORMATION
                         ------------------------------

Item 1:  Consolidated Financial Statements
-------  ---------------------------------
<TABLE>
<CAPTION>
R&G FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                                                                    March 31,         December 31,
                                                                                      1999                1998
                                                                                 --------------     --------------
                                                                                   (Unaudited)
<S>                                                                              <C>                <C>
ASSETS
Cash and due from banks                                                         $   35,700,762     $   51,804,750
Money market investments:
    Securities purchased under agreements to resell                                  7,501,490         11,544,123
    Time deposits with other banks                                                   5,171,966         30,361,527
    Federal funds sold                                                                    --           10,018,048
Mortgage loans held for sale, at lower of cost or market                           109,990,674        117,126,040
Mortgage-backed securities held for trading, at fair value                          25,216,189        450,546,034
Mortgage-backed securities available for sale, at fair value                       528,757,067         95,040,331
Mortgage-backed securities held to maturity, at amortized cost
(estimated market value: 1999 - $26,829,846; 1998 - $28,260,925)                    26,834,199         28,255,518
Investment securities available for sale, at fair value                             71,572,197         59,502,140
Investment securities held to maturity, at amortized cost
(estimated market value: 1999- $ 6,367,577; 1998- $6,378,634)                        6,348,172          6,343,929
Loans receivable, net                                                            1,167,240,530      1,073,668,278
Accounts receivable, including advances to investors, net                           12,233,705          9,665,290
Accrued interest receivable                                                         13,748,392         12,505,431
Servicing Asset                                                                     61,944,250         58,221,052
Premises and equipment                                                              13,549,816         12,962,435
Other assets                                                                        16,736,038         17,216,602
                                                                                --------------     --------------

LIABILITIES AND STOCKHOLDERS' EQUITY                                            $2,102,545,447     $2,044,781,528
Liabilities:                                                                    ==============     ==============

     Deposits                                                                   $1,094,290,510     $1,007,297,304
     Securities sold under agreements to repurchase                                423,340,922        471,421,726
     Notes payable                                                                 172,469,029        182,747,956
     Advances from FHLB                                                            141,000,000        121,000,000
     Other borrowings                                                                9,000,000          9,000,000
     Accounts payable and accrued liabilities                                       26,674,448         28,020,080
     Other liabilities                                                               5,816,186          4,132,603
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
R&G FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

                                                                                    March 31,         December 31,
                                                                                      1999                1998
                                                                                 --------------     --------------
                                                                                   (Unaudited)
<S>                                                                              <C>                <C>
     Preferred stock, $.01 par value, 10,000,000 shares authorized, 7.40%        1,872,591,095      1,823,619,669
         Monthly Income                                                         --------------     --------------

          Preferred Stock, Series A, $25 liquidation value, 2,000,000 shares
             authorized, issued and outstanding                                     50,000,000         50,000,000
     Common stock:
          Class A - $.01 par value, 40,000,000 shares authorized, 18,440,556
             issued  and Outstanding                                                   184,406            184,406
          Class B - $.01 par value, 20,000,000 shares authorized, 10,185,691
             issued and outstanding in 1999 and 10,146,091 in 1998                     101,857            101,461
     Additional paid-in capital                                                     41,703,482         41,544,378
     Retained earnings                                                             133,700,796        124,418,278
     Capital reserves of the Bank                                                    3,547,798          3,547,798
     Accumulated other comprehensive income                                            716,013          1,365,538
                                                                                --------------     --------------
                                                                                   229,954,352        221,161,859
                                                                                --------------     --------------
                                                                                $2,102,545,447     $2,044,781,528
                                                                                ==============     ==============
</TABLE>
        The accompanying notes are an integral part of these statements.

                                      -3-
<PAGE>
<TABLE>
<CAPTION>
R&G FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME

                                                                     Three month
                                                                    period ended
                                                                      March 31,
                                                             ------------------------------
                                                                 1999              1998
                                                             ------------      ------------
                                                                       (Unaudited)
<S>                                                          <C>               <C>
Interest income:
     Loans                                                   $ 26,616,509      $ 18,656,942
     Money market and other investments                           733,461         1,428,203
     Mortgage-backed securities                                 8,035,385         7,691,106
                                                             ------------      ------------
          Total interest income                                35,385,355        27,776,251
                                                             ------------      ------------

Interest expense:
     Deposits                                                  11,460,159         8,345,253
     Securities sold under agreements to repurchase             5,374,542         5,693,530
     Notes payable                                              3,729,187         2,969,761
          Other                                                 1,587,320           781,866
                                                             ------------      ------------
          Total interest expense                               22,151,208        17,790,410
                                                             ------------      ------------
Net interest income                                            13,234,147         9,985,841
Provision for loan losses                                      (1,300,000)       (1,500,000)
                                                             ------------      ------------
Net interest income after provision for loan losses            11,934,147         8,485,841
                                                             ------------      ------------
Other income:
     Net gain on origination and sale of loans                 10,478,205         7,392,555
     Net profit on trading account                                   --              14,580
     Net gain on sales of investments available for sale           19,531           149,468
                                                                5,760,770         3,687,057
     Loan administration and servicing fees
     Service charges, fees and other                            1,485,172         1,184,384
                                                             ------------      ------------
                                                               17,743,678        12,428,044
                                                             ------------      ------------

        Total revenues                                         29,677,825        20,913,885
                                                             ------------      ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
R&G FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME

                                                                     Three month
                                                                    period ended
                                                                      March 31,
                                                             ------------------------------
                                                                 1999              1998
                                                             ------------      ------------
                                                                       (Unaudited)
<S>                                                          <C>               <C>
Operating expenses:
     Employee compensation and benefits                         4,770,004         3,558,222
     Office occupancy and equipment                             2,389,800         1,824,971
     Other administrative and general                           7,677,815         4,794,354
                                                             ------------      ------------
                                                               14,837,619        10,177,547
                                                             ------------      ------------
Income before income taxes                                     14,840,206        10,736,338
                                                             ------------      ------------
Income tax expense:
     Current                                                    1,924,408         1,860,651
     Deferred                                                   1,764,920         1,395,852
                                                             ------------      ------------
                                                                3,689,328         3,256,503
                                                             ------------      ------------
          Net income                                         $ 11,150,878      $  7,479,835
                                                             ============      ============


Earnings per common share - Basic                            $       0.36      $       0.26
                                                             ------------      ------------
                          - Diluted                          $       0.35      $       0.26
                                                             ------------      ------------

Weighted average number of shares outstanding - Basic          28,600,647        28,289,504
                                              - Diluted        29,342,647        29,045,504
</TABLE>

        The accompanying notes are an integral part of these statements.

                                      -4-
<PAGE>
<TABLE>
<CAPTION>
R&G Financial Corporation
Consolidated Statements of Comprehensive Income

                                                                                Three Month
                                                                               period ended
                                                                                 March 31,
                                                                      ------------------------------
                                                                          1999               1998
                                                                      ------------      ------------
                                                                               (Unaudited)


<S>                                                                   <C>               <C>
Net Income                                                            $ 11,150,878      $  7,479,835
                                                                      ------------      ------------
Other comprehensive income, before tax:

Unrealized gains (losses) on securities:

     Arising during period                                              (1,045,264)         (238,609)
     Less:  Reclassification adjustments for gains included in
                 net income                                                (19,531)         (149,468)
                                                                      ------------      ------------
                                                                        (1,064,795)         (388,077)
                                                                      ------------      ------------

Income tax benefit related to items of other comprehensive income          415,270           151,350
                                                                      ------------      ------------

Other comprehensive (loss)  income, net of tax                            (649,525)         (236,727)
                                                                      ------------      ------------

Comprehensive income, net of tax                                      $ 10,501,353      $  7,243,108
                                                                      ============      ============

</TABLE>

        The accompanying notes are an integral part of these statements.

                                      -5-
<PAGE>
<TABLE>
<CAPTION>

R&G  FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                             Three month
                                                                                                            period ended
                                                                                                              March, 31
                                                                                                ------------------------------------
                                                                                                     1999                  1998
                                                                                                -------------         -------------

                                                                                                         (Unaudited)
<S>                                                                                             <C>                   <C>
Cash flows from operating activities:
     Net income                                                                                 $  11,150,878         $   7,479,835
                                                                                                -------------         -------------
           Adjustments to reconcile net income to net cash provided by operating activities:
           Depreciation and amortization                                                              891,342               644,587
           Amortization of premium (accretion of discount) on investments and
               mortgage-backed securities, net                                                         39,462               (21,695)
           Amortization of deferred loan origination  (fees) costs, net                              (391,574)               71,678
           Amortization of servicing rights                                                         1,634,426               614,327
           Provision for loan losses                                                                1,300,000             1,500,000
           Provision for bad debts in accounts  receivable                                            100,000                75,000
           Gain on sales of  loans                                                                 (2,578,960)           (1,089,913)
           Loss (gain) on sales of mortgage-backed and investment securities
              available for sale                                                                      136,102              (149,468)
           Unrealized loss (profit) on trading securities                                             181,718              (743,970)
           Increase in mortgage loans held for sale                                               (42,955,011)           (9,311,286)
           Net increase in mortgage-backed  securities held for trading                            (2,260,268)           (8,690,211)
           (Increase) decrease in receivables                                                      (3,911,376)              508,360
           Decrease in other assets                                                                   310,741             2,200,838
           (Decrease) increase in notes payable                                                   (10,278,927)           15,191,328
           (Decrease) increase in accounts payable and accrued liabilities                           (381,350)            1,225,264
           Increase in other liabilities                                                            1,683,583               163,602
                                                                                                -------------         -------------
               Total adjustments                                                                  (56,480,092)            2,188,441
                                                                                                -------------         -------------
               Net cash (used in) provided by operating activities                                (45,329,214)            9,668,276
                                                                                                -------------         -------------
Cash flows from investing activities:
      Purchases of investment securities                                                          (29,600,000)          (23,842,120)
      Proceeds from sales and maturities of securities available for sale                          63,388,697            25,553,791
      Proceeds from maturities of securities held to maturity                                            --               4,405,420
      Proceeds from sales of loans                                                                 49,660,184            24,399,022
      Net originations of loans                                                                  (143,461,903)         (107,919,577)
      Purchases of  FHLB stock, net                                                                      --              (1,693,500)
      Acquisition of premises and equipment                                                        (1,308,900)           (1,246,796)
      Acquisition of servicing rights                                                              (5,357,624)           (3,126,207)
                                                                                                -------------         -------------
               Net cash used by investing activities                                              (66,679,546)          (83,469,967)
                                                                                                -------------         -------------
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
R&G  FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                             Three month
                                                                                                            period ended
                                                                                                              March, 31
                                                                                                ------------------------------------
                                                                                                     1999                  1998
                                                                                                -------------         -------------

                                                                                                         (Unaudited)
<S>                                                                                             <C>                   <C>
Cash flows from financing activities:
     Increase in deposits - net                                                                    86,444,194            40,912,577
     Decrease in federal funds purchased                                                                 --             (10,000,000)
     (Decrease) increase in securities sold under agreements to repurchase - net                  (48,080,804)           10,603,178
     Advances from FHLB                                                                            20,000,000            20,000,000
     Proceeds from issuance of common stock                                                           159,500                  --
     Cash dividends on common stock                                                                (1,868,360)             (707,238)
                                                                                                -------------         -------------
               Net cash provided by financing activities                                           56,654,530            60,808,517
                                                                                                -------------         -------------
Net decrease in cash and cash equivalents                                                         (55,354,230)          (12,993,174)
Cash and cash equivalents at  beginning of  period                                                103,728,448            68,365,723
                                                                                                -------------         -------------
Cash and cash equivalents at end of period                                                      $  48,374,218         $  55,372,549
                                                                                                =============         =============

Cash and cash equivalents include:
     Cash and due from banks                                                                    $  35,700,762         $  21,371,646
     Securities purchased under agreements to resell                                                7,501,490            21,292,213
     Time deposits with other banks                                                                 5,171,966            12,708,690
     Federal funds sold                                                                                  --                    --
                                                                                                -------------         -------------
                                                                                                $  48,374,218         $  55,372,549
                                                                                                =============         =============

</TABLE>

        The accompanying notes are an integral part of these statements.

                                      -6-
<PAGE>
R&G FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1  -         REPORTING ENTITY AND BASIS OF PRESENTATION


Reporting entity

         The accompanying  unaudited  consolidated  financial statements include
the accounts of R&G  Financial  Corporation  (the  Company) and its wholly owned
subsidiaries,  R&G Mortgage Corp. ("R&G  Mortgage"),  a Puerto Rico corporation,
and R-G Premier Bank of Puerto Rico (the "Bank"),  a commercial  bank  chartered
under the laws of the Commonwealth of Puerto Rico.

         R&G  Mortgage  is engaged  primarily  in the  business  of  originating
FHA-insured,  VA-guaranteed,  and privately  insured  first and second  mortgage
loans on residential real estate. R&G Mortgage pools loans into  mortgage-backed
securities  and  collateralized  mortgage  obligation  certificates  for sale to
investors.  After  selling the loans,  it retains the  servicing  function.  R&G
Mortgage  is also a  seller-servicer  of  conventional  loans.  R&G  Mortgage is
licensed by the  Secretary of the Treasury of Puerto Rico as a mortgage  company
and is duly authorized to do business in the Commonwealth of Puerto Rico.

         The  Bank  provides  a  full  range  of  banking  services,   including
residential,  commercial and personal  loans and a diversified  range of deposit
products  through  twenty  branches  located  mainly in the northern part of the
Commonwealth  of Puerto Rico. The Bank also provides  private  banking and trust
and other  financial  services  to its  customers.  The Bank is  subject  to the
regulations  of certain  federal  and local  agencies,  and  undergoes  periodic
examinations by those regulatory agencies.

Basis of presentation

         The accompanying  unaudited consolidated financial statements have been
prepared in accordance with the instructions for Form 10-Q. Accordingly, they do
not include all of the information and footnotes  required by generally accepted
accounting principles.  However, in the opinion of management,  the accompanying
unaudited consolidated financial statements contain all adjustments (principally
consisting of normal recurring  accruals)  necessary for a fair  presentation of
the  Company's  financial  condition  as of March 31,  1999 and the  results  of
operations  and changes in its cash flows for the three  months  ended March 31,
1999 and 1998.

         The results of  operations  for the three month  period ended March 31,
1999 are not  necessarily  indicative of the results to be expected for the year
ending December 31, 1999. The unaudited  consolidated  financial  statements and
notes  thereto  should  be  read  in  conjunction  with  the  audited  financial
statements and notes thereto for the year ended December 31, 1998.

         Certain  reclassifications (not affecting income before income taxes or
net  income)  have been made to the  consolidated  statements  of income for the
quarter  ended  March 31,  1998 to conform to the  presentation  for the quarter
ended March 31, 1999.

                                      -7-
<PAGE>
Basis of consolidation

         All  significant  intercompany  balances  and  transactions  have  been
eliminated in the accompanying unaudited financial statements.

Accounting for Derivative Instruments and Hedging Activities

         In June 1998, the Financial  Accounting Standards Board ("FASB") issued
SFAS No. 133- "Accounting for Derivative Instruments and Hedging Activities."

         This  Statement  requires that an entity  recognize all  derivatives as
either assets or liabilities in the statement of financial  position and measure
those instruments at fair value. If certain conditions are met, a derivative may
be  specifically  accounted as a hedge.  The  accounting for changes in the fair
value of a derivative (that is, gains and losses) depends on the intended use of
the derivative and the resulting designation.

         This  Statement  is effective  for all fiscal  quarters of fiscal years
beginning after June 15, 1999.  Management is evaluating its hedging strategy in
light of this new  pronouncement  to establish  the initial  designation  of its
hedging activities and determine the effect and timing of adoption. However, due
to the  relatively  limited  extent to which  the  Company  is using  derivative
instruments and the simple nature of the instruments  used,  management does not
expect the impact of adoption to be significant.

Accounting for  Mortgage-Backed  Securities Retained after the Securitization of
Mortgage Loans Held for Sale by a Mortgage Banking Enterprise

         In  October  1998,  the FASB  issued  SFAS  No.  134-  "Accounting  for
Mortgage-Backed  Securities  Retained after the Securitization of Mortgage Loans
Held for Sale by a Mortgage Banking  Enterprise." This Statement amends SFAS No.
65 to require that after the  securitization of mortgage loans held for sale, an
entity   engaged  in  mortgage   banking   activities   classify  the  resulting
mortgage-backed  securities or other retained  interest based on its ability and
intent to sell or hold those investments. This Statement conforms the subsequent
accounting for securities retained after the securitization of mortgage loans by
a mortgage  banking  enterprise  with the  subsequent  accounting for securities
retained  after the  securitization  of other types of assets by a  non-mortgage
banking  enterprise.  This  Statement is effective for the first fiscal  quarter
beginning  after  December 15,  1998.  In  connection  with the adoption of this
Statement  on  January 1, 1999 the  Company  reclassified  approximately  $427.4
million of mortgage-backed securities from trading to available for sale.


NOTE 2  -         EARNINGS PER SHARE

         Basic  earnings  per common  share for the three months ended March 31,
1999 and 1998 are  computed  by  dividing  net  income  for such  periods by the
weighted  average  number  of shares of common  stock  outstanding  during  such
periods,  which was 28,600,647 and 28,289,504,  respectively.  Outstanding stock
options  granted in connection with the Company's Stock Option Plan are included
in the weighted  average  number of shares for purposes of the diluted  earnings
per  share  computation.   The  Company's  weighted  average  number  of  shares
outstanding  for  purposes  of diluted  earnings  per share was  29,342,647  and
29,045,504  for  the  three  month  periods  ended  March  31,  1999  and  1998,
respectively.


                                      -8-
<PAGE>
         On June 25,  1998 the  Company  effected  a 2 for 1 stock  split on the
Company's  common stock, in the form of a stock dividend of one additional share
of common  stock for each  share of common  stock  held in record as of June 12,
1998.  Following   distribution  of  the  additional  shares,  the  Company  had
28,289,504  common shares  outstanding.  Per share  information  for all periods
presented  take into  consideration  the stock split paid by the Company in June
1998.

NOTE 3  -         INVESTMENT AND MORTGAGE-BACKED SECURITIES

         The  carrying   value  and  estimated  fair  value  of  investment  and
mortgage-backed  securities  by  category  are shown  below.  The fair  value of
investment securities is based on quoted market prices and dealer quotes, except
for the investment in Federal Home Loan Bank (FHLB) stock which is valued at its
redemption value.
<TABLE>
<CAPTION>


                                                   March 31,        December 31,
                                                    1999                1998
                                                 ------------       ------------
                                                           (Unaudited)
<S>                                              <C>                <C>
Mortgage-backed securities held for trading:

CMO Residuals (all interest only)                $  8,261,442       $  7,146,762
GNMA Certificates                                  16,954,747        443,399,272
                                                 ------------       ------------
                                                 $ 25,216,189       $450,546,034
                                                 ============       ============

</TABLE>
                                       -9-
<PAGE>
<TABLE>
<CAPTION>
                                                               March 31, 1999                     December 31, 1998
                                                       -----------------------------     -----------------------------
                                                         Amortized          Fair            Amortized          Fair
                                                           cost            value              cost             value
                                                       ------------     ------------     ------------     ------------
                                                                (Unaudited)
<S>                                                    <C>              <C>              <C>              <C>
Mortgage-backed securities available for sale:

CMO residuals and other mortgage-backed securities     $  8,338,991     $ 10,154,780     $  7,845,382     $  9,661,171
                                                       ------------     ------------     ------------     ------------
FNMA certificates:
     Due over ten years                                   7,699,654        7,704,471        8,091,335        8,161,704
                                                       ------------     ------------     ------------     ------------
FHLMC certificates:
     Due from one to five years                              83,754           85,363           89,209           90,765
     Due from five to ten years                           1,003,828        1,015,858          240,394          244,140
     Due over ten years                                  18,990,388       19,185,453       21,368,689       21,723,711
                                                       ------------     ------------     ------------     ------------
                                                         20,077,970       20,286,674       21,698,292       22,058,616
                                                       ------------     ------------     ------------     ------------
GNMA certificates:
      Due over ten years                                491,138,214      490,611,142       55,158,840       55,158,840
                                                       ------------     ------------     ------------     ------------

                                                       $527,254,829     $528,757,067     $ 92,793,849     $ 95,040,331
                                                       ============     ============     ============     ============
Investment securities available for sale:

U.S.  Treasury securities:
     Due from one to five years                        $  4,995,772     $  4,963,280     $  4,995,028     $  4,990,625
                                                       ------------     ------------     ------------     ------------

U.S. Government and agencies securities:
      Due from one to five years                         55,500,000       55,204,050       38,100,000       38,106,648
      Due from five to ten years                                                            5,010,140        5,000,000
                                                       ------------     ------------     ------------     ------------
                                                         55,500,000       55,204,050       43,110,140       43,106,648
                                                       ------------     ------------     ------------     ------------

 FHLB stock                                              11,404,867       11,404,867       11,404,867       11,404,867
                                                       ------------     ------------     ------------     ------------
                                                       $ 71,900,639     $ 71,572,197     $ 59,510,035     $ 59,502,140
                                                       ============     ============     ============     ============
</TABLE>

         Mortgage  backed  securities  available for sale include  interest only
securities with an amortized cost of $3,771,323 as of March 31, 1999,  which are
primarily  associated  with  the sale in prior  years of  collaterized  mortgage
obligations. These sales were not made in connection with the Company's mortgage
banking activities.


                                      -10-
<PAGE>
<TABLE>
<CAPTION>
                                                           March 31, 1999                December 31, 1998
                                                     ---------------------------    -----------------------------
                                                     Amortized          Fair          Amortized         Fair
                                                        cost            value            cost            value
                                                     -----------     -----------     -----------     -----------
                                                             (Unaudited)
<S>                                                 <C>             <C>             <C>             <C>
Mortgage-backed securities held to maturity:

GNMA certificates:
         Due from one to five years                  $    24,404     $    26,173     $    27,227     $    29,201
          Due from five to ten years                  12,406,776      12,146,591      13,024,960      12,751,640
          Due over ten years                           2,338,609       2,285,900       2,359,713       2,306,529
                                                     -----------     -----------     -----------     -----------
                                                      14,769,789      14,458,664      15,411,900      15,087,370
                                                     -----------     -----------     -----------     -----------
  FNMA certificates:
     Due over ten years                               11,842,243      12,155,027      12,607,700      12,944,020
                                                     -----------     -----------     -----------     -----------

FHLMC certificates:

     Due over ten years                                  222,167         216,155         235,918         229,535
                                                     -----------     -----------     -----------     -----------

                                                     $26,834,199     $26,829,846     $28,255,518     $28,260,925
                                                     ===========     ===========     ===========     ===========

Investment securities held to maturity:

U.S.  Treasury securities:
     Due within one year                             $   197,446     $   197,000     $   194,892     $   196,000
                                                     -----------     -----------     -----------     -----------

U.S. Government and agencies securities:
      Due within one year                                207,066         206,910         204,167         204,167
                                                     -----------     -----------     -----------     -----------


Puerto Rico Government and Agencies obligations:
       Due from five to ten years                      5,943,660       5,963,667       5,944,870       5,978,467
                                                     -----------     -----------     -----------     -----------
                                                     $ 6,348,172     $ 6,367,577     $ 6,343,929     $ 6,378,634
                                                     ===========     ===========     ===========     ===========

</TABLE>


                                      -11-
<PAGE>
 NOTE 4  -         LOANS AND ALLOWANCE FOR LOAN LOSSES

   Loans consist of the following:
<TABLE>
<CAPTION>

                                                March 31,           December 31,
                                                  1999                 1998
                                            ----------------     ---------------
                                               (Unaudited)
<S>                                         <C>                  <C>
Real estate loans:
     Residential - first mortgage           $   814,544,472      $   735,457,756
     Residential - second mortgage               18,368,941           18,633,916
     Land                                           388,750              337,250
     Construction                                36,024,315           34,391,170
     Commercial                                 139,092,081          121,393,030
                                            ---------------      ---------------
                                              1,008,418,559          910,213,122
Undisbursed portion of loans in process         (19,489,007)         (18,170,178)
Net deferred loan costs (fees)                      249,207             (166,056)
                                            ---------------      ---------------
                                                989,178,759          891,876,888
                                            ---------------      ---------------
Other loans:
     Commercial                                  44,921,382           46,532,311
     Consumer:
        Secured by deposits                      16,998,053           17,225,437
        Secured by real estate                   85,837,802           85,054,815
        Other                                    39,150,532           41,381,304
Unamortized discount                               (187,188)            (163,499)
Unearned interest                                  (165,693)            (183,546)
                                            ---------------      ---------------
                                                186,554,888          189,846,822
                                            ---------------      ---------------

           Total loans                        1,175,733,647        1,081,723,710
     Allowance for loan losses                   (8,493,117)          (8,055,432)
                                            ---------------      ---------------
                                            $ 1,167,240,530      $ 1,073,668,278
                                            ===============      ===============
</TABLE>
<PAGE>

The changes in the allowance for loan losses follow:

<TABLE>
<CAPTION>
                                                     Three months ended
                                                          March 31,
                                               ---------------------------------
                                                  1999                  1998
                                               -----------          -----------
                                                        (Unaudited)
<S>                                            <C>                  <C>
Balance, beginning of period                   $ 8,055,432          $ 6,771,698
Provision for loan losses                        1,300,000            1,500,000
Loans charged-off                               (1,039,726)          (1,908,602)
Recoveries                                         177,411               44,920
                                               -----------          -----------
Balance, end of period                         $ 8,493,117          $ 6,408,016
                                               ===========          ===========

</TABLE>
                                      -12-
<PAGE>
NOTE 5  -         COMMITMENTS AND CONTINGENCIES

Commitments to developers providing end loans

         The Company has  outstanding  commitments  for various  projects in the
process of  completion.  Total  commitments  amounted  to  approximately  $478.0
million at March 31, 1999.  All  commitments  are subject to  prevailing  market
prices at time of closing  with no market risk  exposure  against the Company or
with firm back-to-back commitments extended in favor of the mortgagee.

Loans in process

         Loans in process  pending final  approval  and/or  closing  amounted to
approximately $153.7 million at March 31, 1999.


Commitments to buy and sell GNMA certificates

         As of March 31, 1999,  the Company had open  commitments  to issue GNMA
certificates of approximately $118.8 million.


Commitments to sell mortgage loans

         As of March 31, 1999 the Company had commitments to sell mortgage loans
to third party investors amounting to approximately $76.9 million.


Lease commitments

         The Company is obligated under several noncancellable leases for office
space and equipment rentals, all of which are accounted for as operating leases.
The leases expire at various dates with options for renewals.


Other

         At March 31,  1999,  the  Company  is  liable  under  limited  recourse
provisions  resulting from the sale of loans to several  investors,  principally
FHLMC. The principal balance of these loans,  which are serviced by the Company,
amounts to approximately  $567.8 million at March 31, 1999.  Liability,  if any,
under the recourse provisions at March 31, 1999 is estimated by management to be
significant.


                                      -13-
<PAGE>

                                   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, thereunto duly authorized.


                                         R&G FINANCIAL CORPORATION



Date: November 5, 1999                   By: /S/ VICTOR J. GALAN
                                             -------------------
                                                  Victor J. Galan, Chairman
                                                  and Chief Executive Officer
                                                  (Principal Executive Officer)



                                         By: /S/ JOSEPH R. SANDOVAL
                                             ----------------------
                                                  Joseph R. Sandoval
                                                  Senior Vice President and
                                                  Chief Financial Officer
                                                  (Principal Financial and
                                                  Accounting Officer)