American General Financial Inc. has agreed to pay $1.5 billion for a “substantial portion” of the consumer branch loans issued by Equity One.
American General Finance, Evansville, Ind., is part of American International Group Inc., New York. It has $27 billion in assets and about 1,550 offices.
Equity One, a unit of Popular Inc., San Juan, Puerto Rico, makes loans secured by real estate, home improvement loans and unsecured loans.
American General Finance and Popular say they hope to close on the deal early this year.
American General Finance may hire some Equity One employees and keep some Equity One branch offices, but “Equity One will close all remaining consumer branches,” Popular says. “Workforce reductions at Equity One will result in the loss of employment for those employees at the consumer services branches not hired by American General Finance … as well as for other related support functions. “
Equity One will provide severance pay and outplacement help for workers whose jobs are eliminated, Popular says.
“We are doing the things we have to do in the U.S. mainland as we focus on our core banking franchise,” Popular Chairman Richard Carrion says in a statement about the deal.
American General Finance is in a position to make the deal because “American General Finance’s business continues to perform quite well compared to many consumer lenders,” says Frederick Geissinger, chairman of American General Finance.