First Financial Caribbean Corp. is coming to the U.S. mainland in force. And if its 50-year-old chairman and chief executive, Salomon Levis, has his way, Puerto Rico's leading mortgage bank will have a major impact on mortgage originations in Hispanic communities here.

While First Financial expects to successfully penetrate the overall U.S. mortgage market, it sees its real niche in the fast-expanding Latin communities. By some estimates, the U.S. Hispanic population, now about 22 million, will reach 30 million before the year 2000.

Through its HF Mortgage Bankers division and Doral Mortgage Corp., First Financial has about 40% of the mortgage market in Puerto Rico. The company, which has 17 offices on the island and one in Orlando, Fla., originates, sells, and services mortgage loans.

Feels It Can Compete

First Financial's plans for U.S. expansion appear ambitious, but the company obviously believes it can compete with the best on the mainland.

"At Countrywide, the No. 1 independent mortgage company in the U.S. and the No. 1 mortgage lender, it now takes about 45 to 60 days to close a loan," Mr. Levis said. "In Puerto Rico, we take anywhere from 15 days to 30 days. So right now we are being more productive than the U.S leader."

Some industry observers have expressed concern that First Financial is expanding into the United States when a rise in interest rates -- which typically depresses mortgage originations -- is expected.

Mr. Levis is optimistic about the U.S. Hispanic market. "Our dominance of the culture, the language, and the fact that we understand the peculiarities of the Latin people will provide an advantage to us since, at the same time, we will be the best-capitalized Hispanic company in the U.S."

"I think we can do very well in Miami. And we also are looking into New York where many Puerto Ricans are asking us to open an operation."

Sees U.S. Push as Key

Mr. Levis said geographic expansion is key to the $426 million-asset company's success because its market in Puerto Rico is limited and it must go to the mainland to continue growing at its current pace.

Mr. Levis said the timetable for expansion might depend on U.S. acquisition activity.

In mortgage loans, First Financial has been competing effectively with large commercial banks in Puerto Rico. "Right now, Citibank, to give you an idea, will be closing $150 million in loans this year against the $1.3 billion we expect to finish with this year," he said. "Banco Popular, by far the largest commercial bank in Puerto Rico, with more than 137 branches, will be closing about $300 million in residential loans."

"For this year, our goal for mortgage originations was $750 million," Mr. Levis said. "Right now we have already surpassed that goal. We are over one billion and we expect to finish the year with $1.3 billion."

A Tendency to Refinance

Mr. Levis is quick to agree that First Financial has benefited from the current low-interest-rate environment. "I think that's an important factor, but earlier in the year -- with interest rates about 200 basis points above what we have now -- we still were able to close over $500 million in loans," Mr Levis said. "In Puerto Rico we have a tendency to refinance homes as a means of consolidating debt. The use of the home as a source of additional cash is more common in Puerto Rico than in the U.S." First Financial's servicing portfolio has also been growing. The company, which had less than $1.2 billion in servicing three years ago, expects to finish 1993 at $2.2 billion -- all from originations.

First Financial reported that net income for the quarter ended Sept. 30 soared by 109% to $5,630,000, or $1.49 per fully diluted share.

First Financial dodged a bullet last weekend when voters elected to retain the island's commonwealth status.

Richard F. Bonini, executive vice president, said maintaining the status quo "leaves intact the tax and financial benefits that exist in Puerto Rico. It's a stabilized situation and we can look forward to those benefits. Our vision for the future is to be a full-service financial institution."

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