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JENKINTOWN, PA-American Financial Realty Trust signed formulated price contracts with three community and regional banks based in Florida. Under the contracts, the locally based financial REIT agrees to buy all branches that each of the banks intends to vacate at a price based on an appraisal formula. Each agreement is for a one-year term.

The banks are: Casselberry, FL-based R-G Crown Bank, which is an operating subsidiary of R-G Financial Corp., a publicly traded bank holding company based in San Juan, Puerto Rico; U.S. Century Bank, which is a privately held banking company based in Miami; and Bradenton, FL-based Coast Financial Holdings, which is the public holding company for Coast Bank of Florida.

No number of anticipated vacancies was disclosed. R-G Crown operates 33 locations. This February, it acquired 18 former South Trust Bank branches, including one in Augusta, GA, from Wachovia, which was required by federal regulators to dispose of them in order to buy South Trust. U.S. Century Bank, which was founded in 2004, has seven locations and, in January, announced plans to add three to four more this year. As of Dec. 30, 2004, Coast Financial Holdings operated in seven locations and announced plans to open four more branches this year.

An AFR statement says the branch vacancies may result from various factors, including strategic business decisions and redundancies resulting from mergers and other corporate transactions. The formulated price contracts provide for certain branch exceptions, such as for properties with environmental or structural defects.

Typically under such contracts, AFR leases the acquired branches to other banks. Branch locations that can't be leased to other banks are generally leased or sold for alternative retail or other uses.

"The acquisition of vacant bank branches through formulated price contracts is a core, and expanding, part of our business," says Nicholas S. Schorsch, AFR's president and CEO. Coincident with, but unrelated to these agreements, AFR makes some management shifts. James T. Ratner, SVP and CFO, was promoted to EVP for finance and corporate strategy. David J. Nettina, who recently joined AFR as chief real estate officer, added the CFO title and responsibilities. Robert J. Delaney, SVP for capital markets and corporate strategy, was promoted to EVP and COO-Europe with responsibility for developing European investment strategy and supporting AFR's existing banking clients' international needs. Glenn Blumenthal and Edward Matey Jr. were promoted to EVPs and continue as COO and general counsel, respectively.

In another unrelated matter, AFR completed its previously announced acquisition of an approximately 82,000-sf office building in Las Vegas that is 97% occupied with Bank of America as the major tenant. AFR paid approximately $24.3 million for the asset and, as part of the purchase, obtained about $17 million in 10-year financing at a fixed interest rate of 5.41%.

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AFR Inks Deals to Buy Vacated Bank Branches

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