PROVIDENCE – Citizens Financial Group Inc. has entered into an agreement to have Citizens Bank N.A. acquire the assets of Tennessee-based Franklin American Mortgage Co. for $511 million in cash, the company announced Thursday.
Citizens said that as of March 31, Franklin American Mortgage managed $41.4 billion mortgage servicing portfolio, and that its assets had a net book value of $488 million. With the deal, Citizens expects to grow its off-balance sheet portfolio of mortgages to about $61.6 billion, which will be in addition to the bank’s on-balance sheet mortgage portolio of about $17.3 billion.
The company had invested in “platform innovation” with “unique proprietary technology,” which Citizens says provides a “excellent customer experience.”
“We are extremely pleased with the financial and strategic opportunities the acquisition of Franklin American Mortgage creates for Citizens,” said John F. Woods, Citizens’ chief financial officer, in a statement. “This transaction fits perfectly with our objective of improving shareholder returns and delivering against our key strategic imperatives. The combined platform will provide significant additional fee income opportunities with enhanced channel diversification, as well as opportunities to realize efficiency gains.”
Franklin American Mortgage has approximately 900 employees, according to Citizens, which said that it expects to maintain a significant presence in Tennessee and Texas associated with the expanded distribution platform of the combined business following the acquisition. Dan Crockett, owner, president and CEO of Franklin American Mortgage, will remain involved in the business in an advisory role with Citizens Home Mortgage.
Citizens did not specify if it intends on maintaining all of the roughly 900 Franklin American Mortgage employees but did say it wanted to leverage the talent of to-be-acquired team and integrate them into the Citizens company.
“We view this transaction as an opportunity to add scale and capital to the outstanding platform and customer-centric culture that our employees have created,” stated Crockett. “Citizens shares our deep and enduring focus on delivering for customers, as well as our strong commitment to colleagues and communities, which Franklin American Mortgage employees have long embraced. Together, we’ll be able to increase our positive impact on customers and grow the business platforms that are a great source of pride for us.”
The transaction is expected to close in the third quarter of 2018.
Chris Bergenheim is the PBN web editor.
