Citizens’ 3Q boosted by mortgage acquisition
Citizens Financial Group on Friday reported higher profits as a recent acquisition helped the Providence, R.I., company buck the industrywide trend of lower mortgage banking fees.
Net income was $443 million during the third quarter, or 27% more than a year earlier. Diluted earnings per share were 91 cents, or 2 cents higher than an estimate of analysts compiled by FactSet Research Systems.
Chairman and CEO Bruce Van Saun highlighted revenue growth and positive operating leverage, and he made note of the recent launch of the $158.6 billion-asset company’s national digital bank.
“We are doing a good job with balance sheet management, as we remain highly prudent and selective on where we deploy capital to support loan growth, and we are building new deposit-gathering capabilities, such as Citizens Access,” Van Saun said in a news release.
Noninterest income increased 9% to $416 million on stronger fees from cards and investment services. The company’s acquisition of Franklin American Mortgage in August also boosted mortgage banking fees, which rose 81% to $49 million.
Net interest income rose 8% to $1.1 billion as the net interest margin climbed 14 basis points. Total loans climbed 4% to $114 billion thanks to steady increases in the company’s commercial and retail portfolios.
Noninterest expenses increased 6% to $910 million, mostly from higher costs associated with salaries and outside services.