Citizens Financial Group, Inc. Completes Previously Announced Franklin American Mortgage Company Transaction

Citizens Financial Group, Inc. (NYSE: CFG or “Citizens”) today announced that its wholly-owned subsidiary, Citizens Bank, National Association (“CBNA”), has completed the acquisition of certain net assets of Franklin American Mortgage Company (“Franklin American Mortgage”), including a sizable mortgage servicing portfolio. Franklin American Mortgage Company is a highly-regarded national mortgage servicing and origination firm with a leading position among private, non-bank mortgage companies.

“We are pleased to announce the completion of the Franklin American Mortgage acquisition,” said Brad Conner, Citizens Vice Chairman and Head of Consumer Banking. “We believe this transaction creates tremendous value for Citizens and takes our mortgage business to the next level, expanding our reach and adding immediate scale in servicing as well as innovative correspondent and wholesale solutions. We welcome our new colleagues from Franklin American Mortgage and we look forward to providing exceptional customer service, along with enhanced products and services to help customers reach their potential.”

The addition of Franklin American Mortgage triples the size of Citizens’ off-balance sheet mortgage servicing portfolio, from $21.6 billion to approximately $65.3 billion, with a total servicing portfolio of approximately $83.1 billion including Citizens’ existing on-balance sheet mortgage portfolio. The purchase includes mortgage servicing rights valued at approximately $600 million.*

The combined mortgage business will be led by Eric Schuppenhauer, Citizens President of Home Mortgage. Scott Tansil, Chief Financial Officer and Chief Operating Officer of Franklin American Mortgage, will lead the correspondent and wholesale origination businesses headquartered in Franklin, Tennessee. Citizens expects to maintain a significant presence in Tennessee and Texas associated with the expanded distribution platform of the combined business.

Forward-Looking Statements

This document contains forward-looking statements within the Private Securities Litigation Reform Act of 1995. Statements regarding potential future share repurchases and future dividends are forward-looking statements. Also, any statement that does not describe historical or current facts is a forward-looking statement. These statements often include the words “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “goals,” “targets,” “initiatives,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future conditional verbs such as “may,” “will,” “should,” “would,” and “could.”

Forward-looking statements are based upon the current beliefs and expectations of management, and on information currently available to management. Our statements speak as of the date hereof, and we do not assume any obligation to update these statements or to update the reasons why actual results could differ from those contained in such statements in light of new information or future events. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation:

• Negative economic and political conditions that adversely affect the general economy, housing prices, the job market, consumer confidence and spending habits which may affect, among other things, the level of nonperforming assets, charge-offs and provision expense;
• The rate of growth in the economy and employment levels, as well as general business and economic conditions, and changes in the competitive environment;
• Our ability to implement our business strategy, including the cost savings and efficiency components, and achieve our financial performance goals;
• Our ability to meet heightened supervisory requirements and expectations;
• Liabilities and business restrictions resulting from litigation and regulatory investigations;
• Our capital and liquidity requirements (including under regulatory capital standards, such as the U.S. Basel III capital rules) and our ability to generate capital internally or raise capital on favorable terms;
• The effect of changes in interest rates on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgages held for sale;
• Changes in interest rates and market liquidity, as well as the magnitude of such changes, which may reduce interest margins, impact funding sources and affect the ability to originate and distribute financial products in the primary and secondary markets;
• The effect of changes in the level of checking or savings account deposits on our funding costs and net interest margin;
• Financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services;
• A failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors or other service providers, including as a result of cyber-attacks; and
• Management’s ability to identify and manage these and other risks.

In addition to the above factors, we also caution that the amount and timing of any future common stock dividends or share repurchases will depend on our financial condition, earnings, cash needs, regulatory constraints, capital requirements (including requirements of our subsidiaries), and any other factors that our Board of Directors deems relevant in making such a determination. Therefore, there can be no assurance that we will repurchase shares or pay any dividends to holders of our common stock, or as to the amount of any such repurchases or dividends.

More information about factors that could cause actual results to differ materially from those described in the forward-looking statements can be found under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017.

About Citizens Financial Group, Inc.

Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $155.4 billion in assets as of June 30, 2018. Headquartered in Providence, Rhode Island, Citizens offers a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. Citizens helps its customers reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas and solutions. In Consumer Banking, Citizens provides an integrated experience that includes mobile and online banking, a 24/7 customer contact center and the convenience of approximately 3,200 ATMs and approximately 1,150 branches in 11 states in the New England, Mid-Atlantic and Midwest regions. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings. In Commercial Banking, Citizens offers corporate, institutional and not-for-profit clients a full range of wholesale banking products and services, including lending and deposits, capital markets, treasury services, foreign exchange and interest rate products and asset finance. More information is available at www.citizensbank.com or visit us on Twitter, LinkedIn or Facebook.

*Servicing portfolio data as of June 30, 2018. Combined data as of June 30, 2018. Total combined mortgage servicing portfolio includes loans held on Citizen’s balance sheet.

CFG-IR

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