US-based Citizens Financial Group has signed an agreement to acquire Franklin American Mortgage Company to expand its mortgage banking business.

Franklin American Mortgage managed a $41.4bn mortgage servicing portfolio as of 31 March 2018 and generated about $13.7bn in annualised originations for the first quarter of this year.

The acquisition of Franklin American Mortgage is expected to triple the size of Citizens Financial’s off-balance sheet mortgage servicing portfolio.

The transaction is also set to more than double Citizens’ origination platform while considerably diversifying its origination capabilities with the addition of correspondent and wholesale channels.

Upon completion of the transaction, Citizens will emerge as a top-15 bank-owned, residential mortgage servicing and origination platform.

The transaction will also add nearly 200,000 servicing households, more than 600 correspondent relationships and over 1,000 wholesale-broker relationships.

Citizens vice chairman and head of consumer banking Brad Conner said: “This transaction 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.

“Franklin American Mortgage’s strong history of excellence in customer service is a great cultural fit with our organization and we are excited to welcome a new group of colleagues to Citizens.”

The combined entity will be headed by Eric Schuppenhauer, current Citizens president of home mortgage.

After the transaction is closed, Scott Tansil, CFO and COO of Franklin American Mortgage will spearhead the acquired correspondent and wholesale origination businesses.

Pursuant the terms of the asset purchase agreement, Citizens’ wholly-owned subsidiary, Citizens Bank will acquire assets with a net book value of about $488m.