PROVIDENCE, R.I. -- Citizens Financial Group said Wednesday it earned $7.2 million in its third fiscal quarter, a 16% gain from the year-earlier period ending June 30.

Citizens, a wholly owned subsidiary of the Royal Bank of Scotland, attributed its improved results to "strong mortgage banking activity" and income from a newly acquired bank in southeastern Connecticut.

In the past 12 months, Citizens bought the 21-branch New England Savings Bank in Connecticut and the eight-branch Plymouth Five Cents Savings Bank in Massachusetts. Both were acquired from the Federal Deposit Insurance Corp.

The bank company, which had $5.3 billion of assets on June 30, also is waiting to close on its purchase of the Boston Five Bancorp, a healthy company with about $1.8 billion of assets.

The company's credit quality improved. Its provision of $5.4 million was down 16.7% from the year-earlier period and its reserve coverage for problem loans and leases grew to 97.9% on June 30 from 85.1% three months earlier.

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