10 Best Local Bank Stocks To Invest In Now

2. Citizens Financial Group, Inc. (NYSE:CFG)

Number of Hedge Fund Holders In Q2 2024: 47

Citizens Financial Group, Inc. (NYSE:CFG) is a Rhode Island based consumer and commercial banking firm. Additionally, the firm also has a private banking division which allows it diversification for its deposit base and income. Citizens Financial Group, Inc. (NYSE:CFG) has a diversified loan portfolio as well, with exposure to commercial real estate limited to 20% as of Q2. An additional 31% of its loans are to non real estate commercial entities and industrial firms, which are more likely to make timely payments than consumer borrowers. However, Citizens Financial Group, Inc. (NYSE:CFG) also holds $11 billion in education loans, and these might see trouble depending on their type if the US government’s student borrower forgiveness programs are expanded. Unlike some other banks though, Citizens Financial Group, Inc. (NYSE:CFG) enjoys the advantage of having 21% of its deposits being non interest paying demand deposits which expands its ability to earn revenue at a time when the US banking industry is expected to face higher costs and dropping interest income. Additionally, its CET1 ratio of 10.7% allows Citizens Financial Group, Inc. (NYSE:CFG) the ability to boost its shares by having room to make buybacks.

Citizens Financial Group, Inc. (NYSE:CFG)’s management shared key details for its private bank during the Q2 2024 earnings call:

“Finally, we’re building a premier private bank, and that is going very well and gaining momentum.

We’re growing our client base and now have about $4 billion of attractive deposits, a $1.6 billion increase from the prior quarter, with roughly 30% non-interest bearing. Also, we are now at $1.4 billion of loans and continuing to grow. We recently opened private banking offices in Mill Valley, California and Palm Beach, Florida, and we are opportunistically adding talent to bolster our banking and wealth capabilities with our Citizens Wealth Management business as the center piece of that effort. We added two exceptional asset management teams in the second quarter, one from San Francisco and the other from Boston, bringing the total private bank AUM to $3.6 billion, well on our way to hit our $10 billion target by the end of 2025. Importantly, our private bank revenue increased 68% to about $30 million in the second quarter, and we are on track to break even on the bottom line later this year.”