5 Best Local Bank Stocks to Buy According to Hedge Funds

In this article, we will be taking a look at the 5 best local bank stocks to buy according to hedge funds. To read our detailed analysis of the banking industry, you can go directly to see the 11 Best Local Bank Stocks to Buy According to Hedge Funds.

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

Number of Hedge Fund Holders: 42

Citizens Financial Group, Inc. (NYSE:CFG) is the bank holding company for Citizens Bank, National Association. It provides retail and commercial banking products and services and is based in Providence, Rhode Island.

Betsy Graseck at Morgan Stanley reiterated an Overweight rating on Citizens Financial Group, Inc. (NYSE:CFG) shares on July 7, alongside a $33 price target.

There were 42 hedge funds long Citizens Financial Group, Inc. (NYSE:CFG) in the first quarter, with a total stake value of $384 million.

4. Fifth Third Bancorp (NASDAQ:FITB)

Number of Hedge Fund Holders: 44

Our hedge fund data for the first quarter shows 44 funds long Fifth Third Bancorp (NASDAQ:FITB). Their total stake value in the company was $466 million.

Fifth Third Bancorp (NASDAQ:FITB) is a diversified financial services company based in Cincinnati, Ohio. The company provides commercial banking, consumer and small business banking, and wealth and asset management services.

RBC Capital analyst Gerard Cassidy holds an Outperform rating on Fifth Third Bancorp (NASDAQ:FITB) shares as of June 15, alongside a $36 price target.

3. U.S. Bancorp (NYSE:USB)

Number of Hedge Fund Holders: 48

As of June 14, Gerard Cassidy at RBC Capital holds an Outperform rating on U.S. Bancorp (NYSE:USB) shares. The analyst also holds a $49 price target on the shares.

Operating as a diversified banking and financial services company based in Minneapolis, Minnesota, U.S. Bancorp (NYSE:USB) offers a range of financial products and services in the US. Its products and services include checking accounts, savings accounts, time certificate contracts, lending services, and more.

U.S. Bancorp (NYSE:USB) was spotted in the 13F holdings of 48 hedge funds in the first quarter, with a total stake value of $742 million.

In its first-quarter 2023 investor letter, ClearBridge Investments made the following comment about U.S. Bancorp (NYSE:USB):

“Our quality bias has always led us to gravitate toward banks with strong and diverse deposit bases; those we own tend to be the larger players, which we also expect to be the biggest beneficiaries from a flight to safety in terms of deposits. JPMorgan Chase comes to mind especially here, but so does Bank of America despite its weakness in March, as well as U.S. Bancorp (NYSE:USB), to which we added opportunistically in the quarter.”

2. Truist Financial Corporation (NYSE:TFC)

Number of Hedge Fund Holders: 48

Truist Financial Corporation (NYSE:TFC) is a banking company based in Charlotte, North Carolina. The company offers banking and trust services in the Southeastern and Mid-Atlantic US.

On July 6, Michael Rose, an analyst at Raymond James, upgraded shares of Truist Financial Corporation (NYSE:TFC) from Market Perform to Outperform. The analyst also announced a $36 price target on the stock.

Truist Financial Corporation (NYSE:TFC) had 48 hedge funds long its stock at the end of the first quarter. Their total stake value in the company was $1.1 billion.

Tweedy, Browne mentioned Truist Financial Corporation (NYSE:TFC) in its first-quarter 2023 investor letter:

“The Funds received very little in the way of return contributions from many of their financial, energy, media, and healthcare holdings. While it would appear that a crisis was avoided by the quick intervention of bank regulators in the US and Switzerland, some uneasiness still remains in the global banking community. This turmoil couldn’t help but have a negative impact on investor sentiment and in turn on Fund bank holdings such as Truist Financial Corporation (NYSE:TFC).”

1. The PNC Financial Services Group, Inc. (NYSE:PNC)

Number of Hedge Fund Holders: 55

The PNC Financial Services Group, Inc. (NYSE:PNC) is a diversified financial services company based in Pittsburgh, Pennsylvania.

As of June 14, Gerard Cassidy at RBC Capital holds an Outperform rating on The PNC Financial Services Group, Inc. (NYSE:PNC) shares, alongside a $148 price target.

There were 55 hedge funds long The PNC Financial Services Group, Inc. (NYSE:PNC) in the first quarter, with a total stake value of $807 million.

Artisan Partners mentioned The PNC Financial Services Group, Inc. (NYSE:PNC) in its first-quarter 2023 investor letter:

“We are taking advantage of the current weakness in bank stocks. In Q1, we purchased The PNC Financial Services Group, Inc. (NYSE:PNC) and US Bancorp. These are banks we have known for years. They are well-managed and have solid capital positions and liquidity. At the end of Q1, we had an ~7% weighting in banks consisting of PNC, US Bancorp and Bank of America. All 3 are among the 10 largest US banks. We believe the range of probabilities and long-term outcomes are tilted in our favor at current prices but are proceeding with caution for several reasons. First, while we believe deposit-runs have likely burned themselves out, there is a non-zero risk these runs spread wider than our base case. Second, we expect more regulation in coming years which will increase the cost of doing business, potentially in exchange for higher FDIC limits. Third, at the very least we expect banks to cease buybacks for the rest of the year to build up liquidity and capital ratios. There is an increasingly more likely outcome that banks issue equity capital and preferred stock once markets stabilize. Fourth, with the banking system in shock, it will likely retrench, which will constrict capital to the US economy. Coupled with the “long and variable lags” of Fed policy, this will slow US economic growth beyond what private credit markets can make up.”

See also 10 Best Bank Penny Stocks to Buy Now and 25 Largest Banks in the World by Assets.