US regional bank failures and block downgrades made for a rough 2023.
This year proved to be the most challenging year for the US regional banking industry since the 2008 global financial crisis. The second-largest bank failure in US history, Silicon Valley Bank, marked the beginning of a turbulent journey that the industry navigated throughout the year. Amid challenges that also included First Republic’s and Signature Bank’s failures and block downgrades for the industry by S&P and Moody’s in August, our winners showed resilience through prudent risk management and strategic market positioning.
Above all, these winning banks showed an unwavering commitment to safeguarding their customers’ assets, refraining from unwarranted risks in both favorable and challenging circumstances. The tenacity of our winners underscores the vital role of the regional banking industry in ensuring the smooth operation of the US banking system for resilient economic growth.
Mid-Atlantic: Fifth Third Private Bank
In this unusually volatile year for US regional banks, Fifth Third Private Bank managed to stay ahead of the competition and post a solid financial performance, keeping its customers safe while others saw growing risks.
With revenue of $516.6 million in 2022; a substantial increase in client balances to $578 billion, up 6% year over year (YoY); and assets under management (AUM) reaching $345 billion, up 14% YoY; the bank takes our award for the Mid-Atlantic region.
Fifth Third Private Bank’s unique value proposition includes a complimentary wealth strategy as part of the customer experience, demonstrating dedication to clients’ financial success.
Additionally, the bank’s Business Transition Advisory Team offers expert guidance to business owners during transitions, solidifying legacies. This talented and credentialed team’s extensive knowledge of local markets underscores the bank’s ability to serve clients effectively for over 160 years.
Midwest: Wells Fargo Private Bank
Under CEO Charlie Scharf’s guidance, Wells Fargo has implemented a deep transformation in its private banking division.
As part of a larger plan that started with folding its Abbot Downing business into its private bank business in 2021, the banking giant has been investing heavily in enhancing its offering for high net worth (HNW) clients.
This endeavor is now beginning to pay off, with AUM rising 9% YoY in the second quarter of 2023 and the prospects for the next few years looking increasingly brighter.
“We anticipate a significant market share growth opportunity over the next three to five years,” says Barry Sommers, head of Wells Fargo’s Wealth and Investment Management division.
Wells Fargo’s strategy includes a strong push to improve offerings and staffing. Recently, the private bank successfully integrated teams from Morgan Stanley, Raymond James Financial, and JPMorgan Chase.
According to Sommers, the independent adviser program is the bank’s most rapidly expanding wealth channel.
Northeast: Fieldpoint Private
Although the regional banking market saw increased volatility in the year’s first quarter, Fieldpoint saw above-average growth.
Not only did the Greenwich, Connecticut—based giant merge with New York–based Dominari Financial, becoming Dominari Securities, but it also managed to increase its penetration among HNW and ultrahigh net worth (UHNW) customers based in the Northeast region of the US by showing customers what sound financial management is all about.
As a result of the year’s best-in-breed management, Fieldpoint Private maintained robust capitalization and compliance with regulatory standards throughout the year’s fluctuations.
Moreover, the bank’s unwavering commitment to prudent risk management is reflected in its allocation of just 12% of total assets to available-for-sale securities and a mere 0.33% to held-to-maturity securities, setting it apart from other financially strained banks with higher asset allocation ratios.
Southeast: Truist Bank
Despite the ongoing difficulties for US regional banks, Truist Bank has managed to stay ahead of the competition by mixing well-chosen growth investments with sound financial planning.
Consequently, the Charlotte, North Carolina–based bank has significantly increased its asset quality throughout the year without letting go of the key element in the private bank offering: technology.
In July, Truist became part of the IBM Quantum Accelerator program, aiming to apply quantum computing within the banking industry in partnership with the technology giant.
Additionally, the bank improved its margins by freeing roughly $750 million yearly in operating costs.
Southwest: PNC Private Bank
While others struggled to maintain a healthy balance sheet in the face of lingering high interest rates and heightened intermarket volatility, PNC Private Bank kept on growing—and so did the customers in the Southwest region who trusted the bank with their investments.
With total assets now at $111 billion, approximately half of which serve UHNW individuals, the bank has continually expanded its AUM base, highlighting an impressive $8 billion surge in discretionary assets within a single year.
Moreover, despite the challenging year, PNC Private Bank continued improving its customers’ experience. The bank made strategic investments in cutting-edge technology and grew its staffing.
West: City National Bank
Trusting your investments to a regional private bank that has a solid balance sheet and a great credit score has never been as crucial as this year, amid the increasing headwinds that have taken a toll on the US market since the Silicon Valley Bank failure in March.
That’s where City National, our Best Private Bank in the West, gets ahead of the competition. With 75 offices spread across the US, including regional centers in Southern California and the San Francisco Bay Area, the Los Angeles–based financial institution has not only stayed resilient in the face of heightened bank volatility in its state but also grew in terms of total assets and AUM, gaining significant market share while others dwindled.
The bank also takes pride in having a solid A+ and A2 credit rating affirmed at Fitch and Moody’s, respectively, as the agencies downgraded multiple banks throughout the year.