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Citizens Financial Closes Clarfeld Financial Advisors Buyout

Zacks Equity Research

Recently, Citizens Financial Group, Inc. CFG completed the buyout of Tarrytown, NY-based Clarfeld Financial Advisors, LLC, for an undisclosed amount. The deal is in line with Citizens’ strategic plan of trimming expenses, expanding its wealth management product offerings and getting digitized with innovative technology.

“The completion of the Clarfeld Financial Advisors acquisition is a significant milestone in the growth of our wealth management business,” said John Bahnken, president and chief executive officer of Citizens Bank Wealth Management. “The addition of Clarfeld’s highly skilled team and broad range of advisory services strengthens our existing platform, enhancing our ability to provide a full suite of family office, investment, financial planning and tax and estate planning services for existing and new clients,” Bahnken noted further.
Terms of the Deal

On the deal’s closure, Clarfeld transformed into a unit of Citizens Bank Wealth Management and will continue to work under its current brand name. Notably, Citizens Bank Private Wealth Management will be combined with Clarfeld.

Further, Clarfield’s Robert A. Clarfeld will be appointed as the CEO of Citizens’ high net worth and ultra-high net worth businesses.

With $6.6 billion of assets under management (AUM) and $900 million of assets under administration (AUA) as of Sep 30, 2018, Clarfeld is a leading wealth-management firm. On the other side, Citizens Bank Wealth Management has AUM worth $7.9 billion and $26.5 billion of total AUM/AUA. Therefore, on closure of the deal, the combined entity will have around $14.4 billion of AUM and $34.1 billion of AUM/AUA.

Similar Deals

In August 2018, Citizens concluded the buyout of Franklin American Mortgage Company. The all-cash deal, announced in early June 2018, was valued at $511 million. Franklin, TN-based Franklin American Mortgage was a well-diversified and nationwide provider of mortgage servicing and origination, with a leading position among private, non-bank mortgage companies.

Bottom Line

Citizens’ inorganic growth activities reflect capital strength and its efforts to bolster performance. Also, it has diversified revenue sources which are likely to support the bank’s financials. Additionally, the company will benefit from improving conditions in the domestic economy.

Shares of Citizens have lost around 30.1% in the past year compared with the 22% decline witnessed by the industry it belongs to.


Currently, Citizens carries a Zacks Rank #3 (Hold).    

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