How Citizens Financial positioned itself to scoop up private bankers from First Republic
Good morning. I think it’s safe to say we’ve all heard a quote or anecdote about the benefits of always being prepared for an opportunity. I’ve found that philosophy to be true, and I think Citizens Financial Group provides a tangible example.
Citizens, headquartered in Providence, R.I., has $222 billion in assets as of Dec. 31, and is the 14th-largest bank in the U.S. I recently had a conversation with John F. Woods, vice chair and CFO at Citizens, for the latest edition of Fortune’s Future of Finance series.
“For a number of years, one of our strategic objectives has been to be able to serve high-net-worth individuals,” he told me. “We did that a while back when we acquired a company called Clarfeld. That created capabilities to provide advice to the high-net-worth customer segments. But we had been unable to scale that platform because of the need to have enough bankers to interact with this customer segment. The opportunity arose when First Republic started to get into trouble last spring.”
First Republic Bank was closed by the California Department of Financial Protection and Innovation on May 1, 2023, with the FDIC appointed as receiver.
“We had an opportunity to bid on acquiring First Republic,” Woods explained. “We didn't win that bid—JPMorgan did. However, as part of that process, we became very attracted to the business model at First Republic. And a lot of the private bankers who worked at First Republic didn't want to work at a very large bank—that's the reason they worked at that bank in the first place.”
The conversation with a handful of people accelerated to about 150 people hired as private bankers to work in California, Boston, New York, and Florida, Woods said. The bank announced earlier this month the hiring of Michael Cherny as head of wealth management advisors and Tom Metzger as head of private wealth managers. Citizens has opened its first private-banking office in Boston and has plans to open additional offices in 2024, including in Palm Beach, Fla., and in Mill Valley, Calif., in the spring.
Woods expects the private bank is going to generate significant returns. “We just formally launched [the private bank] in the fourth quarter of 2023, and we have over a billion dollars of deposits already,” he told me.
During our conversation, Woods also talked about how the CFO role is changing: “The evolution of the CFO role over the past decade or more involves an intensifying expectation that the CFO is a partner to the CEO and to the business unit leaders on deriving strategy.”
You can read the complete Future of Finance interview here.
Sheryl Estrada
sheryl.estrada@fortune.com
This story was originally featured on Fortune.com
