Private Banking & Credit — United States

The US private banking landscape

The US is home to both the largest money-center private banks and a robust ecosystem of regional private banks, trust companies, and specialist lenders. The choice between them is not a single decision but a layered one: primary relationship, specialized lending, trust services, international capability, and often a backup relationship for redundancy.

Five institutional segments dominate the US high-net-worth and ultra-high-net-worth market:

Money-center private banks. J.P. Morgan Private Bank, Goldman Sachs Private Wealth, Morgan Stanley Private Wealth, Bank of America Private Bank, Citi Private Bank. Broad balance sheet, global capability, institutional depth. Minimums have drifted higher over the past decade; most now require $10M+ investable assets or $50M+ total relationship value for meaningful private banking service.

Trust-rooted private banks. Bessemer Trust, Brown Brothers Harriman, Northern Trust, U.S. Bank’s Ascent Private Capital Management, and the legacy US Trust now integrated into Bank of America. Strength in multi-generational trust administration, fiduciary services, and families with significant existing trust structures. Typically better fits for legacy wealth than for post-liquidity founders.

Regional private banks. City National (now part of RBC), BNY Mellon Wealth Management, and various others. Often more intensive personal service; more specialized in specific regions; generally smaller balance sheets than the money-center banks for the largest loans.

Private banking divisions of major trust companies. Specialized offerings from South Dakota, Delaware, and Nevada-based trust companies (Bessemer, Trustee Services, South Dakota Trust Company). Complement full private banking service with situs-specific trust administration.

Specialist lenders. Aircraft finance (GE Capital, PNC), art lending (Sotheby’s Financial, Bank of America Art Services, Athena Art Finance), yacht finance, private market secondaries lenders, and non-bank direct lenders against specific asset classes. For specific needs, these specialists often outperform generalist private banks.

What credit looks like for a US household

Securities-backed lines of credit (SBLOC). Standard at every major private bank. Typically 50–70% loan-to-value against liquid, high-quality public securities; lower LTV on concentrated or volatile positions. Rates historically priced at SOFR plus 100–250 bps for strong relationships. Tax-efficient liquidity that avoids realization events.

Jumbo and portfolio mortgages. Private banks offer mortgage products beyond what conforming loan limits allow. Terms often tied to investment relationship depth, borrowing rates can be meaningfully below retail mortgage rates for clients with substantial AUM at the bank.

Concentrated stock lending. Specialized lending against a concentrated single-stock position. Lower LTVs, specific covenants around market drops, and terms around lockup and secondary transactions for pre-IPO holdings. Goldman Sachs, J.P. Morgan, and Morgan Stanley are the typical providers for large (>$25M) concentrated stock lending.

Private business interest lending. Loans against interests in closely-held businesses. More structured and more expensive than marketable securities lending. Useful in specific circumstances, funding estate taxes on closely-held assets, bridging liquidity gaps before a planned sale.

Art and collectibles lending. Non-recourse lending against art collections. Typical LTV 30–50%. Specific providers dominate the market. Useful liquidity tool for collectors with high-value holdings.

Aviation and yacht financing. Specialized products typically sourced outside traditional private banking. Non-recourse options available; terms vary by aircraft or vessel type and use pattern.

Trust services inside US private banks

US private banks offer varying depth of trust services. The choice often drives the bank selection for families with significant trust structures.

Institutional trusteeship. Large banks serve as institutional trustees for trust structures. Offers continuity and compliance infrastructure; reduces family friction; adds cost and sometimes friction on distribution decisions.

Directed trust services. The bank serves as administrative trustee while investment management and distribution decisions are handled by outside fiduciaries (family members, investment advisors, trust protectors). Common in modern dynasty trust structures.

Private trust company formation. For families of sufficient scale, assisting in formation of a family-owned private trust company. Typically structured around South Dakota, New Hampshire, or Wyoming trust companies.

Charitable administration. Private banks administer private foundations and donor-advised funds for client families. Convenient consolidation; often higher cost than using dedicated DAF sponsors.

The geography problem

US private banking has meaningful geographic variation that clients often underestimate.

New York / Northeast. All major money-center banks maintain their strongest teams here. Particularly deep in capital markets, alternatives access, and legacy family services.

San Francisco / Bay Area. Strong for technology-sector concentrated stock management, pre-IPO planning, and post-liquidity founder services. Goldman and Morgan Stanley particularly strong here.

South Florida. The fastest-growing US private banking market. Reflects the relocation flow from New York and California. Most major banks have significantly expanded their presence. Less depth in alternatives than New York; strong service focus.

Texas. Houston (oil & gas wealth), Austin (technology wealth), Dallas (diverse wealth). Regional and money-center coverage varies significantly across the three cities.

Los Angeles. Deep client base; mid-tier institutional depth compared to New York or San Francisco.

Secondary markets. Chicago, Minneapolis, Seattle, Boston, Atlanta, Denver. Major banks maintain presence; depth varies.

International capability. For households with non-US assets or international residency, the money-center banks typically outperform regionals. J.P. Morgan, Citi, and Goldman have the deepest cross-border capability. UBS and Credit Suisse (now part of UBS) bring European private banking depth.

Fees and the incentive structure

US private banking economics skew heavily toward the investment management fee and away from the lending fee.

Investment management fees. Typically 50–125 basis points for equity portfolios, lower for fixed income, plus fund-level fees for any outsourced management. Significant revenue for the bank; clients who consolidate assets typically receive favorable lending terms in exchange.

Lending spreads. Modest spreads on securities-backed lending; higher on specialized products. Stand-alone lending relationships (borrowing without significant investment AUM) are generally priced less aggressively.

Capital markets fees. Block trades, structured products, and specific capital markets transactions carry transaction-based fees. Sophisticated clients negotiate specifically on these.

Alternative access. Access to proprietary hedge fund managers, private equity funds, and structured products often comes with additional fees (platform fees, fund-level fees, placement fees). The marketing emphasizes access; the economics often dilute the advertised benefit.

Family office services. Cash management, bill pay, consolidated reporting, and tax preparation are offered as add-on services. Typical cost 10–25 bps of AUM, sometimes packaged within a flat fee.

What the best US private banking relationships look like

A senior banker who actually knows the full picture. Not just the investment portfolio. The business, the trust structure, the real estate, the children, the plans for the next 24 months.

Credit pre-established. Securities-backed line, portfolio mortgage terms, and any specialized lending set up before the household needs it, not arranged reactively during a liquidity event.

Real authority on the relationship manager. The banker can actually decide things: a temporary covenant waiver, a pricing accommodation, an expedited loan approval. When things go wrong, good banks have real authority at the RM level.

Multi-bank setup, not single-bank concentration. Primary at the money-center bank, with a secondary relationship at a different institution for redundancy, international capability, or a specific asset class. Reduces counterparty risk and banker-turnover risk.

Transparent about proprietary products. The best relationships are clear about when a recommendation is a proprietary product (and at what fee layer) versus an external option. Clients who passively absorb proprietary products pay meaningfully higher effective fees.

Access to specialist teams. Trust officers, estate planning coordinators, tax specialists, insurance specialists. Available through the same banker rather than requiring separate relationship management.

Common failure modes

Following a banker without evaluating the institution. The banker who built the relationship moves firms. The client moves with them. Sometimes this is right; often the institutional capabilities of the new firm are meaningfully different and the move degrades service.

Over-concentration at one bank. All assets and all loans at a single institution means single counterparty risk, single banker risk, and single institutional risk. The 2008 crisis and 2023 regional bank failures both reminded wealthy households to maintain diversification at the institutional level.

Passive absorption of proprietary products. The private bank recommends its own hedge fund platform, its own structured notes, its own asset management. The client accepts without comparing external alternatives. Fees can compound to 200+ bps of drag on the proprietary allocation.

Missing international capability. A US-only private bank covering a household that develops non-US assets, children studying abroad, or eventual international residency. Late addition of international capability often means rebuilding relationships during a transition.

Confusion between banker and advisor. The banker’s economic incentives are the bank’s. An independent wealth advisor’s incentives are the client’s. Households that use the banker as their primary advisor often find advice skewed toward the bank’s products. The roles work better when separated.

Weak escalation. A banker with no real authority. When issues arise, operational problems, covenant questions, pricing disputes, the client gets passed up a chain of decision-makers they don’t know. Better relationships come with real authority at the RM level.

Where to go deeper

Peer conversation adds unusual value in private banking, the honest conversation about which bank actually delivered in 2008, 2020, or 2023 rarely happens in marketing materials. TIGER 21 and Long Angle members compare notes regularly. For specific lending needs (aircraft, art, concentrated stock), specialist referrals are best sourced through peer groups. See also Tax Strategy, US for the tax coordination that competent bankers should integrate with.