Pacesetter: City National Bank

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Beverly Hills-based City National Bank remained the largest bank headquartered in L.A. County. Its assets were $16 billion as of June 30, up $700 million from a year ago.

City National was one of the first banks to receive preliminary approval to receive an investment from the U.S. Treasury Department’s Capital Purchase Program’s bailout funds. The Treasury will invest $395 million in the company’s preferred stock.

The investment will help the bank expand existing client relationships, add customers and make selected acquisitions. The investment will increase City National’s Tier 1 ratio, which is a measure of a bank’s capital as a percentage of risk-weighted assets, from 9.4 percent to 12 percent.

The bank reported net income of $16.6 million for third quarter 2008. It has reported $96 million in year-to-date net income. It reported its 62nd consecutive profitable quarter.

Nevertheless, the bank has had to deal with charge-offs related to loans made for residential acquisition, development and construction. It recorded a $35 million provision for credit losses in third quarter 2008, the same figure as in the second quarter. It reported net charge-offs of $12.8 million in the third quarter, down from $18.9 million the previous quarter.

City National Bank is a wholly owned subsidiary of City National Corp. It was founded in 1953 and now operates 62 offices, including 15 full-service regional centers. The company has eight majority-owned investment affiliates that manage or administer $52.4 billion in client investment assets, including more than $33 billion under direct management.

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