City National Bank will be opening a high-profile branch next week in the first two floors of the former First Interstate World Center, downtown’s tallest structure.
The tower is the former headquarters of First Interstate Bank, which was acquired by Wells Fargo Bank.
“It is fitting and appropriate that the building once again has the biggest independent bank,” said Russell Goldsmith, vice chairman and CEO of City National Corp., parent of the bank.
Sanwa Bank California is currently the largest bank headquartered in Los Angeles, but it is not considered independent, as it is owned by Sanwa Bank Ltd. of Japan.
City National does not have plans to move its Beverly Hills headquarters downtown, nor does it intend to transfer any of the financial services operations performed at the City National Bank building on Pershing Square to the First Interstate tower.
The bank plans only to open a retail branch on the ground floor of the building and a business loan center on the floor above.
Now called the Library Tower due to its close proximity to the Los Angeles County Library, the building suffered a 20 percent fall in occupancy when First Interstate pulled out.
According to building managers Maguire Partners, the building is now 92 percent full. The former First Interstate Bank branch, however, was vacant until City National opted to move in.
Goldsmith said the building was chosen for the site of the new downtown branch because of its strategic location to the blue-chip businesses on Bunker Hill.
News of the branch follows City National’s announced acquisition of Long Beach-based Harbor Bancorp. That deal, valued at $34.1 million, will push up City National’s total assets to $5 billion and increase its presence in Southern California to 39 branches, up from 23 a year ago. In the second half of 1996, the bank bought both Riverside National Bank and Ventura County National Bancorp, greatly expanding its geographic presence.
City National Corp. saw net income for the second quarter rise 22 percent to $19.6 million. Second quarter return on assets was 1.67 percent, compared with 1.73 percent a year earlier.
“Their management team has been doing fine work,” said Lawrence Vitale, banking analyst at Bear Stearns & Co. “They are seeing good growth, good profits and good returns.”
City National’s share price on the New York Stock Exchange has risen by more than 50 percent since the start of the year, to above $30.
With City National growing at a fast pace, some analysts have speculated that the bank is a prime candidate for acquisition by a larger institution. Goldsmith, however, said the bank is happy to remain independent.
“These rumors have been around for 25 years, we’re getting used to it,” Goldsmith said. “We’ve been growing dynamically as an independent bank.”
As a mid-sized, business-oriented bank, Goldsmith said City National fills an important niche in Los Angeles business community.
“Very few banks focused on Southern California are big enough to serve the needs of successful businesses,” he said.