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City National Bank poised to buy investment firm

City National Bank plans to acquire Rochdale Investment Management, sources say.

April 25, 2012|By Walter Hamilton, Los Angeles Times

City National Bank is buying its second company in three days, acquiring a New York investment firm in an expansion of the bank's growing wealth-management business.

The Los Angeles bank is expected to announce Wednesday that it is purchasing privately held Rochdale Investment Management, according to people familiar with the deal.

Rochdale manages nearly $5 billion for high net worth investors; the deal would push the total assets that City National oversees to more than $60 billion. Rochdale focuses on clients with investable assets of $1 million to $10 million. It also manages six mutual funds.

Once the deal is completed, Rochdale will be integrated into City National Asset Management, which will be renamed City National Rochdale Investment Management, said the people, who said they were not authorized to speak.

The business is expected to be led by Rochdale's current chief executive, Garrett D'Alessandro.

Terms of the deal were not known. On Monday, the bank announced the purchase of First American Equipment Finance, a Rochester, N.Y. equipment-leasing company.

City National is the largest commercial bank based in Southern California, with $24 billion in total assets. The company is best known for its long-standing ties to the entertainment industry and has been referred to as the "bank to the stars."

At a time when many large competitors continue to struggle with problems stemming from the 2008 global financial crisis, City National has benefited from its solid financial footing.

The bank's parent company, City National Corp., reported a 17% jump in first-quarter earnings last week. Its stock is up 19% this year, outdistancing the 10.1% increase in the Standard & Poor's mid-cap 400 index, as well as the 11.6% gain in the index's financial subsector.

With profits squeezed by interest rates that are at generational lows, financial institutions of all sizes have sought to broaden their offerings in higher-margin businesses that generate reliable fee-based income.

City National has steadily expanded its banking and investment-management units.

It has bought four failed banks from the Federal Deposit Insurance Corp. in the last three years, and in the last year opened branches in Nashville and Atlanta to serve entertainment industry clients.

City National hired several bankers in Seattle last month who specialize in the financing of restaurant franchises.

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