City National Bank

The parent of City National Bank on Tuesday added its name to the list of financial companies that want to exit the industry's strained partnership with Uncle Sam. Beverly Hills-based City National Corp. said it raised about $100 million by selling new shares to investors, and intended to put the money toward repayment of $400 million in government capital it received in November. "We'd like to repay the whole thing," said Russell Goldsmith, the company's chief executive.

He's the ultimate insider at the ultimate insider's bank, the place Frank Sinatra turned to for ransom money when his son Frank Jr. was kidnapped. Michael Jackson partied in his vault. Bram Goldsmith, 89, has seen it all at City National Bank. The son-in-law of one of the founders, he took the reins of the "bank to the stars" in the mid-1970s and remains chairman of the parent company to this day. Launched in 1954, City National's 58-year run stands out in an industry where small banks tend to get gobbled by larger rivals.

He's the ultimate insider at the ultimate insider's bank, the place Frank Sinatra turned to for ransom money when his son Frank Jr. was kidnapped. Michael Jackson partied in his vault. Bram Goldsmith, 89, has seen it all at City National Bank. The son-in-law of one of the founders, he took the reins of the "bank to the stars" in the mid-1970s and remains chairman of the parent company to this day. Launched in 1954, City National's 58-year run stands out in an industry where small banks tend to get gobbled by larger rivals.

Southern California's regional banks have put many of their loan problems behind them and are reporting solid results for the second quarter despite the sluggish economy and record low interest rates that are pinching lending profits. The latest positive surprise arrived Thursday, when City National Bancorp reported net income of $54.8 million, or $1.01 per share, up 15% from $47.5 million, or 88 cents, a year earlier. Even excluding one-time gains, the results beat Wall Street's expectations of 88 cents.

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.

Beverly Hills-based City National Bank said Thursday that it would pay a $750,000 fine to settle an investigation by federal regulators into its compliance with money-laundering laws. The City National Corp. subsidiary, which caters to businesses and wealthy individuals, disclosed in January that it was in talks with regulators over its practices related to the Bank Secrecy Act.

City National Bank said it agreed to buy San Diego-based North American Trust Co. from its parent, London Pacific Group, for $11.5 million cash. The bank, a subsidiary of Beverly Hills-based City National Corp., will merge the trust company into its own trust and investments division. The combined unit would manage $14.2 billion in assets. The transaction is expected to close before Dec. 31, pending regulatory approval. Shares of City National fell $1.19 to close at $31.

City National Bank, the state's ninth-largest bank, has reopened its county escrow service department in its Newport Beach regional office after a 10-year hiatus. Unlike many larger banks that are curtailing escrow activities, City National is aggressively seeking more escrow business, said Karen Golberg, a bank spokeswoman. Last year, the escrow business generated $3 million in fees, about 1% of the bank's gross income.

For years, City National Bank has been known as the bank to the stars. Frank Sinatra went there in 1963 for the $240,000 ransom demanded by his son's kidnapers. Business managers deposit the earnings of some of Hollywood's biggest names there. Its customers have included Steven Spielberg, Kirk Douglas and the Marx Brothers. The chief executive's son even runs a production company, Republic Pictures. Lately, however, City National has been a falling star.

Can a $400-million injection of federal bailout money to the "bank to the stars" in Beverly Hills really help revive the troubled U.S. economy? That's one of the questions the Treasury Department's inspector general is asking in a review of the decision to award bailout funds to City National Bank, The Times has learned. The inspector general's examination of the funding for City National reflects growing concern in Washington about whether the banking bailout is working.

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.

City National Bank is southbound — again. The Los Angeles private and business bank, with long-standing ties to Hollywood and 20% of its profit from the entertainment industry, has opened an office in Atlanta. Atlanta has become a hub for Christian music and for other entertainers, with actor-entrepreneur Tyler Perry and rappers Sean Combs and Ludacris among those calling it home. Georgia also has tax incentives that have drawn movie and TV crews south, said Martha Henderson, City National's executive vice president for entertainment.

Declaring that it is now stronger than before the recession, Los Angeles-based City National Corp. reported 37% higher fourth-quarter earnings, even after two large one-time charges, and doubled its dividend to shareholders. The parent of City National Bank said after the close of trading Thursday that it earned $39.7 million, or 74 cents a share, up from $29.1 million, or 38 cents, in the final quarter of 2009. Excluding the two one-time charges, fourth-quarter net income totaled $47.1 million, or 88 cents a share, the bank said.

Los Angeles-based City National Bank, known for its Hollywood ties, has become a fixture on Broadway as well, providing financial services to about one-third of the shows on the Great White Way. The City National Corp. unit said Tuesday that it had opened a branch on New York's Times Square to serve Broadway businesspeople and other clients of the bank who live or do business in New York. It is City National's second New York branch. The bank, whose private banking business caters to wealthy clients, opened an office on Park Avenue in 2002.

A Southern California financial services veteran is launching a fresh bank-buying spree, adding to a wave of private money flooding into California community banks despite the state's high unemployment and depressed real estate. Stephen H. Gordon, who founded Irvine-based Commercial Capital Bancorp in 1998 and sold it to Washington Mutual Inc. for nearly $1 billion in cash in 2006, heads an investment group that agreed this week to pump $460 million into Bay Cities National Bank, a five-branch Redondo Beach institution in need of capital.

Los Angeles-based City National Bank, the largest bank headquartered in Southern California, got a little bigger late Friday by acquiring a failed San Diego financial institution immediately after it was seized by federal regulators. Under a deal with the Federal Deposit Insurance Corp., City National agreed to assume all $250 million of deposits of the local customers of 1st Pacific Bank of California. 1st Pacific's six branches will reopen Monday and continue to operate under 1st Pacific's name until they are rechristened as City National Bank offices in the next few months, said City National spokesman Cary Walker.

An inspector general's audit has found no wrongdoing in the U.S. Treasury Department's $400-million investment of bailout funds in Los Angeles-based City National Bank, according to people familiar with the report. The audit, which is expected to be made public as soon as today, was launched late last year by Treasury Department Inspector General Eric Thorson amid concerns over how and why banks were chosen to receive bailout money. Its focus was whether Treasury officials properly followed the rules established in October when the controversial $250-billion banking bailout was announced as the largest component of the $700-billion federal Troubled Asset Relief Program.

When City National Corp. accepted a $400-million investment from the U.S. Treasury during last year's economic free fall, the regional bank said it was well capitalized and didn't really need the money. And as the economy stabilized this year, the parent of City National Bank raised $550 million in additional capital by selling stock and bonds, with Chief Executive Russell Goldsmith expressing eagerness to repay the debt. On Wednesday, regulators granted half of City National's wish, allowing it to repurchase $200 million of the preferred stock it had sold to the Treasury.

Two more loss-battered Southern California banks were shut down by regulators Friday and immediately sold to two of the largest financial institutions based in the region. Stung by defaults on tricky adjustable mortgages, 80-year-old First Federal Bank of California was closed by federal savings and loan regulators, with its 39 branches to reopen today as part of OneWest Bank. Pasadena-based OneWest, created early this year from the ashes of collapsed home lender IndyMac Bank, agreed to assume all of First Federal's deposits, so no customers will lose money, the Federal Deposit Insurance Corp.