Acquisitive Beverly Hills, Calif.-based City National Bank has been an aggressive buyer of regional banks over the last 12 years. Now, City National may be on the prowl once again, thanks to a $395 million cash infusion from the U.S. Treasury.
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City National's CEO Russell Goldsmith was quick to say in a statement that the bank is in no danger of failing. Additionally, the Office of the Comptroller of the Currency did not specifically instruct it to apply for the federal aid.
But City National like many other healthy banks are taking the government's money to help stimulate liquidity and attempt to make their balance sheets even stronger. On a pro forma basis, the Treasury investment will increase City National's Tier 1 capital ratio to 12% from 9.1%, according to the firm.
The government will receive preferred shares and warrants for its capital infusion. The bank said in addition to increasing its lending, the additional capital would allow it to pursue unspecified "opportunities in this environment," including "acquisitions that make sense."
City National has purchased eight banks in Northern and Southern California and one in Nevada over the last dozen years, but Goldsmith said "there's nothing on our plate at the moment." - Gerald Magpily
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