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City National Consolidating Its County Beachhead

After three years of ad hoc growth stemming from regional acquisitions, Beverly Hills-based City National Bank is getting ready to reorder to its Orange County operations.

In November, the bank,which has grown its OC deposit base 92% since 1997 to $315 million today,will move its corporate operations, private banking, international and trust operations, and a leasing division into 17,000 square feet on the first floor of the Lakeshore Towers II building under construction next to the San Diego (I-405) Freeway near Von Karman Avenue.

Those operations now are housed in bank branches in Irvine and La Palma. The bank also will operate a new branch from the Lakeshore Towers.

While City National has grown here primarily as the result of acquisitions of regional banks with branches in OC, it also opened a branch in the Irvine Spectrum late last year to cater to tech businesses there. It hopes to further expand in the county.

“Look at what has happened the past four or five years in the tech industry and the growth of the economy. We are extremely optimistic,” said Dallas Haun, the bank’s executive vice president of the South Coast region. Haun manages the bank’s operations from San Diego to the South Bay from his office in the current Irvine branch near John Wayne Airport.

For 46 years, City National has been primarily a Westside Los Angeles bank, catering to mid-sized companies, wealthly individuals and the entertainment industry, providing banking services for movie stars as well as funding a few movies. (Haun noted that the most recent Los Angeles Business Journal list of the 50 wealthiest people in Los Angeles County included 23 City National customers.)

In December 1995, the bank had $4.2 billion in assets and a new chairman and chief executive, Russell Goldsmith. He and the board decided to expand the bank through acquisitions to take market share in six Southern California counties.

First, City National acquired Los Angeles-based First Los Angeles Bank. A year later it purchased Ventura-based Ventura County National Bancorp and Riverside-based Riverside National Bank. In 1997, it bought La Palma-based Frontier Bank. In 1998 it acquired Long Beach-based Harbor Bank,which had an Irvine branch and is where Haun came from,and San Diego-based North American Trust Co.

In November, the bank opened its technology practice in the Irvine Spectrum. That year, it also opened an office in Burbank in the media district and purchased San Fernando Valley-based American Pacific State Bank.

In February, City National went a step further with the acquisition of San Francisco-based The Pacific Bank, giving the bank a foothold in the Northern California market.

“We wanted to buy small commercial banks that envisioned our philosophy,” Haun said, which is to be a bank for mid-size companies and affluent individuals.

City National now has $314.7 million in deposits in Orange County, up 12.5% from a year ago. The bank also has total assets of $8.4 billion.

Meanwhile, Haun said, “because of the consolidation (in the banking industry) we were able to recruit a lot of good people, a lot of first-round draft choices.”

And to keep the bank connected to the business community it has formed an advisory board in each of the counties, bringing together bank representatives, community and business leaders.

Following the banking regulation overhaul signed into law last year, City National added a discount brokerage to its list of services. It formed City National Securities Inc. and also unveiled an online brokerage service.

City National recently struck an alliance with TechCoast.com, an Irvine technology incubator, for the bank to provide financial services and consulting for the company. n

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