Russell Goldsmith, chairman and chief executive of Beverly Hills-based City National Bank, has ties to Orange County that go back to his childhood.
“I learned to sail here,” Goldsmith said.
He went to a summer camp for boys on Catalina Island where he first took up boating at age 8. Goldsmith honed his boating skills at Newport Beach Harbor, where he keeps a speedboat and sailboat.
Goldsmith, 56, owns a home in Lido Village. His primary house is in Los Angeles.
Last year, City National opened three branches in OC. Its crown jewel is across from the Fashion Island shopping center in Newport Beach, a spot Goldsmith had his eye on for years.
He’s been going to Fashion Island since he was a teenager. His favorite place: Edwards Island Cinemas.
City National entered OC 31 years ago when it opened a Lido Village office in Newport Beach Harbor to cater to the wealthy.
The branch had a one-of-a-kind teller window that boaters could sail up to do their banking right on the water.
It closed in 1984 when the bank decided to concentrate its resources in OC at City National’s other Newport Beach location on MacArthur Boul-evard. Management felt there were more business banking opportunities in the airport area.
The bank’s seven OC branches have helped fuel its growth. City National, which has 55 branches scattered throughout California, opened three locations,in Anaheim, Irvine and Newport Beach,last year.
Expanding in OC is a no-brainer for City National, which focuses on managing money for the wealthy and offering loans to fast-growing companies, Goldsmith said.
“We are a relationship bank where we offer extensive service to entrepreneurs and investors,” Goldsmith said. “We are not a bank doing car loans on used Chevy’s. There’s nothing wrong with that, but we are just very selective.”
Goldsmith said City National has had a “steady build” in OC during the past decade.
The bank wasn’t always in expansion mode.
In the early 1990s, City National’s reputation as the “bank to the stars” lost some luster.
A recession and problems in the national banking sector sent City National’s shares floundering.
“People were fearing runs on the bank,” said Campbell Chaney, a bank analyst with Sanders Morris Harris in San Francisco. Chaney is a former bank examiner for the government.
“A couple of customers even asked me if (City National) would survive,” he said.
The ratio of non-performing to performing assets at City National soared in late 1991. The next fall, it was under orders to raise $65 million in capital. From 1991 to 1993, it strung together losses totaling $87.5 million.
Today’s story is far different. Its non-performing asset ratio is just 0.16%.
City National has put together 11 consecutive years of improving earnings.
The stock is trading near its record high of $78.25.
Russell Goldsmith’s father, 83-year-old Bram Goldsmith, reshaped the bank when troubles began.
He recruited a team of top bankers, briefly did away with its dividend, cut overhead 10%, formed a division to get rid of troubled loans and sold City National’s data processing division to raise funds.
A decade ago, the elder Goldsmith, who remains chairman of parent City National Corp., brought Russell on board.
Assets have grown 248% to $14.6 billion under the younger Goldsmith’s watch.
Before joining City National, Russell Goldsmith worked at two entertainment companies,Republic Pictures Corp., which he headed, and Lorimar Inc., where he was chief operating officer. He led Republic for almost a decade until its merger with Spellman Entertainment in 1994.
In 1995, Russell Goldsmith was named chairman and chief executive of the bank, which had $4.1 billion in assets.
Goldsmith expanded the bank beyond Los Angeles County to Orange and San Diego counties to the south, Ventura to the north, and Riverside County and the Inland Empire to the east. City National also moved into the San Francisco area.
City National’s bank-buying spree lasted until 2002, when the tech bubble burst and terrorist attacks forced it to slow down a bit.
Since then, Goldsmith said the bank has been filling in with branch expansions.
“It’s a model they built on service to wealthy customers, so they’ve got to be willing to spend some money on them to get deposits and business, and treat them right,” said Gary B. Townsend, bank analyst with Friedman, Billings, Ramsey & Co. in Arlington, Va.
The Goldsmith family controls about 18% of the bank’s shares at a recent check, a stake worth nearly $700 million.
“It seems City National has its fingers on the pulse of money flows in California,” analyst Campbell said.
Goldsmith also has a penchant for reading historical biographies. Robert Caro’s three-volume set of books on 1960s President Lyndon Johnson are among his favorites.
Goldsmith briefly was a part owner of the San Diego Padres in the early ’90s before he sold his stake to software millionaire John Moore in 1994.
“You can get a good meal without owning the restaurant,” said Goldsmith of his experience, and who can be seen watching Angels games.
