Beverly Hills based City National Corporation (NYSE: CYN) is the twenty-fourth largest bank in the US with total deposits of $11.82 billion and $58.5 billion in assets under management. City's services are not for the light of wallet. The company focuses on high net worth individuals, entrepreneurs, and small to mid-sized businesses, and its customer base includes 800,000 households with more than $1 million of investable assets and businesses with annual revenues of $1 million to $250 million^[1].

Like most banks, City makes a substantial portion of its revenue in the form of net interest income, the difference between the interest that it pays on deposits such as CDs and savings accounts, and the interest that it receives from the loans that it makes. City differs from other banks, however, in that its customers tend to place a lot of their cash in non-interest bearing accounts. This means a higher net interest margin for City. City National's conservative lending practices and its focus on high net worth individuals have also helped the company weather the economic turmoil in 2008 comparatively better than other banks and financial institutions. In addition to avoiding subprime loans and option adjustable mortgages, City National has never foreclosed on a mortgage loan that they originated^[2]. Nevertheless, with 57 out of 77 bank branches and regional centers located in California, City National is heavily exposed to one of the worst real estate markets in the nation. Because several of the company's business lines rely on commercial and residential real estate markets, City National remains vulnerable to increases in nonperforming loans and falling loan demand. Additionally, turmoil from the ongoing credit crisis has the potential to mitigate investment returns. Because of the poor economic and financial conditions, City National projects its earnings per share will be 17% to 22% lower in 2008 than in 2007^[3]. City National has also been increasing its long run growth potential by expanding its market share in Nevada, one of the fastest growing regions and wealth centers in the nation.

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