SAN FRANCISCO -- City National Corp., which shored up its balance sheet with an $81 million rights offering last week, now must rebuild its badly eroded revenue base.
In issuing about 12.7 million new shares, the Beverly Hills, Calif., banking company exceeded the $65 million of equity it promised to raise last year in an agreement with the Office of the Comptroller of the Currency.
"We're going from the fix-it stage...back on the offensive to get new business," said Bram Goldsmith, City National chairman and chief executive.
The bank will focus on selling mutual funds and residential mortgages, he added.
Regulators insisted on new capital because nearly half of City National's deposits are uninsured, leaving it vulenerable to massive withdrawals when bad news is announced.
Though City National's financial health has been restored, the weak state of the southern California economy will make it "real tough" to generate new income, said Campbell K. Chaney, an analyst at Hancock Institutional Equity Services.
The bank, which focuses on entrepreneurs and wealthy individuals, was one of California's fastest growing and most profitable financial companies in the 1980s. But, pounded by the southern California real estate slump, it has lost $106 million since the end of 1990 and saw its assets fall by $2 billion since then to $4.9 billion.
