Just days after telling investors and analysts that it is eyeing acquisitions of banks or asset management firms, City National Bank (CYN) in Los Angeles has announced that it is buying...an equipment leasing company.
The $24 billion-asset company said Monday that it is acquiring First American Equipment Finance, a privately owned Rochester, N.Y., lender that owns and services roughly $325 million of assets. First American's clients include hospitals, law firms, educational institutions and nonprofits and its lease transactions typically range from $250,000 to $3 million.
City National's executives have made no secret of their intent to grow the company through acquisitions. In its earnings conference call Thursday, Chairman and Chief Executive Russell Goldsmith reiterated earlier statements from the company's chief financial officer that it was most interested in buying banks or asset firms that would help it deepen market share within its existing footprint.
City National also has leasing operations, though, and Goldsmith said in a news release that First American's focus on many of the same key industries that the bank targets makes the combination an "ideal fit" for City National.
"Combining First American Equipment Finance's many strengths, its talented team and national reach with City National's lower funding costs and access to thousands of clients will enhance the capabilities of both companies to more profitably and effectively meet the equipment leasing needs of clients and more rapidly build our equipment leasing business," he said.
The sale is expected to close later this quarter. A deal price was not disclosed.
City National said that First American's CEO, Bill Verhelle, and his management team will continue to lead the company, which will operate as a subsidiary of City National Bank. Verhelle will report to the bank's president, Christopher Warmuth.