Heavy trading in shares of City National Corp. last week has led to rumors that the Beverly Hills, Calif., company is on the block.

More than 1.7 million of City National's shares changed hands from Aug. 16 through 20, nearly two-and-one-half-times the average weekly volume. Last Wednesday a whopping 865,000 shares were traded, propelling the stock price above $36 a share for the first time in a month.

Volume has since subsided, and shares in the $6.3 billion-asset City National have retreated. The stock was trading at $35, up 87.5 cents, at midday Tuesday.

Nevertheless, rumors persist about a takeover of City National because it is the largest independent bank in California, with 41 branches from Los Angeles to San Diego. Industry analysts say City National is a logical takeover target for any regional banking company seeking to beef up its presence in the Golden State.

"There are clearly buyers who are interested," said Erika L. Hill, a bank analyst at Pacific Crest Securities in Seattle.

Topping the short list of prospects, according to analysts, are Minneapolis-based U.S. Bancorp and Comerica Inc., Detroit.

U.S. Bancorp, which is in the midst of buying $2.5 billion-asset Western Bancorp in Newport Beach, Calif., told analysts in a recent conference call that it was not finished buying banks in Southern California. Comerica already has $4.6 billion of assets in the state and is rumored to be on the hunt for acquisitions.

Russell Goldsmith, vice chairman and chief executive officer, could not be reached to comment on the sudden interest in his company's stock.

But in an Aug. 13 interview in his office, Mr. Goldsmith sounded in no mood to sell.

He said City National's business prospects, coupled with the strong momentum of the Southern California economy, justify the bank's continued independence.

In the past four years, the institution has tripled its assets and branches, bulked up its asset management business, ventured into technology lending, and completed four acquisitions. A fifth deal, for American Pacific State Bank, Sherman Oaks, Calif., is pending.

"It's been a remarkable period, which I think positions us very well for the future," said Mr. Goldsmith. "We have a tremendous upside opportunity to grow against the competition."

A few observers also dismissed the idea that City National would be acquired. "I don't think there is going to be a takeover any time soon," said Campbell Chaney, a bank analyst at Sutro & Co. in San Francisco. "When push comes to shove, you're going to have to go through the Goldsmith family."

Bank analyst Joseph K. Morford 3d of Dain Rauscher Wessels in Menlo Park, Calif., agreed that City National is probably not in any rush to find a buyer.

"City National is under no pressure to sell," said Mr. Morford. "They will grow at the expense of the larger banks."

But Pacific Crest's Ms. Hill suggested that City National may be mulling a sale because of the company's heavy insider ownership.

Ms. Hill said City National, one of the state's best-performing institutions, could fetch $45 to $48 per share in a takeover. That could be very attractive to the family of Mr. Goldsmith, which owns 14.82% of the company's outstanding stock. Mr. Goldsmith's father, Bram, is the chairman and former CEO.

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