City Natl Bank

Overview:

City National Corporation is a bank holding company and a financial holding company. The Company provides a range of banking, investing and trust services to its clients through its wholly owned banking subsidiary, City National Bank (the Bank). The Bank operates through 62 offices, including 15 full-service regional centers, in Southern California, the San Francisco Bay area, Nevada and New York City. The Company operates in three segments: Commercial and Private Banking, Wealth Management, and Other. All investment advisory affiliates and the Bank's wealth management services are included in the Wealth Management segment. All other subsidiaries, the unallocated portion of corporate departments and inter-segment eliminations are included in the Other segment. The Bank's principal client base comprises small to mid-sized businesses, entrepreneurs, professionals, and affluent individuals.

Loan Portfolio:

total 12.2 bil loans
4.7 bil in Commercial loans to small and med biz (particularly large in So Cal and area I know is struggling but has yet to reflect in NPA)
2bil in Com Mortgages (echo the commercial loan comments)
3.3 bil Resi 1st's (ironically their best performing assets)
1.4 bil in real estate construction (almost 10% are NPA)



funding loan book with 11 bil in deposits but also 2.5 bil in fed funds and other deposit purchases

Fed fund purchases are up a whopping 100% YOY (from 672 mil in q3 07 to 1.357 bil in q3 08)

Time deposits over 100k total 1.2 bil which could pose a problem once they come up for renewal and warry depositers might seek to diversify FDIC insurance

This company is heavily levered to So. Cal small and medium sized biz activity...I believe that commercial & construction loans will continue to be a problem for this bank. I do not expect them to meet current analyst projections for the upcoming year or two due to an increase in small and medium sized biz going BK.

mean analyst projections have CYN earning 3.05 per share in next year...this would have CYN forward P/E at 16...TTM P/E is 16.5