City National Corp. named Christopher J. Carey, the former chief financial officer of Provident Financial Corp., as its new CFO on Tuesday.
He succeeded Frank Pekny, who stepped down in March for health reasons.
Mr. Carey, 49, moved to Los Angeles to join the $13.2 billion-asset City National just days after his previous employer was acquired by a similarly named but much larger company: National City Corp. of Cleveland, which now has $128.4 billion in assets.
This is not the first time Mr. Carey has gone through a takeover. Before joining Provident, of Cincinnati, he had been the CFO of CoreStates Bank in Philadelphia for 13 years until First Union Corp., now Wachovia Corp. of Charlotte, bought it in 1997.
“There wasn’t a job that made sense for me there,” Mr. Carey said, speaking in a telephone interview late Wednesday. He said he left National City by mutual consent.
Some analysts said he may have entered a period of stability in his 20-year career. They said that unlike his two previous employers, City National is unlikely to sell in the foreseeable future.
“For someone who has been through a couple of transactions, this represents some stability, because City National doesn’t necessarily have a reason to sell in the next few years,” said Brett Rabatin, an analyst with First Horizon National Corp.’s FTN Midwest Research Securities Corp. “He probably has a long term ahead of him at City National.”
Mr. Carey, who said he has spent the last two days meeting people and looking over the second quarter earnings scheduled for release next week, said that City National, “has one of the better balance sheets in the industry in my mind.”
Provident, a Cincinnati company with $17 billion of assets, ran into trouble in its accounting for auto leases originated between 1997 and 1999; it had to restate earnings in March 2003.
Analysts said City National is probably one of the best positioned banks of its size for rising interest rates. It focuses on business banking and private banking for high-net-worth individuals in the wealthy Beverly Hills area.
Brian Conn, an analyst with Royal Bank of Canada’s RBC Capital Markets, said City National has a low-cost deposit base and has maintained an asset-sensitive position. Rising rates should “benefit City National more than most.”
Mr. Rabatin agreed that, unlike the CFOs of a lot of banking companies, who are spending most of their time managing rate risk, Mr. Carey will not have to focus on putting out any fires.
“He is walking into a good situation here,” he said.
According to Mr. Conn, Mr. Carey has done fairly well in the fields of expense control and asset and liability management — two main areas of responsibility for a CFO. His hiring is a “net positive for the company.”
Manuel Ramirez, a Keefe, Bruyette & Woods Inc. analyst, wrote in a research report Wednesday that Mr. Carey’s appointment eliminates a source of uncertainty for City National investors.
Given its growth over the past several years, “we are encouraged by the bank’s decision to seek a CFO with management experience at larger institutions,” he wrote.
In addition to overseeing finance, treasury, and accounting functions, Mr. Carey will take care of asset and liability management, investor relations, insurance, and other areas. He will be a member of both the executive committee and the strategy and planning committee.
When Mr. Pekny, 60, stepped down, City National said he had been battling cancer since the beginning of the year.
He will remain the vice chairman of City National Bank and the executive vice president of City National Corp., the company said at the time. He will provide counsel on corporate, strategic and financial matters.
