Shares are down 3 percent this morning, a day after the L.A.-based bank reported a 22 percent drop in first-quarter earnings. City National also cut its full-year profit forecast. The results, which fell well short of Wall Street expectations, were the result of a decline in interest rates and the bank setting aside $17 million to cover potential credit losses (City National’s entire loss provision for 2007 was $20 million). Many of those credit problems involve residential construction projects. CEO Russell Goldsmith is trying to put a positive face on the less-than-terrific numbers - here's the release - and he has a point. City National is not burdened with subprime loans or those pesky collateralized debt obligations, which are at the center of the debt crunch.

"Not only does City National have no subprime mortgages or CDOs, or SIVs on its balance sheet, looking forward we have no auto loans, consumer credit card or home equity loans to be concerned about. Our company is well-positioned not only to weather the current economic challenges, but also to take advantage of prudent growth opportunities as competitive and economic conditions improve."