City National Posts a Profit in 4th Quarter
The parent company of City National Bank posted improved fourth-quarter results, giving a much-needed boost to an institution whose health is being watched closely by the entertainment industry.
The Beverly Hills bank’s profit came to $888,000 in the fourth quarter, which contrasts with a loss of $23.8 million a year earlier.
But the company remained mired in red ink for the 12-month period, losing $59.3 million last year, compared to its $21.2 million loss in 1991.
City National, often called the “bank to the stars” because of its wealthy entertainment customers and close ties to influential players, has for months been the subject of nervous gossip throughout Hollywood speculating on the bank’s health.
As with most Southern California banks, City National has been hammered by the area’s soft economy as well as the area’s moribund commercial real estate market.
With about 35% of its loans in commercial real estate, City National is considered vulnerable to further downturns in the market.
But in the fourth quarter, the bank’s problem loans eased, and its cushion against losses showed improvement.
Under an agreement with bank regulators, City National has pledged to raise at least $65 million in fresh capital by June 30. Its directors have already committed $10 million of the amount, and the bank is selling assets.
Among other banks reporting Thursday:
- J.P. Morgan & Co., the nation’s fifth largest banking company, reported its earnings grew 11% in the fourth quarter to $298 million, or $1.48 per share, and 21% for all of 1992.
For all of 1992, New York-based Morgan, parent of Morgan Guaranty & Trust Co., earned $1.382 billion, or $6.92 per share, compared to $1.146 billion, or $5.80 per share, in 1991.
Bank of New York said its fourth-quarter earnings were up sharply on a lower loan-loss provision, stronger fee income, wider interest-rate spreads and controlling expenses.
The company earned $104 million, or $1.20 a share, up from $66 million, or 82 cents a share.
