City National’s Profit in 3rd Quarter Rises 28%

Buoyed by loan growth and a shift in its lending focus, City National Corp., the Beverly Hills-based parent of City National Bank, reported a 28% profit increase in the quarter ended Sept. 30, compared to the year-earlier period.

Net income was $13.3 million, up from $10.4 million in the third quarter of 1994.

City National, best known as a lender to the entertainment and commercial real estate industries, has sharply reduced its commercial real estate lending in the past year while beefing up its residential first-mortgage lending.

The bank’s average third-quarter loan balances jumped 23% from year to year, sparked largely by a $385-million increase in mortgages.

Average first-mortgage loans were $445 million in the quarter, representing 24.5% of the bank’s total loan portfolio, whereas a year earlier, first-mortgage loans had averaged only $59 million, or 4% of the portfolio.

The biggest factor was the bank’s purchase of $295 million worth of mortgages, although it also originated $150 million worth on its own.