City National Corp., the largest bank based in Southern California, said Tuesday that fourth-quarter profit rose more than 14%, capping a year in which increases in deposits and loans helped offset big losses on lending to the telecommunications industry.
During the quarter ended Dec. 31, Beverly Hills-based City National earned $44.4 million, or 87 cents a share, compared with $38.8 million, or 78 cents, during the final quarter of 2001.
The latest figures include results from Civic Bancorp, a San Francisco-area bank that City National acquired in a deal that closed Feb. 28.
Adjusting the fourth-quarter figures from 2001 for changes in accounting standards, earnings were up 6% from just under $42 million in the year-earlier period, the company said.
City National announced its financial results after the close of trading. Its shares fell 78 cents Tuesday to $44.07 on the New York Stock Exchange but rose in after-hours trading, hitting $44.54.
Reflecting the uncertain economy and losses on pooled lending with other banks to telecommunications and media firms, City National charged off $12.2 million in bad loans during the fourth quarter, up from $5.4 million a year earlier, and $54.1 million for all 2002, nearly double the $27.6 million charged off in 2001.
For all of 2002, City National earned $183.1 million, or $3.56 a share, up 25% from $146.2 million, or $2.96, in 2001. Adjusted for accounting changes, 2001 earnings amounted to $159 million, or $3.22 a share.
Troubled loans and foreclosed real estate totaled $72 million at year-end, or 0.9% of all assets, up from $38.6 million, or 0.54% of assets, a year earlier. Assets totaled $11.9 billion at year-end, up 17% from $10.2 billion a year earlier, and deposits rose to $9.8 billion from $8.1 billion, a gain of 21%.
City National Chairman Russell Goldsmith said he expected per-share earnings this year to increase by 8% to 10%. Goldsmith said the weak economy and the bank's greater scrutiny of loans slowed lending growth in the fourth quarter.
But he also sees "lots and lots of positives for the Southern Californian economy": the settlement of the West Coast port labor dispute, increasing weapons spending, a strong real estate sector and the entertainment industry, which Goldsmith said "had a better 2002 than 2001."