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Profit Rises 14% for City National

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Times Staff Writer

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.

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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.

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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.

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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.”

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