City National’s Earnings Rise 13% in 2nd Quarter
City National Corp. on Wednesday reported a 13% increase in second-quarter net income, citing higher money management fees, lower loan losses and larger portfolios of mortgage and construction loans.
The Beverly Hills-based parent of City National Bank earned $52.2 million, or $1.03 a share, up from $46.1 million, or 93 cents, in the second quarter of 2003.
Revenue rose 5% to $180.5 million from $172.2 million on higher net interest income and trust and investment fees.
The bank’s loan portfolio rose 3%, averaging $8.05 billion for the quarter, despite the payoff of nearly $100 million in loans to dairies, a business City National is quitting.
Commercial loans were down 8% as a result of its exit from the dairy business and generally tepid demand. That caused the bank to project overall loan growth this year of 4% to 6%, down from an expected 6% to 9% at the end of the first quarter.
Russell Goldsmith, chairman and chief executive of the bank and vice chairman and CEO of the parent company, said the pace of loan growth should increase in the second half of the year as the California economy and business confidence improve.
City National’s revenue from trust and investment fees was up 37% at $16.7 million, contributing to a 7% gain in non-interest income.
The bank had 18% more residential first mortgages on its books during the second quarter than a year earlier, along with 6% more commercial real estate mortgages and 15% more construction loans.
Overall lending income rose 14%, largely because of improved credit quality. For the second quarter in a row, City National set aside no new funds to cover losses on loans.
The bank, which in April projected it would make as much as $20 million in such provisions this year, said Wednesday that it expected no more than $10 million and perhaps none at all. In the second quarter of 2003, City National’s provision for loan losses was $11.5 million.
City National rose 6 cents to $65.39 on the New York Stock Exchange.
