City National stock jumps after profit beats estimates
Shares of City National Corp. jumped Friday after the Los Angeles bank said its third-quarter profit quadrupled thanks to a continuing trend of fast-growing deposits, rising fee income and shrinking loan losses.
City National earned $34.4 million, or 65 cents a share, in the latest quarter, up from $8 million, or 5 cents, a year earlier.
Revenue climbed 11% to $254.5 million, reflecting the acquisition in the last year of three failed banks in La Jolla, San Diego and Las Vegas.
The per-share earnings in the year-earlier quarter were depressed by dividend payments on a $400-million capital infusion made by the government during the financial crisis. City National has since repaid that money.
Excluding unusual items, earnings were 76 cents a share, beating Wall Street’s consensus estimate of 58 cents.
The results were announced after the close of stock trading Thursday. On Friday, City National’s shares rose $2.38, or 4.6%, to $54.34. The stock is up 19% this year.
The bank’s loan portfolio totaled $11.4 billion on Sept. 30, down 7% from a year earlier and down 1% from the second quarter. The figures exclude loans from the recently acquired banks that are covered by a loss-sharing agreement with the Federal Deposit Insurance Corp.
The company blamed the weak economy and charge-offs of uncollectible commercial mortgages and construction loans.
City National Chief Executive Russell Goldsmith said the bank “continues to energetically seek out quality lending relationships.” He also pointed out that “City National does not have the foreclosure problems and risks that are getting headline attention at some of the nation’s largest banks.”
