City National Corp. reported a 44% surge in third-quarter profit, beating Wall Street’s expectations by a wide margin as deposits and loan balances both grew at a double-digit pace.
Measures of loan problems declined at the parent of City National Bank, which said it expects continued growth in loans, deposits and net income amid “modest” economic growth and low interest rates for the rest of the year.
“New loan production reached a record level for the third quarter in a row,” City National Chief Executive Russell Goldsmith said in announcing the results Thursday afternoon. “Credit quality was sound, and expenses remained in check.”
Los Angeles-based City National earned $59.8 million, or $1.10 per share, during the third quarter, compared to $41.4 million, or 77 cents a share, a year earlier. Revenue was $317.2 million, up 18%. Analysts had expected earnings of 92 cents a share on revenue of $281.6 million.
City National, the largest commercial bank based in Southern California, announced the results after the markets closed. Its shares had risen 64 cents, or 1.3%, to $48.82 earlier in the day.
[For the record, 3:18 p.m., Oct. 18: An earlier version of this post incorrectly quoted City National’s Russell Goldsmith as saying new loan production reached a record level for the third year in a row. It was the third quarter in a row.]