City National’s Profit Falls Short of ExpectationsThursday, January 24, 2013
City National Corp. reported 8 percent growth in fourth-quarter net income, but the profit was lower than Wall Street expected as L.A.’s largest local bank was adversely affected by lower interest rates.
After the markets closed Thursday, the Los Angeles holding company for City National Bank reported net income of $47.2 million (87 cents a share), compared with $43.9 million (82 cents) in the same period a year earlier.
Total revenue rose 5 percent to more than $303 million, with net interest income up 1 percent to $209 million and noninterest income rising 16 percent to $100 million. The provision for losses on loans increased to $7 million from $2 million in the third quarter.
Analysts surveyed by Thompson Financial on average had expected net income of $1 a share on total revenue of $295 million.
Average deposit balances rose 14 percent to a record $23.4 billion. Total assets jumped 21 percent to a record $28.6 billion. City National said its net interest margin in the quarter averaged 3.27 percent, compared with 3.7 percent a year earlier and 3.58 percent in the third quarter.
“2012 was a very strong year of growth in earnings, assets, clients and capabilities,” Chief Executive Russell Goldsmith said in a statement, noting that loan production set new records and deposits grew at double-digit rates.
Shares earlier closed down 30 cents, or less than 1 percent, to $52.55 on the New York Stock Exchange and were unchanged in after-hours trading.