City National joins parade of California banks beating forecasts

City National Corp.'s second-quarter earnings rose 9%, making the L.A.-based private bank and business lender the latest California bank to exceed Wall Street's expectations.

The parent of City National Bank said Thursday that it posted a profit of $59.7 million, or $1.04 a share, compared with $54.8 million, or $1.01, in the same quarter last year. The average estimate of analysts as calculated by Thompson Financial Network was for earnings of just 96 cents a share.

It was the bank's 81st consecutive profitable quarter, said Chief Executive Russell Goldsmith, noting that assets, deposits and wealth-management fees all grew at a double-digit pace.?

Quiz: How much do you know about home loans?

Loans on the bank's books at the end of the quarter totaled $15.8 billion, excluding certain loans taken over from failed banks on which the Federal Deposit Insurance Corp. agreed to share losses.

That was up 17% year over year, making City National the latest California bank to surprise analysts with strong loan growth ? a development that bodes well for the economy as well as promising better earnings in quarters to come.

Aaron Deer, a San Francisco-based analyst at Sandler O?Neill, called the loan growth "great to see" because banks in hard-hit California??have been tripping over themselves over the past couple of years trying to find borrowers.?

?Any pickup in demand could signify that businesses are feeling better about the economic outlook and willing to invest in new opportunities,? Deer said.

City National announced the results after the close of trading. Its shares closed up $2.02, or 3.1%, at? $67.22.

The gain was a vote of confidence from investors who had seen other Southern California banks report favorable earnings after the markets closed Wednesday.

Among them were Citizens Business Bank parent CVB Financial Corp., whose shares jumped 5.6% on Thursday; Cathay General Bancorp, up 1.4%; and East West Bancorp, up 4.9%.?

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Source: http://feeds.latimes.com/~r/MoneyCompany/~3/Ub1d1qW36u0/la-fi-mo-city-national-earnings-20130718,0,5071695.story

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