City National Corp., the parent company of City National Bank, reported net income rose 11 percent in the first-quarter on strong loan production and new clients, but earnings continue to struggle in a low interest-rate environment. Results missed Wall Street estimates.
The company posted net income of $51.5 million, or 90 cents per share, compared with $46.3 million, or 86 cents per share, in the same period last year. Analysts surveyed by Yahoo Finance had expected 92 cents a share.
Revenue in the first quarter rose 7 percent year-over-year to $294.6 million, narrowly missing analyst expectations of $300.8 million. Assets reached $27.4 billion in the first quarter, up 14 percent from the same period a year ago.
City National operates eight branches in Southern Nevada.
“City National continued to grow revenue and net income in the first quarter, thanks to strong loan production, sound credit quality and the addition of new clients across the bank,” said Russell Goldsmith, president and CEO. “Earnings increased despite low interest rates pressuring asset yields and a modest seasonal reduction in deposits.”
Goldsmith said the company has “now been profitable in every quarter for 20 consecutive years.” He said expenses declined slightly even as the bank continues to invest in new employees, products and technology.
City National will open five new offices this year, Goldsmith said. He did not identify where the new offices would be located.
Based in Los Angeles, City National Bank released its earnings Thursday after the financial markets closed. Shares of City National lost 29 cents, or 0.53 percent, to close at $54.36 on the New York Stock Exchange.
The bank’s net interest margin, a measure of lending profitability, averaged 3.21 percent in the first quarter, down from 3.74 percent a year earlier and 3.27 percent in the fourth quarter.
Excluding loans covered by the Federal Deposit Insurance Corp., City National’s quarterly results include no provision for loan and lease losses. The company posted no provision in the first quarter of 2012 and only a $7 million provision in the fourth quarter.
In the earnings report, the bank cautioned investors and clients “low interest rates and a very flat yield curve will continue to put pressure on the company’s net interest margin.”
Goldsmith expected “moderate economic growth” to continue for the rest of 2013.
Contact reporter Chris Sieroty at csieroty@reviewjournal
.com or 702-477-3893. Follow @sierotyfeatures on Twitter.