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Western Alliance, City National report quarterly profits

Two of the largest regional business banks in Southern Nevada posted quarterly profits Thursday, and both attributed their double-digit income growth to new deposits and increased demand for commercial real estate loans.

City National Corp. and Western Alliance Bancorp reported earnings that easily surpassed analyst expectations.

Western Alliance, parent of Bank of Nevada, reported net income of $14 million, or 15 cents a share, compared with $6.2 million, or 5 cents a share, for the same second quarter of 2011. Revenue for the second quarter was $76.6 million.

Analysts surveyed by Yahoo Finance expected earnings of 13 cents a share on revenue of $76.2 million.

“Our strong growth trends continued in the second quarter with record revenue during the period and tripling of our earnings per share from a year ago,” said Robert Sarver, chairman and CEO of Phoenix-based Western Alliance.

Sarver said the company has been able to maintain its positive earnings momentum while continuing to improve the “asset quality composition of our balance sheet.” So far in 2012, Western Alliance has generated more than $300 million in loan and deposit growth.

“This quarter, REO valuations/losses declined to less than $1 million as some properties in our REO portfolio experienced increases in appraised values,” said Ken Vecchione, president and COO of Western Alliance.

Vecchione said offsetting the good news in the second quarter were charge-offs, and the provision for loan losses remained flat to the prior quarter.

Bank of Nevada loans increased by $76 million in the second quarter, largely due to intercompany transfers from Western Alliance Bank in Phoenix, and have increased $147 million during the last 12 months to $2 billion at June 30.

Las Vegas-based Bank of Nevada’s net income was $3.8 million in the second quarter, compared with $3.7 million for the same period last year.

City National reported second-quarter income of $54.8 million, or $1.01 per share, up from $47.5 million, or 88 cents per share, in the same period last year.

City National’s earnings were 13 cents above estimates. The Los Angeles-based bank has nine Nevada branches with more than $390.7 million in deposits.

“City National’s results … reflect another very solid performance with double-digit growth in income, assets, loans and deposits,” said Russell Goldsmith, president and CEO of City National.

Analysts surveyed by Yahoo Finance expected earnings of 88 cents per share.

Revenue for the second quarter was $291.2 million, which also beat analyst estimates of $274.3 million.

“In this quarter, City National … further bolstered the bank’s strong capital position with the successful offering of $150 million in subordinated debt, restoring and expanding an element in our capital structure that we’ve had for many years,” Goldsmith said.

During the quarter, City National closed its acquisitions of First American Equipment Finance and Rochdale Investment Management.

The company said its board of directors has maintained and approved a quarterly common stock cash dividend of 25 cents per share. The dividend is payable Aug. 15 to stockholders of record on Aug. 1.

Shares of City National Bank lost 45 cents, or 0.89 percent, to close Thursday at $49.95. Western Alliance shares lost 19 cents, or 2.01 percent, to close at $9.25. Both companies are listed on the New York Stock Exchange.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.

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