(RTTNews) - City National Corp.(CYN: News ), the parent company of wholly owned City National Bank, Thursday said its third quarter profit nearly halved from a year ago, impacted by higher provision for credit losses. Revenue, however, grew 13% reflecting increased average securities balances, lower funding costs and a net securities gain.

For the third quarter, net income of City National halved to $8.04 million from $16.55 million in the same quarter a year ago.

Net income available to common shareholders, after dividend pay out under the United States Treasury Department's Capital Purchase Program, was $2.54 million or $0.05 per share, compared to $16.55 million or $0.34 per share in the year-ago quarter.

On average, 18 analysts polled by Thomson Reuters expected earnings of $0.09 per share for the quarter. Analysts' estimate typically excludes one-time items.

Net income includes an $85 million provision for credit losses. After net charge-offs of $76.9 million, the third-quarter provision added a net total of $8.1 million to City National's allowance for loan and lease losses.

Allowance increased to $265.0 million, and now equals 2.18 percent of total loans and leases, compared to $256.0 million, or 2.06 percent of total loans and leases, at the end of the second quarter of 2009.

Revenue for the quarter grew 13% to $230.2 million from $203 million in the preceding year quarter, due mainly to increased average securities balances, lower funding costs and a net securities gain. Analysts expected revenues of $223.49 million for the quarter.
The company also continues to expect that the corporation will remain modestly profitable in 2009.

Net interest income for the third quarter grew 6% to $161.34 million from $152.80 million in the same quarter a year ago. Total non-interest income was $68.85 million, up 37% from $50.08 million in the year-ago quarter, reflecting significant securities losses in the year-ago period, compared to net securities gains in the third quarter of 2009.

In the preceding second quarter, City National's net income available to common shareholders was $1.3 million or $0.02 per share, compared to $35.5 million or $0.73 per share in the prior year period. Revenue for quarter was $219.8 million, down 5% from $232 million in the same quarter last year.

Amongst others in the industry, U.S. Bancorp (USB), the holding company for U.S. Bank National Association, reported a 4.7% increase in profit for the third quarter, as revenues grew 26% from last year due to higher net interest income and fee revenue. net income applicable to U.S. Bancorp was $603 million. Total net revenue was $4.25 billion.

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