City National Corp. (CYN), the parent company of wholly owned City National Bank, on Thursday reported a profit for the fourth quarter tripled from last year, helped by a gain on the acquisition of Imperial Capital Bank as well as a 34% surge in revenues. Looking ahead, the company said it anticipates increased profitability in fiscal year 2010.
For the fourth quarter, the company's net income available to common shareholders rose to $19.67 million or $0.38 per share from $6.49 million or $0.13 per share in the year-ago quarter. On average, seventeen analysts polled by Thomson Reuters expected the company to report earnings of $0.04 per share for the quarter. Analysts' estimate typically excludes one-time items.
The results for the latest quarter include an after-tax gain of $21.1 million or $0.41 per share for the acquisition of Imperial Capital Bank and a noncash charge of $4 million or $0.08 per share for the repurchase of $200 million of preferred stock issued to the U.S. Treasury Department.
Net income for the fourth quarter also includes an $80 million provision for credit losses, bringing the total provision for the year to $285 million. The company's provision for credit losses in the year-ago period was $40 million.
Revenue for the quarter surged 34% to $273.1 million from $204.4 million in the preceding year quarter. Analysts had a consensus revenue estimate for the quarter of $238.70 million.
Russell Goldsmith, President and Chief Executive Officer of City National said, "City National finished 2009 positively with the acquisition of Imperial Capital Bank, repayment of $200 million in TARP securities, increased earnings, revenues, reserves, loans and deposits, and the first quarterly improvement of key credit indicators since this harsh economic cycle began."
Fully taxable -equivalent net interest income for the fourth quarter grew 9% to $166.5 million from $152.6 million in the same quarter a year ago. Total non-interest income increased to $110.12 million, up 98% from $55.63 million in the year-ago quarter, primarily due to a $38.2 million pretax gain on the company's acquisition of Imperial Capital Bank during the quarter.
Net interest margin of City National averaged 3.74% in the fourth quarter, down from 4.09% in the year-ago period, due to the combination of strong deposit growth, lower average loan balances, the purchase of short-term, highly liquid securities and pressure on asset yields caused by low interest rates.
Non interest expense for the quarter was $159.24 million, compared to $159.98 million a year ago, and was up 11% from the preceding third quarter due to Imperial Capital Bank-related transaction cost and higher other real estate-owned expense. The company's FDIC costs during the quarter totaled $5.8 million, up from $1.9 million in the year-ago period.
The fourth-quarter provision added $21.3 million, after net charge-offs, to the company's allowance for loan and lease losses. Net charge-offs in the latest quarter totaled $58.7 million or 1.93% of total loans and leases. This compares to net charge-offs of $24.7 million or 0.79% of total loans and leases, in the year-ago period.
At the end of the fourth quarter, City National's allowance for loan and lease losses increased to $288.5 million or 2.38% of total loans and leases from $224.0 million or 1.80% at the end of 2008. The company also maintains an additional $17.3 million in reserves for off-balance-sheet credit commitments.
At December 31, 2009, City National's prime lending rate was 3.25%, unchanged from both December 31, 2008 and September 30, 2009.
The company's nonperforming assets at the end of the year amounted to $442.0 million, or 3.62% of the company's total loans and leases. This compares with nonperforming assets of $222.5 million or 1.79% at the end of the prior year.
For fiscal year 2009, net income available to common shareholders fell to $25.44 million or $0.50 per share from $102.51 million or $2.11 per share in the prior year. Analysts expected the company to report earnings of $0.17 per share for the year.
Revenue for the year increased 6% to $915.3 million from $866.9 million last year, and topped analysts consensus revenue estimate for the year of $892.96 million.
Fully taxable-equivalent net interest income for the year was $638.6 million, up from $616.4 million for the previous year. Total non-interest income increased 9% to $290.52 million from $266.98 million in the prior year.
City National also said its board of directors has maintained and approved a quarterly common stock cash dividend of $0.10 per share. The dividend will be payable on February 24, 2010 to stockholders of record on February 10, 2010.
On December 30, 2009, City National repurchased $200 million of the preferred securities that it had sold to the U.S. Treasury Department in the fourth quarter of 2008. The company expects to repurchase the remaining shares sometime in 2010, subject to regulatory approval.
The company raised $250 million of Tier 1 capital through a trust preferred securities offering, further strengthening its balance sheet and bringing total new Tier 1 and Tier 2 capital raised in 2009 to $550 million. The company's ratio of Tier 1 common shareholders' equity to risk-based assets was 8.9% at December 31, 2009, down from 9.2% at September 30, 2009 due to the company's acquisition of Imperial Capital Bank.
Looking ahead to fiscal year 2010, the company said it anticipates increased profitability. The company also expects net charge-offs to gradually subside in the year, though OREO expense will increase from 2009.
CNY closed Thursday's regular trading session at $50.01, down $0.19 or 0.38% on a volume of 0.71 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.