City National doubles dividend after earnings jump
Declaring that it is now stronger than before the recession, Los Angeles banking firm City National Corp. reported 37% higher fourth-quarter earnings even after two large one-time charges, and doubled its dividend to shareholders.
The parent of City National Bank said after the close of trading Thursday that it earned $39.7 million, or 74 cents a share, up from $29.1 million, 38 cents a share, in the final quarter of 2009.
The latest quarter's results included an after-tax charge of $3.9 million for the redemption of trust preferred securities and a $3.4 million non-cash charge related to one of the company's affiliated investment advisors.
Excluding two one-time charges, fourth-quarter net income totaled $47.1 million, or 88 cents a share, the bank said. Fourth-quarter revenue totaled $280.2 million, up 2% from the same quarter of 2009.
The big jumps in per-share earnings reflected the bank's repayment to the government of $400 million in bank bailout funds, which erased the obligation to pay dividends to the U.S. Treasury. Allocating some of that extra cash, City National said it would increase its quarterly dividend to common shareholders to 20 cents a share from 10 cents.
Still, the quarterly payout remains well below its level before the recession. The bank was paying 48 cents a share in quarterly dividends before slashing the rate in early 2009.
City National -- a specialist in private banking, business lending and home loans for the wealthy -- has more than 80 branches in California and Nevada. It plans to open three more California offices this year, said the bank's chief executive, Russell Goldsmith.
The firm, which recently opened its second New York office, added 10 branches in 2009 and 2010 by acquiring failed banks from the Federal Deposit Insurance Corp.
"City National's dramatically increasing profitability in 2010 reflects significant improvement in credit quality and double-digit increases in revenue, net interest income and deposits," Goldsmith said in announcing the results. "City National has emerged from the recession larger, financially stronger and better able to serve its growing client base."
City National's shares rose 50 cents to $62.12 before the results were announced.
-- E. Scott Reckard