City National profit doubles in first quarter

City National Corp., the largest bank based in Southern California, posted a doubling of its first-quarter profit, with strong growth in deposits and declining provisions for losses on loans.

The Los Angeles company earned $15.7 million, or 19 cents a share, in the first three months of the year, up from $7.5 million, or 4 cents, a year earlier.

Revenue rose to $252 million from $192 million, helped by the acquisition of failed Imperial Capital Bank of La Jolla and a $1-million gain on sales of securities, compared with a $15-million net loss on securities sales a year earlier.

The results were released after the close of trading Thursday. On Friday, City National shares climbed $4.15, or 7.1%, to $62.28.

The bank’s chief executive, Russell Goldsmith, said he was encouraged by positive signs in the Southern California economy, adding that the confidence of City National’s business clients began slowly picking up last fall.

“More of them are looking for credit and talking about making investments,” he said, though many are still wary of expansion because of the harshness of the recession.

City National’s nonperforming assets — delinquent loans and foreclosed real estate — remained relatively high, totaling 3.3% of all of the bank’s loans and foreclosed properties as of March 31. That was up from 2.65% a year earlier but, in an encouraging sign, lower than the 3.62% recorded Dec. 31.

The amount of delinquent commercial real estate and construction loans in the bank’s portfolio declined, and City National charged off fewer loans as uncollectible. The company also added less to the allowance on its books for loan losses.

Excluding Imperial Capital loans covered by a loss-sharing agreement with the Federal Deposit Insurance Corp., City National’s loan portfolio averaged $11.9 billion in the quarter, a decline of 4% from a year earlier and 1% from the fourth quarter.

By contrast, deposits grew from an average of $12.8 billion a year earlier to $16.9 billion in the latest quarter, including $920 million in deposits from Imperial Capital.

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