City National in Los Angeles reported a sharp rise in profits in the second quarter, fueled by loan growth and an increase in fee revenue.
The $31 billion-asset bank's earnings were $67.2 million for the period ending June 30, an increase of 12% compared with a year earlier. Diluted earnings were $1.11 per share, beating by 14 cents the estimate of analysts polled by Bloomberg.
City National reported loans of $18.5 billion, or 17% higher than last year. Net interest income increased 8%, to $219 million. However, the net interest margin dipped three basis points, to 3.21%.
Strong growth in trust and investment fees boosted profits, also, as noninterest income rose 23%, to $101 million.
Asset quality improved, as the bank cut its provision for bad loans by 88%, to $1.5 million.
Operating expenses climbed 7%, to $226 million, because of higher compensation costs.