Shares of City National Corp. (CYN) in Los Angeles rose Friday after it beat its earnings estimates on strong wealth management income.
The $27.4 billion-asset company's stock price was up more than 3%, to $69.44, at midday, after it announced a 9% rise in second-quarter profit, to $59.7 million, Thursday night. Per-share earnings of $1.03 were 7 cents higher than the expectations of analysts polled by Bloomberg.
Noninterest income rose 10%, to $82.2 million, a gain largely due to City National's purchase last year of Rochdale Investment Management, a New York City money manager for the wealthy. City National's trust- and investment-fee revenue rose 46%, to $49.8 million, and its fees from mutual funds and its brokerage business rose 53%, to $8.1 million. Total assets under management increased 27%, to $40.6 million.
Cash management and deposit transaction fees also rose12%, reaching $12.9 million.
Net interest income was $208.4 million, down 6%, as net interest margin fell sharply, to 3.24% from 3.91%.
City National made no provision for credit loss, after making a $1 million provision in the second quarter of 2012. It made $7.5 million in credit recoveries, up from $2.7 million.