Shares of City National Corp. rose 5 percent early Friday, a day after the bank holding company reported third-quarter earnings fell 73 percent mostly due to charges. Los Angeles County's largest locally based bank company also lowered its 2008 earnings outlook.
City National said after Thursday's market close that it earned $16.6 million (34 cents a share) compared with $60.1 million ($1.22) a year ago. Profits were hurt by securities impairment charges primarily related to Fannie Mae and Freddie Mac, said the company, which took a $35 million provision for credit losses.
Excluding those charges, City National's earnings would have been $36.2 million (74 cents). The company declared its regular quarterly cash dividend of 48 cents per share. Revenue fell 14 percent to almost $203 million.
"Credit quality and capital strength remain paramount, and City National is strong on both fronts," said Chief Executive Officer Russell Goldsmith in a conference call. "We intend to stay that way. Let me reiterate that City National has avoided many of the highly publicized problems afflicting other financial institutions."
The bank cut full-year profit guidance to $3.05 to $3.15 a share, down from $3.15 to $3.40. The company expects both noninterest income and loan growth to slow in the current quarter, as well as greater pressure on its net interest margin because of lower interest rates.
The company's shares were up $2.35 to $46.44 in morning trading on the New York Stock Exchange.
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