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TheStreet Open House

5 Banks Stocks Showing 'Real' Earnings Growth

2. City National
Shares of City National Corp. (CYN) of Los Angeles close at $50.56 Friday, returning 16% year-to-date, following a 27% declined last year.

The shares trade for 1.6 times tangible book value, and for 13 times the consensus 2013 EPS estimate of $3.96.

Based on a quarterly payout of 25 cents, the shares have a dividend yield of 1.98%.

City National in July purchased Rochdale Investment management.

The company had $26.3 billion in total assets as of Sept. 30. Third-quarter pre-provision net revenue grew 52% year-over-year, to $108.5 million. Noninterest income -- excluding investment gains -- was up 61% year-over-year to $106.4 million, as City National booked $1.7 million in revenue from FDIC loss-sharing agreements, when the company had reported $14.2 million in expenses from the agreements a year earlier. Trust and investment fees rose to $43.5 million in the third quarter from $35.4 million in the third quarter of 2011, while brokerage and mutual fund fees increased to $9.1 million from $5.1 million, reflecting the Rochdale acquisition.

City National's third-quarter net interest income was up 5% from a year earlier, to $209.9 million, but the net interest margin narrowed to 3.52% from 3.74%.

The company reported third-quarter net income of $59.8 million, or $1.10 a share, increasing from $41.4 million, or 78 cents a share, a year earlier. City National's third-quarter ROA was 0.93% and its return on average equity was 10.35%.

Jefferies analyst Casey Haire rates City National a "Hold," with a $52 price target, and said on Oct. 19 that "we leave our 2013 EPS estimate intact at $3.95 as a stronger-than-expected contribution from Rochdale is offset by a weaker net interest income forecast," that that the outlook for net interest income "is flat at best given thinning capital ratios, which limit CYN's ability to outrun net interest margin compression via balance sheet growth."

CYN Chart CYN data by YCharts

Interested in more on City National? See TheStreet Ratings' report card for this stock.

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