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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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