City National Shares Rise on Gains from Wealth Acquisition

By Chris Cumming July 19, 2013, 12:21 p.m. EDT 1 Min Read

M&A

Acquisitive City National to Buy Rochdale Investment Management

Making good on its promise to bulk up in asset management, City National Bank (CYN) in Los Angeles announced Wednesday that it is buying Rochdale Investment Management in New York and combining it with its asset management subsidiary.

By Alan Kline

April 25

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.

Chris Cumming