City National Q2 profit falls 40 percent

City National Corp. said Thursday its second-quarter profit dropped 40 percent as the bank company set aside $35 million to cover potential losses from loans.

The company, which is the parent of City National Bank, earned $35.5 million, or 73 cents a share, down from $59.2 million, or $1.19 a share, in the April-June quarter last year.

That missed Wall Street expectations. Analysts polled by Thomson Financial had forecast, on average, earnings for the latest quarter of 81 cents a share.

Shares of Los Angeles-based City National lost $3.16, or 6.3 percent, at $47.23 in trading Thursday.

Net interest income, the difference between how much it costs a bank to borrow money and how much it receives from making loans, declined $2.9 million in the second quarter, to $153.3 million.

Looking ahead, the company said it expects earnings per share to come in between $3.15 and $3.40, down from $4.52 last year, amid the continuing housing slump.

The company operates 62 offices in southern California, the San Francisco Bay area, Nevada and New York City.