Please ensure Javascript is enabled for purposes of website accessibility

City National Bank: 9 Critical Numbers

By John Maxfield - Apr 11, 2013 at 1:20PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you own City Financial stock or are thinking about buying it, then at the very least, you should know these nine critical numbers.

Given that you clicked on this article, it seems safe to assume you either own stock in City National Corp. (NYSE: CYN) or are considering buying shares in the near future. If so, then you've come to the right place. The table below reveals the nine most critical numbers that investors need to know about City National stock before deciding whether to buy, sell, or hold it.

But before getting to that, a brief introduction is in order. While City National could easily be lumped together with regional banks, it more closely resembles a large community bank and trust with satellite offices in strategic cities throughout the country, including Las Vegas, New York City, Nashville, and Atlanta. Founded by a "small group of entrepreneurs in 1954," the bank is headquartered in Los Angeles and is loosely known as the banker to the stars given its past support of Frank Sinatra, Arnold Schwarzenegger, and others, and the fact that about one-fifth of its business loans are entertainment-related. Its balance sheet boasts $29 billion in assets and it oversees an additional $57 billion in assets under management or administration.

As you can see in the table above, City National's biggest strength is unquestionably its prudent management of credit risk. With a nonperforming loans ratio of 0.63%, the bank handily beats the industry average by over 120 basis points. Beyond this, and thanks in large part to its robust asset management and administration business, a respectable 32% of total revenue comes from noninterest sources.

On the other hand, City National slightly underperforms its peers when it comes to both net interest margin and efficiency ratio. The former is nine basis points less than the average of the 100+ banks sampled for this article series -- though, it's well within the first standard deviation. And City National's efficiency ratio -- which measures how much it costs a bank to produce each dollar of revenue -- is three percentage points higher than the selected peer group.

Despite the latter issues, however, and largely as a testament to its management of credit risk, City National's return on equity beats the sample by 60 basis points -- though it still underperforms the double-digit rate that most bank investors like to see.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.