City National Bank of Florida, Bankia’s green shoot in the US

FLORIDA | with informations from Brian Bandell | City National Bank of Florida reported improved earnings in the second quarter of the year as it announced plans for four new branches. The Miami-based bank earned $10.3 million in the second quarter, up from $9.4 million in the first quarter. Its net interest income grew to $30.6 million in the second quarter from $30.2 million.

Still, figures are 8.8 percent lower than last year in the same period. The subsidiary has now kept for six consecutive quarters in profit territory after registering losses in most of 2010.

The bank’s loans grew by $113 million, or 5.7 percent, in the first half of 2012 to reach $2.02 billion. That includes $81 million in loan growth during the second quarter. City National Bank said it has enough capital to add $1.5 billion in loans.

City National Bank President and CEO Jorge Gonzalez said the bank has
diversified its loan production by adding many residential loans and small business loans to its staple of commercial real estate loans. It’s also done some construction loans for multifamily, hotels and retail, he added

“Our biggest challenge is finding good quality loan demand,” Gonzalez said. “Since there is still not a significant volume of high quality loan demand then there is a competitiveness between banks for the good opportunities that are out there.”

City National Bank is a subsidiary of Bankia, a Spanish bank that is seeking about $28.5 billion in rescue funds from Spain. City National Bank has a separate balance sheet from Bankia. In contrast to its parent company, City National Bank is profitable and has few problem loans.

City National Bank hopes to attract even more deposits by expanding its branch network. It is seeking locations in Weston, Medley, the Wynwood/Design District area of Miami, and Boca Raton. It currently has 26 branches, so the expansion would give it 30 locations. Gonzalez said the bank has not signed leases in those four cities, but it is getting closer to securing the right locations there.

The bank reported $28.6 million in non-current loans, or 1.37 percent of total loans, on June 30. That’s down from $29.1 million, or 1.45 percent, on March 31. It also had $13.8 million in repossessed property on June 30. Its money held in reserve for future loan losses covered 257 percent of it non-current loans at midyear. Since its reserves were so high, the bank didn’t take any expenses for bad loans in the second quarter.

City National Bank was the fourth-largest bank in South Florida on March 31, with $4.2 billion in assets. By June 30, it was up to $4.3 billion in assets.

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