FBR Capital Reiterates a 'Market Perform' on City National (CYN); 1Q11 Recap: Waiting on Loan Growth and Higher

FBR Capital reiterates a 'Market Perform' on City National (NYSE: CYN), PT $60.

FBR analyst says, "Our neutral rating is based on our view that investors will gravitate toward City National's asset-sensitive balance sheet and core-funded business model in a more favorable interest rate and loan growth environment. In the near term, prospects for loan growth remain tepid, driven by low commercial loan demand and runoff in construction/CRE and covered loan portfolios (higher-yielding loans due to accretable yield adjustments), resulting in negative impacts for its net interest margin. From a credit quality perspective, City National is well ahead of most California peers as evidenced by the net recoveries experienced in 1Q11. In a more normalized environment, we would expect significant earnings momentum as loans become a larger portion of earnings assets (67% today versus 75% historically)...We are increasing our respective FY11 and FY12 EPS estimates to $3.40 (from $3.00) and $4.25 (from $4.10)."

For more ratings news on City National click here and for the rating history of City National click here.

Shares of City National closed at $56.11 yesterday.

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