City National Bank 1Q14 Earnings Call Notes

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A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

Strength in C&I, residential and commercial mortgages

“C&I lending which increased 19% from the first quarter of last year was responsible in this quarter for just over two-thirds of the growth linked quarter-to-quarter. Residential and commercial real estate mortgages also made strong contributions.”

Rising optimism in client base

“Overall, we are seeing rising optimism in our client base.”

Seeing strength across the board

“I think that we’re seeing it across the board as I was just suggesting; technology, franchise, finance, equipment leasing, construction I mentioned, commercial and residential real estate mortgages. We’re still seeing very strong purchase activity in the mortgage space in our client base.”

Most pressure in middle market lending

“middle market lending is where there’s the most pressure. I mean you have less people doing real estate lending or I think you’re seeing some of that’s come back now, it might help us. People have flocked into that and that’s put more pressure on the pricing behind that price and I said a little bit around the specialty areas tend to have less pressure but by the way some of them, franchise get some pressure on the pricing.”

Construction coming back

“I think we are seeing signs that construction levels are picking up and with that that construction lending is an opportunity that’s picking up. I think it is noteworthy that I think loans in this space and projects in this space are getting underwritten on a more conservative basis with more capital, more equity in the deal. So, we’re encouraged by that but it’s a little early in the year to really know for sure. But we think there’s going to be some positive growth here on a sound footing for City National. If we drive around the markets that we’re in, you’re seeing levels of construction, you’re seeing cranes that we all bought four years ago that all moved to China.”