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City National Corporation Grows Third-Quarter 2012 Net Income to $59.8 Million, or $1.10 Per Share, Up 44 Percent From Third-Quarter 2011

City National Corporation Logo

Revenue, loans and deposits grow to record levels

Period-end assets surpass $26 billion for the first time

LOS ANGELES, Oct. 18, 2012 (GLOBE NEWSWIRE) -- City National Corporation (NYSE:CYN), the parent company of wholly owned City National Bank, today reported third-quarter 2012 net income of $59.8 million, or $1.10 per share, up 44 percent from $41.4 million, or $0.77 per share, in the third quarter of 2011.

Year to date, City National's net income totaled $160.8 million, up 25 percent from $128.6 million in the first nine months of 2011. Earnings per share were $2.97, up 24 percent from $2.39 in the first nine months of last year.

City National also announced today that its Board of Directors has maintained and approved a quarterly common stock cash dividend of $0.25 per share. The company's dividend is payable on November 21, 2012 to stockholders of record on November 7, 2012.

THIRD-QUARTER 2012 HIGHLIGHTS

  • Average third-quarter loan and lease balances, excluding loans covered by City National's acquisition-related loss-sharing agreements with the Federal Deposit Insurance Corporation (FDIC), were $13.6 billion, up 15 percent from the third quarter of last year and 4 percent higher than the second quarter of 2012.
  • Fully taxable-equivalent net interest income amounted to $214.8 million, up 6 percent from the year-earlier period and down 3 percent from the second quarter of 2012.
  • Third-quarter deposit balances averaged $21.9 billion, up 11 percent from the third quarter of 2011 and up 5 percent from the second quarter of 2012. Average core deposits, which equal 97 percent of total balances, were up 12 percent from the third quarter of 2011 and up 5 percent from the second quarter of 2012. Period-end deposits reached a record of $22.5 billion.
  • Excluding FDIC-covered loans, third-quarter 2012 results included a $2.0 million provision for loan and lease losses. The company recorded a $1 million provision, excluding FDIC-covered loans, in the second quarter of 2012.
  • Third-quarter 2012 earnings included pretax gains of $4.8 million related to investments. Income, net of expense, from FDIC-covered assets, excluding the base yield, totaled $1.8 million in the third quarter. The aggregate impact of these items was after-tax income of $3.8 million, or $0.07 per share.
  • On July 2, 2012, City National Bank completed its acquisition of Rochdale Investment Management, a New York City-based investment firm that manages $5.1 billion of assets for affluent and high-net-worth clients and their financial advisors across the nation.

"City National delivered another solid performance in the third quarter, and the company is well on the way to achieving its 20th consecutive year of profitability," said President and CEO Russell Goldsmith. "Net income, earnings per share, revenue, loans and deposits all continued to grow at double-digit rates, and for the first time assets exceeded $26 billion. New loan production reached a record level for the third quarter in a row. Credit quality was sound, and expenses remained in check. At the same time, we continued to selectively invest in new people, products and technologies, new companies and capabilities.

"During the third quarter, strong organic growth, especially from new clients, drove income growth, along with the acquisitions of Rochdale Investment Management and First American Equipment Finance. City National also successfully launched its personal mobile banking in the quarter, and it will be followed by business mobile banking in the fourth quarter."

For the three months ended For the three
Dollars in millions, September 30, % months ended %
except per share data 2012 2011 Change June 30, 2012 Change
Earnings Per Share $ 1.10 $ 0.77 43 $ 1.01 9
Net Income Attributable to CNC 59.8 41.4 44 54.8 9
Average Assets $ 25,654.6 $ 22,998.6 12 $ 24,362.5 5
Return on Average Assets 0.93 % 0.71 % 31 0.90 % 3
Return on Average Equity 10.35 % 7.85 % 32 9.86 % 5

ASSETS

Total assets at September 30, 2012 grew to a record $26.3 billion, up 14 percent from the third quarter of 2011 and 6 percent from the second quarter of this year. The year-over-year increase largely reflects strong loan growth and an increase in the securities portfolio due to strong deposit growth.

REVENUE

Revenue for the third quarter of 2012 reached a record $317.2 million, up 18 percent from the year-ago period and up 9 percent from the second quarter of 2012. Revenue for the first nine months of this year was $884.8 million, up 7 percent from the same period of 2011.

NET INTEREST INCOME

Fully taxable-equivalent net interest income was $214.8 million in the third quarter of 2012, up 6 percent from the third quarter of 2011 but down 3 percent from the second quarter of this year. Fully taxable-equivalent net interest income for the first nine months of 2012 was $641.6 million, up 10 percent from $584.3 million in the year-ago period.

Average third-quarter deposits were $21.9 billion, up 11 percent from the year-ago period and up 5 percent from the second quarter of 2012. Average deposits for the first nine months of 2012 totaled $21.0 billion, up 11 percent from the same period of 2011. Period-end deposits grew to a record $22.5 billion, up 13 percent from September 30, 2011 and up 7 percent from June 30, 2012.

Average core deposits were $21.2 billion in the third quarter of 2012, up 12 percent from the same period of 2011 and up 5 percent from the second quarter of this year. Year-to-date 2012 average core deposits grew 12 percent from the year-ago period to $20.3 billion.

Third-quarter 2012 average noninterest-bearing deposits were up 32 percent from the same period of 2011 and up 8 percent from the second quarter of 2012. Average noninterest-bearing deposit balances in the first nine months of 2012 were up 31 percent from the same period last year.

Treasury Services deposit balances, which consist primarily of title, escrow and property management deposits, averaged $2.3 billion in the third quarter of 2012, up 21 percent from the same period of last year and up 7 percent from the second quarter of 2012. For the first nine months of 2012, Treasury Services deposit balances averaged $2.1 billion, up 22 percent from the same period of 2011. The increases reflect an increase in residential refinance activity, as well as sales of existing homes during the quarter.

Third-quarter average loan and lease balances, excluding FDIC-covered loans, were $13.6 billion, up 15 percent from the third quarter of 2011 and up 4 percent from the second quarter of this year. Excluding leases obtained in the company's acquisition of First American Equipment Finance, third-quarter average loan and lease balances increased 13 percent from the year-ago period.

For the first nine months of 2012, City National's average loans and leases, excluding FDIC-covered loans, were $13.1 billion, up 13 percent from the year-ago period. Excluding leases obtained in the company's acquisition of First American, year-to-date average loan and lease balances increased 12 percent from the year-ago period.

Third-quarter average commercial loans were up 24 percent from the year-ago period and 5 percent higher than the second quarter of 2012. The year-over-year increase was primarily due to organic loan growth, as well as the acquisition of First American. Average balances for commercial real estate mortgages were up 27 percent from the third quarter of 2011, and they increased 7 percent from the second quarter of this year. Average balances for commercial real estate construction loans were down 24 percent from the third quarter of last year, and they declined 15 percent from the second quarter of 2012.

Average balances for single-family residential mortgage loans, nearly all of which are made to City National's private banking and entertainment industry clients, were up 4 percent from the year-ago period and 1 percent higher than the second quarter of 2012.

Average securities for the third quarter of 2012 totaled $8.6 billion, up 24 percent from the third quarter of 2011 and up 11 percent from the second quarter of this year, as period-end deposit growth outpaced loan growth. The average duration of total securities at September 30, 2012 was 2.8 compared to 2.1 at September 30, 2011 and 3.0 at the end of the second quarter of 2012.

City National's net interest margin in the third quarter of 2012 averaged 3.58 percent, compared with 3.91 percent in the second quarter of this year and 3.79 percent in the third quarter of 2011. The second-quarter net interest margin reflected the recovery of a previously charged-off loan, and the decline in the third quarter was due primarily to lower interest income related to covered loans that were repaid or charged off in the third quarter, lower loan yields, and continuing deposit growth. The company continued to invest a large share of its growing deposits in securities and other liquid assets. For the first nine months of 2012, City National's net interest margin averaged 3.74 percent, down from 3.82 percent in the previous year.

Third-quarter net interest income included $22.2 million from FDIC-covered loans that were repaid or charged off during the quarter. This compares with $18.3 million in the third quarter of 2011 and $27.4 million in the second quarter of this year.

At September 30, 2012, City National's prime lending rate was 3.25 percent, unchanged from both September 30, 2011 and June 30, 2012.

For the three months ended For the three
September 30, % months ended %
Dollars in millions 2012 2011 Change June 30, 2012 Change
Average Loans and Leases, excluding Covered Loans $ 13,587.5 $ 11,796.6 15 $ 13,125.9 4
Average Covered Loans 1,207.0 1,664.3 (27) 1,341.0 (10)
Average Total Securities 8,631.4 6,954.1 24 7,755.3 11
Average Earning Assets 23,892.0 21,316.6 12 22,769.1 5
Average Deposits 21,940.8 19,724.6 11 20,948.2 5
Average Core Deposits 21,208.5 18,923.6 12 20,215.2 5
Fully Taxable-Equivalent Net Interest Income 214.8 203.6 6 221.4 (3)
Net Interest Margin 3.58 % 3.79 % (6) 3.91 % (8)

COVERED ASSETS

Loans and other real estate owned (OREO) assets acquired in City National's FDIC‑assisted bank acquisitions totaled $1.2 billion at the end of the third quarter of 2012 compared to $1.7 billion at September 30, 2011 and $1.3 billion at June 30, 2012.

In the third quarter of 2012, the company recorded a $2.6 million non-cash net gain to reflect results of the quarterly update of cash-flow projections for the FDIC-covered loans. The gain reflects an $18.1 million provision for losses on covered loans and an offsetting $20.7 million of noninterest income related to City National's loss-sharing agreements with the FDIC. In addition to the $2.6 million non-cash gain for the quarter, the company recognized $0.8 million of other covered assets expense. Income, net of expense, from FDIC-covered assets, excluding the base yield, totaled $1.8 million in the third quarter of 2012, down from $7.3 million in the second quarter of this year. (The base yield is the yield on covered assets, excluding income related to covered loans that are repaid or charged off.) The decrease from $7.3 million in the second quarter was due primarily to lower income from loans that were repaid or charged off.

City National will continue to update cash-flow projections for covered loans on a quarterly basis. Due to the uncertainty in the future performance of the covered loans, additional impairments may be recognized in the future.

OREO assets acquired by City National in four FDIC-assisted bank acquisitions and subject to loss-sharing agreements totaled $83.6 million at September 30, 2012, compared to $102.8 million in the third quarter of 2011 and $82.8 million at the end of the second quarter of this year.

NONINTEREST INCOME

Noninterest income was $107.3 million in the third quarter of 2012, up 54 percent from the year-ago quarter and 43 percent higher than the second quarter of 2012. The increases were due to City National's July 2, 2012 acquisition of Rochdale Investment Management, as well as higher FDIC loss-sharing income and distribution income from investments.

City National's noninterest income for the first nine months of 2012 was up 1 percent from the same period of 2011.

In the third quarter of 2012, noninterest income accounted for 34 percent of City National's total revenue compared to 26 percent in both the third quarter of 2011 and the second quarter of 2012.

Wealth Management

City National's assets under management totaled $38.0 billion as of September 30, 2012, up 13 percent from the year-earlier period and 18 percent higher than the second quarter of 2012.

Trust and investment fees were $43.5 million, up 23 percent from the third quarter of 2011 and 28 percent higher than the second quarter of 2012. Year-to-date 2012 trust and investment fee income was up 3 percent from the same period last year. The increases in assets under management and trust and investment fees were due primarily to the Rochdale acquisition.

Brokerage and mutual fund fees totaled $9.1 million, up 78 percent from the year-earlier period and 71 percent higher than the second quarter of 2012. Brokerage and mutual fund fee income was $19.4 million in the first nine months of this year, up 24 percent from the same period of 2011. The increases in mutual fund fees were due primarily to slightly higher short-term interest rates. The increases in brokerage fees were due to both the acquisition of Rochdale and growth within City National Securities. Not including the Rochdale acquisition, brokerage and mutual fund fees grew 14 percent from the second quarter of 2012 and 5 percent year to date.1

At or for the At or for the
three months ended three months
September 30, % ended %
Dollars in millions 2012 2011 Change June 30, 2012 Change
Trust and Investment Fee Revenue $ 43.5 $ 35.4 23 $ 34.1 28
Brokerage and Mutual Fund Fees 9.1 5.1 78 5.3 71
Assets Under Management (1) 38,043.1 33,590.5 13 32,105.1 18
Assets Under Management or Administration (1)(2) 56,671.8 48,507.4 17 50,040.1 13
(1) Excludes $19.8 billion, $18.4 billion and $16.1 billion of assets under management for asset managers in which City National held a noncontrolling ownership interest as of September 30, 2012, June 30, 2012 and September 30, 2011, respectively.
(2) Assets under administration have been revised to exclude the company's investments that are held in custody and serviced by our wealth management business. Prior-period balances have been reclassified to conform to current period presentation.

Other Noninterest Income

Third-quarter income from cash management and deposit transaction fees was $11.5 million, up 5 percent from the third quarter of 2011 but virtually unchanged from the second quarter of this year. For the first nine months of 2012, cash management and deposit transaction fee income was $34.2 million, up 2 percent from the same period of 2011.

Fee income from foreign exchange services and letters of credit totaled $9.8 million in the third quarter of 2012, down 5 percent from the third quarter of 2011 and 2 percent lower than the second quarter of this year. Year-to-date 2012 foreign exchange services and letters of credit fee income totaled $28.6 million, up 3 percent from the same period last year.

Other income was $27.7 million in the third quarter of 2012, up 105 percent from the year-earlier period and 59 percent higher than the second quarter of 2012. The increases largely reflect gains from investments and trading securities, lease income from First American Equipment Finance, and the growth of income from client swap transactions. Other income in the first nine months of this year was $58.6 million, up 1 percent from the year-ago period.

NONINTEREST EXPENSE

City National's third-quarter 2012 noninterest expense amounted to $207.9 million, up 5 percent from the third quarter of last year and 7 percent from the second quarter of 2012. The increases were due largely to the acquisitions of Rochdale Investment Management and First American Equipment Finance. Noninterest expense for the first nine months of 2012 amounted to $603.1 million, down 1 percent from the same period of last year.

CREDIT QUALITY

The following credit quality information excludes loans subject to loss-sharing agreements involving City National's FDIC-assisted transactions:

Net charge-offs in the third quarter of 2012 totaled $2.2 million, or 0.06 percent of total loans and leases on an annualized basis. The company realized net charge-offs of $10.6 million, or 0.36 percent, in the third quarter of 2011 and net recoveries of $2.7 million, or 0.08 percent, in the second quarter of 2012. Net recoveries for the first nine months of 2012 were $5.0 million, or 0.05 percent of total loans and leases. This compares with net recoveries of $0.1 million in the first nine months of last year.

At September 30, 2012, nonperforming assets amounted to $130.5 million, or 0.95 percent of the company's total loans and leases and OREO, compared to $190.7 million, or 1.56 percent, at September 30, 2011 and $133.3 million, or 0.98 percent, at June 30, 2012.

Nonaccrual loans at September 30, 2012 were $103.5 million compared to $146.1 million at September 30, 2011 and $98.7 million at June 30, 2012.

As of
September 30, 2012
As of
June 30, 2012
As of
September 30, 2011
Period-end Loans (in millions) Total Nonaccrual Total Nonaccrual Total Nonaccrual
Commercial $ 6,264.6 $ 18.8 $ 6,087.0 $ 19.0 $ 5,166.8 $ 34.9
Commercial Real Estate Mortgages 2,463.7 36.6 2,424.3 28.8 2,059.1 20.8
Residential Mortgages 3,897.7 11.7 3,822.6 14.1 3,742.8 10.5
Real Estate Construction 242.1 29.0 301.8 29.7 335.7 70.8
Equity Lines of Credit 719.0 6.9 741.3 6.5 728.9 8.4
Other Loans 137.6 0.5 130.2 0.6 130.9 0.7
Total Loans (1) $ 13,724.7 $ 103.5 $ 13,507.2 $ 98.7 $ 12,164.2 $ 146.1
Other Real Estate Owned (1) 27.0 34.6 44.5
Total Nonperforming Assets, excluding Covered Assets $ 130.5 $ 133.3 $ 190.6
(1) Excludes covered loans, net of allowance, of $1.1 billion, $1.2 billion and $1.6 billion at September 30, 2012, June 30, 2012 and September 30, 2011, respectively, and covered other real estate owned of $83.6 million, $82.8 million and $102.8 million at September 30, 2012, June 30, 2012 and September 30, 2011, respectively.

City National recorded a $2.0 million provision for credit losses in the third quarter of 2012, bringing the total for the year to $3.0 million. The company recorded a $7.5 million provision in the third quarter of 2011.

At September 30, 2012, City National's allowance for loan and lease losses totaled $268.4 million, or 1.96 percent of total loans and leases. That compares to $263.3 million, or 2.16 percent, at September 30, 2011 and $269.5 million, or 2.00 percent, at the end of the second quarter of 2012. The company also maintains an additional $25.3 million in reserves for off-balance-sheet credit commitments.

Commercial Loans

Commercial loan net charge-offs were $4.9 million in the third quarter of 2012. This compares to net charge-offs of $2.9 million in the year-earlier period and net recoveries of $8.1 million in the second quarter of 2012. Net recoveries in the first nine months of 2012 amounted to $8.4 million, compared to net charge-offs of $2.2 million in the same period of last year.

Commercial loans on nonaccrual totaled $18.8 million in the third quarter of 2012 compared to $34.9 million at September 30, 2011 and $19.1 million at June 30, 2012.

Construction Loans

City National's $242.1 million commercial real estate construction portfolio includes secured loans to developers of residential and nonresidential properties. This portfolio now represents slightly less than 2 percent of the company's total loans.

Third-quarter net recoveries of construction loans were $3.1 million compared to net charge-offs of $6.2 million in the third quarter of 2011 and net charge-offs of $4.8 million in the second quarter of 2012. Net charge-offs amounted to $1.6 million in the first nine months of 2012, compared with net charge-offs of $1.8 million in the same period of last year.

At September 30, 2012, construction loans on nonaccrual totaled $29.0 million compared to $70.8 million at September 30, 2011 and $29.7 million at June 30, 2012.

Commercial Real Estate Mortgage Loans

Third-quarter net charge-offs in the company's $2.5 billion commercial real estate mortgage portfolio were $0.2 million compared to net charge-offs of $0.5 million in the third quarter of 2011 and net recoveries of $1.1 million in the second quarter of 2012. Net recoveries amounted to $0.2 million in the first nine months of 2012, compared with net recoveries of $7.0 million in the same period of last year.

Commercial real estate mortgage loans on nonaccrual totaled $36.6 million compared to $20.7 million at September 30, 2011 and $28.8 million at June 30, 2012.

Residential Mortgage Loans and Equity Lines of Credit

City National's $3.9 billion residential mortgage portfolio and $0.7 billion home-equity portfolio continued to perform exceptionally well. Together, they accounted for $0.6 million in net charge-offs in the third quarter of 2012 compared to net charge-offs of $0.7 million at September 30, 2011 and $1.4 million at June 30, 2012. Net charge-offs amounted to $2.6 million in the first nine months of 2012, compared with net charge-offs of $2.4 million in the same period of last year.

Residential mortgage loans and lines of credit on nonaccrual were $18.6 million in the third quarter of 2012 compared to $18.9 million in the third quarter of 2011 and $20.6 million in the second quarter of 2012.

INCOME TAXES

City National's effective tax rate for the third quarter of 2012 was 32.6 percent, up from 27.7 percent in the year-earlier period but down from 33.1 percent in the second quarter of 2012. For the first nine months of 2012, City National's effective tax rate was 32.5 percent, compared to 29.4 percent in the prior-year period. The increases from last year were due primarily to higher pretax income.

CAPITAL LEVELS

City National remains well-capitalized, ending the third quarter of 2012 with a Tier 1 common shareholders' equity ratio of 9.1 percent compared to 10.2 percent at September 30, 2011 and 9.6 percent at June 30, 2012.1 The change from prior periods is a reflection of both asset growth and the acquisitions of Rochdale Investment Management and First American Equipment Finance.

Total risk-based capital and Tier 1 risk-based capital ratios at September 30, 2012 were 12.4 percent and 9.1 percent, respectively. City National's Tier 1 leverage ratio at September 30, 2012 was 6.3 percent. All of City National's capital ratios are above minimum regulatory standards for "well-capitalized" institutions.

Total risk-based capital, Tier 1 risk-based capital and Tier 1 leverage ratios at June 30, 2012 were 12.9 percent, 9.6 percent and 6.7 percent, respectively.

The period-end ratio of equity to total assets at September 30, 2012 was 8.9 percent compared to 9.2 percent at September 30, 2011 and 9.1 percent at June 30, 2012.

2012 OUTLOOK

City National's management continues to anticipate net income growth in 2012, as loans and deposits continue to increase and credit quality remains stable. This outlook reflects management's expectations for modest economic growth and loan-loss provisions as well as low interest rates for the remainder of the year.

CONFERENCE CALL

City National Corporation will host a conference call this afternoon (October 18) to discuss third-quarter 2012 financial results. The call will begin at 2:00 p.m. PDT. Analysts and investors may dial in and participate in the question/answer session. To access the call, please dial (866) 393-6804 and enter Conference ID 29949796. A listen-only live broadcast of the call also will be available on the investor relations page of the company's Website at cnb.com. There, it will be archived and available for 12 months.

ABOUT CITY NATIONAL

City National Corporation's wholly owned subsidiary, City National Bank, provides banking, investment and trust services through 78 offices, including 16 full-service regional centers, in Southern California, the San Francisco Bay Area, Nevada, New York City, Nashville and Atlanta. The corporation and its investment affiliates manage or administer $56.7 billion in client investment assets, including $38.0 billion under direct management.

For more information about City National, visit the company's Website at cnb.com.

The City National Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3142

SAFE-HARBOR LANGUAGE

This news release contains forward-looking statements about the company, for which the company claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

A number of factors, many of which are beyond the company's ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. These factors include: (1) changes in general economic, political, or industry conditions and the related credit and market conditions and the impact they have on the company and its customers, including changes in consumer spending, borrowing and savings habits; (2) the impact on financial markets and the economy of the level of U.S. and European debt; (3) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board; (4) continued delay in the pace of economic recovery and continued stagnant or decreasing employment levels; (5) the effect of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations to be promulgated by supervisory and oversight agencies implementing the new legislation, taking into account that the precise timing, extent and nature of such rules and regulations and the impact on the company is uncertain; (6) the impact of revised capital requirements under Basel III; (7) significant changes in applicable laws and regulations, including those concerning taxes, banking and securities; (8) volatility in the municipal bond market; (9) changes in the level of nonperforming assets, charge-offs, other real estate owned and provision expense; (10) incorrect assumptions in the value of the loans acquired in FDIC-assisted acquisitions resulting in greater than anticipated losses in the acquired loan portfolios exceeding the losses covered by the loss-sharing agreements with the FDIC; (11) changes in inflation, interest rates, and market liquidity which may impact interest margins and impact funding sources; (12) adequacy of the company's enterprise risk management framework; (13) the company's ability to attract new employees and retain and motivate existing employees; (14) increased competition in the company's markets and our ability to increase market share and control expenses; (15) changes in the financial performance and/or condition of the company's borrowers, including adverse impact on loan utilization rates, delinquencies, defaults and customers' ability to meet certain credit obligations, changes in customers' suppliers, and other counterparties' performance and creditworthiness; (16) a substantial and permanent loss of either client accounts and/or assets under management at the company's investment advisory affiliates or its wealth management division; (17) soundness of other financial institutions which could adversely affect the company; (18) protracted labor disputes in the company's markets; (19) the impact of natural disasters, terrorist activities or international hostilities on the operations of our business or the value of collateral; (20) the effect of acquisitions and integration of acquired businesses and de novo branching efforts; (21) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies; (22) the impact of cyber security attacks or other disruptions to the company's information systems and any resulting compromise of data or disruptions in service; and (23) the success of the company at managing the risks involved in the foregoing.

Forward-looking statements speak only as of the date they are made, and the company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the statements are made, or to update earnings guidance, including the factors that influence earnings.

For a more complete discussion of these risks and uncertainties, please refer to the company's Annual Report on Form 10-K for the year ended December 31, 2011 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.

1For notes on non-GAAP measures, see pages 15 and 16 of the Selected Financial Information.

CITY NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
(unaudited)
Three Months Nine Months
For The Period Ended September 30, 2012 2011 % Change 2012 2011 % Change
Per Share
Net income attributable to City National Corporation
Basic $ 1.10 $ 0.78 41 $ 2.98 $ 2.41 24
Diluted 1.10 0.77 43 2.97 2.39 24
Dividends 0.25 0.20 25 0.75 0.60 25
Book value 43.81 40.40 8
Results of Operations: (In millions)
Interest income $ 225 $ 217 4 $ 668 $ 628 6
Interest expense 15 18 (16) 41 57 (27)
Net interest income 210 199 5 627 571 10
Net interest income (Fully taxable-equivalent) 215 204 6 642 584 10
Total revenue 317 269 18 885 827 7
Provision for credit losses on loans and leases, excluding covered loans 2 8 (73) 3 8 (60)
Provision for losses on covered loans 18 5 251 39 26 50
Net income attributable to City National Corporation 60 41 44 161 129 25
Financial Ratios:
Performance Ratios:
Return on average assets 0.93 % 0.71 % 0.87 % 0.78 %
Return on average shareholders' equity 10.35 7.85 9.62 8.46
Period-end equity to period-end assets 8.88 9.18
Net interest margin 3.58 3.79 3.74 3.82
Expense to revenue ratio 61.96 67.68 64.06 66.50
Capital Adequacy Ratios (Period-end):
Tier 1 leverage 6.29 6.82
Tier 1 risk-based capital 9.15 10.28
Total risk-based capital 12.42 12.88
Asset Quality Ratios:
Allowance for loan and lease losses to:
Total loans and leases, excluding covered loans 1.96 % 2.16 %
Nonaccrual loans 259.38 180.21
Nonperforming assets, excluding covered assets, to:
Total loans and leases and other real estate owned, excluding covered assets 0.95 1.56
Total assets 0.50 0.83
Net (charge-offs) recoveries to average total loans and leases, excluding covered loans (annualized) (0.06) % (0.36) % 0.05 % 0.00 %
Average Balances: (In millions)
Loans and leases, excluding covered loans $ 13,588 $ 11,797 15 $ 13,051 $ 11,525 13
Covered loans 1,207 1,664 (27) 1,328 1,748 (24)
Securities 8,631 6,954 24 8,107 6,295 29
Interest-earning assets 23,892 21,317 12 22,925 20,424 12
Assets 25,655 22,999 12 24,558 22,135 11
Core deposits 21,209 18,924 12 20,318 18,084 12
Deposits 21,941 19,725 11 21,039 18,903 11
Interest-bearing liabilities 10,088 10,841 (7) 10,029 10,701 (6)
Shareholders' equity 2,297 2,093 10 2,234 2,032 10
Total equity 2,297 2,117 9 2,234 2,057 9
Period-End Balances: (In millions)
Loans and leases, excluding covered loans $ 13,725 $ 12,164 13
Covered loans 1,144 1,612 (29)
Securities 9,111 7,279 25
Assets 26,252 23,104 14
Core deposits 21,828 19,137 14
Deposits 22,512 19,909 13
Shareholders' equity 2,330 2,120 10
Total equity 2,330 2,120 10
Wealth Management: (In millions) (1)
Assets under management $ 38,043 $ 33,591 13
Assets under management or administration (2) 56,672 48,507 17
(1) Excludes $19.8 billion and $16.1 billion of assets under management for asset managers in which City National held a noncontrolling ownership interest as of September 30, 2012 and September 30, 2011, respectively.
(2) Assets under administration have been revised to exclude the Company's investments that are held in custody and serviced by our wealth management business. Prior period balances have been reclassified to conform to current period presentation.
CITY NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended Nine Months Ended
(Dollars in thousands September 30, September 30,
except per share data) 2012 2011 % Change 2012 2011 % Change
Interest income $ 224,768 $ 216,892 4 $ 668,249 $ 627,838 6
Interest expense 14,846 17,576 (16) 41,135 56,405 (27)
Net interest income 209,922 199,316 5 627,114 571,433 10
Provision for credit losses on loans and leases, excluding covered loans 2,000 7,500 (73) 3,000 7,500 (60)
Provision for losses on covered loans 18,089 5,147 251 38,848 25,979 50
Noninterest income
Trust and investment fees 43,477 35,412 23 111,198 107,737 3
Brokerage and mutual fund fees 9,059 5,079 78 19,380 15,604 24
Cash management and deposit transaction fees 11,526 10,986 5 34,169 33,616 2
International services 9,819 10,352 (5) 28,621 27,683 3
FDIC loss sharing income (expense), net 1,667 (14,191) 112 (3,493) (16,270) (79)
Gain on disposal of assets 3,199 5,191 (38) 8,401 16,037 (48)
Gain on securities 817 3,327 (75) 809 4,688 (83)
Gain on acquisition -- -- -- -- 8,164 (100)
Other 27,693 13,479 105 58,640 58,206 1
Total noninterest income 107,257 69,635 54 257,725 255,465 1
Noninterest expense
Salaries and employee benefits 120,210 112,729 7 355,490 335,880 6
Net occupancy of premises 16,238 13,713 18 43,980 40,724 8
Legal and professional fees 11,757 14,242 (17) 34,996 39,109 (11)
Information services 8,660 7,906 10 25,348 23,738 7
Depreciation and amortization 8,324 6,930 20 23,765 20,582 15
Amortization of intangibles 1,932 2,105 (8) 5,336 6,377 (16)
Marketing and advertising 7,141 6,675 7 21,554 20,819 4
Office services and equipment 4,673 4,456 5 13,113 13,734 (5)
Other real estate owned 8,749 13,160 (34) 28,384 49,811 (43)
FDIC assessments 4,616 6,670 (31) 13,618 25,000 (46)
Other 15,586 9,051 72 37,538 31,092 21
Total noninterest expense 207,886 197,637 5 603,122 606,866 (1)
Income before taxes 89,204 58,667 52 239,869 186,553 29
Applicable income taxes 29,052 16,267 79 78,042 54,803 42
Net income $ 60,152 $ 42,400 42 $ 161,827 $ 131,750 23
Less: Net income attributable to noncontrolling interest 372 1,002 (63) 1,024 3,189 (68)
Net income attributable to City National Corporation $ 59,780 $ 41,398 44 $ 160,803 $ 128,561 25
Other Data:
Earnings per share - basic $ 1.10 $ 0.78 41 $ 2.98 $ 2.41 24
Earnings per share - diluted $ 1.10 $ 0.77 43 $ 2.97 $ 2.39 24
Dividends paid per share $ 0.25 $ 0.20 25 $ 0.75 $ 0.60 25
Dividend payout ratio 22.63 % 25.70 % (12) 25.10 % 24.77 % 1
Return on average assets 0.93 % 0.71 % 31 0.87 % 0.78 % 12
Return on average shareholders' equity 10.35 % 7.85 % 32 9.62 % 8.46 % 14
Net interest margin (Fully taxable-equivalent) 3.58 % 3.79 % (6) 3.74 % 3.82 % (2)
Full-time equivalent employees 3,439 3,287 5
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
2012
(Dollars in thousands Third Second First Year to
except per share data) Quarter Quarter Quarter Date
Interest income $ 224,768 $ 229,889 $ 213,592 $ 668,249
Interest expense 14,846 13,410 12,879 41,135
Net interest income 209,922 216,479 200,713 627,114
Provision for credit losses on loans and leases, excluding covered loans 2,000 1,000 -- 3,000
Provision for losses on covered loans 18,089 13,293 7,466 38,848
Noninterest income
Trust and investment fees 43,477 34,067 33,654 111,198
Brokerage and mutual fund fees 9,059 5,293 5,028 19,380
Cash management and deposit transaction fees 11,526 11,475 11,168 34,169
International services 9,819 10,017 8,785 28,621
FDIC loss sharing income (expense), net 1,667 (6,026) 866 (3,493)
Gain on disposal of assets 3,199 3,011 2,191 8,401
Gain (loss) on securities 817 (457) 449 809
Other 27,693 17,388 13,559 58,640
Total noninterest income 107,257 74,768 75,700 257,725
Noninterest expense
Salaries and employee benefits 120,210 115,035 120,245 355,490
Net occupancy of premises 16,238 14,056 13,686 43,980
Legal and professional fees 11,757 11,359 11,880 34,996
Information services 8,660 8,539 8,149 25,348
Depreciation and amortization 8,324 8,013 7,428 23,765
Amortization of intangibles 1,932 1,518 1,886 5,336
Marketing and advertising 7,141 7,597 6,816 21,554
Office services and equipment 4,673 4,492 3,948 13,113
Other real estate owned 8,749 7,541 12,094 28,384
FDIC assessments 4,616 4,523 4,479 13,618
Other 15,586 11,843 10,109 37,538
Total noninterest expense 207,886 194,516 200,720 603,122
Income before taxes 89,204 82,438 68,227 239,869
Applicable income taxes 29,052 27,271 21,719 78,042
Net income $ 60,152 $ 55,167 $ 46,508 $ 161,827
Less: Net income attributable to noncontrolling interest 372 409 243 1,024
Net income attributable to City National Corporation $ 59,780 $ 54,758 $ 46,265 $ 160,803
Other Data:
Earnings per share - basic $ 1.10 $ 1.02 $ 0.86 $ 2.98
Earnings per share - diluted $ 1.10 $ 1.01 $ 0.86 $ 2.97
Dividends paid per share $ 0.25 $ 0.25 $ 0.25 $ 0.75
Dividend payout ratio 22.63 % 24.57 % 28.91 % 25.10 %
Return on average assets 0.93 % 0.90 % 0.79 % 0.87 %
Return on average shareholders' equity 10.35 % 9.86 % 8.58 % 9.62 %
Net interest margin (Fully taxable-equivalent) 3.58 % 3.91 % 3.74 % 3.74 %
Full-time equivalent employees 3,439 3,330 3,235
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
2011
(Dollars in thousands Fourth Third Second First Year to
except per share data) Quarter Quarter Quarter Quarter Date
Interest income $ 215,252 $ 216,892 $ 210,136 $ 200,810 $ 843,090
Interest expense 13,695 17,576 19,309 19,520 70,100
Net interest income 201,557 199,316 190,827 181,290 772,990
Provision for credit losses on loans and leases, excluding covered loans 5,000 7,500 -- -- 12,500
Provision for losses on covered loans 17,667 5,147 1,716 19,116 43,646
Noninterest income
Trust and investment fees 32,995 35,412 36,687 35,638 140,732
Brokerage and mutual fund fees 4,836 5,079 4,864 5,661 20,440
Cash management and deposit transaction fees 10,689 10,986 10,905 11,725 44,305
International services 8,783 10,352 9,015 8,316 36,466
FDIC loss sharing income (expense), net 7,633 (14,191) (10,684) 8,605 (8,637)
Gain on disposal of assets 4,263 5,191 8,422 2,424 20,300
(Loss) gain on securities (273) 3,327 1,395 (34) 4,415
Gain on acquisition -- -- 8,164 -- 8,164
Other 17,476 13,479 23,169 21,558 75,682
Total noninterest income 86,402 69,635 91,937 93,893 341,867
Noninterest expense
Salaries and employee benefits 112,822 112,729 112,139 111,012 448,702
Net occupancy of premises 13,616 13,713 13,665 13,346 54,340
Legal and professional fees 10,846 14,242 14,790 10,077 49,955
Information services 8,359 7,906 8,335 7,497 32,097
Depreciation and amortization 7,014 6,930 6,904 6,748 27,596
Amortization of intangibles 1,350 2,105 2,104 2,168 7,727
Marketing and advertising 8,101 6,675 7,626 6,518 28,920
Office services and equipment 4,234 4,456 4,672 4,606 17,968
Other real estate owned 15,233 13,160 22,162 14,489 65,044
FDIC assessments 4,480 6,670 8,524 9,806 29,480
Other 12,174 9,051 10,911 11,130 43,266
Total noninterest expense 198,229 197,637 211,832 197,397 805,095
Income before taxes 67,063 58,667 69,216 58,670 253,616
Applicable income taxes 22,758 16,267 20,650 17,886 77,561
Net income $ 44,305 $ 42,400 $ 48,566 $ 40,784 $ 176,055
Less: Net income attributable to noncontrolling interest 445 1,002 1,095 1,092 3,634
Net income attributable to City National Corporation $ 43,860 $ 41,398 $ 47,471 $ 39,692 $ 172,421
Other Data:
Earnings per share - basic $ 0.82 $ 0.78 $ 0.89 $ 0.75 $ 3.24
Earnings per share - diluted $ 0.82 $ 0.77 $ 0.88 $ 0.74 $ 3.21
Dividends paid per share $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.80
Dividend payout ratio 24.25 % 25.70 % 22.40 % 26.65 % 24.64 %
Return on average assets 0.73 % 0.71 % 0.87 % 0.75 % 0.77 %
Return on average shareholders' equity 8.15 % 7.85 % 9.39 % 8.16 % 8.38 %
Net interest margin (Fully taxable-equivalent) 3.70 % 3.79 % 3.85 % 3.84 % 3.79 %
Full-time equivalent employees 3,256 3,287 3,328 3,258
CITY NATIONAL CORPORATION
CONSOLIDATED PERIOD END BALANCE SHEET
(unaudited)
2012
(In thousands) Third
Quarter
Second
Quarter
First
Quarter
Assets
Cash and due from banks $ 235,038 $ 162,894 $ 210,799
Due from banks - interest-bearing 335,300 106,109 101,375
Federal funds sold 19,500 162,000 156,000
Securities available-for-sale 7,872,064 6,865,881 6,838,710
Securities held-to-maturity 1,174,161 1,100,229 996,613
Trading securities 64,749 62,585 82,589
Loans and leases:
Commercial 6,264,562 6,086,947 5,573,782
Commercial real estate mortgages 2,463,664 2,424,333 2,213,114
Residential mortgages 3,897,690 3,822,630 3,805,807
Real estate construction 242,137 301,829 313,409
Equity lines of credit 718,966 741,270 715,997
Installment 137,632 130,200 125,793
Loans and leases, excluding covered loans 13,724,651 13,507,209 12,747,902
Allowance for loan and lease losses (268,440) (269,534) (266,077)
Loans and leases, excluding covered loans, net 13,456,211 13,237,675 12,481,825
Covered loans, net (1) 1,099,359 1,216,988 1,335,685
Net loans and leases 14,555,570 14,454,663 13,817,510
Premises and equipment, net 147,621 147,245 143,238
Goodwill and other intangibles 691,765 589,114 521,717
Other real estate owned (2) 110,673 117,501 107,530
FDIC indemnification asset 160,991 170,654 185,392
Other assets 884,096 863,098 877,016
Total assets $ 26,251,528 $ 24,801,973 $ 24,038,489
Liabilities
Deposits:
Noninterest-bearing $ 13,432,413 $ 12,187,075 $ 11,550,000
Interest-bearing 9,079,903 8,921,977 9,237,737
Total deposits 22,512,316 21,109,052 20,787,737
Short-term borrowings 211,739 322,077 222,776
Long-term debt 706,035 712,280 482,024
Other liabilities 449,728 361,300 302,951
Total liabilities 23,879,818 22,504,709 21,795,488
Redeemable noncontrolling interest 41,386 41,899 43,436
Shareholders' equity
Common stock 53,886 53,886 53,886
Additional paid-in capital 485,975 491,439 489,717
Accumulated other comprehensive income 93,924 82,807 81,342
Retained earnings 1,732,417 1,686,163 1,644,861
Treasury shares (35,878) (58,930) (70,241)
Total shareholders' equity 2,330,324 2,255,365 2,199,565
Total liabilities and shareholders' equity $ 26,251,528 $ 24,801,973 $ 24,038,489
(1) Covered loans are net of $45.0 million, $43.1 million and $61.5 million of allowance for loan losses as of September 30, 2012, June 30, 2012 and March 31, 2012, respectively.
(2) Other real estate owned includes $83.6 million, $82.8 million and $78.5 million covered by FDIC loss share at September 30, 2012, June 30, 2012 and March 31, 2012, respectively.
CITY NATIONAL CORPORATION
CONSOLIDATED PERIOD END BALANCE SHEET
(unaudited)
2011
(In thousands) Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Assets
Cash and due from banks $ 168,376 $ 249,496 $ 181,203 $ 203,600
Due from banks - interest-bearing 76,438 144,754 725,304 743,569
Federal funds sold -- 100,000 123,000 100,000
Securities available-for-sale 7,571,901 7,185,288 6,348,055 5,849,390
Securities held-to-maturity 467,680 -- -- --
Trading securities 61,975 93,707 125,829 81,287
Loans and leases:
Commercial 5,246,081 5,166,802 4,800,252 4,468,177
Commercial real estate mortgages 2,110,749 2,059,114 1,930,269 1,902,862
Residential mortgages 3,763,218 3,742,768 3,710,765 3,603,058
Real estate construction 315,609 335,712 355,014 415,241
Equity lines of credit 741,081 728,890 735,899 733,567
Installment 132,647 130,923 130,924 146,779
Loans and leases, excluding covered loans 12,309,385 12,164,209 11,663,123 11,269,684
Allowance for loan and lease losses (262,557) (263,348) (265,933) (263,356)
Loans and leases, excluding covered loans, net 12,046,828 11,900,861 11,397,190 11,006,328
Covered loans, net (1) 1,417,289 1,550,103 1,657,004 1,684,068
Net loans and leases 13,464,117 13,450,964 13,054,194 12,690,396
Premises and equipment, net 143,641 140,871 134,511 131,345
Goodwill and other intangibles 522,753 524,103 526,207 527,419
Other real estate owned (2) 129,340 147,369 162,541 178,164
FDIC indemnification asset 204,259 212,809 261,734 270,576
Other assets 855,811 854,899 883,511 860,186
Total assets $ 23,666,291 $ 23,104,260 $ 22,526,089 $ 21,635,932
Liabilities
Deposits:
Noninterest-bearing $ 11,146,627 $ 10,308,547 $ 9,403,425 $ 8,756,877
Interest-bearing 9,240,955 9,600,534 9,861,695 9,721,062
Total deposits 20,387,582 19,909,081 19,265,120 18,477,939
Short-term borrowings 50,000 30,640 149,771 151,663
Long-term debt 697,778 699,983 701,829 703,173
Other liabilities 341,439 301,387 281,622 246,517
Total liabilities 21,476,799 20,941,091 20,398,342 19,579,292
Redeemable noncontrolling interest 44,643 42,704 43,737 46,013
Equity
City National Corporation shareholders' equity:
Common stock 53,886 53,886 53,886 53,886
Additional paid-in capital 489,200 489,037 485,064 480,918
Accumulated other comprehensive income 72,372 82,467 56,293 26,535
Retained earnings 1,611,969 1,578,747 1,547,989 1,511,153
Treasury shares (82,578) (83,672) (84,311) (86,954)
Total shareholders' equity 2,144,849 2,120,465 2,058,921 1,985,538
Noncontrolling interest -- -- 25,089 25,089
Total equity 2,144,849 2,120,465 2,084,010 2,010,627
Total liabilities and equity $ 23,666,291 $ 23,104,260 $ 22,526,089 $ 21,635,932
(1) Covered loans are net of $64.6 million, $61.8 million, $67.6 million and $82.0 million of allowance for loan losses as of December 31, 2011, September 30, 2011, June 30, 2011 and March 31, 2011, respectively.
(2) Other real estate owned includes $98.5 million, $102.8 million, $114.9 million and $121.8 million covered by FDIC loss share at December 31, 2011, September 30, 2011, June 30, 2011 and March 31, 2011, respectively.
CITY NATIONAL CORPORATION
CREDIT LOSS EXPERIENCE
(unaudited)
2012 2011
(Dollars in thousands) Third
Quarter
Second
Quarter
First
Quarter
Year To
Date
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Year To
Date
Allowance for Loan and Lease Losses, Excluding Covered Loans
Balance at beginning of period $ 269,534 $ 266,077 $ 262,557 $ 262,557 $ 263,348 $ 265,933 $ 263,356 $ 257,007 $ 257,007
Net (charge-offs)/recoveries:
Commercial (4,936) 8,092 5,283 8,439 (12,534) (2,915) 2,616 (1,937) (14,770)
Commercial real estate mortgages (241) 1,113 (666) 206 (87) (452) 1,269 6,212 6,942
Residential mortgages (535) (543) (494) (1,572) (52) (163) (253) (615) (1,083)
Real estate construction 3,105 (4,839) 104 (1,630) 6,860 (6,233) 577 3,826 5,030
Equity lines of credit (32) (808) (154) (994) (377) (512) (120) (757) (1,766)
Installment 454 (274) 417 597 670 (309) 106 (202) 265
Total net (charge-offs)/recoveries (2,185) 2,741 4,490 5,046 (5,520) (10,584) 4,195 6,527 (5,382)
Provision for credit losses 2,000 1,000 -- 3,000 5,000 7,500 -- -- 12,500
Transfers (to) from reserve for off-balance sheet credit commitments (909) (284) (970) (2,163) (271) 499 (1,618) (178) (1,568)
Balance at end of period $ 268,440 $ 269,534 $ 266,077 $ 268,440 $ 262,557 $ 263,348 $ 265,933 $ 263,356 $ 262,557
Net (Charge-Offs)/Recoveries to Average Total Loans and Leases, Excluding Covered Loans (annualized):
Commercial (0.32) % 0.56 % 0.40 % 0.20 % (0.96) % (0.23) % 0.22 % (0.18) % (0.31) %
Commercial real estate mortgages (0.04) % 0.20 % (0.12) % 0.01 % (0.02) % (0.09) % 0.27 % 1.31 % 0.35 %
Residential mortgages (0.06) % (0.06) % (0.05) % (0.05) % (0.01) % (0.02) % (0.03) % (0.07) % (0.03) %
Real estate construction 4.65 % (6.26) % 0.13 % (0.73) % 8.29 % (7.14) % 0.59 % 3.46 % 1.33 %
Equity lines of credit (0.02) % (0.44) % (0.09) % (0.18) % (0.20) % (0.28) % (0.07) % (0.42) % (0.24) %
Installment 1.34 % (0.85) % 1.30 % 0.61 % 2.00 % (0.94) % 0.32 % (0.55) % 0.19 %
Total loans and leases, excluding covered loans (0.06) % 0.08 % 0.15 % 0.05 % (0.18) % (0.36) % 0.15 % 0.24 % (0.05) %
Reserve for Off-Balance Sheet Credit Commitments
Balance at beginning of period $ 24,351 $ 24,067 $ 23,097 $ 23,097 $ 22,826 $ 23,325 $ 21,707 $ 21,529 $ 21,529
Transfers from (to) allowance 909 284 970 2,163 271 (499) 1,618 178 1,568
Balance at end of period $ 25,260 $ 24,351 $ 24,067 $ 25,260 $ 23,097 $ 22,826 $ 23,325 $ 21,707 $ 23,097
Allowance for Losses on Covered Loans
Balance at beginning of period $ 43,147 $ 61,471 $ 64,565 $ 64,565 $ 61,753 $ 67,629 $ 82,016 $ 67,389 $ 67,389
Provision for losses 18,089 13,293 7,466 38,848 17,667 5,147 1,716 19,116 43,646
Net charge-offs -- -- -- -- -- (325) -- -- (325)
Reduction in allowance due to loan removals (16,258) (31,617) (10,560) (58,435) (14,855) (10,698) (16,103) (4,489) (46,145)
Balance at end of period $ 44,978 $ 43,147 $ 61,471 $ 44,978 $ 64,565 $ 61,753 $ 67,629 $ 82,016 $ 64,565
Note: Certain prior period balances have been reclassified to conform to current period presentation.
CITY NATIONAL CORPORATION
NONPERFORMING ASSETS
(unaudited)
2012 2011
(Dollars in thousands) Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Nonperforming assets, excluding covered assets
Nonaccrual loans, excluding covered loans
Commercial $ 18,848 $ 19,056 $ 19,584 $ 19,888 $ 34,937 $ 24,337 $ 19,297
Commercial real estate mortgages 36,580 28,780 21,071 21,948 20,746 26,676 28,028
Residential mortgages 11,680 14,064 13,628 9,771 10,512 14,211 14,544
Real estate construction 28,963 29,676 48,964 50,876 70,827 60,543 81,448
Equity lines of credit 6,946 6,505 8,831 8,669 8,401 6,668 6,676
Installment 477 575 729 874 707 365 7,399
Total nonaccrual loans, excluding covered loans 103,494 98,656 112,807 112,026 146,130 132,800 157,392
Other real estate owned, excluding covered OREO 27,055 34,667 29,074 30,790 44,521 47,634 56,342
Total nonperforming assets, excluding covered assets $ 130,549 $ 133,323 $ 141,881 $ 142,816 $ 190,651 $ 180,434 $ 213,734
Nonperforming covered assets
Nonaccrual loans $ -- $ 422 $ 422 $ 422 $ 1,023 $ 1,408 $ 2,343
Other real estate owned 83,618 82,834 78,456 98,550 102,848 114,907 121,822
Total nonperforming covered assets $ 83,618 $ 83,256 $ 78,878 $ 98,972 $ 103,871 $ 116,315 $ 124,165
Loans 90 days or more past due on accrual status, excluding covered loans $ 433 $ 2,065 $ 654 $ 453 $ 379 $ 7,214 $ 3,679
Covered loans 90 days or more past due on accrual status $ 140,041 $ 190,005 $ 265,175 $ 330,169 $ 336,193 $ 368,379 $ 390,267
Allowance for loan and lease losses as a percentage of:
Nonaccrual loans 259.38 % 273.21 % 235.87 % 234.37 % 180.21 % 200.25 % 167.32 %
Total nonperforming assets, excluding covered assets 205.62 % 202.17 % 187.54 % 183.84 % 138.13 % 147.39 % 123.22 %
Total loans and leases, excluding covered loans 1.96 % 2.00 % 2.09 % 2.13 % 2.16 % 2.28 % 2.34 %
Nonaccrual loans as a percentage of total loans, excluding covered loans 0.75 % 0.73 % 0.88 % 0.91 % 1.20 % 1.14 % 1.40 %
Nonperforming assets, excluding covered assets, as a percentage of:
Total loans and other real estate owned, excluding covered assets 0.95 % 0.98 % 1.11 % 1.16 % 1.56 % 1.54 % 1.89 %
Total assets 0.50 % 0.54 % 0.59 % 0.60 % 0.83 % 0.80 % 0.99 %
Note: Certain prior period balances have been reclassified to conform to current period presentation.
CITY NATIONAL CORPORATION
AVERAGE BALANCES AND RATES
(unaudited)
2012
Third Quarter Second Quarter First Quarter Year to Date
(Dollars in millions) Average
Balance
Average
Rate
Average
Balance
Average
Rate
Average
Balance
Average
Rate
Average
Balance
Average
Rate
Assets
Interest-earning assets
Loans and leases
Commercial $ 6,128 3.97 % $ 5,845 4.16 % $ 5,319 3.94 % $ 5,765 4.03 %
Commercial real estate mortgages 2,464 4.45 2,295 4.70 2,166 4.87 2,309 4.66
Residential mortgages 3,865 4.11 3,815 4.28 3,777 4.36 3,819 4.25
Real estate construction 265 5.67 311 4.31 314 5.33 297 5.08
Equity lines of credit 731 3.52 731 3.53 727 3.58 730 3.54
Installment 135 4.51 129 4.60 129 4.67 131 4.59
Total loans and leases, excluding covered loans 13,588 4.10 13,126 4.27 12,432 4.26 13,051 4.21
Covered loans 1,207 13.92 1,341 14.51 1,439 10.63 1,328 12.93
Total loans and leases 14,795 4.90 14,467 5.22 13,871 4.93 14,379 5.02
Due from banks - interest-bearing 247 0.26 293 0.24 167 0.22 236 0.24
Federal funds sold and securities purchased under resale agreements 105 0.28 137 0.28 15 0.28 86 0.28
Securities 8,631 2.16 7,755 2.37 7,929 2.40 8,107 2.30
Other interest-earning assets 114 2.40 117 2.39 121 2.30 117 2.36
Total interest-earning assets 23,892 3.82 22,769 4.15 22,103 3.97 22,925 3.98
Allowance for loan and lease losses (319) (331) (335) (328)
Cash and due from banks 184 148 141 158
Other non-earning assets 1,898 1,777 1,736 1,803
Total assets $ 25,655 $ 24,363 $ 23,645 $ 24,558
Liabilities and Equity
Interest-bearing deposits
Interest checking accounts $ 1,981 0.09 % $ 1,890 0.10 % $ 1,952 0.11 % $ 1,941 0.10 %
Money market accounts 5,838 0.11 5,856 0.13 6,018 0.15 5,904 0.13
Savings deposits 371 0.14 360 0.14 358 0.14 363 0.14
Time deposits - under $100,000 220 0.51 228 0.50 242 0.49 230 0.50
Time deposits -- $100,000 and over 732 0.41 733 0.45 697 0.51 721 0.46
Total interest-bearing deposits 9,142 0.14 9,067 0.16 9,267 0.18 9,159 0.16
Federal funds purchased and securities sold under repurchase agreements 24 0.15 4 0.11 166 0.08 64 0.09
Other borrowings 922 4.97 797 4.97 697 5.09 806 5.00
Total interest-bearing liabilities 10,088 0.59 9,868 0.55 10,130 0.51 10,029 0.55
Noninterest-bearing deposits 12,799 11,881 10,950 11,880
Other liabilities 471 379 396 415
Total equity 2,297 2,234 2,169 2,234
Total liabilities and equity $ 25,655 $ 24,363 $ 23,645 $ 24,558
Net interest spread 3.23 % 3.60 % 3.46 % 3.43 %
Net interest margin 3.58 % 3.91 % 3.74 % 3.74 %
Average prime rate 3.25 % 3.25 % 3.25 % 3.25 %
Note: Certain prior period balances have been reclassified to conform to current period presentation.
CITY NATIONAL CORPORATION
AVERAGE BALANCES AND RATES
(unaudited)
2011
Fourth Quarter Third Quarter Second Quarter First Quarter Year to Date
(Dollars in millions) Average Balance Average Rate Average Balance Average Rate Average Balance Average Rate Average Balance Average Rate Average Balance Average Rate
Assets
Interest-earning assets
Loans and leases
Commercial $ 5,204 3.89 % $ 4,928 4.09 % $ 4,693 4.22 % $ 4,437 4.30 % $ 4,818 4.11 %
Commercial real estate mortgages 2,077 5.12 1,944 5.30 1,904 5.67 1,924 5.56 1,963 5.40
Residential mortgages 3,739 4.49 3,717 4.74 3,663 4.78 3,563 4.81 3,671 4.70
Real estate construction 328 5.08 347 4.65 395 5.10 448 4.56 379 4.84
Equity lines of credit 732 3.58 731 3.55 730 3.59 733 3.57 731 3.57
Installment 133 4.87 130 4.94 131 4.88 151 4.81 136 4.88
Total loans and leases, excluding covered loans 12,213 4.30 11,797 4.47 11,516 4.64 11,256 4.67 11,698 4.51
Covered loans 1,554 11.06 1,664 10.65 1,770 8.70 1,811 7.78 1,699 9.48
Total loans and leases 13,767 5.05 13,461 5.23 13,286 5.19 13,067 5.11 13,397 5.14
Due from banks - interest-bearing 435 0.30 642 0.29 526 0.31 490 0.25 524 0.29
Federal funds sold and securities purchased under resale agreements 115 0.28 130 0.28 143 0.28 232 0.27 154 0.27
Securities 7,642 2.27 6,954 2.45 6,224 2.66 5,693 2.75 6,635 2.51
Other interest-earning assets 125 2.13 130 2.09 135 2.09 139 2.04 132 2.09
Total interest-earning assets 22,084 3.95 21,317 4.12 20,314 4.23 19,621 4.24 20,842 4.13
Allowance for loan and lease losses (331) (330) (344) (329) (333)
Cash and due from banks 199 203 184 201 197
Other non-earning assets 1,742 1,809 1,856 1,885 1,822
Total assets $ 23,694 $ 22,999 $ 22,010 $ 21,378 $ 22,528
Liabilities and Equity
Interest-bearing deposits
Interest checking accounts $ 1,865 0.12 % $ 1,727 0.15 % $ 1,707 0.17 % $ 1,772 0.19 % $ 1,768 0.16 %
Money market accounts 6,467 0.18 6,900 0.35 6,683 0.43 6,452 0.45 6,626 0.35
Savings deposits 344 0.17 329 0.29 327 0.32 303 0.34 326 0.28
Time deposits - under $100,000 262 0.53 280 0.48 308 0.49 325 0.56 294 0.52
Time deposits -- $100,000 and over 718 0.57 801 0.61 833 0.70 823 0.75 793 0.66
Total interest-bearing deposits 9,656 0.20 10,037 0.34 9,858 0.41 9,675 0.43 9,807 0.34
Federal funds purchased and securities sold under repurchase agreements 2 0.06 -- 0.07 10 0.07 -- 0.00 3 0.07
Other borrowings 701 4.96 804 4.46 855 4.36 858 4.41 804 4.53
Total interest-bearing liabilities 10,359 0.52 10,841 0.64 10,723 0.72 10,533 0.75 10,614 0.66
Noninterest-bearing deposits 10,844 9,688 8,927 8,509 9,499
Other liabilities 355 353 307 338 338
Total equity 2,136 2,117 2,053 1,998 2,077
Total liabilities and equity $ 23,694 $ 22,999 $ 22,010 $ 21,378 $ 22,528
Net interest spread 3.43 % 3.48 % 3.51 % 3.49 % 3.47 %
Net interest margin 3.70 % 3.79 % 3.85 % 3.84 % 3.79 %
Average prime rate 3.25 % 3.25 % 3.25 % 3.25 % 3.25 %
Note: Certain prior period balances have been reclassified to conform to current period presentation.
CITY NATIONAL CORPORATION
CAPITAL AND CREDIT RATING DATA
(unaudited)
2012 2011
Third
Quarter
Second
Quarter
First
Quarter
Year To
Date
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Year To
Date
Per Common Share:
Shares Outstanding (in thousands):
Average - Basic 53,425 53,105 52,741 53,092 52,488 52,481 52,462 52,320 52,439
Average - Diluted 53,711 53,373 53,021 53,376 52,750 52,720 52,977 52,894 52,849
Period-end 53,190 52,822 52,661 52,499 52,484 52,475 52,440
Book value for shareholders $ 43.81 $ 42.70 $ 41.77 $ 40.86 $ 40.40 $ 39.24 $ 37.86
Closing price:
High $ 54.48 $ 54.63 $ 54.44 $ 54.63 $ 45.10 $ 55.54 $ 58.75 $ 62.90 $ 62.90
Low 48.20 46.39 45.39 45.39 36.01 37.76 52.02 55.65 36.01
Period-end 51.51 48.58 52.47 44.18 37.76 54.25 57.05
Capital Ratios (Dollars in millions):
Risk-based capital
Risk-weighted assets (1) $ 17,174 $ 16,723 $ 15,840 $ 15,305 $ 14,926 $ 14,286 $ 13,551
Tier 1 common shareholders' equity $ 1,566 $ 1,597 $ 1,611 $ 1,565 $ 1,530 $ 1,493 $ 1,449
Percentage of risk-weighted assets (2) 9.12 % 9.55 % 10.17 % 10.22 % 10.25 % 10.45 % 10.69 %
Tier 1 capital $ 1,571 $ 1,602 $ 1,616 $ 1,570 $ 1,535 $ 1,523 $ 1,479
Percentage of risk-weighted assets 9.15 % 9.58 % 10.20 % 10.26 % 10.28 % 10.66 % 10.91 %
Total capital $ 2,133 $ 2,160 $ 2,013 $ 1,963 $ 1,923 $ 1,905 $ 1,853
Percentage of risk-weighted assets 12.42 % 12.91 % 12.71 % 12.83 % 12.88 % 13.34 % 13.68 %
Tier 1 leverage ratio 6.29 % 6.74 % 6.98 % 6.77 % 6.82 % 7.09 % 7.09 %
Period-end equity to period-end assets 8.88 % 9.09 % 9.15 % 9.06 % 9.18 % 9.25 % 9.29 %
Period-end shareholders' equity to period-end assets 8.88 % 9.09 % 9.15 % 9.06 % 9.18 % 9.14 % 9.18 %
Average equity to average assets 8.95 % 9.17 % 9.17 % 9.09 % 9.02 % 9.21 % 9.33 % 9.35 % 9.22 %
Average shareholders' equity to average assets 8.95 % 9.17 % 9.17 % 9.09 % 9.02 % 9.10 % 9.22 % 9.23 % 9.14 %
Period-end tangible equity to period-end tangible assets (2) 6.41 % 6.88 % 7.13 % 7.01 % 7.07 % 7.08 % 7.03 %
Average tangible equity to average tangible assets (2) 6.45 % 7.01 % 7.12 % 6.85 % 6.96 % 7.08 % 7.11 % 7.05 % 7.05 %
Senior Debt Credit Ratings
For The Period Ended September 30, 2012
Moody's Fitch Standard &
Poor's
DBRS
City National Bank A1 A- A- A (high)
City National Corporation A2 A- BBB+ A
(1) In accordance with applicable bank regulatory guidelines, the Company calculates risk-weighted assets by assigning assets and credit equivalent amounts of derivatives and off-balance sheet items to one of several broad risk categories according to the obligor, or, if relevant, the guarantor or the nature of the collateral. The aggregate dollar amount in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are added together for determining risk-weighted assets.
(2) The Tier 1 common shareholders' equity to risk-weighted assets ratio and tangible equity to tangible assets ratio are non-GAAP financial measures. See page 15 and 16 for notes on non-GAAP measures.
CITY NATIONAL CORPORATION
COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE
(unaudited)
City National Corporation applies the two-class method of computing basic and diluted earnings per share ("EPS"). Under the two-class method, EPS is determined for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company grants restricted stock and restricted stock units under a share-based compensation plan that qualify as participating securities. The computation of basic and diluted EPS is presented in the following table:
2012 2011
(Dollars in thousands, except per share amounts) Third
Quarter
Second
Quarter
First
Quarter
Year to
Date
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Year to
Date
Basic EPS:
Net income attributable to City National Corporation $ 59,780 $ 54,758 $ 46,265 $ 160,803 $ 43,860 $ 41,398 $ 47,471 $ 39,692 $ 172,421
Less: Earnings allocated to participating securities 842 788 738 2,380 690 655 759 578 2,678
Earnings allocated to shareholders $ 58,938 $ 53,970 $ 45,527 $ 158,423 $ 43,170 $ 40,743 $ 46,712 $ 39,114 $ 169,743
Weighted average shares outstanding 53,425 53,105 52,741 53,092 52,488 52,481 52,462 52,320 52,439
Basic earnings per share $ 1.10 $ 1.02 $ 0.86 $ 2.98 $ 0.82 $ 0.78 $ 0.89 $ 0.75 $ 3.24
Diluted EPS:
Earnings allocated to shareholders (1) $ 58,941 $ 53,972 $ 45,530 $ 158,432 $ 43,173 $ 40,745 $ 46,718 $ 39,119 $ 169,759
Weighted average shares outstanding 53,425 53,105 52,741 53,092 52,488 52,481 52,462 52,320 52,439
Dilutive effect of equity awards 286 268 280 284 262 239 515 574 410
Weighted average diluted shares outstanding 53,711 53,373 53,021 53,376 52,750 52,720 52,977 52,894 52,849
Diluted earnings per share $ 1.10 $ 1.01 $ 0.86 $ 2.97 $ 0.82 $ 0.77 $ 0.88 $ 0.74 $ 3.21
(1) Earnings allocated to shareholders for basic and diluted EPS may differ under the two-class method as a result of adding common stock equivalents for options to dilutive shares outstanding, which alters the ratio used to allocate earnings to shareholders and participating securities for the purposes of calculating diluted EPS.
CITY NATIONAL CORPORATION
SELECTED FINANCIAL INFORMATION ON COVERED ASSETS
(unaudited)
The following table provides selected components of income and expense related to covered assets:
2012 2011
(in thousands) Third
Quarter
Second
Quarter
Third Quarter
Summary Totals
Net impairment income (expense) (Sum of A) $ 2,639 $ 3,932 $ (5,884)
Other covered asset (expense) income, net (837) 3,388 (589)
Total income (expense), net $ 1,802 $ 7,320 $ (6,473)
Interest income (1)
Income on loans paid-off or fully charged-off $ 22,164 $ 27,402 $ 18,343
Provision for losses on covered loans
Provision for losses on covered loans A 18,089 13,293 5,147
Noninterest income related to covered assets
FDIC loss sharing income (expense), net
Gain on indemnification asset A $ 21,426 $ 17,722 $ (384)
Indemnification asset accretion (4,258) (4,133) (4,043)
Net FDIC reimbursement for OREO and loan expenses 7,612 6,724 10,496
Removal of indemnification asset for loans paid-off or fully charged-off (9,731) (10,654) (10,228)
Removal of indemnification asset for unfunded loan commitments and loans transferred to OREO (2,834) (4,773) (3,703)
Removal of indemnification asset for OREO and net reimbursment to FDIC for OREO sales (1,219) (1,189) (2,823)
Loan recoveries shared with FDIC (8,631) (9,226) (3,153)
Increase in FDIC clawback liability A (698) (497) (353)
Total FDIC loss sharing income (expense), net 1,667 (6,026) (14,191)
Gain on disposal of assets
Net gain on sale of OREO 1,524 1,486 3,625
Other income
Net gain on transfers of covered loans to OREO 4,907 6,864 3,887
Amortization of fair value on acquired unfunded loan commitments 192 413 1,088
OREO income 428 615 379
Other (632) (864) (503)
Total other income 4,895 7,028 4,851
Total noninterest income related to covered assets $ 8,086 $ 2,488 $ (5,715)
Noninterest expense related to covered assets (2)
Other real estate owned
Valuation write-downs $ 4,267 $ 4,250 $ 7,526
Holding costs and foreclosure expense 3,522 2,796 3,449
Total other real estate owned 7,789 7,046 10,975
Legal and professional fees 2,541 2,200 2,961
Other operating expense
Other covered asset expenses 29 31 18
Total noninterest expense related to covered assets (3) $ 10,359 $ 9,277 $ 13,954
Total income (expense), net $ 1,802 $ 7,320 $ (6,473)
Note: Certain prior period balances have been reclassified to conform to current period presentation.
(1) Excludes base yield in interest income related to covered loans.
(2) OREO, legal and professional fees, and other expenses related to covered assets must meet certain FDIC criteria in order for the expense amounts to be reimbursed. Certain amounts reflected in these categories may not be reimbursed by the FDIC.
(3) Excludes personnel and other corporate overhead expenses that the Company incurs to service covered assets and costs associated with the branches acquired in FDIC-assisted acquisitions.
CITY NATIONAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(unaudited)
(a) Tangible equity ratios
Tangible equity to tangible assets is a non-GAAP financial measure that represents total equity less identifiable intangible assets and goodwill divided by total assets less identifiable intangible assets and goodwill. Management reviews this measure in evaluating the Company's capital levels and has included the ratio in response to market participants' interest in tangible equity as a measure of capital. A reconciliation of the GAAP to non-GAAP measure is set forth below:
2012 2011
(Dollars in thousands) Third
Quarter
Second
Quarter
First
Quarter
Year to
Date
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Year to
Date
Period End:
Total equity $ 2,330,324 $ 2,255,365 $ 2,199,565 $ 2,144,849 $ 2,120,465 $ 2,084,010 $ 2,010,627
Less: Goodwill and other intangibles (691,765) (589,114) (521,717) (522,753) (524,103) (526,207) (527,419)
Tangible equity (A) 1,638,559 1,666,251 1,677,848 1,622,096 1,596,362 1,557,803 1,483,208
Total assets $ 26,251,528 $ 24,801,973 $ 24,038,489 $ 23,666,291 $ 23,104,260 $ 22,526,089 $ 21,635,932
Less: Goodwill and other intangibles (691,765) (589,114) (521,717) (522,753) (524,103) (526,207) (527,419)
Tangible assets (B) $ 25,559,763 $ 24,212,859 $ 23,516,772 $ 23,143,538 $ 22,580,157 $ 21,999,882 $ 21,108,513
Period-end tangible equity to period-end tangible assets (A)/(B) 6.41% 6.88% 7.13% 7.01% 7.07% 7.08% 7.03%
Average Balance:
Total equity $ 2,296,754 $ 2,234,411 $ 2,168,748 $ 2,233,536 $ 2,136,215 $ 2,117,249 $ 2,053,447 $ 1,998,006 $ 2,076,721
Less: Goodwill and other intangibles (687,224) (566,989) (522,182) (592,479) (523,206) (525,300) (527,072) (528,205) (525,930)
Tangible equity (C) 1,609,530 1,667,422 1,646,566 1,641,057 1,613,009 1,591,949 1,526,375 1,469,801 1,550,791
Total assets $ 25,654,594 $ 24,362,546 $ 23,644,899 $ 24,558,030 $ 23,694,160 $ 22,998,562 $ 22,009,749 $ 21,377,904 $ 22,527,750
Less: Goodwill and other intangibles (687,224) (566,989) (522,182) (592,479) (523,206) (525,300) (527,072) (528,205) (525,930)
Tangible assets (D) $ 24,967,370 $ 23,795,557 $ 23,122,717 $ 23,965,551 $ 23,170,954 $ 22,473,262 $ 21,482,677 $ 20,849,699 $ 22,001,820
Average tangible equity to average tangible assets (C)/(D) 6.45% 7.01% 7.12% 6.85% 6.96% 7.08% 7.11% 7.05% 7.05%
(b) Tier 1 common shareholders' equity to risk-based assets
The Tier 1 common shareholders' equity to risk-based assets ratio, also known as Tier 1 common ratio, is calculated by dividing (a) Tier 1 capital less non-common components including qualifying noncontrolling interest in subsidiaries and qualifying trust preferred securities by (b) risk-weighted assets. Tier 1 capital and risk-weighted assets are calculated in accordance with applicable bank regulatory guidelines. This ratio is a non-GAAP measure that is used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. Management reviews this measure in evaluating the Company's capital levels and has included these ratios in response to market participants' interest in the Tier 1 common shareholders' equity to risk-based assets ratio.
2012 2011
(Dollars in thousands) Third
Quarter
Second
Quarter
First
Quarter
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Tier 1 capital $ 1,570,778 $ 1,602,398 $ 1,616,099 $ 1,570,101 $ 1,534,831 $ 1,523,269 $ 1,478,820
Less: Noncontrolling interest -- -- -- -- -- (25,089) (25,089)
Less: Trust preferred securities (5,155) (5,155) (5,155) (5,155) (5,155) (5,155) (5,155)
Tier 1 common shareholders' equity (A) $ 1,565,623 $ 1,597,243 $ 1,610,944 $ 1,564,946 $ 1,529,676 $ 1,493,025 $ 1,448,576
Risk-weighted assets (B) $ 17,174,382 $ 16,722,999 $ 15,839,944 $ 15,305,328 $ 14,925,715 $ 14,285,572 $ 13,551,318
Tier 1 common shareholders' equity to risk-based assets (A)/(B) 9.12% 9.55% 10.17% 10.22% 10.25% 10.45% 10.69%
(c) Brokerage and money market mutual fund fees, excluding Rochdale fees
Brokerage and money market mutual fund fees for the third quarter of 2012 were $9.1 million, an increase of 71 percent from the second quarter of 2012. Brokerage and money market mutual fund fees for the first nine months of 2012 were $19.4 million, an increase of 24 percent from the same period in 2011. Both current periods included $3.0 million of fee income from the July 2, 2012 acquisition of Rochdale Investment Management. Excluding this amount, brokerage and money market mutual fund fees increased 14 percent during the third quarter of 2012 from the second quarter of 2012, and increased 5 percent for the first nine months of 2012 compared to the year-earlier period.
Management believes this non-GAAP financial measure enhances the comparability of the financial results with prior periods as well as to highlight the effects of the Rochdale acquisition in the periods presented. The Company believes that investors may find it useful to see this non-GAAP financial measure to analyze the Company's underlying financial performance without the impact of the acquisition.
CONTACT: Financial/Investors Christopher J. Carey, City National, 310.888.6777 Chris.Carey@cnb.com Media Cary Walker, City National, 213.673.7615 Cary.Walker@cnb.com Conference Call: Today 2:00 p.m. PDT (866) 393-6804 Conference ID: 29949796

Source:City National Corporation