Company Records Its 16th Consecutive Year of Profitability
Total Loans and Assets Reach Record Highs
LOS ANGELES, Jan. 22, 2009 (GLOBE NEWSWIRE) -- City National Corporation (NYSE:CYN), the parent company of wholly owned City National Bank, today reported 2008 net income available to common shareholders of $102.5 million, or $2.11 per share. In 2007, the company earned $4.52 per share on net income of $222.7 million.
Net income available to common shareholders reflects net income less the dividend paid on preferred stock related to City National's participation late last year in the United States Treasury Department's Capital Purchase Program.
Net income available to common shareholders in the fourth quarter of 2008 amounted to $6.5 million, or $0.13 per share. Excluding after-tax charges of $15.6 million, or $0.32 per share, for securities and intangible asset impairments, as well as $2.4 million, or $0.05 per share, for the dividends on preferred stock related to the Capital Purchase Program, fourth-quarter net income amounted to $24.5 million, or $0.50 per share. In the fourth quarter of 2007, the company earned $0.96 per share on net income of $46.9 million.
City National also announced today that its Board of Directors has approved a quarterly common stock cash dividend of $0.25 per share, as compared with $0.48 per share previously paid. The company's dividend, which is determined on the basis of the previous year's earnings, will be payable on February 18, 2009 to stockholders of record on February 4, 2009.
2008 HIGHLIGHTS
* City National's average loan balances grew to $12.1 billion, up 9 percent from 2007. * In the fourth quarter alone, City National renewed approximately $1 billion of loans and made approximately $340 million of new loans to new and existing clients, including consumers, homeowners, entrepreneurs, and small and mid-size businesses. * Average deposits totaled $11.9 billion, down 3 percent from 2007. However, average core deposits were up 2 percent from the prior year to $10.6 billion, representing 89 percent of the company's total average deposits. * Fully taxable-equivalent net interest income amounted to $616.4 million, down 1 percent from 2007. The company's net interest margin averaged 4.20 percent in 2008, compared with 4.45 percent the prior year. * Noninterest income amounted to $267.0 million, or 31 percent of City National's total revenue last year. In 2007, the company generated $303.2 million of noninterest income. Excluding pretax charges of $51.2 million for securities impairment, 2008 noninterest income was $318.2 million, up 5 percent from the previous year. * City National recorded a $40 million provision for credit losses in the fourth quarter of 2008, bringing the total provision for the year to $127 million. The company's reserve amounts to 1.80 percent of total loans and leases, compared with 1.45 percent at the end of 2007. * City National is very well capitalized. At December 31, 2008, its ratio of shareholders' equity to total assets was 12.4 percent, compared to 10.4 percent at the same time in 2007. This increase reflects the U.S. Treasury Department's $400 million Capital Purchase Program investment.
"Even in this extremely challenging economy, and with interest rates dropping to record lows, City National completed its 16th consecutive year of profitability with assets and loans at record levels, and deposits strong," said Russell Goldsmith, President and Chief Executive Officer of City National Corporation. "It's particularly noteworthy that City National added approximately $1 billion in average loan balances last year, and a significant portion of that came in the fourth quarter.
"We expect the economy to remain very challenging in 2009. Nonetheless, with a stronger level of capital, robust loan loss reserves, a rigorous cost-control program and no subprime or brokered mortgages and no credit card, consumer or auto debt to be concerned about, City National is well-positioned to remain profitable this year, and we fully expect its fundamental earning power to become even more apparent again in the years ahead."
For the 12 months ended
December 31,
Dollars in millions, ------------------------- %
except per share 2008 2007 Change
--------------------------------- ----------- ----------- -------
Earnings Per Share $ 2.11 $ 4.52 (53)
Net Income $ 104.9 $ 222.7 (53)
Less: Dividend on Preferred Stock 2.4 -- NM
----------- -----------
Net Income Available to Common
Shareholders $ 102.5 $ 222.7 (54)
=========== ===========
Average Assets 16,028.8 15,370.8 4
Return on Average Assets 0.65 % 1.45 % (55)
Return on Average Common Equity 6.09 % 13.92 % (56)
ASSETS
Total assets at December 31, 2008 were $16.5 billion, up 4 percent from 2007, due to strong loan growth that was partly offset by a decline in the securities portfolio.
REVENUE
Revenue was $866.9 million in 2008, compared with $911.5 million for the previous year. The year-over-year difference is due principally to securities impairment charges.
NET INTEREST INCOME
Fully taxable-equivalent net interest income was $616.4 million in 2008, compared with $625.0 million for the previous year.
Average loan balances reached $12.1 billion, up 9 percent from 2007. Commercial loans increased 9 percent from the previous year. Construction and commercial real estate loans also grew 9 percent, as did average single-family residential mortgage loans, which are made primarily to City National's private banking clients.
Average securities for 2008 totaled $2.4 billion, down $435 million from the previous year. The average duration of total available-for-sale securities at December 31, 2008 was 2.7 years, compared with 3.4 years at the end of 2007.
City National's net interest margin averaged 4.20 percent in 2008, compared with 4.45 percent in the previous year. The decline was primarily due to a substantial reduction in interest rates in 2008, particularly in the fourth quarter of the year.
At December 31, 2008, City National's prime lending rate was 3.25 percent, down from 7.25 percent on December 31, 2007 and 5.00 percent on September 30, 2008.
For the 12 months ended
December 31,
------------------------- %
Dollars in millions 2008 2007 Change
------------------------------- ----------- ----------- -------
Average Loans $ 12,088.7 $ 11,057.4 9
Average Total Securities 2,398.3 2,833.5 (15)
Average Earning Assets 14,670.2 14,054.1 4
Average Deposits 11,899.6 12,236.4 (3)
Average Core Deposits 10,600.2 10,360.2 2
Fully Taxable-Equivalent
Net Interest Income 616.4 625.0 (1)
Net Interest Margin 4.20 % 4.45 % (6)
Average deposits for the year totaled $11.9 billion, down 3 percent from 2007, as the company was able to reduce its holdings of higher-cost time deposits. Average core deposits grew 2 percent from 2007 and now equal 89 percent of the company's average deposit balances, compared with 85 percent in 2007.
Title and escrow deposit balances averaged $941 million, down $246 million from 2007, due to a decline in residential and commercial real estate activity.
City National is participating in the FDIC's Temporary Liquidity Guarantee Program, which temporarily increases basic FDIC deposit insurance coverage to $250,000 and provides additional unlimited insurance coverage for funds in certain types of accounts. The company also is taking part in the U.S. Treasury's Temporary Money Market Fund Guarantee Program, which temporarily insures the holdings of any publicly offered eligible money market mutual fund -- both retail and institutional -- that participates in the program.
NONINTEREST INCOME
Noninterest income was $267.0 million in 2008, down 12 percent from the previous year. The decline was due to the following pretax charges against the company's $2.4 billion securities portfolio. These charges reflect unprecedented disruption in the financial markets:
* Previously disclosed impairment charges of $21.9 million for Fannie Mae and Freddie Mac preferred securities; * An $18.1 million charge, including $10.9 million in the fourth quarter, for other-than-temporary impairment of bank income notes; and * An $11.2 million charge, including $7.9 million in the fourth quarter, for other-than-temporary impairment of equity securities.
The company now holds $11.7 million of income notes and $39.7 million of equity securities. Together, they equal 2 percent of the company's securities portfolio.
Wealth Management
City National's assets under management totaled $30.8 billion as of December 31, 2008, down 17 percent from the prior year. City National's money-market funds and managed fixed-income accounts grew as the result of a flight to safety by investors during a time of market volatility. However, this growth was offset by significantly lower equity market valuations as well as an anticipated shift of funds by the former owner of a City National institutional asset management affiliate to its own in-house manager.
As a result of lower valuations and asset mix changes, trust and investment fees fell 6 percent from 2007. Brokerage and mutual fund fees rose 22 percent from the previous year.
At or for the
12 months ended
December 31,
------------------------- %
Dollars in millions 2008 2007 Change
--------------------------------------------- ----------- -------
Trust and Investment Fee Revenue $ 132.2 $ 140.8 (6)
Brokerage and Mutual Fund Fees 73.4 60.3 22
Assets Under Management (1) 30,781.9 37,268.5 (17)
Assets Under Management
or Administration (1) 47,519.8 58,506.3 (19)
(1) Excludes $4.7 billion and $12.4 billion of assets under
management for an asset manager in which City National held a
minority ownership interest as of December 31, 2008 and December
31, 2007, respectively.
Other Noninterest Income
Income from cash management and deposit transaction fees rose to $48.3 million, up 37 percent from 2007 due to the impact of declining interest rates on compensating deposit balances and the sale of additional cash management services. Fee income from foreign exchange services and letters of credit grew to $32.4 million, up 7 percent from the previous year.
Other service charges and fees were $29 million in 2008, down slightly from the previous year.
NONINTEREST EXPENSE
Noninterest expense amounted to $587.5 million, up 9 percent from 2007. The increase was due largely to a $7.9 million impairment of a contract intangible asset associated with an investment management affiliate, $4.7 million of additional expense for FDIC premiums, and a $1.6 million legal settlement. In addition, during 2007, City National made two acquisitions (Business Bank of Nevada and Convergent Wealth Advisors) that affected the comparability of results. Excluding all of these items, City National's 2008 noninterest expense grew 4 percent from 2007.
CREDIT QUALITY
City National recorded $127 million in provisions for credit losses in 2008. After net charge-offs, the provisions added $58.5 million to the company's allowance for loan and lease losses. At December 31, 2008, the allowance for loan and lease losses was $224.0 million, or 1.80 percent of total loans and leases. Consistent with its methodology, the bank maintains an additional $22.7 million in reserves for off-balance-sheet credit commitments.
The provisions reflect management's continuing assessment of the credit quality of the company's loan portfolio, which is affected by various economic trends, including continuing weakness in the housing sector. Additional factors affecting the provision include net loan charge-offs, nonaccrual loans, risk-rating migration and growth in the portfolio.
Nonaccrual loans of $211.1 million and other-real-estate-owned (OREO) assets of $11.4 million at December 31, 2008 totaled $222.5 million, or 1.79 percent of total loans and OREO. That compares with $75.6 million, or 0.65 percent, at the end of 2007 and $153.2 million, or 1.25 percent, at September 30, 2008.
Net loan charge-offs were $68.5 million, or 0.57 percent of average total loans and leases, up from $8.5 million, or 0.08 percent of average total loans and leases, in 2007. Loans to homebuilders for residential land acquisition, development and construction accounted for 46 percent of the 2008 net charge-offs.
As of As of
December 31, 2008 December 31, 2007
---------------------- ----------------------
Period-end Loans Total Nonaccrual Total Nonaccrual
(in millions) ---------- ---------- ---------- ----------
Commercial Loans $ 4,783.6 $ 46.2 $ 4,459.3 $ 17.1
Commercial R.E. Loans 2,184.7 8.9 1,954.5 1.6
Real Estate
Construction Loans 1,252.0 149.5 1,429.8 55.6
Residential Mortgages 3,414.9 3.2 3,176.3 0.4
Equity Lines of Credit 635.3 1.9 432.5 0.7
Other Loans 173.8 1.4 178.2 0.1
---------- ---------- ---------- ----------
Total Loans $ 12,444.3 $ 211.1 $ 11,630.6 $ 75.5
Other Real Estate
Owned $ 11.4 $ --
Loans to homebuilders amounted to $453 million, or 3.6 percent of City National's $12.4 billion loan portfolio, at December 31, 2008. The bank continues to actively manage each homebuilder loan and to take appropriate steps to mitigate risk and minimize loss exposure.
City National's commercial real estate construction portfolio has shown signs of weakness as sales and lease absorption rates have slowed, and prices and lease rates have declined due to the economic slowdown, while the commercial real estate mortgage portfolio continues to perform better, with low levels of nonaccrual loans and virtually no charge-offs.
As expected, the company's $4.8 billion commercial loan portfolio has experienced some deterioration due to the weakening economy. Nonaccrual loans totaled $46.2 million at December 31, 2008, compared to $17.1 million a year earlier. Net charge-offs were $23.9 million, up from $2.5 million the previous year. The increases were largely related to conditions in the real estate development and construction industries.
City National's residential mortgage loans and home-equity loans continued to perform well in 2008. For both portfolios, the average loan-to-value ratios at origination are 50 percent and 54 percent, respectively. City National does not originate or purchase subprime or option adjustable rate mortgages, and none of its loans has been originated through brokers or third parties.
INCOME TAXES
The company's effective tax rate was 31.1 percent for the year, compared to 37.0 percent in 2007. The lower tax rate for 2008 is attributable to lower pretax income.
FOURTH-QUARTER 2008 HIGHLIGHTS
* Fourth-quarter revenue was $204.4 million, down 14 percent from the fourth quarter of 2007 and up 1 percent from the third quarter of last year. * Fully taxable-equivalent net interest income amounted to $152.6 million, down 4.0 percent from the fourth quarter of 2007 and 2.5 percent from the third quarter of 2008. The company's net interest margin averaged 4.09 percent in the fourth quarter of 2008, compared with 4.23 percent in the third quarter of the year. * Average loans reached a record $12.4 billion, up 8 percent from the same period of 2007 and 1 percent from the third quarter of 2008. * Average deposits grew to $12.6 billion in the fourth quarter, up 5 percent from the same period of 2007 and 8 percent from the third quarter of 2008. Average core deposits were $11.1 billion, up 6 percent from both the fourth quarter of 2007 and the third quarter of 2008. Average title and escrow deposits totaled $810 million, down 27 percent from the fourth quarter of 2007 and 16 percent from the third quarter of last year. * Noninterest income totaled $55.6 million, down 32 percent from the same period in 2007 but up 11 percent from the third quarter of 2008. Excluding securities impairment charges, noninterest income was down 10 percent from the fourth quarter of 2007. * Noninterest expense increased 9 percent from the fourth quarter of 2007 and 8 percent from the third quarter of 2008. Excluding a $7.9 million impairment of a contract intangible asset associated with an investment management affiliate, as well as $1.5 million of additional expense for FDIC premiums, fourth-quarter 2008 noninterest expense increased 2 percent from the same period of 2007. * The company realized a tax benefit in the fourth quarter, compared to an effective tax rate of 25.2 percent in the third quarter of 2008. The benefit was due primarily to lower pretax income.
2009 OUTLOOK
City National remains well-capitalized, well-reserved and profitable. The company has significant liquidity and is well-positioned to profitably weather current economic conditions and return to increased profitability when conditions improve. In the short-term, however, net income available to common shareholders and earnings per share will continue to be significantly affected by a weak economy, low revenue growth, historically low interest rates, somewhat higher credit costs, declining equity values, higher FDIC premiums and the additional costs of participating in the U.S. Treasury Department's Capital Purchase Program. Excluding the higher FDIC premiums, which all banks are bearing in 2009, noninterest expense will show virtually no growth this year.
In spite of today's challenging business climate, management expects the company to remain profitable in 2009, though earnings this year are anticipated to be lower than they were in 2008.
CAPITAL LEVELS
On November 21, 2008, the U.S. Treasury Department invested $400 million in City National Corporation's preferred stock and warrants through its Capital Purchase Program. As previously announced, the terms of the investment are consistent with those established by the Treasury for the program.
In addition to expanding the company's lending capacity, this investment bolstered its already strong capital position. Total risk-based capital and Tier 1 risk-based capital ratios at December 31, 2008 were 13.4 percent and 11.7 percent, respectively, compared with the minimum regulatory standards of 10.0 percent and 6.0 percent for "well-capitalized" institutions. City National's Tier 1 leverage ratio at December 31, 2008 was 10.4 percent, well above the regulatory minimum ratio of 5.0 percent.
Total risk-based capital, Tier 1 risk-based capital and the Tier 1 leverage ratios at September 30, 2008 were 11.0 percent, 9.1 percent and 8.0 percent, respectively.
The period-end ratio of shareholders' equity to total assets at December 31, 2008 was 12.4 percent, compared to 10.4 percent at December 31, 2007 and 10.2 percent at September 30, 2008.
STOCK REPURCHASE
In the first half of 2008, City National repurchased 421,500 of its outstanding shares at an average cost per share of $48.41. No shares were purchased in the second half of the year. In light of its participation in the U.S. Treasury's Capital Purchase Program, the company does not expect to repurchase stock this year.
CONFERENCE CALL
City National Corporation will host a conference call this afternoon to discuss 2008 financial results. The call will begin at 2:00 p.m. PST. 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 77831534. A listen-only live broadcast of the call also will be available on the investor relations page of the company's Website at www.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 62 offices, including 15 full-service regional centers, in Southern California, the San Francisco Bay Area, Nevada and New York City. City National and its eight majority-owned investment affiliates manage or administer $47.5 billion in client assets, including more than $30.8 billion under direct management.
For more information about City National, visit the company's Website at www.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.
Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the company's possible or assumed future financial condition, and its results of operations, business and earnings outlook. These forward-looking statements are subject to risks and uncertainties. A number of factors, some 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) difficult and adverse conditions in the global and domestic capital and credit markets, (2) continued volatility and further deterioration of the capital and credit markets, (3) significant changes in banking laws or regulations, including, without limitation, as a result of the Emergency Economic Stabilization Act and the creation of and possible amendments to the Troubled Asset Relief Program (TARP), including the Capital Purchase Program and related executive compensation requirements, (4) continued uncertainty about the impact of TARP and other recent federal programs on the financial markets including levels of volatility and credit availability, (5) a more adverse than expected decline or continued weakness in general business and economic conditions, either nationally, regionally or locally in areas where the company conducts its business, which may affect, among other things, the level of nonperforming assets, charge-offs and provision expense, (6) unprecedented volatility in equity, fixed income and other market valuations, (7) changes in market rates and prices which may adversely impact the value of financial products including securities, loans, deposits, debt and derivative financial instruments, and other similar financial instruments, (8) changes in the interest rate environment and market liquidity which may reduce interest margins and impact funding sources, (9) increased competition in the company's markets, (10) changes in the financial performance and/or condition of the company's borrowers, (11) 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, (12) soundness of other financial institutions which could adversely affect the company, (13) increases in Federal Deposit Insurance Corporation premiums due to market developments and regulatory changes, (14) protracted labor disputes in the company's markets, (15) earthquake, fire or other natural disasters affecting the condition of real estate collateral, (16) the effect of acquisitions and integration of acquired businesses and de novo branching efforts, (17) the impact of changes in regulatory, judicial or legislative tax treatment of business transactions, (18) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies, and (19) 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, see the company's Annual Report on Form 10-K for the year ended December 31, 2007 and particularly Part I, Item 1A, titled "Risk Factors."
CITY NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
(unaudited)
Three Months Twelve Months
------------------------ ------------------------
For The Period
Ended % %
December 31, 2008 2007 Change 2008 2007 Change
---------------- ------------------------ ------------------------
Per Common Share
Net Income
available to
common
shareholders
Basic $ 0.13 $ 0.98 (87) $ 2.14 $ 4.62 (54)
Diluted 0.13 0.96 (86) 2.11 4.52 (53)
Dividends 0.48 0.46 4 1.92 1.84 4
Book value 34.33 34.61 (1)
Results of
Operations:
(In millions)
Interest income $ 188 $ 224 (16) $ 785 $ 894 (12)
Interest
expense 39 70 (44) 185 286 (35)
-------- -------- -------- --------
Net interest
income 149 154 (4) 600 608 (1)
Net interest
income (Fully
taxable-
equivalet) 153 158 (4) 616 625 (1)
Total revenue 204 237 (14) 867 911 (5)
Provision for
credit losses 40 20 100 127 20 535
Net income 9 47 (81) 105 223 (53)
Net income
available to
common
shareholders 6 47 (86) 103 223 (4)
Impact of
Regulation G
Non-GAAP
Disclosures on
Net Income per
Share
Net income
available to
common
shareholders
per share $ 0.13 $ 2.11
Add: Impairment
on debt
and equity
securities 0.23 0.62
Impairment on
intangible
assets 0.09 0.09
-------- --------
Total
impact of
impairment
charges 0.32 0.71
-------- --------
Add: Dividend
on preferred
stock 0.05 0.05
-------- --------
Net income per
share,
excluding
impairment
charges and
dividend on
preferred
stock $ 0.50 $ 2.87
======== ========
Financial
Ratios:
Performance
Ratios:
Return on
average
assets 0.22% 1.19% 0.65% 1.45%
Return on
average
common equity 1.55 11.28 6.09 13.92
Period-end
shareholders'
equity to
period-end
assets 12.42 10.42
Net interest
margin 4.09 4.42 4.20 4.45
Efficiency
ratio 75.72 60.18 66.77 58.21
Capital
Adequacy
Ratios
(Period-end):
Tier 1
leverage 10.44 7.97
Tier 1 risk-
based capital 11.71 9.31
Total risk-
based capital 13.40 11.27
Asset Quality
Ratios:
Allowance for
loan and lease
losses to:
Total loans
and leases 1.80% 1.45%
Nonaccrual
loans 106.11 223.03
Nonperforming
assets to:
Total loans
and leases
and other
real estate
owned 1.79 0.65
Total assets 1.35 0.48
Net (charge-
offs)/
recoveries to
Average total
loans and
leases
(annualized) (0.79)% (0.13)% (0.57)% (0.08)%
Average
Balances: (In
millions)
Loans and
leases $ 12,371 $ 11,461 8 $ 12,089 $ 11,058 9
Interest-
earning assets 14,844 14,223 4 14,670 14,054 4
Assets 16,191 15,589 4 16,029 15,371 4
Core deposits 11,137 10,500 6 10,600 10,360 2
Deposits 12,639 12,014 5 11,900 12,236 (3)
Interest-
bearing
liabilities 8,171 8,065 1 8,436 8,011 5
Shareholders'
equity 1,837 1,651 11 1,727 1,599 8
Common
shareholders'
equity 1,662 1,651 1 1,683 1,599 5
Period-End
Balances : (In
millions)
Loans and
leases $ 12,444 $ 11,631 7
Assets 16,456 15,889 4
Core deposits 11,212 10,516 7
Deposits 12,652 11,823 7
Shareholders'
equity 2,044 1,656 23
Wealth
Management: (In
millions) (1)
Assets under
management $ 30,782 $ 37,269 (17)
Assets under
management or
administration 47,520 58,506 (19)
(1) Excludes $4.7 billion and $12.4 billion of assets under
management for an asset manager in which City National held a
minority ownership interest as of December 31, 2008 and
December 31, 2007, respectively.
CITY NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended Twelve Months Ended
(Dollars in December 31, December 31,
thousands --------------------------- ---------------------------
except per % %
share data) 2008 2007 Change 2008 2007 Change
------------- -------------------------------------------------------
Interest
income $187,623 $223,969 (16) $784,688 $894,101 (12)
Interest
expense 38,864 69,596 (44) 184,792 285,829 (35)
-------- -------- -------- --------
Net
Interest
Income 148,759 154,373 (4) 599,896 608,272 (1)
Provision
for Credit
Losses 40,000 20,000 100 127,000 20,000 535
Noninterest
Income
Trust and
investment
fees 28,221 38,188 (26) 132,214 140,753 (6)
Brokerage
and mutual
fund fees 17,845 16,995 5 73,446 60,279 22
Cash
management
and
deposit
transaction
fees 12,595 9,517 32 48,307 35,261 37
International
services 8,384 8,379 0 32,449 30,399 7
Bank-owned
life
insurance 645 660 (2) 2,752 2,690 2
Other service
charges and
fees 6,770 8,575 (21) 28,960 29,205 (1)
Impairment
loss on
securities (17,344) -- NM (49,280) -- NM
Gain (loss)
on sale of
other assets 37 12 208 (353) 5,989 (106)
Gain on sale
of
securities (1,527) 7 (21,914) (1,511) (1,374) 10
-------- -------- -------- --------
Total
noninterest
income 55,626 82,333 (32) 266,984 303,202 (12)
Noninterest
Expense
Salaries and
employee
benefits 89,943 88,146 2 357,015 331,091 8
Net occupancy
of premises 12,821 11,881 8 49,514 43,538 14
Legal and
professional
fees 8,419 10,050 (16) 32,842 35,975 (9)
Information
services 7,799 6,039 29 26,969 23,364 15
Depreciation
and
amortization 5,737 5,535 4 22,201 20,932 6
Amortization
of
intangibles 11,541 1,749 560 17,738 8,854 100
Marketing and
advertising 6,289 6,977 (10) 22,897 21,837 5
Office
services 3,352 3,323 1 12,404 12,295 1
Equipment 728 867 (16) 3,144 3,249 (3)
Minority
interest
(income)
expense (1,350) 2,244 (160) 5,378 8,856 (39)
Other 11,818 7,464 58 37,417 28,110 33
-------- -------- -------- --------
Total
noninterest
expense 157,097 144,275 9 587,519 538,101
-------- -------- -------- --------
Income Before
Taxes 7,288 72,431 (90) 152,361 353,373 (57)
Applicable
Income Taxes (1,646) 25,509 (106) 47,405 130,660 (64)
-------- -------- -------- --------
Net Income $ 8,934 $ 46,922 (81) $104,956 $222,713 (53)
======== ======== ======== ========
Less:
Dividends on
preferred
stock 2,445 -- NM 2,445 -- NM
-------- -------- -------- --------
Net income
available to
common
shareholders $ 6,489 $ 46,922 (86) $102,511 $222,713 (54)
======== ======== ======== ========
Other Data:
Earnings per
common
share
- basic $ 0.13 $ 0.98 (87) $ 2.14 $ 4.62 (54)
Earnings per
common
share
- diluted $ 0.13 $ 0.96 (86) $ 2.11 $ 4.52 (53)
Dividends
paid per
common
share $ 0.48 $ 0.46 4 $ 1.92 $ 1.84 4
Common
dividend
payout ratio 260.42% 47.44% 449 88.50% 40.13% 121
Return on
average
assets 0.22% 1.19% (82) 0.65% 1.45% (55)
Return on
average
common
equity 1.55% 11.28% (86) 6.09% 13.92% (56)
Net interest
margin
(Fully
taxable-
equivalent) 4.09% 4.42% (7) 4.20% 4.45% (6)
Full-time
equivalent
employees 2,989 2,914 3
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
2008
--------------------------------------------
(Dollars in thousands Fourth Third Second First Year to
except per share data) Quarter Quarter Quarter Quarter Date
----------------------- -------- -------- -------- -------- --------
Interest Income $187,623 $195,606 $193,707 $207,752 $784,688
Interest Expense 38,864 42,802 43,539 59,587 184,792
-------- -------- -------- -------- --------
Net Interest Income 148,759 152,804 150,168 148,165 599,896
Provision for Credit
Losses 40,000 35,000 35,000 17,000 127,000
Noninterest Income
Trust and investment
fees 28,221 33,457 34,187 36,349 132,214
Brokerage and mutual
fund fees 17,845 19,470 18,709 17,422 73,446
Cash management and
deposit transaction
fees 12,595 12,392 12,196 11,124 48,307
International services 8,384 8,202 8,176 7,687 32,449
Bank-owned life
insurance 645 824 628 655 2,752
Other service charges
and fees 6,770 8,403 8,177 5,610 28,960
Impairment loss on
securities (17,344) (31,936) -- -- (49,280)
Gain (loss) on sale of
other assets 37 (198) (192) -- (353)
Gain (loss) on sale of
securities (1,527) (536) (417) 969 (1,511)
-------- -------- -------- -------- --------
Total noninterest
income 55,626 50,078 81,464 79,816 266,984
Noninterest Expense
Salaries and employee
benefits 89,943 89,373 87,520 90,179 357,015
Net occupancy of
premises 12,821 12,719 12,462 11,512 49,514
Legal and professional
fees 8,419 8,332 7,531 8,560 32,842
Information services 7,799 6,576 6,388 6,206 26,969
Depreciation and
amortization 5,737 5,502 5,460 5,502 22,201
Amortization of
intangibles 11,541 2,238 1,528 2,431 17,738
Marketing and
advertising 6,289 5,653 5,360 5,595 22,897
Office services 3,352 2,926 3,140 2,986 12,404
Equipment 728 757 746 913 3,144
Minority interest
(income) expense (1,350) 1,160 2,262 3,306 5,378
Other 11,818 10,521 9,121 5,957 37,417
-------- -------- -------- -------- --------
Total noninterest
expense 157,097 145,757 141,518 143,147 587,519
-------- -------- -------- -------- --------
Income Before Taxes 7,288 22,125 55,114 67,834 152,361
Applicable Income Taxes (1,646) 5,574 19,630 23,847 47,405
-------- -------- -------- -------- --------
Net Income $ 8,934 $ 16,551 $ 35,484 $ 43,987 $104,956
======== ======== ======== ======== ========
Less: Dividends on
preferred stock 2,445 -- -- -- 2,445
-------- -------- -------- -------- --------
Net income available
to common shareholders $ 6,489 $ 16,551 $ 35,484 $ 43,987 $102,511
======== ======== ======== ======== ========
Other Data:
Earnings per common
share - basic $ 0.13 $ 0.35 $ 0.74 $ 0.92 $ 2.14
Earnings per common
share - diluted $ 0.13 $ 0.34 $ 0.73 $ 0.91 $ 2.11
Dividends paid per
common share $ 0.48 $ 0.48 $ 0.48 $ 0.48 $ 1.92
Common dividend
payout ratio 260.42% 140.24% 65.40% 52.75% 88.50%
Return on average
assets 0.22% 0.41% 0.89% 1.13% 0.65%
Return on average
common equity 1.55% 3.91% 8.42% 10.46% 6.09%
Net interest margin
(Fully taxable-
equivalent) 4.09% 4.23% 4.23% 4.26% 4.20%
Full-time equivalent
employees 2,989 3,027 3,013 2,959
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
2007
--------------------------------------------
(Dollars in thousands Fourth Third Second First Year to
except per share data) Quarter Quarter Quarter Quarter Date
----------------------- -------- -------- -------- -------- --------
Interest Income $223,969 $230,066 $225,825 $214,241 $894,101
Interest Expense 69,596 76,340 72,921 66,972 285,829
-------- -------- -------- -------- --------
Net Interest
Income 154,373 153,726 152,904 147,269 608,272
Provision for Credit
Losses 20,000 -- -- -- 20,000
Noninterest Income
Trust and
investment fees 38,188 37,488 34,823 30,254 140,753
Brokerage and
mutual fund fees 16,995 15,546 13,958 13,780 60,279
Cash management
and deposit
transaction fees 9,517 8,801 8,472 8,471 35,261
International
services 8,379 7,995 7,562 6,463 30,399
Bank-owned life
insurance 660 645 761 624 2,690
Other service
charges and fees 8,575 7,251 7,246 6,133 29,205
Impairment loss on
securities -- -- -- -- --
Gain on sale of
other assets 12 6,023 -- (46) 5,989
Gain (loss) on
sale of
securities 7 (2,516) 866 269 (1,374)
-------- -------- -------- -------- --------
Total
noninterest income 82,333 81,233 73,688 65,948 303,202
Noninterest Expense
Salaries and employee
benefits 88,146 84,057 80,904 77,984 331,091
Net occupancy of
premises 11,881 11,837 10,362 9,458 43,538
Legal and professional
fees 10,050 8,614 8,590 8,721 35,975
Information services 6,039 6,024 5,750 5,551 23,364
Depreciation and
amortization 5,535 5,275 5,122 5,000 20,932
Amortization of
intangibles 1,749 2,852 2,623 1,630 8,854
Marketing and
advertising 6,977 5,079 5,783 3,998 21,837
Office services 3,323 3,287 2,938 2,747 12,295
Equipment 867 867 797 718 3,249
Minority interest
expense 2,244 2,211 2,325 2,076 8,856
Other 7,464 7,294 7,446 5,906 28,110
-------- -------- -------- -------- --------
Total noninterest
expense 144,275 137,397 132,640 123,789 538,101
-------- -------- -------- -------- --------
Income Before Taxes 72,431 97,562 93,952 89,428 353,373
Applicable Income Taxes 25,509 37,469 34,799 32,883 130,660
-------- -------- -------- -------- --------
Net Income $ 46,922 $ 60,093 $ 59,153 $ 56,545 $222,713
======== ======== ======== ======== ========
Other Data:
Earnings per
common share - basic $ 0.98 $ 1.24 $ 1.22 $ 1.18 $ 4.62
Earnings per
common share -
diluted $ 0.96 $ 1.22 $ 1.19 $ 1.15 $ 4.52
Dividends paid per
common share $ 0.46 $ 0.46 $ 0.46 $ 0.46 $ 1.84
Common dividend
payout ratio 47.44% 37.26% 38.22% 39.11% 40.13%
Return on average
assets 1.19% 1.53% 1.54% 1.55% 1.45%
Return on average
common equity 11.28% 14.69% 14.79% 15.10% 13.92%
Net interest
margin (Fully
taxable-equivalent) 4.42% 4.42% 4.46% 4.49% 4.45%
Full-time
equivalent employees 2,914 2,878 2,903 2,800
CITY NATIONAL CORPORATION
CONSOLIDATED PERIOD END BALANCE SHEET
(unaudited)
2008
--------------------------------------------------
Fourth Third Second First
(In thousands) Quarter Quarter Quarter Quarter
----------------- ----------- ----------- ----------- -----------
Assets
Cash and due
from banks $ 279,921 $ 428,557 $ 513,736 $ 514,878
Federal funds
sold -- -- -- 1,000
Due from banks -
interest-
bearing 144,344 95,993 88,149 77,567
Securities-
available-for-
sale 2,144,870 2,159,918 2,302,982 2,389,459
Trading account
securities 295,598 310,251 204,825 121,152
Loans and
leases:
Commercial 4,783,565 4,746,035 4,703,307 4,442,448
Commercial
real estate
mortgages 2,184,688 2,159,101 2,016,090 2,011,221
Residential
mortgages 3,414,868 3,364,332 3,319,741 3,215,871
Real estate
construction 1,252,034 1,313,735 1,483,193 1,462,641
Equity lines
of credit 635,325 540,937 495,334 449,177
Installment 173,779 154,377 160,665 173,507
----------- ----------- ----------- -----------
Total loans
and leases 12,444,259 12,278,517 12,178,330 11,754,865
Allowance
for loan
and lease
losses (224,046) (208,046) (185,070) (168,278)
----------- ----------- ----------- -----------
Net loans
and leases 12,220,213 12,070,471 11,993,260 11,586,587
Premises and
equipment, net 131,294 127,361 122,959 119,243
Goodwill and
other
intangibles 500,037 512,297 514,584 514,811
Other assets 739,238 626,020 598,763 609,335
----------- ----------- ----------- -----------
Total assets $16,455,515 $16,330,868 $16,339,258 $15,934,032
=========== =========== =========== ===========
Liabilities:
Deposits:
Noninterest-
bearing $ 6,140,619 $ 5,744,863 $ 5,861,823 $ 5,680,845
Interest-
bearing 6,511,505 6,422,797 6,034,514 6,111,524
----------- ----------- ----------- -----------
Total deposits 12,652,124 12,167,660 11,896,337 11,792,369
Federal funds
purchased and
securities sold
under
repurchase
agreements 908,157 1,272,359 1,221,428 1,118,478
Other short-term
borrowed funds 179,343 630,673 955,000 720,992
Subordinated
debt 161,595 157,769 157,080 162,813
Other long-term
debt 246,554 231,321 237,867 243,439
Other liabilities 232,497 170,686 171,598 181,414
----------- ----------- ----------- -----------
Total
liabilities 14,380,270 14,630,468 14,639,310 14,219,505
Minority
interest 31,231 33,950 32,300 32,199
Shareholders'
Equity
Preferred stock 390,089 -- -- --
Common stock 50,961 50,966 50,972 50,982
Additional paid-
in capital 428,098 415,348 421,689 419,044
Retained
earnings 1,379,624 1,396,400 1,403,062 1,390,781
Accumulated
other
comprehensive
loss (48,022) (38,071) (24,853) (3,431)
Treasury shares (156,736) (158,193) (183,222) (175,048)
----------- ----------- ----------- -----------
Total common
equity 1,653,925 1,666,450 1,667,648 1,682,328
----------- ----------- ----------- -----------
Total
sharehold-
ers' equity 2,044,014 1,666,450 1,667,648 1,682,328
----------- ----------- ----------- -----------
Total liabil-
ities and
sharehold-
ers' equity $16,455,515 $16,330,868 $16,339,258 $15,934,032
=========== =========== =========== ===========
CITY NATIONAL CORPORATION
CONSOLIDATED PERIOD END BALANCE SHEET
(unaudited)
2007
--------------------------------------------------
Fourth Third Second First
(In thousands) Quarter Quarter Quarter Quarter
------------------ ----------- ----------- ----------- -----------
Assets
Cash and due
from banks $ 365,918 $ 462,151 $ 513,463 $ 494,231
Federal funds
sold -- -- 170,000 210,000
Due from banks -
interest-bearing 88,151 95,047 139,539 77,214
Securities-
available-for-
sale 2,462,655 2,563,983 2,797,366 2,902,385
Trading account
securities 293,355 192,162 117,456 35,981
Loans and leases:
Commercial 4,459,308 4,216,048 4,158,131 4,030,601
Commercial real
estate
mortgages 1,954,539 1,894,753 1,947,218 1,877,695
Residential
mortgages 3,176,322 3,114,335 3,009,546 2,895,516
Real estate
construction 1,429,761 1,391,034 1,309,322 1,263,059
Equity lines of
credit 432,513 404,869 409,505 388,279
Installment 178,195 169,041 185,112 194,448
----------- ----------- ----------- -----------
Total loans
and leases 11,630,638 11,190,080 11,018,834 10,649,598
Allowance
for loan
and lease
losses (168,523) (152,018) (157,849) (161,005)
----------- ----------- ----------- -----------
Net loans
and leases 11,462,115 11,038,062 10,860,985 10,488,593
Premises and
equipment, net 118,067 110,779 106,672 103,259
Goodwill and
other
intangibles 520,127 517,396 518,918 420,197
Other assets 578,902 567,817 571,597 532,093
----------- ----------- ----------- -----------
Total assets $15,889,290 $15,547,397 $15,795,996 $15,263,953
=========== ======================== ===========
Liabilities:
Deposits:
Noninterest-
bearing $ 5,858,497 $ 5,538,107 $ 5,926,048 $ 5,690,413
Interest-
bearing 5,964,008 6,642,407 7,204,357 6,915,968
----------- ----------- ----------- -----------
Total
deposits 11,822,505 12,180,514 13,130,405 12,606,381
Federal funds
purchased and
securities sold
under repurchase
agreements 1,544,411 664,970 269,938 310,738
Other short-term
borrowed funds 100,000 326,041 72,818 50,667
Subordinated debt 273,559 270,066 266,962 270,174
Other long-term
debt 233,465 225,598 219,282 224,079
Other liabilities 228,067 217,301 186,212 183,185
----------- ----------- ----------- -----------
Total
liabilities 14,202,007 13,884,490 14,145,617 13,645,224
Minority interest 31,676 29,148 29,029 28,285
Shareholders'
Equity
Preferred stock -- -- -- --
Common stock 50,824 50,813 50,825 50,803
Additional paid-
in capital 420,168 421,754 419,277 421,990
Retained earnings 1,369,999 1,345,337 1,307,638 1,271,092
Accumulated other
comprehensive
loss (9,349) (22,788) (50,709) (31,034)
Treasury shares (176,035) (161,357) (105,681) (122,407)
----------- ----------- ----------- -----------
Total common
equity 1,655,607 1,633,759 1,621,350 1,590,444
----------- ----------- ----------- -----------
Total share-
holders'
equity 1,655,607 1,633,759 1,621,350 1,590,444
----------- ----------- ----------- -----------
Total
liabilities
and share-
holders'
equity $15,889,290 $15,547,397 $15,795,996 $15,263,953
=========== =========== =========== ===========
CITY NATIONAL CORPORATION
CREDIT LOSS EXPERIENCE
(unaudited)
2008
-------------------------------------------------
(Dollars in Fourth Third Second First Year To
thousands) Quarter Quarter Quarter Quarter Date
------------------ -------------------------------------------------
Allowance for Loan
and Lease Losses
Balance at
beginning of
period $208,046 $185,070 $168,278 $168,523 $168,523
Allowance of
acquired
institution -- -- -- -- --
Net (charge-offs)/
recoveries:
Commercial (12,204) (4,357) (5,734) (1,573) (23,868)
Commercial real
estate mortgages (40) -- -- 12 (28)
Residential
mortgages 37 8 10 8 63
Real estate
construction (12,346) (8,415) (13,196) (10,217) (44,174)
Equity lines of
credit -- -- -- (239) (239)
Installment (128) (30) 4 (78) (232)
-------- -------- -------- -------- --------
Total net
(charge-offs)/
recoveries (24,681) (12,794) (18,916) (12,087) (68,478)
Provision for credit
losses 40,000 35,000 35,000 17,000 127,000
Transfers from(to)
reserve for
off-balance sheet
credit commitments 681 770 708 (5,158) (2,999)
Balance at end of -------- -------- -------- -------- --------
period $224,046 $208,046 $185,070 $168,278 $224,046
======== ======== ======== ======== ========
Net (Charge-Offs)/
Recoveries to
Average Total Loans
and Leases:
(annualized)
Commercial (1.01)% (0.37)% (0.49)% (0.14)% (0.51)%
Commercial real
estate mortgages (0.01)% 0.00% 0.00% 0.00% (0.00)%
Residential
mortgage 0.00 % 0.00% 0.00% 0.00% 0.00%
Real estate
construction (3.81)% (2.38)% (3.61)% (2.81)% (3.14)%
Equity lines of
credit 0.00% 0.00% 0.00% (0.22)% (0.05)%
Installment (0.31)% (0.08)% 0.01% (0.18)% (0.14)%
Total loans and
leases (0.79)% (0.42)% (0.63)% (0.42)% (0.57)%
Reserve for
Off-Balance Sheet
Credit Commitments
Balance at beginning
of period $ 23,384 $ 24,154 $ 24,862 $ 19,704 $ 19,704
Recovery of prior
charge-off -- -- -- -- --
Reserve of acquired
institution -- -- -- -- --
Transfers (to)from
allowance (681) (770) (708) 5,158 2,999
-------- -------- -------- -------- --------
Balance at end of
period $ 22,703 $ 23,384 $ 24,154 $ 24,862 $ 22,703
======== ======== ======== ======== ========
2007
-------------------------------------------------
(Dollars in Fourth Third Second First Year To
thousands) Quarter Quarter Quarter Quarter Date
------------------ -------------------------------------------------
Allowance for Loan
and Lease Losses
Balance at
beginning of
period $152,018 $157,849 $161,005 $155,342 $155,342
Allowance of
acquired
institution -- -- -- 4,513 4,513
Net (charge-offs)/
recoveries:
Commercial (900) (632) (2,218) 1,247 (2,503)
Commercial real
estate mortgages 9 (295) -- -- (286)
Residential
mortgages -- -- -- -- --
Real estate
construction (2,872) (2,654) 17 18 (5,491)
Equity lines of
credit (50) -- -- -- (50)
Installment (50) (10) (61) (26) (147)
-------- -------- -------- -------- --------
Total net
(charge-offs)/
recoveries (3,863) (3,591) (2,262) 1,239 (8,477)
Provision for credit
losses 20,000 -- -- -- 20,000
Transfers from(to)
reserve for
off-balance sheet
credit commitments 368 (2,240) (894) (89) (2,855)
Balance at end of -------- -------- -------- -------- --------
period $168,523 $152,018 $157,849 $161,005 $168,523
======== ======== ======== ======== ========
Net (Charge-Offs)/
Recoveries to
Average Total Loans
and Leases:
(annualized)
Commercial (0.08)% (0.06)% (0.21)% 0.12% (0.06)%
Commercial real
estate mortgages 0.00% (0.06)% 0.00% 0.00% (0.02)%
Residential
mortgage 0.00% 0.00% 0.00% 0.00% 0.00%
Real estate
construction (0.81)% (0.78)% 0.01% 0.01% (0.43)%
Equity lines of
credit (0.05)% 0.00% 0.00% 0.00% (0.01)%
Installment (0.12)% (0.02)% (0.13)% (0.06)% (0.08)%
Total loans and
leases (0.13)% (0.13)% (0.08)% 0.05% (0.08)%
Reserve for
Off-Balance Sheet
Credit Commitments
Balance at beginning
of period $ 20,072 $ 17,832 $ 17,005 $ 16,424 $ 16,424
Recovery of prior
charge-off -- -- (67) -- (67)
Reserve of acquired
institution -- -- -- 492 492
Transfers (to)from
allowance (368) 2,240 894 89 2,855
Balance at end of -------- -------- -------- -------- --------
period $ 19,704 $ 20,072 $ 17,832 $ 17,005 $ 19,704
======== ======== ======== ======== ========
CITY NATIONAL CORPORATION
NONPERFORMING ASSETS
(unaudited)
2008
--------------------------------------
Fourth Third Second First
(Dollars in thousands) Quarter Quarter Quarter Quarter
----------------------------- --------------------------------------
Nonaccrual Loans
Commercial $ 46,238 $ 26,184 $ 16,444 $ 16,293
Commercial real estate
mortgages 8,924 5,878 5,903 1,841
Residential mortgages 3,171 266 549 706
Real estate construction 149,536 113,288 81,120 93,296
Equity lines of credit 1,921 1,380 1,398 1,422
Installment 1,352 3,890 763 64
-------- -------- -------- --------
Total nonaccrual loans 211,142 150,886 106,177 113,622
Other Real Estate Owned 11,388 2,279 9,113 3,812
-------- -------- -------- --------
Total nonperforming assets $222,530 $153,165 $115,290 $117,434
======== ======== ======== ========
Loans 90 Days or More Past Due
on Accrual Status $ 663 $ 4,930 $ 2 $ --
Allowance for loan and lease
losses as a percentage of:
Nonaccrual loans 106.11% 137.88% 174.30% 148.10%
Total nonperforming assets 100.68% 135.83% 160.53% 143.30%
Total loans and leases 1.80% 1.69% 1.52% 1.43%
Nonaccrual loans as a
percentage of total loans 1.70% 1.23% 0.87% 0.97%
Nonperforming assets as a
percentage of:
Total loans and other real
estate owned 1.79% 1.25% 0.95% 1.00%
Total assets 1.35% 0.94% 0.71% 0.74%
2007
--------------------------------------
Fourth Third Second First
(Dollars in thousands) Quarter Quarter Quarter Quarter
----------------------------- --------------------------------------
Nonaccrual Loans
Commercial $ 17,103 $ 7,673 $ 3,998 $ 7,024
Commercial real estate
mortgages 1,621 1,970 4,732 4,783
Residential mortgages 387 394 378 --
Real estate construction 55,632 15,513 12,566 11,199
Equity lines of credit 679 502 452 362
Installment 139 175 182 49
-------- -------- -------- --------
Total nonaccrual loans 75,561 26,227 22,308 23,417
Other Real Estate Owned -- -- -- --
-------- -------- -------- --------
Total nonperforming assets $ 75,561 $ 26,227 $ 22,308 $ 23,417
======== ======== ======== ========
Loans 90 Days or More Past Due
on Accrual Status $ 1 $ -- $ -- $ 199
Allowance for loan and lease
losses as a percentage of:
Nonaccrual loans 223.03% 579.63% 707.58% 687.55%
Total nonperforming assets 223.03% 579.63% 707.58% 687.55%
Total loans and leases 1.45% 1.36% 1.43% 1.51%
Nonaccrual loans as a
percentage of total loans 0.65% 0.23% 0.20% 0.22%
Nonperforming assets as a
percentage of:
Total loans and other real
estate owned 0.65% 0.23% 0.20% 0.22%
Total assets 0.48% 0.17% 0.14% 0.15%
CITY NATIONAL CORPORATION
AVERAGE BALANCES AND RATES
(unaudited)
2008
-------------------------------------------------
Fourth Quarter Third Quarter Second Quarter
--------------- --------------- ---------------
(Dollars in Average Average Average Average Average Average
millions) Balance Rate Balance Rate Balance Rate
------------------- ------- ------- ------- ------- ------- -------
Assets
Interest-earning
assets
Loans and leases
Commercial $ 4,790 4.89% $ 4,727 5.30% $ 4,675 5.30%
Commercial real
estate mortgages 2,149 6.31 2,095 6.52 2,009 6.50
Residential
mortgages 3,386 5.65 3,335 5.62 3,271 5.57
Real estate
construction 1,288 4.57 1,404 5.05 1,470 5.43
Equity lines of
credit 591 3.62 513 4.34 470 4.45
Installment 167 5.45 157 5.89 164 5.88
-------- -------- --------
Total loans and
leases 12,371 5.25 12,231 5.53 12,059 5.57
Due from banks -
interest-bearing 120 1.34 94 1.85 95 2.24
Federal funds sold
and securities
purchased under
resale agreements 18 0.33 5 1.88 9 2.54
Securities
available-for-sale 2,136 4.96 2,241 4.97 2,351 4.89
Trading account
securities 123 1.06 118 1.94 102 1.65
Other interest-
earning assets 76 5.64 79 5.92 79 5.24
-------- -------- --------
Total interest-
earning assets 14,844 5.13 14,768 5.39 14,695 5.42
Allowance for loan
and lease losses (204) (182) (163)
Cash and due from
banks 341 375 386
Other non-earning
assets 1,210 1,160 1,159
-------- -------- --------
Total assets $ 16,191 $ 16,121 $ 16,077
======== ======== ========
Liabilities and
Shareholders' Equity
Interest-bearing
deposits
Interest checking
accounts $ 888 0.57% $ 826 0.72% $ 867 0.70%
Money market
accounts 3,911 1.85 3,781 1.68 3,738 1.70
Savings deposits 146 0.52 138 0.44 133 0.28
Time deposits -
under $100,000 240 2.85 213 2.89 208 2.89
Time deposits -
$100,000 and over 1,502 2.32 1,222 2.45 1,143 2.94
-------- -------- --------
Total interest-
bearing deposits 6,687 1.80 6,180 1.72 6,089 1.80
Federal funds
purchased and
securities sold
under repurchase
agreements 636 1.62 1,357 2.28 1,262 2.42
Other borrowings 848 2.86 1,116 2.97 1,193 2.91
-------- -------- --------
Total interest-
bearing
liabilities 8,171 1.89 8,654 1.97 8,544 2.05
Noninterest-bearing
deposits 5,952 5,557 5,606
Other liabilities 231 226 232
Shareholders' equity 1,837 1,685 1,695
-------- -------- --------
Total liabilities
and shareholders'
equity $ 16,191 $ 16,121 $ 16,077
======== ======== ========
Net interest spread 3.24% 3.42% 3.37%
==== ==== ====
Net interest margin 4.09% 4.23% 4.23%
==== ==== ====
Average prime rate 4.06% 5.00% 5.08%
==== ==== ====
2008
--------------------------------
First Quarter Year to Date
--------------- ---------------
Average Average Average Average
(Dollars in millions) Balance Rate Balance Rate
------------------------------------ ------- ------- ------- -------
Assets
Interest-earning assets
Loans and leases
Commercial $ 4,456 6.28% $ 4,663 5.42%
Commercial real estate mortgages 1,975 6.84 2,058 6.54
Residential mortgages 3,179 5.61 3,293 5.61
Real estate construction 1,464 6.47 1,406 5.41
Equity lines of credit 438 5.65 503 4.44
Installment 177 6.49 166 5.93
-------- --------
Total loans and leases 11,689 6.20 12,089 5.63
Due from banks - interest-bearing 78 2.69 97 1.96
Federal funds sold and securities
purchased under resale agreements 8 3.33 10 1.61
Securities available-for-sale 2,446 4.81 2,293 4.90
Trading account securities 78 3.11 105 1.83
Other interest-earning assets 72 5.75 76 5.63
-------- --------
Total interest-earning assets 14,371 5.93 14,670 5.46
Allowance for loan and lease losses (165) (179)
Cash and due from banks 379 371
Other non-earning
assets 1,139 1,167
-------- --------
Total assets $ 15,724 $ 16,029
======== ========
Liabilities and Shareholders' Equity
Interest-bearing deposits
Interest checking accounts $ 823 0.69% $ 851 0.67%
Money market accounts 3,610 2.47 3,761 1.92
Savings deposits 135 0.36 138 0.40
Time deposits - under $100,000 220 3.54 220 3.04
Time deposits - $100,000 and over 1,329 3.99 1,299 2.91
-------- --------
Total interest-bearing deposits 6,117 2.55 6,269 1.96
Federal funds purchased and
securities sold under repurchase
agreements 1,141 3.39 1,099 2.51
Other borrowings 1,119 4.00 1,068 3.20
-------- --------
Total interest-bearing liabilities 8,377 2.86 8,436 2.19
Noninterest-bearing deposits 5,404 5,631
Other liabilities 252 235
Shareholders' equity 1,691 1,727
-------- --------
Total liabilities and shareholders'
equity $ 15,724 $ 16,029
======== ========
Net interest spread 3.07% 3.27%
==== ====
Net interest margin 4.26% 4.20%
==== ====
Average prime rate 6.22% 5.09%
==== ====
CITY NATIONAL CORPORATION
AVERAGE BALANCES AND RATES
(unaudited)
2007
-------------------------------------------------
Fourth Quarter Third Quarter Second Quarter
--------------- --------------- ---------------
(Dollars in Average Average Average Average Average Average
millions) Balance Rate Balance Rate Balance Rate
------------------- ------- ------- ------- ------- ------- -------
Assets
Interest-earning
assets
Loans and leases
Commercial $ 4,391 7.02% $ 4,303 7.42% $ 4,275 7.37%
Commercial real
estate mortgages 1,925 7.01 1,897 7.31 1,932 7.36
Residential
mortgages 3,155 5.61 3,063 5.59 2,975 5.49
Real estate
construction 1,405 8.07 1,344 8.61 1,234 8.88
Equity lines of
credit 414 6.95 406 7.63 404 7.71
Installment 171 7.11 178 7.35 191 7.51
-------- -------- --------
Total loans and
leases 11,461 6.75 11,191 7.04 11,011 7.05
Due from banks -
interest-bearing 95 3.05 98 3.48 89 2.40
Federal funds sold
and securities
purchased under
resale agreements 4 4.61 10 5.33 24 5.27
Securities
available-for-sale 2,500 4.84 2,746 4.78 2,872 4.72
Trading account
securities 94 4.57 84 5.23 72 5.23
Other interest-
earning assets 69 6.08 69 6.15 60 6.36
-------- -------- --------
Total interest-
earning assets 14,223 6.36 14,198 6.55 14,128 6.53
Allowance for loan
and lease losses (151) (157) (162)
Cash and due from
banks 393 434 445
Other non-earning
assets 1,124 1,120 1,041
-------- -------- --------
Total assets $ 15,589 $ 15,595 $ 15,452
======== ======== ========
Liabilities and
Shareholders' Equity
Interest-bearing
deposits
Interest checking
accounts $ 805 0.69% $ 778 0.68% $ 804 0.56%
Money market
accounts 3,726 2.99 3,748 3.16 3,721 3.10
Savings deposits 142 0.49 146 0.49 149 0.48
Time deposits -
under $100,000 224 3.93 232 4.05 274 3.79
Time deposits -
$100,000 and over 1,514 4.38 2,054 4.75 2,066 4.81
-------- -------- --------
Total interest-
bearing deposits 6,411 3.01 6,958 3.32 7,014 3.28
Federal funds
purchased and
securities sold
under repurchase
agreements 908 4.50 672 4.99 486 5.11
Other borrowings 746 5.67 620 6.14 612 6.09
-------- -------- --------
Total interest-
bearing
liabilities 8,065 3.42 8,250 3.67 8,112 3.61
Noninterest-bearing
deposits 5,603 5,484 5,556
Other liabilities 270 238 180
Shareholders' equity 1,651 1,623 1,604
-------- -------- --------
Total liabilities
and shareholders'
equity $ 15,589 $ 15,595 $ 15,452
======== ======== ========
Net interest spread 2.94% 2.88% 2.92%
==== ==== ====
Net interest margin 4.42% 4.42% 4.46%
==== ==== ====
Average prime rate 7.52% 8.18% 8.25%
==== ==== ====
2007
--------------------------------
First Quarter Year to Date
--------------- ---------------
Average Average Average Average
(Dollars in millions) Balance Rate Balance Rate
------------------------------------ ------- ------- ------- -------
Assets
Interest-earning assets
Loans and leases
Commercial $ 4,146 7.25% $ 4,280 7.26%
Commercial real estate mortgages 1,758 7.39 1,879 7.26
Residential mortgages 2,885 5.40 3,020 5.52
Real estate construction 1,181 8.73 1,292 8.55
Equity lines of credit 394 7.86 404 7.53
Installment 191 7.64 183 7.41
-------- --------
Total loans and leases 10,555 6.99 11,058 6.95
Due from banks - interest-bearing 73 2.70 89 2.93
Federal funds sold and securities
purchased under resale agreements 14 5.36 13 5.25
Securities available-for-sale 2,916 4.70 2,757 4.76
Trading account securities 54 6.09 76 5.20
Other interest-earning assets 48 5.96 61 6.14
-------- --------
Total interest-earning assets 13,660 6.48 14,054 6.48
Allowance for loan and lease losses (157) (157)
Cash and due from banks 422 424
Other non-earning assets 911 1,050
-------- --------
Total assets $ 14,836 $ 15,371
======== ========
Liabilities and Shareholders' Equity
Interest-bearing deposits
Interest checking accounts $ 749 0.48% $ 784 0.60%
Money market accounts 3,419 2.98 3,655 3.06
Savings deposits 155 0.47 148 0.48
Time deposits - under $100,000 232 4.10 240 3.96
Time deposits - $100,000 and over 1,872 4.72 1,876 4.68
-------- --------
Total interest-bearing deposits 6,427 3.18 6,703 3.20
Federal funds purchased and
securities sold under repurchase
agreements 582 5.27 663 4.90
Other borrowings 599 6.15 645 6.00
-------- --------
Total interest-bearing
liabilities 7,608 3.57 8,011 3.57
Noninterest-bearing deposits 5,489 5,533
Other liabilities 220 228
Shareholders' equity 1,519 1,599
-------- --------
Total liabilities and shareholders'
equity $ 14,836 $ 15,371
======== ========
Net interest spread 2.91% 2.91%
==== ====
Net interest margin 4.49% 4.45%
==== ====
Average prime rate 8.25% 8.05%
==== ====
CITY NATIONAL CORPORATION
CAPITAL AND CREDIT RATING DATA
(unaudited)
2008
-----------------------------------------------
Fourth Third Second First Year To
Quarter Quarter Quarter Quarter Date
------- ------- ------- ------- -------
Per Common Share:
-----------------
Shares Outstanding
(in thousands):
Average - Basic 48,105 47,934 47,849 47,829 47,930
Average - Diluted 48,609 48,630 48,524 48,517 48,570
Period-End 48,180 48,155 47,777 47,871
Book value for
common
shareholders $ 34.33 $ 34.61 $ 34.90 $ 35.14
Closing price:
High $ 57.56 $ 65.35 $ 51.75 $ 60.00 $ 65.35
Low 34.97 37.60 40.98 48.57 34.97
Period-end 48.70 54.30 42.07 49.46
Capital Ratios
(Dollars in
millions):
--------------
Risk-based capital
Risk-adjusted
assets $13,943 $13,653 $13,546 $13,160
Tier I capital $ 1,633 $ 1,246 $ 1,224 $ 1,222
Percentage of
risk adjusted
assets 11.71% 9.13% 9.03% 9.29%
Total capital $ 1,868 $ 1,507 $ 1,483 $ 1,477
Percentage of
risk adjusted
assets 13.40% 11.04% 10.95% 11.22%
Tier I leverage
ratio 10.44% 8.01% 7.89% 8.06%
Period-end
shareholders'
equity to total
period-end assets 12.42% 10.20% 10.21% 10.56%
Period-end common
equity to total
period-end assets 10.05% 10.20% 10.21% 10.56%
Period-end
tangible
shareholders'
equity to total
period-end
tangible assets 9.68% 7.30% 7.29% 7.57%
Period-end
tangible common
equity to total
period-end
tangible assets 7.23% 7.30% 7.29% 7.57%
Average
shareholders'
equity to total
average assets 11.35% 10.45% 10.54% 10.75% 10.77%
Average common
equity to total
average assets 10.27% 10.45% 10.54% 10.75% 10.50%
Average tangible
shareholders'
equity to total
average tangible
assets 8.46% 7.50% 7.59% 7.71% 7.82%
Average tangible
common equity to
total average
tangible assets 7.35% 7.50% 7.59% 7.71% 7.53%
2007
-----------------------------------------------
Fourth Third Second First Year To
Quarter Quarter Quarter Quarter Date
------- ------- ------- ------- -------
Per Common Share:
-----------------
Shares Outstanding
(in thousands):
Average - Basic 47,947 48,345 48,675 47,968 48,234
Average - Diluted 48,869 49,408 49,838 49,087 49,290
Period-End 47,830 48,064 48,831 48,602
Book value for
common
shareholders $ 34.61 $ 33.99 $ 33.20 $ 32.72
Closing price:
High $ 72.97 $ 78.00 $ 78.39 $ 75.39 $ 78.39
Low 59.10 69.00 72.30 68.00 59.10
Period-end 59.55 69.51 76.09 73.60
Capital Ratios
(Dollars in
millions):
--------------
Risk-based capital
Risk-adjusted
assets $12,886 $12,234 $12,067 $11,618
Tier I capital $ 1,199 $ 1,171 $ 1,185 $ 1,234
Percentage of
risk adjusted
assets 9.31% 9.57% 9.82% 10.62%
Total capital $ 1,453 $ 1,470 $ 1,481 $ 1,524
Percentage of
risk adjusted
assets 11.27% 12.01% 12.28% 13.12%
Tier I leverage
ratio 7.97% 7.80% 7.97% 8.59%
Period-end
shareholders'
equity to total
period-end assets 10.42% 10.51% 10.26% 10.42%
Period-end common
equity to total
period-end assets 10.42% 10.51% 10.26% 10.42%
Period-end
tangible
shareholders'
equity to total
period-end
tangible assets 7.39% 7.43% 7.22% 7.88%
Period-end
tangible common
equity to total
period-end
tangible assets 7.39% 7.43% 7.22% 7.88%
Average
shareholders'
equity to total
average assets 10.59% 10.41% 10.38% 10.24% 10.41%
Average common
equity to total
average assets 10.59% 10.41% 10.38% 10.24% 10.41%
Average tangible
shareholders'
equity to total
average tangible
assets 7.52% 7.33% 7.67% 8.18% 7.67%
Average tangible
common equity to
total average
tangible assets 7.52% 7.33% 7.67% 8.18% 7.67%
Senior Debt Credit Ratings
--------------------------
For The Period Ended
December 31, 2008 Standard &
Moody's Fitch Poor's DBRS
---------- ---------- ---------- ----------
City National Bank Aa3 A- A A (high)
City National
Corporation A1 A- A- A