LOS ANGELES, July 23, 2009 (GLOBE NEWSWIRE) -- City National Corporation (NYSE:CYN), the parent corporation of wholly owned City National Bank, today reported second-quarter 2009 net income of $6.8 million and net income available to common shareholders of $1.3 million, or $0.02 per share, which reflects the dividend paid on preferred stock under the United States Treasury Department's Capital Purchase Program.
Excluding after-tax charges of $5.5 million for City National's share of the FDIC's special assessment levied against all banks that hold insured deposits, as well as after-tax securities gains of $1.0 million, the company's second-quarter 2009 net income available to common shareholders totaled $5.8 million, or $0.11 per share(1). In the second quarter of 2008, the corporation earned $0.73 per share on net income of $35.5 million.
Year to date, City National's net income totaled $14.2 million, while net income available to common shareholders was $3.2 million, or $0.06 per share, on revenue of $412.0 million. Excluding after-tax charges of $15.8 million, or $0.32 per share, for the special FDIC assessment and net securities losses, City National's year-to-date net income available to common shareholders amounted to $19.0 million, or $0.38 per share(1). In the first half of 2008, the corporation earned net income of $79.5 million, or $1.64 per share, on revenue of $459.6 million.
City National also announced today that its board of directors has again declared a 2009 quarterly common stock cash dividend of $0.10 per share, payable on August 19, 2009 to stockholders of record on August 5, 2009.
SECOND-QUARTER 2009 HIGHLIGHTS
* On May 5, 2009, City National netted $120 million in a highly successful common equity offering -- its first since 1993 -- that further strengthened the company's balance sheet. City National's ratio of Tier 1 common shareholders' equity to risk-based assets was 9.31 percent at June 30, 2009(1). (The regulatory minimum is 4.00 percent.) Its tangible common shareholders' equity to tangible assets was 7.35 percent, compared to 6.95 percent at June 30, 2008, and 6.91 percent at March 31, 2009(1). Its second-quarter ratio of total equity to total assets was 12.31 percent, compared to 10.04 percent at June 30, 2008 and 12.10 percent at March 31 of this year. * Average deposit balances grew to a record $14.0 billion, up 20 percent from $11.7 billion in the second quarter of 2008 and 9 percent from $12.8 billion in the first quarter of this year. Average core deposits, which grew 20 percent from the second quarter of last year, amounted to 91 percent of total average balances. Total deposits also reached a record high of $14.5 billion at June 30, 2009, up 22 percent from the year-ago period, and core deposits were up 23 percent to a record $13.3 billion. * Average loans were $12.4 billion, up 2 percent from the same period last year and down slightly from the first quarter of 2009. In the second quarter of this year, the company renewed approximately $1.5 billion of loans and made approximately $900 million in new loan commitments. About $591 million of these commitments were funded. * Second-quarter 2009 net income reflects a $70 million provision for credit losses. After net charge-offs of $56.7 million, the second-quarter provision added a net total of $13.3 million to City National's allowance for loan and lease losses. The corporation's allowance increased to $256.0 million, or 2.06 percent of total loans and leases, compared to $241.6 million, or 1.96 percent of total loans and leases, at the end of the first quarter of 2009. City National also maintained an additional $20.4 million in reserves for off-balance-sheet credit commitments. At June 30, 2009, nonperforming assets amounted to $396.3 million, compared with $326.3 million at March 31 of this year. * Noninterest income totaled $64.3 million in the second quarter of 2009, down 21 percent from the second quarter of 2008, largely due to a decline in wealth management fee income as a result of market conditions. Noninterest income was up 36 percent from the first quarter of 2009, reflecting first-quarter securities write-downs and a second-quarter gain on the sale of securities and other income. * City National's net interest margin averaged 3.98 percent in the second quarter of 2009, down 2 basis points from the first quarter of this year. * The corporation continued to effectively manage expenses. Excluding higher FDIC costs, second-quarter 2009 noninterest expense was down 5 percent from the second quarter of 2008(1). FDIC premiums increased $12.0 million, or 662 percent, from the same period last year. This increase included City National's $7.6 million share of a special assessment levied against all banks that hold insured deposits.
"In spite of several adverse factors created by the continuing recession, including higher loan loss reserves, lower wealth management fee revenue and extraordinary FDIC assessments for the entire industry, City National delivered a modestly profitable quarter," said President and Chief Executive Officer Russell Goldsmith. "Deposits increased dramatically, and core deposits now represent a robust 91 percent of our company's deposit balances. Loans grew as well, and assets reached $17.7 billion for the first time, reflecting the safety, soundness and inherent earnings power of City National.
"The strength and value of City National was further validated in this quarter by the successful equity offering that added $120 million of common equity to City National's already-strong balance sheet. Throughout the quarter we controlled expenses effectively, while continuing to invest strategically in our company's capabilities and growth with the acquisition of the investment firm, Lee Munder Capital, the opening of a second banking office in San Francisco and the addition of some outstanding new talent."
For the
three
For the three months months
ended June 30, ended
Dollars in millions, -------------------- % March 31, %
except per share 2009 2008 Change 2009 Change
----------------------- --------- --------- ------- -------- ------
Earnings Per Share $ 0.02 $ 0.73 (97) $ 0.04 (50)
Net Income Attributable
to CNC $ 6.8 $ 35.5 (81) $ 7.5 (9)
Less: Dividend on
Preferred Stock 5.5 -- NM 5.5 0
--------- --------- --------
Net Income Available to
Common Shareholders $ 1.3 $ 35.5 (96) $ 2.0 (35)
========= ========= =========
Average Assets 17,369.3 16,077.2 8 16,411.2 6
Return on Average Assets 0.16% 0.89% (82) 0.18% (11)
Return on Average Common
Equity 0.29% 8.65% (97) 0.49% (41)
ASSETS
Total assets at June 30, 2009 were $17.7 billion, up 8 percent from the second quarter of 2008, reflecting growth in loans and the securities portfolio, and 4 percent from the first quarter of this year. This marked the first time that City National's assets exceeded $17 billion.
REVENUE
Revenue for the second quarter of 2009 was $219.8 million, down 5 percent from the second quarter of 2008, due principally to a decline in wealth management fees and a lower net interest margin. Revenue was up 14 percent from the first quarter of this year largely due to increased average securities balances, lower funding costs and a net securities gain.
NET INTEREST INCOME
Fully taxable-equivalent net interest income was $158.9 million in the second quarter of 2009, up 3 percent from the same period last year and 7 percent from the first quarter of this year.
Second-quarter average loan balances reached $12.4 billion, up 2 percent from the second quarter of 2008 and down slightly from the first quarter of this year. Commercial loan balances were up 1 percent from the year-ago second quarter, but down slightly from the first quarter of this year.
Commercial real estate and construction loans together were down 4 percent from the year-ago second quarter and 3 percent from the first quarter of this year. Average balances for single-family residential mortgage loans, nearly all of which are made to City National's private banking clients, were up 6 percent from the year-ago period and 1 percent from the first quarter of 2009.
Average securities for the second quarter of 2009 totaled $3.4 billion, up $911 million from the same period last year and $947 million from the first quarter of this year, as increased deposit balances were invested in high-grade, fixed-income instruments. The average duration of total available-for-sale securities at June 30, 2009 was 3.0 years, compared with 3.6 years at the end of the second quarter of 2008 and 2.5 years at March 31, 2009.
City National's net interest margin in the second quarter of 2009 averaged 3.98 percent, down 25 basis points from the year-ago period and 2 basis points from the first quarter of 2009. The corporation's average prime rate was 3.25 percent in the second quarter of 2009, unchanged from the first quarter of this year.
For the
three
For the three months months
ended June 30, ended
-------------------- % March 31, %
Dollars in millions 2009 2008 Change 2009 Change
----------------------- --------- --------- ------ --------- ------
Average Loans and Leases $12,354.3 $12,058.9 2 $12,395.4 (0)
Average Total Securities 3,364.2 2,453.2 37 2,417.1 39
Average Earning Assets 16,003.3 14,694.6 9 15,032.9 6
Average Deposits 14,023.3 11,694.7 20 12,841.1 9
Average Core Deposits 12,711.8 10,551.3 20 11,377.8 12
Fully Taxable-Equivalent
Net Interest Income 158.9 154.4 3 148.4 7
Net Interest Margin 3.98% 4.23% (6) 4.00% (0)
Second-quarter average deposits grew to a record $14.0 billion, up 20 percent from the same period of 2008 and 9 percent from the first quarter of this year, as depositors continued to seek a safe haven for their funds.
Average core deposits grew 20 percent over the second quarter of last year and now stand at $12.7 billion, or 91 percent of total average balances. Average noninterest-bearing deposits were up 21 percent from the second quarter of 2008 and 13 percent from the first quarter of 2009. The company estimates that approximately $1.1 billion of its $2 billion in year-to-date core deposit growth has come from new and existing clients, and that approximately $900 million more has come from money market funds that had been held at City National Asset Management.
Treasury Services deposit balances, which consist primarily of title and escrow deposits, averaged $971 million in the second quarter of this year, compared to $1.0 billion in the second quarter of 2008 and $753 million in the first quarter of this year. The $218 million increase in Treasury Services deposits from the first quarter was due to the addition of new client relationships and increased residential real estate activity.
City National is participating in the FDIC's Temporary Liquidity Guarantee Program, which increases basic FDIC deposit insurance coverage to $250,000 and provides additional unlimited insurance coverage for funds in certain types of accounts. In addition, the company's Prime Money Market Fund and its California Tax Exempt Money Market Fund are taking part in the U.S. Treasury's Temporary Money Market Fund Guarantee Program, which insures the holdings of participating money market mutual funds.
NONINTEREST INCOME
Noninterest income was $64.3 million in the second quarter of 2009, down 21 percent from the year-ago period, due to a decline in wealth management fees. Noninterest income was up 36 percent from the first quarter of 2009, reflecting first-quarter securities write-downs and a second-quarter gain on the sale of securities and other income.
In the second quarter of 2009, noninterest income accounted for 29 percent of City National's total revenue.
Wealth Management
City National's assets under management totaled $30.3 billion as of June 30, 2009, down 10 percent from the same period of 2008 but up 7 percent from the first quarter of this year. The change from the second quarter of last year was caused primarily by significantly lower equity market values. In addition, money-market fund balances declined as a number of clients moved investment funds to FDIC-insured bank deposits and fixed-income securities. Equity values improved in the second quarter of 2009 and accounted for a substantial portion of the increase in assets under management from the first quarter.
As a result of equity market declines, trust and investment fees fell 26 percent from the second quarter of 2008. Money market mutual fund and brokerage fees were down 64 percent from the year-ago period, due to historically low interest rates on government and other quality short-term bonds, which severely impacted net revenue from managing these funds. Additionally, brokerage fees declined significantly from the year-ago period, reflecting reduced spreads and trading activity.
At or
for the
At or for the three
three months ended months
June 30, ended
-------------------- % March 31, %
Dollars in millions 2009 2008 Change 2009 Change
----------------------- --------- --------- ------ --------- ------
Trust and Investment Fee
Revenue $ 25.2 $ 34.2 (26) $ 25.9 (3)
Brokerage and Mutual
Fund Fees 6.6 18.7 (64) 9.8 (33)
Assets Under
Management(1) 30,286.4 33,773.4 (10) 28,414.0 7
Assets Under Management
or Administration(1) 47,838.9 53,509.7 (11) 45,722.2 5
(1) Excludes $7.5 billion, $9.0 billion, and $4.5 billion of assets
under management for an asset manager in which City National held
a noncontrolling ownership interest as of June 30, 2009, June 30,
2008, and March 31, 2009, respectively.
Other Noninterest Income
Income from cash management and deposit transaction fees rose 5 percent from the same period of last year, due to the sales of additional treasury management services and the impact of declining interest rates on the crediting rate for compensating deposit balances, which increased deposit service charge income. Fee income was down 3 percent from the first quarter of 2009, reflecting higher first-quarter fee collection due to end-of-year settlements on accounts that pay for cash management services on an annual basis.
Fee income from foreign exchange services and letters of credit was down 2 percent from the second quarter of 2008, but increased 23 percent from the first quarter of this year. The increase from the first quarter was due primarily to higher demand for letters of credit resulting from new client relationships.
Other income was $9.4 million in the second quarter of 2009, up 18 percent from the year-ago period and 57 percent from the first quarter of this year. The increase from the first quarter was due largely to higher income from client swaps and derivatives.
NONINTEREST EXPENSE
Second-quarter 2009 noninterest expense amounted to $144.1 million, up 3 percent from the second quarter of 2008 and 8 percent from the first quarter of this year. Lower personnel costs in the second quarter of this year were offset by a $12.0 million increase for FDIC premiums. These premiums included City National's $7.6 million share of the FDIC's special assessment, which was levied against all banks that hold FDIC-insured deposits. The company also recorded $2.2 million in second-quarter expense associated with foreclosed assets. Excluding increased FDIC costs, second-quarter 2009 noninterest expense was down 5 percent from the year-ago period(1).
CREDIT QUALITY
Economic conditions continued to weaken in the second quarter of 2009 -- nationally and in the geographies that City National serves. California and Nevada, in particular, experienced significant declines in real estate values and substantially higher unemployment rates.
Net loan charge-offs for the second quarter of 2009 were $56.7 million, or 1.84 percent of average total loans and leases on an annualized basis, up from $18.9 million, or 0.63 percent, in the year-ago period and $33.6 million, or 1.10 percent, in the first quarter of this year.
At June 30, 2009, nonaccrual loans totaled $378.3 million, up from $106.2 million at June 30, 2008 and $313.6 million at March 31, 2009. Total nonperforming assets (nonaccrual loans and foreclosed assets) were $396.3 million, or 3.19 percent of total loans and foreclosed assets, at June 30, 2009. That compares with $115.3 million, or 0.95 percent, at June 30, 2008, and $326.3 million, or 2.65 percent, at the end of first quarter of this year.
As of As of As of
June 30, 2009 March 31, 2009 June 30, 2008
----------------- ----------------- -----------------
Period-end Loans Non- Non- Non-
(in millions) Total accrual Total accrual Total accrual
--------------- --------- ------- --------- ------- --------- -------
Commercial
Loans $ 4,764.8 $ 80.4 $ 4,708.6 $ 56.2 $ 4,703.3 $ 16.4
Commercial R.E
Mortgages 2,162.3 36.1 2,174.0 16.9 2,016.1 5.9
Real Estate
Construction
Loans 1,116.1 237.8 1,189.6 223.4 1,483.2 81.1
Residential
Mortgages 3,511.6 17.3 3,413.5 13.3 3,319.7 0.6
Equity Lines of
Credit 691.2 2.9 651.1 2.4 495.3 1.4
Other Loans 175.3 3.8 168.3 1.4 160.7 0.8
--------- ------- --------- ------- --------- -------
Total Loans $12,421.3 $ 378.3 $12,305.1 $ 313.6 $12,178.3 $ 106.2
Foreclosed
Assets 18.0 12.7 9.1
------- ------- -------
Total
Nonperforming
Assets $ 396.3 $ 326.3 $ 115.3
======= ======= =======
The corporation's $70.0 million second-quarter provision for credit losses added $13.3 million, after net charge-offs, to its allowance for loan and lease losses. City National recorded provisions of $35 million in the second quarter of 2008 and $50 million in the first quarter of this year. At June 30, 2009, the allowance for loan and lease losses was $256.0 million, or 2.06 percent of total loans and leases. That compares with $185.1 million, or 1.52 percent, at the end of the second quarter of 2008 and $241.6 million, or 1.96 percent in the first quarter of this year. City National also maintains an additional $20.4 million in reserves for off-balance-sheet credit commitments.
The provision reflects management's continuing assessment of the loan portfolio's credit quality, which is affected by a broad range of economic factors, including weak valuations in commercial and residential real estate. Additional factors affecting the provision include net loan charge-offs, nonaccrual loans, specific reserves, risk-rating migration and changes in the portfolio size.
Commercial Loans
City National's $4.8 billion commercial loan portfolio experienced some deterioration in the second quarter of this year as a result of the prolonged economic recession.
Commercial loans accounted for $17.3 million of City National's net charge-offs in the second quarter of 2009, down from $18.5 million in the first quarter of this year. Approximately one-half of the commercial loan charge-offs involve companies in real estate-related industries.
Commercial loans on nonaccrual totaled $80.4 million at June 30, 2009, compared to $56.2 million at March 31, 2009, and $16.4 million a year earlier. About 41 percent of commercial nonaccruals are tied to companies in the real estate industry. The remaining loans are not concentrated in any particular industry.
Construction Loans
City National's $1.1 billion commercial real estate construction portfolio, which includes loans to developers of residential and non-residential properties, continued to show signs of weakness. In the commercial sector, sales and lease absorption rates slowed, and values and lease rates declined due to the economic slowdown. Meanwhile, in the residential sector, the value of land continued to deteriorate even as new home sales activity picked up in certain markets.
Net charge-offs of construction loans were $36.2 million in the second quarter of 2009, up from $14.0 million in the first quarter of this year. Construction loans on nonaccrual totaled $237.8 million in the second quarter, up from $223.4 million in the first quarter of 2009.
Loans to homebuilders accounted for 51 percent of all construction loans on nonaccrual and 33 percent of second-quarter net charge-offs. Overall, loans to homebuilders totaled $367.8 million, or 3 percent of City National's $12.4 billion loan portfolio, at June 30, 2009. This total includes $79.3 million of homebuilder loans contained in the commercial loan portfolio.
At the end of the second quarter, non-residential construction loans amounted to $831 million. Net charge-offs totaled $17.5 million, up from $4.1 million at March 31, 2009 and zero at June 30, 2008. Those on nonaccrual were $116.5 million, up from $69.1 million at March 31, 2009 and $13.2 million at June 30, 2008.
Commercial Real Estate Mortgages
Net charge-offs in the commercial real estate mortgage portfolio were zero, unchanged from the end of the first quarter of this year. Commercial real estate mortgage loans on nonaccrual totaled $36.1 million at June 30, 2009, compared to $16.9 million at March 31, 2009.
Residential Mortgage and Equity Lines of Credit
City National's $3.5 billion residential mortgage portfolio and $691.2 million home-equity portfolio continued to perform well. Net charge-offs for the second quarter of 2009 were $1.8 million and nonaccrual loans totaled $20.2 million, compared with $405,000 and $15.7 million, respectively, in the first quarter of this year.
For both portfolios, the average loan-to-value ratios at origination are 49 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 corporation's second-quarter 2009 results reflect a negative tax rate equal to 17.3 percent of pretax income. The company's effective tax rate was 32.8 percent in the second quarter of 2008 and 17.7 percent in the first quarter of this year. The tax benefit for the second quarter of 2009 is attributable primarily to lower pretax income.
FIRST-HALF 2009 HIGHLIGHTS
* Year to date, City National's net income totaled $14.2 million. Net income available to common shareholders was $3.2 million, or $0.06 per share, compared with $79.5 million, or $1.64 per share, for the first six months of 2008. * Revenue for the first six months of this year was $412.0 million, down 10 percent from the first half of 2008. * Fully taxable-equivalent net interest income amounted to $307.3 million, unchanged from the first six months of 2008. The corporation's net interest margin averaged 3.99 percent in the first half of 2009, down from 4.24 percent during same period of the prior year. * Average loans reached $12.4 billion, up 4 percent from the first half of 2008. * Average deposits for the first six months of this year amounted to $13.4 billion, up 16 percent from the same period of 2008. Average core deposit balances totaled $12.0 billion in the first half of 2009, also up 16 percent from the first six months of last year. * Noninterest income was $111.6 million, compared to $161.3 million in the first half of 2008. * During the first half of 2009, the corporation's provision for credit losses totaled $120.0 million. The corporation made $52 million in provisions in the first six months of 2008. * Noninterest expense for the first six months of 2009 declined 2 percent from the same period of 2008. Excluding FDIC special assessment costs, first-half 2009 noninterest expense was down 5 percent from the same period of 2008(1).
CAPITAL LEVELS
During the second quarter of 2009, City National Corporation completed a common stock offering of 3.2 million shares. Gross proceeds from the sale were $126 million, bolstering City National's already-strong capital position.
Total risk-based capital and Tier 1 risk-based capital ratios at June 30, 2009 were 14.31 percent and 12.61 percent, respectively, compared with the minimum regulatory standards of 10 percent and 6 percent for "well-capitalized" institutions. City National's Tier 1 leverage ratio at June 30, 2009 was 10.38 percent, well above the regulatory minimum ratio of 5 percent.
Total risk-based capital, Tier 1 risk-based capital and the Tier 1 leverage ratios at March 31, 2009 were 13.70 percent, 12.00 percent and 10.30 percent, respectively.
The period-end ratio of total equity to total assets at June 30, 2009 was 12.31 percent, compared to 10.04 percent at June 30, 2008 and 12.10 percent at March 31, 2009.
On July 22, the company filed a Form 8(k) announcing that it had completed the issuance of $50 million in subordinated debt. Proceeds from the transaction will qualify as Tier 2 capital for regulatory purposes.
2009 OUTLOOK
Management expects the corporation to remain modestly profitable in 2009.
CONFERENCE CALL
City National Corporation will host a conference call this afternoon to discuss second-quarter 2009 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 14117727. A listen-only live broadcast of the call also will be available on the investor relations page of the corporation's Website at www.cnb.com. There, it will be archived and available for 12 months.
ABOUT CITY NATIONAL
City National Corporation and its wholly owned subsidiary, City National Bank, are headquartered in Los Angeles, California. The bank provides banking, investment and trust services through 63 offices, including 15 full-service regional centers, in Southern California, the San Francisco Bay Area, Nevada and New York City. The corporation and its eight majority-owned investment affiliates manage or administer $47.8 billion in client investment assets, including more than $30 billion under direct management. (These totals do not include assets managed by Lee Munder Capital Group, which City National acquired on July 22, 2009.)
For more information about City National, visit the corporation'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) continuation or worsening of current recessionary conditions, as well as continued turmoil in the financial markets, (2) continued volatility and 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), and rules and regulations issued thereunder, including the TARP Standards for Compensation and Corporate Governance, (4) the ongoing budget crisis in the State of California and the impact of the state's issuance of registered warrants, (5) continued weakness in the real estate market, including the markets for commercial and residential real estate, 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, 2008 and particularly Part I, Item 1A, titled "Risk Factors."
(1) For notes on non-GAAP measures, see pages 13 and 14 of the Selected Financial Information.
CITY NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
(unaudited)
Three Months Six Months
----------------------- -----------------------
For The Period Ended
June 30, 2009 2008 %Change 2009 2008 %Change
-------------------- ----------------------- -----------------------
Per Common Share
Net income available
to common
shareholders
Basic $ 0.02 $ 0.74 (97)$ 0.06 $ 1.65 (96)
Diluted 0.02 0.73 (97) 0.06 1.64 (96)
Dividends 0.10 0.48 (79) 0.35 0.96 (64)
Book value 34.14 33.80 1
Results of Operations:
(In millions)
Interest income $ 176 $ 194 (9)$ 345 $ 401 (14)
Interest expense 20 44 (53) 45 103 (56)
------- ------- ------- -------
Net interest
income 156 150 4 300 298 1
Net interest income
(Fully taxable-
equivalent) 159 154 3 307 307 0
Total revenue 220 232 (5) 412 460 (10)
Provision for credit
losses 70 35 100 120 52 131
Net income
attributable to
City National
Corporation 7 35 (81) 14 79 (82)
Net income available
to common
shareholders 1 35 (96) 3 79 (96)
Financial Ratios:
Performance Ratios:
Return on average
assets 0.16 % 0.89 % 0.17 % 1.01 %
Return on average
common
shareholders'
equity 0.29 8.65 0.39 9.70
Period-end equity
to period-end
assets 12.31 10.04
Net interest
margin 3.98 4.23 3.99 4.24
Expense to revenue
ratio 63.80 59.70 65.83 60.37
Capital Adequacy
Ratios
(Period-end):
Tier 1 leverage 10.38 7.89
Tier 1 risk-based
capital 12.61 9.03
Total risk-based
capital 14.31 10.95
Asset Quality Ratios:
Allowance for loan
and lease losses
to:
Total loans and
leases 2.06 % 1.52 %
Nonaccrual loans 67.68 174.30
Nonperforming assets
to:
Total loans and
leases and
foreclosed assets 3.19 0.95
Total assets 2.24 0.71
Net (charge-offs)/
recoveries to
Average total loans
and leases
(annualized) (1.47)% (0.63)%
Average Balances:
(In millions)
Loans and leases $12,354 $12,059 2 $12,375 $11,874 4
Interest-earning
assets 16,003 14,695 9 15,521 14,533 7
Assets 17,369 16,077 8 16,893 15,900 6
Core deposits 12,712 10,551 20 12,048 10,372 16
Deposits 14,023 11,695 20 13,435 11,608 16
Interest-bearing
liabilities 8,219 8,544 (4) 8,163 8,461 (4)
Common shareholders'
equity 1,730 1,651 5 1,682 1,648 2
Total equity 2,146 1,676 28 2,098 1,674 25
Period-End Balances:
(In millions)
Loans and leases $12,421 $12,178 2
Assets 17,661 16,339 8
Core deposits 13,252 10,774 23
Deposits 14,498 11,896 22
Common shareholders'
equity 1,757 1,615 9
Total equity 2,174 1,641 32
Wealth Management:
(In millions) (1)
Assets under
management $30,286 $33,773 (10)
Assets under
management or
administration 47,839 53,510 (11)
(1)Excludes $7.5 billion and $9.0 billion of assets under
management for an asset manager in which City National held a
noncontrolling ownership interest as of June 30, 2009 and June
30, 2008, respectively.
Note: Certain prior period balances have been reclassified to
conform to current period presentation.
CITY NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended
June 30,
(Dollars in thousands --------------------------------
except per share data) 2009 2008 %Change
---------------------- --------------------------------
Interest income $175,876 $193,707 (9)
Interest expense 20,300 43,539 (53)
-------- --------
Net Interest Income 155,576 150,168 4
Provision for Credit Losses 70,000 35,000 100
Noninterest Income
Trust and investment fees 25,184 34,187 (26)
Brokerage and mutual fund fees 6,645 18,709 (64)
Cash management and deposit
transaction fees 12,778 12,196 5
International services 7,996 8,176 (2)
Bank-owned life insurance 871 628 39
Gain (loss) on securities 1,341 (417) 422
Other 9,442 7,985 18
-------- --------
Total noninterest income 64,257 81,464 (21)
Noninterest Expense
Salaries and employee benefits 75,834 87,520 (13)
Net occupancy of premises 12,559 12,462 1
Legal and professional fees 7,736 7,531 3
Information services 6,992 6,388 9
Depreciation and amortization 5,953 5,460 9
Amortization of intangibles 1,668 1,528 9
Marketing and advertising 4,743 5,360 (12)
Office services and equipment 3,922 3,886 1
FDIC assessments 13,861 1,820 662
Other 10,866 8,546 27
-------- --------
Total noninterest expense 144,134 140,501 3
-------- --------
Income Before Taxes 5,699 56,131 (90)
Applicable Income Taxes (986) 18,385 (105)
-------- --------
Net Income $ 6,685 $ 37,746 (82)
-------- --------
Less: Net income attributable to
noncontrolling interest (88) 2,262 (104)
-------- --------
Net income attributable to City
National Corporation $ 6,773 $ 35,484 (81)
-------- --------
Less: Dividends on preferred stock 5,501 -- NM
-------- --------
Net income available to common
shareholders $ 1,272 $ 35,484 (96)
======== ========
Other Data:
Earnings per common share -
basic (1) $ 0.02 $ 0.74 (97)
Earnings per common share -
diluted $ 0.02 $ 0.73 (97)
Dividends paid per common share $ 0.10 $ 0.48 (79)
Common dividend payout ratio 383.66 % 65.40 % 487
Return on average assets 0.16 % 0.89 % (82)
Return on average common
shareholders' equity 0.29 % 8.65 % (97)
Net interest margin (Fully taxable-
equivalent) 3.98 % 4.23 % (6)
Full-time equivalent employees 2,866 3,013 (5)
Six Months Ended
June 30,
(Dollars in thousands --------------------------------
except per share data) 2009 2008 %Change
----------------------- --------------------------------
Interest income $345,367 $401,459 (14)
Interest expense 44,894 103,126 (56)
-------- --------
Net Interest Income 300,473 298,333 1
Provision for Credit Losses 120,000 52,000 131
Noninterest Income
Trust and investment fees 51,053 70,536 (28)
Brokerage and mutual fund fees 16,402 36,131 (55)
Cash management and deposit
transaction fees 26,001 23,320 11
International services 14,521 15,863 (8)
Bank-owned life insurance 1,734 1,283 35
Gain (loss) on securities (13,626) 552 (2,568)
Other 15,467 13,595 14
-------- --------
Total noninterest income 111,552 161,280 (31)
Noninterest Expense
Salaries and employee benefits 154,086 177,699 (13)
Net occupancy of premises 24,820 23,974 4
Legal and professional fees 15,469 16,091 (4)
Information services 13,472 12,594 7
Depreciation and amortization 11,945 10,962 9
Amortization of intangibles 3,511 3,959 (11)
Marketing and advertising 9,419 10,955 (14)
Office services and equipment 7,526 7,785 (3)
FDIC assessments 16,929 2,171 680
Other 19,942 15,398 30
-------- --------
Total noninterest expense 277,119 281,588 (2)
-------- --------
Income Before Taxes 14,906 126,025 (88)
Applicable Income Taxes 646 40,986 (98)
-------- --------
Net Income $ 14,260 $ 85,039 (83)
-------- --------
Less: Net income attributable to
noncontrolling interest 27 5,568 (100)
-------- --------
Net income attributable to City
National Corporation $ 14,233 $ 79,471 (82)
-------- --------
Less: Dividends on preferred stock 11,002 -- NM
-------- --------
Net income available to common
shareholders $ 3,231 $ 79,471 (96)
======== ========
Other Data:
Earnings per common share -
basic (1) $ 0.06 $ 1.65 (96)
Earnings per common share -
diluted $ 0.06 $ 1.64 (96)
Dividends paid per common share $ 0.35 $ 0.96 (64)
Common dividend payout ratio 526.55 % 58.40 % 802
Return on average assets 0.17 % 1.01 % (83)
Return on average common
shareholders' equity 0.39 % 9.70 % (96)
Net interest margin (Fully taxable-
equivalent) 3.99 % 4.24 % (6)
(1)Basic EPS for certain prior periods have been restated as a
result of the adoption of FSP EITF 03-6-1 "Determining Whether
Instruments Granted in Share-Based Payment Transactions are
Participating Securities."
Note: Certain prior period balances have been reclassified to
conform to current period presentation.
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
2009
-------------------------------
(Dollars in thousands Second First Year to
except per share data) Quarter Quarter Date
------------------------------------ --------- --------- ---------
Interest income $ 175,876 $ 169,491 $ 345,367
Interest expense 20,300 24,594 44,894
--------- --------- ---------
Net Interest Income 155,576 144,897 300,473
Provision for Credit Losses 70,000 50,000 120,000
Noninterest Income
Trust and investment fees 25,184 25,869 51,053
Brokerage and mutual fund fees 6,645 9,757 16,402
Cash management and
deposit transaction fees 12,778 13,223 26,001
International services 7,996 6,525 14,521
Bank-owned life insurance 871 863 1,734
Gain (loss) on securities 1,341 (14,967) (13,626)
Other 9,442 6,025 15,467
--------- --------- ---------
Total noninterest income 64,257 47,295 111,552
Noninterest Expense
Salaries and employee benefits 75,834 78,252 154,086
Net occupancy of premises 12,559 12,261 24,820
Legal and professional fees 7,736 7,733 15,469
Information services 6,992 6,480 13,472
Depreciation and amortization 5,953 5,992 11,945
Amortization of intangibles 1,668 1,843 3,511
Marketing and advertising 4,743 4,676 9,419
Office services and equipment 3,922 3,604 7,526
FDIC assessments 13,861 3,068 16,929
Other 10,866 9,076 19,942
--------- --------- ---------
Total noninterest expense 144,134 132,985 277,119
--------- --------- ---------
Income Before Taxes 5,699 9,207 14,906
Applicable Income Taxes (986) 1,632 646
--------- --------- ---------
Net Income $ 6,685 $ 7,575 $ 14,260
--------- --------- ---------
Less: Net income (loss)
attributable to noncontrolling
interest (88) 115 27
--------- --------- ---------
Net income attributable to City
National Corporation $ 6,773 $ 7,460 $ 14,233
--------- --------- ---------
Less: Dividends on preferred stock 5,501 5,501 11,002
--------- --------- ---------
Net income available to common
shareholders $ 1,272 $ 1,959 $ 3,231
========= ========= =========
Other Data:
Earnings per common share - basic $ 0.02 $ 0.04 $ 0.06
Earnings per common share - diluted $ 0.02 $ 0.04 $ 0.06
Dividends paid per common share $ 0.10 $ 0.25 $ 0.35
Common dividend payout ratio 383.66% 619.32% 526.55%
Return on average assets 0.16% 0.18% 0.17%
Return on average common
shareholders' equity 0.29% 0.49% 0.39%
Net interest margin (Fully taxable-
equivalent) 3.98% 4.00% 3.99%
Full-time equivalent employees 2,866 2,933
Note: Certain prior period balances have been reclassified to
conform to current period presentation.
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
2008
(Dollars in ------------------------------------------------
except per share Fourth Third Second First Year to
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
(Loss) gain on
securities (18,871) (32,472) (417) 969 (50,791)
Other 6,807 8,205 7,985 5,610 28,607
-------- -------- -------- -------- --------
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
and equipment 4,080 3,683 3,886 3,899 15,548
FDIC assessments 1,883 2,188 1,820 351 6,242
Other 11,466 9,933 8,546 6,852 36,797
-------- -------- -------- -------- --------
Total
noninterest
expense 159,978 146,197 140,501 141,087 587,763
-------- -------- -------- -------- --------
Income Before Taxes 4,407 21,685 56,131 69,894 152,117
Applicable Income
Taxes (3,177) 3,974 18,385 22,601 41,783
-------- -------- -------- -------- --------
Net Income $ 7,584 $ 17,711 $ 37,746 $ 47,293 $110,334
-------- -------- -------- -------- --------
Less: Net (loss)
income
attributable to
noncontrolling
interest (1,350) 1,160 2,262 3,306 5,378
-------- -------- -------- -------- --------
Net income
attributable to
City National
Corporation $ 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 (1) $ 0.13 $ 0.34 $ 0.74 $ 0.91 $ 2.12
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 358.52 % 140.24 % 65.40 % 52.75 % 90.61 %
Return on average
assets 0.22 % 0.41 % 0.89 % 1.13 % 0.65 %
Return on average
common equity 1.60 % 4.03 % 8.65 % 10.75 % 6.26 %
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
(1) Basic EPS for certain prior periods have been restated as a
result of the adoption of FSP EITF 03-6-1 "Determining Whether
Instruments Granted in Share-Based Payment Transactions are
Participating Securities".
Note: Certain prior period balances have been reclassified to
conform to current period presentation.
CITY NATIONAL CORPORATION
CONSOLIDATED PERIOD END BALANCE SHEET
(unaudited)
2009
--------------------------
Second First
(In thousands) Quarter Quarter
----------------------------------------- ------------ ------------
Assets
Cash and due from banks $ 350,931 $ 378,289
Federal funds sold 125,000 12,300
Due from banks - interest-bearing 205,656 140,484
Securities-available-for-sale 3,330,326 2,915,883
Trading securities 138,137 67,582
Loans and leases:
Commercial 4,764,755 4,708,627
Commercial real estate mortgages 2,162,294 2,173,983
Residential mortgages 3,511,598 3,413,538
Real estate construction 1,116,154 1,189,594
Equity lines of credit 691,226 651,127
Installment 175,315 168,245
------------ ------------
Total loans and leases 12,421,342 12,305,114
Allowance for loan and lease losses (256,018) (241,586)
------------ ------------
Net loans and leases 12,165,324 12,063,528
Premises and equipment, net 125,510 128,189
Goodwill and other intangibles 496,562 498,194
Other assets 723,339 729,081
------------ ------------
Total assets $ 17,660,785 $ 16,933,530
============ ============
Liabilities
Deposits:
Noninterest-bearing $ 7,118,660 $ 6,611,752
Interest-bearing 7,379,591 7,077,798
------------ ------------
Total deposits 14,498,251 13,689,550
Federal funds purchased and securities
sold under repurchase agreements 316,388 519,687
Other short-term borrowed funds 50,000 28,405
Subordinated debt 162,434 164,296
Other long-term debt 233,456 242,122
Other liabilities 189,588 199,863
------------ ------------
Total liabilities 15,450,117 14,843,923
Redeemable noncontrolling interest 36,752 40,237
Equity
City National Corporation shareholders'
equity:
Preferred stock 391,091 390,590
Common stock 53,886 50,961
Additional paid-in capital 511,939 393,114
Retained earnings 1,365,842 1,369,451
Accumulated other
comprehensive loss (18,110) (23,093)
Treasury shares (156,119) (157,094)
------------ ------------
Total common shareholders' equity 1,757,438 1,633,339
------------ ------------
Total shareholders' equity 2,148,529 2,023,929
Noncontrolling interest 25,387 25,441
------------ ------------
Total equity 2,173,916 2,049,370
------------ ------------
Total liabilities and equity $ 17,660,785 $ 16,933,530
============ ============
Note: Certain prior period balances have been reclassified to
conform to current period presentation.
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 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 124,500 630,673 955,000 720,992
Subordinated debt 161,595 157,769 157,080 162,813
Other long-term
debt 246,554 231,321 237,867 243,439
Other liabilities 287,340 170,686 171,598 181,414
----------- ----------- ----------- -----------
Total liabilities 14,380,270 14,630,468 14,639,310 14,219,505
Redeemable
noncontrolling
interest 44,811 52,556 59,234 50,216
Equity
City National
Corporation
shareholders'
equity:
Preferred stock 390,089 -- -- --
Common stock 50,961 50,966 50,972 50,982
Additional
paid-in capital 389,077 371,279 369,045 375,374
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
shareholders'
equity 1,614,904 1,622,381 1,615,004 1,638,658
----------- ----------- ----------- -----------
Total
shareholders'
equity 2,004,993 1,622,381 1,615,004 1,638,658
Noncontrolling
interest 25,441 25,463 25,710 25,653
----------- ----------- ----------- -----------
Total equity 2,030,434 1,647,844 1,640,714 1,664,311
----------- ----------- ----------- -----------
Total
liabilities and
equity $16,455,515 $16,330,868 $16,339,258 $15,934,032
=========== =========== =========== ===========
Note: Certain prior period balances have been reclassified to
conform to current period presentation.
CITY NATIONAL CORPORATION
CREDIT LOSS EXPERIENCE
(unaudited)
2009
----------------------------
Second First Year To
(Dollars in thousands) Quarter Quarter Date
----------------------------------- -------- -------- --------
Allowance for Loan and Lease Losses
Balance at beginning of period $241,586 $224,046 $224,046
Net (charge-offs)/recoveries:
Commercial (17,283) (18,459) (35,742)
Commercial real estate mortgages -- -- --
Residential mortgages (731) (367) (1,098)
Real estate construction (36,189) (14,049) (50,238)
Equity lines of credit (1,039) (38) (1,077)
Installment (1,448) (706) (2,154)
-------- -------- --------
Total net (charge-offs)/recoveries (56,690) (33,619) (90,309)
Provision for credit losses 70,000 50,000 120,000
Transfers from (to) reserve for
off-balance sheet credit commitments 1,122 1,159 2,281
-------- -------- --------
Balance at end of period $256,018 $241,586 $256,018
======== ======== ========
Net (Charge-Offs)/Recoveries to Average
Total Loans and Leases: (annualized)
Commercial (1.47)% (1.57)% (1.52)%
Commercial real estate mortgages 0.00 % 0.00 % 0.00 %
Residential mortgage (0.08)% (0.04)% (0.06)%
Real estate construction (12.59)% (4.63)% (8.50)%
Equity lines of credit (0.62)% (0.02)% (0.33)%
Installment (3.33)% (1.67)% (2.51)%
Total loans and leases (1.84)% (1.10)% (1.47)%
Reserve for Off-Balance Sheet
Credit Commitments
Balance at beginning of period $ 21,544 $ 22,703 $ 22,703
Recovery of prior charge-off -- -- --
Transfers (to) from allowance (1,122) (1,159) (2,281)
-------- -------- --------
Balance at end of period $ 20,422 $ 21,544 $ 20,422
======== ======== ========
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
Net (charge-offs)/
recoveries:
Commercial (12,123) (4,331) (5,195) (1,574) (23,223)
Commercial real
estate mortgages -- -- -- (552) (552)
Residential
mortgages 37 8 10 8 63
Real estate
construction (12,279) (8,370) (13,196) (9,905) (43,750)
Equity lines
of credit -- -- -- -- --
Installment (316) (101) (535) (64) (1,016)
-------- -------- -------- -------- --------
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)% (0.36)% (0.45)% (0.14)% (0.50)%
Commercial real
estate mortgages 0.00 % 0.00 % 0.00 % (0.11)% (0.03)%
Residential mortgage 0.00 % 0.00 % 0.00 % 0.00 % 0.00 %
Real estate
construction (3.79)% (2.37)% (3.61)% (2.72)% (3.11)%
Equity lines
of credit 0.00 % 0.00 % 0.00 % 0.00 % 0.00 %
Installment (0.76)% (0.26)% (1.32)% (0.15)% (0.61)%
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 -- -- -- -- --
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
======== ======== ======== ======== ========
Note: Certain prior period balances have been reclassified to
conform to current period presentation.
CITY NATIONAL CORPORATION
NONPERFORMING ASSETS
(unaudited)
2009
------------------
Second First
(Dollars in thousands) Quarter Quarter
------------------------------------------------- -------- --------
Nonaccrual Loans
Commercial $ 80,372 $ 56,246
Commercial real estate mortgages 36,112 16,923
Residential mortgages 17,262 13,270
Real estate construction 237,828 223,416
Equity lines of credit 2,919 2,432
Installment 3,768 1,354
-------- --------
Total nonaccrual loans 378,261 313,641
Foreclosed assets 18,064 12,639
-------- --------
Total nonperforming assets $396,325 $326,280
======== ========
Loans 90 days or more past due
on accrual status $ -- $ 16,261
Allowance for loan and lease losses as
a percentage of:
Nonaccrual loans 67.68% 77.03%
Total nonperforming assets 64.60% 74.04%
Total loans and leases 2.06% 1.96%
Nonaccrual loans as a percentage of total loans 3.05% 2.55%
Nonperforming assets as a percentage of:
Total loans and foreclosed assets 3.19% 2.65%
Total assets 2.24% 1.93%
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
Foreclosed assets 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 $ 13
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
foreclosed assets 1.79% 1.25% 0.95% 1.00%
Total assets 1.35% 0.94% 0.71% 0.74%
CITY NATIONAL CORPORATION
AVERAGE BALANCES AND RATES
(unaudited)
2009
----------------------------------------------------
Second Quarter First Quarter Year to Date
---------------- ---------------- ----------------
(Dollars in Average Average Average Average Average Average
millions) Balance Rate Balance Rate Balance Rate
---------------- ------- ------- ------- ------- ------- -------
Assets
Interest-earning
assets
Loans and
leases
Commercial $ 4,721 4.21% $ 4,756 4.22% $ 4,738 4.21%
Commercial
real estate
mortgages 2,178 5.69 2,200 5.74 2,189 5.71
Residential
mortgages 3,454 5.51 3,406 5.58 3,431 5.55
Real estate
construction 1,153 3.04 1,232 3.20 1,192 3.12
Equity lines
of credit 674 3.46 630 3.39 652 3.43
Installment 174 5.05 171 5.12 173 5.08
------- ------- -------
Total loans
and leases 12,354 4.70 12,395 4.75 12,375 4.73
Due from banks
- interest
-bearing 195 0.60 134 0.47 165 0.54
Federal funds
sold and
securities
purchased
under resale
agreements 15 0.23 11 0.24 13 0.23
Securities
available
-for-sale 3,252 4.08 2,302 4.65 2,779 4.31
Trading
securities 112 1.36 115 0.19 114 0.77
Other interest
-earning
assets 75 3.45 76 3.48 75 3.46
------- ------- -------
Total interest
-earning
assets 16,003 4.49 15,033 4.67 15,521 4.58
Allowance for
loan and lease
losses (246) (236) (241)
Cash and due
from banks 324 335 329
Other
non-earning
assets 1,288 1,279 1,284
------- ------- -------
Total assets $17,369 $16,411 $16,893
======= ======= =======
Liabilities
and Equity
Interest-bearing
deposits
Interest
checking
accounts $ 1,388 0.29% $ 1,098 0.32% $ 1,244 0.30%
Money market
accounts 4,111 0.86 3,897 1.01 4,004 0.93
Savings
deposits 222 0.74 166 0.65 194 0.70
Time deposits
- under
$100,000 221 1.42 234 2.22 227 1.83
Time deposits
- $100,000
and over 1,311 1.56 1,463 2.06 1,387 1.82
------- ------- -------
Total interest
-bearing
deposits 7,253 0.89 6,858 1.16 7,056 1.02
Federal funds
purchased and
securities
sold under
repurchase
agreements 472 1.77 723 1.22 597 1.44
Other
borrowings 494 1.75 526 2.20 510 1.98
------- ------- -------
Total interest
-bearing
liabilities 8,219 0.99 8,107 1.23 8,163 1.11
Noninterest
-bearing
deposits 6,770 5,983 6,379
Other
liabilities 234 271 253
Total equity 2,146 2,050 2,098
------- ------- -------
Total
liabilities
and equity $17,369 $16,411 $16,893
======= ======= =======
Net interest
spread 3.50% 3.44% 3.47%
======= ======= =======
Net interest
margin 3.98% 4.00% 3.99%
======= ======= =======
Average prime
rate 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)
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 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 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 2.87 1,117 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 250 252 251
Total equity 1,818 1,658 1,676
------- ------- -------
Total liabilities
and 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 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 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 272 256
Total equity 1,671 1,706
------- -------
Total liabilities and 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%
====== ======
Note: Certain prior period balances have been reclassified to conform
to current period presentation.
CITY NATIONAL CORPORATION
CAPITAL AND CREDIT RATING DATA
(unaudited)
2009
-------------------------
Second First Year To
Quarter Quarter Date
------- ------- -------
Per Common Share:
-----------------
Shares Outstanding (in thousands):
Average - Basic 50,416 48,046 49,028
Average - Diluted(1) 50,551 48,130 49,138
Period-end 51,471 48,224
Book value for common shareholders $ 34.14 $ 33.87
Closing price:
High $ 44.14 $ 47.76 $ 47.76
Low 31.87 22.83 22.83
Period-end 36.83 33.77
Capital Ratios (Dollars in millions):
-------------------------------------
Risk-based capital
Risk-weighted assets(2) $13,887 $13,619
Tier I capital $ 1,752 $ 1,635
Percentage of risk-weighted assets 12.61% 12.00%
Total capital $ 1,987 $ 1,866
Percentage of risk-weighted assets 14.31% 13.70%
Tier I leverage ratio 10.38% 10.30%
Period-end equity to period-end assets 12.31% 12.10%
Period-end common shareholders' equity to
period-end assets 9.95% 9.65%
Average equity to average assets 12.35% 12.49% 12.42%
Average common shareholders' equity to
average assets 9.96% 9.96% 9.96%
Period-end tangible equity to period-end
tangible assets(3) 9.77% 9.44%
Period-end tangible common shareholders'
equity to period-end tangible assets(3) 7.35% 6.91%
Average tangible equity to average tangible
assets(3) 9.77% 9.75% 9.76%
Average tangible common shareholders'
equity to average tangible assets(3) 7.30% 7.14% 7.22%
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(1) 48,280 48,207 48,179 48,185 48,196
Period-end 48,180 48,155 47,777 47,871
Book value for common
shareholders $ 33.52 $ 33.69 $ 33.80 $ 34.23
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-weighted assets(2) $13,943 $13,653 $13,546 $13,160
Tier I capital $ 1,633 $ 1,246 $ 1,224 $ 1,222
Percentage of
risk-weighted assets 11.71% 9.13% 9.03% 9.29%
Total capital $ 1,868 $ 1,507 $ 1,483 $ 1,477
Percentage of
risk-weighted assets 13.40% 11.04% 10.95% 11.22%
Tier I leverage ratio 10.44% 8.01% 7.89% 8.06%
Period-end equity to
period-end assets 12.34% 10.09% 10.04% 10.45%
Period-end common
shareholders' equity to
period-end assets 9.81% 9.93% 9.88% 10.28%
Average equity to average
assets 11.23% 10.28% 10.43% 10.63% 10.64%
Average common
shareholders' equity
to average assets 9.99% 10.12% 10.27% 10.46% 10.21%
Period-end tangible equity
to period-end tangible
assets(3) 9.59% 7.18% 7.12% 7.45%
Period-end tangible common
shareholders' equity to
period-end tangible
assets(3) 6.99% 7.02% 6.95% 7.29%
Average tangible equity to
average tangible
assets(3) 8.34% 7.33% 7.47% 7.58% 7.68%
Average tangible common
shareholders' equity to
average tangible
assets(3) 7.07% 7.17% 7.31% 7.41% 7.24%
Senior Debt Credit Ratings
--------------------------
For The Period Ended June 30, 2009
Standard &
Moody's Fitch Poor's DBRS
---------- ---------- ---------- ----------
City National Bank Aa3 A- A- A (high)
City National Corporation A1 A- BBB+ A
Note: Certain prior period balances have been reclassified to
conform to current period presentation.
(1) Average diluted shares outstanding for prior periods in 2008 have
been restated as a result of the adoption of FSP EITF 03-6-1
"Determining Whether Instruments Granted in Share-Based Payment
Transactions are Participating Securities".
(2) 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 mutliplied 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.
(3) Tangible equity to tangible assets and tangible common
shareholders' equity to tangible assets are non-GAAP financial
measures. For notes on non-GAAP measures, see page 13 of the
Selected Financial Information.
CITY NATIONAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(unaudited)
(a) Net income available to common shareholders, excluding securities
gains/losses and FDIC special assessment fee
A reconciliation of the GAAP to non-GAAP measure is set forth
below:
Second Quarter Year To Date
2009 2009
---------------- ----------------
(in thousands, except per share Per Per
amounts) $ Share $ Share
--------------------------------- ------- ------- ------- -------
Net income available to common
shareholders $ 1,272 $ 0.02 3,231 $ 0.06
Less/Add: Securities (gains)
losses, after tax (1,001) (0.02) 10,245 0.21
Add: FDIC special assessment fee,
after tax 5,518 0.11 5,518 0.11
------- ------- ------- -------
Net income per share, excluding
securities (gains) losses and
FDIC special assessment fee $ 5,789 $ 0.11 $18,994 $ 0.38
======= ======= ======= =======
Management believes these non-GAAP financial measures enhance the
comparability of the financial results with prior periods as well as
highlight the effects of unusual charges in the periods presented.
The Company believes that investors may find it useful to see these
non-GAAP financial measures to analyze the Company's underlying
financial performance without the impact of unusual items.
(b) Tangible equity and tangible common shareholders' 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. Tangible common shareholders' equity to tangible assets
is a non-GAAP financial measure that represents tangible equity less
preferred stock and noncontrolling interest divided by total assets
less identifiable intangible assets and goodwill. Management reviews
both these measures in evaluating the Company's capital levels and
has included these ratios in response to market participant interest
in tangible equity and tangible common shareholders' equity as a
measure of capital. A reconciliation of the GAAP to non-GAAP measure
is set forth below:
2009 2008
------------------------------------- -----------
Second First Year To Fourth
(in thousands) Quarter Quarter Date Quarter
----------------- ----------- ----------- ----------- -----------
Period End:
Total equity $ 2,173,916 $ 2,049,370 $ 2,030,434
Less: Goodwill
and other
intangibles (496,562) (498,194) (500,037)
----------- ----------- -----------
Tangible
equity(A) 1,677,354 1,551,176 1,530,397
Less:
Noncontrolling
interest (25,387) (25,441) (25,441)
Less: Preferred
stock (391,091) (390,590) (390,089)
----------- ----------- -----------
Tangible common
shareholders'
equity(B) $ 1,260,876 $ 1,135,145 $ 1,114,867
Total assets $17,660,785 $16,933,530 $16,455,515
Less: Goodwill and
other intangibles (496,562) (498,194) (500,037)
----------- ----------- -----------
Tangible
assets(C) $17,164,223 $16,435,336 $15,955,478
Period-end
tangible equity
to period-end
tangible assets
(A)/(C) 9.77% 9.44% 9.59%
Period-end
tangible common
shareholders'
equity to
period-end
tangible assets
(B)/(C) 7.35% 6.91% 6.99%
Average Balance:
Total equity $ 2,145,859 $ 2,050,401 $ 2,098,394 $ 1,818,392
Less: Goodwill and
other intangibles (497,487) (499,229) (498,353) (510,125)
----------- ----------- ----------- -----------
Tangible
equity(D) 1,648,372 1,551,172 1,600,041 1,308,267
Less:
Noncontrolling
interest (25,438) (25,441) (25,439) (25,455)
Less: Preferred
stock (390,838) (390,348) (390,594) (174,677)
----------- ----------- ----------- -----------
Tangible common
shareholders'
equity(E) $ 1,232,096 $ 1,135,383 $ 1,184,008 $ 1,108,135
Total assets $17,369,311 $16,411,240 $16,892,922 $16,191,243
Less: Goodwill and
other intangibles (497,487) (499,229) (498,353) (510,125)
----------- ----------- ----------- -----------
Tangible
assets(F) $16,871,824 $15,912,011 $16,394,569 $15,681,118
Average tangible
equity to average
tangible assets
(D)/(F) 9.77% 9.75% 9.76% 8.34%
Average tangible
common
shareholders'
equity to average
tangible assets
(E)/(F) 7.30% 7.14% 7.22% 7.07%
2008
--------------------------------------------------
Third Second First Year To
(in thousands) Quarter Quarter Quarter Date
----------------- ----------- ----------- ----------- -----------
Period End:
Total equity $ 1,647,844 $ 1,640,714 $ 1,664,311
Less: Goodwill
and other
intangibles (512,297) (514,584) (514,811)
----------- ----------- -----------
Tangible
equity(A) 1,135,547 1,126,130 1,149,500
Less:
Noncontrolling
interest (25,463) (25,710) (25,653)
Less: Preferred
stock -- -- --
----------- ----------- -----------
Tangible common
shareholders'
equity(B) $ 1,110,084 $ 1,100,420 $ 1,123,847
Total assets $16,330,868 $16,339,258 $15,934,032
Less: Goodwill and
other intangibles (512,297) (514,584) (514,811)
----------- ----------- -----------
Tangible
assets(C) $15,818,571 $15,824,674 $15,419,221
Period-end
tangible equity
to period-end
tangible assets
(A)/(C) 7.18% 7.12% 7.45%
Period-end
tangible common
shareholders'
equity to
period-end
tangible assets
(B)/(C) 7.02% 6.95% 7.29%
Average Balance:
Total equity $ 1,657,813 $ 1,676,430 $ 1,671,030 $ 1,706,092
Less: Goodwill and
other intangibles (513,609) (513,791) (518,913) (514,097)
----------- ----------- ----------- -----------
Tangible
equity(D) 1,144,204 1,162,639 1,152,117 1,191,995
Less:
Noncontrolling
interest (25,612) (25,677) (25,608) (25,588)
Less: Preferred
stock -- -- -- (43,908)
----------- ----------- ----------- -----------
Tangible common
shareholders'
equity(E) $ 1,118,591 $ 1,136,962 $ 1,126,509 $ 1,122,499
Total assets $16,120,584 $16,077,156 $15,723,507 $16,028,821
Less: Goodwill and
other intangibles (513,609) (513,791) (518,913) (514,097)
----------- ----------- ----------- -----------
Tangible
assets(F) $15,606,975 $15,563,365 $15,204,594 $15,514,724
Average tangible
equity to average
tangible assets
(D)/(F) 7.33% 7.47% 7.58% 7.68%
Average tangible
common
shareholders'
equity to average
tangible assets
(E)/(F) 7.17% 7.31% 7.41% 7.24%
CITY NATIONAL CORPORATION
NON-GAAP FINANCIAL MEASURES (continued)
(unaudited)
(c) 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
perpetual preferred stock, 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, including the Federal Reserve in the
Supervisory Capital Assessment Program, 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 participant interest in the Tier 1 common
shareholders' equity to risk-based assets ratio.
Tier 1 capital was $1.75 billion as of June 30, 2009. To calculate
Tier 1 common shareholders' equity, Tier 1 capital was reduced by
preferred stock of $391.1 million, noncontrolling interest in
subsidiaries of $62.1 million and trust preferred securities of
$5.2 million, resulting in Tier 1 common shareholders' equity of
$1.29 billion as of June 30, 2009. Refer to page 12 of the Selected
Financial Information for risk-weighted assets as of June 30, 2009.
(d) Noninterest expense, excluding higher FDIC costs
Noninterest expense for the three-months ending June 30, 2009 was
$144.1 million, an increase of 3 percent compared to the three-months
ending June 30, 2008. Noninterest expense, excluding higher FDIC costs
of $10.8 million (which includes the special assessment fee), was
$133.3 million, a decrease of 5 percent compared to the three-months
ending June 30, 2008.
Noninterest expense for the six-months ending June 30, 2009 was
$277.1 million, a decrease of 2 percent compared to the six-months
ending June 30, 2008. Noninterest expense, excluding higher FDIC costs
of $10.8 million (which includes the special assessment fee), was
$266.3 million, a decrease of 5 percent compared to the six-months
ending June 30, 2008.
Management believes these non-GAAP financial measures enhance
the comparability of the financial results with prior periods as well
as highlight the effects of unusual charges in the periods presented.
The Company believes that investors may find it useful to see these
non-GAAP financial measures to analyze the Company's underlying
financial performance without the impact of unusual items.