Management Declares Quarterly Cash Dividend of $0.48 Per Share
Assets, Loans, Core Deposits and Brokerage Assets Increase
LOS ANGELES, Oct. 23, 2008 (GLOBE NEWSWIRE) -- City National Corporation (NYSE:CYN) (www.cnb.com), the parent company of wholly owned City National Bank, today reported third-quarter 2008 net income of $16.6 million, or $0.34 per share. Excluding charges of $19.6 million, or $0.40 per share, for the impairment of Fannie Mae, Freddie Mac and other securities, third-quarter net income amounted to $36.2 million, or $0.74 per share. In the third quarter of 2007, the company earned $1.22 per share on net income of $60.1 million.
Year to date, City National has earned $96.0 million, or $1.98 per share, on revenue of $662.5 million. In the first nine months of 2007, the company earned net income of $175.8 million, or $3.56 per share, on revenue of $674.8 million.
The company also announced today that its Board of Directors has again declared a 2008 quarterly common stock cash dividend of $0.48 per share. The quarterly dividend is payable on November 19, 2008 to stockholders of record on November 5, 2008.
THIRD-QUARTER 2008 HIGHLIGHTS
* Average loans reached $12.2 billion, up 9 percent from the same period a year ago. * Average core deposits were $10.5 billion, up 1 percent from the third quarter of 2007. * Third-quarter 2008 net income reflects a $35.0 million provision for credit losses, equal to what the company recorded for the second quarter of this year. Taking into account net charge-offs of $12.8 million, the third-quarter provision added an incremental $23.0 million to City National's allowance for loan and lease losses. At September 30, 2008, the company's allowance was $208.0 million, or 169 basis points of total loans and leases. * Excluding securities impairment charges, noninterest income totaled $82.6 million, up 2 percent from the third quarter of 2007. * City National's net interest margin averaged 4.23 percent in the third quarter of 2008, unchanged from the second quarter of this year. * The company remained well capitalized. Its period-end ratio of equity-to-total-assets at September 30, 2008 was 10.20 percent, compared to 10.51 percent at September 30, 2007 and 10.21 percent at June 30 of this year.
"City National recorded its 62nd consecutive quarter of profitability and has earned nearly $100 million year-to-date," said President and Chief Executive Officer Russell Goldsmith. "The fundamentals of our business are solid and profitable. Capital, liquidity and credit reserves remain strong, but earnings this quarter were clearly impacted by securities impairment charges.
"City National is not burdened by many of the highly publicized problems, such as subprime loans, that are affecting some other financial institutions. While we remain focused on credit quality and cost control, we are, at the same time, investing in the future of our franchise by selectively adding key talent, attracting new clients and expanding relationships with existing clients, as evidenced by the addition in this quarter of $1 billion in clients' securities, deposits and money-market investments."
For the
For the three
three months ended months
September 30, ended
Dollars in millions, ------------------ % June 30, %
except per share 2008 2007 Change 2008 Change
------------------- -------- -------- -------- -------- --------
Earnings Per Share $ 0.34 $ 1.22 (72) $ 0.73 (53)
Net Income 16.6 60.1 (72) 35.5 (53)
Average Assets 16,120.6 15,594.9 3 16,077.2 0
Return on
Average Assets 0.41% 1.53% (73) 0.89% (54)
Return on
Average Equity 3.91% 14.69% (73) 8.42% (54)
ASSETS
Total assets at September 30, 2008 were $16.3 billion, up 5 percent from the third quarter of 2007.
City National's third-quarter return on average assets was 0.41 percent, compared with 1.53 percent for the same period last year, and 0.89 percent for the second quarter of 2008. The company's return on average equity was 3.91 percent, compared with 14.69 percent for the third quarter of 2007 and 8.42 percent for the second quarter of this year.
REVENUE
Revenue was $202.9 million in the third quarter of 2008, compared with $235.0 million in the year-ago period and $231.6 million in the second quarter of this year. Excluding impairment charges, revenue grew slightly from the third quarter of 2007 and 2 percent from the second quarter of this year.
NET INTEREST INCOME
Fully taxable-equivalent net interest income was $157.1 million in the third quarter, up 2 percent from the second quarter of this year and virtually unchanged from the same period last year.
Third-quarter average loan balances reached $12.2 billion, up 9 percent from the third quarter of 2007 and 1 percent from the second quarter of this year. Commercial loans increased 10 percent from the third quarter of last year and 1 percent from the second quarter of this year. Construction and commercial real estate loans together grew 8 percent from the third quarter of 2007 but were virtually unchanged from the second quarter of this year. Average single-family residential mortgage loans to City National's private banking clients rose 9 percent from the third quarter of 2007 and 2 percent from the second quarter of this year.
Average securities for the third quarter of 2008 totaled $2.4 billion, down $471 million from the same period last year and $94 million from the second quarter of 2008. Cash flow from the investment portfolio was used to fund growth in loans. The average duration of total available-for-sale securities at September 30, 2008 was 3.4 years, compared with 3.4 years at the end of the third quarter of 2007 and 3.6 years at June 30, 2008.
At September 30, 2008, City National's prime lending rate was 5.0 percent, down 275 basis points from September 30, 2007 and unchanged from June 30, 2008.
City National's net interest margin in the third quarter of 2008 averaged 4.23 percent, unchanged from the second quarter of 2008.
For the
For the three three
months ended months
September 30, ended
------------------ % June 30, %
Dollars in millions 2008 2007 Change 2008 Change
------------------- -------- -------- -------- -------- --------
Average Loans
and Leases $12,230.6 $11,191.1 9 $12,058.9 1
Average
Total Securities 2,358.9 2,830.5 (17) 2,453.2 (4)
Average
Earning Assets 14,767.8 14,198.4 4 14,694.6 0
Average Deposits 11,737.1 12,442.2 (6) 11,694.7 0
Average
Core Deposits 10,514.8 10,388.0 1 10,551.4 0
Fully
Taxable-Equivalent
Net Interest Income 157.1 158.1 (1) 154.4 2
Net Interest Margin 4.23% 4.42% (4) 4.23% 0
Third-quarter average deposits totaled $11.7 billion, down 6 percent from the third quarter of last year, as the company was able to reduce its holdings of higher-cost non-core time deposits. Average deposits grew slightly from the second quarter of 2008.
Both average core deposits and average noninterest-bearing deposits grew 1 percent from the third quarter of 2007 but were down slightly from the second quarter of 2008 and now equal 90 percent of the company's average deposit balances.
Title and escrow deposit balances averaged $967 million, down $209 million from the third quarter of 2007 and $25 million from the second quarter of this year, due to a decline in residential and commercial real estate activity.
NONINTEREST INCOME
Noninterest income was $50.1 million in the third quarter of 2008, a 38 percent decline from the same period one year ago. The decline was due to impairment charges resulting from unprecedented disruption in the financial markets. One was the previously announced $21.9 million write-down of Fannie Mae and Freddie Mac perpetual preferred investments. Third-quarter results also reflect charges of $10.7 million for the impairment of securities held in the company's $2.2 billion available-for-sale securities portfolio.
Wealth Management
City National's assets under management totaled $33.1 billion as of September 30, 2008, down 11 percent from the year-earlier period. 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 a decline in assets under management at the company's wealth management affiliates. This decline was due in part to an anticipated shift of funds by the former owner of City National's institutional asset management affiliate to its own in-house manager. Assets under management also were significantly affected by lower market valuations.
As a result of lower valuations and asset mix changes, trust and investment fees fell 11 percent from the third quarter of 2007. Brokerage and mutual fund fees rose 25 percent from the third quarter of last year, due largely to the growth of money-market fund balances. These fees grew 4 percent from the second quarter of 2008, reflecting an increase of 11 percent -- or $719 million -- in brokerage assets.
At or
for the
At or for the three
three months ended months
September 30, ended
------------------ % June 30, %
Dollars in millions 2008 2007 Change 2008 Change
------------------- -------- -------- -------- -------- --------
Trust and Investment
Fee Revenue $ 33.5 $ 37.5 (11) $ 34.2 (2)
Brokerage and
Mutual Fund Fees 19.5 15.5 25 18.7 4
Assets Under
Management (1) 33,105.6 37,112.0 (11) 33,773.4 (2)
Assets Under
Management or
Administration (1) 52,367.2 59,243.5 (12) 53,509.7 (2)
(1) Excludes $6.9 billion, $12.1 billion, and $9.0 billion of
assets under management for an asset manager in which City
National held a minority ownership interest as of September 30,
2008, September 30, 2007, and June 30, 2008, respectively.
Other Noninterest Income
Income from cash management and deposit transaction fees rose 41 percent from the same period of last year and 2 percent from the second quarter of 2008, 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 3 percent from the third quarter of 2007 and was up slightly from the second quarter of this year.
Other service charges and fees were $8.4 million in the third quarter of 2008, up 16 percent from the year-ago period.
NONINTEREST EXPENSE
Third-quarter 2008 noninterest expense amounted to $145.8 million, up 6 percent from the third quarter of 2007, and 3 percent from the second quarter of this year. The increase from last year was due in part to $1.8 million of additional expense for FDIC premiums and a $1.6 million settlement related to licensing of check imaging and processing technology. Excluding higher FDIC premiums and the settlement, City National's third-quarter noninterest expense grew 4 percent from the year-ago period.
CREDIT QUALITY
City National recorded a $35.0 million provision for credit losses in the third quarter of 2008, as it did in the second quarter of this year. After net charge-offs, this provision added $23.0 million to the company's allowance for loan and lease losses. The provision reflects 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 $150.9 million and other-real-estate-owned (OREO) assets of $2.3 million at September 30, 2008 totaled $153.2 million, or 125 basis points of total loans and other nonperforming assets, up from $115.3 million, or 95 basis points, in the second quarter and $26.2 million, or 23 basis points, at September 30, 2007.
Third-quarter net charge-offs totaled $12.8 million, down from $18.9 million in the second quarter of this year. Net charge-offs were $3.6 million in the third quarter of 2007. Loans for residential acquisition and development and construction accounted for most of the third-quarter 2008 net charge-offs.
As of As of As of
Period-end September 30, 2008 September 30, 2007 June 30, 2008
Loans (in ------------------ ------------------ ------------------
millions) Total Nonaccrual Total Nonaccrual Total Nonaccrual
---------- -------- -------- -------- -------- -------- --------
Commercial
Loans $ 4,746.0 $ 26.2 $ 4,216.1 $ 7.7 $ 4,703.3 $ 16.4
Commercial
R.E. Loans 2,159.1 5.9 1,894.8 2.0 2,016.1 0.7
Real Estate
Construc-
tion Loans 1,313.7 113.3 1,391.0 15.5 1,483.2 86.3
Residential
Mortgages 3,364.3 0.3 3,114.3 0.4 3,319.7 0.6
Equity
Lines
of Credit 541.0 1.4 404.9 0.5 495.3 1.4
Other Loans 154.4 3.8 169.0 0.1 160.7 0.8
-------- -------- -------- -------- -------- --------
Total
Loans $12,278.5 $ 150.9 $11,190.1 $ 26.2 $12,178.3 $ 106.2
Other Real
Estate
Owned $ 2.3 $ -- $ 9.1
Loans to homebuilders amounted to $480 million, or 3.9 percent of City National's $12.3 billion loan portfolio, at September 30, 2008. These loans generally have a guarantor or other credit enhancement support. The bank is actively managing each homebuilder loan and taking appropriate steps to mitigate risk and minimize loss exposure.
Excluding loans to homebuilders, City National's construction and commercial real estate portfolio has generally continued to perform satisfactorily. Within the construction portfolio, there is weakness in consumer-oriented property types, including for-sale housing and, to a lesser extent, retail projects. These portfolios are diverse in terms of geography and product type. They consist primarily of recourse loans to well-established real estate developers and are generally located in established urban markets. Most of these developers are clients with whom the bank has significant long-term relationships.
The company's commercial loan portfolio also continued to perform satisfactorily.
City National's residential mortgage loans and home-equity loans continue to perform well. The portfolio average loan-to-value ratios at origination are 50 percent and 53 percent, respectively. None of the loans has been originated through brokers or third parties. City National does not originate or purchase subprime or option adjustable rate mortgages.
At September 30, 2008, the allowance for loan and lease losses was $208.0 million, or 169 basis points of total loans and leases. Consistent with its methodology, the bank maintains an additional $23.3 million in reserves for off-balance-sheet credit commitments.
INCOME TAXES
The company's third-quarter 2008 effective tax rate was 25.2 percent, compared to 38.4 percent in the third quarter of last year. The lower tax rate for the third quarter of this year is attributable to lower pretax income. The effective rate for the second quarter of this year was 35.6 percent.
The company expects the tax rate to return to more normal levels in the fourth quarter of this year.
2008 YEAR-TO-DATE HIGHLIGHTS
* Year to date, City National has earned $96.0 million, or $1.98 per share, compared with $175.8 million, or $3.56 per share for the first nine months of 2007. * Revenue for the first nine months of this year was $662.5 million, compared with $674.8 million for the first three quarters of 2007. * Fully taxable-equivalent net interest income amounted to $464 million, down slightly from the first nine months of 2007. The company's net interest margin averaged 4.24 percent in the first nine months of 2008, down from 4.46 percent during the same period of the prior year. * Average loans reached $12.0 billion, up 10 percent from the first nine months of 2007. * Average deposits for the first nine months of this year amounted to $11.7 billion, down 5 percent from the same period of 2007. Core deposit balances totaled $10.4 billion in the first three quarters of 2008, up 1 percent from the first nine months of 2007. * Noninterest income totaled $211.4 million, down 4 percent from the first nine months of 2007. * During the first nine months of 2008, the company's provisions for loan losses totaled $87 million. The company made no provision in the first nine months of 2007. * Noninterest expense for the first nine months of 2008 increased 9 percent from the same period of 2007. Excluding increased FDIC costs, the settlement related to licenses for deposit processing technology and the acquisitions of both Business Bank of Nevada and Convergent Wealth Advisors, noninterest expense increased 4 percent from the same period of 2007.
2008 OUTLOOK
City National had a profitable third quarter, as most of its businesses continued to perform in line with expectations. The company's credit reserves, capital and liquidity remain strong.
Looking to the fourth quarter of 2008, City National expects noninterest income to slow due to declines in the equity markets. The company also anticipates subdued loan growth and pressure on its net interest margin due to lower interest rates.
Excluding the previously mentioned after-tax impairment charges of $19.6 million, or $0.40 per share, the company expects 2008 earnings per share of between $3.05 and $3.15.
CAPITAL LEVELS
City National remains well capitalized. Total risk-based capital and Tier 1 risk-based capital ratios at September 30, 2008 were 11.0 percent and 9.1 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 September 30, 2008 was 8.0 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 June 30, 2008 were 11.0 percent, 9.0 percent and 7.9 percent, respectively.
The period-end ratio of shareholders' equity to total assets at September 30, 2008 was 10.2 percent, compared to 10.5 percent at September 30, 2007 and 10.2 percent at June 30, 2008.
STOCK REPURCHASE
In the third quarter of 2008, City National did not repurchase any outstanding shares of the company's stock. During the first three quarters of this year, it bought back 421,500 shares at an average cost of $48.41.
CONFERENCE CALL
City National Corporation will host a conference call this afternoon to discuss third-quarter 2008 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 64856245. 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. In September, the company opened an office in Manhattan Beach, Calif. City National and its eight majority-owned investment affiliates manage or administer $52.4 billion in client assets, including more than $33 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) unknown impact of recently enacted federal legislation (i.e., the Emergency Economic Stabilization Act ("EESA") on the financial markets, including levels of volatility and limited credit availability currently being experienced, (2) significant changes in banking laws or regulations, including, without limitation, as a result of EESA and the creation of the Troubled Asset Relief Program and the Capital Purchase Program and related executive compensation requirements, (3) more adverse than expected changes 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, (4) unprecedented volatility in equity, fixed income and other market valuations, (5) 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, (6) changes in the interest rate environment and market liquidity which may reduce interest margins and impact funding sources, (7) increased competition in the company's markets, (8) higher-than-expected credit losses due to business losses, real estate cycles, capital market disruptions, changes in commercial real estate development and real estate prices or other economic factors, (9) changes in the financial performance and/or condition of the company's borrowers, (10) 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, (11) soundness of other financial institutions which could adversely affect the company, (12) increases in Federal Deposit Insurance Corporation premiums due to market developments and regulatory changes, (13) protracted labor disputes in the company's markets, (14) earthquake, fire or other natural disasters affecting the condition of real estate collateral, (15) the effect of acquisitions and integration of acquired businesses and de novo branching efforts, (16) the impact of changes in regulatory, judicial or legislative tax treatment of business transactions, (17) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies, and (18) 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 Nine Months
For The ---------------------- -----------------------
Period Ended % %
September 30, 2008 2007 Change 2008 2007 Change
----------------- ---------------------- -----------------------
Per Common Share
Net Income
Basic $ 0.35 $ 1.24 (72) $ 2.01 $ 3.64 (45)
Diluted 0.34 1.22 (72) 1.98 3.56 (44)
Dividends 0.48 0.46 4 1.44 1.38 4
Book value 34.61 33.99 2
Results of
Operations:
(In millions)
Interest income $ 196 $ 230 (15) $ 597 $ 670 (11)
Interest expense 43 76 (44) 146 216 (33)
------- ------- ------- -------
Net interest
income 153 154 (1) 451 454 (1)
Net interest
income (Fully
taxable-
equivalent) 157 158 (1) 464 467 (1)
Total revenue 203 235 (14) 662 675 (2)
Provision for
credit losses 35 -- NM 87 -- NM
Net income 17 60 (72) 96 176 (45)
Impact of
Regulation G
Non-GAAP
Disclosures on
Net Income per
Share
Net income per
share $ 0.34 $ 1.98
Add: Impairment
- Fannie Mae
and Freddie Mac 0.27 0.27
Impairment and
realized
losses - other
debt and
equity
securities 0.13 0.13
------- -------
Total impact
of
impairment
charges 0.40 0.40
------- -------
Net income per
share,
excluding
impairment
charges $ 0.74 $ 2.38
======= =======
Financial Ratios:
Performance
Ratios:
Return on
average assets 0.41% 1.53% 0.80% 1.54%
Return on
average
shareholders'
equity 3.91 14.69 7.59 14.86
Period-end
shareholders'
equity to
period-end
assets 10.20 10.51
Net interest
margin 4.23 4.42 4.24 4.46
Efficiency
ratio 70.74 57.66 64.01 57.52
Capital Adequacy
Ratios
(Period-end):
Tier 1 leverage 8.01 7.80
Tier 1 risk
-based capital 9.13 9.57
Total risk-
based capital 11.04 12.01
Asset Quality Ratios:
Allowance for
loan and lease
losses to:
Total loans and
leases 1.69% 1.36%
Nonaccrual loans 137.88 579.63
Nonperforming
assets to:
Total loans and
leases and
nonperforming
assets 1.25 0.23
Total assets 0.94 0.17
Net (charge-offs)
/recoveries to
Average total
loans and
leases
(annualized) (0.42)% (0.13)% (0.49)% (0.06)%
Average Balances:
(In millions)
Loans and leases $12,231 $11,191 9 $11,994 $10,921 10
Interest-earning
assets 14,768 14,198 4 14,612 13,997 4
Assets 16,121 15,595 3 15,974 15,297 4
Core deposits 10,515 10,388 1 10,421 10,314 1
Deposits 11,737 12,442 (6) 11,651 12,312 (5)
Interest-bearing
liabilities 8,654 8,250 5 8,526 7,992 7
Shareholders'
equity 1,685 1,623 4 1,690 1,582 7
Period-End
Balances:
(In millions)
Loans and leases $12,279 $11,190 10
Assets 16,331 15,547 5
Core deposits 10,792 10,426 4
Deposits 12,168 12,181 --
Shareholders'
equity 1,666 1,634 2
Wealth Management:
(In millions) (1)
Assets under
management $33,106 $37,112 (11)
Assets under
management or
administration 52,367 59,244 (12)
(1) Excludes $6.9 billion and $12.1 billion of assets under
management for an asset manager in which City National held a
minority ownership interest as of September 30, 2008 and
September 30, 2007, respectively.
CITY NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended Nine Months Ended
(Dollars in September 30, September 30,
thousands ------------------------- -------------------------
except per % %
share data) 2008 2007 Change 2008 2007 Change
--------------- ---------------------------------------------------
Interest income $195,606 $230,066 (15) $597,065 $670,133 (11)
Interest expense 42,802 76,340 (44) 145,928 216,233 (33)
-------- -------- -------- --------
Net Interest
Income 152,804 153,726 (1) 451,137 453,900 (1)
Provision for
Credit Losses 35,000 -- NM 87,000 -- NM
Noninterest
Income
Trust and
investment
fees 33,457 37,488 (11) 103,993 102,565 1
Brokerage and
mutual fund
fees 19,470 15,546 25 55,601 43,284 28
Cash management
and deposit
transaction
fees 12,392 8,801 41 35,712 25,744 39
International
services 8,202 7,995 3 24,065 22,020 9
Bank-owned life
insurance 824 645 28 2,107 2,030 4
Other service
charges and
fees 8,403 7,251 16 22,190 20,630 8
Impairment loss
on securities (31,936) -- NM (31,936) -- NM
Gain (loss) on
sale of other
assets (198) 6,023 (103) (390) 5,977 (107)
Gain (loss) on
sale of
securities (536) (2,516) (79) 16 (1,381) (101)
-------- -------- -------- --------
Total
noninterest
income 50,078 81,233 (38) 211,358 220,869 (4)
Noninterest
Expense
Salaries and
employee
benefits 89,373 84,057 6 267,072 242,945 10
Net occupancy
of premises 12,719 11,837 7 36,693 31,657 16
Legal and
professional
fees 8,332 8,614 (3) 24,423 25,926 (6)
Information
services 6,576 6,024 9 19,170 17,325 11
Depreciation
and
amortization 5,502 5,275 4 16,464 15,397 7
Amortization of
intangibles 2,238 2,852 (22) 6,197 7,105 (13)
Marketing and
advertising 5,653 5,079 11 16,608 14,860 12
Office services 2,926 3,287 (11) 9,052 8,972 1
Equipment 757 867 (13) 2,416 2,382 1
Minority
interest
expense 1,160 2,211 (48) 6,728 6,612 2
Other 10,521 7,294 44 25,599 20,646 24
-------- -------- -------- --------
Total
noninterest
expense 145,757 137,397 6 430,422 393,827 9
-------- -------- -------- --------
Income Before
Taxes 22,125 97,562 (77) 145,073 280,942 (48)
Applicable
Income Taxes 5,574 37,469 (85) 49,051 105,151 (53)
-------- -------- -------- --------
Net Income $ 16,551 $ 60,093 (72) $ 96,022 $175,791 (45)
======== ======== ======== ========
Other Data:
Earnings per
common share
- basic $ 0.35 $ 1.24 (72) $ 2.01 $ 3.64 (45)
Earnings per
common share -
diluted $ 0.34 $ 1.22 (72) $ 1.98 $ 3.56 (44)
Dividends paid
per common
share $ 0.48 $ 0.46 4 $ 1.44 $ 1.38 4
Dividend payout
ratio 140.24% 37.26% 276 72.51% 38.18% 90
Return on
average assets 0.41% 1.53% (73) 0.80% 1.54% (48)
Return on
average
shareholders'
equity 3.91% 14.69% (73) 7.59% 14.86% (49)
Net interest
margin (Fully
taxable-
equivalent) 4.23% 4.42% (4) 4.24% 4.46% (5)
Full-time
equivalent
employees 3,027 2,878 5
Impact of
Regulation G
Non-GAAP
Disclosures on
Net Income
(after-tax):
Net income $ 16,551 $ 96,022
Add: Impairment
- Fannie
Mae and
Freddie
Mac 13,157 13,157
Impairment
and
realized
losses -
other debt
and equity
securities 6,436 6,436
-------- --------
Total impact
of
impairment
charges 19,593 19,593
-------- --------
Net income,
excluding
impairment
charges $ 36,144 $115,615
======== ========
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
2008
------------------------------------------
(Dollars in thousands Third Second First Year to
except per share data) Quarter Quarter Quarter Date
---------------------- -------- -------- -------- --------
Interest Income $195,606 $193,707 $207,752 $597,065
Interest Expense 42,802 43,539 59,587 145,928
-------- -------- -------- --------
Net Interest Income 152,804 150,168 148,165 451,137
Provision for Credit Losses 35,000 35,000 17,000 87,000
Noninterest Income
Trust and investment fees 33,457 34,187 36,349 103,993
Brokerage and mutual fund
fees 19,470 18,709 17,422 55,601
Cash management and
deposit transaction fees 12,392 12,196 11,124 35,712
International services 8,202 8,176 7,687 24,065
Bank-owned life insurance 824 628 655 2,107
Other service charges and
fees 8,403 8,177 5,610 22,190
Impairment loss on
securities (31,936) -- -- (31,936)
Gain (loss) on sale of
other assets (198) (192) -- (390)
Gain (loss) on sale of
securities (536) (417) 969 16
-------- -------- -------- --------
Total noninterest
income 50,078 81,464 79,816 211,358
Noninterest Expense
Salaries and employee
benefits 89,373 87,520 90,179 267,072
Net occupancy of premises 12,719 12,462 11,512 36,693
Legal and professional
fees 8,332 7,531 8,560 24,423
Information services 6,576 6,388 6,206 19,170
Depreciation and
amortization 5,502 5,460 5,502 16,464
Amortization of
intangibles 2,238 1,528 2,431 6,197
Marketing and advertising 5,653 5,360 5,595 16,608
Office services 2,926 3,140 2,986 9,052
Equipment 757 746 913 2,416
Minority interest expense 1,160 2,262 3,306 6,728
Other 10,521 9,121 5,957 25,599
-------- -------- -------- --------
Total noninterest
expense 145,757 141,518 143,147 430,422
-------- -------- -------- --------
Income Before Taxes 22,125 55,114 67,834 145,073
Applicable Income Taxes 5,574 19,630 23,847 49,051
-------- -------- -------- --------
Net Income $ 16,551 $ 35,484 $ 43,987 $ 96,022
======== ======== ======== ========
Other Data:
Earnings per common share
- basic $ 0.35 $ 0.74 $ 0.92 $ 2.01
Earnings per common share
- diluted $ 0.34 $ 0.73 $ 0.91 $ 1.98
Dividends paid per common
share $ 0.48 $ 0.48 $ 0.48 $ 1.44
Dividend payout ratio 140.24% 65.40% 52.75% 72.51%
Return on average assets 0.41% 0.89% 1.13% 0.80%
Return on average
shareholders' equity 3.91% 8.42% 10.46% 7.59%
Net interest margin
(Fully taxable-
equivalent) 4.23% 4.23% 4.26% 4.24%
Full-time equivalent
employees 3,027 3,013 2,959
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
2007
------------------------------------------------
(Dollars in
thousands
except per share Fourth Third Second First Full
data) Quarter Quarter Quarter Quarter Year
----------------- -------- -------- -------- -------- --------
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 (loss) 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
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
shareholders'
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
-------------------------------------
Third Second First
(In thousands) Quarter Quarter Quarter
---------------------------- ----------- ----------- -----------
Assets
Cash and due from banks $ 428,557 $ 513,736 $ 514,878
Federal funds sold -- -- 1,000
Due from banks - interest-
bearing 95,993 88,149 77,567
Securities-available-for-
sale 2,159,918 2,302,982 2,389,459
Trading account securities 310,251 204,825 121,152
Loans and leases:
Commercial 4,746,035 4,703,307 4,442,448
Commercial real estate
mortgages 2,159,101 2,016,090 2,011,221
Residential mortgages 3,364,332 3,319,741 3,215,871
Real estate construction 1,313,735 1,483,193 1,462,641
Equity lines of credit 540,937 495,334 449,177
Installment 154,377 160,665 173,507
----------- ----------- -----------
Total loans and leases 12,278,517 12,178,330 11,754,865
Allowance for loan and
lease losses (208,046) (185,070) (168,278)
----------- ----------- -----------
Net loans and leases 12,070,471 11,993,260 11,586,587
Premises and equipment, net 127,361 122,959 119,243
Goodwill and other
intangibles 512,297 514,584 514,811
Other assets 626,020 598,763 609,335
----------- ----------- -----------
Total assets $16,330,868 $16,339,258 $15,934,032
=========== =========== ===========
Liabilities:
Deposits:
Noninterest-bearing $ 5,744,863 $ 5,861,823 $ 5,680,845
Interest-bearing 6,422,797 6,034,514 6,111,524
----------- ----------- -----------
Total deposits 12,167,660 11,896,337 11,792,369
Federal funds purchased and
securities sold under
repurchase agreements 1,272,359 1,221,428 1,118,478
Other short-term borrowed
funds 630,673 955,000 720,992
Subordinated debt 157,769 157,080 162,813
Other long-term debt 231,321 237,867 243,439
Other liabilities 170,686 171,598 181,414
----------- ----------- -----------
Total liabilities 14,630,468 14,639,310 14,219,505
Minority interest 33,950 32,300 32,199
Shareholders' Equity
Common stock 50,966 50,972 50,982
Additional paid-in capital 415,348 421,689 419,044
Retained earnings 1,396,400 1,403,062 1,390,781
Accumulated other
comprehensive loss (38,071) (24,853) (3,431)
Treasury shares (158,193) (183,222) (175,048)
----------- ----------- -----------
Total shareholders' equity 1,666,450 1,667,648 1,682,328
----------- ----------- -----------
Total liabilities and
shareholders' equity $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
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
shareholders'
equity 1,655,607 1,633,759 1,621,350 1,590,444
----------- ----------- ----------- -----------
Total
liabilities and
shareholders'
equity $15,889,290 $15,547,397 $15,795,996 $15,263,953
=========== =========== =========== ===========
CITY NATIONAL CORPORATION
CREDIT LOSS EXPERIENCE
(unaudited)
2008
---------------------------------------
Third Second First Year To
(Dollars in thousands) Quarter Quarter Quarter Date
--------------------------- -------- -------- -------- --------
Allowance for Loan and
Lease Losses
Balance at beginning of
period $185,070 $168,278 $168,523 $168,523
Allowance of acquired
institution -- -- -- --
Net (charge-offs)/
recoveries:
Commercial (4,356) (5,734) (1,573) (11,664)
Commercial real estate
mortgages -- -- 12 12
Residential mortgages 8 10 8 25
Real estate construction (8,415) (13,196) (10,217) (31,828)
Equity lines of credit -- -- (239) (239)
Installment (30) 4 (78) (104)
-------- -------- -------- --------
Total net (charge-offs)/
recoveries (12,794) (18,916) (12,087) (43,797)
Provision for credit losses 35,000 35,000 17,000 87,000
Transfers from(to) reserve
for off-balance sheet
credit commitments 770 708 (5,158) (3,680)
-------- -------- -------- --------
Balance at end of period $208,046 $185,070 $168,278 $208,046
======== ======== ======== ========
Net (Charge-Offs)/
Recoveries
to Average Total Loans and
Leases: (annualized)
Commercial (0.37)% (0.49)% (0.14)% (0.34)%
Commercial real estate
mortgages 0.00 % 0.00 % 0.00 % 0.00 %
Residential mortgage 0.00 % 0.00 % 0.00 % 0.00 %
Real estate construction (2.38)% (3.61)% (2.81)% (2.94)%
Equity lines of credit 0.00 % 0.00 % (0.22)% (0.07)%
Installment (0.08)% 0.01 % (0.18)% (0.08)%
Total loans and leases (0.42)% (0.63)% (0.42)% (0.49)%
Reserve for Off-Balance
Sheet Credit Commitments
Balance at beginning of
period $ 24,154 $ 24,862 $ 19,704 $ 19,704
Recovery of prior charge-
off -- -- -- --
Reserve of acquired
institution -- -- -- --
Transfers (to)from
allowance (770) (708) 5,158 3,680
-------- -------- -------- --------
Balance at end of period $ 23,384 $ 24,154 $ 24,862 $ 23,384
======== ======== ======== ========
2007
------------------------------------------------
(Dollars in Fourth Third Second First Full
thousands) Quarter Quarter Quarter Quarter Year
------------------ -------- -------- -------- -------- --------
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
----------------------------
Third Second First
(Dollars in thousands) Quarter Quarter Quarter
--------------------------------------- -------- -------- --------
Nonaccrual Loans
Commercial $ 26,184 $ 16,444 $ 16,293
Commercial real estate mortgages 5,878 5,903 1,841
Residential mortgages 266 549 706
Real estate construction 113,288 81,120 93,296
Equity lines of credit 1,380 1,398 1,422
Installment 3,890 763 64
-------- -------- --------
Total nonaccrual loans 150,886 106,177 113,622
Other Nonperforming Assets 2,279 9,113 3,812
-------- -------- --------
Total nonperforming assets $153,165 $115,290 $117,434
======== ======== ========
Loans 90 Days or More Past Due on
Accrual Status $ 4,930 $ 2 $ --
Allowance for loan and lease losses as
a percentage of:
Nonaccrual loans 137.88% 174.30% 148.10%
Total nonperforming assets 135.83% 160.53% 143.30%
Total loans and leases 1.69% 1.52% 1.43%
Nonaccrual loans as a percentage of
total loans 1.23% 0.87% 0.97%
Nonperforming assets as a percentage of:
Total loans and other nonperforming
assets 1.25% 0.95% 1.00%
Total assets 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 Nonperforming Assets -- -- -- --
-------- -------- -------- --------
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
nonperforming assets 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
----------------------------------------------
Third Quarter Second Quarter First Quarter
-------------- -------------- ---------------
Average Average Average Average Average Average
(Dollars in millions) Balance Rate Balance Rate Balance Rate
--------------------- ------- ------- ------- ------- ------- -------
Assets
Interest-earning
assets
Loans and leases
Commercial $ 4,727 5.30% $ 4,675 5.30% $ 4,456 6.28%
Commercial real
estate mortgages 2,095 6.52 2,009 6.50 1,975 6.84
Residential
mortgages 3,335 5.62 3,271 5.57 3,179 5.61
Real estate
construction 1,404 5.05 1,470 5.43 1,464 6.47
Equity lines of
credit 513 4.34 470 4.45 438 5.65
Installment 157 5.89 164 5.88 177 6.49
------- ------- -------
Total loans and
leases 12,231 5.53 12,059 5.57 11,689 6.20
Due from banks -
interest-bearing 94 1.85 95 2.24 78 2.69
Federal funds sold
and securities
purchased under
resale agreements 5 1.88 9 2.54 8 3.33
Securities available
-for-sale 2,241 4.97 2,351 4.89 2,446 4.81
Trading account
securities 118 1.94 102 1.65 78 3.11
Other interest-
earning assets 79 5.92 79 5.24 72 5.75
------- ------- -------
Total interest-
earning assets 14,768 5.38 14,695 5.42 14,371 5.93
Allowance for loan
and lease losses (182) (163) (165)
Cash and due from
banks 375 386 379
Other non-earning
assets 1,160 1,159 1,139
------- ------- -------
Total assets $16,121 $16,077 $15,724
======= ======= =======
Liabilities and
Shareholders' Equity
Interest-bearing
deposits
Interest checking
accounts $ 826 0.72% $ 867 0.70% $ 823 0.69%
Money market accounts 3,781 1.68 3,738 1.70 3,610 2.47
Savings deposits 138 0.44 133 0.28 135 0.36
Time deposits - under
$100,000 213 2.89 208 2.89 220 3.54
Time deposits -
$100,000 and over 1,222 2.45 1,143 2.94 1,329 3.99
------- ------- -------
Total interest-
bearing deposits 6,181 1.72 6,089 1.80 6,117 2.55
Federal funds
purchased and
securities sold
under repurchase
agreements 1,357 2.28 1,262 2.42 1,141 3.39
Other borrowings 1,116 2.97 1,193 2.91 1,119 4.00
------- ------- -------
Total interest-
bearing liabilities 8,654 1.97 8,544 2.05 8,377 2.86
Noninterest-bearing
deposits 5,556 5,606 5,404
Other liabilities 226 232 252
Shareholders' equity 1,685 1,695 1,691
------- ------- -------
Total liabilities
and shareholders'
equity $16,121 $16,077 $15,724
======= ======= =======
Net interest spread 3.42% 3.37% 3.07%
==== ==== ====
Net interest margin 4.23% 4.23% 4.26%
==== ==== ====
Average prime rate 5.00% 5.08% 6.22%
==== ==== ====
2008
--------------
Year to Date
--------------
Average Average
(Dollars in millions) Balance Rate
----------------------------------------------------- ------- -------
Assets
Interest-earning assets
Loans and leases
Commercial $ 4,620 5.61%
Commercial real estate mortgages 2,027 6.62
Residential mortgages 3,262 5.60
Real estate construction 1,446 5.66
Equity lines of credit 474 4.78
Installment 165 6.10
-------
Total loans and leases 11,994 5.76
Due from banks - interest-bearing 89 2.23
Federal funds sold and securities purchased under
resale agreements 7 2.66
Securities available-for-sale 2,346 4.89
Trading account securities 99 2.15
Other interest-earning assets 77 5.63
-------
Total interest-earning assets 14,612 5.57
Allowance for loan and lease losses (170)
Cash and due from banks 380
Other non-earning assets 1,152
-------
Total assets $15,974
=======
Liabilities and Shareholders' Equity
Interest-bearing deposits
Interest checking accounts $ 839 0.70%
Money market accounts 3,710 1.94
Savings deposits 135 0.36
Time deposits - under $100,000 214 3.11
Time deposits - $100,000 and over 1,231 3.15
-------
Total interest-bearing deposits 6,129 2.02
Federal funds purchased and securities sold under
repurchase agreements 1,254 2.66
Other borrowings 1,143 3.29
-------
Total interest-bearing liabilities 8,526 2.29
Noninterest-bearing deposits 5,522
Other liabilities 236
Shareholders' equity 1,690
-------
Total liabilities and shareholders' equity $15,974
=======
Net interest spread 3.29%
====
Net interest margin 4.24%
====
Average prime rate 5.43%
====
CITY NATIONAL CORPORATION
AVERAGE BALANCES AND RATES
(unaudited)
2007
----------------------------------------------
Fourth Quarter Third Quarter Second Quarter
-------------- -------------- ---------------
Average Average Average Average Average Average
(Dollars in 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
--------------------------------------
Third Second First Year To
Quarter Quarter Quarter Date
-------- -------- -------- --------
Per Common Share:
-----------------
Shares Outstanding (in
thousands):
Average - Basic 47,934 47,849 47,829 47,871
Average - Diluted 48,630 48,524 48,517 48,557
Period-End 48,155 47,777 47,871
Book Value $ 34.61 $ 34.90 $ 35.14
Closing price:
High $ 65.35 $ 51.75 $ 60.00 $ 65.35
Low 37.60 40.98 48.57 37.60
Period-end 54.30 42.07 49.46
Capital Ratios (Dollars in
millions):
--------------------------
Risk-based capital
Risk-adjusted assets $ 13,653 $ 13,546 $ 13,160
Tier I capital $ 1,246 $ 1,224 $ 1,222
Percentage of risk adjusted
assets 9.13% 9.03% 9.29%
Total capital $ 1,507 $ 1,483 $ 1,477
Percentage of risk adjusted
assets 11.04% 10.95% 11.22%
Tier I leverage ratio 8.01% 7.89% 8.06%
Period-end shareholders'
equity to total period-end
assets 10.20% 10.21% 10.56%
Period-end tangible
shareholders' equity to total
period-end tangible assets 7.30% 7.29% 7.57%
Average shareholders' equity
to total average assets 10.45% 10.54% 10.75% 10.58%
Average tangible shareholders'
equity to total average
tangible assets 7.50% 7.59% 7.71% 7.60%
2007
------------------------------------------------
Fourth Third Second First Full
Quarter Quarter Quarter Quarter Year
-------- -------- -------- -------- --------
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 $ 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 tangible
shareholders'
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 tangible
shareholders'
equity to total
average tangible
assets 7.52% 7.33% 7.67% 8.18% 7.67%
Senior Debt Credit Ratings
--------------------------
For The Period Ended September 30, 2008
Standard &
Moody's Fitch Poor's DBRS
------- ----- ---------- --------
City National Bank Aa3 A- A A (high)
City National Corporation A1 A- A- A