Revenue, loans and deposits grow to record levelsPeriod-end assets surpass $26 billion for the first time LOS ANGELES, Oct. 18, 2012 (GLOBE NEWSWIRE) -- City National Corporation (NYSE:CYN), the parent company of wholly owned City National Bank, today reported third-quarter 2012 net income of $59.8 million, or $1.10 per share, up 44 percent from $41.4 million, or $0.77 per share, in the third quarter of 2011. Year to date, City National's net income totaled $160.8 million, up 25 percent from $128.6 million in the first nine months of 2011. Earnings per share were $2.97, up 24 percent from $2.39 in the first nine months of last year. City National also announced today that its Board of Directors has maintained and approved a quarterly common stock cash dividend of $0.25 per share. The company's dividend is payable on November 21, 2012 to stockholders of record on November 7, 2012. THIRD-QUARTER 2012 HIGHLIGHTS
Average third-quarter loan and lease balances, excluding loans covered by City National's acquisition-related loss-sharing agreements with the Federal Deposit Insurance Corporation (FDIC), were $13.6 billion, up 15 percent from the third quarter of last year and 4 percent higher than the second quarter of 2012.
Fully taxable-equivalent net interest income amounted to $214.8 million, up 6 percent from the year-earlier period and down 3 percent from the second quarter of 2012.
Third-quarter deposit balances averaged $21.9 billion, up 11 percent from the third quarter of 2011 and up 5 percent from the second quarter of 2012. Average core deposits, which equal 97 percent of total balances, were up 12 percent from the third quarter of 2011 and up 5 percent from the second quarter of 2012. Period-end deposits reached a record of $22.5 billion.
Excluding FDIC-covered loans, third-quarter 2012 results included a $2.0 million provision for loan and lease losses. The company recorded a $1 million provision, excluding FDIC-covered loans, in the second quarter of 2012.
Third-quarter 2012 earnings included pretax gains of $4.8 million related to investments. Income, net of expense, from FDIC-covered assets, excluding the base yield, totaled $1.8 million in the third quarter. The aggregate impact of these items was after-tax income of $3.8 million, or $0.07 per share.
On July 2, 2012, City National Bank completed its acquisition of Rochdale Investment Management, a New York City-based investment firm that manages $5.1 billion of assets for affluent and high-net-worth clients and their financial advisors across the nation.
"City National delivered another solid performance in the third quarter, and the company is well on the way to achieving its 20 th consecutive year of profitability," said President and CEO Russell Goldsmith. "Net income, earnings per share, revenue, loans and deposits all continued to grow at double-digit rates, and for the first time assets exceeded $26 billion. New loan production reached a record level for the third quarter in a row. Credit quality was sound, and expenses remained in check. At the same time, we continued to selectively invest in new people, products and technologies, new companies and capabilities. "During the third quarter, strong organic growth, especially from new clients, drove income growth, along with the acquisitions of Rochdale Investment Management and First American Equipment Finance. City National also successfully launched its personal mobile banking in the quarter, and it will be followed by business mobile banking in the fourth quarter."
For the three months ended
For the three
Dollars in millions,
September 30,
%
months ended
%
except per share data
2012
2011
Change
June 30, 2012
Change
Earnings Per Share
$ 1.10
$ 0.77
43
$ 1.01
9
Net Income Attributable to CNC
59.8
41.4
44
54.8
9
Average Assets
$ 25,654.6
$ 22,998.6
12
$ 24,362.5
5
Return on Average Assets
0.93 %
0.71 %
31
0.90 %
3
Return on Average Equity
10.35 %
7.85 %
32
9.86 %
5
ASSETS Total assets at September 30, 2012 grew to a record $26.3 billion, up 14 percent from the third quarter of 2011 and 6 percent from the second quarter of this year. The year-over-year increase largely reflects strong loan growth and an increase in the securities portfolio due to strong deposit growth.
REVENUE
Revenue for the third quarter of 2012 reached a record $317.2 million, up 18 percent from the year-ago period and up 9 percent from the second quarter of 2012. Revenue for the first nine months of this year was $884.8 million, up 7 percent from the same period of 2011. NET INTEREST INCOME Fully taxable-equivalent net interest income was $214.8 million in the third quarter of 2012, up 6 percent from the third quarter of 2011 but down 3 percent from the second quarter of this year. Fully taxable-equivalent net interest income for the first nine months of 2012 was $641.6 million, up 10 percent from $584.3 million in the year-ago period. Average third-quarter deposits were $21.9 billion, up 11 percent from the year-ago period and up 5 percent from the second quarter of 2012. Average deposits for the first nine months of 2012 totaled $21.0 billion, up 11 percent from the same period of 2011. Period-end deposits grew to a record $22.5 billion, up 13 percent from September 30, 2011 and up 7 percent from June 30, 2012. Average core deposits were $21.2 billion in the third quarter of 2012, up 12 percent from the same period of 2011 and up 5 percent from the second quarter of this year. Year-to-date 2012 average core deposits grew 12 percent from the year-ago period to $20.3 billion. Third-quarter 2012 average noninterest-bearing deposits were up 32 percent from the same period of 2011 and up 8 percent from the second quarter of 2012. Average noninterest-bearing deposit balances in the first nine months of 2012 were up 31 percent from the same period last year. Treasury Services deposit balances, which consist primarily of title, escrow and property management deposits, averaged $2.3 billion in the third quarter of 2012, up 21 percent from the same period of last year and up 7 percent from the second quarter of 2012. For the first nine months of 2012, Treasury Services deposit balances averaged $2.1 billion, up 22 percent from the same period of 2011. The increases reflect an increase in residential refinance activity, as well as sales of existing homes during the quarter.
Third-quarter average loan and lease balances, excluding FDIC-covered loans, were $13.6 billion, up 15 percent from the third quarter of 2011 and up 4 percent from the second quarter of this year. Excluding leases obtained in the company's acquisition of First American Equipment Finance, third-quarter average loan and lease balances increased 13 percent from the year-ago period.
For the first nine months of 2012, City National's average loans and leases, excluding FDIC-covered loans, were $13.1 billion, up 13 percent from the year-ago period. Excluding leases obtained in the company's acquisition of First American, year-to-date average loan and lease balances increased 12 percent from the year-ago period. Third-quarter average commercial loans were up 24 percent from the year-ago period and 5 percent higher than the second quarter of 2012. The year-over-year increase was primarily due to organic loan growth, as well as the acquisition of First American. Average balances for commercial real estate mortgages were up 27 percent from the third quarter of 2011, and they increased 7 percent from the second quarter of this year. Average balances for commercial real estate construction loans were down 24 percent from the third quarter of last year, and they declined 15 percent from the second quarter of 2012. Average balances for single-family residential mortgage loans, nearly all of which are made to City National's private banking and entertainment industry clients, were up 4 percent from the year-ago period and 1 percent higher than the second quarter of 2012. Average securities for the third quarter of 2012 totaled $8.6 billion, up 24 percent from the third quarter of 2011 and up 11 percent from the second quarter of this year, as period-end deposit growth outpaced loan growth. The average duration of total securities at September 30, 2012 was 2.8 compared to 2.1 at September 30, 2011 and 3.0 at the end of the second quarter of 2012. City National's net interest margin in the third quarter of 2012 averaged 3.58 percent, compared with 3.91 percent in the second quarter of this year and 3.79 percent in the third quarter of 2011. The second-quarter net interest margin reflected the recovery of a previously charged-off loan, and the decline in the third quarter was due primarily to lower interest income related to covered loans that were repaid or charged off in the third quarter, lower loan yields, and continuing deposit growth. The company continued to invest a large share of its growing deposits in securities and other liquid assets. For the first nine months of 2012, City National's net interest margin averaged 3.74 percent, down from 3.82 percent in the previous year.
Third-quarter net interest income included $22.2 million from FDIC-covered loans that were repaid or charged off during the quarter. This compares with $18.3 million in the third quarter of 2011 and $27.4 million in the second quarter of this year.
At September 30, 2012, City National's prime lending rate was 3.25 percent, unchanged from both September 30, 2011 and June 30, 2012.
For the three months ended
For the three
September 30,
%
months ended
%
Dollars in millions
2012
2011
Change
June 30, 2012
Change
Average Loans and Leases, excluding Covered Loans
$ 13,587.5
$ 11,796.6
15
$ 13,125.9
4
Average Covered Loans
1,207.0
1,664.3
(27)
1,341.0
(10)
Average Total Securities
8,631.4
6,954.1
24
7,755.3
11
Average Earning Assets
23,892.0
21,316.6
12
22,769.1
5
Average Deposits
21,940.8
19,724.6
11
20,948.2
5
Average Core Deposits
21,208.5
18,923.6
12
20,215.2
5
Fully Taxable-Equivalent Net Interest Income
214.8
203.6
6
221.4
(3)
Net Interest Margin
3.58 %
3.79 %
(6)
3.91 %
(8)
COVERED ASSETS Loans and other real estate owned (OREO) assets acquired in City National's FDIC‑assisted bank acquisitions totaled $1.2 billion at the end of the third quarter of 2012 compared to $1.7 billion at September 30, 2011 and $1.3 billion at June 30, 2012.
In the third quarter of 2012, the company recorded a $2.6 million non-cash net gain to reflect results of the quarterly update of cash-flow projections for the FDIC-covered loans. The gain reflects an $18.1 million provision for losses on covered loans and an offsetting $20.7 million of noninterest income related to City National's loss-sharing agreements with the FDIC. In addition to the $2.6 million non-cash gain for the quarter, the company recognized $0.8 million of other covered assets expense. Income, net of expense, from FDIC-covered assets, excluding the base yield, totaled $1.8 million in the third quarter of 2012, down from $7.3 million in the second quarter of this year. (The base yield is the yield on covered assets, excluding income related to covered loans that are repaid or charged off.) The decrease from $7.3 million in the second quarter was due primarily to lower income from loans that were repaid or charged off.
City National will continue to update cash-flow projections for covered loans on a quarterly basis. Due to the uncertainty in the future performance of the covered loans, additional impairments may be recognized in the future. OREO assets acquired by City National in four FDIC-assisted bank acquisitions and subject to loss-sharing agreements totaled $83.6 million at September 30, 2012, compared to $102.8 million in the third quarter of 2011 and $82.8 million at the end of the second quarter of this year. NONINTEREST INCOME Noninterest income was $107.3 million in the third quarter of 2012, up 54 percent from the year-ago quarter and 43 percent higher than the second quarter of 2012. The increases were due to City National's July 2, 2012 acquisition of Rochdale Investment Management, as well as higher FDIC loss-sharing income and distribution income from investments. City National's noninterest income for the first nine months of 2012 was up 1 percent from the same period of 2011.
In the third quarter of 2012, noninterest income accounted for 34 percent of City National's total revenue compared to 26 percent in both the third quarter of 2011 and the second quarter of 2012.
Wealth Management City National's assets under management totaled $38.0 billion as of September 30, 2012, up 13 percent from the year-earlier period and 18 percent higher than the second quarter of 2012. Trust and investment fees were $43.5 million, up 23 percent from the third quarter of 2011 and 28 percent higher than the second quarter of 2012. Year-to-date 2012 trust and investment fee income was up 3 percent from the same period last year. The increases in assets under management and trust and investment fees were due primarily to the Rochdale acquisition. Brokerage and mutual fund fees totaled $9.1 million, up 78 percent from the year-earlier period and 71 percent higher than the second quarter of 2012. Brokerage and mutual fund fee income was $19.4 million in the first nine months of this year, up 24 percent from the same period of 2011. The increases in mutual fund fees were due primarily to slightly higher short-term interest rates. The increases in brokerage fees were due to both the acquisition of Rochdale and growth within City National Securities. Not including the Rochdale acquisition, brokerage and mutual fund fees grew 14 percent from the second quarter of 2012 and 5 percent year to date. 1
At or for the
At or for the
three months ended
three months
September 30,
%
ended
%
Dollars in millions
2012
2011
Change
June 30, 2012
Change
Trust and Investment Fee Revenue
$ 43.5
$ 35.4
23
$ 34.1
28
Brokerage and Mutual Fund Fees
9.1
5.1
78
5.3
71
Assets Under Management (1)
38,043.1
33,590.5
13
32,105.1
18
Assets Under Management or Administration (1)(2)
56,671.8
48,507.4
17
50,040.1
13
(1) Excludes $19.8 billion, $18.4 billion and $16.1 billion of assets under management for asset managers in which City National held a noncontrolling ownership interest as of September 30, 2012, June 30, 2012 and September 30, 2011, respectively.
(2) Assets under administration have been revised to exclude the company's investments that are held in custody and serviced by our wealth management business. Prior-period balances have been reclassified to conform to current period presentation.
Other Noninterest Income Third-quarter income from cash management and deposit transaction fees was $11.5 million, up 5 percent from the third quarter of 2011 but virtually unchanged from the second quarter of this year. For the first nine months of 2012, cash management and deposit transaction fee income was $34.2 million, up 2 percent from the same period of 2011.
Fee income from foreign exchange services and letters of credit totaled $9.8 million in the third quarter of 2012, down 5 percent from the third quarter of 2011 and 2 percent lower than the second quarter of this year. Year-to-date 2012 foreign exchange services and letters of credit fee income totaled $28.6 million, up 3 percent from the same period last year.
Other income was $27.7 million in the third quarter of 2012, up 105 percent from the year-earlier period and 59 percent higher than the second quarter of 2012. The increases largely reflect gains from investments and trading securities, lease income from First American Equipment Finance, and the growth of income from client swap transactions. Other income in the first nine months of this year was $58.6 million, up 1 percent from the year-ago period. NONINTEREST EXPENSE City National's third-quarter 2012 noninterest expense amounted to $207.9 million, up 5 percent from the third quarter of last year and 7 percent from the second quarter of 2012. The increases were due largely to the acquisitions of Rochdale Investment Management and First American Equipment Finance. Noninterest expense for the first nine months of 2012 amounted to $603.1 million, down 1 percent from the same period of last year. CREDIT QUALITY The following credit quality information excludes loans subject to loss-sharing agreements involving City National's FDIC-assisted transactions: Net charge-offs in the third quarter of 2012 totaled $2.2 million, or 0.06 percent of total loans and leases on an annualized basis. The company realized net charge-offs of $10.6 million, or 0.36 percent, in the third quarter of 2011 and net recoveries of $2.7 million, or 0.08 percent, in the second quarter of 2012. Net recoveries for the first nine months of 2012 were $5.0 million, or 0.05 percent of total loans and leases. This compares with net recoveries of $0.1 million in the first nine months of last year. At September 30, 2012, nonperforming assets amounted to $130.5 million, or 0.95 percent of the company's total loans and leases and OREO, compared to $190.7 million, or 1.56 percent, at September 30, 2011 and $133.3 million, or 0.98 percent, at June 30, 2012.
Nonaccrual loans at September 30, 2012 were $103.5 million compared to $146.1 million at September 30, 2011 and $98.7 million at June 30, 2012.
As of September 30, 2012
As of June 30, 2012
As of September 30, 2011
Period-end Loans (in millions)
Total
Nonaccrual
Total
Nonaccrual
Total
Nonaccrual
Commercial
$ 6,264.6
$ 18.8
$ 6,087.0
$ 19.0
$ 5,166.8
$ 34.9
Commercial Real Estate Mortgages
2,463.7
36.6
2,424.3
28.8
2,059.1
20.8
Residential Mortgages
3,897.7
11.7
3,822.6
14.1
3,742.8
10.5
Real Estate Construction
242.1
29.0
301.8
29.7
335.7
70.8
Equity Lines of Credit
719.0
6.9
741.3
6.5
728.9
8.4
Other Loans
137.6
0.5
130.2
0.6
130.9
0.7
Total Loans (1)
$ 13,724.7
$ 103.5
$ 13,507.2
$ 98.7
$ 12,164.2
$ 146.1
Other Real Estate Owned (1)
27.0
34.6
44.5
Total Nonperforming Assets, excluding Covered Assets
$ 130.5
$ 133.3
$ 190.6
(1) Excludes covered loans, net of allowance, of $1.1 billion, $1.2 billion and $1.6 billion at September 30, 2012, June 30, 2012 and September 30, 2011, respectively, and covered other real estate owned of $83.6 million, $82.8 million and $102.8 million at September 30, 2012, June 30, 2012 and September 30, 2011, respectively.
City National recorded a $2.0 million provision for credit losses in the third quarter of 2012, bringing the total for the year to $3.0 million. The company recorded a $7.5 million provision in the third quarter of 2011.
At September 30, 2012, City National's allowance for loan and lease losses totaled $268.4 million, or 1.96 percent of total loans and leases. That compares to $263.3 million, or 2.16 percent, at September 30, 2011 and $269.5 million, or 2.00 percent, at the end of the second quarter of 2012. The company also maintains an additional $25.3 million in reserves for off-balance-sheet credit commitments.
Commercial Loans Commercial loan net charge-offs were $4.9 million in the third quarter of 2012. This compares to net charge-offs of $2.9 million in the year-earlier period and net recoveries of $8.1 million in the second quarter of 2012. Net recoveries in the first nine months of 2012 amounted to $8.4 million, compared to net charge-offs of $2.2 million in the same period of last year. Commercial loans on nonaccrual totaled $18.8 million in the third quarter of 2012 compared to $34.9 million at September 30, 2011 and $19.1 million at June 30, 2012. Construction Loans City National's $242.1 million commercial real estate construction portfolio includes secured loans to developers of residential and nonresidential properties. This portfolio now represents slightly less than 2 percent of the company's total loans. Third-quarter net recoveries of construction loans were $3.1 million compared to net charge-offs of $6.2 million in the third quarter of 2011 and net charge-offs of $4.8 million in the second quarter of 2012. Net charge-offs amounted to $1.6 million in the first nine months of 2012, compared with net charge-offs of $1.8 million in the same period of last year. At September 30, 2012, construction loans on nonaccrual totaled $29.0 million compared to $70.8 million at September 30, 2011 and $29.7 million at June 30, 2012. Commercial Real Estate Mortgage Loans Third-quarter net charge-offs in the company's $2.5 billion commercial real estate mortgage portfolio were $0.2 million compared to net charge-offs of $0.5 million in the third quarter of 2011 and net recoveries of $1.1 million in the second quarter of 2012. Net recoveries amounted to $0.2 million in the first nine months of 2012, compared with net recoveries of $7.0 million in the same period of last year.
Commercial real estate mortgage loans on nonaccrual totaled $36.6 million compared to $20.7 million at September 30, 2011 and $28.8 million at June 30, 2012.
Residential Mortgage Loans and Equity Lines of Credit City National's $3.9 billion residential mortgage portfolio and $0.7 billion home-equity portfolio continued to perform exceptionally well. Together, they accounted for $0.6 million in net charge-offs in the third quarter of 2012 compared to net charge-offs of $0.7 million at September 30, 2011 and $1.4 million at June 30, 2012. Net charge-offs amounted to $2.6 million in the first nine months of 2012, compared with net charge-offs of $2.4 million in the same period of last year. Residential mortgage loans and lines of credit on nonaccrual were $18.6 million in the third quarter of 2012 compared to $18.9 million in the third quarter of 2011 and $20.6 million in the second quarter of 2012. INCOME TAXES City National's effective tax rate for the third quarter of 2012 was 32.6 percent, up from 27.7 percent in the year-earlier period but down from 33.1 percent in the second quarter of 2012. For the first nine months of 2012, City National's effective tax rate was 32.5 percent, compared to 29.4 percent in the prior-year period. The increases from last year were due primarily to higher pretax income. CAPITAL LEVELS City National remains well-capitalized, ending the third quarter of 2012 with a Tier 1 common shareholders' equity ratio of 9.1 percent compared to 10.2 percent at September 30, 2011 and 9.6 percent at June 30, 2012. 1 The change from prior periods is a reflection of both asset growth and the acquisitions of Rochdale Investment Management and First American Equipment Finance. Total risk-based capital and Tier 1 risk-based capital ratios at September 30, 2012 were 12.4 percent and 9.1 percent, respectively. City National's Tier 1 leverage ratio at September 30, 2012 was 6.3 percent. All of City National's capital ratios are above minimum regulatory standards for "well-capitalized" institutions.
Total risk-based capital, Tier 1 risk-based capital and Tier 1 leverage ratios at June 30, 2012 were 12.9 percent, 9.6 percent and 6.7 percent, respectively.
The period-end ratio of equity to total assets at September 30, 2012 was 8.9 percent compared to 9.2 percent at September 30, 2011 and 9.1 percent at June 30, 2012. 2012 OUTLOOK City National's management continues to anticipate net income growth in 2012, as loans and deposits continue to increase and credit quality remains stable. This outlook reflects management's expectations for modest economic growth and loan-loss provisions as well as low interest rates for the remainder of the year. CONFERENCE CALLCity National Corporation will host a conference call this afternoon (October 18) to discuss third-quarter 2012 financial results. The call will begin at 2:00 p.m. PDT. Analysts and investors may dial in and participate in the question/answer session. To access the call, please dial (866) 393-6804 and enter Conference ID 29949796. A listen-only live broadcast of the call also will be available on the investor relations page of the company's Website at cnb.com. There, it will be archived and available for 12 months.ABOUT CITY NATIONAL City National Corporation's wholly owned subsidiary, City National Bank, provides banking, investment and trust services through 78 offices, including 16 full-service regional centers, in Southern California, the San Francisco Bay Area, Nevada, New York City, Nashville and Atlanta. The corporation and its investment affiliates manage or administer $56.7 billion in client investment assets, including $38.0 billion under direct management. For more information about City National, visit the company's Website at cnb.com. The City National Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3142SAFE-HARBOR LANGUAGE This news release contains forward-looking statements about the company, for which the company claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.
A number of factors, many of which are beyond the company's ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. These factors include: (1) changes in general economic, political, or industry conditions and the related credit and market conditions and the impact they have on the company and its customers, including changes in consumer spending, borrowing and savings habits; (2) the impact on financial markets and the economy of the level of U.S. and European debt; (3) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board; (4) continued delay in the pace of economic recovery and continued stagnant or decreasing employment levels; (5) the effect of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations to be promulgated by supervisory and oversight agencies implementing the new legislation, taking into account that the precise timing, extent and nature of such rules and regulations and the impact on the company is uncertain; (6) the impact of revised capital requirements under Basel III; (7) significant changes in applicable laws and regulations, including those concerning taxes, banking and securities; (8) volatility in the municipal bond market; (9) changes in the level of nonperforming assets, charge-offs, other real estate owned and provision expense; (10) incorrect assumptions in the value of the loans acquired in FDIC-assisted acquisitions resulting in greater than anticipated losses in the acquired loan portfolios exceeding the losses covered by the loss-sharing agreements with the FDIC; (11) changes in inflation, interest rates, and market liquidity which may impact interest margins and impact funding sources; (12) adequacy of the company's enterprise risk management framework; (13) the company's ability to attract new employees and retain and motivate existing employees; (14) increased competition in the company's markets and our ability to increase market share and control expenses; (15) changes in the financial performance and/or condition of the company's borrowers, including adverse impact on loan utilization rates, delinquencies, defaults and customers' ability to meet certain credit obligations, changes in customers' suppliers, and other counterparties' performance and creditworthiness; (16) a substantial and permanent loss of either client accounts and/or assets under management at the company's investment advisory affiliates or its wealth management division; (17) soundness of other financial institutions which could adversely affect the company; (18) protracted labor disputes in the company's markets; (19) the impact of natural disasters, terrorist activities or international hostilities on the operations of our business or the value of collateral; (20) the effect of acquisitions and integration of acquired businesses and de novo branching efforts; (21) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies; (22) the impact of cyber security attacks or other disruptions to the company's information systems and any resulting compromise of data or disruptions in service; and (23) the success of the company at managing the risks involved in the foregoing.
Forward-looking statements speak only as of the date they are made, and the company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the statements are made, or to update earnings guidance, including the factors that influence earnings.
For a more complete discussion of these risks and uncertainties, please refer to the company's Annual Report on Form 10-K for the year ended December 31, 2011 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2012. 1For notes on non-GAAP measures, see pages 15 and 16 of the Selected Financial Information.
CITY NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
(unaudited)
Three Months
Nine Months
For The Period Ended September 30,
2012
2011
% Change
2012
2011
% Change
Per Share
Net income attributable to City National Corporation
Basic
$ 1.10
$ 0.78
41
$ 2.98
$ 2.41
24
Diluted
1.10
0.77
43
2.97
2.39
24
Dividends
0.25
0.20
25
0.75
0.60
25
Book value
43.81
40.40
8
Results of Operations: (In millions)
Interest income
$ 225
$ 217
4
$ 668
$ 628
6
Interest expense
15
18
(16)
41
57
(27)
Net interest income
210
199
5
627
571
10
Net interest income (Fully taxable-equivalent)
215
204
6
642
584
10
Total revenue
317
269
18
885
827
7
Provision for credit losses on loans and leases, excluding covered loans
2
8
(73)
3
8
(60)
Provision for losses on covered loans
18
5
251
39
26
50
Net income attributable to City National Corporation
60
41
44
161
129
25
Financial Ratios:
Performance Ratios:
Return on average assets
0.93 %
0.71 %
0.87 %
0.78 %
Return on average shareholders' equity
10.35
7.85
9.62
8.46
Period-end equity to period-end assets
8.88
9.18
Net interest margin
3.58
3.79
3.74
3.82
Expense to revenue ratio
61.96
67.68
64.06
66.50
Capital Adequacy Ratios (Period-end):
Tier 1 leverage
6.29
6.82
Tier 1 risk-based capital
9.15
10.28
Total risk-based capital
12.42
12.88
Asset Quality Ratios:
Allowance for loan and lease losses to:
Total loans and leases, excluding covered loans
1.96 %
2.16 %
Nonaccrual loans
259.38
180.21
Nonperforming assets, excluding covered assets, to:
Total loans and leases and other real estate owned, excluding covered assets
0.95
1.56
Total assets
0.50
0.83
Net (charge-offs) recoveries to average total loans and leases, excluding covered loans (annualized)
(0.06) %
(0.36) %
0.05 %
0.00 %
Average Balances: (In millions)
Loans and leases, excluding covered loans
$ 13,588
$ 11,797
15
$ 13,051
$ 11,525
13
Covered loans
1,207
1,664
(27)
1,328
1,748
(24)
Securities
8,631
6,954
24
8,107
6,295
29
Interest-earning assets
23,892
21,317
12
22,925
20,424
12
Assets
25,655
22,999
12
24,558
22,135
11
Core deposits
21,209
18,924
12
20,318
18,084
12
Deposits
21,941
19,725
11
21,039
18,903
11
Interest-bearing liabilities
10,088
10,841
(7)
10,029
10,701
(6)
Shareholders' equity
2,297
2,093
10
2,234
2,032
10
Total equity
2,297
2,117
9
2,234
2,057
9
Period-End Balances: (In millions)
Loans and leases, excluding covered loans
$ 13,725
$ 12,164
13
Covered loans
1,144
1,612
(29)
Securities
9,111
7,279
25
Assets
26,252
23,104
14
Core deposits
21,828
19,137
14
Deposits
22,512
19,909
13
Shareholders' equity
2,330
2,120
10
Total equity
2,330
2,120
10
Wealth Management: (In millions) (1)
Assets under management
$ 38,043
$ 33,591
13
Assets under management or administration (2)
56,672
48,507
17
(1) Excludes $19.8 billion and $16.1 billion of assets under management for asset managers in which City National held a noncontrolling ownership interest as of September 30, 2012 and September 30, 2011, respectively.
(2) Assets under administration have been revised to exclude the Company's investments that are held in custody and serviced by our wealth management business. Prior period balances have been reclassified to conform to current period presentation.
CITY NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended
Nine Months Ended
(Dollars in thousands
September 30,
September 30,
except per share data)
2012
2011
% Change
2012
2011
% Change
Interest income
$ 224,768
$ 216,892
4
$ 668,249
$ 627,838
6
Interest expense
14,846
17,576
(16)
41,135
56,405
(27)
Net interest income
209,922
199,316
5
627,114
571,433
10
Provision for credit losses on loans and leases, excluding covered loans
2,000
7,500
(73)
3,000
7,500
(60)
Provision for losses on covered loans
18,089
5,147
251
38,848
25,979
50
Noninterest income
Trust and investment fees
43,477
35,412
23
111,198
107,737
3
Brokerage and mutual fund fees
9,059
5,079
78
19,380
15,604
24
Cash management and deposit transaction fees
11,526
10,986
5
34,169
33,616
2
International services
9,819
10,352
(5)
28,621
27,683
3
FDIC loss sharing income (expense), net
1,667
(14,191)
112
(3,493)
(16,270)
(79)
Gain on disposal of assets
3,199
5,191
(38)
8,401
16,037
(48)
Gain on securities
817
3,327
(75)
809
4,688
(83)
Gain on acquisition
--
--
--
--
8,164
(100)
Other
27,693
13,479
105
58,640
58,206
1
Total noninterest income
107,257
69,635
54
257,725
255,465
1
Noninterest expense
Salaries and employee benefits
120,210
112,729
7
355,490
335,880
6
Net occupancy of premises
16,238
13,713
18
43,980
40,724
8
Legal and professional fees
11,757
14,242
(17)
34,996
39,109
(11)
Information services
8,660
7,906
10
25,348
23,738
7
Depreciation and amortization
8,324
6,930
20
23,765
20,582
15
Amortization of intangibles
1,932
2,105
(8)
5,336
6,377
(16)
Marketing and advertising
7,141
6,675
7
21,554
20,819
4
Office services and equipment
4,673
4,456
5
13,113
13,734
(5)
Other real estate owned
8,749
13,160
(34)
28,384
49,811
(43)
FDIC assessments
4,616
6,670
(31)
13,618
25,000
(46)
Other
15,586
9,051
72
37,538
31,092
21
Total noninterest expense
207,886
197,637
5
603,122
606,866
(1)
Income before taxes
89,204
58,667
52
239,869
186,553
29
Applicable income taxes
29,052
16,267
79
78,042
54,803
42
Net income
$ 60,152
$ 42,400
42
$ 161,827
$ 131,750
23
Less: Net income attributable to noncontrolling interest
372
1,002
(63)
1,024
3,189
(68)
Net income attributable to City National Corporation
$ 59,780
$ 41,398
44
$ 160,803
$ 128,561
25
Other Data:
Earnings per share - basic
$ 1.10
$ 0.78
41
$ 2.98
$ 2.41
24
Earnings per share - diluted
$ 1.10
$ 0.77
43
$ 2.97
$ 2.39
24
Dividends paid per share
$ 0.25
$ 0.20
25
$ 0.75
$ 0.60
25
Dividend payout ratio
22.63 %
25.70 %
(12)
25.10 %
24.77 %
1
Return on average assets
0.93 %
0.71 %
31
0.87 %
0.78 %
12
Return on average shareholders' equity
10.35 %
7.85 %
32
9.62 %
8.46 %
14
Net interest margin (Fully taxable-equivalent)
3.58 %
3.79 %
(6)
3.74 %
3.82 %
(2)
Full-time equivalent employees
3,439
3,287
5
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
2012
(Dollars in thousands
Third
Second
First
Year to
except per share data)
Quarter
Quarter
Quarter
Date
Interest income
$ 224,768
$ 229,889
$ 213,592
$ 668,249
Interest expense
14,846
13,410
12,879
41,135
Net interest income
209,922
216,479
200,713
627,114
Provision for credit losses on loans and leases, excluding covered loans
2,000
1,000
--
3,000
Provision for losses on covered loans
18,089
13,293
7,466
38,848
Noninterest income
Trust and investment fees
43,477
34,067
33,654
111,198
Brokerage and mutual fund fees
9,059
5,293
5,028
19,380
Cash management and deposit transaction fees
11,526
11,475
11,168
34,169
International services
9,819
10,017
8,785
28,621
FDIC loss sharing income (expense), net
1,667
(6,026)
866
(3,493)
Gain on disposal of assets
3,199
3,011
2,191
8,401
Gain (loss) on securities
817
(457)
449
809
Other
27,693
17,388
13,559
58,640
Total noninterest income
107,257
74,768
75,700
257,725
Noninterest expense
Salaries and employee benefits
120,210
115,035
120,245
355,490
Net occupancy of premises
16,238
14,056
13,686
43,980
Legal and professional fees
11,757
11,359
11,880
34,996
Information services
8,660
8,539
8,149
25,348
Depreciation and amortization
8,324
8,013
7,428
23,765
Amortization of intangibles
1,932
1,518
1,886
5,336
Marketing and advertising
7,141
7,597
6,816
21,554
Office services and equipment
4,673
4,492
3,948
13,113
Other real estate owned
8,749
7,541
12,094
28,384
FDIC assessments
4,616
4,523
4,479
13,618
Other
15,586
11,843
10,109
37,538
Total noninterest expense
207,886
194,516
200,720
603,122
Income before taxes
89,204
82,438
68,227
239,869
Applicable income taxes
29,052
27,271
21,719
78,042
Net income
$ 60,152
$ 55,167
$ 46,508
$ 161,827
Less: Net income attributable to noncontrolling interest
372
409
243
1,024
Net income attributable to City National Corporation
$ 59,780
$ 54,758
$ 46,265
$ 160,803
Other Data:
Earnings per share - basic
$ 1.10
$ 1.02
$ 0.86
$ 2.98
Earnings per share - diluted
$ 1.10
$ 1.01
$ 0.86
$ 2.97
Dividends paid per share
$ 0.25
$ 0.25
$ 0.25
$ 0.75
Dividend payout ratio
22.63 %
24.57 %
28.91 %
25.10 %
Return on average assets
0.93 %
0.90 %
0.79 %
0.87 %
Return on average shareholders' equity
10.35 %
9.86 %
8.58 %
9.62 %
Net interest margin (Fully taxable-equivalent)
3.58 %
3.91 %
3.74 %
3.74 %
Full-time equivalent employees
3,439
3,330
3,235
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
2011
(Dollars in thousands
Fourth
Third
Second
First
Year to
except per share data)
Quarter
Quarter
Quarter
Quarter
Date
Interest income
$ 215,252
$ 216,892
$ 210,136
$ 200,810
$ 843,090
Interest expense
13,695
17,576
19,309
19,520
70,100
Net interest income
201,557
199,316
190,827
181,290
772,990
Provision for credit losses on loans and leases, excluding covered loans
5,000
7,500
--
--
12,500
Provision for losses on covered loans
17,667
5,147
1,716
19,116
43,646
Noninterest income
Trust and investment fees
32,995
35,412
36,687
35,638
140,732
Brokerage and mutual fund fees
4,836
5,079
4,864
5,661
20,440
Cash management and deposit transaction fees
10,689
10,986
10,905
11,725
44,305
International services
8,783
10,352
9,015
8,316
36,466
FDIC loss sharing income (expense), net
7,633
(14,191)
(10,684)
8,605
(8,637)
Gain on disposal of assets
4,263
5,191
8,422
2,424
20,300
(Loss) gain on securities
(273)
3,327
1,395
(34)
4,415
Gain on acquisition
--
--
8,164
--
8,164
Other
17,476
13,479
23,169
21,558
75,682
Total noninterest income
86,402
69,635
91,937
93,893
341,867
Noninterest expense
Salaries and employee benefits
112,822
112,729
112,139
111,012
448,702
Net occupancy of premises
13,616
13,713
13,665
13,346
54,340
Legal and professional fees
10,846
14,242
14,790
10,077
49,955
Information services
8,359
7,906
8,335
7,497
32,097
Depreciation and amortization
7,014
6,930
6,904
6,748
27,596
Amortization of intangibles
1,350
2,105
2,104
2,168
7,727
Marketing and advertising
8,101
6,675
7,626
6,518
28,920
Office services and equipment
4,234
4,456
4,672
4,606
17,968
Other real estate owned
15,233
13,160
22,162
14,489
65,044
FDIC assessments
4,480
6,670
8,524
9,806
29,480
Other
12,174
9,051
10,911
11,130
43,266
Total noninterest expense
198,229
197,637
211,832
197,397
805,095
Income before taxes
67,063
58,667
69,216
58,670
253,616
Applicable income taxes
22,758
16,267
20,650
17,886
77,561
Net income
$ 44,305
$ 42,400
$ 48,566
$ 40,784
$ 176,055
Less: Net income attributable to noncontrolling interest
445
1,002
1,095
1,092
3,634
Net income attributable to City National Corporation
$ 43,860
$ 41,398
$ 47,471
$ 39,692
$ 172,421
Other Data:
Earnings per share - basic
$ 0.82
$ 0.78
$ 0.89
$ 0.75
$ 3.24
Earnings per share - diluted
$ 0.82
$ 0.77
$ 0.88
$ 0.74
$ 3.21
Dividends paid per share
$ 0.20
$ 0.20
$ 0.20
$ 0.20
$ 0.80
Dividend payout ratio
24.25 %
25.70 %
22.40 %
26.65 %
24.64 %
Return on average assets
0.73 %
0.71 %
0.87 %
0.75 %
0.77 %
Return on average shareholders' equity
8.15 %
7.85 %
9.39 %
8.16 %
8.38 %
Net interest margin (Fully taxable-equivalent)
3.70 %
3.79 %
3.85 %
3.84 %
3.79 %
Full-time equivalent employees
3,256
3,287
3,328
3,258
CITY NATIONAL CORPORATION
CONSOLIDATED PERIOD END BALANCE SHEET
(unaudited)
2012
(In thousands)
Third Quarter
Second Quarter
First Quarter
Assets
Cash and due from banks
$ 235,038
$ 162,894
$ 210,799
Due from banks - interest-bearing
335,300
106,109
101,375
Federal funds sold
19,500
162,000
156,000
Securities available-for-sale
7,872,064
6,865,881
6,838,710
Securities held-to-maturity
1,174,161
1,100,229
996,613
Trading securities
64,749
62,585
82,589
Loans and leases:
Commercial
6,264,562
6,086,947
5,573,782
Commercial real estate mortgages
2,463,664
2,424,333
2,213,114
Residential mortgages
3,897,690
3,822,630
3,805,807
Real estate construction
242,137
301,829
313,409
Equity lines of credit
718,966
741,270
715,997
Installment
137,632
130,200
125,793
Loans and leases, excluding covered loans
13,724,651
13,507,209
12,747,902
Allowance for loan and lease losses
(268,440)
(269,534)
(266,077)
Loans and leases, excluding covered loans, net
13,456,211
13,237,675
12,481,825
Covered loans, net (1)
1,099,359
1,216,988
1,335,685
Net loans and leases
14,555,570
14,454,663
13,817,510
Premises and equipment, net
147,621
147,245
143,238
Goodwill and other intangibles
691,765
589,114
521,717
Other real estate owned (2)
110,673
117,501
107,530
FDIC indemnification asset
160,991
170,654
185,392
Other assets
884,096
863,098
877,016
Total assets
$ 26,251,528
$ 24,801,973
$ 24,038,489
Liabilities
Deposits:
Noninterest-bearing
$ 13,432,413
$ 12,187,075
$ 11,550,000
Interest-bearing
9,079,903
8,921,977
9,237,737
Total deposits
22,512,316
21,109,052
20,787,737
Short-term borrowings
211,739
322,077
222,776
Long-term debt
706,035
712,280
482,024
Other liabilities
449,728
361,300
302,951
Total liabilities
23,879,818
22,504,709
21,795,488
Redeemable noncontrolling interest
41,386
41,899
43,436
Shareholders' equity
Common stock
53,886
53,886
53,886
Additional paid-in capital
485,975
491,439
489,717
Accumulated other comprehensive income
93,924
82,807
81,342
Retained earnings
1,732,417
1,686,163
1,644,861
Treasury shares
(35,878)
(58,930)
(70,241)
Total shareholders' equity
2,330,324
2,255,365
2,199,565
Total liabilities and shareholders' equity
$ 26,251,528
$ 24,801,973
$ 24,038,489
(1) Covered loans are net of $45.0 million, $43.1 million and $61.5 million of allowance for loan losses as of September 30, 2012, June 30, 2012 and March 31, 2012, respectively.
(2) Other real estate owned includes $83.6 million, $82.8 million and $78.5 million covered by FDIC loss share at September 30, 2012, June 30, 2012 and March 31, 2012, respectively.
CITY NATIONAL CORPORATION
CONSOLIDATED PERIOD END BALANCE SHEET
(unaudited)
2011
(In thousands)
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Assets
Cash and due from banks
$ 168,376
$ 249,496
$ 181,203
$ 203,600
Due from banks - interest-bearing
76,438
144,754
725,304
743,569
Federal funds sold
--
100,000
123,000
100,000
Securities available-for-sale
7,571,901
7,185,288
6,348,055
5,849,390
Securities held-to-maturity
467,680
--
--
--
Trading securities
61,975
93,707
125,829
81,287
Loans and leases:
Commercial
5,246,081
5,166,802
4,800,252
4,468,177
Commercial real estate mortgages
2,110,749
2,059,114
1,930,269
1,902,862
Residential mortgages
3,763,218
3,742,768
3,710,765
3,603,058
Real estate construction
315,609
335,712
355,014
415,241
Equity lines of credit
741,081
728,890
735,899
733,567
Installment
132,647
130,923
130,924
146,779
Loans and leases, excluding covered loans
12,309,385
12,164,209
11,663,123
11,269,684
Allowance for loan and lease losses
(262,557)
(263,348)
(265,933)
(263,356)
Loans and leases, excluding covered loans, net
12,046,828
11,900,861
11,397,190
11,006,328
Covered loans, net (1)
1,417,289
1,550,103
1,657,004
1,684,068
Net loans and leases
13,464,117
13,450,964
13,054,194
12,690,396
Premises and equipment, net
143,641
140,871
134,511
131,345
Goodwill and other intangibles
522,753
524,103
526,207
527,419
Other real estate owned (2)
129,340
147,369
162,541
178,164
FDIC indemnification asset
204,259
212,809
261,734
270,576
Other assets
855,811
854,899
883,511
860,186
Total assets
$ 23,666,291
$ 23,104,260
$ 22,526,089
$ 21,635,932
Liabilities
Deposits:
Noninterest-bearing
$ 11,146,627
$ 10,308,547
$ 9,403,425
$ 8,756,877
Interest-bearing
9,240,955
9,600,534
9,861,695
9,721,062
Total deposits
20,387,582
19,909,081
19,265,120
18,477,939
Short-term borrowings
50,000
30,640
149,771
151,663
Long-term debt
697,778
699,983
701,829
703,173
Other liabilities
341,439
301,387
281,622
246,517
Total liabilities
21,476,799
20,941,091
20,398,342
19,579,292
Redeemable noncontrolling interest
44,643
42,704
43,737
46,013
Equity
City National Corporation shareholders' equity:
Common stock
53,886
53,886
53,886
53,886
Additional paid-in capital
489,200
489,037
485,064
480,918
Accumulated other comprehensive income
72,372
82,467
56,293
26,535
Retained earnings
1,611,969
1,578,747
1,547,989
1,511,153
Treasury shares
(82,578)
(83,672)
(84,311)
(86,954)
Total shareholders' equity
2,144,849
2,120,465
2,058,921
1,985,538
Noncontrolling interest
--
--
25,089
25,089
Total equity
2,144,849
2,120,465
2,084,010
2,010,627
Total liabilities and equity
$ 23,666,291
$ 23,104,260
$ 22,526,089
$ 21,635,932
(1) Covered loans are net of $64.6 million, $61.8 million, $67.6 million and $82.0 million of allowance for loan losses as of December 31, 2011, September 30, 2011, June 30, 2011 and March 31, 2011, respectively.
(2) Other real estate owned includes $98.5 million, $102.8 million, $114.9 million and $121.8 million covered by FDIC loss share at December 31, 2011, September 30, 2011, June 30, 2011 and March 31, 2011, respectively.
CITY NATIONAL CORPORATION
CREDIT LOSS EXPERIENCE
(unaudited)
2012
2011
(Dollars in thousands)
Third Quarter
Second Quarter
First Quarter
Year To Date
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Year To Date
Allowance for Loan and Lease Losses, Excluding Covered Loans
Balance at beginning of period
$ 269,534
$ 266,077
$ 262,557
$ 262,557
$ 263,348
$ 265,933
$ 263,356
$ 257,007
$ 257,007
Net (charge-offs)/recoveries:
Commercial
(4,936)
8,092
5,283
8,439
(12,534)
(2,915)
2,616
(1,937)
(14,770)
Commercial real estate mortgages
(241)
1,113
(666)
206
(87)
(452)
1,269
6,212
6,942
Residential mortgages
(535)
(543)
(494)
(1,572)
(52)
(163)
(253)
(615)
(1,083)
Real estate construction
3,105
(4,839)
104
(1,630)
6,860
(6,233)
577
3,826
5,030
Equity lines of credit
(32)
(808)
(154)
(994)
(377)
(512)
(120)
(757)
(1,766)
Installment
454
(274)
417
597
670
(309)
106
(202)
265
Total net (charge-offs)/recoveries
(2,185)
2,741
4,490
5,046
(5,520)
(10,584)
4,195
6,527
(5,382)
Provision for credit losses
2,000
1,000
--
3,000
5,000
7,500
--
--
12,500
Transfers (to) from reserve for off-balance sheet credit commitments
(909)
(284)
(970)
(2,163)
(271)
499
(1,618)
(178)
(1,568)
Balance at end of period
$ 268,440
$ 269,534
$ 266,077
$ 268,440
$ 262,557
$ 263,348
$ 265,933
$ 263,356
$ 262,557
Net (Charge-Offs)/Recoveries to Average Total Loans and Leases, Excluding Covered Loans (annualized):
Commercial
(0.32) %
0.56 %
0.40 %
0.20 %
(0.96) %
(0.23) %
0.22 %
(0.18) %
(0.31) %
Commercial real estate mortgages
(0.04) %
0.20 %
(0.12) %
0.01 %
(0.02) %
(0.09) %
0.27 %
1.31 %
0.35 %
Residential mortgages
(0.06) %
(0.06) %
(0.05) %
(0.05) %
(0.01) %
(0.02) %
(0.03) %
(0.07) %
(0.03) %
Real estate construction
4.65 %
(6.26) %
0.13 %
(0.73) %
8.29 %
(7.14) %
0.59 %
3.46 %
1.33 %
Equity lines of credit
(0.02) %
(0.44) %
(0.09) %
(0.18) %
(0.20) %
(0.28) %
(0.07) %
(0.42) %
(0.24) %
Installment
1.34 %
(0.85) %
1.30 %
0.61 %
2.00 %
(0.94) %
0.32 %
(0.55) %
0.19 %
Total loans and leases, excluding covered loans
(0.06) %
0.08 %
0.15 %
0.05 %
(0.18) %
(0.36) %
0.15 %
0.24 %
(0.05) %
Reserve for Off-Balance Sheet Credit Commitments
Balance at beginning of period
$ 24,351
$ 24,067
$ 23,097
$ 23,097
$ 22,826
$ 23,325
$ 21,707
$ 21,529
$ 21,529
Transfers from (to) allowance
909
284
970
2,163
271
(499)
1,618
178
1,568
Balance at end of period
$ 25,260
$ 24,351
$ 24,067
$ 25,260
$ 23,097
$ 22,826
$ 23,325
$ 21,707
$ 23,097
Allowance for Losses on Covered Loans
Balance at beginning of period
$ 43,147
$ 61,471
$ 64,565
$ 64,565
$ 61,753
$ 67,629
$ 82,016
$ 67,389
$ 67,389
Provision for losses
18,089
13,293
7,466
38,848
17,667
5,147
1,716
19,116
43,646
Net charge-offs
--
--
--
--
--
(325)
--
--
(325)
Reduction in allowance due to loan removals
(16,258)
(31,617)
(10,560)
(58,435)
(14,855)
(10,698)
(16,103)
(4,489)
(46,145)
Balance at end of period
$ 44,978
$ 43,147
$ 61,471
$ 44,978
$ 64,565
$ 61,753
$ 67,629
$ 82,016
$ 64,565
Note: Certain prior period balances have been reclassified to conform to current period presentation.
CITY NATIONAL CORPORATION
NONPERFORMING ASSETS
(unaudited)
2012
2011
(Dollars in thousands)
Third Quarter
Second Quarter
First Quarter
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Nonperforming assets, excluding covered assets
Nonaccrual loans, excluding covered loans
Commercial
$ 18,848
$ 19,056
$ 19,584
$ 19,888
$ 34,937
$ 24,337
$ 19,297
Commercial real estate mortgages
36,580
28,780
21,071
21,948
20,746
26,676
28,028
Residential mortgages
11,680
14,064
13,628
9,771
10,512
14,211
14,544
Real estate construction
28,963
29,676
48,964
50,876
70,827
60,543
81,448
Equity lines of credit
6,946
6,505
8,831
8,669
8,401
6,668
6,676
Installment
477
575
729
874
707
365
7,399
Total nonaccrual loans, excluding covered loans
103,494
98,656
112,807
112,026
146,130
132,800
157,392
Other real estate owned, excluding covered OREO
27,055
34,667
29,074
30,790
44,521
47,634
56,342
Total nonperforming assets, excluding covered assets
$ 130,549
$ 133,323
$ 141,881
$ 142,816
$ 190,651
$ 180,434
$ 213,734
Nonperforming covered assets
Nonaccrual loans
$ --
$ 422
$ 422
$ 422
$ 1,023
$ 1,408
$ 2,343
Other real estate owned
83,618
82,834
78,456
98,550
102,848
114,907
121,822
Total nonperforming covered assets
$ 83,618
$ 83,256
$ 78,878
$ 98,972
$ 103,871
$ 116,315
$ 124,165
Loans 90 days or more past due on accrual status, excluding covered loans
$ 433
$ 2,065
$ 654
$ 453
$ 379
$ 7,214
$ 3,679
Covered loans 90 days or more past due on accrual status
$ 140,041
$ 190,005
$ 265,175
$ 330,169
$ 336,193
$ 368,379
$ 390,267
Allowance for loan and lease losses as a percentage of:
Nonaccrual loans
259.38 %
273.21 %
235.87 %
234.37 %
180.21 %
200.25 %
167.32 %
Total nonperforming assets, excluding covered assets
205.62 %
202.17 %
187.54 %
183.84 %
138.13 %
147.39 %
123.22 %
Total loans and leases, excluding covered loans
1.96 %
2.00 %
2.09 %
2.13 %
2.16 %
2.28 %
2.34 %
Nonaccrual loans as a percentage of total loans, excluding covered loans
0.75 %
0.73 %
0.88 %
0.91 %
1.20 %
1.14 %
1.40 %
Nonperforming assets, excluding covered assets, as a percentage of:
Total loans and other real estate owned, excluding covered assets
0.95 %
0.98 %
1.11 %
1.16 %
1.56 %
1.54 %
1.89 %
Total assets
0.50 %
0.54 %
0.59 %
0.60 %
0.83 %
0.80 %
0.99 %
Note: Certain prior period balances have been reclassified to conform to current period presentation.
CITY NATIONAL CORPORATION
AVERAGE BALANCES AND RATES
(unaudited)
2012
Third Quarter
Second Quarter
First Quarter
Year to Date
(Dollars in millions)
Average Balance
Average Rate
Average Balance
Average Rate
Average Balance
Average Rate
Average Balance
Average Rate
Assets
Interest-earning assets
Loans and leases
Commercial
$ 6,128
3.97 %
$ 5,845
4.16 %
$ 5,319
3.94 %
$ 5,765
4.03 %
Commercial real estate mortgages
2,464
4.45
2,295
4.70
2,166
4.87
2,309
4.66
Residential mortgages
3,865
4.11
3,815
4.28
3,777
4.36
3,819
4.25
Real estate construction
265
5.67
311
4.31
314
5.33
297
5.08
Equity lines of credit
731
3.52
731
3.53
727
3.58
730
3.54
Installment
135
4.51
129
4.60
129
4.67
131
4.59
Total loans and leases, excluding covered loans
13,588
4.10
13,126
4.27
12,432
4.26
13,051
4.21
Covered loans
1,207
13.92
1,341
14.51
1,439
10.63
1,328
12.93
Total loans and leases
14,795
4.90
14,467
5.22
13,871
4.93
14,379
5.02
Due from banks - interest-bearing
247
0.26
293
0.24
167
0.22
236
0.24
Federal funds sold and securities purchased under resale agreements
105
0.28
137
0.28
15
0.28
86
0.28
Securities
8,631
2.16
7,755
2.37
7,929
2.40
8,107
2.30
Other interest-earning assets
114
2.40
117
2.39
121
2.30
117
2.36
Total interest-earning assets
23,892
3.82
22,769
4.15
22,103
3.97
22,925
3.98
Allowance for loan and lease losses
(319)
(331)
(335)
(328)
Cash and due from banks
184
148
141
158
Other non-earning assets
1,898
1,777
1,736
1,803
Total assets
$ 25,655
$ 24,363
$ 23,645
$ 24,558
Liabilities and Equity
Interest-bearing deposits
Interest checking accounts
$ 1,981
0.09 %
$ 1,890
0.10 %
$ 1,952
0.11 %
$ 1,941
0.10 %
Money market accounts
5,838
0.11
5,856
0.13
6,018
0.15
5,904
0.13
Savings deposits
371
0.14
360
0.14
358
0.14
363
0.14
Time deposits - under $100,000
220
0.51
228
0.50
242
0.49
230
0.50
Time deposits -- $100,000 and over
732
0.41
733
0.45
697
0.51
721
0.46
Total interest-bearing deposits
9,142
0.14
9,067
0.16
9,267
0.18
9,159
0.16
Federal funds purchased and securities sold under repurchase agreements
24
0.15
4
0.11
166
0.08
64
0.09
Other borrowings
922
4.97
797
4.97
697
5.09
806
5.00
Total interest-bearing liabilities
10,088
0.59
9,868
0.55
10,130
0.51
10,029
0.55
Noninterest-bearing deposits
12,799
11,881
10,950
11,880
Other liabilities
471
379
396
415
Total equity
2,297
2,234
2,169
2,234
Total liabilities and equity
$ 25,655
$ 24,363
$ 23,645
$ 24,558
Net interest spread
3.23 %
3.60 %
3.46 %
3.43 %
Net interest margin
3.58 %
3.91 %
3.74 %
3.74 %
Average prime rate
3.25 %
3.25 %
3.25 %
3.25 %
Note: Certain prior period balances have been reclassified to conform to current period presentation.
CITY NATIONAL CORPORATION
AVERAGE BALANCES AND RATES
(unaudited)
2011
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Year to Date
(Dollars in millions)
Average Balance
Average Rate
Average Balance
Average Rate
Average Balance
Average Rate
Average Balance
Average Rate
Average Balance
Average Rate
Assets
Interest-earning assets
Loans and leases
Commercial
$ 5,204
3.89 %
$ 4,928
4.09 %
$ 4,693
4.22 %
$ 4,437
4.30 %
$ 4,818
4.11 %
Commercial real estate mortgages
2,077
5.12
1,944
5.30
1,904
5.67
1,924
5.56
1,963
5.40
Residential mortgages
3,739
4.49
3,717
4.74
3,663
4.78
3,563
4.81
3,671
4.70
Real estate construction
328
5.08
347
4.65
395
5.10
448
4.56
379
4.84
Equity lines of credit
732
3.58
731
3.55
730
3.59
733
3.57
731
3.57
Installment
133
4.87
130
4.94
131
4.88
151
4.81
136
4.88
Total loans and leases, excluding covered loans
12,213
4.30
11,797
4.47
11,516
4.64
11,256
4.67
11,698
4.51
Covered loans
1,554
11.06
1,664
10.65
1,770
8.70
1,811
7.78
1,699
9.48
Total loans and leases
13,767
5.05
13,461
5.23
13,286
5.19
13,067
5.11
13,397
5.14
Due from banks - interest-bearing
435
0.30
642
0.29
526
0.31
490
0.25
524
0.29
Federal funds sold and securities purchased under resale agreements
115
0.28
130
0.28
143
0.28
232
0.27
154
0.27
Securities
7,642
2.27
6,954
2.45
6,224
2.66
5,693
2.75
6,635
2.51
Other interest-earning assets
125
2.13
130
2.09
135
2.09
139
2.04
132
2.09
Total interest-earning assets
22,084
3.95
21,317
4.12
20,314
4.23
19,621
4.24
20,842
4.13
Allowance for loan and lease losses
(331)
(330)
(344)
(329)
(333)
Cash and due from banks
199
203
184
201
197
Other non-earning assets
1,742
1,809
1,856
1,885
1,822
Total assets
$ 23,694
$ 22,999
$ 22,010
$ 21,378
$ 22,528
Liabilities and Equity
Interest-bearing deposits
Interest checking accounts
$ 1,865
0.12 %
$ 1,727
0.15 %
$ 1,707
0.17 %
$ 1,772
0.19 %
$ 1,768
0.16 %
Money market accounts
6,467
0.18
6,900
0.35
6,683
0.43
6,452
0.45
6,626
0.35
Savings deposits
344
0.17
329
0.29
327
0.32
303
0.34
326
0.28
Time deposits - under $100,000
262
0.53
280
0.48
308
0.49
325
0.56
294
0.52
Time deposits -- $100,000 and over
718
0.57
801
0.61
833
0.70
823
0.75
793
0.66
Total interest-bearing deposits
9,656
0.20
10,037
0.34
9,858
0.41
9,675
0.43
9,807
0.34
Federal funds purchased and securities sold under repurchase agreements
2
0.06
--
0.07
10
0.07
--
0.00
3
0.07
Other borrowings
701
4.96
804
4.46
855
4.36
858
4.41
804
4.53
Total interest-bearing liabilities
10,359
0.52
10,841
0.64
10,723
0.72
10,533
0.75
10,614
0.66
Noninterest-bearing deposits
10,844
9,688
8,927
8,509
9,499
Other liabilities
355
353
307
338
338
Total equity
2,136
2,117
2,053
1,998
2,077
Total liabilities and equity
$ 23,694
$ 22,999
$ 22,010
$ 21,378
$ 22,528
Net interest spread
3.43 %
3.48 %
3.51 %
3.49 %
3.47 %
Net interest margin
3.70 %
3.79 %
3.85 %
3.84 %
3.79 %
Average prime rate
3.25 %
3.25 %
3.25 %
3.25 %
3.25 %
Note: Certain prior period balances have been reclassified to conform to current period presentation.
CITY NATIONAL CORPORATION
CAPITAL AND CREDIT RATING DATA
(unaudited)
2012
2011
Third Quarter
Second Quarter
First Quarter
Year To Date
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Year To Date
Per Common Share:
Shares Outstanding (in thousands):
Average - Basic
53,425
53,105
52,741
53,092
52,488
52,481
52,462
52,320
52,439
Average - Diluted
53,711
53,373
53,021
53,376
52,750
52,720
52,977
52,894
52,849
Period-end
53,190
52,822
52,661
52,499
52,484
52,475
52,440
Book value for shareholders
$ 43.81
$ 42.70
$ 41.77
$ 40.86
$ 40.40
$ 39.24
$ 37.86
Closing price:
High
$ 54.48
$ 54.63
$ 54.44
$ 54.63
$ 45.10
$ 55.54
$ 58.75
$ 62.90
$ 62.90
Low
48.20
46.39
45.39
45.39
36.01
37.76
52.02
55.65
36.01
Period-end
51.51
48.58
52.47
44.18
37.76
54.25
57.05
Capital Ratios (Dollars in millions):
Risk-based capital
Risk-weighted assets (1)
$ 17,174
$ 16,723
$ 15,840
$ 15,305
$ 14,926
$ 14,286
$ 13,551
Tier 1 common shareholders' equity
$ 1,566
$ 1,597
$ 1,611
$ 1,565
$ 1,530
$ 1,493
$ 1,449
Percentage of risk-weighted assets (2)
9.12 %
9.55 %
10.17 %
10.22 %
10.25 %
10.45 %
10.69 %
Tier 1 capital
$ 1,571
$ 1,602
$ 1,616
$ 1,570
$ 1,535
$ 1,523
$ 1,479
Percentage of risk-weighted assets
9.15 %
9.58 %
10.20 %
10.26 %
10.28 %
10.66 %
10.91 %
Total capital
$ 2,133
$ 2,160
$ 2,013
$ 1,963
$ 1,923
$ 1,905
$ 1,853
Percentage of risk-weighted assets
12.42 %
12.91 %
12.71 %
12.83 %
12.88 %
13.34 %
13.68 %
Tier 1 leverage ratio
6.29 %
6.74 %
6.98 %
6.77 %
6.82 %
7.09 %
7.09 %
Period-end equity to period-end assets
8.88 %
9.09 %
9.15 %
9.06 %
9.18 %
9.25 %
9.29 %
Period-end shareholders' equity to period-end assets
8.88 %
9.09 %
9.15 %
9.06 %
9.18 %
9.14 %
9.18 %
Average equity to average assets
8.95 %
9.17 %
9.17 %
9.09 %
9.02 %
9.21 %
9.33 %
9.35 %
9.22 %
Average shareholders' equity to average assets
8.95 %
9.17 %
9.17 %
9.09 %
9.02 %
9.10 %
9.22 %
9.23 %
9.14 %
Period-end tangible equity to period-end tangible assets (2)
6.41 %
6.88 %
7.13 %
7.01 %
7.07 %
7.08 %
7.03 %
Average tangible equity to average tangible assets (2)
6.45 %
7.01 %
7.12 %
6.85 %
6.96 %
7.08 %
7.11 %
7.05 %
7.05 %
Senior Debt Credit Ratings
For The Period Ended September 30, 2012
Moody's
Fitch
Standard & Poor's
DBRS
City National Bank
A1
A-
A-
A (high)
City National Corporation
A2
A-
BBB+
A
(1) In accordance with applicable bank regulatory guidelines, the Company calculates risk-weighted assets by assigning assets and credit equivalent amounts of derivatives and off-balance sheet items to one of several broad risk categories according to the obligor, or, if relevant, the guarantor or the nature of the collateral. The aggregate dollar amount in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are added together for determining risk-weighted assets.
(2) The Tier 1 common shareholders' equity to risk-weighted assets ratio and tangible equity to tangible assets ratio are non-GAAP financial measures. See page 15 and 16 for notes on non-GAAP measures.
CITY NATIONAL CORPORATION
COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE
(unaudited)
City National Corporation applies the two-class method of computing basic and diluted earnings per share ("EPS"). Under the two-class method, EPS is determined for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company grants restricted stock and restricted stock units under a share-based compensation plan that qualify as participating securities. The computation of basic and diluted EPS is presented in the following table:
2012
2011
(Dollars in thousands, except per share amounts)
Third Quarter
Second Quarter
First Quarter
Year to Date
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Year to Date
Basic EPS:
Net income attributable to City National Corporation
$ 59,780
$ 54,758
$ 46,265
$ 160,803
$ 43,860
$ 41,398
$ 47,471
$ 39,692
$ 172,421
Less: Earnings allocated to participating securities
842
788
738
2,380
690
655
759
578
2,678
Earnings allocated to shareholders
$ 58,938
$ 53,970
$ 45,527
$ 158,423
$ 43,170
$ 40,743
$ 46,712
$ 39,114
$ 169,743
Weighted average shares outstanding
53,425
53,105
52,741
53,092
52,488
52,481
52,462
52,320
52,439
Basic earnings per share
$ 1.10
$ 1.02
$ 0.86
$ 2.98
$ 0.82
$ 0.78
$ 0.89
$ 0.75
$ 3.24
Diluted EPS:
Earnings allocated to shareholders (1)
$ 58,941
$ 53,972
$ 45,530
$ 158,432
$ 43,173
$ 40,745
$ 46,718
$ 39,119
$ 169,759
Weighted average shares outstanding
53,425
53,105
52,741
53,092
52,488
52,481
52,462
52,320
52,439
Dilutive effect of equity awards
286
268
280
284
262
239
515
574
410
Weighted average diluted shares outstanding
53,711
53,373
53,021
53,376
52,750
52,720
52,977
52,894
52,849
Diluted earnings per share
$ 1.10
$ 1.01
$ 0.86
$ 2.97
$ 0.82
$ 0.77
$ 0.88
$ 0.74
$ 3.21
(1) Earnings allocated to shareholders for basic and diluted EPS may differ under the two-class method as a result of adding common stock equivalents for options to dilutive shares outstanding, which alters the ratio used to allocate earnings to shareholders and participating securities for the purposes of calculating diluted EPS.
CITY NATIONAL CORPORATION
SELECTED FINANCIAL INFORMATION ON COVERED ASSETS
(unaudited)
The following table provides selected components of income and expense related to covered assets:
2012
2011
(in thousands)
Third Quarter
Second Quarter
Third Quarter
Summary Totals
Net impairment income (expense) (Sum of A)
$ 2,639
$ 3,932
$ (5,884)
Other covered asset (expense) income, net
(837)
3,388
(589)
Total income (expense), net
$ 1,802
$ 7,320
$ (6,473)
Interest income (1)
Income on loans paid-off or fully charged-off
$ 22,164
$ 27,402
$ 18,343
Provision for losses on covered loans
Provision for losses on covered loans
A
18,089
13,293
5,147
Noninterest income related to covered assets
FDIC loss sharing income (expense), net
Gain on indemnification asset
A
$ 21,426
$ 17,722
$ (384)
Indemnification asset accretion
(4,258)
(4,133)
(4,043)
Net FDIC reimbursement for OREO and loan expenses
7,612
6,724
10,496
Removal of indemnification asset for loans paid-off or fully charged-off
(9,731)
(10,654)
(10,228)
Removal of indemnification asset for unfunded loan commitments and loans transferred to OREO
(2,834)
(4,773)
(3,703)
Removal of indemnification asset for OREO and net reimbursment to FDIC for OREO sales
(1,219)
(1,189)
(2,823)
Loan recoveries shared with FDIC
(8,631)
(9,226)
(3,153)
Increase in FDIC clawback liability
A
(698)
(497)
(353)
Total FDIC loss sharing income (expense), net
1,667
(6,026)
(14,191)
Gain on disposal of assets
Net gain on sale of OREO
1,524
1,486
3,625
Other income
Net gain on transfers of covered loans to OREO
4,907
6,864
3,887
Amortization of fair value on acquired unfunded loan commitments
192
413
1,088
OREO income
428
615
379
Other
(632)
(864)
(503)
Total other income
4,895
7,028
4,851
Total noninterest income related to covered assets
$ 8,086
$ 2,488
$ (5,715)
Noninterest expense related to covered assets (2)
Other real estate owned
Valuation write-downs
$ 4,267
$ 4,250
$ 7,526
Holding costs and foreclosure expense
3,522
2,796
3,449
Total other real estate owned
7,789
7,046
10,975
Legal and professional fees
2,541
2,200
2,961
Other operating expense
Other covered asset expenses
29
31
18
Total noninterest expense related to covered assets (3)
$ 10,359
$ 9,277
$ 13,954
Total income (expense), net
$ 1,802
$ 7,320
$ (6,473)
Note: Certain prior period balances have been reclassified to conform to current period presentation.
(1) Excludes base yield in interest income related to covered loans.
(2) OREO, legal and professional fees, and other expenses related to covered assets must meet certain FDIC criteria in order for the expense amounts to be reimbursed. Certain amounts reflected in these categories may not be reimbursed by the FDIC.
(3) Excludes personnel and other corporate overhead expenses that the Company incurs to service covered assets and costs associated with the branches acquired in FDIC-assisted acquisitions.
CITY NATIONAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(unaudited)
(a) Tangible equity ratios
Tangible equity to tangible assets is a non-GAAP financial measure that represents total equity less identifiable intangible assets and goodwill divided by total assets less identifiable intangible assets and goodwill. Management reviews this measure in evaluating the Company's capital levels and has included the ratio in response to market participants' interest in tangible equity as a measure of capital. A reconciliation of the GAAP to non-GAAP measure is set forth below:
2012
2011
(Dollars in thousands)
Third Quarter
Second Quarter
First Quarter
Year to Date
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Year to Date
Period End:
Total equity
$ 2,330,324
$ 2,255,365
$ 2,199,565
$ 2,144,849
$ 2,120,465
$ 2,084,010
$ 2,010,627
Less: Goodwill and other intangibles
(691,765)
(589,114)
(521,717)
(522,753)
(524,103)
(526,207)
(527,419)
Tangible equity (A)
1,638,559
1,666,251
1,677,848
1,622,096
1,596,362
1,557,803
1,483,208
Total assets
$ 26,251,528
$ 24,801,973
$ 24,038,489
$ 23,666,291
$ 23,104,260
$ 22,526,089
$ 21,635,932
Less: Goodwill and other intangibles
(691,765)
(589,114)
(521,717)
(522,753)
(524,103)
(526,207)
(527,419)
Tangible assets (B)
$ 25,559,763
$ 24,212,859
$ 23,516,772
$ 23,143,538
$ 22,580,157
$ 21,999,882
$ 21,108,513
Period-end tangible equity to period-end tangible assets (A)/(B)
6.41%
6.88%
7.13%
7.01%
7.07%
7.08%
7.03%
Average Balance:
Total equity
$ 2,296,754
$ 2,234,411
$ 2,168,748
$ 2,233,536
$ 2,136,215
$ 2,117,249
$ 2,053,447
$ 1,998,006
$ 2,076,721
Less: Goodwill and other intangibles
(687,224)
(566,989)
(522,182)
(592,479)
(523,206)
(525,300)
(527,072)
(528,205)
(525,930)
Tangible equity (C)
1,609,530
1,667,422
1,646,566
1,641,057
1,613,009
1,591,949
1,526,375
1,469,801
1,550,791
Total assets
$ 25,654,594
$ 24,362,546
$ 23,644,899
$ 24,558,030
$ 23,694,160
$ 22,998,562
$ 22,009,749
$ 21,377,904
$ 22,527,750
Less: Goodwill and other intangibles
(687,224)
(566,989)
(522,182)
(592,479)
(523,206)
(525,300)
(527,072)
(528,205)
(525,930)
Tangible assets (D)
$ 24,967,370
$ 23,795,557
$ 23,122,717
$ 23,965,551
$ 23,170,954
$ 22,473,262
$ 21,482,677
$ 20,849,699
$ 22,001,820
Average tangible equity to average tangible assets (C)/(D)
6.45%
7.01%
7.12%
6.85%
6.96%
7.08%
7.11%
7.05%
7.05%
(b) Tier 1 common shareholders' equity to risk-based assets
The Tier 1 common shareholders' equity to risk-based assets ratio, also known as Tier 1 common ratio, is calculated by dividing (a) Tier 1 capital less non-common components including qualifying noncontrolling interest in subsidiaries and qualifying trust preferred securities by (b) risk-weighted assets. Tier 1 capital and risk-weighted assets are calculated in accordance with applicable bank regulatory guidelines. This ratio is a non-GAAP measure that is used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. Management reviews this measure in evaluating the Company's capital levels and has included these ratios in response to market participants' interest in the Tier 1 common shareholders' equity to risk-based assets ratio.
2012
2011
(Dollars in thousands)
Third Quarter
Second Quarter
First Quarter
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
Tier 1 capital
$ 1,570,778
$ 1,602,398
$ 1,616,099
$ 1,570,101
$ 1,534,831
$ 1,523,269
$ 1,478,820
Less: Noncontrolling interest
--
--
--
--
--
(25,089)
(25,089)
Less: Trust preferred securities
(5,155)
(5,155)
(5,155)
(5,155)
(5,155)
(5,155)
(5,155)
Tier 1 common shareholders' equity (A)
$ 1,565,623
$ 1,597,243
$ 1,610,944
$ 1,564,946
$ 1,529,676
$ 1,493,025
$ 1,448,576
Risk-weighted assets (B)
$ 17,174,382
$ 16,722,999
$ 15,839,944
$ 15,305,328
$ 14,925,715
$ 14,285,572
$ 13,551,318
Tier 1 common shareholders' equity to risk-based assets (A)/(B)
9.12%
9.55%
10.17%
10.22%
10.25%
10.45%
10.69%
(c) Brokerage and money market mutual fund fees, excluding Rochdale fees
Brokerage and money market mutual fund fees for the third quarter of 2012 were $9.1 million, an increase of 71 percent from the second quarter of 2012. Brokerage and money market mutual fund fees for the first nine months of 2012 were $19.4 million, an increase of 24 percent from the same period in 2011. Both current periods included $3.0 million of fee income from the July 2, 2012 acquisition of Rochdale Investment Management. Excluding this amount, brokerage and money market mutual fund fees increased 14 percent during the third quarter of 2012 from the second quarter of 2012, and increased 5 percent for the first nine months of 2012 compared to the year-earlier period.
Management believes this non-GAAP financial measure enhances the comparability of the financial results with prior periods as well as to highlight the effects of the Rochdale acquisition in the periods presented. The Company believes that investors may find it useful to see this non-GAAP financial measure to analyze the Company's underlying financial performance without the impact of the acquisition.
CONTACT: Financial/Investors Christopher J. Carey, City National, 310.888.6777 Chris.Carey@cnb.com Media Cary Walker, City National, 213.673.7615 Cary.Walker@cnb.com Conference Call: Today 2:00 p.m. PDT (866) 393-6804 Conference ID: 29949796