Exhibit 99.1
City National Corporation Reports Record Net Income of $206.3 Million
or $4.04 Per Share for 2004;
Net Income Increases 11 Percent Year Over Year
LOS ANGELES--(BUSINESS WIRE)--Jan. 12, 2005--
Assets Exceed $14 Billion for the First Time
City National Corporation (NYSE:CYN), parent company of wholly
owned City National Bank, today reported its ninth consecutive year of
record net income. Net income totaled $206.3 million, or $4.04 per
share in 2004, compared with $186.7 million, or $3.72 per share in
2003. Included in the results was an after-tax non-cash charge of $4.8
million, or $0.09 a share, for "other-than-temporary impairment" on
perpetual fixed-rate preferred securities that had no impact on
shareholders' equity.
2004 FINANCIAL HIGHLIGHTS
-- Average deposits grew 12 percent, exceeding $11 billion for
the first time, and core deposits increased 15 percent over
2003.
-- Average loans exceeded $8 billion for the first time, an
increase of $389.3 million, or 5 percent from the prior year.
-- Revenues increased 6 percent over 2003.
-- No provision for credit losses was recorded for 2004 due to
continued strong credit quality. In 2003, the company recorded
a provision for credit losses of $29.0 million.
-- Assets under management increased 19 percent to $16.2 billion,
and assets under administration and management increased 22
percent to $35.1 billion.
For the twelve
months ended
Dollars in millions, December 31, %
except per share 2004 2003 Change
- ----------------------------------------- ---------- ---------- ------
Earnings Per Share $4.04 $3.72 9
Net Income 206.3 186.7 11
Average Assets (1) 13,396.0 12,156.1 10
Return on Average Assets (1) 1.54% 1.54% 0
Return on Average Equity 16.34 16.27 0
(1) As of September 30, 2004, the company reclassified the reserve for
unfunded credit commitments from the allowance for loan losses to
other liabilities. Amounts presented prior to the third quarter of
2004 have been reclassified to conform with the presentation in
the current reporting period.
"We are pleased to report our ninth consecutive year of record
earnings and even greater strength in our capital position, credit
quality, and other key metrics," said Chief Executive Officer Russell
Goldsmith. "City National's double-digit net income growth over the
prior year also reflected significant growth in deposits, primarily
core deposits, as well as higher noninterest income and the absence of
a provision for credit losses. We are particularly encouraged by a
solid increase both in total loans and commercial loans in the fourth
quarter.
"Completing our 50th year with over $14 billion in bank assets,
these strong results demonstrate that City National has built a very
solid foundation for continuing growth. With our outstanding team of
2,400 colleagues, we look forward to building additional shareholder
value in 2005 by providing our clients with the excellent service and
extensive capabilities of California's premier private and business
bank."
Fourth-quarter 2004 net income was $49.7 million, or $0.97 per
share, compared with $44.4 million, or $0.87 per share for the fourth
quarter of 2003 and $53.5 million, or $1.04 per share for the third
quarter of 2004. During the fourth quarter of 2003, $8.1 million, or
$0.16 per share of net state tax benefits recognized during the first
three quarters of 2003 relating to the company's two REITs, was
reversed. Included in fourth-quarter 2004 results was the after-tax
non-cash charge of $4.8 million, or $0.09 a share, for
"other-than-temporary impairment" on perpetual fixed-rate preferred
securities issued by government sponsored enterprises.
The following table shows the growth of earnings per share with
and without the 2003 REITs tax charge and the 2004
"other-than-temporary impairment" charge discussed above:
For the three months ended
December 31, %
2004 2003 Change
- ------------------------------- ------------ -------------- --------
Without the REITs Tax Charge
and the "Other-Than-Temporary
Impairment" Charge $1.06 $1.03 3
With the REITs Tax Charge and
the "Other-Than-Temporary
Impairment" Charge $0.97 $0.87 11
During the fourth quarter of 2004, the company increased its
resources devoted to risk management to enhance its policies and
procedures to fully comply with the requirements of the Bank Secrecy
Act, and the USA Patriot Act. Significant corrective results were
accomplished in 2004 and these efforts will be enhanced during 2005.
The company expects to enter into an agreement with bank regulators in
the near term pertaining to these matters but the company does not
know whether this will include any monetary assessment. The current
expected expense of these compliance activities is included in this
announcement's 2005 Outlook.
ASSETS
Average assets of $13.4 billion for 2004 were $1.2 billion, or 10
percent higher than 2003, primarily due to an increase in average
securities and loans. Total assets at December 31, 2004 increased 9
percent to $14.2 billion from $13.0 billion at December 31, 2003.
REVENUES
Revenues (net interest income plus noninterest income) for 2004
increased 6 percent to $730.2 million due to higher net interest
income and wealth management fees.
NET INTEREST INCOME
Fully taxable-equivalent net interest income for 2004 was $559.5
million, up 6 percent from $529.0 million for 2003. This, in part,
reflected a 125-basis-point increase in interest rates during 2004 and
in the growth of City National's loans and securities. The bank's
prime rate was 5.25 percent as of December 31, 2004. Net interest
margin was 4.54 percent in 2004, 20 basis points lower than it was in
2003. The change was due to a 24 percent increase in holdings of
average securities as strong deposit growth exceeded the demand for
loans during most of the year.
For the twelve months ended
December 31, %
Dollars in millions 2004 2003 Change
- -------------------------- -------------- ---------------- ----------
Average Loans $8,118.5 $7,729.2 5
Average Securities 3,689.0 2,976.7 24
Average Deposits 11,275.0 10,045.3 12
Average Core Deposits 10,425.5 9,042.3 15
Fully Taxable-Equivalent
Net Interest Income 559.5 529.0 6
Net Interest Margin 4.54% 4.74% (4)
Period-end December 31, 2004 loans increased $611.4 million from
December 31, 2003, reflecting growth in residential and commercial
real estate-related borrowings.
Compared with the prior-year averages, residential mortgage loans
rose 17 percent, real estate construction loans rose 19 percent, and
commercial real estate mortgage loans rose 6 percent. Commercial loans
decreased 6 percent partially due to the virtual elimination of the
company's dairy loan portfolio, which began the year at $151.7 million
and ended the year at $7.9 million.
The company's "plain vanilla" interest rate swaps, which are part
of its long-standing asset-liability management strategy of hedging
loans, deposits and borrowings, were $1.3 billion at December 31,
2004, compared with $1.1 billion at December 31, 2003 and $1.0 billion
at September 30, 2004.
NONINTEREST INCOME
Noninterest income for 2004 was 4 percent higher than the prior
year due primarily to the strength of wealth management income. This
increase is attributable to higher trust and investment fees from
higher assets under management or administration. Noninterest income
was impacted by the $8.2 million non-cash charge on certain perpetual
fixed-rate preferred securities. Noninterest income as a percentage of
total revenues was 25 percent for 2004 and 26 percent for 2003.
Wealth Management
Trust and investment fees increased 45 percent over 2003 primarily
due to higher customer balances under management or administration.
Assets under management at December 31, 2004 increased 19 percent to
$16.2 billion from last year primarily due to new business, strong
relative investment performance, and higher market values. Results for
2004 include the operation of Convergent Capital Management, LLC
("CCM") for the entire year, while 2003 results only include the
operations of CCM beginning April 1, 2003, the date the acquisition
was completed.
At or for the
twelve months ended
December 31, %
Dollars in millions 2004 2003 Change
- --------------------------------- ------------- ------------ ---------
Trust and Investment Fee Revenue $68.4 $47.1 45
Brokerage and Mutual Fund Fees 37.7 36.6 3
Assets Under Management (1) 16,185.2 13,610.8 19
Assets Under Administration
and Management 35,092.7 28,835.3 22
(1) Excludes $4,227 and $2,858 million of assets under management for
the CCM minority owned asset managers as of December 31, 2004 and
December 31, 2003, respectively
Other Noninterest Income
Cash management and deposit transaction fees totaled $41.4 million
in 2004, down 5 percent from 2003. Contributing to the year-over-year
decrease were higher deposit balances maintained to offset fees and an
increase in the earnings credit for deposits under analysis.
International service fees for 2004 were 7 percent higher over the
prior year primarily due to both higher letter of credit fees and
foreign exchange income.
Other income for 2004 was 22 percent lower than 2003 primarily due
to lower participating mortgage loan fees. Participating mortgage loan
fees are earned upon completion and repayment of debt for certain real
estate construction projects. In these cases, City National lends a
portion of the equity requirement and receives a share of the profits
in return.
For 2004, the company recorded $5.9 million in net losses on the
sale of loans, assets and debt repurchase and on the sale or write
down of securities, compared with $3.2 million in gains for 2003.
NONINTEREST EXPENSE
Noninterest expense for 2004 totaled $395.4 million, a 9 percent
increase from 2003. The increase was due primarily to higher
restricted stock expense, net occupancy expense for premises and
higher risk management costs for complying with the Bank Secrecy Act,
USA Patriot Act and Sarbanes-Oxley 404 requirements.
For 2004, the efficiency ratio was 53.89 percent compared with
52.15 percent for 2003.
INCOME TAXES
The 2004 effective tax rate was 37.4 percent, compared with 36.6
percent for 2003. The effective tax rate reflects changes in the mix
of tax rates applicable to income before tax. As previously reported,
the California Franchise Tax Board has taken the position that certain
real estate investment trust and registered investment company tax
deductions shall be disallowed under California law adopted in the
fourth quarter of 2003. While management continues to believe that the
tax benefits realized in previous years were appropriate, the company
deemed it prudent to participate in the statutory Voluntary Compliance
Initiative-Option 2, requiring payment of all California taxes and
interest on these disputed 2000 through 2002 tax years, and permitting
the company to claim a refund for these years while avoiding certain
potential penalties. The company's strategic and financial positions
remain unchanged from the previously reported period.
FOURTH-QUARTER FINANCIAL HIGHLIGHTS
-- Average deposits and core deposits for the fourth quarter of
2004 grew 12 percent and 14 percent, respectively, from the
fourth quarter of 2003. Average deposits and core deposits
increased 4 percent over the third quarter of 2004 due to
continued strong bank-wide growth. Average core deposits
represented 93 percent of average deposit balances for the
fourth quarter of 2004.
-- Fourth-quarter 2004 average loans increased 10 percent from
the same period last year and 2 percent from the third quarter
of 2004. Compared with the prior year fourth-quarter averages,
residential mortgage loans rose 17 percent, commercial real
estate mortgage loans rose 8 percent, and real estate
construction loans rose 34 percent. Commercial loans were
essentially unchanged partially due to the payoff of dairy
loans previously announced. Compared with the third quarter of
2004, all loan categories increased.
During the fourth quarter, loans increased from September 30,
2004 by $320.1 million, or 4 percent.
-- Revenue for the fourth quarter of 2004 increased 5 percent
over the same period last year. The net interest margin for
the fourth quarter of 2004 increased slightly to 4.54 percent
from 4.52 percent for the year-ago quarter. It increased 8
basis points from the third quarter of 2004.
-- No provision for credit losses was recorded for the fourth
quarter of 2004 due to continued strong credit quality. The
fourth quarter of 2003 and the third quarter of 2004 also
included no provision for credit losses.
-- Noninterest income for the fourth quarter of 2004 declined 13
percent to $41.8 million from the same period last year and
decreased 12 percent from the third quarter of 2004 primarily
due to the $8.2 million non-cash charge on the perpetual
fixed-rate preferred securities. Wealth management fees
continued to increase during the quarter. Noninterest income
as a percentage of total revenues was 22 percent in the fourth
quarter of 2004.
-- Fourth-quarter 2004 noninterest expense was up 13 percent from
the fourth quarter of 2003 and 10 percent over the third
quarter of 2004 due primarily to higher restricted stock
expense, higher net occupancy expense for premises and higher
risk management costs for complying with Bank Secrecy Act, USA
Patriot Act and Sarbanes-Oxley 404 requirements.
CREDIT QUALITY
The company made no provision for credit losses in 2004. This was
attributable to the continued strong credit quality of its $8.5
billion loan portfolio, low level of net charge-offs, management's
ongoing assessment of the credit quality of the portfolio, and an
improving economic environment. Nonaccrual loans as of December 31,
2004 were $34.6 million, down 18 percent from December 31, 2003, and
down 2 percent from September 30, 2004.
At September 30, 2004, the company reclassified a portion of its
allowance for loan losses to reserve for unfunded commitments included
in other liabilities. The process used to determine the adequacy of
the reserve for unfunded credit commitments is consistent with the
process for the allowance for loan losses.
At December 31, 2004, the allowance for loan losses was $148.6
million or 1.75 percent of outstanding loans. The reserve for unfunded
credit commitments was $11.8 million.
At or for the
twelve months
ended
December 31, %
Dollars in millions 2004 2003 Change
- --------------------------------------------- -------- -------- ------
Provision For Credit Losses $- $29.0 (100)
Net Loan Charge-Offs 5.7 27.5 (79)
Annualized Percentage of Net Charge-offs
to Average Loans 0.07% 0.36% (81)
Nonperforming Assets $34.6 $42.3 (18)
Percentage of Nonaccrual Loans
and ORE to Total Loans and ORE 0.41% 0.54% (24)
Allowance for Loan Losses (1) $148.6 $156.0 (5)
Reserve for Off-Balance Sheet
Credit Commitments (1) $11.8 $10.0 18
Percentage of Allowance for Loan
Losses to Outstanding Loans (1) 1.75% 1.98% (12)
Percentage of Allowance for Loan
Losses to Nonaccrual Loans (1) 428.92 369.07 16
(1) As of September 30, 2004, the company reclassified the reserve for
unfunded credit commitments from the allowance for loan losses to
other liabilities. Amounts presented prior to the third quarter of
2004 have been reclassified to conform with the presentation in
the current reporting period.
OUTLOOK FOR 2005
Management currently expects the growth of net income per share
for 2005 to be approximately 11 percent to 14 percent higher than net
income per share for 2004. This is based on current economic
conditions, business indicators and an expectation that the Fed Funds
Rate will rise by an additional 75 basis points during 2005.
Average loans are expected to grow at a rate faster than in 2004
while average deposits in 2005 are expected to grow at a slower rate
than in 2004. Net interest income in 2005 is expected to grow at a
much higher rate as a result of interest rate increases that occurred
in 2004 and expected rate increases for 2005 as well as increased loan
balances. Management expects that a provision for credit losses will
be required in 2005 as average loan balances grow. Noninterest income
is expected to grow at about the 2004 growth rate exclusive of the
"other-than-temporary" impairment charge on securities. Noninterest
expense is expected to grow at about the same rate in 2005 compared
with 2004. This includes higher risk management costs. It also
includes higher premises costs relating to the opening of three new
offices in Southern California as well as continuing consolidation of
operations and colleagues at City National Plaza in downtown Los
Angeles. Also expected to contribute to noninterest expense growth are
the continued recognition of the cost of restricted stock grants and
the cost of stock option expense beginning in the second half of 2005.
The effective tax rate is expected to be about the same in 2005 as it
was in 2004.
CAPITAL LEVELS
Total risk-based capital and Tier 1 risk-based capital ratios at
December 31, 2004 were 15.11 percent and 11.51 percent, compared with
the minimum "well capitalized" capital ratios of 10 percent and 6
percent, respectively. The company's Tier 1 leverage ratio at December
31, 2004 was 7.83 percent. Total risk-based capital, Tier 1 risk-based
capital and the Tier 1 leverage ratios at September 30, 2004 were
14.99 percent, 11.35 percent and 7.80 percent, respectively.
Shareholders' equity to assets as of December 31, 2004 was 9.5
percent compared with 9.4 percent as of December 31, 2003.
Accumulated other comprehensive income at December 31, 2004 was a
loss of $1.4 million compared with income of $12.9 million at December
31, 2003, and $3.7 million at September 30, 2004. The average duration
of total available-for-sale securities at December 31, 2004 was 3.0
years compared to 3.4 years at December 31, 2003.
STOCK REPURCHASE
As previously announced, the company has board authorization to
repurchase 1,009,500 of its outstanding shares as of December 31,
2004. During 2004, 740,400 of outstanding shares were repurchased at
an average cost of $59.19. There were no shares repurchased during the
fourth quarter of 2004. There were 1,042,629 treasury shares at
December 31, 2004.
CONFERENCE CALL
City National Corporation will host a conference call this
afternoon to discuss results for the year and fourth quarter of 2004.
The call will begin at 2:00 p.m. PST or 5:00 p.m. EST. Analysts and
investors may dial in and participate in the question/answer session.
To access the call, please dial (866) 800-8652 and enter pass code
16742230. 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 is a financial services company with
$14.2 billion in total assets. Its wholly owned subsidiary, City
National Bank, is California's Premier Private and Business Bank(SM).
The bank provides banking, investment, and trust services through its
52 offices, including 12 full-service regional centers, in Southern
California, the San Francisco Bay Area and New York City. The company
and its affiliates manage or administer $35.1 billion in client trust
and investment assets, including $16.2 billion under management.
For more information about City National, visit the company's
Website at cnb.com http://www.cnb.com/.
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) the unknown economic impact of state budget issues, (2) changes in
interest rates, (3) significant changes in banking laws or
regulations, (4) the risk management costs of complying with
Sarbanes-Oxley 404 and with Anti-Money Laundering, USA Patriot Act
requirements, (5) increased competition in the company's market, (6)
other-than-expected credit losses due to real estate cycles or other
economic events, (7) earthquake or other natural disasters affecting
the condition of real estate collateral, (8) the effect of
acquisitions and integration of acquired businesses, and (9) the
impact of changes in regulatory, judicial, or legislative tax
treatment of business transactions. Management cannot predict at this
time the extent of the economic recovery, and a slowing or reversal
could adversely affect our performance in a number of ways including
decreased demand for our products and services and increased credit
losses. Likewise, changes in deposit interest rates, among other
things, could slow the rate of growth or put pressure on current
deposit levels. 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 Quarterly Report on Form 10-Q for the quarter-ended
September 30, 2004, and particularly the section of Management's
Discussion and Analysis therein titled "Cautionary Statement for
Purposes of the 'Safe Harbor' Provisions of the Private Securities
Litigation Reform Act of 1995."
CITY NATIONAL CORPORATION
- ----------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
(unaudited)
(Dollars in thousands, except per share amount)
- ----------------------------------------------------------------------
December 31, September 30,
2004 2003 % Change 2004
------------ ------------ -------- -------------
Assets
Cash and due from
banks $240,492 $461,443 (48) $410,694
Federal funds sold 427,000 240,000 78 890,000
Due from banks -
interest bearing 236,362 405,747 (42) 37,890
Securities 4,190,176 3,457,189 21 3,830,502
Loans (net of
allowance for loan
losses of $148,568;
$156,015 and
$148,056) (1) 8,345,619 7,726,727 8 8,026,081
Other assets 791,864 737,107 7 786,233
------------ ------------ ------------
Total assets (1) $14,231,513 $13,028,213 9 $13,981,400
============ ============ ============
Liabilities and
Shareholders' Equity
Noninterest-bearing
deposits $6,026,428 $5,486,668 10 $5,922,689
Interest-bearing
deposits 5,960,487 5,450,395 9 5,942,864
------------ ------------ ------------
Total deposits 11,986,915 10,937,063 10 11,865,553
Federal funds
purchased and
securities sold
under repurchase
agreements 204,654 111,713 83 71,570
Other short-term
borrowed funds 125 65,135 (100) 50,125
Subordinated debt 288,934 295,723 (2) 291,073
Other long-term debt 230,416 230,555 - 231,882
Reserve for off-
balance sheet credit
commitments (1) 11,751 9,971 18 12,295
Other liabilities /
minority interest 160,183 158,797 1 145,675
------------ ------------ ------------
Total
liabilities (1) 12,882,978 11,808,957 9 12,668,173
Shareholders' equity
Common stock,
paid-in capital,
retained earnings,
treasury shares
and deferred
equity
compensation 1,349,887 1,206,353 12 1,309,544
Accumulated
other
comprehensive
income (loss) (1,352) 12,903 (110) 3,683
------------ ------------ ------------
Total
shareholders'
equity 1,348,535 1,219,256 11 1,313,227
------------ ------------ ------------
Total liabilities and
shareholders'
equity (1) $14,231,513 $13,028,213 9 $13,981,400
============ ============ ============
Book value per share $27.31 $24.85 10 $26.73
Number of shares at
period end 49,378,904 49,060,593 1 49,127,167
(1) As of September 30, 2004, the company reclassified the reserve for
unfunded credit commitments from the allowance for loan losses to
other liabilities. Amounts presented prior to the third quarter of
2004 have been reclassified to conform with the presentation in
the current reporting period.
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
(Dollars in thousands, except per share amount)
- ----------------------------------------------------------------------
For the three months
ended
December 31,
2004 2003 % Change
----------- ----------- ---------
Interest income $162,919 $143,355 14
Interest expense (17,619) (12,742) 38
----------- -----------
Net interest income 145,300 130,613 11
Provision for credit losses - - -
----------- -----------
Net interest income after provision
for credit losses 145,300 130,613 11
Noninterest income 41,789 47,929 (13)
Noninterest expense (107,463) (95,117) 13
Minority interest (584) (782) (25)
----------- -----------
Income before taxes 79,042 82,643 (4)
Income taxes (29,296) (38,205) (23)
----------- -----------
Net income $49,746 $44,438 12
=========== ===========
Net income per share, diluted $0.97 $0.87 11
=========== ===========
Dividends paid per share $0.32 $0.28 14
=========== ===========
Shares used to compute per share net
income, diluted 51,386,299 50,965,884
Net income per share, diluted $0.97 $0.87 11
Eliminate REITs charge reversing
benefit in the first three
quarters of the year - 0.16 N/M
Eliminate other-than-temporary
impairment on GSE 0.09 - N/M
----------- -----------
Adjusted net income per share,
diluted (1) $1.06 $1.03 3
=========== ===========
For the twelve months
ended
December 31,
2004 2003 % Change
----------- ---------- --------
Interest income $604,325 $575,725 5
Interest expense (58,437) (61,110) (4)
----------- ----------
Net interest income 545,888 514,615 6
Provision for credit losses - (29,000) (100)
----------- ----------
Net interest income after provision for
credit losses 545,888 485,615 12
Noninterest income 184,265 177,225 4
Noninterest expense (395,410) (364,178) 9
Minority interest (4,992) (4,039) 24
----------- ----------
Income before taxes 329,751 294,623 12
Income taxes (123,429) (107,946) 14
----------- ----------
Net income $206,322 $186,677 11
=========== ==========
Net income per share, diluted $4.04 $3.72 9
=========== ==========
Dividends paid per share $1.28 $0.97 32
=========== ==========
Shares used to compute per share net
income, diluted 51,074,008 50,197,722
Net income per share, diluted $4.04 $3.72 9
Eliminate REITs charge reversing
benefit in the first three
quarters of the year - - N/M
Eliminate other-than-temporary
impairment on GSE 0.09 - N/M
----------------------
Adjusted net income per share, diluted
(1) $4.13 $3.72 11
======================
(1) This is presented to aid in evaluation of financial performance
CITY NATIONAL CORPORATION
- ----------------------------------------------------------------------
SELECTED FINANCIAL INFORMATION
(unaudited)
(Dollars in thousands)
- ----------------------------------------------------------------------
For the three months
ended
December 31,
2004 2003 % Change
----------- ----------- ---------
Average Balances
Loans
Commercial $3,143,644 $3,129,296 -
Commercial real estate mortgage 1,850,250 1,719,375 8
Residential mortgage 2,197,680 1,878,248 17
Real estate construction 826,116 614,300 34
Equity lines of credit 245,513 180,259 36
Installment 93,354 83,939 11
----------- -----------
Total loans $8,356,557 $7,605,417 10
=========== ===========
Securities $4,012,183 $3,278,831 22
Due from banks - interest bearing 91,817 145,460 (37)
Interest-earning assets 13,039,640 11,749,593 11
Assets (1) 14,120,530 12,766,528 11
Core deposits 11,074,428 9,737,343 14
Deposits 11,938,672 10,693,959 12
Shareholders' equity 1,330,614 1,200,390 11
Noninterest income
Trust and investment fees $19,264 $14,235 35
Brokerage and mutual fund fees 9,909 9,082 9
Cash management and deposit
transaction fees 9,024 10,642 (15)
International services 5,425 5,144 5
Bank owned life insurance 678 773 (12)
Other 5,204 7,557 (31)
----------- -----------
Subtotal - core 49,504 47,433 4
Gain (loss) on sale of loans and
assets/debt repurchase - (40) (100)
Gain (loss) on sale of securities (7,715) 536 (1,539)
----------- -----------
Total $41,789 $47,929 (13)
=========== ===========
Total revenue $187,089 $178,542 5
=========== ===========
Noninterest expense
Salaries and employee benefits $60,926 $55,912 9
----------- -----------
All Other
Net occupancy of premises 10,045 8,435 19
Professional 11,347 7,204 58
Information services 5,170 4,699 10
Depreciation 3,503 3,343 5
Marketing and advertising 4,513 3,499 29
Office services 2,955 2,485 19
Amortization of intangibles 1,798 2,654 (32)
Equipment 581 519 12
Other operating 6,625 6,367 4
----------- -----------
Total all other 46,537 39,205 19
----------- -----------
Total $107,463 $95,117 13
=========== ===========
Selected Ratios
For the Period
Return on average assets (1) 1.40 % 1.38 % 1
Return on average shareholders'
equity 14.87 14.69 1
Efficiency ratio (2) 56.69 52.77 7
Dividend payout ratio 31.81 30.94 3
Period End (1)
Tier 1 risk-based capital ratio
Total risk-based capital ratio
Tier 1 leverage ratio
For the twelve months
ended
December 31,
2004 2003 % Change
----------- ----------- ---------
Average Balances
Loans
Commercial $3,136,538 $3,319,328 (6)
Commercial real estate mortgage 1,827,221 1,727,554 6
Residential mortgage 2,081,066 1,781,006 17
Real estate construction 767,841 647,851 19
Equity lines of credit 216,206 173,937 24
Installment 89,604 79,474 13
----------- -----------
Total loans $8,118,476 $7,729,150 5
=========== ===========
Securities $3,689,024 $2,976,741 24
Due from banks - interest bearing 63,042 66,755 (6)
Interest-earning assets 12,334,521 11,159,034 11
Assets (1) 13,395,995 12,156,145 10
Core deposits 10,425,528 9,042,255 15
Deposits 11,275,017 10,045,267 12
Shareholders' equity 1,262,562 1,147,477 10
Noninterest income
Trust and investment fees $68,366 $47,113 45
Brokerage and mutual fund fees $37,677 $36,601 3
Cash management and deposit
transaction fees 41,386 43,513 (5)
International services 20,784 19,336 7
Bank owned life insurance 2,812 2,965 (5)
Other 19,119 24,545 (22)
----------- -----------
Subtotal - core 190,144 174,073 9
Gain (loss) on sale of loans and
assets/debt repurchase 9 78 (88)
Gain (loss) on sale of securities (5,888) 3,074 (292)
----------- -----------
Total $184,265 $177,225 4
=========== ===========
Total revenue $730,153 $691,840 6
=========== ===========
Noninterest expense
Salaries and employee benefits $239,583 $217,494 10
----------- -----------
All Other
Net occupancy of premises 33,126 31,408 5
Professional 31,765 27,230 17
Information services 18,802 18,003 4
Depreciation 13,619 12,796 6
Marketing and advertising 15,498 13,224 17
Office services 10,305 9,957 3
Amortization of intangibles 7,080 9,222 (23)
Equipment 2,460 2,351 5
Other operating 23,172 22,493 3
----------- -----------
Total all other 155,827 146,684 6
----------- -----------
Total $395,410 $364,178 9
=========== ===========
Selected Ratios
For the Period
Return on average assets (1) 1.54 % 1.54 % -
Return on average shareholders'
equity 16.34 16.27 -
Efficiency ratio (2) 53.89 52.15 3
Dividend payout ratio 30.50 25.33 20
Period End (1)
Tier 1 risk-based capital ratio 11.51 10.80 7
Total risk-based capital ratio 15.11 14.85 2
Tier 1 leverage ratio 7.83 7.48 5
(1) As of September 30, 2004, the company reclassified the reserve for
unfunded credit commitments from the allowance for loan losses to
other liabilities. Amounts presented prior to the third quarter of
2004 have been reclassified to conform with the presentation in
the current reporting period.
(2) The efficiency ratio is defined as noninterest expense excluding
ORE expense divided by total revenue (net interest income on a
tax-equivalent basis and noninterest income).
CITY NATIONAL CORPORATION
- ----------------------------------------------------------------------
SELECTED FINANCIAL INFORMATION
(unaudited)
(Dollars in thousands)
- ----------------------------------------------------------------------
Period end December 31, September 30,
2004 2003 % Change 2004
------------- ------------ --------- -------------
Loans
Commercial $3,158,369 $3,222,444 (2) $3,020,235
Commercial real
estate mortgage 1,892,823 1,813,519 4 1,852,472
Residential
mortgage 2,248,742 1,937,979 16 2,167,623
Real estate
construction 847,364 637,595 33 797,109
Equity lines of
credit 255,194 188,710 35 242,050
Installment 91,695 82,495 11 94,648
------------- ------------ --------------
Total loans $8,494,187 $7,882,742 8 $8,174,137
============= ============ ==============
Deposits
Noninterest-
bearing $6,026,428 $5,486,668 10 $5,922,689
Interest-
bearing,
core 5,027,638 4,510,194 11 5,083,550
------------ ------------ --------------
Total core
deposits 11,054,066 9,996,862 11 11,006,239
Time deposits
- $100,000
and over 932,849 940,201 (1) 859,314
------------ ------------ --------------
Total deposits $11,986,915 $10,937,063 10 $11,865,553
============ ============ ==============
For the three For the twelve
months ended months ended
December 31, December 31,
2004 2003 % Change 2004 2003 % Change
-------- ----- --------- -------- ----- ---------
Yields and Rates for
the Period
Loans 5.68% 5.51% 3 5.52% 5.75% (4)
Securities 4.35 4.55 (4) 4.40 4.72 (7)
Interest-earning
assets 5.08 4.95 3 5.01 5.29 (5)
Interest-bearing
deposits 0.87 0.69 26 0.76 0.86 (12)
Other borrowings 2.77 1.86 49 2.23 2.13 5
Total interest
bearing
liabilities 1.05 0.80 31 0.90 0.99 (9)
Net interest margin 4.54 4.52 0 4.54 4.74 (4)
December 31, September 30,
2004 2003 % Change 2004
-------- -------- --------- -------------
Credit Quality
Nonaccrual loans and ORE
Nonaccrual loans $34,638 $42,273 (18) $35,269
ORE - - - -
-------- -------- -------------
Total nonaccrual loans
and ORE $34,638 $42,273 (18) $35,269
======== ======== =============
Total nonaccrual loans
and ORE to total loans
and ORE 0.41 0.54 (24) 0.43
Loans past due 90 days
or more on accrual
status $142 $2,043 (93) $3,586
======== ======== =============
For the three For the twelve
months ended months ended
December 31, December 31,
2004 2003 % Change 2004 2003 % Change
-------- --------- --------- --------- --------- --------
Allowance for
Loan Losses
Beginning
balance $148,056 $156,563 (5) $156,015 $156,598 -
Provision for
credit
losses (2) 544 (325) (267) (1,780) 26,933 (107)
Charge-offs (6,339) (3,330) 90 (28,525) (40,022) (29)
Recoveries 6,307 3,107 103 22,858 12,506 83
--------- --------- --------- ---------
Net charge-
offs (32) (223) (86) (5,667) (27,516) (79)
--------- --------- --------- ---------
Ending
Balance $148,568 $156,015 (5) $148,568 $156,015 (5)
========= ========= ========= =========
Reserve for
Off-Balance
Sheet Credit
Commitments
Beginning
balance $12,295 $9,646 27 $9,971 $7,904 26
Provision (544) 325 (267) 1,780 2,067 (14)
--------- --------- --------- ---------
Ending
Balance $11,751 $9,971 18 $11,751 $9,971 18
========= ========= ========= =========
Total net
charge-offs
to average
loans
(annualized) 0.00 (0.01) (100) (0.07) (0.36) (81)
Allowance for
loan losses
to total
loans 1.75 1.98 (12)
Allowance for
loan losses
to
nonaccrual
loans 428.92 369.07 16
Allowance for
credit
losses to
nonaccrual
loans (1) 462.84 392.65 18
As of September 30, 2004, the company reclassified the reserve for
unfunded credit commitments from the allowance for loan losses to
other liabilities. Amounts presented prior to the third quarter of
2004 have been reclassified to conform to the presentation in the
current reporting period.
(1) Allowance for credit losses equals allowance for loan losses and
reserves off-balance sheet credit commitments.
(2) Including reclass from/(to) reserve for unfunded credit
commitments.
CONTACT: City National Corporation
Christopher J. Carey, 310-888-6777 (Financial/Investors)
Cary Walker, 213-833-4715 (Media)
or
Conference Call
Today 2:00 p.m. PST
866-800-8652
Pass code 16742230