Exhibit 99.1
City National Corporation Reports Record Earnings of $57.7 Million, or $1.13 Per
Share; Second-Quarter Revenue and Net Income Rise 11 Percent
LOS ANGELES--(BUSINESS WIRE)--July 20, 2005--
Conference Call: Today 2:00 p.m. PDT, 800.573.4842, Pass Code 55871547
City National Corporation (NYSE:CYN), parent company of wholly
owned City National Bank, today reported second-quarter net income of
$57.7 million, an increase of 11 percent from the same period last
year and 4 percent from the first quarter of 2005.
Earnings per share reached $1.13, up 10 percent from the second
quarter of 2004 and 4 percent from the first quarter of this year.
Year to date, City National has earned net income of $113.2
million, or $2.22 per share.
HIGHLIGHTS
-- Second-quarter revenue rose 11 percent over the second quarter
of 2004.
-- Average loans grew to $8.8 billion, up 9 percent from the
second quarter of 2004.
-- Credit quality was again strong. Nonaccrual loans fell to
$22.2 million, a 47 percent decline from June 30, 2004. The
company required no provision for credit losses, remaining
adequately reserved at 1.66 percent of total loans.
-- Average deposits for the second quarter reached $11.7 billion,
up 5 percent from the same period last year.
-- The second-quarter net interest margin was 4.73 percent,
compared with 4.49 percent for the same period last year, and
4.75 percent for the first quarter of 2005.
"City National performed well in the second quarter," said Chief
Executive Officer Russell Goldsmith. "Double-digit revenue, income and
EPS growth primarily reflect encouraging growth in loans and net
interest income, excellent credit quality and further increases in our
wealth management and other noninterest income. With rising interest
rates, a solid California economy, a growing organization and our
successful leadership transition in this quarter, City National is
well-positioned to achieve its goals in 2005 and beyond."
For the three For the three
months ended months ended
Dollars in millions, June 30, March 31,
except per share 2005 2004 % 2005 %
Change Change
- ----------------------- ------------------- ------ ---------- ------
Earnings Per Share $1.13 $1.03 10 $1.09 4
Net Income 57.7 52.2 11 55.5 4
Average Assets 14,040.6 13,223.4 6 13,873.4 1
Return on Average
Assets 1.65 % 1.59 % 4 1.62 % 2
Return on Average
Equity 17.03 17.07 0 16.63 2
OUTLOOK
Based on current economic conditions and business indicators,
management continues to expect earnings per share for 2005 to be
approximately 11 percent to 14 percent higher than earnings per share
for 2004.
ASSETS
Total assets at June 30, 2005 reached $14.5 billion, up 7 percent
from the second quarter of last year, primarily because of loan
growth. Total assets grew 4 percent from the first quarter of 2005.
REVENUE
Second-quarter revenue (net interest income plus noninterest
income) grew to $201 million, up 11 percent from the second quarter of
2004 and 2 percent from the first quarter of this year.
NET INTEREST INCOME
Fully taxable-equivalent net interest income reached $152.7
million, a 13 percent increase over the second quarter of 2004, and 2
percent higher than the first quarter of this year.
Net interest income increased approximately $3 million from the
first quarter of this year, even though City National's net interest
margin declined 2 basis points. The margin narrowed primarily because
average loans grew faster than average deposits and the yield on the
company's securities portfolio fell 13 basis points.
The bank's prime rate was 6.25 percent on June 30, up from 4.25
percent at the same time last year, and 5.75 percent on March 31,
2005.
For the
For the three three months
months ended % ended %
Dollars in millions June 30, Change March 31, Change
2005 2004 2005
- ----------------------- ---------- ---------- ------ ---------- ------
Average Loans $8,762.4 $8,053.9 9 $8,585.2 2
Average Securities 4,071.5 3,601.0 13 4,115.4 (1)
Average Earning Assets 12,950.3 12,137.3 7 12,798.5 1
Average Deposits 11,678.5 11,121.5 5 11,572.4 1
Average Core Deposits 10,781.6 10,310.7 5 10,628.3 1
Fully Taxable-
Equivalent
Net Interest Income 152.7 135.6 13 149.9 2
Net Interest Margin 4.73 % 4.49 % 5 4.75 % (0)
Second-quarter average loan balances increased 9 percent over the
same period last year. Residential mortgage loans grew 16 percent,
while commercial loans and commercial real estate mortgage loans each
rose 6 percent. Real estate construction loans fell 5 percent,
primarily as the result of accelerated repayments due to the fast pace
of new home sales and early refinancing by income property developers
taking advantage of low interest rates. Compared with the first
quarter of this year, average loans increased in all categories except
real estate construction.
Year to date, the company's average loan balances increased 9
percent over the first six months of 2004.
Total loan balances at June 30, 2005 were $300 million higher than
they were at March 31, 2005, reflecting the growth of commercial
lending and most real estate-related loan categories.
City National's average deposits reached $11.7 billion in the
second quarter, up 5 percent from the same period last year and 1
percent from the first quarter of 2005.
Period-end deposits were 3 percent higher than they were at March
31 of this year.
Year to date, the company's average deposits grew 7 percent over
the first six months of 2004.
As part of its long-standing asset-liability management strategy,
the company uses "plain-vanilla" interest-rate swaps to hedge loans,
deposits and borrowings. The notional value of these swaps was $1.4
billion at June 30, 2005, up $0.3 billion from the second quarter of
last year but unchanged from the first quarter of this year.
NONINTEREST INCOME
Second-quarter 2005 noninterest income of $51.4 million was 6
percent higher than the second quarter of 2004, due primarily to
higher trust and investment fees. Noninterest income was 26 percent of
total revenue in the second quarter of 2005, unchanged from the second
quarter of last year and the first quarter of this year.
Wealth Management
Trust and investment fees increased 18 percent over the second
quarter of 2004, due primarily to an increase in balances under
management or administration. Assets under direct management grew more
than 18 percent from the same period last year, largely as the result
of new business, a strong relative investment performance and higher
market values. Increases in market values are reflected in fee income
primarily on a trailing-quarter basis.
At or for
At or for the
the three three months
months ended % ended %
Dollars in millions June 30, Change March 31, Change
2005 2004 2005
- -------------------------- --------- --------- ------ --------- ------
Trust and Investment Fee
Revenue $19.6 $16.7 18 $19.4 1
Brokerage and Mutual Fund
Fees 9.9 9.4 6 9.9 1
Assets Under Management
(1) 17,257.5 14,567.2 18 16,378.8 5
Assets Under Management
or Administration 36,972.9 31,749.9 16 35,829.2 3
(1) Excludes $5,539, $3,275, and $6,071 million of assets under
management for the CCM minority-owned asset managers as of June 30,
2005, June 30, 2004, and March 31, 2005, respectively
Other Noninterest Income
Second-quarter cash management and deposit transaction fees fell
19 percent from the same period last year and 2 percent from the first
quarter of 2005, due largely to a higher earnings credit for clients
who maintain deposit balances to pay for services.
International service fees for the second quarter of 2005 grew 17
percent from the same period last year and 21 percent from the first
quarter of this year. Behind this growth were sharp increases in the
demand for foreign exchange and standby letters of credit.
Other income was 15 percent higher in the second quarter of 2005
than it was for the same period one year ago. However, it fell 11
percent from the first quarter of 2005, reflecting a decline in the
fees collected for participating mortgage loans and other loan-related
services.
In the second quarter of 2005, the company recorded $1 million in
gains on the sale of assets and securities, compared with gains of
$0.9 million for the second quarter of 2004 and $0.3 million in for
the first quarter of this year.
NONINTEREST EXPENSE
Second-quarter noninterest expense amounted to $109 million, up 12
percent from the same period last year and 1 percent from the first
quarter of 2005. Noninterest expense is up 13 percent year to date.
Legal and professional fees increased $3.4 million, or 47 percent,
from the second quarter of 2004 and 24 percent from the first quarter
of this year. These increases reflect costs associated with the
company's commitment to further strengthen compliance with the Bank
Secrecy Act and the USA Patriot Act.
Staffing expenses were 8 percent higher than they were one year
ago, due to the addition of new sales, business development,
regulatory compliance and risk management personnel. However, these
expenses fell 4 percent from the first quarter of 2005.
The company's second-quarter efficiency ratio was 53.39 percent,
compared with 52.72 percent for the second quarter of 2004, and 54.10
percent for the first quarter of this year.
CREDIT QUALITY
For the eighth consecutive quarter, City National made no
provision for credit losses. This decision reflected strong credit
quality, management's ongoing assessment of the loan portfolio, loan
growth and an improving economic environment. Net loan recoveries in
the second quarter amounted to $1.2 million, compared with $0.04
million for the second quarter of 2004 and $0.20 million for the first
quarter of this year. Nonaccrual loans at June 30, 2005 were $22.2
million, down 47 percent from June 30, 2004 and 26 percent from March
31, 2005. They now amount to 25 basis points of total loans.
At June 30, 2005 the allowance for loan losses was $148 million or
1.66 percent of total loans. The reserve for unfunded credit
commitments was $13.8 million.
INCOME TAXES
The company's effective tax rate for the second quarter was 37.3
percent, compared with 37.4 percent for all of 2004. 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 the disputed 2000-through-2002
tax years, and permitting the company to claim a refund for these
years while avoiding certain potential penalties.
City National has elected to proceed with its claim for refund as
allowed by law. The company's strategic and financial positions remain
unchanged from the first quarter of this year. Its receivable related
to the disputed taxes is $23.7 million, net of previously established
reserves.
CAPITAL LEVELS
The company remains well-capitalized. Total risk-based capital and
Tier 1 risk-based capital ratios at June 30, 2005 were 15.45 percent
and 11.91 percent, compared with the minimum regulatory standards of
10 percent and 6 percent, respectively, for "well-capitalized"
institutions. The company's Tier 1 leverage ratio at June 30, 2005 was
8.39 percent, well above the regulatory minimum ratio of 5 percent.
At March 31, 2005 total risk-based capital, Tier 1 risk-based
capital and the Tier 1 leverage ratios were 15.27 percent, 11.69
percent and 8.12 percent, respectively.
Shareholders' equity to assets at June 30, 2005 was 9.68 percent,
compared with 9.10 percent at the same time last year and 9.49 percent
at March 31 of this year.
The accumulated other comprehensive loss at June 30, 2005 was
$12.9 million, compared with $38.4 million at the same time last year
and $43.3 million at March 31, 2005. The average duration of total
available-for-sale securities at June 30 was 3.1 years, compared with
3.8 years at the same time last year and 3.5 years at March 31, 2005.
CONFERENCE CALL
City National Corporation will host a conference call this
afternoon to discuss results for the second quarter of 2005. 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 (800) 573-4842 and enter pass code 55871547. 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 is a financial services company with
$14.5 billion in total assets. Its wholly owned subsidiary, City
National Bank, is California's Premier Private and Business Bank(R).
The bank provides banking, investment, and trust services through 53
offices, including 12 full-service regional centers, in Southern
California, the San Francisco Bay Area and New York City. City
National and its affiliates manage or administer approximately $37
billion in client trust and investment assets, including more than $17
billion under direct management.
City National is in the process of opening four new branches in
Southern California and relocating three more. The company, which is
celebrating its 30th anniversary in Orange County, added a new office
in Anaheim on July 18. In two weeks, it will open another one in
Newport Beach.
In May, the company announced that Chief Credit Officer Chris
Warmuth would become President of City National Bank. He succeeded
George H. Benter, Jr., who became Vice Chairman of the bank. The
company also announced that former Regional Manager Dallas Haun had
been promoted to a newly created position as the leader of regional
private and commercial banking.
For more information about City National, visit the company's
Website at cnb.com.
SAFE-HARBOR LANGUAGE
This news release contains forward-looking statements about the
company, for which the company claims the protection of the safe
harbor provisions contained in the Private Securities Litigation
Reform Act of 1995.
Forward-looking statements are based on management's knowledge and
belief as of today and include information concerning the company's
possible or assumed future financial condition, and its results of
operations, business and earnings outlook. These forward-looking
statements are subject to risks and uncertainties. A number of
factors, some of which are beyond the company's ability to control or
predict, could cause future results to differ materially from those
contemplated by such forward-looking statements. These factors include
(1) changes in interest rates, (2) significant changes in banking laws
or regulations, (3) increased competition in the company's markets,
(4) other-than-expected credit losses due to real estate cycles or
other economic events, (5) earthquake or other natural disasters
affecting the condition of real estate collateral, (6) the effect of
acquisitions and integration of acquired businesses, and (7) 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 report on Form 10-Q for the quarter ended March 31,
2005, and its Annual Report on
Form 10-K for the year ended December 31, 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
FINANCIAL HIGHLIGHTS
(unaudited)
Three Months Six Months
------------------------ --------------------------
For The Period % %
Ended June 30, 2005 2004 Change 2005 2004 Change
- ------------------ ------------------------ --------------------------
Per Common Share
Net Income
Basic $1.18 $1.07 10 $2.30 $2.11 9
Diluted 1.13 1.03 10 2.22 2.03 9
Dividends 0.36 0.32 13 0.72 0.64 13
Book value 28.51 25.05 14
Results of Operations:
(In millions)
Net interest
income $150 $132 13 $296 $263 12
Net interest
income (Fully
tax-equivalent) 153 136 13 303 270 12
Total revenue 201 181 11 398 358 11
Provision for
credit losses - - - - - -
Net income 58 52 11 113 103 10
Financial Ratios:
Performance
Ratios:
Return on
average
assets 1.65 % 1.59 % 1.64 % 1.60 %
Return on
average
shareholders'
equity 17.03 17.07 16.83 16.91
Average
shareholders'
equity to
average
assets 9.68 9.30 9.71 9.42
Net interest
margin 4.73 4.49 4.74 4.54
Efficiency
ratio 53.39 52.72 53.74 53.05
Capital Adequacy
Ratios (Period
end):
Shareholders' equity to total assets 9.68 9.10
Tier 1 leverage 8.39 7.68
Tier 1 risk-based capital 11.91 11.08
Total risk-based capital 15.45 14.77
Asset Quality Ratios:
Allowance for
loan losses to:
Total loans 1.66 % 1.89 %
Nonaccrual loans 667.52 366.39
Nonperforming
assets to:
Total loans and nonperforming assets 0.25 0.51
Total assets 0.15 0.31
Net (charge-offs)/recoveries
to
Average total
loans
(annualized) 0.05 % n/m % 0.03 (0.02)
Average Balances:
(In millions)
Loans $8,762 $8,054 9 $8,674 $7,970 9
Interest-earning
assets 12,950 12,137 7 12,875 11,870 8
Assets 14,041 13,223 6 13,957 12,920 8
Core deposits 10,782 10,311 5 10,706 9,966 7
Deposits 11,679 11,122 5 11,626 10,828 7
Interest-bearing
liabilities 6,527 6,402 2 6,589 6,316 4
Shareholders'
equity 1,359 1,230 10 1,356 1,226 11
Period-End
Balances: (In
millions)
Loans $8,886 $8,125 9
Assets 14,476 13,486 7
Core deposits 11,141 10,664 4
Deposits 12,152 11,455 6
Shareholders' equity 1,401 1,228 14
Wealth Management:
(In millions) (1)
Assets under management $17,258 $14,567 18
Assets under management and administration 36,973 31,750 16
(1) Excludes $5,539 and $3,275 million of assets under management
for the Convergent Capital Management minority-owned asset managers as
of June 30, 2005 and June 30, 2004, respectively.
CITY NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended Six Months Ended
(Dollars in thousands June 30, June 30,
except per share data) -------------------- ---------------------
2005 2004 % Change 2005 2004 % Change
---------------------------------------------------------------------
Net Interest Income $149,646 $132,275 13 $296,072 $263,247 12
Provision for Credit
Losses - - - - - -
Noninterest Income
Trust and
investment fees 19,632 16,664 18 39,069 32,252 21
Brokerage and
mutual fund fees 9,928 9,367 6 19,796 18,093 9
Cash management
and deposit
transaction fees 8,874 10,942 (19) 17,884 22,040 (19)
International
services 5,908 5,042 17 10,796 10,168 6
Bank-owned life
insurance 652 715 (9) 1,516 1,546 (2)
Other service
charges and fees 5,359 4,665 15 11,372 9,237 23
Gain (loss) on
sale of assets 162 - n/m 185 - n/m
Gain (loss) on
sale of
securities 844 871 (3) 1,099 1,500 (27)
--------- --------- --------- ---------
Total
noninterest
income 51,359 48,266 6 101,717 94,836 7
Noninterest Expense
Salaries and
employee
benefits 63,839 59,306 8 130,471 118,982 10
Net occupancy of
premises 8,727 7,020 24 16,343 13,662 20
Legal and
professional
fees 10,791 7,359 47 19,505 14,131 38
Information
services 5,010 4,588 9 10,176 9,110 12
Depreciation 3,540 3,274 8 7,155 6,502 10
Amortization of
intangibles 1,441 1,760 (18) 2,882 3,519 (18)
Marketing and
advertising 3,943 3,812 3 7,517 7,319 3
Office services 2,688 2,487 8 5,177 4,906 6
Equipment 646 636 2 1,195 1,401 (15)
Minority interest
expense 1,532 1,306 17 3,343 2,906 15
Other 6,796 5,413 26 13,504 10,654 27
--------- --------- --------- ---------
Total
noninterest
expense 108,953 96,961 12 217,268 193,092 13
--------- --------- --------- ---------
Income Before Taxes 92,052 83,580 10 180,521 164,991 9
Applicable Income
Taxes 34,345 31,380 9 67,353 61,893 9
--------- --------- --------- ---------
Net Income $57,707 $52,200 11 $113,168 $103,098 10
========= ========= ========= =========
Other Data:
Earnings per
common share -
basic $1.18 $1.07 10 $2.30 $2.11 9
Earnings per
common share -
diluted $1.13 $1.03 10 $2.22 $2.03 9
Dividends paid
per common share $0.36 $0.32 13 $0.72 $0.64 13
Dividend payout
ratio 30.85 % 30.06 % 3 31.43 % 30.38 % 3
Return on average
assets 1.65 % 1.59 % 4 1.64 % 1.55 % 6
Return on average
shareholders'
equity 17.03 % 17.07 % - 16.83 % 16.42 % 2
Net interest
margin (Fully
taxable-
equivalent) 4.73 % 4.49 % 5 4.74 % 4.57 % 4
Full-time
equivalent
employees 2,477 2,346 6
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
2005
-----------------------------
(Dollars in thousands Second First Year to
except per share data) Quarter Quarter Date
- --------------------------------------- --------- --------- ---------
Net Interest Income $149,646 $146,426 $296,072
Provision for Credit Losses - - -
Noninterest Income
Trust and investment fees 19,632 19,437 39,069
Brokerage and mutual fund fees 9,928 9,868 19,796
Cash management
deposit transaction fees 8,874 9,010 17,884
International services 5,908 4,888 10,796
Bank-owned life insurance 652 864 1,516
Other service charges and fees 5,359 6,013 11,372
Gain on sale of assets 162 23 185
Gain on sale of securities 844 255 1,099
--------- --------- ---------
Total noninterest income 51,359 50,358 101,717
Noninterest Expense
Salaries and employee benefits 63,839 66,632 130,471
Net occupancy of premises 8,727 7,616 16,343
Legal and professional fees 10,791 8,714 19,505
Information services 5,010 5,166 10,176
Depreciation 3,540 3,615 7,155
Amortization of intangibles 1,441 1,441 2,882
Marketing and advertising 3,943 3,574 7,517
Office services 2,688 2,489 5,177
Equipment 646 549 1,195
Minority interest expense 1,532 1,811 3,343
Other 6,796 6,708 13,504
--------- --------- ---------
Total noninterest expense 108,953 108,315 217,268
Income Before Taxes 92,052 88,469 180,521
Applicable Income Taxes 34,345 33,008 67,353
--------- --------- ---------
Net Income $57,707 $55,461 $113,168
========= ========= =========
Other Data:
Earnings per common share - basic $1.18 $1.13 $2.30
Earnings per common share - diluted $1.13 $1.09 $2.22
Dividends paid per common share $0.36 $0.36 $0.72
Dividend payout ratio 30.85 % 32.02 % 31.43 %
Return on average assets 1.65 % 1.62 % 1.64 %
Return on average shareholders' equity 17.03 % 16.63 % 16.83 %
Net interest margin (Fully taxable-
equivalent) 4.73 % 4.75 % 4.74 %
Full-time equivalent employees 2,477 2,445
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
2004
-------------------------------------------------
(Dollars in Fourth Third Second First Full
thousands except Quarter Quarter Quarter Quarter Year
per share data)
- ------------------- --------- --------- --------- --------- ---------
Net Interest Income $145,300 $137,341 $132,275 $130,972 $545,888
Provision for
Credit Losses - - - - -
Noninterest Income
Trust and
investment fees 19,264 16,850 16,664 15,588 68,366
Brokerage and
mutual fund fees 9,909 9,675 9,367 8,726 37,677
Cash management
deposit transaction
fees 9,024 10,322 10,942 11,098 41,386
International
services 5,425 5,191 5,042 5,126 20,784
Bank-owned life
insurance 678 588 715 831 2,812
Other service
charges and fees 5,204 4,678 4,665 4,572 19,119
Gain on sale of
assets - 9 - - 9
Gain (loss) on
sale of
securities (7,715) 327 871 629 (5,888)
--------- --------- --------- --------- ---------
Total
noninterest
income 41,789 47,640 48,266 46,570 184,265
Noninterest Expense
Salaries and
employee benefits 60,926 59,675 59,306 59,676 239,583
Net occupancy of
premises 9,454 7,513 7,020 6,642 30,629
Legal and
professional fees 11,938 8,193 7,359 6,772 34,262
Information
services 5,170 4,522 4,588 4,522 18,802
Depreciation 3,503 3,614 3,274 3,228 13,619
Amortization of
intangibles 1,798 1,763 1,760 1,759 7,080
Marketing and
advertising 4,513 3,666 3,812 3,507 15,498
Office services 2,955 2,444 2,487 2,419 10,305
Equipment 581 478 636 765 2,460
Minority interest
expense 584 1,502 1,306 1,600 4,992
Other 6,625 5,893 5,413 5,241 23,172
--------- --------- --------- --------- ---------
Total
noninterest
expense 108,047 99,263 96,961 96,131 400,402
--------- --------- --------- --------- ---------
Income Before Taxes 79,042 85,718 83,580 81,411 329,751
Applicable Income
Taxes 29,296 32,240 31,380 30,513 123,429
--------- --------- --------- --------- ---------
Net Income $49,746 $53,478 $52,200 $50,898 $206,322
========= ========= ========= ========= =========
Other Data:
Earnings per
common share -
basic $1.01 $1.09 $1.07 $1.04 $4.21
Earnings per
common share -
diluted $0.97 $1.04 $1.03 $1.00 $4.04
Dividends paid per
common share $0.32 $0.32 $0.32 $0.32 $1.28
Dividend payout
ratio 31.81 % 29.51 % 30.06 % 30.71 % 30.50 %
Return on average
assets 1.40 % 1.56 % 1.59 % 1.62 % 1.54 %
Return on average
shareholders'
equity 14.87 % 16.80 % 17.07 % 16.75 % 16.34 %
Net interest
margin (Fully
taxable-
equivalent) 4.54 % 4.46 % 4.49 % 4.66 % 4.54 %
Full-time
equivalent
employees 2,347 2,348 2,346 2,341
CITY NATIONAL CORPORATION
CONSOLIDATED PERIOD END BALANCE SHEET
(unaudited)
2005
---------------------------
Second First
(In thousands) Quarter Quarter
- -------------------------------------- ------------- -------------
Assets
Cash and due from banks $406,709 $386,999
Federal funds sold 400,000 190,000
Due from banks - interest-bearing 34,676 36,982
Securities-available-for-sale 4,057,267 4,018,969
Trading account securities 22,337 37,490
Loans:
Commercial 3,320,836 3,082,663
Commercial real estate mortgages 1,892,187 1,919,788
Residential mortgages 2,398,627 2,323,879
Real estate construction 741,486 772,000
Equity lines of credit 310,101 274,735
Installment 223,029 212,398
------------- -------------
Total loans 8,886,266 8,585,463
Allowance for loan losses (147,930) (147,607)
------------- -------------
Net loans 8,738,336 8,437,856
Premises and equipment, net 73,169 68,354
Goodwill 251,494 251,494
Other assets 491,610 489,894
------------- -------------
Total assets $14,475,598 $13,918,038
============= =============
Liabilities:
Deposits:
Noninterest-bearing $6,468,339 $6,069,061
Interest-bearing 5,683,869 5,693,563
------------- -------------
Total deposits 12,152,208 11,762,624
Federal funds purchased and
securities sold under
repurchase agreement 204,052 155,645
Other short-term borrowed funds 27,678 125
Subordinated debt 285,771 280,068
Other long-term debt 233,290 224,829
Minority Interest 25,400 25,525
Other liabilities 146,311 149,039
------------- -------------
Total liabilities 13,074,710 12,597,855
Shareholders' Equity
Common stock 50,640 50,712
Additional paid-in capital 415,802 419,505
Retained earnings 1,035,589 995,688
Accumulated other
comprehensive loss (12,948) (43,288)
Deferred equity compensation (16,821) (19,893)
Treasury shares (71,374) (82,541)
------------- -------------
Total shareholders' equity 1,400,888 1,320,183
------------- -------------
Total liabilities and shareholders'
equity $14,475,598 $13,918,038
============= =============
CITY NATIONAL CORPORATION
CONSOLIDATED PERIOD END BALANCE SHEET
(unaudited)
2004
---------------------------------------------------
Fourth Third Second First
(In thousands) Quarter Quarter Quarter Quarter
- ------------------ ------------ ------------ ------------ ------------
Assets
Cash and due
from banks $240,492 $410,694 $485,208 $472,541
Federal funds
sold 427,000 890,000 595,000 519,000
Due from banks -
interest-
bearing 236,362 37,890 76,890 34,570
Securities-
available-for-
sale 4,114,298 3,780,750 3,518,757 3,612,173
Trading account
securities 75,878 49,752 28,893 39,549
Loans:
Commercial 3,030,363 2,912,703 2,981,806 3,086,307
Commercial
Real estate
mortgages 2,248,742 1,852,472 1,842,956 1,807,591
Residential
mortgages 1,892,823 2,167,623 2,114,335 1,977,952
Real estate
construction 847,364 797,109 782,435 741,637
Equity lines
of credit 255,194 242,050 214,533 197,269
Installment 219,701 202,180 189,431 156,883
------------ ------------ ------------ ------------
Total
loans 8,494,187 8,174,137 8,125,496 7,967,639
Allowance
for loan
losses (148,568) (148,056) (153,271) (154,498)
------------ ------------ ------------ ------------
Net loans 8,345,619 8,026,081 7,972,225 7,813,141
Premises and
equipment, net 68,624 63,097 60,488 60,175
Goodwill 253,740 253,817 253,736 253,737
Other assets 469,500 469,319 494,549 426,212
------------ ------------ ------------ ------------
Total assets $14,231,513 $13,981,400 $13,485,746 $13,231,098
============ ============ ============ ============
Liabilities:
Deposits:
Noninterest-
bearing $6,026,428 $5,922,689 $5,809,241 $5,525,627
Interest-
bearing 5,960,487 5,942,864 5,645,678 5,609,050
------------ ------------ ------------ ------------
Total
deposits 11,986,915 11,865,553 11,454,919 11,134,677
Federal funds
purchased and
securities
sold under
repurchase
agreement 204,654 71,570 94,898 88,063
Other short-term
borrowed funds 125 50,125 50,125 50,125
Subordinated
debt 288,934 291,073 286,896 300,758
Other long-term
debt 230,416 231,882 224,488 239,804
Minority
Interest 26,362 27,180 27,180 27,180
Other
liabilities 145,572 130,790 119,431 150,561
------------ ------------ ------------ ------------
Total
liabilities 12,882,978 12,668,173 12,257,937 11,991,168
Shareholders' Equity
Common stock 50,589 50,585 50,578 50,583
Additional paid-
in capital 410,216 409,597 408,463 409,235
Retained
earnings 957,987 924,066 886,367 849,859
Accumulated
other comprehensive
income (loss) (1,352) 3,683 (38,418) 32,237
Deferred equity
compensation (12,262) (13,355) (13,343) (14,343)
Treasury shares (56,643) (61,349) (65,838) (87,641)
------------ ------------ ------------ ------------
Total
shareholders'
equity 1,348,535 1,313,227 1,227,809 1,239,930
------------ ------------ ------------ ------------
Total
liabilities
and
shareholders'
equity $14,231,513 $13,981,400 $13,485,746 $13,231,098
============ ============ ============ ============
CITY NATIONAL CORPORATION
CREDIT LOSS EXPERIENCE
(unaudited)
2005
-----------------------------
Second First Year To
(Dollars in thousands) Quarter Quarter Date
- -------------------------------------- --------- --------- ---------
Allowance for Loan Losses
Balance at beginning of period $147,607 $148,568 $148,568
Net (charge-offs)/recoveries:
Commercial 1,067 2,117 3,184
Commercial real estate mortgages 7 (1,893) (1,886)
Residential mortgages 1 2 3
Real estate construction 71 23 94
Equity lines of credit 39 1 40
Installment 5 (18) (13)
--------- --------- ---------
Total net (charge-offs)/recoveries 1,190 232 1,422
Provision charged to expense - - -
Provision allocated (to) from reserve
for off-balance sheet commitments (867) (1,193) (2,060)
--------- --------- ---------
Balance at end of period $147,930 $147,607 $147,930
========= ========= =========
Net (Charge-Offs)/Recoveries to Average Total Loans: (annualized)
Commercial 0.13 % 0.28 % 0.20 %
Commercial real estate mortgages 0.00 % (0.41)% (0.20)%
Residential mortgage 0.00 % 0.00 % 0.00 %
Real estate construction 0.04 % 0.01 % 0.02 %
Equity lines of credit 0.05 % 0.00 % 0.03 %
Installment 0.01 % (0.03)% (0.01)%
Total loans 0.05 % 0.01 % 0.03 %
Reserve for Off-Balance Sheet Credit Commitments
Balance at beginning of period $12,944 $11,751 $11,751
Provision for credit losses 867 1,193 2,060
--------- --------- ---------
Balance at end of period $13,811 $12,944 $13,811
========= ========= =========
2004
-------------------------------------------------
Fourth Third Second First Full
(Dollars in Quarter Quarter Quarter Quarter Year
thousands)
- ----------------------------- --------- --------- --------- ---------
Allowance for Loan
Losses
Balance at beginning
of period $148,056 $153,271 $154,498 $156,015 $156,015
Net (charge-offs)/
recoveries:
Commercial 1,280 (3,030) (955) 68 (2,637)
Commercial real
estate mortgages (1,274) (1,705) 975 (870) (2,874)
Residential
mortgages (3) 14 - - 11
Real estate
construction 34 19 18 29 100
Equity lines of
credit 1 - 1 1 3
Installment (70) (64) 6 (142) (270)
--------- --------- --------- --------- ---------
Total net (charge-
offs)/recoveries (32) (4,766) 45 (914) (5,667)
Provision charged to
expense - - - - -
Provision allocated
(to) from reserve
for off-balance
sheet commitments 544 (449) (1,272) (603) (1,780)
--------- --------- --------- --------- ---------
Balance at end of
period $148,568 $148,056 $153,271 $154,498 $148,568
========= ========= ========= ========= =========
Net (Charge-Offs)/Recoveries to Average Total Loans: (annualized)
Commercial 0.16 % (0.39)% (0.12)% 0.01 % (0.09)%
Commercial real
estate mortgages (0.28)% (0.37)% 0.22 % (0.19)% (0.16)%
Residential
mortgage (0.00)% 0.00 % 0.00 % 0.00 % 0.00 %
Real estate
construction 0.02 % 0.01 % 0.01 % 0.02 % 0.01 %
Equity lines of
credit 0.00 % 0.00 % 0.00 % 0.00 % 0.00 %
Installment (0.30)% (0.28)% 0.03 % (0.70)% (0.15)%
Total loans (0.00)% (0.23)% 0.00 % (0.05)% (0.07)%
Reserve for Off-Balance Sheet Credit Commitments
Balance at beginning
of period $12,295 $11,846 $10,574 $9,971 $9,971
Provision for
credit losses (544) 449 1,272 603 1,780
--------- --------- --------- --------- ---------
Balance at end of
period $11,751 $12,295 $11,846 $10,574 $11,751
========= ========= ========= ========= =========
CITY NATIONAL CORPORATION
NONPERFORMING ASSETS
(unaudited)
2005 2004
----------------- -----------------------------------
Second First Fourth Third Second First
(Dollars in Quarter Quarter Quarter Quarter Quarter Quarter
thousands)
- --------------- -------- -------- -------- -------- -------- --------
Nonaccrual Loans
Commercial $17,982 $25,117 $30,334 $28,127 $34,651 $37,457
Commercial
real estate
mortgages 1,543 1,945 2,255 4,032 3,238 4,811
Residential
mortgages 1,990 1,990 94 1,193 2,371 11
Real estate
construction - 790 1,163 1,168 -
Equity lines
of credit 22 212 380 384 25 25
Installment 624 654 785 370 380 429
-------- -------- -------- -------- -------- --------
Total
nonaccrual
loans 22,161 29,918 34,638 35,269 41,833 42,733
Other
Nonperforming
Assets - - - - - -
-------- -------- -------- -------- -------- --------
Total
nonperforming
assets $22,161 $29,918 $34,638 $35,269 $41,833 $42,733
======== ======== ======== ======== ======== ========
Loans 90 Days
or More Past
Due
on Accrual
Status $103 $807 $142 $3,586 $153 $5,057
Allowance for
loan losses as
a percentage
of:
Nonaccrual
loans 667.52 % 493.37 % 428.92 % 419.79 % 366.39 % 361.54 %
Total
nonperforming
assets 667.52 % 493.37 % 428.92 % 419.79 % 366.39 % 361.54 %
Total loans 1.66 % 1.72 % 1.75 % 1.81 % 1.89 % 1.94 %
Nonaccrual
loans as a
percentage of
total loans 0.25 % 0.35 % 0.41 % 0.43 % 0.51 % 0.54 %
Nonperforming
assets as a
percentage of:
Total loans
and other
nonperforming
assets 0.25 % 0.35 % 0.41 % 0.43 % 0.51 % 0.54 %
Total Assets 0.15 % 0.21 % 0.24 % 0.25 % 0.31 % 0.32 %
CITY NATIONAL CORPORATION
AVERAGE BALANCES AND RATES
(unaudited)
2005
--------------------------------------------------
Second Quarter First Quarter Year to Date
---------------- ---------------- ----------------
Average Average Average Average Average Average
(Dollars in Balance Rate Balance Rate Balance Rate
millions)
- ------------------- -------- ------- -------- ------- -------- -------
Assets
Interest-earning
assets
Loans
Commercial $3,225 6.06 % $3,111 5.75 % $3,169 5.89 %
Commercial
real estate
mortgages 1,926 6.61 1,877 6.57 1,901 6.59
Residential
mortgages 2,354 5.47 2,286 5.56 2,320 5.52
Real estate
construction 742 7.23 830 6.63 786 6.92
Equity lines
of credit 297 5.70 265 5.42 281 5.57
Installment 218 6.39 216 6.28 217 6.68
-------- -------- --------
Total loans 8,762 6.12 8,585 5.97 8,674 6.05
Due from banks
- interest-
bearing 37 1.24 65 1.34 51 1.30
Federal funds
sold and
securities
purchased
under resale
agreements 80 2.76 33 2.59 57 2.71
Securities
available-for-
sale 4,034 4.25 4,078 4.38 4,056 4.31
Trading account
securities 37 3.25 38 2.40 37 2.83
-------- -------- --------
Total
interest-
earning
assets 12,950 5.49 12,799 5.42 12,875 5.46
Allowance for
loan losses (148) (149) (148)
Cash and due
from banks 443 441 442
Other non-
earning assets 796 782 788
-------- -------- --------
Total assets $14,041 $13,873 $13,957
======== ======== ========
Liabilities and
Shareholders'
Equity
Interest-bearing
deposits
Interest
checking
accounts $849 0.08 $858 0.09 $854 0.09
Money market
accounts 3,568 1.15 3,690 1.00 3,629 1.08
Savings
deposits 199 0.28 205 0.24 202 0.26
Time deposits -
under $100,000 181 2.38 182 2.07 181 2.22
Time deposits -
$100,000 and
over 897 2.56 944 2.11 920 2.33
-------- -------- --------
Total
interest-
bearing
deposits 5,694 1.22 5,879 1.05 5,786 1.14
Federal funds
purchased and
securities
sold under
repurchase
agreements 315 2.88 254 2.33 284 2.64
Other
borrowings 518 3.85 519 3.53 519 3.69
-------- -------- --------
Total
interest-
bearing
liabilities 6,527 1.51 6,652 1.29 6,589 1.40
Noninterest-
bearing deposits 5,985 5,694 5,840
Other liabilities 170 175 172
Shareholders'
equity 1,359 1,352 1,356
-------- -------- --------
Total
liabilities
and
shareholders'
equity $14,041 $13,873 $13,957
======== ======== ========
Net interest spread 3.98 % 4.13 % 4.06 %
====== ====== ======
Net interest margin 4.73 % 4.75 % 4.74 %
====== ====== ======
CITY NATIONAL CORPORATION
AVERAGE BALANCES AND RATES
(unaudited)
2004
------------------------------------
Fourth Quarter Third Quarter
---------------- ----------------
Average Average Average Average
(Dollars in millions) Balance Rate Balance Rate
- --------------------------------- -------- ------- -------- -------
Assets
Interest-earning assets
Loans
Commercial $3,028 5.47 % $2,996 5.30 %
Commercial real estate
mortgages 1,850 6.30 1,838 6.14
Residential mortgages 2,198 5.33 2,136 5.40
Real estate construction 826 6.01 787 5.46
Equity lines of credit 246 5.32 221 4.87
Installment 209 5.96 196 6.20
-------- --------
Total loans 8,357 5.68 8,174 5.54
Due from banks - interest-
bearing 92 1.84 39 0.86
Federal funds sold and
securities
purchased under resale
agreements 579 1.98 659 1.48
Securities available-for-sale 3,980 4.36 3,641 4.30
Trading account securities 32 2.06 36 0.98
-------- --------
Total interest-earning assets 13,040 5.08 12,549 4.94
Allowance for loan losses (149) (153)
Cash and due from banks 446 432
Other non-earning assets 784 784
-------- --------
Total assets $14,121 $13,612
======== ========
Liabilities and Shareholders' Equity
Interest-bearing deposits
Interest checking accounts $858 0.08 $834 0.08
Money market accounts 3,910 0.84 3,879 0.76
Savings deposits 206 0.25 208 0.25
Time deposits - under $100,000 184 1.76 189 1.50
Time deposits - $100,000 and over 864 1.76 811 1.48
-------- --------
Total interest-bearing deposits 6,022 0.87 5,921
Federal funds purchased and
securities sold under
repurchase agreements 115 1.73 129 1.27
Other borrowings 557 2.77 561 2.30
-------- --------
Total interest-bearing
liabilities 6,694 1.05 6,611 0.91
Noninterest-bearing deposits 5,917 5,575
Other liabilities 179 159
Shareholders' equity 1,331 1,267
-------- --------
Total liabilities and
shareholders' equity $14,121 $13,612
======== ========
Net interest spread 4.03 % 4.03 %
===== =====
Net interest margin 4.54 % 4.46 %
===== =====
2004
--------------------------------------------------
Second Quarter First Quarter Full Year
---------------- ---------------- ----------------
Average Average Average Average Average Average
(Dollars in Balance Rate Balance Rate Balance Rate
millions)
- ---------------------------- ------- -------- ------- -------- -------
Assets
Interest-earning
assets
Loans
Commercial $3,042 5.00 % $3,104 5.09 % $3,042 5.21 %
Commercial real
estate mortgages 1,813 6.09 1,808 6.28 1,827 6.24
Residential
mortgages 2,036 5.41 1,952 5.52 2,081 5.41
Real estate
construction 779 5.10 678 5.08 768 5.44
Equity lines of
credit 204 4.54 194 4.17 216 4.46
Installment 180 6.13 150 6.24 184 6.13
-------- -------- --------
Total loans 8,054 5.37 7,886 5.47 8,118 5.52
Due from banks -
interest-bearing 43 0.86 78 0.72 63 1.17
Federal funds sold
and securities
purchased under
resale
agreements 439 1.02 175 0.99 464 1.48
Securities
available-for-
sale 3,569 4.47 3,433 4.62 3,657 4.43
Trading account
securities 32 0.48 30 0.52 32 1.02
-------- -------- --------
Total interest-
earning assets 12,137 4.92 11,602 5.10 12,334 5.01
Allowance for loan
losses (155) (156) (153)
Cash and due from
banks 446 447 443
Other non-earning
assets 795 724 772
-------- -------- --------
Total assets $13,223 $12,617 $13,396
======== ======== ========
Liabilities and Shareholders' Equity
Interest-bearing deposits
Interest checking
accounts $825 0.08 $802 0.08 $792 0.09
Money market
accounts 3,649 0.68 3,421 0.68 3,712 0.75
Savings deposits 212 0.27 205 0.26 249 0.21
Time deposits -
under $100,000 194 1.39 198 1.45 191 1.52
Time deposits -
$100,000 and over 811 1.33 912 1.29 850 1.47
-------- -------- --------
Total interest-
bearing deposits 5,691 0.70 5,538 0.71 5,794 0.76
Federal funds
purchased and
securities sold
under repurchase
agreements 121 0.89 112 0.88 119 1.19
Other borrowings 590 1.91 579 1.97 572 2.23
-------- -------- --------
Total interest-
bearing
liabilities 6,402 0.81 6,229 0.83 6,485 0.90
Noninterest-bearing
deposits 5,431 4,995 5,481
Other liabilities 160 171 167
Shareholders' equity 1,230 1,222 1,263
-------- -------- --------
Total liabilities
and shareholders'
equity $13,223 $12,617 $13,396
======== ======== ========
Net interest spread 4.11 % 4.27 % 4.11 %
====== ====== ======
Net interest margin 4.49 % 4.66 % 4.54 %
====== ====== ======
CITY NATIONAL CORPORATION
CAPITAL AND CREDIT RATING DATA
(unaudited)
2005
---------------------------------
Second First Year To
Quarter Quarter Date
----------- ----------- -------
Per Common Share:
- ------------------------------------
Shares Outstanding (in thousands):
Average - Basic 49,090 49,162 49,101
Average - Diluted 51,043 51,030 51,037
Period-End 49,145 48,958
Book Value $28.51 $26.97
Price:
High $72.90 $71.35 $72.90
Low 66.84 67.49 66.84
Period-end 71.71 69.82
Capital Ratios (Dollars in millions):
- ------------------------------------
Risk-based capital
Risk-adjusted assets $9,663 $9,410
Tier I capital $1,151 $1,100
Percentage of risk adjusted assets 11.91 % 11.69 %
Total capital $1,493 $1,437
Percentage of risk adjusted assets 15.45 % 15.27 %
Tier I leverage ratio 8.39 % 8.12 %
Period-end shareholders' equity
to total period-end assets 9.68 % 9.49 %
Period-end tangible shareholders'
equity to total period-end tangible
assets 7.83 % 7.55 %
Average shareholders' equity
to total average assets 9.68 % 9.75 % 9.71%
Average tangible shareholders'
equity to total average tangible assets 7.77 % 7.80 % 7.78%
2004
---------------------------------------
Fourth Third Second First Full
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- -------
Per Common Share:
- ------------------------------
Shares Outstanding (in
thousands):
Average - Basic 49,195 49,076 48,796 48,732 48,950
Average - Diluted 51,385 51,182 50,925 50,679 51,074
Period-End 49,238 49,127 49,015 48,553
Book Value $27.39 $26.73 $25.05 $25.54
Price:
High $70.99 $68.65 $65.95 $63.55 $70.99
Low 64.34 61.87 57.36 57.36 57.36
Period-end 70.65 64.95 65.70 59.90
Capital Ratios (Dollars in millions):
- ------------------------------
Risk-based capital
Risk-adjusted assets $9,383 $9,129 $8,947 $8,777
Tier I capital $1,080 $1,036 $991 $935
Percentage of risk adjusted
assets 11.51 % 11.35 % 11.08 % 10.65 %
Total capital $1,418 $1,369 $1,321 $1,265
Percentage of risk adjusted
assets 15.11 % 14.99 % 14.77 % 14.41 %
Tier I leverage ratio 7.83 % 7.80 % 7.68 % 7.60 %
Period-end shareholders'
equity to total period-end
assets 9.48 % 9.39 % 9.10 % 9.37 %
Period-end tangible
shareholders' equity
to total period-end tangible
assets 7.56 % 7.43 % 7.05 % 7.24 %
Average shareholders' equity
to total average assets 9.42 % 9.31 % 9.30 % 9.69 % 9.42 %
Average tangible
shareholders' equity
to total average tangible
assets 7.48 % 7.28 % 7.20 % 7.46 % 7.36 %
Senior Debt Credit Ratings
- -------------------------------
For The Period Ended June Standard
30, 2005 &
Moody's Fitch Poor's DBRS
------- ----- -------- ------
City National Bank A2 A- A- A
City National Corporation A3 A- BBB+ A(low)
CONTACT: City National Corporation
Financial/Investors:
Christopher J. Carey, 310.888.6777
Chris.Carey@cnb.com
Media:
Cary Walker, 213.833.4715
Cary.Walker@cnb.com