Company Announces 12 Percent Dividend Increase
Average Loans Grow 12 Percent
LOS ANGELES, Jan. 23, 2007 (PRIME NEWSWIRE) -- City National Corporation (NYSE:CYN), the parent company of wholly owned City National Bank, today reported 2006 net income of $233.5 million, or $4.66 per share. In 2005, the company earned $4.60 per share on net income of $234.7 million.
Net income in the fourth quarter of 2006 amounted to $58.6 million, or $1.19 per share, compared with $61.8 million, or $1.21 per share, in the fourth quarter of 2005.
City National Corporation also announced that its Board of Directors has increased the company's annual common stock cash dividend to $1.84 per share, up 12 percent from the $1.64 previously paid. A dividend of $0.46 per share will be payable on February 21, 2007 to stockholders of record on February 7, 2007.
This is the 13th consecutive year in which City National Corporation has increased its dividend.
2006 FINANCIAL HIGHLIGHTS
-- Average loan balances rose 12 percent to $9.9 billion.
-- Average deposits totaled $11.9 billion, a 1 percent increase from 2005.
-- Noninterest income reached $242.6 million, up 15 percent from the
previous year due to the acquisition of Independence Investments as
well as increasing wealth management and international banking
services fee revenue.
-- Assets under direct management increased 45 percent to $27.9 billion.
-- Credit quality remained strong. The company required no provision
for credit losses, remaining adequately reserved at 1.5 percent of
total loans.
-- City National's return on average equity in 2006 was 15.99 percent,
compared with 16.89 percent in 2005. The company's return on average
assets in 2006 was 1.59 percent, compared with 1.66 percent for the
previous year.
"City National's 2006 performance was excellent in every respect, except growth in net income due primarily to the rise in deposit costs and a relatively moderate reduction in our strong net interest margin in this interest rate environment," said Russell Goldsmith, President and Chief Executive Officer of City National Corporation. "Loan growth was strong. Credit quality was outstanding. Noninterest income continued its robust year-over-year growth.
"City National also continued to make meaningful and appropriate investments for its long-term growth. Early in 2006, the company broadened its investment capabilities by acquiring Independence Investments and more recently announced plans to expand into Nevada with the acquisition of Business Bank of Nevada, which should close in the first quarter of 2007. Our talented organization continued to add new client relationships and successfully introduced new products, like City National E-Deposit, that reflect our focus and effectiveness as California's Premier Private and Business Bank. Recognizing City National's quality, strength and value, Bank Director magazine recently ranked the company fourth in a comprehensive performance comparison of America's top 150 banks."
For the 12 months
ended
December 31,
Dollars in millions, ------------------------ %
except per share 2006 2005 Change
---------------------------------- ------------------------ ---------
Earnings Per Share $ 4.66 $ 4.60 1
Net Income 233.5 234.7 (1)
Average Assets 14,715.5 14,161.3 4
Return on Average Assets 1.59% 1.66% (4)
Return on Average Equity 15.99 16.89 (5)
ASSETS
Total assets at December 31, 2006 were $14.9 billion, up 2 percent from the previous year.
REVENUE
Revenue grew to $848 million, up 3 percent from 2005, due primarily to the strong growth of noninterest income and loans.
NET INTEREST INCOME
Fully taxable-equivalent net interest income totaled $619 million in 2006, down 1 percent from 2005, due primarily to higher deposit costs.
Average loan balances grew 12 percent in 2006, led by a 17 percent increase in commercial loans and an 11 percent rise in residential mortgage loans. Commercial real estate mortgages increased 8 percent, while construction loans were virtually unchanged.
City National's prime lending rate was 8.25 percent on December 31, 2006, unchanged from September 30, 2006 but up 100 basis points from the end of 2005.
Dollars in millions 2006 2005 Change ---------------------------- --------------------------- ------- Average Loans $ 9,948.3 $ 8,875.4 12 Average Total Securities 3,489.1 4,029.4 (13) Average Earning Assets 13,522.7 13,001.7 4 Average Deposits 11,869.9 11,778.8 1 Average Core Deposits 10,148.6 10,765.3 (6) Fully Taxable-Equivalent Net Interest Income 618.8 622.5 (1) Net Interest Margin 4.58% 4.79% (4)
Average deposits for the year totaled $11.9 billion, a 1 percent increase from the previous year. Average noninterest-bearing deposits fell 4 percent from 2005 but increased 1 percent from the third quarter of 2006. Title and escrow balances averaged $1.26 billion for the year, down from $1.61 billion in 2005 but slightly higher than the third-quarter 2006 total of $1.25 billion. Average interest-bearing deposits increased 6 percent from 2005 and 1 percent from the third quarter of 2006.
The company's net interest margin averaged 4.58 percent in 2006, compared with 4.79 percent in the previous year. This decline was attributable primarily to higher deposit costs.
Average securities for 2006 totaled $3.5 billion, a 13 percent decline from the previous year. At December 31, 2006 the average duration of total available-for-sale securities was 3.3 years. It was 3.0 years at the end of 2005.
NONINTEREST INCOME
Noninterest income reached $242.6 million in 2006, up 15 percent from the previous year, or 7 percent excluding the impact of the second-quarter acquisition of Independence Investments LLC. The increase in 2006 was due largely to the continued growth of City National's wealth management business and international banking services fees.
At year-end 2006, noninterest income accounted for 29 percent of City National's total revenue, up from 25 percent at December 31, 2005.
Wealth Management
Trust and investment fees grew 33 percent in 2006, while fees for brokerage and mutual fund services increased 20 percent. Assets under management increased 45 percent from 2005, due to the Independence acquisition, 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 the
12 months ended
December 31,
------------------------ %
Dollars in millions 2006 2005 Change
-------------------------------- ----------- ---------- ------
Trust and Investment Fee Revenue $107.5 $ 80.8 33
Brokerage and Mutual Fund Fees 50.4 41.9 20
Assets Under Management (1) 27,859.7 19,256.2 45
Total Assets Under Management
or Administration (1) 48,684.2 39,589.0 23
(1) Excludes $9.1 billion and $7.2 billion of assets under management
for the investment affiliates in which City National held
minority ownership interests as of December 31, 2006 and December
31, 2005, respectively.
Other Noninterest Income
International banking services fees grew 13 percent in 2006, reflecting increased demand for both foreign exchange services and letters of credit. Service charges for deposit accounts fell 7 percent from 2005, due largely to a higher earnings credit for cash management clients who maintain deposit balances to pay for services.
NONINTEREST EXPENSE
Expenses grew 9 percent in 2006. However, they increased only 4 percent excluding the impact of the acquisition of Independence Investments and the new expensing required for stock options in 2006. Implementation of the required accounting change for employee stock options increased City National's noninterest expense by $6.9 million. After tax, it amounted to $4.3 million, or 8 cents per share.
City National's 2006 efficiency ratio was 55.98, compared with 53.30 in 2005. This year-over-year increase was due primarily to lower revenue growth brought about by a shift in deposits as well as stock option expensing and the acquisition of Independence Investments.
CREDIT QUALITY
Asset quality remained strong. Nonaccrual loans at December 31, 2006 totaled $20.9 million, or 20 basis points of total loans. Net loan recoveries in 2006 amounted to $2.8 million.
The company made no provision for credit losses in 2006. This was attributable to management's quantitative and qualitative assessment of asset quality, credit risk, loan growth and economic conditions. At December 31, 2006 the allowance for loan losses was $155.3 million, or 1.5 percent of total loans. The company maintains an additional reserve of $16.4 million for unfunded credit commitments.
INCOME TAXES
City National's effective tax rate was 36.4 percent for the year. That compares with a 37.7 percent rate in 2005. The decline in the effective tax rate was due primarily to a tax-free gain on an investment in liquidation.
FOURTH-QUARTER 2006 HIGHLIGHTS
-- Fourth-quarter revenue grew to $215 million, up 1 percent from both
the fourth quarter of 2005 and the third quarter of 2006.
-- Fully tax-equivalent net interest income amounted to $154 million,
down 5 percent from the fourth quarter of 2005 but up 1 percent from
the third quarter of 2006. The company's net interest margin averaged
4.51 percent in the fourth quarter of 2006, compared with 4.53 percent
in the previous quarter.
-- Average loans reached an all-time high of $10.2 billion, up 11
percent from the same period of 2005 and 2 percent from the third
quarter of 2006.
-- Average deposits amounted to $12.1 billion in the fourth quarter,
$51 million higher than they were in the same period of 2005.
Average balances increased 1 percent from the third quarter of 2006.
-- Credit quality remained strong. Nonaccrual loans totaled $20.9
million, or 20 basis points of total loans. Net charge-offs amounted
to only $2.9 million, or 11 basis points of total loans.
-- Noninterest income totaled $64 million, up 20 percent from the same
period in 2005 but down 1 percent from the third quarter of 2006.
Excluding the impact of the Independence acquisition and several
unusual items, noninterest income increased 10 percent from the
fourth quarter of 2005. In the fourth quarter of 2006, City
National realized a tax-free gain of $6.9 million ($11.1 million on
a pre-tax equivalent basis) on the recovery of an investment in
liquidation, which was partly offset by a loss on the sale of an
asset management affiliate. The company also realized investment
securities losses of $4.1 million.
-- Noninterest expense increased 11 percent from the fourth quarter of
2005 and 5 percent from the third quarter of 2006. Fourth-quarter
2006 results included an additional $2.5 million of miscellaneous
expenses. Excluding the impact of the Independence acquisition and
stock option expense, noninterest expense increased 5 percent from
the fourth quarter of 2005.
-- The fourth-quarter effective tax rate was 33.5 percent. Excluding
the tax-free gain on an investment in liquidation, the company's tax
rate was 36 percent, compared with 36.5 percent in the third quarter.
2007 OUTLOOK
Management currently anticipates earnings per share growth of between 3 percent and 5 percent in 2007. Nearly all of City National's key operating metrics -- loans, credit quality, noninterest income and noninterest expense management -- are expected to reflect a reasonably strong performance this year, with loans growing at a slightly lower rate than they did in 2006. Earnings per share growth will be moderated by the full-year averaging effect of lower deposit levels and higher deposit costs realized in 2006, as well as the likelihood of a modest credit-loss provision in 2007.
City National's pending acquisition of Business Bank of Nevada is scheduled to close during the first quarter of this year, and the acquisition is expected to be neutral to earnings per share in 2007.
CAPITAL LEVELS
City National remains well-capitalized by regulatory standards. Total risk-based capital and Tier 1 risk-based capital ratios at December 31, 2006 were 13.53 percent and 11.01 percent, respectively, compared with the minimum regulatory standards of 10 percent and 6 percent for "well-capitalized" institutions. City National's Tier 1 leverage ratio at December 31, 2006 was 8.74 percent, well above the regulatory minimum ratio of 5 percent.
At September 30, 2006 the total risk-based capital, Tier 1 risk-based capital and Tier 1 leverage ratios were 14.21 percent, 11.18 percent and 8.66 percent, respectively.
The period-end ratio of shareholders' equity to total assets at December 31, 2006 was 9.96 percent, compared with 10.00 percent at the same time in 2005 and 9.98 percent at September 30, 2006.
In the fourth quarter of 2006, City National implemented SEC Staff Accounting Bulletin No. 108. This resulted in a $10.2 million reduction to shareholders' equity to correct cumulative immaterial differences as of January 1, 2006 related to prior years.
STOCK REPURCHASE
In 2006, City National repurchased 2.3 million shares at an average cost of $69.01. The company is currently authorized to buy back an additional 1.1 million shares.
CONFERENCE CALL
City National Corporation will host a conference call this afternoon to discuss 2006 financial results. The call will begin at 2:00 p.m. PST. Analysts and investors may dial in and participate in the question/answer session. To access the call, please dial 800.706.7741 and enter pass code 35592070. 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. It will be archived and available there for 12 months.
ABOUT CITY NATIONAL
City National Corporation's wholly owned subsidiary, City National Bank, provides banking, investment and trust services through 54 offices, including 12 full-service regional centers, in Southern California, the San Francisco Bay Area and New York City. For more information about City National, visit the company’s website at www.cnb.com.
THE MERGER OF BUSINESS BANK CORP. INTO CITY NATIONAL CORP.
On November 1, 2006 City National Corporation announced plans to acquire Business Bank Corporation, parent company of the Business Bank of Nevada. City National Corporation and Business Bank Corporation have filed a proxy statement/prospectus and other relevant documents concerning the merger with the United States Securities and Exchange Commission (SEC). WE URGE INVESTORS TO READ THIS PROXY STATEMENT/PROSPECTUS AND ALL OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
Investors can obtain City National Corporation documents free of charge at the SEC's web site (www.sec.gov). In addition, documents filed with the SEC by City National Corporation are available free of charge from the company's Investor Relations Department at (213) 673-7615. Business Bank Corporation stockholder documents are available free of charge from Business Bank Corporation's Investor Relations Department at (702) 952-4415.
The directors, executive officers, and certain other members of management and employees of Business Bank Corporation are participants in the solicitation of proxies in favor of the merger from the stockholders of Business Bank Corporation. Information about the directors and executive officers of Business Bank Corporation is set forth in the proxy statement for its 2006 annual meeting of stockholders, which is available on Business Bank Corporation's website at www.bbnv.com, under the heading "Investor Relations." Additional information regarding the interests of such participants is included in the proxy statement/prospectus and the other relevant documents filed with the SEC.
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 business losses, 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 de novo branching efforts, (7) the impact of changes in regulatory, judicial or legislative tax treatment of business transactions, (8) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies, and (9) general business and economic conditions, including movements in interest rates, the slope of the yield curve and changes in business formation and growth, commercial real estate development and real estate prices.
Forward-looking statements speak only as of the date they are made, and the company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the statements are made, or to update earnings guidance, including the factors that influence earnings.
For a more complete discussion of these risks and uncertainties, see the company's Annual Report on Form 10-K for the year ended December 31, 2005 and particularly Part I, Item 1A, titled "Risk Factors."
CITY NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
(unaudited)
For The Period Ended December 31,
----------------------------------------------------
Three Months Twelve Months
------------------------- ------------------------
% %
2006 2005 Change 2006 2005 Change
------------------------- ------------------------
Per Common Share
Net Income
Basic $ 1.23 $ 1.25 (2) $ 4.82 $ 4.77 1
Diluted 1.19 1.21 (2) 4.66 4.60 1
Dividends 0.41 0.36 14 1.64 1.44 14
Book value 31.18 29.55 6
Results of
Operations:
(In millions)
Interest income $ 214 $ 191 12 $ 826 $ 716 15
Interest expense 63 32 97 220 106 108
------------------------- ------------------------
Net interest
income 151 159 (5) 606 610 (1)
Net interest
income (Fully
tax-equivalent) 154 162 (5) 619 623 (1)
Total revenue 215 213 1 848 821 3
Provision for
credit losses -- -- NM (1) -- NM
Net income 59 62 (5) 234 235 (1)
Financial Ratios:
Performance Ratios:
Return on average
assets 1.58% 1.69% 1.59% 1.66%
Return on average
shareholders'
equity 15.77 17.15 15.99 16.89
Period-end share-
holders' equity
to period-end
assets 9.96 10.00
Net interest
margin 4.51 4.85 4.58 4.79
Efficiency
ratio 58.21 52.86 55.98 53.30
Capital Adequacy
Ratios
(Period end):
Tier 1 leverage 8.74 8.82
Tier 1 risk-
based capital 11.01 12.33
Total risk-
based capital 13.53 15.53
Asset Quality
Ratios:
Allowance for
loan and lease
losses to:
Total loans 1.50% 1.66%
Nonaccrual
loans 743.88 1,069.33
Nonperforming
assets to:
Total loans and
nonperforming
assets 0.20 0.16
Total assets 0.14 0.10
Net (charge-offs)/
recoveries to
Average total
loans
(annualized) (0.11)% 0.09% 0.03% 0.10%
Average Balances:
(In millions)
Loans $10,245 $ 9,210 11 $ 9,948 $ 8,875 12
Interest-earning
assets 13,538 13,281 2 13,523 13,002 4
Assets 14,712 14,468 2 14,716 14,161 4
Core deposits 10,081 10,864 (7) 10,149 10,765 (6)
Deposits 12,051 12,000 -- 11,870 11,779 1
Interest-bearing
liabilities 7,310 6,636 10 7,305 6,592 11
Shareholders'
equity 1,473 1,429 3 1,461 1,390 5
------------------------- ------------------------
Period-End
Balances:
(In millions)
Loans $10,386 $ 9,266 12
Assets 14,874 14,582 2
Core deposits 10,326 11,081 (7)
Deposits 12,173 12,138 --
Shareholders'
equity 1,481 1,458 2
Wealth Management:
(In millions)(a)
Assets under
management $27,860 $19,256 45
Assets under
management or
administration 48,684 39,589 23
(a) Excludes $9.1 and $7.2 billion of assets under management for
the Convergent Capital Management asset managers in which City
National holds minority ownership interests as of December 31,
2006 and December 31, 2005, respectively.
CITY NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(Dollars in thousands except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------- ------------------------
% %
2006 2005 Change 2006 2005 Change
-----------------------------------------------------
Interest
income $213,551 $191,333 12 $826,294 $716,276 15
Interest
expense 62,788 31,886 97 220,405 106,125 108
-------- -------- -------- --------
Net Interest
Income 150,763 159,447 (5) 605,889 610,151 (1)
Provision for
Credit Losses -- -- NM (610) -- NM
Noninterest Income
Trust and invest-
ment fees 30,777 20,362 51 107,462 80,818 33
Brokerage and
mutual fund
fees 13,309 11,174 19 50,358 41,927 20
Cash management
and deposit
transaction fees 7,909 7,842 1 31,631 34,096 (7)
International
services 6,486 6,256 4 26,174 23,159 13
Bank-owned life
insurance 700 670 4 2,996 3,203 (6)
Other service
charges and fees 6,725 7,185 (6) 25,693 24,908 3
Gain (loss) on
sale of assets 2,482 81 2,964 2,750 1,067 158
Gain (loss) on
sale of
securities (4,130) (53) 7,692 (4,500) 1,287 (450)
-------- -------- -------- --------
Total non-
interest
income 64,258 53,517 20 242,564 210,465 15
Noninterest Expense
Salaries and
employee
benefits 74,499 66,460 12 295,151 263,398 12
Net occupancy of
premises 11,562 10,074 15 40,241 35,083 15
Legal and pro-
fessional fees 10,025 11,419 (12) 37,731 41,596 (9)
Information
services 5,138 4,299 20 19,097 16,996 12
Depreciation 4,908 4,778 3 19,062 18,434 3
Amortization of
intangibles 1,456 1,865 (22) 5,284 6,595 (20)
Marketing and
advertising 5,153 4,472 15 18,654 16,171 15
Office services 2,888 2,942 (2) 10,751 10,697 1
Equipment 1,043 582 79 2,812 2,355 19
Minority interest
expense 1,709 571 199 5,958 5,675 5
Other 8,632 6,690 29 27,436 27,060 1
-------- -------- -------- --------
Total non-
interest
expense 127,013 114,152 11 482,177 444,060 9
-------- -------- -------- --------
Income Before
Taxes 88,008 98,812 (11) 366,886 376,556 (3)
Applicable Income
Taxes 29,452 37,055 (21) 133,363 141,821 (6)
-------- -------- -------- --------
Net Income $ 58,556 $ 61,757 (5) $233,523 $234,735 (1)
======== ======== ======== ========
Other Data:
Earnings per
common share
- basic $ 1.23 $ 1.25 (2) $ 4.82 $ 4.77 1
Earnings per
common share
- diluted $ 1.19 $ 1.21 (2) $ 4.66 $ 4.60 1
Dividends paid
per common
share $ 0.41 $ 0.36 14 $ 1.64 $ 1.44 14
Dividend payout
ratio 33.55% 28.89% 16 34.31% 30.35% 13
Return on average
assets 1.58% 1.69% (7) 1.59% 1.66% (4)
Return on average
shareholders'
equity 15.77% 17.15% (8) 15.99% 16.89% (5)
Net interest
margin (Fully
taxable-
equivalent) 4.51% 4.85% (7) 4.58% 4.79% (4)
Full-time
equivalent
employees 2,670 2,539 5
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
(Dollars in thousands except per share data)
2006
----------------------------------------------------
Fourth Third Second First Year to
Quarter Quarter Quarter Quarter Date
-------- -------- -------- -------- --------
Interest Income $213,551 $208,347 $206,204 $198,192 $826,294
Interest Expense 62,788 59,625 52,206 45,786 220,405
-------- -------- -------- -------- --------
Net Interest
Income 150,763 148,722 153,998 152,406 605,889
Provision for
Credit Losses -- -- (610) -- (610)
Noninterest Income
Trust and invest-
ment fees 30,777 30,002 24,909 21,774 107,462
Brokerage and
mutual fund fees 13,309 13,096 12,269 11,684 50,358
Cash management
and deposit
transaction fees 7,909 7,967 7,691 8,064 31,631
International
services 6,486 6,829 6,870 5,989 26,174
Bank-owned life
insurance 700 685 677 934 2,996
Other service
charges and fees 6,725 6,303 6,888 5,777 25,693
Gain on sale
of assets 2,482 268 -- -- 2,750
Gain (loss) on
sale of
securities (4,130) (362) (716) 708 (4,500)
-------- -------- -------- -------- --------
Total non-
interest income 64,258 64,788 58,588 54,930 242,564
Noninterest Expense
Salaries and
employee
benefits 74,499 75,318 73,718 71,616 295,151
Net occupancy of
premises 11,562 10,207 9,460 9,012 40,241
Legal and pro-
fessional fees 10,025 9,120 9,169 9,417 37,731
Information
services 5,138 4,932 4,571 4,456 19,097
Depreciation 4,908 4,832 4,662 4,660 19,062
Amortization of
intangibles 1,456 (37) 1,974 1,891 5,284
Marketing and
advertising 5,153 4,495 4,990 4,016 18,654
Office services 2,888 2,623 2,549 2,691 10,751
Equipment 1,043 514 623 632 2,812
Minority interest
expense 1,709 1,808 1,213 1,228 5,958
Other 8,632 6,857 6,243 5,704 27,436
-------- -------- -------- -------- --------
Total non-
interest
expense 127,013 120,669 119,172 115,323 482,177
-------- -------- -------- -------- --------
Income Before
Taxes 88,008 92,841 94,024 92,013 366,886
Applicable Income
Taxes 29,452 33,847 35,283 34,781 133,363
-------- -------- -------- -------- --------
Net Income $ 58,556 $ 58,994 $ 58,741 $ 57,232 $233,523
======== ======== ======== ======== ========
Other Data:
Earnings per
common share
- basic $ 1.23 $ 1.23 $ 1.20 $ 1.16 $ 4.82
Earnings per
common share
- diluted $ 1.19 $ 1.20 $ 1.16 $ 1.12 $ 4.66
Dividends paid
per common
share $ 0.41 $ 0.41 $ 0.41 $ 0.41 $ 1.64
Dividend payout
ratio 33.55% 33.64% 34.43% 35.65% 34.31%
Return on
average assets 1.58% 1.61% 1.59% 1.57% 1.59%
Return on
average share-
holders' equity 15.77% 16.30% 16.20% 15.68% 15.99%
Net interest
margin (Fully
taxable-
equivalent) 4.51% 4.53% 4.65% 4.62% 4.58%
Full-time
equivalent
employees 2,670 2,672 2,648 2,570
CITY NATIONAL CORPORATION
CONSOLIDATED QUARTERLY STATEMENTS OF INCOME
(unaudited)
(Dollars in thousands except per share data)
2005
-------------------------------------------------------
Fourth Third Second First Full
Quarter Quarter Quarter Quarter Year
--------- --------- --------- --------- ---------
Interest Income $ 191,333 $ 184,145 $ 173,692 $ 167,106 $ 716,276
Interest Expense 31,886 28,396 24,619 21,224 106,125
--------- --------- --------- --------- ---------
Net Interest
Income 159,447 155,749 149,073 145,882 610,151
Provision for
Credit Losses -- -- -- -- --
Noninterest
Income
Trust and investment
fees 20,362 20,494 20,119 19,844 80,818
Brokerage and
mutual fund
fees 11,174 10,946 9,931 9,877 41,927
Cash management
and deposit
transaction
fees 7,842 8,370 8,874 9,010 34,096
International
services 6,256 6,107 5,908 4,888 23,159
Bank-owned life
insurance 670 1,017 652 864 3,203
Other service
charges and
fees 7,185 6,138 5,442 6,141 24,908
Gain on sale
of assets 81 801 162 23 1,067
Gain (loss) on
sale of
securities (53) 241 844 255 1,287
--------- --------- --------- --------- ---------
Total noninterest
income 53,517 54,114 51,932 50,902 210,465
Noninterest Expense
Salaries and
employee
benefits 66,460 66,467 63,839 66,632 263,398
Net occupancy
of premises 10,074 8,666 8,727 7,616 35,083
Legal and
professional
fees 11,419 10,672 10,791 8,714 41,596
Information
services 4,299 4,471 4,015 4,211 16,996
Depreciation 4,778 4,551 4,535 4,570 18,434
Amortization of
intangibles 1,865 1,852 1,441 1,441 6,595
Marketing and
advertising 4,472 4,182 3,943 3,574 16,171
Office services 2,942 2,578 2,688 2,489 10,697
Equipment 582 578 646 549 2,355
Minority interest
expense 571 1,761 1,532 1,811 5,675
Other 6,690 6,862 6,796 6,708 27,060
--------- --------- --------- --------- ---------
Total
noninterest
expense 114,152 112,640 108,953 108,315 444,060
--------- --------- --------- --------- ---------
Income Before
Taxes 98,812 97,223 92,052 88,469 376,556
Applicable Income
Taxes 37,055 37,413 34,345 33,008 141,821
--------- --------- --------- --------- ---------
Net Income $ 61,757 $ 59,810 $ 57,707 $ 55,461 $ 234,735
========= ========= ========= ========= =========
Other Data:
Earnings per
common share -
basic $ 1.25 $ 1.22 $ 1.18 $ 1.13 $ 4.77
Earnings per
common share -
diluted $ 1.21 $ 1.17 $ 1.13 $ 1.09 $ 4.60
Dividends paid
per common
share $ 0.36 $ 0.36 $ 0.36 $ 0.36 $ 1.44
Dividend payout
ratio 28.89% 29.82% 30.86% 32.02% 30.35%
Return on average
assets 1.69% 1.66% 1.65% 1.62% 1.66%
Return on average
shareholders'
equity 17.15% 16.74% 17.03% 16.63% 16.89%
Net interest margin
(Fully taxable-
equivalent) 4.85% 4.80% 4.72% 4.75% 4.79%
Full-time equivalent
employees 2,539 2,516 2,477 2,445
CITY NATIONAL CORPORATION
CONSOLIDATED PERIOD END BALANCE SHEET
(unaudited)
2006
--------------------------------------------------
Fourth Third Second First
(In thousands) Quarter Quarter Quarter Quarter
----------------- ----------- ----------- ----------- -----------
Assets
Cash and due
from banks $ 423,114 $ 457,396 $ 467,076 $ 457,156
Federal funds
sold 127,000 3,300 1,900 --
Due from banks -
interest-bearing 60,940 65,323 50,416 48,890
Securities-
available-for-
sale 2,954,372 3,175,230 3,211,590 3,850,173
Trading account
securities 147,907 116,870 123,418 57,353
Loans:
Commercial 4,084,377 3,782,781 3,738,361 3,698,614
Commercial real
estate
mortgages 2,064,478 2,066,373 2,032,698 1,891,517
Residential
mortgages 2,869,775 2,830,761 2,769,340 2,700,966
Real estate
construction 761,593 757,742 723,570 748,696
Equity lines
of credit 404,657 384,830 364,312 339,348
Installment 201,125 197,871 193,474 188,262
----------- ----------- ----------- -----------
Total loans 10,386,005 10,020,358 9,821,755 9,567,403
Allowance for
loan and lease
losses (155,342) (159,063) (157,580) (156,482)
----------- ----------- ----------- -----------
Net loans 10,230,663 9,861,295 9,664,175 9,410,921
Premises and
equipment, net 94,745 88,582 84,802 84,884
Goodwill and
other
intangibles 287,561 298,471 298,004 283,642
Other assets 548,155 550,291 575,686 546,365
----------- ----------- ----------- -----------
Total assets $14,874,457 $14,616,758 $14,477,067 $14,739,384
=========== =========== =========== ===========
Liabilities:
Deposits:
Noninterest-
bearing $ 6,002,068 $ 5,639,811 $ 5,880,630 $ 5,945,485
Interest-
bearing 6,170,748 6,252,206 6,098,200 5,963,044
----------- ----------- ----------- -----------
Total deposits 12,172,816 11,892,017 11,978,830 11,908,529
Federal funds
purchased and
securities sold
under repurchase
agreements 422,903 506,962 234,995 526,920
Other short-term
borrowed funds 97,525 72,426 143,724 151,522
Subordinated debt 269,848 270,522 266,675 269,785
Other long-term
debt 217,569 217,323 209,864 213,819
Minority interest 28,425 28,578 27,985 25,225
Other liabilities 184,380 170,710 206,929 164,020
----------- ----------- ----------- -----------
Total
liabilities 13,393,466 13,158,538 13,069,002 13,259,820
Shareholders' Equity
Common stock 50,719 50,729 50,735 50,693
Additional
paid-in capital 402,324 404,163 402,476 399,976
Retained earnings 1,264,697 1,235,959 1,196,812 1,158,290
Accumulated other
comprehensive
loss (41,386) (46,400) (86,931) (73,250)
Treasury shares (195,363) (186,231) (155,027) (56,145)
----------- ----------- ----------- -----------
Total
shareholders'
equity 1,480,991 1,458,220 1,408,065 1,479,564
----------- ----------- ----------- -----------
Total
liabilities
and
shareholders'
equity $14,874,457 $14,616,758 $14,477,067 $14,739,384
=========== =========== =========== ===========
CITY NATIONAL CORPORATION
CONSOLIDATED PERIOD END BALANCE SHEET
(unaudited)
2005
--------------------------------------------------
Fourth Third Second First
(In thousands) Quarter Quarter Quarter Quarter
----------------- ----------- ----------- ----------- -----------
Assets
Cash and due
from banks $ 365,217 $ 438,786 $ 406,709 $ 386,999
Federal funds
sold 157,000 185,000 400,000 190,000
Due from banks -
interest-bearing 40,803 39,485 34,676 36,982
Securities-
available-for-
sale 3,952,501 3,983,874 4,010,860 3,972,247
Trading account
securities 59,344 42,634 22,337 37,490
Loans:
Commercial 3,505,576 3,367,607 3,311,059 3,082,663
Commercial real
estate
mortgages 1,860,262 1,841,111 1,826,379 1,848,512
Residential
mortgages 2,644,030 2,571,537 2,485,177 2,405,732
Real estate
construction 721,890 711,755 724,895 759,090
Equity lines of
credit 333,548 317,703 310,101 274,735
Installment 200,296 195,168 212,064 201,821
----------- ----------- ----------- -----------
Total loans 9,265,602 9,004,881 8,869,675 8,572,553
Allowance for
loan and
lease losses (153,983) (152,920) (147,930) (147,607)
----------- ----------- ----------- -----------
Net loans 9,111,619 8,851,961 8,721,745 8,424,946
Premises and
equipment, net 82,868 76,754 73,169 68,354
Goodwill and
other
intangibles 284,124 285,553 289,675 291,116
Other assets 528,384 525,397 516,427 509,904
----------- ----------- ----------- -----------
Total assets $14,581,860 $14,429,444 $14,475,598 $13,918,038
=========== =========== =========== ===========
Liabilities:
Deposits:
Noninterest-
bearing $ 6,562,038 $ 6,345,907 $ 6,468,339 $ 6,069,061
Interest-
bearing 5,576,434 5,769,807 5,683,869 5,693,563
----------- ----------- ----------- -----------
Total deposits 12,138,472 12,115,714 12,152,208 11,762,624
Federal funds
purchased and
securities sold
under repurchase
agreements 190,190 191,036 204,052 155,645
Other short-term
borrowed funds 100,000 26,197 27,678 125
Subordinated debt 275,682 278,076 285,771 280,068
Other long-term
debt 219,445 221,168 233,290 224,829
Minority interest 24,351 24,856 25,400 25,525
Other liabilities 175,712 155,220 146,311 149,039
----------- ----------- ----------- -----------
Total
liabilities 13,123,852 13,012,267 13,074,710 12,597,855
Shareholders'
Equity
Common stock 50,601 50,601 50,640 50,712
Additional
paid-in capital 396,659 398,289 398,981 399,612
Retained earnings 1,121,474 1,077,561 1,035,589 995,688
Accumulated other
comprehensive
loss (51,551) (36,879) (12,948) (43,288)
Treasury shares (59,175) (72,395) (71,374) (82,541)
----------- ----------- ----------- -----------
Total
shareholders'
equity 1,458,008 1,417,177 1,400,888 1,320,183
----------- ----------- ----------- -----------
Total
liabilities
and
shareholders'
equity $14,581,860 $14,429,444 $14,475,598 $13,918,038
=========== =========== =========== ===========
CITY NATIONAL CORPORATION
CREDIT LOSS EXPERIENCE
(unaudited)
(Dollars in thousands)
2006
----------------------------------------------------
Fourth Third Second First Year To
Quarter Quarter Quarter Quarter Date
-------- -------- -------- -------- --------
Allowance for Loan
and Lease Losses
Balance at
beginning of
period $159,063 $157,580 $156,482 $153,983 $153,983
Net (charge-offs)/
recoveries:
Commercial (2,665) 1,912 1,122 1,792 2,161
Commercial real
estate mortgages 356 -- 11 844 1,211
Residential
mortgages -- -- -- -- --
Real estate
construction (666) 18 17 16 (615)
Equity lines of
credit -- (11) -- -- (11)
Installment 26 10 11 4 51
-------- -------- -------- -------- --------
Total net
(charge-offs)/
recoveries (2,949) 1,929 1,161 2,656 2,797
Provision for
credit losses/
transfers (772) (446) (63) (157) (1,438)
-------- -------- -------- -------- --------
Balance at end
of period $155,342 $159,063 $157,580 $156,482 $155,342
======== ======== ======== ======== ========
Net (Charge-Offs)/
Recoveries to
Average Total
Loans: (annualized)
Commercial (0.27)% 0.20% 0.11% 0.19% 0.06%
Commercial real
estate mortgages 0.07% 0.00% 0.00% 0.18% 0.06%
Residential
mortgage 0.00% 0.00% 0.00% 0.00% 0.00%
Real estate
construction (0.35)% 0.01% 0.01% 0.01% (0.08)%
Equity lines of
credit 0.00% (0.01)% 0.00% 0.00% (0.00)%
Installment 0.05% 0.02% 0.02% 0.01% 0.03%
Total loans (0.11)% 0.08% 0.05% 0.11% 0.03%
Reserve for Off-
Balance Sheet
Credit Commitments
Balance at
beginning of
period $ 15,652 $ 15,206 $ 15,753 $ 15,596 $ 15,596
Provision for
credit losses/
transfers 772 446 (547) 157 828
-------- -------- -------- -------- --------
Balance at end
of period $ 16,424 $ 15,652 $ 15,206 $ 15,753 $ 16,424
======== ======== ======== ======== ========
2005
---------------------------------------------------
Fourth Third Second First Full
Quarter Quarter Quarter Quarter Year
-------- ------- ------- ------- -------
Allowance for Loan
and Lease Losses
Balance at
beginning of
period $152,920 $147,930 $147,607 $148,568 $148,568
Net (charge-offs)/
recoveries:
Commercial 2,085 4,213 1,067 2,117 9,482
Commercial real
estate mortgages 7 324 7 (1,893) (1,555)
Residential
mortgages -- -- 1 2 3
Real estate
construction 15 1,192 71 23 1,301
Equity lines of
credit -- -- 39 1 40
Installment (11) 13 5 (18) (11)
-------- -------- -------- -------- --------
Total net
(charge-offs)/
recoveries 2,096 5,742 1,190 232 9,260
Provision for
credit losses/
transfers (1,033) (752) (867) (1,193) (3,845)
-------- -------- -------- -------- --------
Balance at end
of period $153,983 $152,920 $147,930 $147,607 $153,983
======== ======== ======== ======== ========
Net (Charge-Offs)/
Recoveries to
Average Total
Loans: (annualized)
Commercial 0.24% 0.50% 0.13% 0.28% 0.29%
Commercial real
estate mortgages 0.00% 0.07% 0.00% (0.41)% (0.09)%
Residential
mortgage 0.00% 0.00% 0.00% 0.00% 0.00%
Real estate
construction 0.01% 0.65% 0.04% 0.01% 0.17%
Equity lines of
credit 0.00% 0.00% 0.05% 0.00% 0.01%
Installment (0.02)% 0.02% 0.01% (0.03)% (0.01)%
Total loans 0.09% 0.25% 0.05% 0.01% 0.10%
Reserve for Off-
Balance Sheet
Credit Commitments
Balance at
beginning of
period $ 14,563 $ 13,811 $ 12,944 $ 11,751 $ 11,751
Provision for
credit losses/
transfers 1,033 752 867 1,193 3,845
-------- -------- -------- -------- --------
Balance at end
of period $ 15,596 $ 14,563 $ 13,811 $ 12,944 $ 15,596
======== ======== ======== ======== ========
CITY NATIONAL CORPORATION
NONPERFORMING ASSETS
(unaudited)
(Dollars in thousands)
2006
------------------------------------------
Fourth Third Second First
Quarter Quarter Quarter Quarter
------- ------- -------- --------
Nonaccrual Loans
Commercial $ 2,977 $10,416 $ 6,691 $ 5,642
Commercial real estate
mortgages 4,849 8,094 3,644 923
Residential mortgages -- -- -- --
Real estate construction 12,678 -- 4,617 7,492
Equity lines of credit -- -- -- --
Installment 379 269 49 498
------- ------- -------- --------
Total nonaccrual loans 20,883 18,779 15,001 14,555
Other Nonperforming Assets -- -- -- --
------- ------- -------- --------
Total nonperforming
assets $20,883 $18,779 $ 15,001 $ 14,555
======= ======= ======== ========
Loans 90 Days or More Past
Due on Accrual Status $ 337 $ 27 $ 18 $ --
Allowance for loan and lease
losses as a percentage of:
Nonaccrual loans 743.88% 847.03% 1,050.47% 1,075.11%
Total nonperforming
assets 743.88% 847.03% 1,050.47% 1,075.11%
Total loans 1.50% 1.59% 1.60% 1.64%
Nonaccrual loans as a
percentage of total loans 0.20% 0.19% 0.15% 0.15%
Nonperforming assets as
a percentage of:
Total loans and other
nonperforming assets 0.20% 0.19% 0.15% 0.15%
Total assets 0.14% 0.13% 0.10% 0.10%
2005
------------------------------------------
Fourth Third Second First
Quarter Quarter Quarter Quarter
------- ------- -------- --------
Nonaccrual Loans
Commercial $ 5,141 $14,917 $ 17,982 $ 25,117
Commercial real estate
mortgages 923 955 1,543 1,945
Residential mortgages 294 2,259 1,990 1,990
Real estate construction 7,650 -- -- --
Equity lines of credit 21 22 22 212
Installment 371 401 624 654
------- ------- -------- --------
Total nonaccrual loans 14,400 18,554 22,161 29,918
Other Nonperforming Assets -- -- -- --
------- ------- -------- --------
Total nonperforming
assets $14,400 $18,554 $ 22,161 $ 29,918
======= ======= ======== ========
Loans 90 Days or More Past
Due on Accrual Status $ -- $ -- $ 103 $ 807
Allowance for loan and
lease losses as a
percentage of:
Nonaccrual loans 1,069.33% 824.19% 667.52% 493.37%
Total nonperforming
assets 1,069.33% 824.19% 667.52% 493.37%
Total loans 1.66% 1.70% 1.67% 1.72%
Nonaccrual loans as a
percentage of total loans 0.16% 0.21% 0.25% 0.35%
Nonperforming assets as a
percentage of:
Total loans and other non-
performing assets 0.16% 0.21% 0.25% 0.35%
Total assets 0.10% 0.13% 0.15% 0.21%
CITY NATIONAL CORPORATION
AVERAGE BALANCES AND RATES
(unaudited)
(Dollars in millions) 2006
---------------------------------------------
Fourth Quarter Third Quarter Second Quarter
------------- ------------- --------------
Average Average Average
Balance Rate Balance Rate Balance Rate
------- ---- ------- ---- ------- -----
Assets
Interest-earning
assets
Loans
Commercial $ 3,955 7.12% $ 3,827 7.05% $ 3,933 6.85%
Commercial real
estate mortgages 2,083 7.60 2,055 7.48 1,943 7.58
Residential
mortgages 2,852 5.40 2,801 5.38 2,737 5.31
Real estate con-
struction 763 9.24 761 9.37 743 9.14
Equity lines of
credit 397 7.86 375 7.91 352 7.63
Installment 195 7.56 194 7.58 195 7.72
------- ------- -------
Total loans 10,245 6.92 10,013 6.88 9,903 6.79
Due from banks -
interest-bearing 68 2.70 61 2.55 46 2.31
Federal funds sold
and securities
purchased under
resale agreements 54 5.28 3 7.13 51 4.77
Securities available-
for-sale 3,122 4.64 3,191 4.63 3,529 4.55
Trading account
securities 49 5.32 54 5.22 52 6.61
------- ------- -------
Total interest-
earning assets 13,538 6.35 13,322 6.30 13,581 6.19
Allowance for loan
and lease losses (159) (158) (157)
Cash and due from
banks 407 428 443
Other assets 926 953 915
------- ------- -------
Total assets $14,712 $14,545 $14,782
======= ======= =======
Liabilities and
Shareholders' Equity
Interest-bearing
deposits
Interest checking
accounts $ 762 0.43% $ 706 0.36% $ 757 0.27%
Money market accounts 3,252 2.75 3,224 2.57 3,352 2.13
Savings deposits 160 0.48 163 0.41 174 0.37
Time deposits - under
$100,000 197 4.11 184 3.87 176 3.00
Time deposits -
$100,000 and over 1,969 4.65 1,999 4.55 1,652 4.07
------- ------- -------
Total interest-
bearing deposits 6,340 3.04 6,276 2.93 6,111 2.40
Federal funds purchased
and securities sold
under repurchase
agreements 416 5.24 401 5.26 546 4.93
Other borrowings 554 6.19 558 5.63 652 5.51
------- ------- -------
Total interest-
bearing liabilities 7,310 3.41 7,235 3.27 7,309 2.86
Noninterest-bearing
deposits 5,711 5,629 5,820
Other liabilities 218 245 199
Shareholders' equity 1,473 1,436 1,454
------- ------- -------
Total liabilities
and shareholders'
equity $14,712 $14,545 $14,782
======= ======= =======
Net interest spread 2.94% 3.03% 3.33%
==== ==== =====
Net interest margin 4.51% 4.53% 4.65%
==== ==== =====
Average prime rate 8.25% 8.25% 7.90%
==== ==== =====
First Quarter Year to Date
-------------- --------------
Average Average
Balance Rate Balance Rate
-------- ---- ------- ----
Assets
Interest-earning assets
Loans
Commercial $ 3,813 6.62% $ 3,882 6.91%
Commercial real estate
mortgages 1,872 7.35 1,989 7.51
Residential mortgages 2,666 5.27 2,764 5.34
Real estate construction 743 8.58 753 9.09
Equity lines of credit 334 7.17 365 7.66
Installment 197 7.41 195 7.57
------- -------
Total loans 9,625 6.59 9,948 6.80
Due from banks - interest-
bearing 44 1.98 55 2.43
Federal funds sold and securities
purchased under resale agreements 13 4.32 31 5.01
Securities available-for-sale 3,926 4.47 3,439 4.57
Trading account securities 44 5.26 50 5.61
------- -------
Total interest-earning assets 13,652 5.98 13,523 6.21
Allowance for loan and lease losses (155) (157)
Cash and due from banks 439 429
Other assets 891 921
------- -------
Total assets $14,827 $14,716
======= =======
Liabilities and Shareholders' Equity
Interest-bearing deposits
Interest checking accounts $ 808 0.23% 758 0.32%
Money market accounts 3,388 1.81 3,304 2.31
Savings deposits 179 0.37 169 0.41
Time deposits - under $100,000 180 2.59 184 3.42
Time deposits - $100,000 and over 1,254 3.42 1,721 4.26
------- -------
Total interest-bearing deposits 5,809 1.92 6,136 2.59
Federal funds purchased and
securities sold under repurchase
agreements 809 4.48 542 4.89
Other borrowings 749 5.09 627 5.57
------- -------
Total interest-bearing liabilities 7,367 2.52 7,305 3.02
Noninterest-bearing deposits 5,779 5,734
Other liabilities 200 216
Shareholders' equity 1,481 1,461
------- -------
Total liabilities and
shareholders' equity $14,827 $14,716
======= =======
Net interest spread 3.46% 3.19%
==== ====
Net interest margin 4.62% 4.58%
==== ====
Average prime rate 7.43% 7.96%
==== ====
CITY NATIONAL CORPORATION
AVERAGE BALANCES AND RATES
(unaudited)
(Dollars in millions) 2005
---------------------------------------------
Fourth Quarter Third Quarter Second Quarter
------------- ------------- --------------
Average Average Average
Balance Rate Balance Rate Balance Rate
------- ---- ------- ---- ------- -----
Assets
Interest-earning assets
Loans
Commercial $ 3,517 6.48% $ 3,376 6.21% $ 3,215 6.01%
Commercial real estate
mortgages 1,849 7.28 1,829 7.47 1,856 7.01
Residential mortgages 2,603 5.23 2,519 5.25 2,444 5.19
Real estate con-
struction 727 8.36 725 7.98 728 7.37
Equity lines of credit 322 6.77 310 6.10 297 5.70
Installment 192 7.19 204 7.05 208 7.12
------- ------- -------
Total loans 9,210 6.45 8,963 6.34 8,748 6.13
Due from banks -
interest-bearing 44 1.63 41 1.45 37 1.24
Federal funds sold and
securities purchased
under resale agreements 23 4.23 65 3.70 80 2.76
Securities available-
for-sale 3,965 4.36 3,983 4.25 3,988 4.24
Trading account
securities 39 5.13 37 3.95 37 3.25
------- ------- -------
Total interest-
earning assets 13,281 5.80 13,089 5.67 12,890 5.50
Allowance for loan and
lease losses (153) (151) (148)
Cash and due from banks 451 441 443
Other assets 889 877 856
------- ------- -------
Total assets $14,468 $14,256 $14,041
======= ======= =======
Liabilities and
Shareholders' Equity
Interest-bearing
deposits
Interest checking
accounts $ 813 0.21% $ 795 0.14% $ 849 0.08%
Money market accounts 3,471 1.49 3,507 1.30 3,568 1.15
Savings deposits 186 0.29 196 0.29 199 0.28
Time deposits - under
$100,000 189 2.62 183 2.03 181 0.98
Time deposits -
$100,000 and over 1,136 2.78 1,074 2.87 897 2.84
------- ------- -------
Total interest-
bearing deposits 5,795 1.56 5,755 1.42 5,694 1.22
Federal funds purchased
and securities sold
under repurchase
agreements 289 3.79 256 3.25 315 2.88
Other borrowings 552 4.55 545 4.13 518 3.85
------- ------- -------
Total interest-
bearing liabilities 6,636 1.91 6,556 1.72 6,527 1.51
Noninterest-bearing
deposits 6,205 6,104 5,985
Other liabilities 198 178 170
Shareholders' equity 1,429 1,418 1,359
------- ------- -------
Total liabilities
and shareholders'
equity $14,468 $14,256 $14,041
======= ======= =======
Net interest spread 3.89% 3.95% 3.99%
==== ==== ====
Net interest margin 4.85% 4.80% 4.73%
==== ==== ====
Average prime rate 6.97% 6.42% 5.91%
==== ==== ====
---------------------------------------------
First Quarter Year to Date
-------------- --------------
Average Average
Balance Rate Balance Rate
------- ---- ------- ----
Assets
Interest-earning assets
Loans
Commercial $ 3,112 5.75% $ 3,306 6.13%
Commercial real estate mortgages 1,818 7.02 1,838 7.20
Residential mortgages 2,354 5.18 2,481 5.21
Real estate construction 817 6.74 749 7.59
Equity lines of credit 265 5.42 299 6.03
Installment 206 6.28 202 6.93
------- -------
Total loans 8,572 5.98 8,875 6.23
Due from banks - interest-bearing 65 1.34 47 1.42
Federal funds sold and securities
purchased under resale agreements 33 2.59 50 3.22
Securities available-for-sale 4,031 4.38 3,992 4.31
Trading account securities 38 2.40 38 3.71
------- -------
Total interest-earning assets 12,739 5.43 13,002 5.61
Allowance for loan and lease losses (149) (150)
Cash and due from banks 441 444
Other assets 842 865
------- -------
Total assets $13,873 $14,161
======= =======
Liabilities and
Shareholders' Equity
Interest-bearing deposits
Interest checking accounts $ 858 0.09% $ 828 0.13%
Money market accounts 3,690 1.00 3,558 1.23
Savings deposits 205 0.24 197 0.27
Time deposits - under $100,000 182 1.69 184 1.65
Time deposits - $100,000 and over 944 2.19 1,013 2.72
------- ----------
Total interest-bearing deposits 5,879 1.05 5,780 1.32
Federal funds purchased and securities
sold under repurchase agreements 254 2.33 278 3.08
Other borrowings 519 3.53 534 4.03
------- -------
Total interest-bearing liabilities 6,652 1.29 6,592 1.61
Noninterest-bearing deposits 5,694 5,999
Other liabilities 175 180
Shareholders' equity 1,352 1,390
------- -------
Total liabilities and
shareholders' equity $13,873 $14,161
======= =======
Net interest spread 4.14% 4.00%
==== ====
Net interest margin 4.75% 4.79%
==== ====
Average prime rate 5.44% 6.19%
==== ====
CITY NATIONAL CORPORATION
CAPITAL AND CREDIT RATING DATA
(unaudited)
2006
-----------------------------------------------
Fourth Third Second First Year To
Quarter Quarter Quarter Quarter Date
------- ------- ------- ------- -------
Per Common Share:
-----------------
Shares Outstanding
(in thousands):
Average - Basic 47,573 47,919 48,957 49,484 48,477
Average - Diluted 49,012 49,318 50,654 51,309 50,063
Period-End 47,492 47,639 48,115 49,535
Book Value $ 31.18 $ 30.61 $ 29.26 $ 29.87
Price:
High $ 71.29 $ 68.41 $ 78.25 $ 78.25 $ 78.25
Low 65.34 63.69 60.02 71.95 60.02
Period-end 71.20 67.06 65.09 76.79
Capital Ratios
(Dollars in millions):
-----------------------
Risk-based capital
Risk-adjusted assets $11,411 $10,999 $10,811 $10,473
Tier I capital $ 1,256 $ 1,229 $ 1,221 $ 1,295
Percentage of risk
adjusted assets 11.01 11.18% 11.29% 12.36%
Total capital $ 1,544 $ 1,563 $ 1,552 $ 1,624
Percentage of risk
adjusted assets 13.53 14.21% 14.36% 15.51%
Tier I leverage ratio 8.74% 8.66% 8.45% 8.92%
Period-end shareholders'
equity to total
period-end assets 9.96 9.98% 9.73% 10.04%
Period-end tangible
shareholders' equity
to total period-end
tangible assets 8.18% 8.10% 7.83% 8.27%
Average shareholders'
equity to total
average assets 10.01 9.87% 9.84% 9.99% 9.93%
Average tangible
shareholders' equity
to total average
tangible assets 8.15% 7.99% 8.04% 8.23% 8.10%
2005
-----------------------------------------------
Fourth Third Second First Full
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- -------
Per Common Share:
-----------------
Shares Outstanding
(in thousands):
Average - Basic 49,238 49,198 49,090 49,162 49,159
Average - Diluted 51,053 51,123 51,043 51,030 51,062
Period-End 49,347 49,117 49,145 48,958
Book Value $ 29.55 $ 28.85 $ 28.51 $ 26.97
Price:
High $ 75.12 $ 76.10 $ 72.90 $ 71.35 $ 76.10
Low 66.39 68.42 66.84 67.49 66.39
Period-end 72.44 70.09 71.71 69.82
Capital Ratios
(Dollars in millions):
---------------------
Risk-based capital
Risk-adjusted assets $10,148 $ 9,802 $ 9,663 $ 9,410
Tier I capital $ 1,251 $ 1,195 $ 1,151 $ 1,100
Percentage of risk
adjusted assets 12.33% 12.19% 11.91% 11.69%
Total capital $ 1,576 $ 1,539 $ 1,493 $ 1,437
Percentage of risk
adjusted assets 15.53% 15.70% 15.45% 15.27%
Tier I leverage ratio 8.82% 8.58% 8.39% 8.12%
Period-end shareholders'
equity to total
period-end assets 10.00% 9.82% 9.68% 9.49%
Period-end tangible
shareholders' equity
to total period-end
tangible assets 8.21% 8.00% 7.83% 7.55%
Average shareholders'
equity to total
average assets 9.88% 9.94% 9.68% 9.75% 9.81%
Average tangible
shareholders' equity
to total average
tangible assets 8.07% 8.08% 7.77% 7.80% 7.93%
Senior Debt Credit Ratings
--------------------------
For The Period Ended Standard &
December 31, 2006 Moody's Fitch Poor's DBRS
------- ------ ---------- -------
City National Bank A2 A- A A (high)
City National Corporation A3 A- A- A